Risk Factors Update Summary

• The company could fail to fund the SBA, impacting loan originations and results of operations.
• The Federal Reserve raised interest rates in 2022 and 2023, impacting future monetary policy changes.
• Increased use of mobile and cloud technologies heightens operational risks due to remote work.
• Risks related to operation as a financial holding company were significantly expanded, including regulatory violations and loss of pass-through tax treatment.
• Increased competition in the lending market may negatively impact loan origination volume and profitability.
• NSBF funded approximately 10,570 PPP loans totaling $1.19 billion during the PPP duration.
• Risks related to the economy were detailed, including global conditions, inflation, and impacts of terrorist attacks or natural disasters.
• SEC rules now require disclosure of material cybersecurity incidents within four business days.
• Changes to SBA Section 7(a) Program regulations could reduce loan origination volume and profitability.
• Risks related to regulation, supervision, and compliance structure were emphasized, highlighting the need for stringent capital and liquidity regulations.
• The termination of NTS activities may negatively impact revenue, income, and cybersecurity risk management.
• Climate change poses physical and financial risks, affecting energy products and services.
• The 2024, 2025, 2026, and 2028 Notes are unsecured and effectively subordinated to secured indebtedness.
• The company's transition to a financial holding company brought about extensive changes in accounting and financial reporting requirements.
• The company redeemed $40.0 million of the 2024 Notes in December 2021.
• Increased governmental and regulatory scrutiny or negative publicity could adversely affect the company's reputation, cash flow, and results of operations.
• The company may redeem outstanding Notes, impacting the ability of holders to reinvest at comparable rates.
• Economic recessions or downturns could impair the company's clients, leading to non-performing assets and decreased portfolio value.
• The trading market for publicly traded debt securities may fluctuate based on various factors.
• Changes in interest rates could negatively impact the company's results of operations and financial condition, affecting its interest rate spread.