First Bancorp, Inc

As a result of recent innovations related to generative artificial intelligence ("AI"), the Bank has established a cross-functional task force to analyze current and future use cases for AI and to promote effective and secure implementation. The task force has developed a policy to govern the permissible use of AI tools. Currently employees have access to generative AI applications for limited productivity and research purposes. The tools are not integrated into the Bank's core systems, automated workflows, underwriting, fraud decisioning compliance monitoring, or other customer-facing processes. The Bank does not intentionally input customer data into external generative AI platforms. Traditional machine-learning capabilities remain embedded within certain long-standing third-party banking applications, consistent with industry practice. The Bank continues to evaluate potential operational, regulatory, data security, and other opportunities and risks associated with AI technologies.

The financial services industry is continually undergoing technological change with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial institutions to better serve customers and to reduce costs. Our future success depends, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in our operations. Our largest competitors have substantially greater resources to invest in technological improvements. We may not be able to effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers. Failure to successfully keep pace with technological change affecting the financial services industry, and increased costs due to efforts to keep pace with change, could have a material adverse effect on us. To date, there has been no material adverse effect on our business or operations due to failure of keeping pace with technological change. As a result of recent innovations related to artificial intelligence ("AI"), the Bank has created a task force to analyze current and future use cases for AI to ensure it is used effectively and securely.