Bank of South Carolina Corporation (BKSC): PESTLE Analysis [Nov-2025 Updated]

You're looking for a clear, no-nonsense assessment of the external forces shaping Bank of South Carolina Corporation (BKSC) right now. As a regional community bank operating primarily in the Charleston area, its PESTLE profile is a mix of national regulatory shifts and strong local economic tailwinds. Here's the quick math: the bank is performing exceptionally well, with nine-month 2025 net income at $5,893,809, but regulatory change is a defintely persistent overhead cost. You need to know how the Federal Reserve's outlook, new 'open banking' rules, and coastal climate risk will impact that 14.03% Annualized Return on Average Equity.

Bank of South Carolina Corporation (BKSC) - PESTLE Analysis: Political factors

Federal Reserve's outlook suggests one or two potential rate cuts in 2025.

The Federal Reserve's (the Fed) monetary policy is the single biggest political factor impacting Bank of South Carolina Corporation (BKSC)'s net interest margin (NIM). The consensus from major financial institutions in late 2025 is that the Fed is nearing the end of its tightening cycle, but the path to rate cuts is still uneven.

As of November 2025, the federal funds rate is sitting in a range of 3.75% to 4.0%. The market is pricing in a pause, but the forward outlook suggests easing is coming. For example, J.P. Morgan Global Research projects two more rate cuts in 2025. Morgan Stanley's forecast is even more aggressive, projecting cuts in January, April, and June of 2026, which would bring the terminal rate down to 3.0% to 3.25%. For a community bank like BKSC, lower rates mean cheaper funding, but also pressure on loan yields, so the timing of any cut is defintely critical.

Here's the quick math: A drop in the federal funds rate will immediately lower the cost of wholesale funding, but it will also compress the yield curve, making long-term lending less profitable. Wells Fargo forecasters project that mortgage rates, which are a core product for community banks, are likely to fall only to around 6.3% in 2025, which is still elevated compared to historical averages. That's a good thing for maintaining loan profitability, but it still means a slower pace of new loan origination.

Shifting U.S. Securities and Exchange Commission (SEC) leadership delaying compliance dates.

The shifting political landscape at the U.S. Securities and Exchange Commission (SEC) has created a period of regulatory uncertainty, which paradoxically offers some temporary relief from new compliance costs for smaller public companies like BKSC. The designation of Commissioner Mark Uyeda as Acting Chair on January 21, 2025, led to a clear shift in the agency's rulemaking pace and focus.

This shift has resulted in concrete delays and withdrawals of proposed rules. For instance, the SEC formally withdrew fourteen outstanding rule proposals on June 12, 2025, effectively taking them off the table for the near term. Also, the compliance date for amendments to Form PF was extended until October 1, 2025, and a temporary exemption for Form SHO reporting was pushed out to February 17, 2026. This regulatory pause frees up capital and personnel that would otherwise be dedicated to compliance implementation.

The most significant delay for larger fund groups, though not directly for BKSC, was the extension of compliance dates for amendments to Form N-PORT reporting requirements until November 17, 2027. This sets a precedent: new leadership can, and will, delay or rescind rules, making the regulatory environment less predictable but also less immediately burdensome.

Ongoing regulatory discussions around financial stability for community banks.

Regulatory discussions in 2025 are focused on tailoring financial stability rules to the size and complexity of community banks, recognizing that a one-size-fits-all approach is inefficient and costly. This is a clear opportunity for BKSC to reduce its compliance overhead.

The Office of the Comptroller of the Currency (OCC) announced a broad package of measures in October 2025 specifically aimed at reducing burdens for community banks, which are generally defined as institutions with up to $30 billion in assets. These changes are substantial:

• Eliminate non-statutory, policy-based exam requirements starting January 1, 2026.
• Tailor examination scope and frequency to the bank's size and risk profile.
• Rescind the Fair Housing Home Loan Data System regulation to eliminate duplicative data collection.
• Clarify that model risk management practices should be commensurate with the bank's risk exposures.

Also, federal regulators are jointly proposing to rescind the controversial 2023 Community Reinvestment Act (CRA) final rule and reinstate the original 1995 regulations. This move is intended to restore consistency and ease regulatory burdens, allowing community banks to focus on their core mission of serving local communities.

State fiscal policy, where South Carolina's per capita total state taxes are $3,290.21.

