First Financial Bankshares (FFIN) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We are subject to interest rate risk
2. 02In our business, we must effectively manage our credit risk
3. 03We are subject to environmental liability risk associated with lending activities
4. 04The value of real estate collateral may fluctuate significantly resulting in an under-collateralized loan portfolio
5. 05We are subject to liquidity risk20% rewritten

Operational Risk

1. 06Our accounting estimates and risk management processes rely on analytical and forecasting models
2. 07The value of our goodwill and other intangible assets may decline in the future
3. 08Breakdowns in our internal controls and procedures could have an adverse effect on us
4. 09New lines of business or new products and services may subject the Company to additional risks
5. 10First Financial Bankshares, Inc. relies on dividends from its subsidiaries for most of its revenue
6. 11Hurricanes, tornadoes, extended drought conditions, severe weather and natural disasters could significantly impact the Company's business
7. 12We rely heavily on our management team, and the unexpected loss of key management or inability to recruit qualified personnel in the future may adversely impact our operations
8. 13World events such as the Russia-Ukraine conflict, the Israel-Palestine conflict and other world events, including health related events, may adversely impact our business and our financial results, and the ultimate impact will depend on future developments, which are highly uncertain and cannot be predicted34% rewritten
9. 14System failure or cybersecurity breaches of our network security could subject us to increased operating costs as well as litigation and other potential losses
10. 15We are subject to claims and litigation pertaining to intellectual property83% rewritten
11. 16We do business with other financial institutions that could experience financial difficulty
12. 17We are subject to possible claims and litigation pertaining to fiduciary responsibility
13. 18Our operations rely on certain external vendors
14. 19Certain of our investment advisory and wealth management contracts are subject to termination on short notice, and termination of a significant number of investment advisory contracts could have a material adverse impact on our revenue
15. 20The trust wealth management fees we receive may decrease as a result of poor investment performance, in either relative or absolute terms, which could decrease our revenues and net earnings
16. 21our wealth managers and investment advisors may depart to join a competitor or otherwise21% rewritten
17. 22Our reputation and business could be damaged by negative publicity
18. 23Our business faces unpredictable economic conditions, which could have an adverse effect on us
19. 24federal, state and local laws affecting these matters
20. 25Our business is concentrated in Texas and a downturn in the economy of Texas may adversely affect our business
21. 26Our Company lends primarily to small to medium-sized businesses that may have fewer resources to weather a downturn in the economy, which could adversely impact the Company’s operating results
22. 27If we are unable to continue to originate residential real estate loans and sell them into the secondary market for a profit, our earnings could decrease58% rewritten
23. 28ability to market those loans is impaired as the profitability on the loans decreases. These fluctuations can have an adverse effect on the revenue we generate from residential real estate loans and in certain instances, could result in a loss on the sale of the loansNew
24. 29We compete in an industry that continually experiences technological change, and we may have fewer resources than many of our competitors to continue to invest in technological improvements
25. 30Difficult or changes in market conditions could adversely affect the financial services industry
26. 31Inflationary pressures and rising prices may affect our results of operations and financial conditions
27. 32Our financial instruments expose us to certain market risks and may increase the volatility of earnings and AOCI
28. 33We may need to raise additional capital and such funds may not be available when needed
29. 34Climate change, and related legislative and regulatory initiatives, have the potential to disrupt our business and adversely impact the operations and creditworthiness of our customers60% rewritten
30. 35Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our sustainability practices may impose additional costs on us or expose us to new or additional risks25% rewritten
31. 36We compete with many larger financial institutions which have substantially greater financial resources than we have
32. 37We may be subject to more stringent capital requirements which would adversely affect our net income and future growth
33. 38OFAC, the BSA and related FinCEN and FFIEC Guidelines and regulations could result in material implications
34. 39Our business is subject to significant government regulation
35. 40We are subject to heightened regulatory requirements as our total assets exceed $10 billion
36. 41Federal income tax reform could have unforeseen effects on our financial condition and results of operations
37. 42Our FDIC deposit insurance assessments could increase substantially resulting in higher operating costs50% rewritten

Risks Related to Acquisition Activities

1. 43To continue our growth, we are affected by our ability to identify and acquire other financial institutions27% rewritten
2. 44We may not be able to complete future acquisitions, may not be successful in realizing the benefits of any acquisitions that are completed, or may choose not to pursue acquisition opportunities we might find beneficial
3. 45Use of our common stock for future acquisitions or to raise capital may be dilutive to existing stockholders
4. 46The trading volume in our common stock is less than other larger financial institutions
5. 47Our stock ownership has shifted to larger institutional shareholders
6. 48Certain banking laws may have an anti-takeover effect
7. 49We may not continue to pay dividends on our common stock in the future
8. 50The Company’s stock price can be volatile
9. 51changes in economic, competitive, regulatory conditions and technical factors, or other developments affecting our industry, and publicity regarding our business or any of our significant customers or competitorsNew
10. 52An investment in our common stock is not an insured deposit
11. 53If we are unable to continue our historical levels of growth, we may not be able to maintain our historical earnings trends