CB Financial Services (CBFV) risk factors, FY2024 10-K

Risks Related to Our Lending Activities

1. 01A large percentage of the Company’s loans are collateralized by real estate, and further disruptions in the real estate market may result in losses and reduce the Company’s earnings
2. 02Because the Company emphasizes commercial real estate and commercial loan originations, its credit risk profile is increased, and continued downturns in the local real estate market or economy could adversely affect its earnings
3. 03If our nonperforming assets increase, our earnings will suffer
4. 04If the Company’s allowance for credit losses is not sufficient to cover actual credit losses, the Company’s results of operations would be negatively affected

Risk Related to Changes in Market Interest Rates

1. 05Changes in interest rates may reduce the Company’s profits and impair asset values

Risks Related to Our Acquisition Activity

1. 06Impairment in the carrying value of goodwill could negatively affect our results of operations

Risk Related to Our Liquidity Position

1. 07If we are unable to borrow funds, we may not be able to meet the cash flow requirements of our depositors, creditors, and borrowers, or the operating cash needed to fund corporate expansion and other corporate activities

Risks Related to Our Ability to Pay Dividends

1. 08The Company’s ability to pay dividends is subject to the ability of Community Bank to make capital distributions to the Company, and also may be limited by Federal Reserve policy

Risks Related to Our Operations

1. 09Because the nature of the financial services business involves a high volume of transactions, the Company faces significant operational risks
2. 10Risks associated with system failures, interruptions, breaches of security or cyber security could negatively affect the Company’s earnings
3. 11and possible financial liability. Although the Company has not experienced any system failures, interruption or breach of security to date, any of these events could have a material adverse effect on its financial condition and results of operations
4. 12The Company’s risk management framework may not be effective in mitigating risk and reducing the potential for significant losses
5. 13We could be adversely affected by failure in our internal controls

Risks Related to Accounting Matters

1. 14Changes in the Company’s accounting policies or in accounting standards could materially affect how the Company reports its financial condition and results of operations
2. 15The need to account for certain assets at estimated fair value, such as securities, may adversely affect the Company’s financial condition and results of operations

Risks Related to Competitive Matters

1. 16Strong competition within the Company’s market area could adversely affect the Company’s earnings and slow growth
2. 17A worsening of economic conditions could adversely affect the Company’s financial condition and results of operations
3. 18Inflation can have an adverse impact on our business and on our customers
4. 19Climate change and related legislative and regulatory initiatives may materially affect the Company’s financial condition and results of operations