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New words:
acknowledgement, ACL, agenda, alerting, Andrew, Anna, APAC, Ashbrook, behavior, Blake, Brasher, Brown, Bryon, calendar, cancellable, Carriere, ceremony, certificate, Certification, CFA, CGMA, Chatelain, China, citizenship, cohort, collaboration, color, column, commensurate, comparison, compensatory, compromised, concert, confirming, Consent, constitutionality, consultant, contrast, cooling, Cooper, CPA, CRE, Cutrer, cyclical, David, Debbie, demographic, depth, discriminated, discrimination, Distinguishing, Don, duly, education, EisnerAmper, embedded, emulation, Endorsement, engineering, ERM, exfiltrated, Exhibit, expert, Farmland, feed, FFIEC, forecast, forecasted, formatted, gave, genetic, granular, graph, greenhouse, groundbreaking, guarantor, Handbook, hereof, herewith, hybrid, identity, II, Indenture, Inline, instance, intelligence, intermediate, IntraFi, intrusion, investigation, Isabel, ISO, Israel, IV, iXBRL, joined, judgement, Kirk, Label, labeled, lawfully, lessee, Lindsey, Linkbase, livestock, LLP, lookback, matching, mechanism, modification, Moreau, MOVEit, navigated, Obey, omitted, OTC, overseeing, page, par, peer, placement, Plant, pool, pooled, pregnancy, race, ranked, ranking, ratifying, reciprocal, redeploy, religion, retrospective, Robert, Schema, Scott, Secretary, sex, signature, Silicon, soliciting, sooner, Specimen, stay, stead, steady, substance, suburban, Supreme, swept, Taxonomy, Teddy, theft, thereunder, thereunto, therewith, thing, Thompson, threat, timberland, Tool, top, Torbett, Triche, true, unconditionally, undersigned, unsold, usable, user, Valley, veteran, Vice, vision, voluntary, Willie, XBRL
Removed:
accretive, alternate, ambiguity, anticipation, assessing, assuring, benchmark, carryover, childcare, constructed, creating, customarily, defer, deflation, designation, developer, discontinuance, disorder, disrupted, earn, exacerbated, exceeded, fallback, falling, feasibility, finalized, great, handled, healthcare, honor, instantaneously, multiplied, newer, noncompliance, observed, pandemic, paperwork, participated, passed, phased, portrayal, prelease, presale, prescribed, readily, reallocated, reinvested, resale, rest, revising, serving, shocked, similarly, slowly, structure, study, successor, taxable, temporarily, turn, typical, unavailable, vital
Financial report summary
?Risks
- We may not be able to adequately measure and limit our credit risk, which could lead to unexpected losses.
- Our commercial real estate loan portfolio exposes us to risks that may be greater than the risks related to other types of loans.
- A significant portion of our loan portfolio consists of real estate loans, which subjects us to the potential impairment of the collateral securing the loan if the real estate market experiences negative changes and the costs and potential risks associated with the ownership of the real property if we are forced to foreclose.
- Our business may be adversely affected by credit risk associated with residential property.
- A significant portion of our loan portfolio is comprised of commercial and industrial loans secured by receivables, inventory, equipment, or other commercial collateral, and the deterioration in the collateral’s value could expose us to credit losses.
- Our ACL may prove to be insufficient to absorb losses inherent in our loan portfolio.
- Appraisals and other valuation techniques we use in evaluating and monitoring loans secured by real property, OREO, and repossessed personal property may not accurately describe the net value of the asset.
- The amount of our nonperforming assets may increase significantly, resulting in additional losses, costs, and expenses.
- The small to medium-sized businesses that we lend to may have fewer resources to handle adverse business developments, which may impair their ability to repay loans.
- We could be subject to losses, regulatory action, or reputational harm due to fraudulent and negligent acts on the part of loan applicants, our employees, and other parties.
- We are subject to risks due to changing interest rates.
- Natural disasters, acts of war or terrorism, the impact of pandemics, civil unrest, and other external events could result in a disruption of our operations and increases in credit losses.
- As a business operating in the financial services industry, our business and operations may be adversely affected in numerous and complex ways, including demand for our products and services, inflation, and financial markets.
- The borrowing needs of our customers may increase, especially during a challenging economic environment, which could result in increased borrowing against our contractual obligations to extend credit.
- Volatility in oil and natural gas prices along with cyclical downturns in the energy industry, particularly in Louisiana, could lead to increased credit losses in our loan portfolio.
