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Financial report summary
?Risks
- Our portfolios of commercial real estate loans and commercial and industrial loans have increased in recent periods, and we intend to continue originating these types of loans. These loans involve credit risks that could adversely affect our financial condition and results of operations.
- The level of our commercial real estate loan portfolio subjects us to additional regulatory scrutiny.
- Our construction and land development loans involve credit risks that could adversely affect our financial condition and results of operations.
- Lack of seasoning of certain portions of our commercial and industrial loan portfolio, especially with respect to cannabis, wind and solar customers, may increase the risk of credit defaults in the future.
- The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in the local economy.
- If our allowance for credit losses is not sufficient to cover actual credit losses, our earnings could decrease.
- We provide banking services to customers who do business in the cannabis industry and the strict enforcement of federal laws regarding cannabis would likely result in our inability to continue to provide banking services to these customers and we could have legal action taken against us by the federal government.
- Environmental liability associated with our lending activities could result in losses.
- The foreclosure process may adversely impact our recoveries on non-performing loans.
- The reversal of the historically low interest rate environment may adversely affect our net interest income and profitability.
- Changes in interest rates could reduce our profits and asset values.
- Hedging against interest rate exposure may adversely affect our earnings.
- Inflation can have an adverse impact on our business and on our customers.
- A worsening of economic conditions in our market area could reduce demand for our products and services and/or result in increases in our level of non-performing loans, which could adversely affect our operations, financial condition and earnings.
- We have a high concentration of loans secured by real estate in our market area. Adverse economic conditions, both generally and in our market area, could adversely affect our financial condition and results of operations.
- Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations.
- Our securities portfolio performance in difficult market conditions could have adverse effects on our results of operations.
- The fair value of our investment securities can fluctuate due to factors outside of our control.
- Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings and financial condition.
- The soundness of other financial institutions could adversely affect us.
- Our inability to generate core deposits may cause us to rely more heavily on wholesale funding strategies for funding and liquidity needs, which could have an adverse effect on our net interest margin and profitability.
- Our funding sources may prove insufficient to replace deposits at maturity and support our future growth.
- Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations.
- Our cannabis-related business, money service business and ATM business present compliance risks that are different in kind or degree compared to those that we are accustomed to managing and have required us to implement new or enhance existing procedures, systems and controls.
- Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions.
- Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations.
- We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or limit our ability to pay dividends or repurchase shares.
- We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.
- If our deposits grow too large, we may lose the benefits of excess deposit insurance provided by the Depositors Insurance Fund.
- We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.
- Our continued pace of growth may require us to raise additional capital in the future, but that capital may not be available when it is needed.
- We depend on our management team to implement our business strategy and execute successful operations and we could be harmed by the loss of their services.
- Development of new products and services may impose additional costs on us and may expose us to increased operational risk.
- Strong competition within our market area may limit our growth and profitability.
- We face significant operational risks because of our reliance on technology. Our information technology systems may be subject to failure, interruption or security breaches.
- Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes.
- Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results.
- Changes in accounting standards could affect reported earnings.
- We operate as a community bank and our ability to maintain our reputation, which is critical to the success of our business, may materially adversely affect our performance.
- The cost of additional finance and accounting systems, procedures and controls in order to satisfy our new public company reporting requirements will increase our expenses.
- Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers.
- Various factors may make takeover attempts more difficult to achieve.
- Our articles of incorporation provide that, subject to limited exception, state and federal courts in the State of Maryland are the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, and other employees.