Investar Holding (ISTR) risk factors, FY2025 10-K

Risks Related to our Business

1. 01As a business operating in the financial services industry, our business and operations may be adversely affected by prevailing economic conditions and geopolitical matters
2. 02Changes in interest rates could have an adverse effect on our profitability55% rewritten
3. 03A lack of liquidity, including due to events outside our control or ineffective liquidity management, could adversely affect our ability to fund operations and meet our obligations as they become due31% rewritten
4. 04Inflation and rising prices may continue to adversely affect our results of operations and financial condition79% rewritten
5. 05Our allowance for credit losses may prove to be insufficient to absorb losses inherent in our loan portfolio, and we may be required to further increase our provision for credit losses. If our actual credit losses exceed our allowance for credit losses, our net income will decreaseNew
6. 06Our business strategy includes both organic growth and the continuation of our multi-state growth plans, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively
7. 07The merger with WFB and the integration of the businesses may be more difficult, costly or time-consuming than expected, and we may fail to realize the anticipated benefits of the mergerNew
8. 08Changes in retail distribution strategies and consumer behavior may adversely impact our business, financial condition and results of operations24% rewritten
9. 09Our business is concentrated in southern Louisiana, Texas, and Alabama, and an economic downturn affecting these areas may magnify the adverse effects and consequences to us25% rewritten
10. 10Adverse economic factors affecting particular industries could have a negative effect on our customers and their ability to make payments to us30% rewritten
11. 11We have a significant number of loans secured by real estate, and a downturn in the real estate market could result in losses and negatively impact our profitability
12. 12Commercial real estate loans may expose us to greater risks than our other real estate loans
13. 13Commercial and industrial loans may expose us to greater risk than other loans29% rewritten
14. 14Changes in deposit mix have increased our funding costs, which could continue, and loss of deposits could also increase our funding costs22% rewritten
15. 15Loss of our senior executive officers or other key employees and our inability to recruit or retain suitable replacements could adversely affect our business, results of operations and ability to successfully execute our business strategy
16. 16Hurricanes or other adverse weather conditions, as well as man-made disasters, could negatively affect our local markets or disrupt our operations, which may adversely affect our business and results of operations
17. 17Our failure to effectively implement new technologies including artificial intelligence could adversely affect our operations and financial condition
18. 18We rely on information technology and telecommunications systems, many of which are provided by third-party vendors
19. 19Cyberattacks or other security breaches could adversely affect our operations, net income or reputation
20. 20We may need to raise additional capital in the future to execute our long-term business strategy or to comply with regulatory requirements26% rewritten
21. 21Competition in our industry is intense, which could adversely affect our profitability and long-term growth
22. 22The value of the securities in our investment portfolio may decline in the future, and we may incur losses with respect to our investment securities
23. 23We face significant fraud, operational and other risks related to our activities, which could expose us to negative publicity, litigation and/or regulatory action
24. 24Climate related events and legislative and societal responses regarding climate change present risks to our business
25. 25If the goodwill that we record in connection with a business acquisition becomes impaired, it could require charges to earnings, which would have a negative impact on our financial condition and results of operations

Risks Related to Our Industry

1. 26We operate in a highly regulated environment, which could restrain our growth and profitability
2. 27Federal regulators periodically examine our business, and we may be required to remediate adverse examination findings
3. 28We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions
4. 29We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations
5. 30Our success depends on our ability to respond to the threats and opportunities of fintech innovation79% rewritten
6. 31We may be required to pay significantly higher FDIC deposit insurance premiums in the future
7. 32Our use of third-party vendors and our other ongoing third-party business relationships are subject to increasing regulatory requirements and attention

Risks Related to an Investment in our Common Stock

1. 33The market price of our common stock may be volatile, which may make it difficult for investors to sell their shares at the volume, prices and times desired
2. 34other news, announcements or disclosures (whether by us or others) related to us, our competitors, our markets or the financial services industry
3. 35Shares eligible for future sale and shares we may issue in the future could adversely affect market prices of our common stock28% rewritten
4. 36Our dividend policy may change without notice, and our future ability to pay dividends is subject to restrictions
5. 37Our Restated Articles of Incorporation and By-laws, and certain banking laws applicable to us, could have an anti-takeover effect that decreases our chances of being acquired, even if our acquisition is in our shareholders’ best interests
6. 38require prior regulatory application and approval of any transaction involving control of our organization
7. 39Our Series A Preferred Stock could adversely affect our liquidity, financial condition and holders of our common stockNew
8. 40Our issuance of preferred stock in the future could adversely affect holders of our common stock and discourage a takeover47% rewritten
9. 41An investment in our common stock is not an insured deposit and is subject to risk of loss