Company: NECB
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001558370-25-010872
Chunk: 18

Company: NorthEast Community Bancorp, Inc./MD/
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 3Q
Chunk 18
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 one or two years).  Economic value simulation reflects the interest rate sensitivity of assets and liabilities in a more comprehensive fashion, reflecting all future time periods.  It can identify the quantity of interest rate risk as a function of the changes in the economic values of assets and liabilities, and the corresponding change in the economic value of equity of NorthEast Community Bank.  Both types of simulation assist in identifying, measuring, monitoring and controlling interest rate risk and are employed by management to ensure that variations in interest rate risk exposure will be maintained within policy guidelines.

We produce these simulation reports and discuss them at our Asset and Liability Committee meetings on at least a quarterly basis.  The simulation reports compare baseline (no interest rate change) to the results of an interest rate shock, to illustrate the specific impact of the interest rate scenario tested on income and equity.  The model, which incorporates asset and liability rate information, simulates the effect of various interest rate movements on income and equity value.  The reports identify and measure our interest rate risk exposure present in our current asset/liability structure.  Management considers both a static (current position) and dynamic (forecast changes in volume) analysis as well as non-parallel and gradual changes in interest rates and the yield curve in assessing interest rate exposures.