Virginia National Bankshares (VABK) risk factors, FY2024 10-K

Other

1. 01The Company’s credit standards and its on-going credit assessment processes might not protect it from significant credit losses
2. 02The Company’s ACL may be insufficient and any increases in the ACL may have a material adverse effect on the Company’s financial condition and results of operations
3. 03The Company’s focus on lending to small to mid-sized community-based businesses may increase its credit risk
4. 04The Company’s concentration in loans secured by real estate may increase its future credit losses, which would negatively affect the Company’s financial results
5. 05The Company has a moderate concentration of credit exposure in commercial real estate and loans with this type of collateral are viewed as having higher risk of default
6. 06The Company’s results of operations are significantly affected by the ability of borrowers to repay their loans

Market Risks

1. 07The Company may be adversely impacted by changes in market conditions
2. 08Weaknesses in economic or market conditions, or adverse developments in the financial services industry, could pose challenges for the Company and could adversely affect the results of operations, liquidity, and financial condition[
3. 09Inflation can have an adverse impact on the Company’s business and on its customers
4. 10The Company’s business is subject to interest rate risk, and variations in interest rates and inadequate management of interest rate risk may negatively affect financial performance
5. 11The Company’s liquidity needs could adversely affect results of operations and financial condition
6. 12Recent negative developments affecting the banking industry, and resulting media coverage, have eroded customer confidence in the banking system
7. 13The Company may need to raise additional capital in the future and may not be able to do so on acceptable terms, or at all

Strategic Risks

1. 14The Company faces strong and growing competition from financial services companies and other companies that offer banking and other financial services, which could negatively affect the Company’s business
2. 15The Company’s ability to continue to grow depends, in part, upon its ability to (i) open new branch offices or acquire existing branches or other financial institutions, (ii) attract deposits to those locations, and (iii) identify attractive loan and investment opportunities

Operational Risks

1. 16The Company is subject to a variety of operational risks, including reputational risk, legal and compliance risk, and the risk of fraud or theft by employees or outsiders
2. 17Changes in accounting standards could impact reported earnings
3. 18Failure to maintain effective systems of internal and disclosure control could have a material adverse effect on the Company’s results of operation and financial condition
4. 19The Company depends on the accuracy and completeness of information about customers and counterparties, and the Company’s financial condition could be adversely affected if it relies on misleading or incorrect information
5. 20The Company’s success depends on its management team, and the unexpected loss of any of these personnel could adversely affect operations
6. 21The Company relies on other companies to provide key components of its business infrastructure
7. 22The soundness of other financial institutions could adversely affect the Company
8. 23The Company’s operations may be adversely affected by cybersecurity risks
9. 24Consumers may increasingly decide not to directly use banks to complete their financial transactions, which would have a material adverse impact on the Company’s financial condition and operations
10. 25The Company’s ability to operate profitably may be dependent on its ability to integrate or introduce various technologies into its operations

Legal, Regulatory and Compliance Risks

1. 26The Company operates in a highly regulated industry and the laws and regulations that govern the Company’s operations, corporate governance, executive compensation and financial accounting, or reporting, including changes in them or the Company’s failure to comply with them, may adversely affect the Company
2. 27Regulations issued by the CFPB could adversely impact earnings due to, among other things, increased compliance costs or costs due to noncompliance
3. 28The Company’s business and earnings are impacted by governmental, fiscal and monetary policy over which it has no control

Risks Related to the Company’s Common Stock

1. 29The Company is not obligated to pay dividends and its ability to pay dividends is limited
2. 30Future issuances of the Company’s common stock could adversely affect the market price of the common stock and could be dilutive
3. 31An investment in the Company’s common stock is not an insured deposit
4. 32The Company qualifies as a “smaller reporting company,” and the reduced disclosure obligations applicable to smaller reporting companies may make its common stock less attractive to investors
5. 33While the Company’s common stock is currently listed on the Nasdaq Capital Market, it has less liquidity than stocks for larger companies listed on national securities exchanges
6. 34The Company is exposed to risk of environmental liabilities with respect to properties to which it takes title
7. 35Severe weather, earthquakes, other natural disasters, pandemics, endemics, acts of war or terrorism and other external events could significantly impact the Company's business