Southside Bancshares (SBSI) risk factors, FY2025 10-K

RISKS RELATED TO OUR BUSINESS

1. 01Our earnings are subject to interest rate risk35% rewritten
2. 02We are subject to credit quality risks and our credit policies may not be sufficient to avoid losses
3. 03Unstable economic conditions may have serious adverse consequences on our business, financial condition, and operationsNew
4. 04We 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
5. 05Cybersecurity incidents, including security breaches and failures of our information systems, could significantly disrupt our business, result in the unintended disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs, and cause lossesNew
6. 06Increased fraudulent activity may cause losses to us or our clients, damage to our brand, and increases in our costs, in turn, materially and adversely affecting our business, financial condition, and results of operationsNew
7. 07The development and use of AI presents risks and challenges that may adversely impact our business35% rewritten
8. 08General political or economic conditions in the United States could adversely affect our financial condition and results of operations
9. 09Corporate responsibility risks could adversely affect our reputation and shareholder, employee, client, and third-party relationships and may negatively affect our stock priceNew
10. 10Negative developments in the banking industry could adversely affect our current and projected business operations and our financial condition and results of operations
11. 11Despite recent cuts, extended periods of elevated 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
12. 12Inflationary pressures and rising prices may affect our results of operations and financial conditionNew
13. 13We rely on other companies to provide key components of our business infrastructure
14. 14We continually encounter technological change
15. 15Industry adoption of real-time payments networks could negatively impact financial performance through reductions in product profitability, increased liquidity reserves and the potential for increased fraud losses, among other risksNew
16. 16We are subject to the risk that our U.S. agency MBS could prepay faster than we have projected
17. 17We rely on dividends from our bank subsidiary for most of our revenue
18. 18Although 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
19. 19We may not be able to attract and retain skilled personnel
20. 20We operate in a highly competitive industry and market area
21. 21Failures in the analytical and forecasting models relied upon for our accounting estimates and risk management processes could have a material adverse effect on our business, financial condition, and results of operations
22. 22Our allowance for loan losses may be insufficient or we may be adversely affected by credit risk exposures
23. 23Our interest rate risk, liquidity, fair value of securities and profitability are dependent upon the successful management of our balance sheet strategy
24. 24Our process for managing risk may not be effective in mitigating risk or losses to us
25. 25New lines of business or new products and services may subject us to additional risks29% rewritten
26. 26Acquisitions and potential acquisitions may disrupt our business and dilute shareholder value
27. 27Our profitability depends significantly on economic conditions in the State of Texas
28. 28Funding to provide liquidity may not be available to us on favorable terms or at all
29. 29If 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
30. 30The value of our goodwill and other intangible assets may decline in the future
31. 31We are subject to environmental liability as a result of certain lending activities
32. 32We may be adversely affected by declining crude oil prices20% rewritten
33. 33Severe weather, natural disasters, climate change, acts of war or terrorism, health emergencies, epidemics or pandemics and other external events could significantly impact our business
34. 34We are subject or may become subject to extensive government regulation and supervision
35. 35We may become subject to increased regulatory capital requirements
36. 36Changes in accounting and tax rules applicable to banks could adversely affect our financial condition and results of operations
37. 37Financial 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
38. 38Customers may decide not to use banks to complete their financial transactions
39. 39The soundness of other financial institutions could adversely affect us
40. 40We are subject to claims and litigation pertaining to fiduciary responsibility
41. 41Deposit insurance premiums levied against the Bank could increaseNew

GENERAL RISK FACTORS

1. 42Our stock price can be volatile
2. 43The holders of our subordinated notes and junior subordinated debentures have rights that are senior to those of our common stock shareholders
3. 44The trading volume in our common stock is less than that of other larger financial services companies
4. 45We may issue additional securities, which could dilute your ownership percentage
5. 46Securities analysts might not continue coverage on our common stock, which could adversely affect the market for our common stock
6. 47Provisions 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
7. 48An investment in our common stock is not an insured deposit