Community Bancorp (CMTV) risk factors, FY2025 10-K

OPERATIONAL RISKS

1. 01Changes in interest rates could adversely affect our business, results of operations and financial condition
2. 02We are subject to liquidity risk because we rely primarily on deposit-gathering to satisfy our funding needs
3. 03We are subject to credit risk and if our ACL is not adequate to cover actual losses, our earnings could decrease
4. 04Prepayments of loans may negatively impact our business
5. 05Our loans and deposits are geographically concentrated and adverse local economic conditions could negatively affect our business
6. 06We have a high concentration of loans secured by real estate, so a deterioration in the real estate markets could require material increases in our ACL and adversely affect our business, financial condition, and results of operations
7. 07Systems failures, interruptions, cyberattacks or other breaches of information security, including those affecting our vendors, could disrupt our business and have an adverse effect on our reputation, business, results of operations and financial condition
8. 08We depend on the accuracy and completeness of information about customers and counterparties
9. 09Environmental liability associated with our lending activities could result in losses
10. 10Pandemics, epidemics, disease outbreaks and other public health crises, such as the recent COVID-19 pandemic, have disrupted our business and operations, and future outbreaks could materially adversely impact our business, financial condition, liquidity and results of operations

REGULATORY, LEGAL AND ACCOUNTING RISKS

1. 11Our ability to pay dividends on our capital stock and to service our debt depends primarily on dividends from our subsidiary and may be subject to regulatory and contractual limitations
2. 12Our banking business is highly regulated, and we may be adversely affected by changes in law and regulation
3. 13A decline in the fair value of our investment portfolio could adversely affect our financial results and capital
4. 14Changes in accounting standards could materially affect our financial statements
5. 15Our internal controls and procedures may fail or be circumvented
6. 16We are subject to detailed capital requirements that could limit our ability to pay dividends and to take certain other actions
7. 17We may be required to write down goodwill
8. 18Our investment in tax credit partnerships and other structures may not generate expected or anticipated returns, which could have an adverse impact on our results of operations and financial condition

RISKS RELATING TO OUR COMMON STOCK

1. 19Although our common stock is now exchange-listed, our trading volume is less than that of larger public companies, which can contribute to volatility in our stock price and adversely affect the price and liquidity of an investment in our common stock76% rewritten
2. 20Our common stock is subordinate to our existing and future indebtedness and to any preferred stock we may issue in the future72% rewritten
3. 21Securities issued by us, including our common stock, are not FDIC insured
4. 22Our organizational documents may have the effect of discouraging a third party from acquiring us

GENERAL RISKS

1. 23Market changes in delivery of financial services may adversely affect demand for our services
2. 24Substantial competition and disintermediation of payment services could adversely affect us
3. 25New products and services are essential to remain competitive but may subject us to additional risks
4. 26Changes in our tax rates could affect our future results
5. 27Our business could suffer if we fail to attract and retain skilled personnel
6. 28We are not able to offer all of the financial services and products of a financial holding company
7. 29Our risk management framework may not be effective in mitigating risk and loss