8 unchanged sentences
The Corporation, through the Corporation's Asset-Liability Committee, has sought to reduce the exposure of its earnings to changes in interest rates by attempting to manage the repricing mismatch between interest-earning assets and interest-bearing liabilities.
−Removed: The principal element in achieving this objective is to increase the interest rate sensitivity of the Corporation's interest-earning assets by retaining for its portfolio new loan originations with interest rates subject to periodic adjustment to market conditions.
−Removed: In addition, the Corporation maintains an investment portfolio, which is largely comprised of U.S.
−Removed: government agency MBS and U.S.
−Removed: government sponsored enterprise MBS and CMO with contractual maturities of up to 30 years that reprice frequently or have a relatively short-average life.
+Added: The principal element in achieving this objective is to increase the interest rate sensitivity of the Corporation's interest-earning assets by retaining new loan originations with interest rates subject to periodic adjustment to market conditions.
The Corporation relies on retail deposits as its primary source of funds while utilizing brokered certificates of deposit and FHLB - San Francisco advances as secondary sources of funding.
3 unchanged sentences
Through the use of an internal interest rate risk model, the Corporation is able to analyze its interest rate risk exposure by measuring the change in net portfolio value (“NPV”) over a variety of interest rate scenarios.
−Removed: NPV is defined as the net present value of expected future cash flows from assets, liabilities and off-balance sheet contracts.
−Removed: The calculation is intended to illustrate the change in NPV that would occur in the event of an immediate change in interest rates of -300, -
−Removed: 200, -100, +100, +200 and +300 basis points (“bp”) with no effect given to steps that management might take to counter the effect of the interest rate movement.
+Added: NPV is defined as the net present value of expected future cash flows from assets, liabilities and off-balance sheet obligations.
+Added: The calculation is intended to illustrate the change in NPV that would occur in the event of an immediate change in interest rates of -300, -200, -100, +100, +200 and +300 basis points (“bp”) with no effect given to steps that management might take to counter the effect of the interest rate movement.
As of June 30, 2025, the targeted federal funds rate range was 4.25% to 4.50%.
5 unchanged sentences
(1) Represents the (decrease) increase of the NPV at the indicated interest rate change in comparison to the NPV at June 30, 2025 (“base case”).
−Removed: (2) Calculated as the NPV divided by the portfolio value of total assets.
+Added: (2) Calculated as the NPV divided by the total portfolio value of assets.
(3) Calculated as the change in the NPV ratio (NPV as a Percentage of Portfolio Value Assets) from the base case amount assuming the indicated change in interest rates (expressed in basis points).
−Removed: The following table is derived from the internal interest rate risk model and represents the change in the NPV at a +200 bp rate shock at June 30, 2024 and -200 bp rate shock at June 30, 2023 which has been determined to be the most detrimental to the interest rate risk of the Corporation in a -200, -100, +100 and +200 bp rate shock scenario:
+Added: The following table is derived from the internal interest rate risk model and represents the change in the NPV at a -200 bp rate shock at June 30, 2025 and +200 bp rate shock at June 30, 2024 which has been determined to be the worst scenario to the interest rate risk of the Corporation in a -200, -100, +100 and +200 bp rate shock.
At June 30, 2025
9 unchanged sentences
The pre-shock NPV ratio increased 203 basis points to 12.15% at June 30, 2025 from 10.12% at June 30, 2024, and the post-shock NPV ratio increased 200 basis points to 11.17% (-200 basis point rate shock) at June 30, 2025 from 9.17% (+200 basis point rate shock) at June 30, 2024.
−Removed: The increase of the NPV ratios was primarily attributable to the net income in fiscal 2024 and amortization of stock-based compensation, partly offset by a $7.0 million cash dividend distribution from the Bank to the Corporation in September 2023, an $824,000 CECL adoption charged to equity, and increases in market interest rates.
+Added: The increase of the NPV ratios was primarily attributable changes in asset and liability balances, interest rates, and portfolio composition.
The sensitivity measure increased to 98 basis points at June 30, 2025 from 95 basis points at June 30, 2024.
10 unchanged sentences
For loans, securities and liabilities with contractual maturities, the table presents contractual repricing or scheduled maturity.
−Removed: For transaction accounts (checking, money market and savings deposits) that have no contractual maturity, the table presents estimated principal cash flows and, as applicable, the Corporation's historical experience, management's judgment and statistical analysis concerning their most likely withdrawal behaviors.
+Added: For transaction accounts (checking, money market and savings deposits) that have no contractual
+Added: maturity, the table presents estimated principal cash flows and, as applicable, the Corporation's historical experience, management's judgment and statistical analysis concerning their most likely withdrawal behaviors.
