Risk Factors Update Summary

• The Company's ability to retain and grow loans, deposits, and fee income depends on employees. Losing employees could lead to customer loss. This could have a material adverse effect.
• Noninterest income decreased from 52% to 47% of total revenue, impacting fee-based services.
• Total deposits decreased from $47.1 million in 2022 to $46.1 million in 2023.
• The Company's allowance for loan losses was 1.30% of total loans in 2022, and 1.30% in 2023.
• The Company's loan administration costs could increase by $1 million, impacting financial performance.
• Uncertainty surrounding legal, regulatory, and policy changes due to presidential elections may impact financial institutions and the global economy.
• Failure to comply with laws could result in civil money penalties or damage to reputation.
• Borrowed funds decreased from $378.1 million in 2022 to $314.2 million in 2023.
• The Company's new stock repurchase program authorizes repurchasing up to 1,000,000 shares, replacing the previous program.
• Changes in federal policy post-elections can affect oversight and focus on the financial services industry.
• The Company may face difficulties in recruiting and retaining personnel due to labor shortages. Labor costs may increase, affecting operations and growth prospects.
• The Company's mortgage loan volume decreased from $812.3 million to $364.1 million.
• The Company's exposure to home equity lines of credit increased to $216.1 million.
• A 1% increase in nonperforming loans could negatively impact net interest income and loan administration costs.
• The Company's future success depends on its ability to implement new technology effectively. Operational challenges may arise.
• Outflows of $4.5 billion were experienced in the retirement and benefit services division.
• The Company's 10 largest borrowing relationships increased from 5% to 6% of the total loan portfolio.
• Increased capital requirements post-bank failures could constrain earnings, growth, and lead to regulatory limitations.
• The Company's success depends on its ability to compete effectively in the financial services industry. Intense competition may impact noninterest income and growth prospects.
• The Company's nonperforming loans totaled $3.7 million, or 0.16% of the total loan portfolio in 2022, and $3.8 million, or 0.32% in 2023.
• The Company's ability to attract and retain skilled employees is crucial for its mortgage business. Employee turnover may impact mortgage origination volume.
• FHLB advances decreased from $225 million to $200 million, and federal funds purchased decreased from $153 million to $114.2 million.
• The 10 largest depositor relationships accounted for approximately 10% of total deposits in 2022, decreasing to 8% in 2023.
• The Company's use of third-party vendors is subject to increasing regulatory requirements. Enhanced requirements may increase costs.
• New lines of business or products may subject the Company to additional risks. Failure to address these risks could have a material adverse effect.
• Goodwill decreased from $47.1 million to $46.1 million, representing 13% of total stockholders' equity.
• The Company's internal controls may not match those of larger institutions, leading to decreased revenues and net income.