What changed in this filing

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Item 1. Business

2025-03-07 compared with 2024-03-15 · 28 added, 65 removed, 688 unchanged (12% of the section changed)

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We believe our integrated business model distinguishes us from other banks and non-bank financial services companies in the markets in which we operate.

As of December 31, 2023, we provided fiduciary and advisory services on $6.75 billion of trust and investment management assets ("AUM"), and we had total assets of $2.98 billion, total loans, excluding mortgage loans held for sale, of $2.53 billion, total deposits of $2.53 billion and total shareholders’ equity of $242.7 million.

As of December 31, 2024, we provided fiduciary and advisory services on $7.32 billion of trust and investment management assets ("AUM"), and we had total assets of $2.92 billion, total loans excluding mortgage loans held for sale and loans held for sale of $2.43 billion, total deposits of $2.51 billion, and total shareholders’ equity of $252.3 million.

Our mission is to be the best private bank for the Western wealth management client.

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Our target clients include successful entrepreneurs, professionals and other high net worth individuals or families, along with their businesses and philanthropic organizations.

We offer our services through a branded network of boutique private trust bank offices, loan production offices, and trust offices, which we believe are strategically located in affluent and high-growth markets in eighteen locations across Colorado, Arizona, Wyoming, Montana, and California.

We offer our services through a branded network of boutique private trust bank offices, loan production offices, and trust offices, which we believe are strategically located in affluent and high-growth markets in twenty locations across Colorado, Arizona, Wyoming, Montana, and California.

We generate a significant portion of our revenues from non-interest income, which we produce from our trust, investment management, and other advisory services as well as through the origination and sale of mortgage loans.

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Since we completed an initial public offering of our common stock on July 23, 2018, our common stock has been listed on the Nasdaq Global Select Market under the symbol "MYFW."

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Our Business Strategy

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• Deepening Existing Client Relationships.

We deliver our services though our eighteen local boutique private trust bank offices, loan production offices, and trust offices.

We deliver our services though our twenty local boutique private trust bank offices, loan production offices, and trust offices.

This allows us to use multi-discipline sales and client service teams, in-market, to ensure we are meeting each client’s comprehensive set of needs.

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A key part of our strategy is to continue to enhance our funding sources by continuing to build our private and commercial banking capabilities to keep building our base of attractively priced core deposits.

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• Attracting Talent .

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Our mortgage banking loan sales activities are primarily directed at originating single family mortgages, which generally conform to Fannie Mae and Freddie Mac guidelines and are delivered to the investor shortly after funding.

Additionally, we offer installment loans and lines of credit, typically to facilitate investment opportunities for consumer clients whose financial characteristics support the request.

Additionally, we offer installment loans and lines of credit, which are typically to facilitate investment opportunities for consumer clients whose financial characteristics support the request.

We also provide clients loans collateralized by cash and marketable securities.

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We employ experienced banking and business development teams who provide superior client service, value-add lending solutions and competitive pricing to market our lending products and services.

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Generally, our loans conform to Fannie Mae and Freddie Mac underwriting guidelines and conform to internal policies for debt-to-income or free cash flow levels.

We retain a valid lien

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on real estate, obtain a title insurance policy that insures that the property is free from encumbrances and require hazard insurance.

We retain a valid lien on real estate, obtain a title insurance policy that insures that the property is free from encumbrances and require hazard insurance.

Our focus for mortgage lending is to originate high-quality loans to drive growth in our mortgage loan portfolio.

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These loans are primarily dependent on the strength of the industries of the related borrowers and the success of their businesses.

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Construction and Development .

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We place a considerable emphasis on effective risk management and preserving sound credit underwriting standards as we grow our loan portfolio.

Underwriting considerations include collateral, defined sources of repayment, strength of guarantor(s) and opportunities to broaden the relationship with the client.

Underwriting considerations include adherence to credit policy, collateral, defined sources of repayment, strength of guarantor(s) and opportunities to broaden the relationship with the client.

Our credit policy requires key risks be identified and measured, documented and mitigated, to the extent possible, to seek to ensure the soundness of our loan portfolio.

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Historically, we believe we have made sound, high quality loans while recognizing that lending money involves a degree of business risk.

We have loan policies designed to assist us in managing this business risk.

We have credit policies designed to assist us in managing this business risk.

These policies provide a general framework for our loan origination, monitoring and funding activities, while recognizing that not all risks can be anticipated.

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Our processes emphasize early stage review of loans, regular credit evaluations and management reviews of loans, which supplement the ongoing and proactive credit monitoring and loan servicing provided by our bankers.

