Smartfinancial (SMBK) risk factors, FY2025 10-K

Risks Related to Our Industry

1. 01Our net interest income could be negatively affected by interest rate adjustments by the Federal Reserve Board63% rewritten
2. 02We are subject to extensive government regulation that could limit or restrict our activities, which in turn may adversely impact our ability to increase our assets and earnings
3. 03The Federal Reserve may require us to commit capital resources to support the Bank
4. 04Federal and state regulators periodically examine our business, and we may be required to remediate adverse examination findings

Risks Related to Our Company

1. 05If our allowance for credit losses is not sufficient to cover actual losses, our earnings will be adversely affected
2. 06Negative developments in the banking industry could adversely affect our current and projected business operations and our financial condition and results of operations
3. 07Our success depends significantly on economic conditions in our market areas
4. 08Competition from financial institutions and other financial service providers may adversely affect our profitability
5. 09The development and use of artificial intelligence (“AI”) presents risks and challenges that may adversely impact our business
6. 10Our organic loan and lease growth may be limited by regulatory constraints30% rewritten
7. 11To the extent that we are unable to identify and consummate attractive acquisitions, or increase loans and leases through organic loan and lease growth, we may be unable to successfully implement our growth strategy, which could materially and adversely affect us
8. 12We expect to continue to expand in our current markets and in other select markets through additional branches or through acquisitions of all or part of other financial institutions. These types of expansions involve various risks, including the risks detailed below
9. 13We may face risks with respect to future acquisitions
10. 14Our concentration in loans secured by real estate, particularly commercial real estate and construction and development, is subject to risks that could adversely affect our results of operations and financial condition90% rewritten
11. 15effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverseNew
12. 16Our largest loan relationships currently make up a significant percentage of our total loan portfolio26% rewritten
13. 17Declines in the businesses or industries of our customers could cause increased credit losses and decreased loan balances, which could adversely affect our financial results
14. 18Our use of appraisals in deciding whether to make a loan secured by real property does not ensure the value of the real property collateral
15. 19Liquidity risk could impair our ability to fund our operations and jeopardize our financial condition
16. 20We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate
17. 21We face additional risks due to our increase in mortgage banking activities that have and could negatively impact our net income and profitability28% rewritten
18. 22Any expansion into new lines of business might not be successful
19. 23Any deficiencies in our financial reporting or internal controls could materially and adversely affect us, including resulting in material misstatements in our financial statements, and could materially and adversely affect the market price of our common stock
20. 24Inability to retain senior management and key employees or to attract new experienced financial services professionals could impair our relationship with our customers, reduce growth and adversely affect our business
21. 25Employee misconduct could expose us to significant legal liability and reputational harm
22. 26We may be adversely affected by the soundness of other financial institutions

Risks Related to Our Stock

1. 27Our ability to declare and pay dividends is limited
2. 28Even though our common stock is currently traded on the New York Stock Exchange (“NYSE”), it has less liquidity than many other stocks quoted on a national securities exchange
3. 29We may issue additional shares of stock or equity derivative securities, including awards to current and future executive officers, directors and employees, which could result in the dilution of shareholders’ investment
4. 30Corporate responsibility risks could adversely affect our reputation and shareholder, employee, client and third party relationships and may negatively affect our stock price
5. 31Our securities are not FDIC insured
6. 32Anti-takeover laws and certain agreements and charter provisions may adversely affect the price of our common stock