Risk Factors Update Summary

• Adverse developments in the financial services industry may impact operations. Recent events caused uncertainty and concern regarding liquidity adequacy, leading to potential reputational risk, deposit outflows, increased costs, and competition for liquidity. This could have a material adverse effect on financial condition and results of operations.
• Banking segment faces risks from weaknesses in the commercial real estate market. Commercial real estate loans comprised approximately 39% of the loan portfolio, with potential credit risks due to adverse economic conditions and changes in regulations. Inadequate risk management could lead to increased delinquencies and losses, impacting business, financial condition, and results of operations.
• Data breach incident affecting customers' information. Unauthorized party obtained data, including social security numbers and account numbers, leading to potential litigation, regulatory scrutiny, expenses, and ongoing risks and uncertainties.
• Mortgage origination segment experienced lower-than-forecasted operating results due to tight housing inventories, customer sensitivity to economic forecasts, and rapid increases in U.S. treasury yields and mortgage interest rates. Broker-dealer segment faced challenges from macroeconomic conditions, resulting in variability in operating results.
• Changes in interest rates impacting profitability. Interest rates increased by 525 basis points between March 2022 and December 2023, potentially affecting margins and profitability.
• Cybersecurity incidents pose risks. Continued occurrence of cyber incidents could adversely affect reputation and financial condition, with potential disruptions in customer relationships.
• Environmental liabilities risk. Subject to liabilities for property damage or personal injury, which could harm financial condition and results of operations.