5 unchanged sentences
Management continually develops and applies strategies to mitigate this risk.
−Removed: Management does not believe that the Company’s primary market risk exposure and management of that exposure in 2021 have materially changed compared to those in 2020.
The Company’s objectives are to manage interest rate risk to foster consistent growth of earnings and capital.
1 unchanged sentence
To measure that risk, the Company uses an earnings simulation approach.
−Removed: (dollars in thousands, except per share amounts)
The Company has an Asset Liability Committee which meets quarterly to review the interest rate sensitivity position and to review and develop various strategies for managing interest rate risk.
9 unchanged sentences
The results of the simulation are compared against approved policy limits.
+Added: (dollars in thousands, except per share amounts)
The following table presents the estimated change in net interest income for one year under several scenarios of assumed interest rate changes for the rate shock levels shown.
−Removed: The net interest income in each scenario is based on parallel and permanent changes in the interest rates.
−Removed: Year Ended December 31, 2021
−Removed: Scenario % Change
+Added: The change in each interest rate scenario represents the difference between estimated net interest income in the unchanged interest rate scenario, or the base case, and the estimated net interest income in each of the alternative interest rate scenarios.
+Added: The net interest income in each scenario is based on parallel yield curve changes in the interest rates applied to a static balance sheet.
+Added: These do not reflect the earnings expectations of management.
+Added: Net Interest Income at
+Added: December 31, 2022
+Added: Change in Interest Rates Amount % Change
300 basis points rising $ 86,907 (7.24) %
1 unchanged sentence
100 basis points rising 90,990 (2.88)
−Removed: As of December 31, 2021, the estimated effect of a 300 basis point increase in interest rates would be an increase of the Company’s net interest income by approximately 2.85 percent, or $2,593 over the twelve months ended December 31, 2022.
−Removed: The estimated effect of a decrease in rates is not reasonably calculable due to the current low interest rate environment.
+Added: Base case 93,690 —
+Added: 100 basis points falling 96,460 2.96
+Added: 200 basis points falling 103,052 9.99
Computations of the prospective effects of hypothetical interest rate changes are based on numerous assumptions.
The assumptions used in our interest rate sensitivity simulation discussed above are inherently uncertain and, as a result, the simulations cannot precisely measure net interest income or precisely predict the impact of changes in interest rates on net interest income.
−Removed: Actual values may differ from those projections set forth above due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions.
+Added: Actual results may differ from those projections set forth above due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and customer behavior.
Further, the computations do not contemplate any actions the Company may undertake in response to changes in interest rates.
+Added: For modeling purposes, as of December 31, 2021, the model simulations projected that 100 and 200 basis point ratable increases in interest rates would result in positive variances in net interest income of 0.99 percent and 2.85 percent, respectively, relative to the flat-rate case over the next 12 months.
+Added: The model simulations as of December 31, 2021 indicated that our projected balance sheet was slightly asset sensitive in comparison to a liability sensitive balance sheet as of December 31, 2022.
+Added: The increase in liability sensitivity was partly due to changes in the sensitivity assumptions of our deposits and changes in the mix of balance sheet liabilities.
+Added: Sensitivity assumptions of deposits were adjusted to be more reflective of actual depositor behavior during the unprecedented interest rate increases in 2022.
+Added: The change in mix of deposits, brokered funds and short term borrowings and the increase of short term funding on the balance sheet at December 31, 2022 compared to December 31, 2021 has also increased the liability sensitivity of the balance sheet.
West Bancorporation, Inc.
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.