Bay Banks of Virginia (BAYK) Financial Report Summaries

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Content analysis

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Avg

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Removed: accreted, TDR, volatility

From filing 10-Q 2020 Q3

Financial report summary

Risks

We may have difficulty managing our growth in our target markets due to competition and our previous limited operations in these markets.
Changes in economic and market conditions, especially in the areas in which we conduct operations, could materially and negatively affect our business.
We may be adversely affected by changes in market conditions.
We have a high concentration of loans secured by real estate, and a downturn in real estate markets in which we conduct business could materially and negatively affect our business.
We have a significant concentration of credit exposure in commercial real estate, and loans with this type of collateral are viewed as having more risk of default.
A portion of our loan portfolio consists of construction and development loans, which are inherently higher risk. Our ability to evaluate these loans or our borrower’s ability to effectively manage these projects could have an adverse effect on our business.
A portion of our loan portfolio consists of purchased loans and participations, which may have a higher risk of loss than loans we originate.
Our focus on lending to small to mid-sized businesses may increase our credit risk.
We depend on the accuracy and completeness of information about customers and counterparties and our financial condition could be adversely affected if we rely on misleading information.
Our allowance for loan losses may not be adequate to cover actual losses, which could materially and adversely affect our operating results.
We rely upon independent appraisals to determine the value of the real estate that secures a significant portion of our loans, and the values indicated by such appraisals may not be realizable if we are forced to foreclose upon such loans.
Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition.
The amount of our OREO may increase, resulting in additional OREO-related losses, and costs and expenses that will negatively affect our operations.
We are exposed to risk of environmental liabilities with respect to properties to which we take title.
Our business is subject to interest rate risk and variations in interest rates may negatively affect financial performance.
We may be required to transition from the use of the London Interbank Offered Rate (“LIBOR”) index in the future.
Liquidity risk could impair our ability to fund operations and jeopardize our business and financial condition.
We may not be able to raise capital at an acceptable price.
Our common stock has less liquidity than stocks of larger publicly traded companies.
The success of our strategy depends on our ability to identify and retain individuals with experience and relationships in our markets.
We face strong competition from financial services companies and other companies that offer banking and other financial services, which could negatively affect our business.
Consumers may decide not to use banks to complete their financial transactions.
Our exposure to operational, technological, and organizational risk may adversely affect us.
Our information systems may experience an interruption or breach in security.
We operate in a highly-regulated industry and the laws and regulations that govern our operations, corporate governance, executive compensation, and financial accounting, or reporting, including changes in them or our failure to comply with them, may adversely affect us.
We are subject to more stringent capital and liquidity requirements, the short-term and long-term effect of which is uncertain.
Our ability to pay dividends is limited, and we may be unable to pay future dividends.
If we fail to pay interest on or otherwise default on our subordinated notes, we will be prohibited from paying dividends or distributions on our common stock.
Changes in the federal, state, or local tax laws may negatively affect our financial performance.
Our governing documents and Virginia law contain anti-takeover provisions that could negatively affect our shareholders.
Changes in accounting standards could affect reported earnings.
Severe weather, natural disasters, acts of war or terrorism, and other external events could significantly impact our business.

Management Discussion

This report contains statements concerning the Company’s expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements may constitute “forward-looking statements” as defined by federal securities laws. These statements may address issues that involve estimates and assumptions made by management, risks and uncertainties, and actual results could differ materially from historical results or those anticipated by such statements. Words such as “anticipates,” “believes,” “intends,” “should,” “expects,” “will,” and variations of similar expressions are intended to identify forward-looking statements. Factors that could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to, changes in interest rates; general economic conditions; the legislative/regulatory climate; monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality or composition of the loan or investment portfolios; the adequacy of the Company’s allowance for loan losses; demand for loan products; deposit flows; competition; difficulty managing growth; demand for financial services in the Company’s market area; operational risks; the Company’s ability to maintain effective systems of internal and disclosure controls; accounting principles, policies and guidelines, and the other factors detailed in Item 1A, Risk Factors, in this Form 10-K and in the Company’s other documents publicly filed with the SEC. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date they are made.