Southern Missouri Bancorp (SMBC) risk factors, FY2025 10-K

Risks Relating to Marco Economic Conditions

1. 01Changes in economic conditions, particularly an economic slowdown in Missouri or northern Arkansas, could hurt our business
2. 02Downturns in the real estate markets in our primary market area could hurt our business
3. 03Inflationary pressures and rising prices may adversely affect our results of operations and financial condition36% rewritten
4. 04Severe weather and other natural disasters, acts of war or terrorism, new public health issues or other adverse external events could harm our business

Risks Relating to Credit and Lending Activities

1. 05Our ACL may be insufficient to absorb losses in our loan portfolio
2. 06If actual credit losses exceed the projections modeled in arriving at our estimate of the allowance for credit losses, our business, financial condition and profitability may suffer73% rewritten
3. 07If our nonperforming assets increase, our earnings will be adversely affected
4. 08Our construction lending exposes us to significant risk
5. 09Our loan portfolio possesses increased risk due to our percentage of commercial real estate and commercial business loans22% rewritten
6. 10Our loan portfolio possesses risk due to our agricultural lending27% rewritten
7. 11Continued growth of our commercial real estate and commercial business loan portfolios may increase the risk of credit defaults in the future
8. 12Credit losses on investment securities could require charges to earnings, which could negatively impact our results of operations

Risks Relating to Market Interest Rates

1. 13Changes in interest rates may negatively affect our earnings and the value of our assets
2. 14We may incur losses on our securities portfolio due to factors beyond our control, including changes in interest rates

Risks Relating to Liquidity

1. 15Liquidity risk could impair our ability to fund operations and jeopardize our financial condition

Risks Relating to Merger and Acquisition Activities

1. 16We may fail to realize all of the anticipated benefits of our acquisition activities

Risks Relating to Future Growth

1. 17Our 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 very high

Risks Relating to Regulation

1. 18Legislative or regulatory changes or actions, or significant litigation, could adversely impact us or the businesses in which we are engaged
2. 19Non-compliance with USA Patriot Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions
3. 20We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations, some of which is expected to increase our costs of operations
4. 21We currently exceed thresholds defined in interagency guidance on commercial real estate concentrations, and as such, we may incur additional expense or slow the growth of certain categories of commercial real estate lending45% rewritten
5. 22Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations

Risks Relating to Technology and Cyber Security and Other Operational Matters

1. 23The Company continually encounters technological change
2. 24We are subject to security and operational risks relating to our use of technology that could damage our reputation and business
3. 25We face significant operational risks because the financial services business involves a high volume of transactions and increased reliance on technology, including risk of loss related to cyber-security breaches
4. 26Our information technology systems may be subject to failure, interruption, or security breaches
5. 27The Company’s operations rely on certain external vendors
6. 28The soundness of other financial institutions could adversely affect us
7. 29Significant legal actions could subject us to substantial liabilities

Risks Relating to Earnings and Capital from Potential Impairment of Intangible or Deferred Tax Assets

1. 30Impairment of intangible assets or deferred tax assets could require charges to earnings, which could negatively impact our results of operations21% rewritten

Risks Relating to Our Common Stock

1. 31The price of our common stock may fluctuate significantly, and this may make it difficult for you to resell our common stock when you want or at prices you find attractive
2. 32Regulatory and contractual restrictions may limit or prevent us from paying dividends on and repurchasing our common stock
3. 33If we defer interest payments on our outstanding junior subordinated debt securities or if certain defaults relating to those debt securities occur, we will be prohibited from declaring or paying dividends or distributions on, and from making liquidation payments with respect to, our common stock
4. 34Anti-takeover provisions could negatively impact our shareholders