−Removed: Item 3 – Quantitative and Qualitative Disclosures about Market Risk.
+Added: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our primary market risk is interest rate fluctuation, and management has procedures in place to evaluate and mitigate this risk.
−Removed: This risk and these procedures are discussed in Part II, Item 7A of the 2023 Annual Report under the caption “Quantitative and Qualitative Disclosures About Market Risk”.
−Removed: Management recognizes that recent changes in interest rates have had an impact on the Company’s market risk.
+Added: This risk and these procedures are discussed in Part II, Item 7A.
+Added: of the 2024 Annual Report under the caption “Quantitative and Qualitative Disclosures About Market Risk.” Management recognizes that recent changes in interest rates have had an impact on the Company’s market risk.
The procedures used to evaluate and mitigate these risks remain unchanged, and we continue to monitor our actual and simulated sensitivity positions since December 31, 2024.
+Added: The Company prepares a current base case and several alternative simulations at least quarterly.
+Added: Current interest rates are shocked by +/- 100, 200, 300 and 400 basis points.
+Added: In addition, the Company simulates additional rate curve scenarios.
+Added: The Company may elect not to use particular scenarios that it determines are impractical in a current rate environment.
+Added: The Company’s internal limits for parallel shock scenarios are as follows:
+Added: Shock in Basis Points Net Interest Income
+Added: Economic Value of Equity
+Added: + - 400 +/-25% +/-40%
+Added: + - 300 +/- 20% +/- 30%
+Added: + - 200 +/- 15% +/- 20%
+Added: + - 100 +/- 10% +/- 10%
+Added: It is management’s goal to manage the Bank’s portfolios so that NII at risk over 12 and 24-month periods and the economic value of equity at risk do not exceed policy guidelines at the various interest rate shock levels .
+Added: As of March 31, 2025, the Com pany exceeded Board approved limits for percentage change in economic value of equity in the interest rate shock of -200 and -100 an d at December 31, 2024, the Company exceeded Board approved limits for the percentage change in economic value of equity in the interest rate shock of -200.
+Added: In both periods the Company exceeded board approved levels due to average lives and low level of market rates on non-maturing deposit instruments.
+Added: Measures of NII at risk produced by simulation analysis are indicators of an institution’s short-term performance in alternative rate environments.
+Added: The below schedule estimates the changes in NII over a 12-month period for parallel rate shocks for up 400, 300, 200, 100 and down 100 and 200 scenarios:
+Added: Estimated Changes in Net Interest Income
+Added: Change in Interest Rates:
+Added: + 400 basis points + 300 basis points + 200 basis points + 100 basis points - 100 basis points - 200 basis points
+Added: Policy limit +/-25% +/- 20% +/- 15% +/- 10% +/-10% +/- 15%
+Added: March 31, 2025 (3.9) % (2.5) % (1.4) % (0.6) % 0.1 % (1.7) %
+Added: December 31, 2024 (3.8) % (2.4) % (1.3) % (0.5) % (0.1) % (2.1) %
+Added: Measures of equity value at risk indicate the ongoing economic value of the Company by considering the effects of changes in interest rates on all of the Company’s cash flows, and by discounting the cash flows to estimate the present value of assets and liabilities.
+Added: The below schedule estimates the changes in the economic value of equity at parallel shocks for up 400, 300, 200, 100 and down 100 and 200 scenarios:
+Added: Estimated Changes in Economic Value of Equity
+Added: Change in Interest Rates:
+Added: + 400 basis points + 300 basis points + 200 basis points + 100 basis points - 100 basis points - 200 basis points
+Added: Policy limit +/-40% +/- 30% +/- 20% +/- 10% +/-10% +/- 20%
+Added: March 31, 2025 17.3 % 15.9 % 12.9 % 7.9 % (10.8) % (25.9) %
+Added: December 31, 2024 15.2 % 14.2 % 11.7 % 7.2 % (10.0) % (24.2) %
+Added: As with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing tables.
+Added: For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates.
+Added: Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of
+Added: changes in market interest rates, while interest rates on other types may lag behind changes in market rates.
+Added: Additionally, certain assets, such as adjustable rate mortgage loans, have features which restrict changes in interest rates on a short-term basis and over the life of the asset.
+Added: Further, if interest rates change, expected rates of prepayments on loans and early withdrawals from certificates of deposit could deviate significantly from those assumed in calculating the tables.
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.