Our Chief Credit Officer, together with our central underwriting, credit administration and loan operations teams, provides credit oversight.

Our Chief Risk Officer, together with our central underwriting, credit administration and loan operations teams, provides credit oversight.

We periodically review all credit risk portfolios to ensure that the risk identification processes are functioning properly and that our credit standards are followed.

In addition, a third-party loan review is performed to assist in the identification of problem assets and to confirm our internal risk rating of loans.

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Our loan policies include other underwriting guidelines for loans collateralized by real estate.

Our credit policies include other underwriting guidelines for loans collateralized by real estate.

These underwriting standards are designed to determine the maximum loan amount that a borrower has the capacity to repay based upon the type of collateral securing the loan and the borrower’s income.

Such loan policies include maximum amortization schedules and loan terms for each category of loans collateralized by liens on real estate.

In addition, our loan policies provide guidelines for personal guarantees;

an environmental review;

loans to employees;

executive officers and directors;

problem loan identification;

maintenance of an adequate allowance for credit losses;

and other matters relating to lending practices.

Such credit policies include maximum amortization schedules and loan terms for each category of loans collateralized by liens on real estate.

In addition, our credit policies provide guidelines for personal guarantees, an environmental review, loans to employees, executive officers and directors, problem loan identification, maintenance of an adequate allowance for credit losses, and other matters relating to lending practices.

We believe that an important part of our assessment of client risk is the ongoing completion of periodic risk rating reviews.

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Lending Limits.

Our lending activities are subject to a variety of lending limits imposed by state and federal regulation.

Our lending activities are subject to a variety of lending limits imposed by state and federal regulations.

The Bank is subject to a legal lending limit on loans to related borrowers based on the Bank’s capital level.

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We have experienced banking and business development teams who we believe provide superior client service, creative cash management solutions and competitive pricing to market our depository products and services.

As of December 31, 2023 , total deposits we re $2.53 billion, a n increase of $123.8 million, or 5.1%, compared to $2.41 billion as of December 31, 2022.

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As of December 31, 2023 , our deposit portfolio contained a balanced and diverse mix of deposits, as shown below:

As of December 31, 2024 , total deposits we re $2.51 billion, a n decrease of $14.8 million, or 0.6%, compared to $2.53 billion as of December 31, 2023.

As of December 31, 2024 , our deposit portfolio contained a diverse mix of deposits, as shown below:

Trust and Investment Management, Advisory

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As of December 31, 2024 , total AUM was $7.32 billion, an increase of $568.0 million, or 8.4%, compared to $6.75 billion as of December 31, 2023.

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As of December 31, 2024 , we provided fiduciary and advisory services on $7.32 billion of trust and investment management assets, as shown below:

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By combining internal research and a dedicated team of accredited specialized advisors like Chartered Financial Analysts and Certified Financial Planners with our pairing of proprietary and third-party investment options, we create unique solutions tailored to the specific needs of each of our clients.

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Other Products

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Sales and marketing support is provided centrally but delivered locally.

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• Our investment platform is controlled by our central investment research group, which has a strong research focus and includes many associates who have Chartered Financial Analyst designations, with oversight by our Chief Investment Officer and our Investment Policy Committee.

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In addition, business resiliency testing and planning ensures the capability of critical vendors to fail over to fully-hot replicated systems that provide complete redundancy in the event of a disaster.

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Enterprise Risk Management

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Our Enterprise Risk Management ("ERM") Committee oversees our ERM program.

This group contains key members of management including the Chief Executive Officer, the Chief Operating Officer, and the Chief Financial Officer.

This group contains key members of management including the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, and the Chief Risk Officer.

In order to carry out the ERM program, we have developed the following objectives to:

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The financial services industry is highly competitive and we compete in a number of areas, including commercial and consumer banking, residential mortgages, wealth advisory, investment management, trust, and insurance, among others.

We compete with other bank and nonbank institutions located within our market area, along with competitors situated regionally, nationally or with only an online presence.

We compete with other bank and non-bank institutions located within our market area, along with competitors situated regionally, nationally or with only an online presence.

These include large banks and other financial intermediaries, such as consumer finance companies, brokerage firms, mortgage banking companies, business leasing and finance companies and insurance agencies, as well as major retailers, all actively engaged in providing various types of loans and other financial services.

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Associates are our trusted partners both within their teams and with our clients as we build a partnership for generations to come.

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We strive to be a high performing financial institution producing consistent, strong financial results, coming from a well-executed strategy.

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We believe that our strong relationships with our associates are central to establishing the corporate culture we need to serve our clients, shareholders, and our communities well.

