6 unchanged sentences
The policies established by the ALCO are reviewed and approved by the Company’s board of directors.
−Removed: The primary goal of interest rate risk management is to control exposure to interest rate risk, within policy limits approved by the Board.
+Added: The primary goal of interest rate risk management is to control exposure to interest rate risk, within policy limits approved by the board of directors.
These limits reflect the Company’s tolerance for interest rate risk over short-term and long-term horizons.
−Removed: The Company also performs valuation analyses, which are used for evaluating levels of risk present in the balance sheet that might not be taken into account in the net interest income simulation analyses.
+Added: The Company also performs valuation analyses, which are used for evaluating levels of risk present in the balance sheet that might not be considered in the net interest income simulation analyses.
Whereas net interest income simulation highlights exposures over a relatively short time horizon, valuation analysis incorporates all cash flows over the estimated remaining life of all balance sheet positions.
2 unchanged sentences
In contrast to the net interest income simulation, which assumes interest rates will change over a period of time, EVE uses instantaneous changes in rates.
+Added: EVE values only the current balance sheet, and does not incorporate the growth assumptions that are used in the net interest income simulation model.
As with the net interest income simulation model, assumptions about the timing and variability of balance sheet cash flows are critical in the EVE analysis.
2 unchanged sentences
The Company periodically reassesses its assumptions regarding the indeterminate lives of core deposits utilizing an independent third-party resource to assist.
−Removed: With lower interest rates over a prolonged period, the average lives of core deposits have trended higher and favorably impacted model estimates of EVE for higher rates.
+Added: These assumptions could see greater volatility due to changes in the level of interest rates and recent industry events.
+Added: With higher interest rates, the average lives of core deposits have trended lower and unfavorably impacted model estimates of EVE.
+Added: In addition, the Company’s acquisitions have changed the composition of the balance sheet, both of which have resulted in changes to our EVE profile.
The following table presents the projected impact of a change in interest rates on the balance sheet.
2 unchanged sentences
+2.00% (2.7)%
+Added: +1.00% (1.0)%
+Added: -1.00% (2.6%)
+Added: -2.00% (9.6%)
While an instantaneous and severe shift in interest rates is used in this analysis to provide an estimate of exposure under an extremely adverse scenario, a gradual shift in interest rates would have a much more modest impact.
Since EVE measures the discounted present value of cash flows over the estimated lives of instruments, the change in EVE does not directly correlate to the degree that earnings would be impacted over a shorter time horizon, i.e., the next fiscal year.
−Removed: Further, EVE does not take into account factors such as future balance sheet growth, changes in product mix, change in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.
+Added: Further, EVE does not consider factors such as future balance sheet growth, changes in product mix, change in yield curve relationships, and changing product spreads that could mitigate the adverse impact of changes in interest rates.
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.