First Financial Bancorp (FFBC) risk factors, FY2024 10-K

Risks Related to Economic and Market Conditions

1. 01Weakness in the economy and governmental policies, whether or not adopted in response to economic conditions such as inflation, may adversely affect us
2. 02Changes in market interest rates or financial markets could affect our revenues and expenses, the value of assets and obligations, and the availability and cost of capital or liquidity
3. 03levels could also be affected if the interest we receive on loans and other investments falls more quickly than the interest we pay on deposits and other borrowings
4. 04The Presidential Administration’s regulatory agenda could result in substantial impact to our regulatory compliance procedures and operations
5. 05Local economic factors may adversely affect our business and the results of our operations
6. 06Our loan portfolio and investments in mortgage-backed securities consist of a significant number of loans secured by real estate and other assets, the value of which can be affected by national and local market conditions
7. 07Weakness in the secondary market for residential mortgage loans could affect our financial condition and results of operations
8. 08Our financial instruments carried at fair value expose us to certain market risks

Risks Related to Our Business

1. 09When we loan money, commit to loan money or enter into a letter of credit or other contract with a counterparty, we incur credit risk, or the risk of loss if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts
2. 10The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an effect on our business, results of operations and financial condition
3. 11Our allowance for credit losses may prove to be insufficient to absorb losses in our loan portfolio
4. 12the portfolio extended due slower loan prepayments. Depending upon future circumstances, as well as broader macroeconomic shifts, we may incur significant provision expense for credit losses in future periods
5. 13In August 2019, First Financial acquired Bannockburn, which engages in various capital markets activities as part of its matched book business encompassing foreign exchange, interest rate, and commodity hedging transactions
6. 14We rely on other companies to provide key components of our business infrastructure, creating risks of failures or disruptions by such companies and cybersecurity incidents which may involve our customers’ information
7. 15Unauthorized use or disclosure of sensitive or confidential client or customer information, whether through a breach of our computer systems or otherwise, or other breaches in the security of our systems could harm our business
8. 16We rely on our systems, employees and certain counterparties, and certain failures or actions could affect our operations
9. 17Our liquidity is dependent upon our ability to receive dividends from our subsidiaries, which accounts for most of our revenue and could affect our ability to pay dividends, and we may be unable to provide liquidity from other sources
10. 18Clients could pursue alternatives to bank deposits, causing us to lose a relatively inexpensive source of funding
11. 19Our financial condition, results of operations, and stock price may be negatively impacted by unrelated bank failures and negative depositor and/or investor confidence in depository institutions
12. 20Disruptions in our ability to access capital markets on desirable terms may affect our capital resources, liquidity and business
13. 21Projections for new business initiatives and strategies may prove inaccurate
14. 22We may be required to repurchase mortgage loans or indemnify mortgage loan purchasers as a result of breaches of representations and warranties, borrower fraud, or certain borrower defaults, which could harm our liquidity, results of operations and financial condition
15. 23Competition in the financial services industry is intense and could result in our losing business and/or experiencing reduced margins
16. 24Maintaining or increasing market share depends on market acceptance and regulatory approval of new products and services
17. 25Failure to keep pace or successfully adopt new technologies could adversely affect the results of our operations
18. 26We may undertake additional costs to implement new technologies. If we are not successful in implementing the new technologies, or otherwise do not realize the intended efficiency and cost benefits of the implementation of new technologies, we may be unable to recover the costs incurred during the implementation
19. 27Another increasingly competitive factor in the financial services industry is the competition to attract and retain talented employees across many of our business and support areas, many of whom are key to executing our strategic plan and to maintaining relationships with the customers and communities they serve
20. 28Our wealth management business subjects us to a variety of investment and market risks
21. 29Negative public opinion could damage our reputation and impact business operations and revenues
22. 30We may not pay dividends on our common shares
23. 31Significant or sustained declines in our current market capitalization could impact the carrying value of our goodwill
24. 32A reduction in our credit rating could affect us or the holders of our securities
25. 33Potential acquisitions may disrupt our business and dilute shareholder value, we may not be able to successfully consummate or integrate such acquisitions, and we may not realize the anticipated benefits contemplated when pursuing a potential acquisition
26. 34Our accounting policies and processes are critical to how we report our financial condition and results of operations. They require management to make estimates about matters that are uncertain
27. 35Changes in our accounting policies or in accounting standards could materially affect how we report our financial results and condition
28. 36Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud
29. 37Our revenues derived from investment securities may be volatile and subject to a variety of risks

Risks Related to the Legal and Regulatory Environment

1. 38We operate in a highly regulated industry and compliance with regulations and/or regulatory actions could impact the results of our operations
2. 39Regulations related to information security, data protection and data privacy could expose us to regulatory risks, civil liabilities and increase our costs
3. 40The regulations under which we operate are subject to change, which could result in restrictions and requirements that could detrimentally impact the results of our operations
4. 41oversight requirements. These changes may result in increased compliance costs which could detrimentally affect the results of our operations
5. 42Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks
6. 43Weaknesses of other financial institutions could affect us
7. 44The fiscal and monetary policies of the United States government and its agencies could have an effect on our earnings
8. 45Changes in tax laws could affect our performance
9. 46Adverse external events outside of our control, such as natural disasters, acts of war or terrorism, new public health issues, could impact our business operations