An agency conducts an Empirical Bayes (EB) analysis at a location and finds the expected crash frequency is 12 crashes per year, while the SPF prediction for similar sites is 8 crashes per year. What does this indicate?

1. The location is performing as expected
2. The location has a potential for safety improvement (PSI) because expected crashes exceed the predicted norm
3. The SPF is miscalibrated and should be discarded
4. The crash data at this location is unreliable