State-level fiscal policy in South Carolina directly impacts the local economy and, by extension, BKSC's customer base and loan demand. South Carolina's per capita total state taxes were reported at $3,290.21 in 2025. This figure is relatively low compared to other states, which helps maintain a favorable business and residential climate.

The state's tax structure is currently undergoing significant reform. For the 2025 tax year, South Carolina has a graduated state individual income tax with marginal rates of 0 percent, 3 percent, and 6.2 percent. However, a bill is in motion to amend this structure starting in tax year 2026, imposing a flat tax rate of 3.99 percent, with provisions for future annual reductions if revenue growth targets are met. This is a strong political signal for long-term fiscal conservatism and competitiveness.

The state's corporate income tax rate of 5.0% and the average effective property tax rate of 0.47% on owner-occupied housing are also key competitive advantages. These policies attract businesses and residents, which drives loan demand and deposit growth for a local bank. The stability and low-tax environment are a tailwind for the bank's operating region.

Bank of South Carolina Corporation (BKSC) - PESTLE Analysis: Economic factors

Nine-month 2025 unaudited net income reached $5,893,809, up 19.51% from 2024.

You need to see hard numbers to trust the narrative, and Bank of South Carolina Corporation delivered a strong nine-month performance in 2025. Unaudited net income for the period ending September 30, 2025, hit a record $5,893,809, which is a significant increase of 19.51% compared to the $4,931,457 reported for the same period in 2024. This substantial profit growth, which translates to a $962,352 year-over-year increase, is a direct result of a strong net interest margin, consistent fee income generation, and disciplined expense management. This isn't just growth; it's a clear signal of operational efficiency in a challenging rate environment.

Annualized Return on Average Equity (ROAE) for Q3 2025 was strong at 14.03%.

A key measure of a bank's profitability and management effectiveness is its Return on Average Equity (ROAE), and BKSC's figure is excellent. For the nine months ending September 30, 2025, the annualized ROAE stood at a robust 14.03%, a solid improvement from the 13.50% recorded in the prior year period. This performance is well above the average for community banks and suggests that management is deploying shareholder capital very effectively. Also, the annualized return on average assets (ROAA) improved to 1.37% in the same period, up from 1.10% a year earlier.

Here's the quick math on core performance metrics:

South Carolina's regional economy is expected to continue moderate, positive growth through 2025.

The local economic backdrop is defintely a tailwind for BKSC. The South Carolina regional economy is expected to maintain moderate, positive growth throughout 2025, with economists grading its current performance at a 'B+' level. This steady expansion provides a stable operating environment for a community bank focused on the Charleston, Berkeley, and Dorchester communities.

The state's economic resilience is notable, especially when compared to national trends:

• Real GDP Growth (Q1 2025): South Carolina grew at an annualized rate of 1.7%, significantly outpacing the national GDP, which contracted at an annualized rate of 0.5%.
• Personal Income Growth (Q1 2025): South Carolina ranked fourth in the U.S. with a strong annualized personal income growth rate of 9.1%.
• Sector Drivers: Key contributors to this Q1 2025 growth included the real estate and rental/leasing sector, construction, and finance and insurance.

What this estimate hides is the deceleration of growth compared to 2024, but the key is that growth remains positive and stable, with wage growth of 3.9% outpacing inflation at 2.7% in 2025, which helps consumer purchasing power.

Balance sheet is positioned for a potential lower-rate environment, despite Q3 loan payoffs.

The bank's management is proactively positioning the balance sheet to benefit from anticipated monetary policy shifts. They explicitly state the balance sheet is 'well positioned for a potential lower-rate environment,' even though the timing of Federal Reserve rate cuts remains uncertain. This strategy suggests an asset-liability structure that benefits from lower funding costs when rates fall, which would further enhance the net interest margin.

Still, the third quarter saw a decline in loans due to 'anticipated payoffs.' This is a near-term risk to loan growth, but the bank prudently increased its allowance for credit losses as part of its ongoing risk management strategy, which is the right action to take. The bank's focus is on deploying maturing investment securities into higher-yielding loans and other assets to enhance net interest margin over time, regardless of the Fed's actions.

Bank of South Carolina Corporation (BKSC) - PESTLE Analysis: Social factors

The social factors influencing Bank of South Carolina Corporation (BKSC) are deeply rooted in its identity as a community bank, which is both a competitive advantage and a regulatory mandate. Your investment thesis must account for how well the bank manages its local reputation and navigates the evolving financial behaviors of South Carolina residents, especially given the current economic climate.

