Farmers National Banc (FMNB) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We have significant exposure to risks associated with commercial real estate and residential real estate in our primary markets
2. 02Our indirect lending exposes us to increased credit risks
3. 03Commercial and industrial loans may expose us to greater financial and credit risk than other loans
4. 04We may be unable to integrate the business of the Company and Middlefield successfully or realize the anticipated benefits of the MergerNew
5. 05It is possible that the integration process could result in diversion of the attention of the Company’s management and the disruption of, or the loss of momentum in, the Company’s ongoing businesses or inconsistencies in standards, controls, procedures and policiesNew
6. 06Our allowance for credit losses may not be adequate to cover the expected, lifetime losses in our loan portfolio
7. 07We are subject to certain risks with respect to liquidity
8. 08Our 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
9. 09We may experience difficulties in integrating acquired businesses, or acquisitions may not perform as expected
10. 10the acquired operations may not otherwise perform as expected or provide expected results
11. 11We may fail to realize all of the anticipated benefits of acquisitions, which could reduce our anticipated profitability
12. 12We may not be able to attract and retain skilled people
13. 13Strong competition within our markets could reduce our ability to attract and retain business
14. 14Consumers may decide not to use banks to complete their financial transactions
15. 15We are exposed to operational risk
16. 16We depend on the accuracy and completeness of information about our customers
17. 17Unauthorized 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
18. 18We depend on our subsidiaries for dividends, distributions and other payments
19. 19We may elect or be compelled to seek additional capital in the future, but that capital may not be available when it is needed
20. 20We may not be able to adapt to technological change

Risks Relating to General Economic and Market Conditions

1. 21Significant changes to the size, structure, powers and operations of the federal government, changes to U.S. economic policies, and uncertainties regarding these changes may cause economic disruptions which could adversely impact our business, results of operations and financial conditionNew
2. 22Changes in economic, political, and market conditions may adversely affect our industry and our business
3. 23Adverse 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 operations34% rewritten
4. 24Changes in interest rates could adversely affect our income and financial condition
5. 25Inflation may adversely impact our business and our customers
6. 26Defaults by another larger financial institution could adversely affect financial markets generally
7. 27In recent years, several high profile bank failures caused uncertainty in the investor community and negative confidence among bank customers generally

Risks Related to the Legal and Regulatory Environment

1. 28Increases in FDIC insurance premiums may have a material adverse effect on our earnings75% rewritten
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