Risk Factors Update Summary

• Fluctuations in interest rates impact credit spreads and funding costs, potentially leading to net interest margin compression.
• Increased commercial real estate loans by $1.5 billion (18%) may impact loan demand and financial condition.
• Projected net interest decreases of approximately 0.4% and 0.9% may occur.
• Ceasing residential mortgage originations may reduce noninterest income and negatively affect financials.
• Higher interest rates may adversely affect the creditworthiness of the Bank's borrowers.
• High concentration of depositors (22% of total deposits) poses liquidity risk if withdrawals occur.
• Adverse changes in the real estate market could negatively impact earnings and asset quality.
• Increased brokered time deposits by $998.0 million while other interest-bearing deposits decreased by $977.6 million.
• Commercial real estate values have declined due to hybrid work arrangements, affecting property values.
• Commercial real estate concentration at $949.0 million (12% of total loan portfolio) may impact credit losses.
• Changes in climate may negatively impact the business due to extreme weather events.
• Land and commercial loans increased by $1.0 billion (14%) and $1.5 billion (18%), respectively, affecting loan portfolio.
• Cyber-attacks pose a risk, despite efforts to implement protective measures, potentially affecting financial condition.
• Ceasing residential mortgage originations may impact earnings, asset quality, and share price.