The bank's continued success is tied to its ability to maintain a high-touch, relationship-focused model while demonstrating concrete commitment to its local communities, a strategy that clearly pays off in a state where regional pride is a powerful asset.

Community Reinvestment Act (CRA) compliance requires meeting credit needs in all income areas.

For a community bank like Bank of South Carolina, compliance with the Community Reinvestment Act (CRA) is not just a regulatory hurdle; it's a social license to operate. The CRA requires the bank to help meet the credit needs of its entire community, including low- and moderate-income (LMI) neighborhoods.

While the bank's most recent public CRA rating is not explicitly detailed in 2025 announcements, a consistent, strong performance is an implicit expectation for a bank with its reputation and financial metrics. The focus is on providing credit access in its assessment areas, which include Charleston, North Charleston, Summerville, Mt. Pleasant, James Island, and the West Ashley community.

Here's the quick math: a strong community development record supports loan growth by expanding the addressable market. The bank's annualized Return on Average Assets (ROAA) stood at a robust 1.37% and Return on Average Equity (ROAE) at 14.03% for the nine months ended September 30, 2025, which suggests efficient and well-managed lending practices across its markets.

The bank's community focus is validated by its ranking as 66th among the nation's Top 100 community banks.

The market has defintely validated Bank of South Carolina's community-centric model. The bank was ranked 66th among the nation's Top 100 publicly traded community banks with assets under $2 billion in the 2025 list published by American Banker magazine. This ranking, based on the three-year average return on equity from 2022 to 2024, underscores that a local, relationship-driven approach can translate directly into superior financial performance.

Being the only South Carolina-based bank recognized on this 2025 list highlights a significant competitive edge in a state with strong local loyalty. This community focus translates into a sticky customer base and lower risk profile, evidenced by the consistent performance.

• Total Assets (Sept 30, 2025): $557.16 million
• Nine-Month Net Income (Sept 30, 2025): $5,893,809
• 2025 Community Ranking: 66th in the nation

Consumer confidence and saving behaviors directly influence deposit and loan demand.

The bank operates within the broader South Carolina economy, which was graded at a 'B+' level in early 2025 by University of South Carolina economists. However, this steady growth is tempered by low consumer sentiment.

The lingering effects of inflation mean that the average South Carolinian is still worse off in terms of purchasing power than they were pre-pandemic, keeping consumer confidence low. This social reality creates a mixed demand signal for the bank:

• Risk to Deposits: Low consumer sentiment can lead to cautious saving, but high prices might also force consumers to draw down on savings, impacting deposit stability.
• Opportunity in Lending: Wage growth is beginning to outpace inflation, suggesting consumers may recapture lost purchasing power in 2025, which could fuel a rebound in consumer spending and, consequently, loan demand for mortgages and small business ventures.

You need to watch the bank's loan-to-deposit ratio closely for the full 2025 fiscal year to see if loan demand remains robust, as it was in the first half of the year. The bank's strategy to deploy maturing investment securities into higher-yielding loans is a direct response to this environment.

Maintaining a local, relationship-focused model against national bank competition.

Bank of South Carolina's core social factor is its distinct differentiation from large national banks. Its model is built on personal service, responsiveness, and long-term customer relationships, serving local businesses, professionals, and individuals.

This local model is critical for attracting and retaining the high-value customers who desire personalized attention over the scale of a national player. The competition is fierce, but the bank's proven performance-being a Top 100 community bank-shows this strategy is effective. This is a classic 'local knowledge' moat that national banks struggle to cross.

The action here is clear: Bank of South Carolina must continue to invest in its human capital and local branches to keep that service edge sharp, because that's the only thing keeping the big guys from eating their lunch.

Bank of South Carolina Corporation (BKSC) - PESTLE Analysis: Technological factors

Compliance with new FDIC rules requires proper digital signage on all platforms by May 1, 2025.

You need to move fast on the Federal Deposit Insurance Corporation (FDIC) signage rules, which are a direct technology and operations cost. While the compliance deadline for new physical signage at branches-the gold-standard Member FDIC plaque-was May 1, 2025, the requirements for digital channels are even more complex and costly.

