SB Financial Group (SBFG) risk factors, FY2025 10-K

Other

1. 01Cautionary Statement Regarding Forward-Looking Information
2. 02Changes in economic and political conditions could adversely affect our earnings through declines in deposits, loan demand, the ability of our customers to repay loans and the value of collateral securing our loans
3. 03Instability in global economic conditions and geopolitical matters, as well as volatility in financial markets, could have a material adverse effect on our results of operations and financial condition
4. 04We may be unable to manage interest rate risks, which could reduce our net interest income

Risks Related to Our Business Operations

1. 05If our actual credit losses exceed our allowance for credit losses, our net income will decrease
2. 06Our success depends upon our ability to attract and retain key personnel
3. 07We depend upon the accuracy and completeness of information about customers
4. 08We may not be able to grow, and if we do, we may have difficulty managing that growth
5. 09Acquisitions or other expansion may adversely impact our financial condition and results of operations
6. 10We are exposed to a number of operational risks
7. 11We rely heavily on communications and information systems to conduct our business. Any failure, interruption or breach in security of these systems could result in failures or disruptions in our customer relationship management, general ledger, deposit, loan and other systems
8. 12Recent and future bank failures may adversely affect the Company’s business, earnings and financial condition
9. 13We could experience an unexpected inability to obtain needed liquidity which could adversely affect our business, profitability, and viability a going concern
10. 14Our information systems may experience an interruption or security breach
11. 15Unauthorized disclosure of sensitive or confidential client information, or breaches in security of our systems, could severely harm our business
12. 16Our business could be adversely affected through third parties who perform significant operational services on our behalf
13. 17Strong competition within our market area may reduce our ability to attract and retain deposits and originate loans
14. 18We may be required to repurchase loans we have sold or indemnify loan purchasers under the terms of the sale agreements, which could adversely affect our liquidity, results of operations and financial statements
15. 19We are subject to environmental liability risk associated with lending activities
16. 20FDIC insurance premiums may increase materially, which could negatively affect our profitability
17. 21We operate in a highly regulated industry, and the laws and regulations that govern our operations, corporate governance, executive compensation and financial accounting, or reporting, including changes in, or failure to comply with the same, may adversely affect the Company
18. 22Legislative or regulatory changes or actions could adversely impact our business
19. 23Changes in accounting standards could influence our results of operations
20. 24Noncompliance with the Bank Secrecy Act (BSA) and other anti-money laundering statutes and regulations could cause a material financial loss
21. 25We may be the subject of litigation, which could result in legal liability and damage to our business and reputation

Risks Related to Our Capital and Common Shares

1. 26Our ability to pay cash dividends is limited, and we may be unable to pay cash dividends in the future
2. 27A limited trading market exists for our common shares, which could lead to price volatility
3. 28The market price of our common shares may be subject to fluctuations and volatility
4. 29Investors could become subject to regulatory restrictions upon ownership of our common shares
5. 30We have implemented anti-takeover devices that could make it more difficult for another company to purchase us, even though such a purchase may increase shareholder value
6. 31We may be compelled to seek additional capital in the future, but capital may not be available when needed
7. 32Our earnings are significantly affected by the fiscal and monetary policies of the federal government and its agencies
8. 33Changes in tax laws could adversely affect our performance
9. 34The preparation of our financial statements requires the use of estimates that may vary from actual results28% rewritten
10. 35We may experience increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to the Company’s environmental, social and governance (“ESG”) practices
11. 36We need to constantly update our technology in order to compete and meet customer demands
12. 37Climate change, severe weather, natural disasters, acts of war or terrorism and other external events could significantly impact our business