- Our ability to attract and retain customers and maintain our reputation is critical to our growth, profitability, and market share.
- We may be adversely affected by the soundness of other financial institutions.
- We may not be able to implement our expansion strategy, which may adversely affect our ability to maintain our historical earnings trends.
- New lines of business, products, product enhancements, or services may subject us to additional risks.
- We may need to rely on financial markets to provide needed capital in the future, and if we fail to maintain sufficient capital, we may not be able to satisfy regulatory requirements or maintain adequate protection against financial stress.
- A lack of liquidity could impair our ability to fund operations.
- The fair value of our investment securities can fluctuate due to factors outside of our control, which could have a material adverse effect on our business and profitability.
- We rely heavily on our executive management team and other key employees, and we could be adversely affected by an unexpected loss of their service.
- We are subject to laws regarding the privacy, information security, and protection of personal information. Unauthorized access, cyber-crime, and other threats to data security may require significant resources, harm our reputation, and otherwise cause harm to our business.
- We rely on third parties to provide key components of our business infrastructure, and a failure of these parties to perform for any reason could disrupt our operations.
- We are subject to claims, litigation, and other proceedings that could result in legal liability.
- We have a continuing need for technological improvements, and we may not have the resources to effectively implement new technology, or we may experience operational challenges when implementing new technology.
- Our financial results depend on management’s selection of accounting methods and certain assumptions and estimates.
- We are dependent on the use of data and modeling in our management’s decision-making, and faulty data or modeling approaches could negatively impact our decision-making ability or subject us to regulatory scrutiny.
- We utilize third-party companies to support our investment group, and we may be adversely affected by the condition or performance of our third-party brokerage partners.
- Climate related events and legislative and societal responses regarding climate change present risks to our business.
- The market price of our common stock may be subject to substantial fluctuations, which may make it difficult to sell shares at the volumes, prices, or times desired.
- Future sales or the availability for sale of substantial amounts of our equity securities in the public market could adversely affect the prevailing market price of our common stock and could impair our ability to raise capital through future sales of equity securities.
- Our directors and executive officers have significant control over our business.
- The rights of our common shareholders may be subordinate to the holders of any debt securities or preferred stock that we may issue in the future.
- We are an emerging growth company, and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.
- Our dividend policy may change without notice, and our future ability to pay dividends is subject to restrictions.
- Our stock repurchase program may not enhance long-term stockholder value, and stock repurchases, if any, could increase the volatility of the price of our common stock and diminish our cash reserves.
- Our corporate governance documents, and certain corporate and banking laws applicable to us, could make a takeover more difficult.
- Securities analysts may not continue coverage on us or may publish unfavorable reports, which could adversely impact the price of our common stock.
- We operate in a highly regulated environment and the laws and regulations that govern our operations, corporate governance, executive compensation, and accounting principles, or changes in them, or our failure to comply with them, could subject us to regulatory action or penalties.
- Legislative and regulatory actions taken now or in the future, may increase our costs.
- New activities and expansion require regulatory approvals, and failure to obtain them may restrict our growth.
- Federal and state banking agencies periodically conduct examinations of our business, and our failure to comply with any supervisory actions as a result of such examinations could result in regulatory action or penalties.
- We are subject to capital requirements, which may result in lower returns on equity, require us to raise additional capital, prevent us from accessing FHLB advances, limit growth opportunities, result in regulatory restrictions, or require us to commit capital resources to support the Bank.
- Federal, state, and local consumer lending laws may restrict our ability to originate certain mortgage loans, increase our risk of liability with respect to such loans, increase the time and expense associated with the foreclosure process, or prevent us from foreclosing at all.
- We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance.
Management Discussion
- 2023 was a challenging year due to the failure of a few financial institutions in the first half of the year. These issues and the changing interest rate environment impacted most financial institutions. However, we navigated these challenges and had steady and solid financial results for 2023. We also implemented the CECL methodology, completed the 2023 stock repurchase program, increased the cash dividend, and improved our banking center network.
- •Net income for the year ended December 31, 2023, was $34.9 million, or $4.86 diluted EPS, a decrease of $2.0 million, or 5.5%, compared to $36.9 million, or $5.13 diluted EPS, for the year ended December 31, 2022. These decreases were mainly due to higher operating expenses, partially offset by higher noninterest income and lower provision for credit losses. Net interest income was consistent between the years with offsetting increases in interest income and interest expense.
- •The return on assets was 1.15% for 2023 and 1.18% for 2022.