Risk Factors Update Summary

• Ownership of common stock involves risks inherent in dealing with material shortages, supply chain difficulties, and inflationary pressures, which could adversely affect net income.
• The commercial real estate loan portfolio increased from $393 million to $412 million, with owner-occupied loans increasing from 20.6% to 20.7% of loans HFI.
• The loan portfolio increased from approximately $310.1 million to $315.3 million, with commercial and movable property collateral that may decline in value rapidly.
• The FDIC Board of Directors approved a final rule to implement a special assessment from banking organizations with $5.0 billion or more in total assets to recover the loss to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.
• Potential impact on earnings due to new factor. This change could reduce earnings by 33%.
• The construction and development loans for commercial real estate activities increased from $560.6 million to $566.6 million, or from 28.4% to 29.2% of loans HFI.
• The allowance for loan losses increased from $20.6 million to $21.3 million, representing approximately 1.08% to 1.07% of loans HFI.
• The net unrealized gains and losses on securities AFS fluctuated, impacting the accumulated other comprehensive income in equity.