Fidelity D & D Bancorp (FDBC) risk factors, FY2024 10-K

Risks Related to the Company’s Business

1. 01The short-term and long-term effects of inflation and rising costs may adversely affect the Company’s financial performance
2. 02The Company’s business is subject to interest rate risk and variations in interest rates may negatively affect its financial performance
3. 03The Company is subject to lending risk
4. 04The Company is subject to commercial real estate volatility that may result in increases in non-performing loans that could have an adverse impact on our financial condition and results of operations
5. 05The Company’s allowance for credit losses may be insufficient
6. 06If we conclude that the decline in value of any of our investment securities is a credit loss, we will be required to book a contra-asset
7. 07The Basel III and other regulatory capital requirements may require us to maintain higher levels of capital, which could reduce our profitability
8. 08The Company may need, or be compelled, to raise additional capital in the future, but that capital may not be available when it is needed and on terms favorable to current shareholders
9. 09The Company is subject to environmental liability risk associated with lending activities
10. 10The Company’s profitability depends significantly on economic conditions in the Commonwealth of Pennsylvania and the markets in which it conducts business
11. 11There is no assurance that the Company will be able to successfully compete with others for business
12. 12The Company is subject to extensive government regulation and supervision
13. 13The Company’s controls and procedures may fail or be circumvented
14. 14New lines of business or new products and services may subject the Company to additional risks
15. 15The Company’s future acquisitions could dilute your ownership and may cause it to become more susceptible to adverse economic events
16. 16The Company may not be able to attract and retain skilled people
17. 17The Company’s communications, information and technology systems may experience a failure, interruption or breach in security
18. 18The Company continually encounters technological change
19. 19The operations of our business, including our interaction with customers, are increasingly done via electronic means, and this has increased our risks related to cyber security
20. 20The Company may use artificial intelligence (AI) in its business, and challenges with properly managing its use could result in disruption of our internal operations, reputational harm, competitive harm, legal liability and adversely affect our results of operations and stock price
21. 21The Company is subject to claims and litigation pertaining to fiduciary responsibility
22. 22Pennsylvania Business Corporation Law and various anti-takeover provisions under our articles and bylaws could impede the takeover of the Company
23. 23The Company is a holding company and relies on dividends from its banking subsidiary for substantially all of its revenue and its ability to make dividends, distributions, and other payments
24. 24The Company’s banking subsidiary may be required to pay higher FDIC insurance premiums or special assessments which may adversely affect its earnings
25. 25Severe weather, natural disasters, acts of war or terrorism, global instability, pandemics and other external events could significantly impact the Company’s business
26. 26The increasing use of social media platforms presents new risks and challenges and our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could materially adversely impact our business
27. 27The Company’s stock price can be volatile
28. 28Geopolitical conditions such as acts or threats of terrorism or military conflicts
29. 29The trading volume in the Company’s common stock is less than that of other larger financial services companies
30. 30Future governmental regulation and legislation could limit the Company’s future growth
31. 31The earnings of financial services companies are significantly affected by general business and economic conditions
32. 32Financial services companies depend on the accuracy and completeness of information about customers and counterparties
33. 33Consumers may decide not to use banks to complete their financial transactions
34. 34Extended shutdowns of parts of the federal government could negatively impact the financial performance of certain customers and could impact customers’ future access to certain loan and guarantee programs. As a result, this could impact the Company’s business, financial condition and results of operations
35. 35The regulatory environment for the financial services is being significantly impacted by financial regulatory reform initiatives in the United States and elsewhere, including Dodd-Frank and regulations promulgated to implement it