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Financial report summary
?Risks
- We are subject to extensive regulation that could limit or restrict our activities and impose financial requirements or limitations on the conduct of our business, and changes in the laws and regulations to which we are subject could adversely affect our profitability.
- We are subject to heightened regulatory requirements as our total assets exceed $10 billion.
- Difficult market and economic conditions may adversely affect our industry and our business.
- Our FDIC insurance premiums and assessments could increase and result in higher noninterest expense.
- Our profitability is vulnerable to interest rate fluctuations and monetary policy and could be adversely affected by any future actions taken by the Federal Reserve Board to address rising inflation.
- We may experience future adverse impacts from the recent transition from the use of the LIBOR interest rate index.
- The failure of other financial institutions could adversely affect us, and we may incur losses on investments in other financial institutions.
- Our decisions regarding credit risk could be inaccurate and our allowance for credit losses may be inadequate, which would materially and adversely affect us.
- Our high concentration of real estate loans and especially commercial real estate loans exposes us to increased lending risk.
- Our geographic concentration of banking activities and loan portfolio makes us more vulnerable to adverse conditions in our local markets.
- If the value of real estate were to deteriorate, a significant portion of our loans could become under-collateralized, which could have a material adverse effect on us.
- Because we have a concentration of exposure to a number of individual borrowers, a significant loss on any of those loans could materially and adversely affect us.
- Our cost of funds may increase as a result of general economic conditions, interest rates and competitive pressures.
- The loss of key employees may materially and adversely affect us.
- The value of securities in our investment portfolio may decline in the future.
- Our recent results do not indicate our future results and may not provide guidance to assess the risk of an investment in our common stock.
- We may not be able to raise the additional capital we need to grow and, as a result, our ability to expand our operations could be materially impaired.
- Our growth and expansion strategy may not be successful, and our market value and profitability may suffer.
- If we acquire additional banks or bank assets in the future, there may be undiscovered risks or losses associated with such acquisitions which would have a negative impact upon our future income.
- If the goodwill that we may record or have recorded in connection with a business acquisition becomes impaired, it could require charges to earnings.
- Competition from other financial institutions and financial service providers may adversely affect our profitability.
- We continually encounter technological change, and we may have fewer resources than many of our competitors to continue to invest in technological improvements and innovations.
- A failure in or breach of our operational or security systems, or those of our third-party service providers, including as a result of cyber-attacks, could disrupt our business, result in unintentional disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses.
- We may incur losses as a result of unforeseen or catastrophic events, including extreme weather events or other natural disasters.
- We may incur environmental liabilities with respect to properties to which we take title.
- Our operations could be interrupted if certain external vendors on which we rely experience difficulty, terminate their services or fail to comply with banking laws and regulations.
- Our earnings could be adversely impacted by incidences of fraud and compliance failure.
- The rights of our common shareholders are subordinate to the holders of any debt securities that we may issue from time to time and may be subordinate to the holders of any series of preferred stock that may issue in the future.
- We may be unable to, or choose not to, pay dividends on our common stock.
Management Discussion
- Our net income increased $87.7 million, or 28.7%, to $392.9 million for the year ended December 31, 2023, from $305.3 million for the same period in 2022. On a diluted earnings per share basis, our earnings were $1.94 per share for the year ended December 31, 2023 and $1.57 per share for the year ended December 31, 2022. The Company recorded $12.1 million in credit loss expense for the year ended December 31, 2023. This consisted of a $12.0 million provision for credit losses on loans, a $1.7 million provision for credit losses on investment securities and a reversal of $1.5 million provision for unfunded commitments. During the year ended December 31, 2023, the Company recorded $13.0 million in Federal Deposit Insurance Corporation ("FDIC") special assessment expense and $1.1 million loss for the decrease in fair value of marketable securities, which were partially offset by $3.5 million in recoveries on historic losses from loans charged off prior to acquisition and $3.1 million in bank owned life insurance ("BOLI") death benefits.