8 unchanged sentences
To measure that risk, the Company uses an earnings simulation approach.
−Removed: 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.
+Added: The Company has an Asset Liability Committee which meets quarterly, or more often when deemed necessary, to review the interest rate sensitivity position and to review and develop various strategies for managing interest rate risk.
Measuring and maintaining interest rate risk is a dynamic process that management performs with the objective of maximizing net interest margin while maintaining interest rate risk within acceptable tolerances.
3 unchanged sentences
The simulations allow for ongoing assessment of interest rate sensitivity and can include the impact of potential new business strategies.
−Removed: The modeled scenarios begin with a base case in which rates are unchanged and include parallel and nonparallel rate shocks.
+Added: The modeled scenarios begin with a base case in which rates are unchanged and can include parallel and nonparallel rate shocks.
The results of these shocks are measured in two forms:
2 unchanged sentences
The results of the simulation are compared against approved policy limits.
−Removed: (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.
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.
−Removed: 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: The net interest income in each scenario is based on immediate parallel yield curve changes in the interest rates applied to a static balance sheet.
These do not reflect the earnings expectations of management.
1 unchanged sentence
December 31, 2023
−Removed: Change in Interest Rates Amount % Change
+Added: Change in Interest Rates $ Change % Change
300 basis points rising $ (11,456) (14.73) %
1 unchanged sentence
100 basis points rising (3,559) (4.58)
−Removed: Base case 93,690 —
100 basis points falling 2,461 3.16
4 unchanged sentences
Further, the computations do not contemplate any actions the Company may undertake in response to changes in interest rates.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Sensitivity assumptions of deposits were adjusted to be more reflective of actual depositor behavior during the unprecedented interest rate increases in 2022.
−Removed: 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.