Our business is adversely affected by unfavorable economic, market, and political conditions.
The COVID-19 pandemic created substantial disruption to global and domestic economies and has adversely impacted, and could continue to adversely impact, our business operations, asset valuations, and financial results.
Our business is dependent upon the continued growth and welfare of the geographic markets that we serve.
We may not collect all amounts that are contractually owed to us by our borrowers.
Our loans and leases are concentrated by location, collateral value, and borrower type, which could exacerbate credit losses if certain markets or industries were to experience economic difficulties or operating issues.
We have a number of large credit relationships and individual commitments.
Our business is subject to interest rate risk, and variations in interest rates may materially and adversely affect our financial performance.
We may be adversely impacted by the transition from LIBOR as a reference rate.
The value of our securities in our investment portfolio may decline in the future.
We may need to raise additional capital in the future, and such capital may not be available when needed or at all.
A slowdown in venture capital investment levels has reduced the market for venture capital investment for our venture banking clients, which has, and could continue to, adversely affect our deposit balances, business, results of operations, and financial condition.
We are subject to extensive regulation, which could materially and adversely affect our business.
The Company and its subsidiaries are subject to changes in federal and state tax laws and the interpretation of existing laws and examinations and challenges by taxing authorities.
We are subject to claims and litigation that could adversely affect our cash flows, financial condition, and results of operations, or cause us significant reputational harm.
Regulations relating to privacy, information security, and data protection could increase our costs, affect or limit how we collect and use personal information, and adversely affect our business opportunities.
Our ability to attract and retain qualified employees is critical to our success.
Labor shortages and constraints in supply chains could adversely affect our customers’ operations as well as our operations.
We face strong competition from financial services companies and other companies that offer banking services, which could materially and adversely affect our business.
Failure to keep pace with technological change could adversely affect our business.
Our ability to maintain, attract and retain customer relationships and investors is highly dependent on our reputation.
A failure, interruption, or breach in the security of our systems, or those of contracted vendors, could disrupt our business, result in the disclosure of confidential information, damage our reputation, and create significant financial and legal exposure.
We rely on other companies to provide key components of our business infrastructure.
Climate change has the potential to disrupt our business and adversely impact the operations and creditworthiness of our clients. Further, global concerns regarding climate risk may lead to new or heightened governmental regulations to mitigate those risks which could adversely affect our business.
Acts of war or terrorism, international hostilities, domestic civil unrest, new public health issues, or other adverse external events could harm the Company’s business.
The Company's consolidated financial statements are based in part on assumptions and estimates which, if incorrect, could cause unexpected losses in the future.
There are risks resulting from the extensive use of models in our business.
The primary source of the holding company’s earnings from which we pay dividends, among other things, is the receipt of dividends from the Bank.
We may reduce or discontinue the payment of dividends on our common and preferred stock.
Net (loss) earnings available to common stockholders for the third quarter of 2023 was a loss of $33.3 million, or a loss of $0.28 per diluted share, compared to net earnings available to common stockholders for the third quarter of 2022 of $122.2 million, or $1.02 per diluted share. The $155.5 million decrease in net earnings available to common stockholders from the third quarter of 2022 was due mainly to a $204.5 million decrease in net interest income and a $5.5 million increase in noninterest expense, offset partially by a $3.0 million decrease in provision for credit losses, a $5.2 million increase in noninterest income, and a $46.8 million decrease in income tax expense. The decrease in net interest income was due primarily to our interest-bearing liabilities repricing faster than our interest-bearing assets when interest rates rapidly increased over the last year. Also, the mix of our interest-bearing liabilities changed significantly to higher-cost borrowings and brokered deposits from lower-cost customer deposits, as the closure of three banks in the first half of 2023 caused an outflow of such lower-cost customer deposits. The increase in noninterest expense was due primarily to a $31.1 million increase in insurance and assessments expense, a $14.3 million increase in customer related expense, and a $9.9 million increase in acquisition, integration and reorganization costs, offset partially by a $34.3 million decrease in compensation expense, a $7.6 million decrease in other expense, a $5.1 million decrease in other professional services expense, and a $2.0 million decrease in loan expense. The increase in noninterest income was due mainly to a $14.5 million legal settlement gain in the third quarter of 2023 as compared to a $5.5 million legal settlement gain in the third quarter of 2022. The decrease in income tax expense is due to the income tax benefit recorded on a loss before taxes in the third quarter of 2023, compared to income tax expense recorded on earnings before income taxes in the third quarter of 2022.
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