ConnectOne Bancorp (CNOB) risk factors, FY2024 10-K

Other

1. 01Our growth-oriented business strategy could be adversely affected if we are not able to attract and retain skilled employees or if we lose the services of our senior management team
2. 02We may need to raise additional capital to execute our growth-oriented business strategy
3. 03We have a significant concentration in commercial real estate loans
4. 04Loans secured by owner-occupied real estate are reliant on the operating businesses to provide cash flow to meet debt service obligations, and as a result may be more susceptible to the general impact on the economic environment affecting those operating companies as well as the real estate
5. 05If we are limited in our ability to originate loans secured by commercial real estate, we may face greater risk in our loan portfolio
6. 06Our New York State multifamily loan portfolio could be adversely impacted by changes in legislation or regulation which, in turn, could have a material adverse effect on our financial condition and results of operations
7. 07The small-to medium-sized businesses that the Bank lends to may have fewer resources to weather a downturn in the economy, which may impair a borrower’s ability to repay a loan to the Bank that could materially harm our operating results
8. 08Our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affect our performance
9. 09Anti-takeover provisions in our corporate documents and in New Jersey corporate law may make it difficult and expensive to remove current management
10. 10Competition in originating loans and attracting deposits may adversely affect our profitability
11. 11These competitors may offer higher interest rates than we do, which could decrease the deposits that we attract or require us to increase our rates to retain existing deposits or attract new deposits
12. 12Increased deposit competition could adversely affect our ability to generate the funds necessary for lending operations, which may increase our cost of funds
13. 13External factors, many of which we cannot control, may result in liquidity concerns for us
14. 14Liquidity is required to fund various obligations, including credit commitments to borrowers, mortgage and other loan originations, withdrawals by depositors, repayment of borrowings, operating expenses, capital expenditures and dividend payments to shareholders
15. 15Declines in the value of our investment securities portfolio may adversely impact our results
16. 16The Bank’s ability to pay dividends is subject to regulatory limitations, which, to the extent that the Company requires such dividends in the future, may affect the Company’s ability to honor its obligations and pay dividends
17. 17We may not be able to pay dividends on our common stock if we have not made required dividend payments on our outstanding, noncumulative preferred stock
18. 18We may incur impairment to goodwill
19. 19We have grown and may continue to grow through acquisitions
20. 20Attractive acquisition opportunities may not be available to us in the future
21. 21Hurricanes or other adverse weather or health related events could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business or results of operations
22. 22The Company will be subject to heightened regulatory requirements when total assets exceed $10 billion
23. 23Shareholders of ConnectOne will have less influence as shareholders of the combined company than as a shareholder of ConnectOne prior to the completion of the merger
24. 24Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the Merger
25. 25ConnectOne may need to raise additional capital in connection with the merger
26. 26Failure to complete the merger could severely disadvantage ConnectOne
27. 27ConnectOne’s management’s and employees’ attention may be diverted from their day-to-day business and operational matters as a result of efforts relating to the attempt to consummate the merger
28. 28The expected benefits of the merger may not be realized if the combined company does not achieve cost savings and other benefits
29. 29ConnectOne will be subject to business uncertainties and contractual restrictions, while the merger is pending
30. 30Shareholder litigation could prevent or delay the completion of the merger or otherwise negatively impact the business and operations of ConnectOne
31. 31The combined company may be unable to retain ConnectOne and/or FLIC personnel successfully after the merger is completed
32. 32Unanticipated costs relating to the merger could reduce ConnectOne’s future earnings per share
33. 33Issuance of shares of ConnectOne common stock in connection with the merger may adversely affect the market price of ConnectOne common stock
34. 34Our allowance for credit losses may not be adequate to cover actual losses
35. 35Changes in interest rates, as well as other actions the Federal Reserve may take may adversely affect our earnings and financial condition
36. 36A period of sustained high market interest rates could adversely affect our earnings if our cost of funds increases more rapidly than our yield on our earning assets and compresses our net interest margin. In addition, the economic value of portfolio equity would decline as interest rates increase
37. 37The banking business is subject to significant government regulations
38. 38The laws that regulate our operations are designed for the protection of depositors and the public, not our shareholders
39. 39We cannot predict how changes in technology will impact our business; increased use of technology may expose us to service interruptions or breaches in security