The FDIC's revised Part 328 rule modernizes the signage requirements for the digital world. This means the Bank of South Carolina Corporation must display the official digital FDIC sign clearly and continuously on all customer-facing digital platforms. The good news is the deadline for digital channels (websites, mobile apps, and ATMs) was extended to March 1, 2026, giving you more time to integrate the new design specifications.

This isn't just a design change; it requires core system and third-party vendor coordination. You must ensure the digital sign appears on the homepage, all login or sign-in pages, and any transactional page where a customer can initiate a deposit, like a remote deposit capture screen. Plus, you need clear, continuous disclosures for non-deposit products (like investments) stating they are not FDIC-insured and may lose value.

Here's the quick math: The Bank of South Carolina Corporation reported total other expenses of $3,516,683 for the quarter ended September 30, 2025. A significant portion of this must be ring-fenced for compliance-driven technology projects like this, otherwise, you risk regulatory fines that quickly erode that disciplined expense management.

Heightened regulatory scrutiny on the use of Artificial Intelligence (AI) and algorithms in lending.

The use of Artificial Intelligence (AI) and machine learning algorithms in credit underwriting and lending decisions is a major regulatory flashpoint in 2025. Regulators like the Consumer Financial Protection Bureau (CFPB) are laser-focused on preventing algorithmic bias-where AI models inadvertently lead to a disparate impact on protected classes, even if the bank didn't intend it.

For a regional bank, this means moving beyond just using a black-box model. You must invest in Explainable AI (XAI) tools to provide clear, auditable records for every credit decision. Honestly, technical compliance alone is no longer enough; you need to be able to explain the why to regulators and to the public.

The risk here is substantial. In 2025, regulators are shifting liability frameworks to hold financial institutions directly accountable for AI-driven decisions that cause financial harm, risking severe penalties and reputational damage. This is a clear call to action: audit all lending models now.

The Consumer Financial Protection Bureau (CFPB) is revisiting the 'open banking' rule for consumer data rights.

The landscape for open banking (the practice of sharing consumer financial data with third-party apps and services) is in a state of high uncertainty in the latter half of 2025. The CFPB's final rule on personal financial data rights under Section 1033 of the Dodd-Frank Act, which would have mandated institutions like the Bank of South Carolina Corporation to provide consumer data access free of charge, is now on hold.

In mid-2025, the CFPB initiated a new rulemaking process to reconsider and substantially revise the rule, which has effectively stayed the original compliance timeline. The original rule's compliance date was set for June 30, 2026, but that is now highly likely to be extended.

The new rulemaking process, which includes an Advanced Notice of Proposed Rulemaking (ANPR), is focusing on four critical areas that will defintely shape your future technology spending:

• Defining who can act as a consumer-authorized data recipient.
• Allocating the costs of data access (i.e., who pays for the API development).
• Managing information security risks associated with data sharing.
• Safeguarding consumer privacy in the open banking ecosystem.

What this regulatory pause hides is a major strategic opportunity: you have time to influence the final rule and build your data-sharing Application Programming Interfaces (APIs) strategically, rather than reactively, which could lower long-term integration costs.

Need for continuous investment in cybersecurity to protect customer data and comply with Regulation S-P.

Cybersecurity is no longer just an IT function; it's a non-negotiable compliance mandate. The Securities and Exchange Commission (SEC) amendments to Regulation S-P (Privacy of Consumer Financial Information) are creating new, strict federal standards for data protection.

For financial institutions, the key compliance date for larger entities is December 3, 2025. The amendments require you to implement a formal, written incident response program and notify affected customers within 30 days of a data breach. This requires immediate investment in detection and response technology, plus rigorous vendor oversight.

The cost of non-compliance is staggering. The average data breach cost for the financial sector tops $6 million, which is a huge hit for a bank of your size. That's why your cybersecurity investment must be continuous and robust.

Here is a breakdown of the immediate technological compliance requirements for 2025:

Finance: draft a 13-week cash view by Friday to model the capital expenditure required to hit the December 3, 2025, Regulation S-P deadline.

Bank of South Carolina Corporation (BKSC) - PESTLE Analysis: Legal factors

New 2025 asset-size thresholds for 'small bank' and 'intermediate small bank' CRA compliance.

You need to know exactly where Bank of South Carolina Corporation (BKSC) sits on the regulatory spectrum, because your compliance burden changes dramatically based on your asset size. The Federal Reserve, FDIC, and OCC annually adjust the Community Reinvestment Act (CRA) thresholds for inflation, and the new 2025 figures are in effect.

