7 unchanged sentences
Management of interest rate risk focuses on maintaining consistent growth in net interest income within Board-approved policy limits.
−Removed: United’s Asset/Liability Management Committee (“ALCO”), which includes senior management representatives and reports to the Board, monitors and manages interest rate risk to maintain an acceptable level of change to net interest income as a result of changes in interest rates.
+Added: United’s Asset/Liability Management Committee (“ALCO”), which includes senior management representatives and reports to the Board of Directors, monitors and manages interest rate risk to maintain an acceptable level of change to net interest income as a result of changes in interest rates.
Policy established for interest rate risk is stated in terms of the change in net interest income over a one-year and two-year horizon given an immediate and sustained increase or decrease in interest rates.
−Removed: The current limits approved by the Board are structured on a staged basis with each stage requiring specific actions.
+Added: The current limits approved by the Board of Directors are structured on a staged basis with each stage requiring specific actions.
United employs a variety of measurement techniques to identify and manage its exposure to changing interest rates.
1 unchanged sentence
The model is based on actual cash flows and repricing characteristics for on and off-balance sheet instruments and incorporates market-based assumptions regarding the impact of changing interest rates on the prepayment rate of certain assets and liabilities.
−Removed: The model also includes executive management projections for activity levels in product lines offered
+Added: The model also includes executive management projections for activity levels in product lines offered by United.
Assumptions based on the historical behavior of deposit rates and balances in relation to changes in interest rates are also incorporated into the model.
7 unchanged sentences
United closely monitors the sensitivity of its assets and liabilities on an on-going basis and projects the effect of various interest rate changes on its net interest margin.
−Removed: The following table shows United’s estimated earnings sensitivity profile as of September 30, 2024 and December 31, 2023:
+Added: The following table shows United’s estimated earnings sensitivity profile as of March 31, 2025 and December 31, 2024:
Change in Interest Rates
1 unchanged sentence
Percentage Change in Net Interest Income
−Removed: September 30, 2024
+Added: March 31, 2025
December 31, 2024
−Removed: At September 30, 2024, given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 1.82% over one year as compared to an increase by 0.24% at December 31, 2023.
−Removed: A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 2.82% over one year as of September 30, 2024, as compared to a decrease of 0.28% as of December 31, 2023.
−Removed: A 100 basis point immediate, sustained downward shock in the yield curve would increase net interest income by an estimated 0.22% over one year as of September 30, 2024 as compared to an increase of 2.66%, over one year as of December 31, 2023.
−Removed: A 200 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 0.14% over one year as of September 30, 2024 as compared to an increase of 4.35% over one year as of December 31, 2023.
+Added: At March 31, 2025, given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 2.05% over one year as compared to an increase by 1.75% at December 31, 2024.
+Added: A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 3.26% over one year as of March 31, 2025, as compared to an increase of 2.82% as of December 31, 2024.
+Added: A 100 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 0.24% over one year as of March 31, 2025 as compared to an increase of 0.26% over one year as of December 31, 2024.
+Added: A 200 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 0.41% over one year as of March 31, 2025 as compared to an increase of 0.40% over one year as of December 31, 2024.
In addition to the one year earnings sensitivity analysis, a two-year analysis is also performed.
Compared to the one year analysis, United is projected to show improved performance in year two within the upward rate shock scenarios.
−Removed: Given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 4.00% in year two as of September 30, 2024.
−Removed: A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 6.89% in year two as of September 30, 2024.
−Removed: A 100 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 2.29% in year two as of September 30, 2024.
−Removed: A 200 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 5.86% in year two as of September 30, 2024.
+Added: Given an immediate, sustained 100 basis point upward shock to the yield curve used in the simulation model, net interest income for United is estimated to increase by 4.09% in year two as of March 31, 2025.
+Added: A 200 basis point immediate, sustained upward shock in the yield curve would increase net interest income by an estimated 7.03% in year two as of March 31, 2025.
+Added: A 100 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 2.63% in year two as of March 31, 2025.
+Added: A 200 basis point immediate, sustained downward shock in the yield curve would decrease net interest income by an estimated 5.79% in year two as of March 31, 2025.
