Risk Factors Update Summary

• Lawmakers' failure to address the federal debt ceiling may affect securities valuation and increase borrowing costs. This includes $23.2 million in U.S. government agency securities and $128.6 million in residential mortgage-backed securities.
• The company adopted the CECL model, replacing the incurred loss model, potentially requiring a significant increase in the provision for credit losses.
• The company's non-interest expenses totaled $36.4 million for the year ended December 31, 2023, compared to $35.4 million for the year ended December 31, 2022.
• Total deposits decreased by $99.4 million, or 8.8%, to $1.031 billion at December 31, 2023, from $1.130 billion at December 31, 2022. This led to an increase in Federal Home Loan Bank advances to $128.1 million at December 31, 2023.
• The company's assets decreased by $22.8 million, or 1.7%, from $1.336 billion at December 31, 2022, to $1.313 billion at December 31, 2023, primarily due to decreases in cash and available-for-sale securities, partially offset by an increase in loans.
• Our efficiency ratio totaled 83.28% for the year ended December 31, 2023, compared to 78.40% for the year ended December 31, 2022.
• The company's non-owner occupied commercial real estate loans increased to $304.8 million, or 30.3% of the total loan portfolio, at December 31, 2023, from $112.4 million, or 11.8% of the total loan portfolio, at December 31, 2022.