−Removed: The risks set forth below, in addition to the other risks described in this Annual Report on Form 10-K, may adversely affect the Company's business, financial condition, strategic objectives, and operating results.
−Removed: In addition to the risks set forth below and the other risks described in this annual report, there may be additional risks and uncertainties that are not currently known to the Company or that the Company currently deems to be immaterial that could materially and adversely affect the Company's business, financial condition, strategic objectives, or operating results.
−Removed: As a result, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.
−Removed: Further, to the extent that any of the information contained in this Annual Report on Form 10-K constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company.
−Removed: Risk Factors Summary
−Removed: Merger-Related Risks
−Removed: • Berkshire Will Be Subject to Business Uncertainties and Contractual Restrictions While the Mergers Are Pending.
−Removed: • The Announcement of the Proposed Mergers Could Disrupt Berkshire’s Relationships with its Customers, Suppliers, Business Partners and Others, As Well As Its Operating Results and Business Generally.
−Removed: • The Merger Agreement Limits Berkshire’s Ability to Pursue Alternatives to the Mergers and May Discourage Other Companies from Trying to Acquire Berkshire.
−Removed: • In Connection with the Mergers, Berkshire Will Assume Brookline’s Outstanding Debt Obligations, and the Combined Company’s Level Of Indebtedness Following the Completion of the Mergers Could Adversely Affect the Combined Company’s Ability to Raise Additional Capital and Meet Its Obligations Under Existing Indebtedness.
−Removed: • The Combined Company Will Incur Significant Transaction and Merger-Related Costs In Connection with the Mergers.
−Removed: • If the Mergers Are Not Completed, Berkshire Will Have Incurred Substantial Expenses Without Its Stockholders Realizing The Expected Benefits of the Mergers.
−Removed: • Berkshire and Brookline May Not Be Able to Successfully Integrate the Two Companies or to Realize the Anticipated Benefits of the Mergers.
−Removed: • The Merger Agreement May Be Terminated In Accordance With Its Terms, and the Mergers May Not Be Completed.
−Removed: • The Need for Regulatory Approvals May Delay the Date of Completion of the Mergers or May Diminish the Benefits of the Mergers.
−Removed: • Litigation Against Berkshire or Brookline, or the Members of Berkshire’s or Brookline’s Board of Directors, Could Prevent or Delay the Completion of the Mergers.
−Removed: • The Future Results of the Combined Company Following the Mergers May Suffer if the Combined Company Does Not Effectively Manage Its Expanded Operations.
−Removed: • The Market Price of Berkshire’s Common Stock After the Mergers May Be Affected By Factors Different from Those Currently Affecting Berkshire’s Common Stock.
−Removed: • Current Holders of Berkshire’s Common Stock Will Have a Significantly Reduced Ownership and Voting Interest in the Combined Company After the Mergers and Will Therefore Have Less Voting Influence Over the Combined Company.
−Removed: • The Market Price of Berkshire Common Stock May Decline in the Future as a Result of the Mergers.
−Removed: Lending Risks
−Removed: • Deterioration in the Housing Sector, Commercial Real Estate, and Related Markets May Adversely Affect Business and Financial Results.
−Removed: • The Company’s Emphasis on Commercial Lending May Expose the Company to Increased Lending Risks, Which Could Hurt Profits.
−Removed: • The Company is Subject to a Variety of Risks in Connection With Any Sale of Loans it May Conduct.
−Removed: • The Company is Exposed to Risk of Environmental Liability When It Takes Title to Property.
−Removed: Operating Risks
−Removed: • General Economic Conditions, Either Nationally or in Our Market Areas, Which May Be Affected by Macroeconomic Factors, Including Inflation, Unemployment, Government Policies, Supply Chain Issues, and Geopolitical Risks Associated with International Conflict, May Be Worse Than Expected.
