munity Bank System(CBU)2023-02-28 16:00Credit Losses and Allowance - The Company recorded a provision for credit losses of 1.91 million (0.4%) in a +200 basis points rate environment, while an increase of $1.09 million (0.2%) is expected in a +100 basis points environment[317]. - The Company’s net interest income projections are sensitive to changes in interest rates, with significant impacts expected from the repricing of loans and deposits[315]. Asset Management and Investment Strategy - The ongoing monitoring of interest rate risk is a key component of the Company’s asset/liability management process, with monthly reviews by the Asset-Liability Committee (ALCO)[313]. - The Company plans to use investment cash flows to pay down overnight borrowings and fund loan growth, with no additional investment security purchases expected over the next twelve months[320]. - The Company’s investment portfolio is primarily composed of 90.3% Treasury and agency securities rated AAA, with minimal foreign currency exchange rate risk exposure[312]. Loan Portfolio Management - The Company’s loan portfolio segments are disaggregated to monitor risk and performance effectively, considering various risk characteristics[85]. - The model assumes average deposit balances will decrease approximately 4.6% over the next twelve months, impacting overall earning assets[319]. - The Company anticipates that cash flows on earning assets will increase modestly throughout the forecast period[318].