Risk Factors Update Summary

• Strategic Risk: Added focus on building a leading regional commercial and small business bank, emphasizing relationship-based business.
• Enhanced regulatory scrutiny for bank mergers with assets over $50 billion may impact future acquisitions.
• Operational Risk: Highlighted dependence on information technology and potential harm from disruptions.
• A special assessment of $35.4 million was levied by the FDIC based on uninsured deposits.
• Liquidity Risk: Increased emphasis on potential unanticipated deposit outflows and impact on liquidity.
• Potential downgrades of the U.S. credit rating could negatively impact economic conditions and business operations.
• Interest Rate Risk: Mentioned the impact of changes in interest rates on net interest income and the ability to manage interest rate risk.
• Credit Risk: Discussed the sensitivity of commercial real estate valuations to market dynamics and regulatory changes.
• Competitive Risk: Noted increased competition from financial services providers and potential impact on growth and profitability.
• Cybersecurity Risk: Highlighted the vulnerability to cybersecurity incidents and potential adverse effects on business operations.