Riverview Bancorp (RVSB) risk factors, FY2025 10-K

Risks Related to Macroeconomic Conditions

1. 01Our business may be adversely affected by downturns in the national and the regional economies on which we depend
2. 02A significant portion of the loans in our portfolio are secured by real estate. A downturn in local economic conditions could have a greater impact on our earnings and capital compared to larger financial institutions with more geographically diversified real estate loan portfolios
3. 03Monetary policy, inflation, deflation, and other external economic factors could adversely impact our financial performance and operations

Risks Related to our Lending Activities

1. 04Our real estate construction loans are based upon estimates of costs and the value of the completed project, and as with land loans may be more difficult to liquidate, if necessary
2. 05Commercial and multi-family real estate lending involves higher risks than real estate one-to-four family and other consumer lending, which exposes us to increased lending risks
3. 06Our business may be adversely affected by credit risk associated with residential property and declining property values
4. 07Repayment of our commercial business loans is often dependent on the cash flows of the borrower, which may be unpredictable, and the collateral securing these loans may fluctuate in value
5. 08Our ACL for loans may prove insufficient to absorb losses in our loan portfolio. Future additions to our ACL, as well as charge-offs in excess of reserves, will reduce our earnings

Risks Related to Market and Interest Rate Changes

1. 09Changes in interest rates may reduce our net interest income and may result in higher defaults in a rising rate environment
2. 10We may incur losses on our securities portfolio as a result of changes in interest rates
3. 11Revenue from broker loan fees is sensitive to changes in economic conditions, decreased economic activity, a slowdown in the housing market, higher interest rates or new legislation which may adversely impact our financial condition and results of operations
4. 12the purchasing mortgage company and are not considered assets of the Company. Instead, the Company receives a fee typically ranging from 1.5% to 2.0% of the loan amount, which is shared with the commissioned broker
5. 13A general decline in economic conditions may adversely affect the fees generated by our asset management company

Risks Related to Regulatory, Legal and Compliance Matters

1. 14The continued focus on increasing our commercial real estate loan portfolio may subject us to additional regulatory scrutiny
2. 15We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations
3. 16Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions
4. 17If our enterprise risk management framework is not effective at mitigating risk and loss to us, we could suffer unexpected losses and our results of operations could be materially adversely affected
5. 18Climate change and related legislative and regulatory initiatives may materially affect the Company’s business and results of operations

Risks Related to Cybersecurity, Data and Fraud

1. 19We are subject to certain risks in connection with our use of technology
2. 20Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes
3. 21Our current and future uses of Artificial Intelligence (“AI”) and other emerging technologies may create additional risks

Risks Related to Accounting Matters

1. 22Our reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates, which, if incorrect, could cause unexpected losses in the future
2. 23We may experience future goodwill impairment, which could reduce our earnings

Risks Related to Merger and Acquisition Strategy

1. 24While acquisitions supplement our strategic growth objectives, they involve risks that may negatively impact our results of operations and financial condition

Risks Related to our Business and Industry General

1. 25We rely on other companies to provide key components of our business infrastructure
2. 26Ineffective liquidity management could adversely affect our financial results and condition
3. 27Our branching strategy may cause our expenses to increase faster than revenues
4. 28Our growth or future losses may require us to raise additional capital in the future, but that capital may not be available when it is needed or the cost of that capital may be exceedingly high
5. 29Regulatory Changes to Diversity, Equity and Inclusion (“DEI”) and Environmental, Social and Governance (“ESG”) Practices May Adversely Impact Our Reputation, Compliance Costs, and Business Operations
6. 30Competition with other financial institutions could adversely affect our profitability
7. 31Our ability to retain and recruit key management personnel and bankers is critical to the success of our business strategy and any failure to do so could impair our customer relationships and adversely affect our business and results of operations
8. 32We rely on dividends from the Bank for substantially all of our revenue at the holding company level