−Removed: • The Effects of any Public Health Emergencies and Pandemic Disease, Natural Disaster, War, Acts of Terrorism, Accident, or Similar Action or Event (collectively, "an Event") May Adversely Affect, the Company’s Business, Financial Condition, Liquidity, and Results of Operations.
−Removed: • The Company is Subject to Security and Operational Risks Relating to the Use of Technology that Could Damage the Company's Reputation and Business.
−Removed: • The Company Faces Cybersecurity Risks, Including Denial of Service Attacks, Ransomware, Hacking and Identity Theft that Could Result in the Disclosure of Sensitive Information or the Creation of Unauthorized Transactions, Which Could Adversely Affect the Company’s Business or Reputation and Create Significant Legal and Financial Exposure.
−Removed: • Counterparties and Correspondents Expose the Company to Risks.
−Removed: • The Company’s Business is Reliant on Outside Vendors.
−Removed: • Tailoring The Bank's Delivery Model to Respond to Customer Preferences in Banking May Negatively Affect Earnings
−Removed: • Development of New Products and Services May Impose Additional Costs on the Company and May Expose It to Increased Operational Risk.
−Removed: • The Soundness of Other Financial Institutions Could Adversely Affect Us.
−Removed: • Legal and Regulatory Proceedings and Related Matters Could Adversely Affect Us and the Banking Industry in General.
−Removed: • Loss of Key Employees Could Disrupt Relationships With Certain Customers.
−Removed: • Mergers, Acquisitions and Dispositions Involve Numerous Risks and Uncertainties.
−Removed: Interest Rate Risks
−Removed: • Market Interest Rate Conditions Could Adversely Affect Results of Operations and Financial Condition.
−Removed: Liquidity Risks
−Removed: • Liquidity is Essential to the Company’s Business and a Lack of Liquidity Could Adversely Affect the Company’s Financial Condition and Results of Operations.
−Removed: • Bank Failures and Stresses May Lead to Negative Depositor Confidence in Depository Institutions.
−Removed: Systemic Impacts May Have a Material Adverse Effect on our Financial Condition and Results of Operations and Stock Price.
−Removed: • The Company's Wholesale Funding Sources May Prove Insufficient to Support Operations and Future Growth.
−Removed: • The Company's Ability to Service Its Debt, Pay Dividends, and Otherwise Pay Obligations as They Come Due Is Substantially Dependent on Capital Distributions from the Bank, and These Distributions Are Subject to Regulatory Limits and Other Restrictions.
−Removed: The Company’s Stock Repurchase Program is also Dependent on These Distributions.
−Removed: • Secondary Mortgage Market Conditions Could Have a Material Impact on the Company’s Financial Condition and Results of Operations.
−Removed: Securities Market Value Risks
−Removed: • Declines in the Value of Certain Investment Securities Could Require Write-Downs, Which Would Reduce Earnings.
−Removed: Regulatory Matters Risks
−Removed: • Legislative and Regulatory Initiatives May Affect Business Activities and Increase Operating Costs.
−Removed: • Provisions of the Company's Certificate of Incorporation, Bylaws, and Delaware Law, as Well as State and Federal Banking Regulations, Could Delay or Prevent a Takeover of Us by a Third Party.
−Removed: • Changes in Tax Laws and Accounting Policies and Practices.
−Removed: Significant Accounting Estimates Risks
−Removed: • Various Factors May Cause Our Allowance for Credit Losses on Loans to Increase.
−Removed: • Fair Value Measurements May Be Affected by Inherent Uncertainties.
−Removed: Trading of the Company's Common Stock
−Removed: • The Trading History of the Company’s Common Stock is Characterized By Low Trading Volume.
−Removed: The Value of Shareholder Investments May be Subject to Sudden Decreases Due to the Volatility of the Price of the Common Stock .
−Removed: • Negative Public Opinion Could Damage the Company’s Reputation and Impact Business Operations and Revenues.
