2021 Annual Report

Item 1.A. RISK FACTORS Investing in the Company’s common stock involves various risks, many of which are specific to the Company’s business. Before making an investment decision, you should carefully read and consider the risk factors described below as well as the other information included in this report and other documents we file with the SEC. The discussion below addresses the material risks and uncertainties, of which the Company is currently aware, that could have a material adverse effect on the Company’s business, results of operations, financial condition, and growth prospects. Other risks that the Company does not know about now, or that the Company does not currently believe are significant, could negatively impact the Company’s business or the trading price of the Company’s securities. Summary This is a summary of some of the material risks and uncertainties that management believes affects us. The list is not exhaustive but provides a high-level summary of some of the material risks that are further described in this Item 1.A. We encourage you to read Item 1A in its entirety. Credit Risks • the overall health of the local and national real estate market; • business and economic conditions generally, and in the financial services industry, nationally and within our market area, including rising rates of inflation; • the ability to successfully manage credit risk; • the ability to maintain an adequate level of allowance for loan losses; • new or revised accounting standards, including as a result of the implementation of the new Current Expected Credit Loss standard; and • the concentration of large loans to certain borrowers. Liquidity and Funding Risks • The ability to successfully manage liquidity risk, especially in light of recent excess liquidity at the Bank; • the dependence on non-core funding sources and our cost of funds; • the concentration of large deposits from certain clients; and • the ability to raise additional capital to implement our business plan. Operational, Strategic and Reputational Risks • The ability to implement the Company’s growth strategy and manage costs effectively; • the ability to attract and retain key personnel, including the strategic leadership team; • talent and labor shortages and high rates of employee turnover; • the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; • interruptions involving critical systems or third-party servicers; • competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; • severe weather, natural disasters, widespread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism, civil unrest or other adverse external events; and • developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates. • Loan concentrations in our loan portfolio;

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