Risk Factors Update Summary

• The Company acquired HSBI in 2023, adding federal tax net operating loss carryovers.
• Ongoing military conflicts in Ukraine and the Middle East added as new risks.
• The Company's loan portfolio decreased by $227.9 million in 2023, from $3.735 billion to $3.507 billion.
• Amended Supplemental Executive Retirement Agreement dated February 26, 2024, with Milton R. Cole, Jr. This change increases benefits significantly.
• Net Interest Income at Risk increased by 300 bps from 12.4% to 15.4%.
• Implementation of Incentive Compensation Recovery Policy effective October 2, 2023, for Executive Officers.
• Recent negative developments led to significant market volatility impacting customer confidence.
• Land proceeds increased by $416 million to $712 million.
• Allowance for Credit Losses increased by $16.8 million from $38.9 million to $54.7 million.
• Employee benefits increased with ESOP shares and SERP expenses rising to $24k in 2023.
• The Company acquired loans with a gross contractual amount of approximately $1.125 billion, with $16.5 million not expected to be collected.
• The Company repurchased $289.3 million of common stock in 2022, compared to $165.6 million in 2023.
• Amended Supplemental Executive Retirement Agreement dated February 26, 2024, with Donna T. Lowery. This change enhances benefits significantly.
• Definition of "Erroneously Awarded Compensation" added, detailing excess compensation recovery procedures.
• Comprehensive income increased to $106.8 million in 2023 from a loss of $94.0 million in 2022.
• Interest rate swaps were adjusted, with fair value changes impacting income by $1.3 million.
• Net interest income increased to $249.3 million in 2023 from $177.8 million in 2022.
• Expansion of Policy to cover recovery of Erroneously Awarded Compensation from Other Covered Persons.
• Second Amendment to Supplemental Executive Retirement Plan Agreement dated May 15, 2014. This amendment impacts benefits.
• Cash paid for acquisitions increased from $23 million to $106 million.
• Acquisition of HSBI and Heritage Southeast Bank in 2023 may result in goodwill impairment.
• The Company recorded a provision for credit losses of $13.8 million in 2023, compared to $5.4 million in 2022.
• Nonaccrual loans decreased by $15.1 million from $28.6 million to $13.5 million.
• Net interest margin increased to 3.59% in 2023 from 3.19% in 2022.
• Net cash provided by operating activities increased to $108.5 million in 2023 from $90.0 million in 2022.
• Total loans increased by $1.381 billion, or 37.0%, from $3.735 billion in 2022 to $5.116 billion in 2023.
• Financing activities saw an increase in deposits from $223 million to $427 million.
• Total non-interest income decreased to $46.7 million in 2023 from $36.9 million in 2022.
• First Amendment to Supplemental Executive Retirement Plan Agreement dated January 1, 2020. This amendment increases benefits.
• The Company amended SERP agreements in 2023, impacting retirement benefits for key executives.
• Total deposits increased by $968.5 million from $5.494 billion to $6.463 billion.
• Total assets increased to $7.999 billion in 2023 from $6.462 billion in 2022.
• Changes in Vested Percentage in the Agreement from January 1, 2024, to January 31, 2027. These changes affect benefit calculations.
• Total assets increased by $1.538 billion to $7.999 billion at December 31, 2023.
• Interest-bearing deposits cost increased by 120 bps from 0.37% to 1.57%.
• The Company's income tax expense increased from $10.563 million in 2022 to $21.347 million in 2023.
• Operating segments saw changes in interest income, with 2023 showing $340,933 compared to $199,937 in 2022.
• Derivative financial instruments were detailed, with swaps and fair values reported for 2023.
• Loans increased to $5.119 billion at December 31, 2023, from $3.740 billion at December 31, 2022.
• The Company's total risk-based capital ratio decreased from 16.7% in 2022 to 15.0% in 2023.
• The Company redeemed all $24.0 million of the outstanding 5.875% fixed-to-floating rate subordinated notes due 2028.
• Changes in Distribution Event Benefits and Timing of Distributions in the Agreement. These changes impact benefit payments.
• Quarterly results showed fluctuations, with net income varying from $16,271 to $23,779 in 2023.
• The amortized cost of PCD loans increased from $24.0 million in 2022 to $57.8 million in 2023.
• Changes in the Company's authorized shares from 31,063,780 to 40,000,000. This change affects the company's capital structure.
• The Notes due 2033 have a fixed annual interest rate of 6.40% for the first ten years.
• Deposits increased to $6.463 billion at December 31, 2023, from $5.494 billion at December 31, 2022.
• The Company's right-of-use assets increased from $6.489 million in 2022 to $9.550 million in 2023.