While it is unlikely market rates would immediately move 100 or 200 basis points upward or downward on a sustained basis, this is another tool used by management and the Board to gauge interest rate risk.
16 unchanged sentences
This is generally referred to as extension risk.
−Removed: At September 30, 2024, United’s mortgage related securities portfolio had an amortized cost of $1.8 billion, of which approximately $925.9 million or 51% were fixed rate collateralized mortgage obligations (“CMOs”).
+Added: At March 31, 2025, United’s mortgage related securities portfolio had an amortized cost of $1.8 billion, of which approximately $828.1 million or 46% were fixed rate collateralized mortgage obligations (“CMOs”).
These fixed rate CMOs consisted primarily of planned amortization class (PACs), sequential-pay and accretion directed (“VADMs”) bonds having an average life of approximately 4.8 years and a weighted average yield of 2.84%, under current projected prepayment assumptions.
These securities are expected to have moderate extension risk in a rising rate environment.
−Removed: Current models show that an immediate, sustained upward shock of 300 basis points, the average life of these securities would only extend to 6.4 years.
+Added: Current models show that given an immediate, sustained upward shock of 300 basis points, the average life of these securities would only extend to 6.6 years.
The projected price decline of the fixed rate CMO portfolio in rates up 300 basis points would be 15.6%, or less than the price decline of a 7- year treasury note.
By comparison, the price decline of a 30-year 5.5% current coupon mortgage backed security (“MBS”) in rates higher by 300 basis points would be approximately 19.1%.
−Removed: United had approximately $383.4 million in fixed rate Commercial mortgage backed Securities (“CMBS”) with a projected yield of 1.84% and a projected average life of 4.5 years on September 30, 2024.
+Added: United had approximately $362.4 million in fixed rate Commercial mortgage backed Securities (CMBS) with a projected yield of 1.87% and a projected average life of 4.5 years on March 31, 2025.
This portfolio consisted primarily of Freddie Mac Multifamily K securities and Fannie Mae Delegated Underwriting and Servicing (“DUS”) securities with a weighted average maturity (“WAM”) of 8.4 years.
−Removed: United had approximately $11.3 million in 15-year mortgage backed securities with a projected yield of 2.05% and a projected average life of 4.1 years as of September 30, 2024.
−Removed: This portfolio consisted of seasoned 15-year mortgage paper with a weighted average loan age (“WALA”) of 5.5 years and a weighted average maturity (“WAM”) of 10.3 years.
−Removed: United had approximately $304.4 million in 20-year mortgage backed securities with a projected yield of 1.81% and a projected average life of 6.1 years on September 30, 2024.
−Removed: This portfolio consisted of seasoned 20-year mortgage paper with a weighted average loan age (“WALA”) of 3.5 years and a weighted average maturity (“WAM”) of 16.3 years.
−Removed: United had approximately $151.8 million in 30-year mortgage backed securities with a projected yield of 2.88% and a projected average life of 7 years on September 30, 2024.
+Added: United had approximately $22.3 million in 15-year mortgage backed securities with a projected yield of 4.02% and a projected average life of 4 years as of March 31, 2025.
This portfolio consisted of seasoned 15-year mortgage paper with a weighted average loan age (“WALA”) of 5.3 years and a weighted average maturity (“WAM”) of 9.9 years.
−Removed: The remaining 1% of the mortgage related securities portfolio on September 30, 2024, included floating rate CMO, CMBS and mortgage backed securities.
+Added: United had approximately $317.5 million in 20-year mortgage backed securities with a projected yield of 2.14% and a projected average life of 6 years on March 31, 2025.
+Added: This portfolio consisted of seasoned 20-year mortgage paper with a WALA of 4 years and a WAM of 15.7 years.
+Added: United had approximately $230.7 million in 30-year mortgage backed securities with a projected yield of 3.95% and a projected average life of 7.6 years on March 31, 2025.
+Added: This portfolio consisted of seasoned 30-year mortgage paper with a WALA of 5.3 years and a WAM of 22.7 years.
+Added: The remaining 3% of the mortgage related securities portfolio on March 31, 2025, included floating rate CMO, CMBS and mortgage backed securities.
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.