2 unchanged sentences
Interest rate risk is inherent in the balance sheet due to the mismatch between the maturities of rate-sensitive assets and rate-sensitive liabilities.
−Removed: If rates are rising, and the level of rate-sensitive assets exceed the level of rate-sensitive liabilities, the impact on the net interest margin will be favorable.
−Removed: Conversely, if rates are falling, and the level of rate-sensitive assets is less than the level of rate-sensitive liabilities, the impact on the net interest margin will be unfavorable.
+Added: If rates are rising, and the level of rate-sensitive liabilities exceeds the level of rate-sensitive assets, the net interest margin will be negatively impacted.
+Added: Conversely, if rates are falling, and the level of rate-sensitive liabilities exceeds the level of rate-sensitive assets, the impact on the net interest margin will be favorable.
Managing interest rate risk is further complicated by the fact that all rates do not change at the same pace;
7 unchanged sentences
The asset liability committee employs multiple modeling scenarios to analyze the maturities of rate-sensitive assets and liabilities.
−Removed: The interest rate risk model measures the “gap”
−Removed: which is defined as the difference between the dollar amount of rate-sensitive assets repricing during a period and the volume of rate-sensitive liabilities repricing during the same period.
+Added: The interest rate risk model measures the “gap” which is defined as the difference between the dollar amount of rate-sensitive assets repricing during a period and the volume of rate-sensitive liabilities repricing during the same period.
The gap is also expressed as the ratio of rate-sensitive assets divided by rate-sensitive liabilities.
−Removed: If the ratio is greater than “one,”
−Removed: the dollar value of assets exceeds the dollar value of liabilities;
−Removed: the balance sheet is “asset sensitive.”
−Removed: Conversely, if the value of liabilities exceeds the value of assets, the ratio is less than one and the balance sheet is “liability sensitive.”
−Removed: Our internal policy requires management to maintain the gap such that net interest margins will not change more than 10% if interest rates change 100 basis points or more than 15% if interest rates change 200 basis points.
+Added: If the ratio is greater than “one,” the dollar value of assets exceeds the dollar value of liabilities;
+Added: the balance sheet is “asset sensitive.” Conversely, if the value of liabilities exceeds the value of assets, the ratio is less than one and the balance sheet is “liability sensitive.” Our internal policy requires management to maintain the gap such that net interest margins will not change more than 10% if interest rates change 100 basis points or more than 15% if interest rates change 200 basis points.
As of December 31, 2023, our gap was within such ranges.
The interest rate risk model measures scheduled maturities in periods of three months, four to twelve months, one to five years and over five years.
−Removed: The chart below illustrates our rate-sensitive position at December 31, 2022.
+Added: The chart below illustrates our rate-sensitive position at December 31, 2023.
Management uses the one-year gap as the appropriate time period for setting strategy.
16 unchanged sentences
Percent of cumulative sensitivity Gap to total interest-earning assets
−Removed: The interest rate risk model that defines the gap position also performs a “rate shock”
−Removed: test of the balance sheet. 
+Added: The interest rate risk model that defines the gap position also performs a “rate shock” test of the balance sheet.
The rate shock procedure measures the impact on the economic value of equity (“EVE”), which is a measure of long-term interest rate risk.
3 unchanged sentences
Regulatory guidelines specify a maximum change of 30% for a 200 basis points rate change.
−Removed: After starting the year at a rate of 0.15%, the Federal Reserve increased its targeted federal funds rate by 425 basis points and ended the 2022 year at a 4.40%.
−Removed: At December 31, 2022, the model shows an increase in our EVE for an upward shift of 100 basis points and decrease in upward shifts of 200, 300 and 400 basis points.
−Removed: The chart below identifies the EVE impact of a downward shift in rates of 100 basis points and an upward shift in rates of 100, 200, 300 and 400 basis points.
+Added: After starting the year 2022 at a rate of 0.15%, the Federal Reserve increased its targeted federal funds rate by 525 basis points and ended the year 2023 at 5.40%.
+Added: As of December 31, 2023, the model shows decreases in our EVE for all rate shock scenarios.
+Added: The chart below identifies the EVE impact of rate shocks of down 400 to up 400 in 100 basis point increments.
Economic Value of Equity Under Rate Shock
4 unchanged sentences
Percent change
−Removed: The one-year gap ratio of negative -14.52% indicates that we would show a decrease in net interest income in a rising rate environment, and the EVE rate shock shows that the EVE would increase in a rising rate environment.
+Added: The one-year gap ratio of (10.26) indicates that net interest income would decrease in a rising rate environment, and the EVE rate shock shows that the EVE would decrease less in a rising rate environment.
The EVE simulation model is a static model which provides information only at a certain point in time.
5 unchanged sentences
Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market rates, while interest rates on other types may lag behind changes in general market rates.
−Removed: Our asset liability committee develops its view of future rate trends by monitoring economic indicators, examining the views of economists and other experts, and understanding the current status of our balance sheet and conducts a quarterly analysis of the rate sensitivity position. 
+Added: Our asset liability committee develops its view of future rate trends by monitoring economic indicators, examining the views of economists and other experts, and understanding the current status of our balance sheet and conducts a quarterly analysis of the rate sensitivity position.
The results of the analysis are reported to our board of directors on a quarterly basis.
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.