Central Plains Bancshares (CPBI) risk factors, FY2025 10-K

Risks Related to Market Interest Rates

1. 01Future changes in interest rates could reduce our profits and asset values
2. 02the interest expense we pay on interest-bearing liabilities, such as deposits and borrowings
3. 03our adjustable-rate loans reprice immediately, such that changes in market interest rates take a period of time to affect our portfolio yields

Risks Related to Our Lending Activities

1. 04Our real estate commercial loans involve credit risks that could adversely affect our financial condition and results of operations
2. 05Our agricultural loans involve credit risks that could adversely affect our financial condition and results of operations
3. 06Our commercial and industrial loans involve credit risks that could adversely affect our financial condition and results of operations
4. 07Our real estate construction loans involve credit risks that could adversely affect our financial condition and results of operations
5. 08Our historical emphasis on real estate residential loans exposes us to lending risks
6. 09If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease
7. 10We are subject to environmental liability risk associated with lending activities or properties we own
8. 11Our mortgage banking revenue and the value of our mortgage servicing rights can be volatile
9. 12The foreclosure process may adversely impact our recoveries on non-performing loans

Risks Related to Laws and Regulations

1. 13Changes 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
2. 14Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions
3. 15We may become subject to enforcement actions even though non-compliance was inadvertent or unintentional
4. 16Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations
5. 17We 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
6. 18We 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
7. 19We are also a smaller reporting company, and even if we no longer qualify as an emerging growth company, any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors
8. 20The Federal Reserve Board may require us to commit capital resources to support Home Federal Savings

Risks Related to Economic Conditions

1. 21Changes to trade policies and tariffs can have an adverse impact on our business and our customers
2. 22Inflation can have an adverse impact on our business and on our customers
3. 23We 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
4. 24A worsening of economic conditions could reduce demand for our products and services and/or increase our level of non-performing loans, which could adversely affect our financial condition and results of operations
5. 25the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us

Risks Related to our Business Strategy

1. 26Our business strategy includes growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Growing our operations could also cause our expenses to increase faster than our revenues
2. 27Our 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

Risks Related to Competitive Matters

1. 28Strong competition within our market area may limit our growth and profitability
2. 29Our smaller size may make it more difficult for us to compete

Risks Related to Operational Matters

1. 30We face significant operational risks because of our reliance on technology. Our information technology systems may be subject to failure, interruption or security breaches
2. 31Our board of directors relies to a large degree on management and outside consultants in overseeing cybersecurity risk management
3. 32We 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
4. 33Our funding sources may prove insufficient to replace deposits at maturity and support our future growth. A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on us
5. 34adversely affected. Alternatively, we may need to sell a portion of our investment and/or loan portfolio to raise funds, which, depending upon market conditions, could result in us realizing a loss on the sale of such assets
6. 35The soundness of other financial institutions could adversely affect us

Risks Related to Acquisitions

1. 36Acquisitions may disrupt our business and dilute stockholder value

Risks Related to Accounting Matters

1. 37Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results
2. 38Changes in accounting standards could affect reported earnings
3. 39We are a community bank and our ability to maintain our reputation is critical to the success of our business. The failure to do so may materially adversely affect our performance
4. 40Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
5. 41A protracted government shutdown may result in reduced loan originations and related gains on sale and could negatively affect our financial condition and results of operations
6. 42Severe weather, natural disasters and other external events could significantly affect our operations and results
7. 43Various factors may make takeover attempts more difficult to achieve