Challenges Ahead

• Anticipate continued increases in our cost-of-funds in response to the current interest rate environment, which may negatively impact our net interest margin in the future.
• We anticipate continued increases in our cost-of-funds due to the current short-term interest rate environment.
• These increases may negatively impact our net interest margin in future quarters.
• The increase in the allowance as a percentage of loans was general reserve driven considering loan growth and qualitative factors associated with the current uncertain economic environment including, but not limited to, its potential impact on the New York metro commercial real estate market.
• Our deposit cost-of-funds, excluding demand deposits, increased 88 basis points in the current quarter when compared to 2022 due to increases in short-term interest rates as well as management pro-actively increasing rates on escrow accounts in the various states where we operate (interest on lawyer trust accounts or IOLTA).