First Financial (THFF) risk factors, FY2024 10-K

Risks Related to Economic and Market Conditions

1. 01Economic conditions have affected and could adversely affect our revenue and profits
2. 02Unrelated bank failures, other issues of unrelated banks, and decreased depositor confidence in depository institutions could negatively impact our stock price and we may experience a material adverse effect on our financial condition and results of operations
3. 03Continued elevated levels of inflation could adversely impact our business and results of operations
4. 04Changes in interest rates could adversely affect the Corporation’s results of operations and financial condition
5. 05Labor shortages and the loss of one or more of those key personnel may materially and adversely affect our business
6. 06Terrorist attacks, threats, or actual war, natural disasters, global climate change, pandemics, other catastrophic events, trade policies, civil unrest, protests, and other global and domestic conflicts may impact all aspects of our operations, revenues, costs, and stock price in unpredictable ways
7. 07Geographic concentration of the Corporation’s markets makes our business highly susceptible to local economic conditions and a downturn in local economic conditions may adversely affect our business

Risks Related to Our Business

1. 08A lack of liquidity could affect our operations and jeopardize our financial condition
2. 09When we loan money, commit to loan money, or enter into a letter of credit or other contract with a counterparty, we incur credit risk, or the risk of loss if our borrowers do not repay their loans or our counterparties fail to perform according to the terms of their contracts
3. 10The Corporation has significant exposure to risks associated with commercial and commercial real estate loans
4. 11The information that we use in managing our credit risk may be inaccurate or incomplete, which may result in an increased risk of default and otherwise have an adverse effect on our business, results of operations, and financial condition
5. 12Decreased demand from secondary market purchasers of the Corporation’s long-term fixed residential mortgages could adversely affect our business, liquidity, results of operations, and financial condition
6. 13The Corporation operates in a highly competitive industry and market, and our business will suffer if we are unable to compete effectively
7. 14The Corporation’s accounting estimates and risk management processes rely on analytical and forecasting models, which, if inadequate, may result in a material adverse effect on our business, financial condition, or results of operation
8. 15We are a community bank and our ability to maintain our reputation is critical to the success of our business
9. 16Our operational systems and networks are subject to an increasing risk of continually evolving cybersecurity or other technological risks, which could result in a loss of customer business, financial liability, regulatory penalties, damage to our reputation, or the disclosure of confidential information
10. 17We rely on external vendors, which could expose the Corporation to additional operational risks
11. 18New lines of business or new products and services may subject the Corporation to additional risks
12. 19The financial services industry is characterized by rapid technological change, and if we fail to keep pace, our business may suffer
13. 20The implementation of artificial intelligence, machine learning, and other large language models and similar technologies may subject the Corporation to increased regulatory risk, reputational risk, and may have material adverse effects on the Corporation’s business, financial condition, and results of operations
14. 21The Corporation’s controls and procedures may fail or be circumvented, and the Corporation’s methods of reducing risk exposure may not be effective
15. 22The Corporation may be adversely affected by the soundness of other financial institutions
16. 23The Corporation may foreclose on collateral property and would be subject to the increased costs associated with ownership of real property, resulting in reduced revenues and earnings
17. 24The Corporation’s earnings may be adversely impacted due to environmental liabilities associated with lending activities
18. 25The Corporation may become subject to claims and litigation pertaining to intellectual property
19. 26Changes in consumer use of banks and changes in consumer spending and savings habits could adversely affect the Corporation’s financial results
20. 27Our acquisition of SimplyBank presents certain additional risks to our business and operations
21. 28Potential acquisitions may disrupt the Corporation’s business and dilute shareholder value
22. 29Future growth or operating results may require the Corporation to raise additional capital, but that capital may not be available or it may be dilutive
23. 30The value of the Corporation’s goodwill and other intangible assets may decline in the future
24. 31The Corporation relies on dividends from its subsidiaries for most of its revenue

Risks Related to the Legal and Regulatory Environment

1. 32We operate in a highly regulated environment and the regulatory framework to which we are subject may adversely affect our results of operations
2. 33The new U.S. presidential administration’s regulatory reform agenda could result in a material impact to our regulatory compliance and operations procedures
3. 34Legislative and regulatory actions taken now or in the future may increase our costs and impact our business, regulatory structure, financial condition, and/or results of operations
4. 35The Basel III capital rules may require us to retain higher capital levels, impacting our ability to pay dividends, repurchase our stock, or pay discretionary bonuses
5. 36We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations
6. 37Higher FDIC deposit insurance premiums and assessments could adversely affect our financial condition
7. 38We have risk related to legal proceedings

Risks Related to the Corporation’s Common Stock

1. 39The Corporation may not be able to pay dividends in the future in accordance with past practice
2. 40The price of the Corporation’s common stock may be volatile, which may result in losses for investors
3. 41Future capital needs could result in dilution of shareholder investment
4. 42Anti-takeover laws and charter provisions may adversely affect the value of our common stock
5. 43An investment in the Corporation’s common stock is not an insured deposit