Southside Bancshares (SBSI) risk factors, 2025 10-K

RISKS RELATED TO OUR BUSINESS

1. 01Our earnings are subject to interest rate risk
2. 02We are subject to credit quality risks and our credit policies may not be sufficient to avoid losses
3. 03We have a high concentration of loans secured by real estate and a decline in the real estate market, for any reason, could result in losses and materially and adversely affect our business, financial condition, results of operations and future prospects
4. 04Our information systems may experience an interruption or breach in security
5. 05The development and use of artificial intelligence presents risks and challenges that may adversely impact our business
6. 06General political or economic conditions in the United States could adversely affect our financial condition and results of operations
7. 07Societal, legislative and regulatory responses to ESG concerns, "anti ESG" concerns, as well as DEI and anti-DEI concerns, could adversely affect our business and performance, including indirectly through impacts on our customers
8. 08Negative developments in the banking industry could adversely affect our current and projected business operations and our financial condition and results of operations
9. 09Elevated interest rates have decreased the value of a portion of the Company’s securities portfolio, and the Company would realize losses if it were required to sell such securities to meet liquidity needs
10. 10We rely on other companies to provide key components of our business infrastructure
11. 11We continually encounter technological change
12. 12We are subject to the risk that our U.S. agency MBS could prepay faster than we have projected
13. 13We rely on dividends from our bank subsidiary for most of our revenue
14. 14Although we have historically declared quarterly cash dividends on our common stock, we are not required to do so and may reduce or cease to pay dividends to our shareholders in the future. If we reduce or cease to pay cash dividends on our common stock, the market price of our common stock could be adversely affected
15. 15We may not be able to attract and retain skilled personnel
16. 16We operate in a highly competitive industry and market area
17. 17Our accounting estimates and risk management processes rely on analytical and forecasting models
18. 18Our allowance for loan losses may be insufficient
19. 19Our interest rate risk, liquidity, fair value of securities and profitability are dependent upon the successful management of our balance sheet strategy
20. 20Our process for managing risk may not be effective in mitigating risk or losses to us
21. 21New lines of business or new products and services may subject us to additional risks
22. 22Acquisitions and potential acquisitions may disrupt our business and dilute shareholder value
23. 23Our profitability depends significantly on economic conditions in the State of Texas
24. 24Funding to provide liquidity may not be available to us on favorable terms or at all
25. 25collateralized borrowings such as FHLB advance agreements, the issuance and sale of debt securities and the issuance and sale of preferred or common securities in public or private transactions. The Bank also can borrow from the FRDW
26. 26If we are unable to access any of these funding sources when needed, we might be unable to meet customers’ needs, which could adversely impact our business, financial condition, results of operations, cash flows and liquidity and level of regulatory-qualifying capital
27. 27The value of our goodwill and other intangible assets may decline in the future
28. 28We are subject to environmental liability as a result of certain lending activities
29. 29We may be adversely affected by declining crude oil prices
30. 30Severe weather, natural disasters, climate change, acts of war or terrorism, health emergencies, epidemics or pandemics and other external events could significantly impact our business
31. 31We are subject or may become subject to extensive government regulation and supervision
32. 32We may become subject to increased regulatory capital requirements
33. 33Changes in accounting and tax rules applicable to banks could adversely affect our financial condition and results of operations
34. 34Financial services companies depend on the accuracy and completeness of information about customers and counterparties and inaccuracies in such information, including as a result of fraud, could adversely impact our business, financial condition and results of operations
35. 35Customers may decide not to use banks to complete their financial transactions
36. 36The soundness of other financial institutions could adversely affect us
37. 37We are subject to claims and litigation pertaining to fiduciary responsibility
38. 38Our stock price can be volatile
39. 39The holders of our subordinated notes and junior subordinated debentures have rights that are senior to those of our common stock shareholders
40. 40The trading volume in our common stock is less than that of other larger financial services companies
41. 41We may issue additional securities, which could dilute your ownership percentage
42. 42Securities analyst might not continue coverage on our common stock, which could adversely affect the market for our common stock
43. 43Provisions of our certificate of formation and bylaws, as well as state and federal banking regulations, could delay or prevent a takeover of us by a third party
44. 44An investment in our common stock is not an insured deposit