Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• Downturn in local economic conditions could negatively impact the Bank’s business.
• Reliance on the Federal Home Loan Bank system may adversely affect our liquidity and/or capital position.
• Fluctuations in interest rates may negatively impact the Bank’s business.
• Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.
• Environmental liability associated with commercial real estate lending could result in losses.
• The Bank’s loan loss reserves may prove to be insufficient if future economic conditions deteriorate.
• Competition from financial institutions and other financial service providers may adversely affect our growth and profitability.
• We could be adversely affected by the loss of one or more key employees or an inability to attract and retain qualified personnel.
• Damage to our reputation could significantly harm our business, including our competitive position and business prospects.
• We invest a portion of our stockholder capital in equity securities, which may result in significant variability in our investment results and may negatively impact stockholders’ equity and reported earnings.
• Our business may be adversely affected if we fail to adapt our products and services to evolving industry standards and consumer preferences.
• System failure or breaches of our network security could subject us to increase operating costs as well as possible liability and damage our reputation.
• Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems and third-party servicers.
• Natural disasters, acts of terrorism, climate change, and other external events could harm our business.
• Possible U.S. federal tax code changes could adversely affect us.
• Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.

Mitigation Strategies

• The Bank has adopted asset and liability management policies that are intended to minimize the potential adverse effects of changes in interest rates on net interest income, primarily by altering the mix and maturity of loans, investments and funding sources.
• The Bank conducts three mutually supporting programs to maintain and monitor the credit quality of the portfolio: Internal Quality Control, Independent Loan Review, Stress Testing.
• The Bank seeks to mitigate environmental risks by conducting pre-origination environmental due diligence on commercial real estate and generally acquires title to foreclosed real estate through special purpose entities designed to limit the Bank’s liability.
• The Bank maintains an allowance for loan losses based upon, among other things, historical losses, loan-to-value ratios, underlying collateral values, payment history, the size of the loan portfolio and the risks associated with certain loan types, as well as other factors such as local economic trends, real estate market conditions and credit concentrations.
• We may not be successful in developing or introducing new products and services, integrating new products or services into our existing offerings, responding or adapting to changes in consumer behavior, preferences, spending, investing and/or saving habits, achieving market acceptance of our products and services, reducing costs in response to pressures to deliver products and services at lower prices or sufficiently developing and maintaining loyal customers.
• Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operational procedures to prevent such damage, our security measures may not be successful.
• While we have general liability insurance and cyber liability insurance, there are limitations on coverage as well as dollar amount.
• We have established and regularly test disaster recovery procedures.
• The Bank carefully manages its balance sheet to control the deposit insurance expense associated with excess liquidity.
• The Bank continues to carefully manage these expenses and focus marketing efforts on the Bank’s Commercial Real Estate and Specialized Deposit Groups.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• natural disasters

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacted rental income from apartments above Nantucket branch in 2020.
• COVID-19 pandemic impacted customer service fees on deposits in the first quarter of 2020.

Mitigation Strategies

• Continued focus on credit quality and disciplined expense control.
• Managed core product rates, implemented special offerings, and continued to use wholesale time deposits to remain competitive while providing a cost-efficient means for balanced growth.
• Carefully managed its wholesale funding mix allocation based on market conditions to reduce the Bank’s cost on interest-bearing liabilities and improve the Bank’s net interest margin.
• Worked with residential borrowers experiencing economic hardship to craft solutions, generally providing three to six-month interest-only periods.
• Worked collaboratively with commercial customers to identify reasonable restructuring solutions, requiring interest-carry reserves and/or additional consideration for modifications.

Supply Chain Management

Climate-Related Risks & Opportunities