Eagle Bancorp Montana (EBMT) risk factors, FY2024 10-K

Risks Related to Economic and Market Conditions

1. 01Our business may be adversely affected by conditions in the financial markets and economic conditions generally and in our market areas in particular
2. 02Additionally, financial markets may be adversely affected by the current or anticipated impact of military conflict, including escalating military tension between Russia and Ukraine, the Middle East, terrorism and other geopolitical events
3. 03Declines in home values could decrease our loan originations and increase delinquencies and defaults
4. 04Changes in interest rates could adversely affect our results of operations and financial condition
5. 05We may be impacted by the retirement of London Interbank Offered Rate (“LIBOR”) as a reference rate
6. 06Strong competition may limit growth and profitability
7. 07We are subject to physical and financial risks associated with climate change and other weather and natural disaster impacts
8. 08The emergence or continuation of widespread health emergencies or pandemics could have a material adverse effect on our business, results of operations and financial condition, and such effects will depend on future developments, which are highly uncertain and are difficult to predict

Risks Related to Our Business

1. 09We hold certain intangible assets that could be classified as impaired in the future. If these assets are considered to be either partially or fully impaired in the future, our earnings and the book values of these assets would decrease
2. 10Risks associated with system failures, interruptions, or breaches of security could negatively affect our earnings
3. 11If the allowance for credit losses is not sufficient to cover actual credit losses, our earnings could decrease
4. 12We could record future losses on our securities portfolio
5. 13Changes in our accounting policies or in accounting standards could materially affect how we report our financial condition and results of operations
6. 14Because we have increased our commercial real estate and commercial business loan originations, our credit risk has increased and continued downturns in the local real estate market or economy could adversely affect our earnings
7. 15We continually encounter technological change
8. 16We depend on the services of our executive officers and other key employees
9. 17We earn a significant portion of our noninterest income through sales of residential mortgages in the secondary market. We rely on the mortgage secondary market for some of our liquidity
10. 18There can be no assurance we will be able to continue paying dividends on our common stock at recent levels
11. 19Our business strategy includes significant growth plans, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively
12. 20We may be unsuccessful in integrating the operations of the business we have acquired or expect to acquire in the future
13. 21Failure to maintain effective internal control over financial reporting or disclosure controls and procedures could adversely affect our ability to report our financial condition and results of operations accurately and on a timely basis
14. 22Changes in interest rates may change the value of our mortgage servicing rights portfolio, which may increase the volatility of our earnings
15. 23Farmland and agriculture production lending presents unique credit risk
16. 24Consumers may decide not to use banks to complete their financial transactions
17. 25We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations
18. 26We operate in a highly regulated environment and may be adversely affected by changes in laws and regulations
19. 27Future legislation, regulatory reform or policy changes under the current U.S. administration could have a material effect on our business and results of operations
20. 28If our investment in the Federal Home Loan Bank of Des Moines becomes impaired, our earnings and shareholders’ equity could decrease
21. 29A continuation of recent turmoil in our industry, and responsive measures to manage it, could have an adverse effect on our financial position or results of operations