We are committed to implementing diverse, equitable and, inclusive ("DEI") policies and practices across the Company.

We are committed to implementing diverse, equitable, and inclusive policies and practices across the Company.

Our corporate values speak directly to the spirit of inclusion as well as the importance of embracing diversity and equitable practices.

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Our compensation program includes competitive salary/hourly pay and incentive pay in the form of an annual bonus and stock awards to officers and certain members of the management team.

We have significant insider ownership, and, in 2021, the Board approved stock ownership guidelines applicable to our executive officers and other key position holders to further align management and shareholder interests.

We have significant insider ownership and the Board of Directors has approved stock ownership guidelines applicable to our executive officers and other key position holders to further align management and shareholder interests.

In addition, the Company offers a 401(k) Plan with an employer matching contribution.

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Our structure, with local teams and central experts, is designed to serve clients that have assets, liabilities, families, businesses, and long term goals that each require different types of expertise.

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Respectful – For First Westerners, Respectful means valuing the unique knowledge and experiences each stakeholder brings to a discussion.

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They may also require us to provide financial support to any bank that we control, maintain capital balances in excess of those desired by management, and pay higher deposit insurance premiums as a result of a general deterioration in the financial condition of the Bank or other depository institutions we control.

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The description below summarizes certain elements of the applicable bank regulatory framework.

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In addition, these rules include greater recognition of collateral and guarantees, and revised capital treatment for derivatives and repo-style transactions.

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The federal bank regulators have modified certain aspects of the Basel III Capital Rules since the rules were initially published, and additional modifications may be made in the future.

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Among other things, these standards revise the Basel Committee’s standardized approach for credit risk (including by recalibrating risk weights and introducing new capital requirements for certain "unconditionally cancellable commitments," such as unused credit card lines of credit) and provides a new standardized approach for operational risk capital.

Under the Basel framework, these standards will generally be effective on January 1, 2023, with an aggregate output floor phasing in through January 1, 2028.

Under the Basel framework, these standards were generally effective on January 1, 2023, with an aggregate output floor phasing in through January 1, 2028.

On September 9, 2022, the U.S.

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The Company filed an election and became a financial holding company in 2006.

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Sound Banking Practices.

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In reviewing applications seeking approval of merger and acquisition transactions, the bank regulatory authorities generally consider, among other things, the competitive effect and public benefits of the transactions, the financial and managerial resources and future prospects of the combined organization (including the capital position of the combined organization), the applicant’s performance record under the Community Reinvestment Act, (see the section captioned "Community Reinvestment Act" included below in this item), fair housing laws and the effectiveness of the subject organizations in combating money laundering activities.

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The Company is also subject to the Change in Bank Control Act of 1978 ("Control Act") and related Federal Reserve regulations, which provide that any person who proposes to acquire at least 10% (but less than 25%) of any class of a bank holding company’s voting securities is presumed to control the company (unless the company is not publicly held or some other shareholder owns a greater percentage of voting stock).

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The FDIC may also direct state nonmember banks that are poorly rated or subject to written supervisory actions not to pay dividends in order to ensure adequate capital exists to support their risk profile.

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In 2009, the Federal Reserve issued a supervisory letter providing greater clarity to its policy statement on the payment of dividends by bank holding companies.

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Regulation Y requires that a bank holding company that is not well capitalized or well managed, or that is subject to any unresolved supervisory issues, provide prior notice to the Federal Reserve for any repurchase or redemption of its equity securities for cash or other value that would reduce by 10% or more the holding company’s consolidated net worth aggregated over the preceding 12-month period.

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Annual Reporting;

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However, the revised capital requirements of the proposed rule would not apply to the Company or the Bank because they have less than $100 billion in total consolidated assets and trading assets and liabilities below the threshold for market risk requirements.

In August 2022, the Inflation Reduction Act of 2022 (the “IRA”) was enacted.

Among other things, the IRA imposes a new 1% excise tax on the fair market value of stock repurchased after December 31, 2022 by publicly traded U.S.

corporations.

With certain exceptions, the value of stock repurchased is determined net of stock issued in the year, including shares issued pursuant to compensatory arrangements.

Imposition of Liability for Undercapitalized Subsidiaries.

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As of December 31, 2024 an d 2023, the Bank exceeded all regulatory minimum capital requirements.

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Prompt Corrective Regulatory Action.

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well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.

Under the FDIC’s prompt corrective action regulations, an institution is deemed to be "well capitalized" if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a CET1 risk-based capital ratio of 6.5% or greater and a leverage capital ratio of 5.0% or greater.

