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Financial report summary
?Risks
- New governmental regulations and/or changes in existing governmental regulations could have a material adverse effect on the Company.
- Negative developments in the banking industry could result in increased regulatory scrutiny.
- Tax legislative initiatives or assessments could adversely affect our results of operations and financial condition.
- We may be subject to more stringent capital requirements in the future, the impact of which could have a material risk to our operations.
- Changes in accounting standards could materially negatively impact our financial statements.
- We are subject to the USA PATRIOT Act, OFAC guidelines and requirements, the Bank Secrecy Act (“BSA”), and related Financial Crimes Enforcement Network (“FinCEN”) and Federal Financial Institutions Examination Council (“FFIEC”) Guidelines and regulations and any failure to comply with them could result in material implications that could harm our business.
- Federal deposit insurance premiums could increase further in the future.
- A decline in economic conditions could reduce demand for our products and services and negatively impact the credit quality of loans, which could have an adverse effect on our results of operations.
- If we experience loan credit losses in excess of estimated amounts, our earnings could be adversely affected.
- We invest in Collateralized Loan Obligations (CLO) securities, which may expose us to losses in connection with such investments.
- United States trade policies and other factors beyond the Company’s control, including the imposition of tariffs and retaliatory tariffs, may adversely impact our business, financial condition, and results of operations.
- The soundness of other financial institutions could adversely affect the Company.
- We are subject to liquidity risks which could impair our cash flows and adversely affect the Company.
- Loss of deposits or a change in deposit mix could increase the Company’s funding costs and negatively affect the Company’s operations.
- Our Liquidity could be impacted by an inability to access funding, by an unforeseen outflow of cash, or by the inability to monetize liquid assets.
- Changes in interest rates may have an adverse effect on demand for our products and services and on our profitability.
- Changes in interest rates may have an adverse effect on the value of our investment securities.
- Our goodwill and other intangible assets may become impaired, which may adversely impact our results of operations and financial condition.
- The Company relies on other companies to provide certain key components of its business infrastructure.
- Our reputation is very important to our ability to maintain, attract and retain client relationships and if our reputation were impaired, it could have an adverse effect on the Company.
- The results of mainstream media and social media contagion and speculation could impact the banking system and have an adverse effect on us.
- We may not be able to attract and retain qualified employees to operate our business effectively, which could have an adverse effect on our business.
- We may not effectively implement technology-facilitated products and services or be successful in marketing these products and services to our clients, which could negatively impact our business.
- We may encounter difficulties in combining the operations of future acquired entities or assets with our own operations or assessing the effectiveness of businesses in which we make strategic investments or with which we enter into strategic contractual relationships may prevent us from achieving the expected benefits from these acquisitions, investments, or relationships.
- “Anti-takeover” provisions and the regulations to which we are subject may also make it more difficult for a third party to acquire control of us, even if the change in control could be deemed beneficial to stockholders.
- Our dividend policy, or our ability to pay dividends, may change.
- Future equity issuances could result in dilution, which could cause our common stock price to decline.
- The common stock is equity and is subordinate to our existing and future indebtedness.
- We recently identified combined deficiencies resulting in a material weakness in our internal control over financial reporting, which, if we are unable to remediate appropriately or timely, could result in a loss of investor confidence and adversely impact our stock price, and could impair our ability to accurately and timely report our financial results and harm our business.
- Our business is subject to the risks of certain global conditions, earthquakes, volcanoes, tsunamis, tornados, floods, fires, drought, and other natural catastrophic events.
- Climate change manifesting as physical or transition risks could adversely affect our operations, businesses and customers.
Management Discussion
- Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
- In addition to financial measures presented in accordance with GAAP, this document contains GAAP financial measures and non-GAAP financial measures where management believes it to be helpful in understanding our results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found herein.
- Fully-Taxable Equivalent Basis. Interest income, yields, and ratios on an FTE basis are considered non-GAAP financial measures. Management believes net interest income on an FTE basis provides an insightful picture of the interest margin for comparison purposes. The FTE basis also allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The FTE basis assumes a federal statutory tax rate of 21 percent. We encourage readers to consider the Consolidated Financial Statements and other financial information contained in this Form 10-K in their entirety, and not to rely on any single financial measure.