−Removed: Merger-Related Risks
−Removed: Berkshire Will Be Subject to Business Uncertainties and Contractual Restrictions While the Mergers Are Pending.
−Removed: On December 16, 2024, Berkshire, Commerce Acquisition Sub, Inc., a direct, wholly-owned subsidiary of Berkshire (“Merger Sub”) and Brookline entered into a merger agreement (the “Merger Agreement”) pursuant to which Berkshire and Brookline have agreed to combine their respective businesses in a merger of equals.
−Removed: Under the Merger Agreement, Merger Sub will merge with and into Brookline, with Brookline as the surviving corporation (the “Merger”), immediately followed by the merger of Brookline with and into Berkshire, with Berkshire as the surviving corporation (the “Holdco Merger”).
−Removed: Immediately following the Merger and the Holdco Merger (collectively, the “Mergers”), Berkshire Bank, the wholly-owned subsidiary of Berkshire, as well as Brookline’s two other banking subsidiaries, PCSB Bank and Bank Rhode Island, will merge with and into Brookline Bank, the wholly-owned subsidiary of Brookline, with Brookline Bank as the surviving corporation (collectively, the “Bank Merger”).
−Removed: Uncertainty about the effect of the Mergers on employees and customers may have an adverse effect on Berkshire.
−Removed: These uncertainties may impair Berkshire’s ability to attract, retain and motivate key personnel until the Mergers are completed, and could cause customers and others who deal with Berkshire to seek to change existing business relationships with Berkshire.
−Removed: In addition, the Merger Agreement requires that Berkshire conduct its business in the ordinary course of business consistent with past practice and restricts Berkshire from taking certain actions prior to the effective time or termination of the Merger Agreement without Brookline’s consent in writing.
−Removed: These restrictions may prevent Berkshire from pursuing attractive business opportunities that may arise prior to the completion of the Mergers.
−Removed: The Announcement of the Proposed Mergers Could Disrupt Berkshire’s Relationships with its Customers, Suppliers, Business Partners and Others, As Well As its Operating Results and Business Generally.
−Removed: Whether or not the Mergers are ultimately consummated, as a result of uncertainty related to the Mergers, risks relating to the impact of the announcement of the Mergers on Berkshire’s business include the following:
−Removed: • employees may experience uncertainty about their future roles, which might adversely affect Berkshire’s ability to retain and hire key personnel and other employees;
−Removed: • customers, suppliers, business partners and other parties with which Berkshire maintains business relationships may experience uncertainty about their respective futures and seek alternative relationships with third parties, seek to alter their business relationships with Berkshire or fail to extend an existing relationship with Berkshire;
−Removed: • Berkshire has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Mergers.
−Removed: If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact Berkshire’s results of operations and financial condition.
−Removed: The Merger Agreement Limits Berkshire’s Ability to Pursue Alternatives to the Mergers and May Discourage Other Companies from Trying to Acquire Berkshire.
−Removed: The Merger Agreement contains “no shop” covenants that restrict Berkshire’s ability to, directly or indirectly, among other things initiate, solicit, knowingly encourage or knowingly facilitate, inquiries or proposals with respect to, or, subject to certain exceptions generally related to the exercise of fiduciary duties by Berkshire’s board of directors, engage in any negotiations concerning, or provide any confidential or non-public information or data relating to, any alternative acquisition proposals.
−Removed: These provisions, which include a $45.0 million termination fee payable under certain circumstances, may discourage a potential third-party acquirer that might have an interest in acquiring all or a significant part of Berkshire from considering or making that acquisition proposal.
−Removed: In Connection with the Mergers, Berkshire Will Assume Brookline’s Outstanding Debt Obligations, and the Combined Company’s Level Of Indebtedness Following the Completion of the Mergers Could Adversely Affect the Combined Company’s Ability to Raise Additional Capital and Meet its Obligations Under Existing Indebtedness.
