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New words:
American, build, Codification, compression, disaggregated, downturn, half, jurisdictional, multifamily, North, November, paydown, pipeline, SEC, Simplification, transparency, transportation, vacancy
Removed:
accelerated, accrual, aforementioned, agent, announced, behalf, CECL, chain, closing, column, concentration, consumer, contractually, cumulative, deducted, deferred, discontinued, estimating, extended, footprint, Foregone, generating, immaterial, impaired, implemented, insider, large, legacy, lifetime, maximum, moderate, negotiated, offered, OTTI, payroll, percent, prevailing, prevented, publicly, qualifying, recently, reclassification, replaced, retrospective, securing, segmentation, shift, supply, sustainable, uncollected, waived, workforce
Financial report summary
?Risks
- If we do not effectively manage our credit risk, we may experience increased levels of delinquencies, non-performing loans, and charge-offs, which would require increases in our provision for credit losses.
- Our allowance for credit losses may not be adequate to cover actual losses.
- A significant portion of our loan and lease portfolio is comprised of commercial real estate loans, which involve risks specific to real estate values and the real estate markets in general.
- Real estate construction and land development loans are based upon estimates of costs and values associated with the completed project. These estimates may be inaccurate and we may be exposed to significant losses on loans for these projects.
- A large portion of our loan and lease portfolio is comprised of commercial loans secured by various business assets, the deterioration in value of which could increase our exposure to future probable losses.
- The success of our SBA lending program is dependent upon the continued availability of SBA loan programs, our status as a Preferred Lender under the SBA loan programs, our ability to effectively compete and originate new SBA loans, and our ability to comply with applicable SBA lending requirements.
- Non-performing assets take time to resolve, adversely affect our results of operations and financial condition, and could result in losses.
- Liquidity risks could affect operations and jeopardize our business, financial condition, and results of operations.
- The Corporation is a bank holding company and its sources of funds necessary to meet its obligations are limited.
- Interest rate shifts may reduce net interest income and otherwise negatively impact our financial condition and results of operations.
- The proportion of the Corporation’s deposit account balances that exceed FDIC insurance limits may expose the Bank to enhanced liquidity risk.
- Information security risks for financial institutions like us continue to increase in part because of new technologies, the increased use of the internet and telecommunications technologies (including mobile devices and cloud computing) to conduct financial and other business transactions, political activism, and the increased sophistication and activities of organized crime, terrorist, hackers, and perpetrators of fraud. A successful cyber-attack or other breach of our information systems could adversely affect the Corporation’s business, financial condition or results of operations and damage its reputation.
- We are dependent upon third parties for certain information systems, data management and processing services, and key components of our business infrastructure, which are subject to operational, security, and other risks.
- Our business continuity plans could prove to be inadequate, resulting in a material interruption in or disruption to our business and a negative impact on our results of operations.
- New lines of business, products, and services are essential to our ability to compete but may subject us to additional risks.
- Our framework for managing risks may not be effective in mitigating risk and loss to us.
- We are subject to changes in accounting principles, policies, or guidelines.
- Our internal controls may be ineffective.
- The Corporation’s business and financial results could be materially and adversely affected by widespread public health events.
- Our business may be adversely affected by conditions in the financial markets and economic conditions generally.
- Our business is concentrated in and largely dependent upon the continued growth and welfare of the general geographical markets in which we operate.
- Our financial condition and results of operations could be negatively affected if we fail to effectively execute our strategic plan or manage the growth called for in our strategic plan.
- We could recognize impairment losses on securities held in our securities portfolio, goodwill, or other long-lived assets.
- We could be required to establish a deferred tax asset valuation allowance and a corresponding charge against earnings if we experience a decrease in earnings.
- Competition from other financial services providers could adversely affect our profitability.
- Consumers and businesses are increasingly using non-banks to complete their financial transactions, which could adversely affect our business and results of operations.
- If we are unable to keep pace with technological advances in our industry, our ability to attract and retain clients could be adversely affected.
- Our private wealth management results of operations may be negatively impacted by changes in economic and market conditions.
- Potential acquisitions may disrupt our business and dilute shareholder value.
- The investments we make in certain tax-advantaged projects may not generate returns as anticipated and may have an adverse impact on the Corporation’s financial results.
- A prolonged U.S. government shutdown or default by the U.S. on government obligations would harm our results of operations.
- We operate in multiple states and in a highly regulated industry and the federal and state laws and regulations that govern our operations, corporate governance, executive compensation, and accounting principles. Changes in them or our failure to comply with them, may adversely affect us.
- The financial services industry, as well as the broader economy, may be subject to new legislation, regulation, and government policy.
- We face a risk of noncompliance and enforcement action with the Bank Secrecy Act (“BSA”) and other anti-money laundering (“AML”) statutes and regulations.
- We are periodically subject to examination and scrutiny by a number of banking agencies and, depending upon the findings and determinations of these agencies, we may be required to make adjustments to our business that could adversely affect us.
- We are subject to claims and litigation pertaining to our fiduciary responsibilities.
- Our stock is thinly traded and our stock price can fluctuate.
- To maintain adequate capital levels, we may be required to raise additional capital in the future, but that capital may not be available when it is needed and/or could be dilutive to our existing shareholders.
- If equity research analysts publish research or reports about our business with unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.
- We rely on our management and the loss of one or more of those managers may harm our business.
- Negative publicity could damage our reputation and adversely impact our business and financial results.
Management Discussion
- Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
- Unless otherwise indicated or unless the context requires otherwise, all references in this Report to the “Corporation,” “we,” “us,” “our,” or similar references mean First Business Financial Services, Inc. together with our subsidiary. “FBB” or the “Bank” refers to our subsidiary, First Business Bank.
- This report may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which reflect our current views with respect to future events and financial performance. Forward-looking statements are not based on historical information, but rather are related to future operations, strategies, financial results, or other developments. Forward-looking statements are based on management’s expectations as well as certain assumptions and estimates made by, and information available to, management at the time the statements are made. Such statements are subject to risks and uncertainties, including among other things: