LCNB (LCNB) risk factors, FY2024 10-K

Risks Related to Economic and Market Conditions

1. 01Weakness in the economy and in the real estate market, including weakness specific to LCNB's geographic footprint, may negatively affect its financial condition and earnings
2. 02Declining values of real estate, increases in unemployment, insurance market disruptions, and the related effects on local economies may increase LCNB's credit losses, which would negatively affect financial results

Risks Related to LCNB's Operations

1. 03LCNB’s loan portfolio includes a substantial amount of commercial and industrial loans and commercial real estate loans, which may have more risks than residential or consumer loans
2. 04Future growth and expansion opportunities may contain risks that could negatively affect us
3. 05Liquidity risk could impair LCNB's ability to fund operations and could jeopardize financial results
4. 06LCNB’s controls and procedures may fail or be circumvented
5. 07LCNB’s information systems may experience an interruption, cyberattack, or other breach in security
6. 08LCNB’s ability to pay cash dividends is limited
7. 09LCNB must compete to hire and retain employees
8. 10Competition for wealth management business is intense. Competitors include other commercial bank and trust companies, brokerage firms, investment advisory firms, mutual fund companies, accountants, and attorneys
9. 11Failure to meet regulatory capital requirements could adversely affect LCNB’s business
10. 12Changes in economic or political conditions could adversely affect LCNB's earnings
11. 13The FOMC decreased the Federal Funds target range by 100 basis points during 2024 after increasing the range by 100 basis points during 2023
12. 14Gains from sales of mortgage loans may experience significant volatility
13. 15Banking competition is intense
14. 16Economic conditions in LCNB's market areas could adversely affect its financial condition and results of operations
15. 17New lines of business or new products and services may subject LCNB to additional risks
16. 18The allowance for credit losses may be inadequate
17. 19The fair value of LCNB’s investments could decline
18. 20Changes in tax law and accounting standards could materially affect LCNB's operations
19. 21LCNB is subject to environmental liability risk associated with lending activities
20. 22The banking industry is highly regulated
21. 23FDIC deposit insurance assessments may materially increase in the future
22. 24Failure to adopt new technologies may result in customer dissatisfaction
23. 25Emergence of non-bank alternatives to the financial system may result in customer disintermediation
24. 26Climate change, severe weather, natural disasters, acts of war or terrorism, political instability, epidemics and other external events could significantly impact LCNB’s business
25. 27Outbreaks of communicable diseases have led to periods of significant volatility in financial and other markets, adversely affected our ability to conduct normal business, adversely affected our clients, and may harm our businesses, financial condition and results of operations