The key takeaway is that the bar for a 'large bank' CRA examination-which involves significantly more data collection and a more complex assessment-has moved up slightly. This is defintely a small reprieve for institutions near the boundary. Here are the precise thresholds for the 2025 calendar year, based on the 2.91% increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the period ending November 2024.

If Bank of South Carolina Corporation's (BKSC) assets are between $402 million and $1.609 billion, you remain an Intermediate Small Bank, meaning you avoid the full-scale data collection of a Large Bank, but you still face a more involved exam than a Small Bank.

Final rules to modernize Anti-Money Laundering (AML)/Counter-Financing of Terrorism (CFT) programs are expected in 2025.

FinCEN (Financial Crimes Enforcement Network) is pushing for a major overhaul of Bank Secrecy Act (BSA) compliance, moving away from a check-the-box system to one focused on demonstrable effectiveness. While the final rule is still pending after the June 2024 Notice of Proposed Rule Making (NPRM), the direction is clear: you must pivot your Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) program to be explicitly 'effective, risk-based, and reasonably designed.'

The new rule will formalize what was once a best practice into a mandatory requirement. You need to be preparing your compliance team now for these core changes:

• Mandatory Risk Assessment: Explicitly require a documented process to identify, evaluate, and mitigate risks, factoring in FinCEN's national AML/CFT priorities (like cybercrime and terrorist financing).
• Formal CFT Inclusion: The program must officially be an 'AML/CFT Program,' requiring you to adapt controls and training to monitor for both money laundering and terrorist financing.
• Focus on Effectiveness: Regulators will assess your program's outcomes, not just its existence. This means your internal controls and systems must show a clear, documented link to your risk profile.

The industry anticipates the final rule will be substantially similar to the proposal, so delay is a risk. You should already be updating your governance documents and performing a gap analysis against the proposed 'effective' standard.

Tier 1 filers must begin collecting Small Business Data (Dodd-Frank 1071) by July 18, 2025.

The mandate under Section 1071 of the Dodd-Frank Act, which requires financial institutions to collect and report data on small business loan applications, has been significantly delayed due to ongoing litigation. The original compliance date for the highest-volume lenders (Tier 1) was July 18, 2025, but the CFPB (Consumer Financial Protection Bureau) has extended this timeline.

The court-ordered stay and the CFPB's subsequent interim final rule in June 2025 pushed all compliance dates back by approximately one year. This extension gives Bank of South Carolina Corporation (BKSC) a crucial window to refine its data collection systems for protected demographic information, like the ethnicity, race, and sex of the small business owner.

Here's the quick math on the new deadlines, assuming the litigation does not cause further delays:

If Bank of South Carolina Corporation (BKSC) is a Tier 1 lender, you are not collecting data on July 18, 2025, but you are still expected to use this time to test your systems. The stay applies to the plaintiffs in the litigation, but the CFPB's extension rule applies to all covered institutions.

Ongoing litigation is delaying the compliance timeline for the CFPB's 'open banking' rule.

The CFPB's Personal Financial Data Rights Rule-the so-called 'open banking' rule under Dodd-Frank Section 1033-is currently on ice due to a federal court injunction issued in late 2025. This injunction, granted by a U.S. District Court in Kentucky, prohibits the CFPB from enforcing the rule's compliance dates while the Bureau reconsiders and rewrites the regulation.

The initial rule, finalized in October 2024, would have required financial institutions like Bank of South Carolina Corporation (BKSC) to provide consumers and authorized third parties (like FinTechs) with access to account information via secure, standardized Application Programming Interfaces (APIs). The first compliance deadline was originally set for June 30, 2026, but that date is now frozen.

What this means for your strategy is a pause on immediate, large-scale API infrastructure spending. The court agreed with banking plaintiffs that forcing institutions to incur significant costs for a rule the CFPB itself is rewriting constitutes an irreparable harm.

• Immediate Relief: The injunction removes the pressure to meet the original June 2026 deadline.
• Future Uncertainty: The CFPB has stated it intends to 'comprehensively reexamine' the rule, with new rulemaking anticipated to stretch well into 2026.
• Key Issues: The rewrite will likely focus on the court's concerns: the CFPB's authority to compel data sharing with non-fiduciary third parties, the prohibition on interface access fees, and the failure to adequately address cumulative data security risks.

You should use this delay to monitor the new rulemaking process and engage with industry groups to help shape a more workable standard, rather than halting all data-sharing strategy.

