Dime Commercial Bancshares, Inc.

The Company's reputation is important to our success. Our ability to attract and retain customers, investors, employees and advisors may depend upon external perceptions of the Company. Damage to the Company's reputation could cause significant harm to our business and prospects and may arise from numerous sources, including litigation or regulatory actions, compliance failures, cybersecurity incidents, errors in the use of artificial intelligence, customer services failures, or unethical behavior or misconduct of employees, advisors and counterparties. In addition, third parties with whom the Company has relationships with may take actions the Company has limited control over that could negatively impact perceptions about the Company or the financial services industry. Adverse developments with respect to the financial services industry may also, by association, negatively impact the Company's reputation or result in greater regulatory or

The potential reliance on and integration of artificial intelligence (“AI”) and machine learning (“ML”) technologies expose us to various risks, including operational, data, regulatory, and reputational risks, which could materially affect our business and financial results.

● Operational & Model Risk: Potential AI/ML models, used for credit scoring, fraud detection, customer service, and investment decisions, rely on complex algorithms and vast datasets. Errors, biases, or "hallucinations" (generating false information) in these models, or unexpected system failures, could lead to flawed decisions, financial losses, compliance failures, or degraded customer experiences, impacting profitability and client retention.

● Data Security & Privacy: AI systems process sensitive customer data. Security breaches or unauthorized access to these systems could result in data theft, loss of intellectual property, and significant penalties, damaging customer trust.

● Regulatory & Compliance Risk: The regulatory landscape for AI is rapidly evolving. New laws could impose costly compliance burdens, restrict AI use, or introduce liabilities, particularly concerning algorithmic bias and fair lending practices (e.g., "digital redlining"), potentially increasing operational costs and limiting service offerings.

● Talent & Third-Party Risk : Attracting and retaining skilled AI professionals is crucial and competitive. We also depend on third-party AI vendors, creating dependency risks and potential issues with data handling, model reliability, and licensing, all of which could disrupt operations.

● Reputational & Ethical Risk : Misuse of AI, biased outcomes, or privacy violations can harm our brand, erode customer confidence, and attract negative public attention, potentially affecting demand for our services.

If we cannot effectively manage these challenges, including adapting to rapid technological change and ensuring responsible AI governance, our reputation, competitive position, and financial performance could be significantly harmed.

We may be subject to IP rights claims from third parties claiming ownership of, or demanding the release or license of, modifications or derivative works that we have developed using open-source software (which could include our proprietary source code or AI models), or otherwise seeking to enforce the terms of the applicable open-source license. Our applications and uses of trademarks relating to our design, software or AI technologies could be found to infringe upon existing trademark ownership and rights.

IP Rights – Generative AI-Related Infringement by Registrant

We utilize some open-source software that may include generative AI software or other software that incorporates or relies on generative AI. Software that includes generative AI may incorporate data from entities and the use of that data may itself be illegal and/or violate contractual or IP rights. By using such software, we may expose the company to risks as the IP ownership and license rights, including copyright, of generative AI software and tools, have not been fully interpreted by U.S. courts or been fully addressed by federal, state, or international regulations. In addition, any use of generative AI by our customers may lead to additional claims of IP infringement.