Risk Factors Update Summary

• The Department announced a broad-based student debt relief plan with conditional loan cancellation up to $20,000.
• Loan Portfolio now includes investment interests, increasing exposure to prepayment and credit risks.
• Failure to extend Department contracts could significantly reduce loan servicing revenue and impact operations.
• The CFPB closely monitors student loan servicers post-repayment restart in October 2023, risking non-compliance consequences.
• The extension of the CARES Act payment pause could further increase loan prepayments.
• The Administration's Executive Order on AI safety and security may impact AI use and reporting requirements.
• Changes in laws and regulations could significantly alter business operations and product offerings.
• Regulatory changes may increase compliance costs and litigation exposure, impacting profitability.
• The transition from LIBOR to SOFR could significantly impact derivatives, with a decrease in fixed rate floor income.
• Ownership voting rights shifted slightly, with Union Bank now owning 7.0% and individuals owning 81.4% and 0.9%.
• Income from transactions with Union Bank decreased from $11.0 million to $8.9 million in 2023.