Farmers National Banc (FMNB) risk factors, FY2024 10-K

Risks Relating to General Economic and Market Conditions

1. 01Changes in economic, political, and market conditions may adversely affect our industry and our business
2. 02Instability in geopolitical matters, as well as volatility in financial markets, may have a material adverse effect on our industry and our business
3. 03Changes to United States tariff and import/export regulations may have a negative effect on our industry and our business
4. 04Adverse changes in the ability or willingness of our customers to meet their repayment obligations to the Company could adversely impact our liquidity, financial condition and results of operations
5. 05uncollectible, we cannot estimate loan losses with certainty, and we cannot provide any assurances that our allowance for loan losses will prove sufficient to cover actual credit losses in the future. Credit losses in excess of our reserves may adversely affect our financial condition and results of operations
6. 06Changes in Interest rates could adversely affect our income and financial condition
7. 07Inflation may adversely impact our business and our customers
8. 08Defaults by another larger financial institution could adversely affect financial markets generally
9. 09During 2023, several high profile bank failures caused uncertainty in the investor community and negative confidence among bank customers generally

Risks Related to Our Business

1. 10We have significant exposure to risks associated with commercial real estate and residential real estate in our primary markets
2. 11Our indirect lending exposes us to increased credit risks
3. 12Commercial and industrial loans may expose us to greater financial and credit risk than other loans
4. 13Our allowance for credit losses may not be adequate to cover the expected, lifetime losses in our loan portfolio
5. 14We are subject to certain risks with respect to liquidity
6. 15Our business strategy includes continuing our growth plans. Our business, financial condition or results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively
7. 16We may experience difficulties in integrating acquired businesses, or acquisitions may not perform as expected
8. 17the acquired operations may not otherwise perform as expected or provide expected results
9. 18We may fail to realize all of the anticipated benefits of acquisitions, which could reduce our anticipated profitability
10. 19We may not be able to attract and retain skilled people
11. 20Strong competition within our markets could reduce our ability to attract and retain business
12. 21Consumers may decide not to use banks to complete their financial transactions
13. 22We are exposed to operational risk
14. 23We depend on the accuracy and completeness of information about our customers
15. 24Unauthorized disclosure of sensitive or confidential customer information, whether through a data breach of our computer systems, third-party service providers’ systems, by cyber-attack or otherwise, could severely harm our business
16. 25We depend on our subsidiaries for dividends, distributions and other payments
17. 26We may elect or be compelled to seek additional capital in the future, but that capital may not be available when it is needed
18. 27We may not be able to adapt to technological change

Risks Related to the Legal and Regulatory Environment

1. 28Increases in FDIC insurance premiums may have a material adverse effect on our earnings
2. 29Legislative or regulatory changes or actions, or significant litigation, could adversely impact us or the businesses in which we are engaged
3. 30Even a reduction in regulatory restrictions could adversely affect our operations and our shareholders if less restrictive regulation increases competition within the industry generally or within our markets
4. 31Environmental liability associated with commercial lending could have a material adverse effect on our business, financial condition or results of operations
5. 32Increasing 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. 33Impairment of investment securities, goodwill, other intangible assets, or deferred tax assets could require charges to earnings, which could result in a negative impact on our results of operations
7. 34Changes and uncertainty in tax laws could adversely affect our performance
8. 35Anti-takeover provisions could delay or prevent an acquisition or change in control by a third party
9. 36We may be a defendant from time to time in the future in a variety of litigation and other actions, which could have a material adverse effect on our business, financial condition or results of operations