MetroCity Bankshares (MCBS) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01A decline in general business and economic conditions and any regulatory responses to such conditions could have a material adverse effect on our business, financial position, results of operations and growth prospects22% rewritten
2. 02We face strong competition from financial services companies and other companies that offer commercial and retail banking services, which could harm our business39% rewritten
3. 03Fluctuations in interest rates have impacted net interest income and may otherwise negatively impact our financial condition and results of operations23% rewritten
4. 04Inflation could negatively impact our business, our profitability and our stock price
5. 05Negative developments in the banking industry could adversely affect our current and projected business operations and our financial condition and results of operations44% rewritten
6. 06Liquidity risks could affect operations and jeopardize our business, financial condition, and results of operations
7. 07Our business depends on our ability to successfully manage our asset quality and credit risk22% rewritten
8. 08Because a significant portion of our loan portfolio is comprised of commercial and residential real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses
9. 09The residential mortgage loans that we originate consist primarily of non-conforming residential mortgage loans which may be considered less liquid and riskier
10. 10The non-guaranteed portion of SBA loans that we retain on our balance sheet, as well as the guaranteed portion of SBA loans that we sell, could expose us to various credit and default risks
11. 11We may not be able to meet our unfunded credit commitments, or adequately reserve for losses associated with our unfunded credit commitments29% rewritten
12. 12We use brokered deposits which may be an unstable and/or expensive deposit source to fund earning asset growth
13. 13We are highly dependent on our management team, and the loss of our senior executive officers or other key employees could harm our ability to implement our strategic plan, impair our relationships with customers and adversely affect our business, results of operations and growth prospects
14. 14Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition, and could result in further losses in the future
15. 15Our provision and allowance for credit losses may prove to be insufficient to absorb potential losses in our loan portfolio
16. 16Decreased residential mortgage origination, volume and pricing decisions of competitors may adversely affect our profitability
17. 17We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate27% rewritten
18. 18New lines of business or new products and services may subject us to additional risks43% rewritten
19. 19We focus on marketing our services to a limited segment of the population and any adverse change impacting such segment is likely to have an adverse impact on us
20. 20The costs and effects of litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, operating results and financial condition94% rewritten
21. 21Our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our business and the value of our common stock
22. 22Our risk management framework may not be effective in mitigating risks and/or losses to us
23. 23We have a continuing need for technological change, and we may not have the resources to effectively implement new technology or we may experience operational challenges when implementing new technology
24. 24System failure or compromises of our network security could subject us to increased operating costs as well as litigation and other liabilities
25. 25Our operations could be interrupted if our third-party service providers experience difficulty, terminate their services or fail to comply with banking regulations
26. 26The developments and use of artificial intelligence (“AI”) presents risks and challenges that may adversely impact our business
27. 27We depend on the accuracy and completeness of information provided by customers and counterparties and any misrepresented information could adversely affect our business, financial condition and results of operations
28. 28Our accounting estimates and risk management processes rely on analytical and forecasting models
29. 29Changes in accounting standards could materially impact our financial statements
30. 30Failure to maintain effective internal controls over financial reporting could have a material adverse effect on our business and stock price

Risks Related to Legislative and Regulatory Events

1. 31We are subject to extensive government regulation that could limit or restrict our activities, which in turn may adversely impact our ability to increase our assets and earnings22% rewritten
2. 32Federal and state regulators periodically examine our business, and we may be required to remediate adverse examination findings
3. 33Changes to monetary policy by the Federal Reserve could adversely impact our results of operations75% rewritten
4. 34We are subject to federal and state fair lending laws, and failure to comply with these laws could lead to material penalties
5. 35The Federal Reserve may require us to commit capital resources to support the Bank28% rewritten
6. 36We could face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations
7. 37Our deposit insurance premiums could be substantially higher in the future, which could have a material adverse effect on our future earnings30% rewritten

Risks Related to Our Common Stock

1. 38An investment in our common stock is not an insured deposit and may lose value
2. 39Environmental, social and governance (“ESG”) and diversity, equity and inclusion (“DEI”) risks could adversely affect our reputation and shareholder, employee, client and third party relationships and may negatively affect our stock price100% rewritten
3. 40Our dividend policy may change, and consequently, your only opportunity to achieve a return on your investment may be if the price of our common stock appreciates
4. 41We may need to raise additional capital in the future53% rewritten
5. 42We have the ability to incur debt and pledge our assets, including our stock in the Bank, to secure that debt
6. 43If we fail to successfully integrate our acquisitions or to realize the anticipated benefits of them, our financial condition and results of operations could be negatively affected New
7. 44Our future success is largely dependent upon our ability to successfully execute our business strategy94% rewritten