2021 Annual Report

downward of the yield curve of 100 basis points and immediate, parallel shifts upward of the yield curve of 100, 200, 300 and 400 basis points. In the current interest rate environment, a downward shift of the yield curve of 200, 300 and 400 basis points does not provide us with meaningful results and thus is not presented. December 31, 2020 Change (basis points) in Interest Rates Forecasted Net Percentage Change Forecasted Net Percentage Change (12-Month Projection) Interest Income from Base Interest Income from Base +400 . . . . . . . . . . . . . . . $ 116,256 5.75 % $ 91,046 10.03 % +300 . . . . . . . . . . . . . . . 114,328 4.00 88,698 7.19 +200 . . . . . . . . . . . . . . . 112,288 2.15 86,241 4.22 +100 . . . . . . . . . . . . . . . 110,539 0.55 84,195 1.75 0 . . . . . . . . . . . . . . . . . 109,930 — 82,747 — í100 . . . . . . . . . . . . . . . 106,955 (2.71) 81,780 (1.17) The table above indicates that as of December 31, 2021, in the event of an immediate and sustained 400 basis point increase in interest rates, the Company would experience a 5.75% increase in net interest income. In the event of an immediate 100 basis point decrease in interest rates, the Company would experience a 2.71% decrease in net interest income. The results of this simulation analysis are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted. For example, if the timing and magnitude of interest rate changes differ from those projected, net interest income might vary significantly. Non-parallel yield curve shifts such as a flattening or steepening of the yield curve or changes in interest rate spreads would also cause net interest income to be different from that depicted. An increasing interest rate environment could reduce projected net interest income if deposits and other short-term liabilities re-price faster than expected or re-price faster than the Company’s assets. Actual results could differ from those projected if the Company grows assets and liabilities faster or slower than estimated, if the Company experienced a net outflow of deposit liabilities, or if the mix of assets and liabilities otherwise changes. Actual results could also differ from those projected if the Company experienced substantially different repayment speeds in the loan portfolio than those assumed in the simulation model. Finally, these simulation results do not contemplate all the actions that the Company may undertake in response to potential or actual changes in interest rates, such as changes to the Company’s loan, investment, deposit, or funding strategies. December 31, 2021

82