First Capital (FCAP) risk factors, FY2024 10-K

Credit Risk

1. 01We may not be able to measure and limit our credit risk adequately, which could adversely affect our profitability
2. 02Higher loan losses could require the Company to increase its ACL on loans and unfunded commitments through a charge to earnings
3. 03Commercial business lending may expose the Company to increased lending risks
4. 04Commercial real estate lending may expose the Company to increased lending risks
5. 05Non-performing assets take significant time to resolve, adversely affect our results of operations and financial condition, and could result in losses

Liquidity and Interest Rate Risk

1. 06Above average interest rate risk associated with fixed-rate loans may have an adverse effect on our financial position or results of operations
2. 07Liquidity risks could affect operations and jeopardize our business, financial condition, and results of operations
3. 08The Company is a bank holding company and its sources of funds necessary to meet its obligations are limited

Operational Risk

1. 09Our information systems may experience an interruption or breach in security
2. 10We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors
3. 11We depend on outside third parties for processing and handling of our records and data
4. 12Our framework for managing risks may not be effective in mitigating risk and loss to us
5. 13We are subject to changes in accounting principles, policies, or guidelines

Strategic and External Risk

1. 14Our business may be adversely affected by conditions in the financial markets and economic conditions generally
2. 15Acquisitions and the addition of branch facilities may not produce revenue enhancements or cost savings at levels or within timeframes originally anticipated and may result in unforeseen integration difficulties and dilution to existing shareholder value
3. 16Turmoil in the financial markets could result in lower fair values for our investment securities
4. 17Strong competition within the Bank’s market area could hurt the Company’s profitability and growth
5. 18We continually encounter technological change

Regulatory, Compliance, Legal, and Reputational Risk

1. 19We are subject to federal regulations that seek to protect the Deposit Insurance Fund and the depositors and borrowers of the Bank, and our federal regulators may impose restrictions on our operations that are detrimental to holders of the Company’s common stock
2. 20Financial regulatory reform may have a material impact on the Company’s operations
3. 21We face a risk of noncompliance and enforcement action with the BSA and other anti-money laundering statutes and regulations
4. 22We are periodically subject to examination and scrutiny by a number of banking agencies and, depending upon the findings and determinations of these agencies, we may be required to make adjustments to our business that could adversely affect us

Risks Related to the Company’s Stock

1. 23An investment in the Company’s Common Stock is not an insured deposit
2. 24The price of the Company’s common stock may be volatile, which may result in losses for investors
3. 25The trading volume in the Company’s common stock is less than that of other larger financial services institutions
4. 26The Company’s Articles of Incorporation, Indiana law, and certain banking laws may have an anti-takeover effect
5. 27The Company may issue additional securities, which could dilute the ownership percentage of holders of the Company’s common stock
6. 28We may not be able to pay dividends in the future in accordance with past practice

General Risk Factors

1. 29We may not be able to attract and retain skilled people
2. 30Loss of key employees may disrupt relationships with certain customers
3. 31We rely heavily on our executive management team and other key personnel for our successful operation, and we could be adversely affected by the unexpected loss of their services
4. 32Our internal controls may be ineffective