Bank of South Carolina Corporation (BKSC) - PESTLE Analysis: Environmental factors

Physical Climate Risk (Hurricanes) in the Coastal South Carolina Operating Area Impacts Real Estate Collateral

The primary environmental risk for Bank of South Carolina Corporation (BKSC) is physical climate risk, specifically the increasing frequency and intensity of Atlantic hurricanes, which directly impacts the value of its real estate collateral. Your loan portfolio is heavily concentrated in the low-country region, including Charleston, Berkeley, and Dorchester counties.

The 2025 Atlantic hurricane season is predicted to be above-normal. For context, the National Oceanic and Atmospheric Administration (NOAA) forecasts a range of 19 to 25 named storms, with 3 to 6 of those potentially reaching major hurricane strength (Category 3 or higher). South Carolina faces the fourth-highest chance of a major hurricane landfall this year. This isn't just a weather forecast; it's a credit risk factor.

Here's the quick math: In South Carolina, an estimated 21% of housing units are at risk of storm surge flooding alone. If a major storm hits, coastal properties in the short term can lose 15% to 20% of their value. That depreciation directly erodes the collateral backing your loans, increasing the bank's loan-to-value ratio (LTV) and raising default and delinquency risks, even with insurance. You need to be defintely stress-testing your commercial and residential real estate portfolios against a 20% value haircut in high-risk zones.

Growing Pressure from Institutional Investors to Disclose ESG Metrics

As a smaller, publicly traded institution (OTCQX: BKSC) with a recent market capitalization of approximately $93.8 million, you currently benefit from less stringent Environmental, Social, and Governance (ESG) reporting requirements than larger peers. Still, the pressure is mounting from institutional investors and the broader market, even for community banks.

Your strong financial performance-like the annualized Return on Average Equity (ROE) of 13.73% for the six months ended June 30, 2025-is a clear positive. But investors are increasingly looking beyond just the numbers. They want to see a clear framework for managing long-term climate risk and social impact. The absence of a formal, public ESG disclosure or climate-related financial risk (TCFD) report is becoming a notable information gap for a bank operating in a high-risk coastal area.

This lack of disclosure can raise your cost of capital (the discount rate used in a discounted cash flow (DCF) valuation) because it signals unquantified risk. The market is starting to penalize opaqueness. You need a simple, one-page ESG statement. It's a small lift with a big payoff in investor relations.

Operational Focus on Reducing Environmental Footprint

While Bank of South Carolina Corporation (BKSC) has not publicly released quantitative data on its operational environmental footprint-like energy or paper use reductions-the industry trend is clear. Community banks are adopting digital strategies that inherently reduce their environmental impact, even without a formal ESG program. This is a quiet win.

The push toward paperless processes, mobile banking, and digital document management, which is necessary to maintain a competitive Net Interest Margin (which exceeded 4% in the second quarter of 2025), automatically shrinks your carbon footprint. For a bank with a small team of approximately 82 professionals, the operational footprint is minimal compared to lending risks. The focus should be on formalizing these existing efficiencies into a simple disclosure.

• Quantify paper reduction from digital statements.
• Track energy consumption per branch location.
• Formalize work-from-home or hybrid policies to reduce employee commuting emissions.

Future Lending Policies May Face Scrutiny Regarding Financing Projects with High Carbon Intensity

While Bank of South Carolina Corporation's (BKSC) primary lending is focused on local commercial and residential real estate, the bank operates in a state with significant carbon-intensive infrastructure. The regional financial ecosystem is already under scrutiny for its role in climate change.

For example, a regional entity like the South Carolina Public Service Authority has received a total of $3.83 million in fossil fuel financing over a recent period, according to a 2025 report on climate chaos banking. This shows that capital is still flowing to high-carbon projects in your operating area. While you may not be directly participating in large syndicated loans for power plants, your commercial lending policies for local businesses-such as manufacturing, logistics, or large-scale construction-will eventually face questions about their carbon intensity.

The action here is to get ahead of the curve by integrating climate considerations into your commercial real estate (CRE) underwriting (the process of assessing the risk of a loan). This means favoring properties with energy efficiency certifications or flood mitigation features, which helps manage both climate risk and reputational risk. You can't afford to be caught off-guard when the next round of regulatory guidance hits. Finance: draft a climate-risk overlay for CRE underwriting by the end of the quarter.