Risk Factors Update Summary

• A downturn in economic conditions may result in elevated loan delinquencies, increasing our allowance for loan losses from $16.2 million to $18 million.
• Our evaluation of goodwill involves substantial judgement; incorrect judgement could lead to a non-cash charge impacting earnings significantly.
• The company faces risks from climate change, which could adversely impact our financial performance and the value of collateral securing loans.
• New branches may initially weigh on earnings until they achieve economies of scale, impacting profitability.
• New SEC climate-related disclosure rules could increase reporting costs and complexity, impacting our financial condition and results of operations.
• Increasing scrutiny on ESG practices may impose additional costs and negatively affect our reputation and operations.
• The allowance for loan losses may need to increase due to deteriorating economic conditions, potentially affecting our financial performance significantly.
• The inability to receive dividends from the Bank could jeopardize our ability to meet creditor claims.
• Cybersecurity threats are pervasive, with increased risks of data breaches potentially leading to reputational damage and financial losses.