Union Bankshares (UNB) risk factors, FY2024 10-K

Other

1. 01Our loans are concentrated in certain areas of Vermont and New Hampshire and adverse conditions in those markets could adversely affect our operations
2. 02If our allowance for credit losses is not sufficient to cover actual loan losses, our earnings could decrease
3. 03In determining the size of the allowance for credit losses, we rely on an analysis of our loan portfolio, our experience and a third-party economic forecast. If our assumptions prove to be incorrect, our current allowance for credit losses may not be sufficient to cover the losses
4. 04Our commercial, commercial real estate and construction loan portfolio may expose us to increased credit risks
5. 05Changes in interest rates and interest rate volatility may reduce our profitability
6. 06The fair value of our investment securities can fluctuate due to factors outside of our control, and impairment of investment securities could require charges to earnings, which could result in a negative impact on our results of operations
7. 07A lack of liquidity could adversely affect the Company’s financial condition and results of operations and result in regulatory restrictions
8. 08Rising interest rates have decreased the value of the Company’s securities portfolio, and the Company would realize losses if it were required to sell such securities to meet liquidity needs
9. 09Potential deterioration in the performance or financial position of the Federal Home Loan Bank ("FHLB") of Boston might restrict our funding needs and may adversely impact our financial condition and results of operations
10. 10Prepayments of loans may negatively impact our business
11. 11Environmental liability associated with our lending activities could result in losses

Risks Relating to Regulation of the Industry

1. 12We operate in a highly regulated environment and may be adversely affected by changes in laws, regulations and monetary policy
2. 13Additional requirements imposed by the Dodd-Frank Act could adversely affect us
3. 14borrowers, or could make it more expensive and time-consuming to make these loans, which could limit the Bank’s growth or profitability
4. 15We are subject to stringent capital requirements which may adversely impact return on equity, require additional capital raises, or limit the ability to pay dividends or repurchase shares
5. 16We may incur fines, penalties and other negative consequences from regulatory violations, possibly even inadvertent or unintentional violations
6. 17We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us
7. 18Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of operations
8. 19Our financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future

Risks Relating to the Company's Stock

1. 20If we do not maintain net income growth, the market price of our common stock could be adversely affected
2. 21We are a holding company and depend on Union Bank for dividends, distributions and other payments
3. 22Our stockholders may not receive dividends on our common stock
4. 23We may need to raise additional capital in the future and such capital may not be available when needed or on acceptable terms
5. 24Market volatility may impact our business and the value of our common stock
6. 25Certain provisions of our articles of incorporation may have an anti-takeover effect
7. 26Environmental, social and governance oversight may influence the Company's stock price and increase compliance costs

Operational Risks

1. 27A failure in or breach of our operational systems, information systems, or infrastructure, or those of our third party vendors and other service providers, may result in financial losses, loss of customers, or damage to our reputation
2. 28systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, has increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased
3. 29We rely on other companies to provide key components of our business infrastructure

Strategic Risks

1. 30Competition in the local banking industry may impair our ability to attract and retain customers at current levels
2. 31We may incur significant losses as a result of ineffective risk management processes and strategies
3. 32Expansion or contraction of our branch network may adversely affect our financial results
4. 33We must adapt to information technology changes in the financial services industry, which could present operational issues, require significant capital spending, or impact our reputation
5. 34External 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
6. 35Our financial condition and results of operations have been adversely affected, and may continue to be adversely affected, by general market and economic conditions
7. 36Our business and financial results could be adversely affected by the political environment and governmental policies

General Risks

1. 37We may be unable to attract and retain key personnel
2. 38We are subject to reputational risk
3. 39We face significant and increasing competition in the financial services industry
4. 40We may be required to write down goodwill and other identifiable intangible assets
5. 41The accuracy of our financial statements and related disclosures could be affected if the judgments, assumptions or estimates used in our critical accounting policies are inaccurate