The following table represents the interest rate gap analysis of the Corporation’s assets and liabilities as of June 30, 2025:
28 unchanged sentences
Management views noninterest-bearing deposits to be the least sensitive to changes in market interest rates and these accounts are therefore characterized as long-term funding.
−Removed: Interest-bearing checking deposits are considered more sensitive, followed by increased sensitivity
−Removed: for savings and money market deposits.
+Added: Interest-bearing checking deposits are considered more sensitive, followed by increased sensitivity for savings and money market deposits.
For the purpose of calculating gap, a portion of these interest-bearing deposit balances are assumed to be subject to estimated repricing as follows:
interest-bearing checking deposits at 15% per year, savings deposits at 20% per year and money market deposits at 50% in the first and second years.
−Removed: The gap results presented above could vary substantially if different assumptions are used or if actual experience differs from the assumptions used in the preparation of the gap analysis.
−Removed: Furthermore, the gap analysis provides a static view of interest rate risk exposure at a specific point in time without taking into account redirection of cash flows activity and deposit fluctuations.
−Removed: The extent to which the net interest margin will be impacted by changes in prevailing interest rates will depend on a number of factors, including how quickly interest-earning assets and interest-bearing liabilities react to interest rate changes.
−Removed: It is not uncommon for rates on certain assets or liabilities to lag behind changes in the market rates of interest.
−Removed: Additionally, prepayments of loans and early withdrawals of time deposits could cause interest sensitivities to vary.
−Removed: As a result, the relationship between interest-earning assets and interest-bearing liabilities, as shown in the previous table, is only a general indicator of interest rate sensitivity and the effect of changing interest rates on net interest income.
−Removed: Results are likely to be different from that predicted solely on the basis of the interest rate sensitivity analysis set forth in the previous table.
+Added: The gap results presented above are based on specific assumptions and represent a static view of interest rate risk at a point in time.
+Added: Actual experience may vary if assumptions differ or if customers’ behaviors and market conditions change.
+Added: The impact of changes in prevailing interest rates on the Corporation’s net interest margin will depend on how quickly interest-earning assets and interest-bearing liabilities adjust to rate changes.
+Added: Rates on certain assets or liabilities may lag behind market rates, and factors such as loan prepayments or early deposit withdrawals can further affect cash flows.
+Added: Management believes the results of the interest rate sensitivity analysis reflect the Corporation’s current asset-liability positioning, but the projected changes in net interest income assume immediate and sustained shifts in market rates and do not include any actions management might take in response.
+Added: Actual results could differ materially due to variations in customer behavior, market conditions, and competitive pressures.
The Corporation also models the sensitivity of net interest income for the 12-month period subsequent to any given month-end assuming a dynamic balance sheet accounting for, among other items:
16 unchanged sentences
Net Interest Income
−Removed: At June 30, 2024, the Corporation was close to neutral with regard to the sensitivity of net interest income as projected net interest income declines slightly under rising or declining interest rates during the subsequent 12-month period.
−Removed: At June 30, 2023, the Corporation was liability sensitive as its interest-bearing liabilities are expected to reprice more quickly than its interest-earning assets during the subsequent 12-month period.
−Removed: Therefore, in a rising interest rate environment, the model projects a decrease in net interest income over the subsequent 12-month period.
−Removed: In a falling interest rate environment, the results project an increase in net interest income over the subsequent 12-month period at the -100 basis point scenario and a decrease in net interest income over the subsequent 12-month period for the -200 and -300 basis point scenarios.
+Added: At June 30, 2025, the Corporation was asset sensitive as its interest-earning assets are expected to reprice more quickly than its interest-bearing liabilities during the subsequent 12-month period;
+Added: while at June 30, 2024, the Corporation was close to neutral with regard to the sensitivity of net interest income as projected net interest income declines slightly under rising or declining interest rates during the subsequent 12-month period.
+Added: Therefore at June 30, 2025, in a rising interest rate environment, the model projects an increase in net interest income over the subsequent 12-month period, except at the +300 basis point scenario.
+Added: In a falling interest rate environment, the results project a decrease in net interest income over the subsequent 12-month period.
Management believes that the assumptions used to complete the analysis described in the table above are reasonable.
−Removed: However, past experience has shown that immediate, permanent and parallel movements in interest rates will not
−Removed: necessarily occur.
+Added: However, past experience has shown that immediate, permanent and parallel movements in interest rates will not necessarily occur.
Additionally, while the analysis provides a tool to evaluate the projected net interest income to changes in interest rates, actual results may be substantially different if actual experience differs from the assumptions used to complete the analysis, particularly with respect to the 12-month business plan when asset growth is forecast.
4 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.