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New words:
ACL, AFS, analyzed, anniversary, architecture, arrangement, artificial, avoid, baseline, blockchain, budget, casualty, clarify, cohort, collaborate, conflict, coupled, creation, DCF, Decemer, defense, degrade, degraded, depth, email, enterprise, eroding, exam, fisal, half, HTM, identifty, incidend, intelligence, Israel, jurisdiction, learning, ledger, machine, milion, nineteen, NIST, NPV, outreach, pipeline, preemptive, proactive, produce, reconciling, refinancing, regression, repossession, resilience, revert, revolving, Simplification, sophistication, sovereign, strongly, sudden, tabletop, unconditionally, utilze, virtue
Removed:
accelerate, administrator, aftermath, aid, AMT, ATI, August, auto, brought, Bureau, chain, charging, China, clear, collectible, commentary, compelling, Comptroller, concession, concessionary, conducting, consultation, creating, decided, deferment, defining, designate, deteriorated, developed, Disaster, discontinuation, dispose, downgrade, driven, duration, EIDL, element, encouraging, establishment, faith, fight, forcing, forgive, forgiven, formula, grew, grossed, IBA, ICE, identifiable, India, Interbank, Kingdom, Korea, lessor, London, modification, modifying, NCUA, NOL, noncredit, occurred, originally, participated, PCD, PCI, persuading, prospectively, publish, publishing, quantifiable, quantified, removed, removing, repealed, research, restructure, restructuring, round, selected, sooner, stimulate, stipulated, suspend, TDR, temporarily, trillion, unallocated, uncollectibility, Union, validation, visibility, work, world
Financial report summary
?Risks
- A decline in general business and economic conditions and any regulatory responses to such conditions could have a material adverse effect on our business, financial position, results of operations and growth prospects.
- We face strong competition from financial services companies and other companies that offer commercial and retail banking services, which could harm our business.
- Fluctuations in interest rates have impacted net interest income and may otherwise negatively impact our financial condition and results of operations.
- Our future success is largely dependent upon our ability to successfully execute our business strategy.
- Liquidity risks could affect operations and jeopardize our business, financial condition, and results of operations.
- Our business depends on our ability to successfully manage our asset quality and credit risk.
- Because a significant portion of our loan portfolio is comprised of commercial and residential real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses.
- The residential mortgage loans that we originate consist primarily of non-conforming residential mortgage loans which may be considered less liquid and riskier.
- Small Business Administration lending is an important part of our business. Our SBA lending program is dependent upon the U.S. federal government, and we face specific risks associated with originating SBA loans.
- The non-guaranteed portion of SBA loans that we retain on our balance sheet, as well as the guaranteed portion of SBA loans that we sell, could expose us to various credit and default risks.
- We may not be able to meet our unfunded credit commitments, or adequately reserve for losses associated with our unfunded credit commitments.
- We use brokered deposits which may be an unstable and/or expensive deposit source to fund earning asset growth.
- We are highly dependent on our management team, and the loss of our senior executive officers or other key employees could harm our ability to implement our strategic plan, impair our relationships with customers and adversely affect our business, results of operations and growth prospects.
- Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition, and could result in further losses in the future.
- Our provision and allowance for credit losses may prove to be insufficient to absorb potential losses in our loan portfolio.
- We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate.
- New lines of business or new products and services may subject us to additional risks.
- We focus on marketing our services to a limited segment of the population and any adverse change impacting such segment is likely to have an adverse impact on us.
- The costs and effects of litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, operating results and financial condition.
- Our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our business and the value of our common stock.
- Our risk management framework may not be effective in mitigating risks and/or losses to us.
- We have a continuing need for technological change, and we may not have the resources to effectively implement new technology or we may experience operational challenges when implementing new technology.
- System failure or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities.
- Our operations could be interrupted if our third-party service providers experience difficulty, terminate their services or fail to comply with banking regulations.
- We depend on the accuracy and completeness of information provided by customers and counterparties and any misrepresented information could adversely affect our business, financial condition and results of operations.
- Our accounting estimates and risk management processes rely on analytical and forecasting models.
- Changes in accounting standards could materially impact our financial statements.
- Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business and stock price.
- We may be adversely affected by the soundness of other financial institutions.
- We are subject to extensive government regulation that could limit or restrict our activities, which in turn may adversely impact our ability to increase our assets and earnings.
- Federal and state regulators periodically examine our business, and we may be required to remediate adverse examination findings.
- The Company’s directors may have interests that differ from other shareholders, and such directors have ownership interests in the Company that, when aggregated with holdings of their extended families and their affiliated entities, may allow such individuals and entities to take certain corporate actions without the consent of other shareholders.
- An investment in our common stock is not an insured deposit and may lose value.
- Our dividend policy may change, and consequently, your only opportunity to achieve a return on your investment may be if the price of our common stock appreciates.
- We may need to raise additional capital in the future.
- We have the ability to incur debt and pledge our assets, including our stock in the Bank, to secure that debt.
- We are an “emerging growth company,” and the reduced regulatory and reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.
Management Discussion
- We recorded net income of $51.6 million for the year ended December 31, 2023 compared to $62.6 million for the year ended December 31, 2022, a decrease of $11.0 million, or 17.6%. The decrease was due to a $18.1 million decrease in net interest income and a $2.8 million increase in provision for credit losses, offset by a $8.3 million decrease in provision for income taxes, a $1.6 million decrease in noninterest expense and an $86,000 increase noninterest income.
- Basic and diluted earnings per common share for the year ended December 31, 2023 was $2.05 and $2.02, respectively, compared to $2.46 and $2.44 for the basic and diluted earnings per common share for the year ended December 31, 2022.