Timberland Bancorp (TSBK) risk factors, FY2024 10-K

Risks Related to Economic Conditions

1. 01Our business may be adversely affected by downturns in the national economy and in the economies in our market areas
2. 02External economic factors, such as changes in monetary policy and inflation and deflation, may have an adverse effect on our business, financial condition and results of operations

Risks Related to our Lending Activities

1. 03Our real estate construction and land loans expose us to significant risks
2. 04Our emphasis on commercial real estate lending may expose us to increased lending risks
3. 05Repayment of our commercial business loans is often dependent on the cash flows of the borrower, which may be unpredictable, and the collateral securing these loans may fluctuate in value
4. 06Our business may be adversely affected by credit risk associated with residential property
5. 07Our allowance for credit losses on loans may not be sufficient to absorb losses in our loan portfolio
6. 08If our non-performing assets increase, our earnings will be adversely affected

Risk Related to our Business Strategy

1. 09We may be adversely affected by risks associated with completed and potential acquisitions

Risk Related to Market Interest Rates

1. 10Changes in interest rates may reduce our net interest income and may result in higher defaults in a rising rate environment
2. 11Our securities portfolio may be negatively impacted by fluctuations in market value and interest rates
3. 12An increase in interest rates, change in the programs offered by Freddie Mac or our ability to qualify for their programs may reduce our mortgage revenues, which would negatively impact our non-interest income

Risks Related to Laws and Regulations

1. 13The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny
2. 14We operate in a highly regulated environment and may be adversely affected by changes in federal and state laws and regulations that could increase our costs of operations
3. 15Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions and limit our ability to get regulatory approval of acquisitions
4. 16Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations

Risks Related to Cybersecurity, Third-Parties and Technology

1. 17The financial services market is undergoing rapid technological changes and, if we are unable to stay current with those changes, we may not be able to effectively compete
2. 18We are subject to certain risks in connection with our use of technology
3. 19Our business may be adversely affected by an increasing prevalence of fraud and other financial crimes
4. 20We rely on other companies to provide key components of our business infrastructure

Risks Related to Accounting Matters

1. 21The Company’s reported financial results depend on management’s selection of accounting methods and certain assumptions and estimates, which, if incorrect, could cause unexpected losses in the future
2. 22We may experience future goodwill impairment, which could reduce our earnings
3. 23We are subject to an extensive body of accounting rules and best practices. Periodic changes to such rules may change the treatment and recognition of critical financial line items and affect our profitability
4. 24We may experience decreases in the fair value of our loan servicing rights, which could reduce our earnings
5. 25If our investments in real estate are not properly valued or sufficiently reserved to cover actual losses, or if we are required to increase our valuation allowances, our earnings could be reduced
6. 26Ineffective liquidity management could adversely affect our financial results and condition
7. 27Our 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 exceedingly high
8. 28Our framework for managing risks may not be effective in mitigating risk and loss to us
9. 29We are dependent on key personnel, and the loss of one or more of those key personnel may materially and adversely affect our prospects