Meridian (MRBK) risk factors, FY2024 10-K

Other

1. 01below are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. See “Cautionary Note Regarding Forward-Looking Statements”

Risks Related to Our Business / Operations

1. 02Our business and operations may be materially adversely affected by national and local market economic conditions
2. 03The value of the financial instruments we own may decline in the future
3. 04Our small business customers may lack the resources to weather a downturn in the economy
4. 05We may be adversely affected by risks associated with completed and potential acquisitions
5. 06Liquidity risks could affect operations and jeopardize our business, financial condition and results of operations
6. 07Loss of deposits could increase our funding costs
7. 08We may need to raise additional capital in the future, and such capital may not be available when needed or at all
8. 09There can be no assurance that we will be able to continue to grow and to be profitable in future periods, or, if profitable, that our overall earnings will remain consistent or increase in the future. Our strategy is focused on organic growth, supplemented by opportunistic acquisitions
9. 10The occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents could have a material adverse effect on our business, financial condition or results of operations
10. 11We depend on information technology and telecommunications systems of third parties, and any systems failures, interruptions or data breaches involving these systems could adversely affect our operations and financial condition
11. 12We continually encounter technological change
12. 13intelligence (AI) could adversely affect our business, results of operations, and financial condition
13. 14Any of the foregoing, together with developing guidance and/or decisions in this area, may affect our use of AI and our ability to provide
14. 15We may not be able to attract and retain key personnel and other skilled employees
15. 16New lines of business, products, product enhancements or services may subject us to additional risks
16. 17We operate in a highly competitive and changing industry and market area and compete with both banks and non-banks
17. 18Our ability to maintain, attract and retain customer relationships is highly dependent on our reputation
18. 19Accounting standards periodically change and the application of our accounting policies and methods may require management to make estimates about matters that are uncertain
19. 20The Corporation’s controls and procedures may fail or be circumvented

Risks Related to Interest Rates

1. 21We must effectively manage interest rate risk
2. 22As of December 31, 2024, the target range for the federal funds rate had been decreased to 4.25% from 4.50% at September 30, 2024. Our interest rate spread, net interest margin and net interest income improved during this period as our interest-bearing liabilities repriced at a faster pace than interest-earning assets
3. 23The impact of interest rates on our mortgage banking business can have a significant impact on revenues
4. 24Changes in interest rates could also reduce the value of our residential mortgage-related securities and MSRs, which could negatively affect our earnings

Risks Related to Lending Activities

1. 25We must effectively manage the credit risks of our loan portfolio
2. 26Nonperforming assets take significant time to resolve and adversely affect the Corporation's results of operations and financial condition
3. 27Our allowance for credit losses may be insufficient, and an increase in the allowance would reduce earnings
4. 28Our business, profitability and liquidity may be adversely affected by deterioration in the credit quality of, or defaults by, third parties who owe us money, securities or other assets or whose securities or obligations we hold
5. 29The residential mortgage business is highly competitive, and highly susceptible to changes in market interest rates, consumer confidence levels, employment statistics, the capacity and willingness of secondary market purchasers to acquire and hold or securitize loans, and other factors beyond our control
6. 30Our SBA lending program is dependent upon the federal government and we face specific risks associated with originating SBA loans
7. 31Our loan servicing rights could become impaired, which may require us to take non-cash charges
8. 32We may be required to repurchase mortgage loans or indemnify buyers against losses in some circumstances, which could harm liquidity, results of operations and financial condition
9. 33We are subject to environmental liability risk associated with our lending activities and with the properties we own
10. 34Our business is significantly dependent on the real estate markets in which we operate, as a large percentage of our loan portfolio is secured by real estate or mortgage loans originated for sale
11. 35Revenues and profitability from our wealth management business may be adversely affected by any reduction in assets under management, which could reduce fees earned
12. 36The wealth management business is subject to extensive regulation, supervision and examination by regulators, and any enforcement action or adverse changes in the laws or regulations governing our business could decrease our revenues and profitability
13. 37We may not be able to attract and retain wealth management clients

Risks Related to Regulation

1. 38Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs of operations
2. 39We cannot predict the effect of legislative and regulatory initiatives, which could increase our costs of doing business and adversely affect our results of operations and financial condition
3. 40We are subject to capital adequacy requirements and may be subject to more stringent capital requirements
4. 41Our stock price, like many of our peers, may be volatile, and you could lose part or all of your investment as a result
5. 42Certain banking laws and certain provisions of our articles of incorporation may have an anti-takeover effect
6. 43Natural disasters, acts of war or terrorism, outbreaks or escalations of hostilities and other external events could negatively impact the Corporation