An institution is "adequately capitalized" if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a CET1 risk-based capital ratio of 4.5% or greater and a leverage capital ratio of 4.0% or greater.

An institution is "undercapitalized" if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a CET1 risk-based capital ratio of less than 4.5% or a leverage capital ratio of less than 4.0%.

An institution is deemed to be "significantly undercapitalized" if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a CET1 capital ratio of less than 3.0% or a leverage capital ratio of less than 3.0%.

An institution is considered to be "critically undercapitalized" if it has a ratio of tangible equity to total assets that is equal to or less than 2.0%.

Under the FDIC’s prompt corrective action regulations, an institutions capitalization is deemed to be as follows:

• "Well capitalized" if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a CET1 risk-based capital ratio of 6.5% or greater and a leverage capital ratio of 5.0% or greater.

• "Adequately capitalized" if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a CET1 risk-based capital ratio of 4.5% or greater and a leverage capital ratio of 4.0% or greater.

• "Undercapitalized" if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a CET1 risk-based capital ratio of less than 4.5% or a leverage capital ratio of less than 4.0%.

• "Significantly undercapitalized" if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a CET1 capital ratio of less than 3.0% or a leverage capital ratio of less than 3.0%.

• "Critically undercapitalized" if it has a ratio of tangible equity to total assets that is equal to or less than 2.0%.

Undercapitalized institutions are subject to growth limitations and are required to submit a capital restoration plan to the FDIC.

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If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors, including the parent bank holding company, with respect to any extensions of credit they have made to such insured depository institution.

In November 2023, the FDIC issued a final rule to implement a special assessment to recover losses to the DIF incurred as a result of recent bank failures and the FDIC's use of the systemic risk exception to cover certain deposits that were otherwise uninsured.

In November 2023, the FDIC issued a final rule to implement a special assessment to recover losses to the DIF incurred as a result of 2023 bank failures and the FDIC's use of the systemic risk exception to cover certain deposits that were otherwise uninsured.

The special assessment was based on estimated uninsured deposits as of December 31, 2022 (excluding the first $5.0 billion) and will be assessed at a quarterly rate of 3.36 basis points, over eight quarterly assessment periods, beginning in the first quarter of 2024.

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The extent to which any such additional future assessments will impact our future deposit insurance expense is currently uncertain.

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Consumer Financial Protection.

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Undercapitalized institutions are generally not permitted to accept, renew, or roll over brokered deposits.

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Community Reinvestment Act.

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The privacy provisions of the GLB Act affect how consumer information is transmitted through diversified financial companies and conveyed to outside vendors.

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Anti-Money Laundering.

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The Company’s CRE concentrations are discussed in the "Risk Factors" section below.

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Interstate Banking and Branching

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Limitations on Incentive Compensation

In June 2016, several federal financial agencies (including the Federal Reserve and FDIC) re-proposed restrictions on incentive-based compensation pursuant to Section 956 of the Dodd-Frank Act for financial institutions with $1 billion or more in total consolidated assets.

In 2016, several federal financial agencies (including the Federal Reserve and FDIC) re-proposed restrictions on incentive-based compensation pursuant to Section 956 of the Dodd-Frank Act for financial institutions with $1 billion or more in total consolidated assets.

For institutions with at least $1 billion but less than $50 billion in total consolidated assets, the proposal would impose principles-based restrictions that are broadly consistent with existing interagency guidance on incentive-based compensation.

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If we fail to remain compliant with changing components of this regulation, we could be subject to various regulatory sanctions, including financial penalties.

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The FFIEC's examination procedures regarding overall business continuity management ("BCM") focus on enterprise-wide approaches that address technology, business operations, testing, and communication strategies critical to the continuity of the business.

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the dynamics of smaller institutions being at a disadvantage in securing preferred contract terms given the current market concentration;

The increasingly complex and diverse global landscape for cloud services providers and users to be compliant and to also be able to weather operational challenges with inconsistent regulatory frameworks.

and the increasingly complex and diverse global landscape for cloud services providers and users to be compliant and to also be able to weather operational challenges with inconsistent regulatory frameworks.

In 2023, the Treasury Department conveyed its commitment to work with financial regulators, industry, and cloud service providers to drive increased collaboration and transparency by building trust and cooperation to promote safe and effective migration for financial institutions choosing to adopt cloud services.

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Under this rule, banking organizations that are SEC registrants must generally disclose information about a material cybersecurity incident within four business days of determining it is material with periodic updates as to the status of the incident in subsequent filings as necessary.

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Anti-Money Laundering Act of 2020

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The nature of future monetary policies and the effects of these policies on the Bank’s business and earnings cannot be predicted.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business