15 unchanged sentences
In general, we seek to minimize the impact of changing interest rates on net interest income and the economic values of assets and liabilities.
−Removed: The ALCO meets monthly to monitor the level of interest rate risk sensitivity to ensure compliance with the board of directors’ approved risk limits and to oversee management's balance sheet risk management strategies.
+Added: The ALCO meets at least quarterly to monitor the level of interest rate risk sensitivity to ensure compliance with the board of directors’ approved risk limits and to oversee management's balance sheet risk management strategies.
Interest rate risk management is an active process that encompasses monitoring loan and deposit flows complemented by investment and funding activities.
7 unchanged sentences
Net Interest Income at Risk (NII at Risk), and Economic Value of Equity (“EVE”).
−Removed: Under NII at Risk, net interest income is modeled utilizing various assumptions for assets, liabilities, and derivatives over a 12 month and 24 month time horizon assuming a flat balance sheet and an instantaneous and parallel shift in market interest rates of -300, -200, -100, +100, +200 and +300.
+Added: Under NII at Risk, net interest income is modeled utilizing various assumptions for assets, liabilities, and derivatives over a 12 month horizon assuming a flat balance sheet and an instantaneous and parallel shift in market interest rates in 100 basis point increments.
We report NII at Risk to isolate the change in income related solely to interest-earning assets and interest-bearing liabilities.
4 unchanged sentences
Immediate Change in Rates
−Removed: (dollars in thousands)
December 31, 2024
+Added: (dollars in thousands)
Dollar change
3 unchanged sentences
Percent change
−Removed: At December 31, 2023, our NII at Risk profile is liability sensitive in the down rate scenarios and this is directionally consistent with our December 31, 2022 profile.
−Removed: For the up rate scenarios, at December 31, 2023, our NII at Risk profile is “neutral” compared to “asset sensitive” at December 31, 2022.
−Removed: The NII at Risk results are within board policy limits.
−Removed: This shift is primarily due to the change in the mix of assets and funding sources during 2023 due to deleveraging the balance sheet and increasing our on balance sheet liquidity.
+Added: At December 31, 2024, our NII at Risk profile is liability sensitive in the down and up rate scenarios.
+Added: This is directionally consistent with our profile at December 31, 2023 for the down rate and a change from neutral in the up rate scenario.
+Added: For the up rate scenarios, we are more liability sensitive due to fixed rate debt approaching its maturity date in the first quarter of 2025.
Actual results could vary materially from those calculated by our model, due to a variety of factors or assumptions such as the uncertainty of the magnitude, timing and direction of future interest rate movement or the shape of the yield curve.
+Added: The NII at Risk results are within board policy limits.
Economic Value of Equity Sensitivity (Shock)
Immediate Change in Rates
−Removed: (dollars in thousands)
December 31, 2024
+Added: (dollars in thousands)
Dollar change
3 unchanged sentences
Percent change
−Removed: The EVE reported at December 31, 2023 indicates that if interest rates increased immediately, the EVE position is expected to decrease and if interest rates were to decrease immediately, the EVE position is expected to increase in the down 100 basis points scenario and then decrease for the down 200 basis points and down 300 basis points scenarios.
−Removed: When interest rates rise, fixed rate assets generally lose economic value as these assets are discounted at a higher rate demonstrating that the longer duration causes greater value to be lost.
−Removed: When interest rates fall, the opposite is true, however these positives are being offset by a decrease in the value of floating rate assets as well as the value of noninterest-bearing deposits.
−Removed: Noninterest-bearing have a lower value in lower interest rate environments.
+Added: At December 31, 2024, the EVE position is projected to decrease in the up rate scenarios.
+Added: When interest rates rise, fixed rate assets generally lose economic value as these instruments are discounted at a higher rate demonstrating the relative longer asset duration as compared to the overall liability duration.
+Added: In the down rate scenario, the EVE position is projected to initially increase as assets gain in value at a faster rate than the decrease in the value of noninterest-bearing deposits.
+Added: However, as the down rate shocks become more severe, the pace of the increase in the value of loans slows a loan prepayments increase and discount rates reach their floors, resulting in a lower EVE position in the down 300 scenario.
Actual results could vary materially from those calculated by our model, due to a variety of factors or assumptions such as the uncertainty of the magnitude, timing and direction of future interest rate movement or the shape of the yield curve.
1 unchanged sentence
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.