FVCBankcorp (FVCB) risk factors, FY2024 10-K

Risks Related to the Economy, Financial Markets, Interest Rates and Liquidity

1. 01Our business and operations may be materially adversely affected by weak economic conditions
2. 02We are subject to interest rate risk, which could adversely affect our profitability
3. 03Inflation can have an adverse impact on our business and on our customers
4. 04Insufficient liquidity could impair our ability to fund operations and meet our obligations as they become due, and could materially adversely affect our growth, business, profitability and financial condition
5. 05We may not be able to retain or grow our core deposit base, which could adversely impact our funding costs
6. 06Unrealized losses in our securities portfolio could affect liquidity
7. 07We are subject to credit risk, which could adversely affect our profitability
8. 08Increases to our nonperforming assets or other problem assets will have an adverse effect on our earnings
9. 09Our concentrations of loans may create a greater risk of loan defaults and losses
10. 10Regulatory requirements affecting our loans secured by commercial real estate could limit our ability to leverage our capital and adversely affect our growth and profitability
11. 11Our portfolio of loans to small and mid-sized community-based businesses may increase our credit risk
12. 12Our government contractor customers, and businesses in the Washington, D.C. metropolitan area in general, may be adversely impacted by reductions in spending by the federal government and/or a budget impasse
13. 13We have extended off-balance sheet commitments to borrowers which expose us to credit and interest rate risk
14. 14Our allowance for credit losses may be inadequate to absorb actual losses in the loan portfolio, which could have a material adverse effect on our business, financial condition, and results of operations

Strategic Risks

1. 15We operate in a highly competitive market and face increasing competition from a variety of traditional and new financial services providers, which could adversely impact our profitability
2. 16The success of our growth strategy depends, in part, on our ability to identify and retain individuals with experience and relationships in our market
3. 17We may not be able to successfully manage continued growth
4. 18We may face risks with respect to future expansion or acquisition activity
5. 19New lines of business, products, product enhancements or services may subject us to additional risk

Operational Risks

1. 20We depend on information technology and telecommunications systems of third parties, and any systems failures, interruptions, or breaches of security could adversely affect our operations and financial condition
2. 21We are subject to cybersecurity risks and security breaches and may incur increasing costs in an effort to minimize those risks and to respond to cyber incidents, and we may experience harm to our reputation and liability exposure from security breaches
3. 22Failure to keep up with the rapid technological changes in the financial services industry could have a material adverse effect on our competitive position and profitability
4. 23Our risk management framework may not be effective in mitigating risks and/or losses to us
5. 24We are at risk of increased losses from fraud
6. 25We may be adversely affected by the soundness of other financial institutions
7. 26Litigation and regulatory actions, including possible enforcement actions, could subject us to significant fines, penalties, judgments or other requirements resulting in increased expenses or restrictions on our business activities
8. 27Scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to environmental, social and governance (“ESG”) practices may impose additional costs on us or expose us to new or additional risks

Risks Related to Our Securities

1. 28We may need to raise additional capital in the future, and we may not be able to do so
2. 29We have no current plans to pay cash dividends

Risks Related to Our Industry

1. 30We operate in a highly regulated industry and the laws and regulations that govern our operations, corporate governance, executive compensation, and financial accounting or reporting, including changes in them or our failure to comply with them, may adversely affect our results of operations
2. 31We are subject to an extensive body of accounting rules and best practices. Periodic changes to such rules may change the treatment and recognition of critical financial line items and affect our profitability
3. 32Regulatory initiatives regarding bank capital requirements may require heightened capital
4. 33Our use of third party vendors and our other ongoing third party business relationships are subject to increasing regulatory requirements and attention

General Risks

1. 34Severe weather, natural disasters, geopolitical conditions, trade restrictions and tariffs, and acts of war or terrorism, public health issues, and other external events could significantly impact our business
2. 35The development and use of Artificial Intelligence (“AI”) presents risks and challenges that may adversely impact our business