−Removed: In connection with the Mergers, Berkshire has agreed to assume, or to cause its subsidiary to assume, Brookline’s outstanding indebtedness.
−Removed: Berkshire’s existing debt, together with any future incurrence of additional indebtedness, and the assumption of Brookline’s outstanding indebtedness, could have important consequences for the combined company’s creditors and the combined company’s stockholders.
−Removed: For example, it could:
−Removed: • limit the combined company’s ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;
−Removed: • restrict the combined company from making strategic acquisitions or cause the combined company to make non-strategic divestitures;
−Removed: • restrict the combined company from paying dividends to its stockholders;
−Removed: • increase the combined company’s vulnerability to general economic and industry conditions;
−Removed: • require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on the combined company’s indebtedness, thereby reducing the combined company’s ability to use cash flows to fund its operations, capital expenditures and future business opportunities.
−Removed: The Combined Company Will Incur Significant Transaction and Merger-Related Costs In Connection with the Mergers.
−Removed: Berkshire and Brookline will incur costs to combine the operations of the two companies.
−Removed: Berkshire and Brookline are collecting information to formulate detailed integration plans to deliver planned synergies.
−Removed: Additional unanticipated costs may be incurred in the integration of the businesses of Berkshire and Brookline.
−Removed: Whether or not the Mergers are consummated, Berkshire will incur substantial expenses, such as legal, accounting, printing and financial advisory fees, in pursuing the Mergers.
−Removed: Although Berkshire expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transactions and merger-related costs over time, this net benefit may not be achieved in the near term, or at all.
−Removed: If the Mergers Are Not Completed, Berkshire Will Have Incurred Substantial Expenses Without Its Stockholders Realizing The Expected Benefits of the Mergers.
−Removed: Berkshire has incurred and will incur further substantial expenses in connection with the Mergers, which are charged to earnings as incurred.
−Removed: These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees and other regulatory fees, financial printing and other printing costs and other related costs.
−Removed: If the Mergers are not completed, these expenses will still be charged to earnings even though Berkshire would not have realized the expected benefits of the Mergers.
−Removed: There can be no assurance that the Mergers will be completed.
−Removed: Berkshire and Brookline May Not Be Able to Successfully Integrate the Two Companies or to Realize the Anticipated Benefits of the Mergers.
−Removed: The Mergers involve the combination of two companies that previously have operated independently.
−Removed: A successful combination of the operations of the two entities will depend substantially on both parties’ ability to consolidate cultures, personnel, operations, systems and procedures and to eliminate redundancies and reduce costs of the combined operations.
−Removed: Berkshire may not be able to combine the operations of Brookline with Berkshire’s operations without encountering difficulties, such as:
−Removed: • the loss of key employees and customers;
−Removed: • the disruption of operations and business;
−Removed: • the inability to maintain and increase competitive presence;
−Removed: • those associated with entering a new geographic market;
−Removed: • deposit attrition, customer loss and revenue loss;
−Removed: • possible inconsistencies in standards, control procedures and policies;
−Removed: • unexpected problems with costs, operations, personnel, technology and credit;
−Removed: • problems with the assimilation of new operations, sites or personnel, which could divert resources from regular banking operations.
−Removed: Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit the successful integration of Brookline.
−Removed: Berkshire entered into the Merger Agreement with the expectation that the Mergers will result in various benefits including, among other things, enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, improved technology, cost savings and operating efficiencies.
−Removed: Achieving the anticipated benefits of the Mergers are subject to a number of uncertainties, including whether Berkshire and Brookline integrate in an efficient and effective manner, and general competitive factors in the marketplace.
−Removed: Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materially adversely impact Berkshire’s business, financial condition and operating results.
−Removed: Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.
−Removed: The Merger Agreement May Be Terminated In Accordance With Its Terms, and the Mergers May Not Be Completed.
−Removed: The Merger Agreement is subject to a number of conditions that must be fulfilled to complete the Mergers.
−Removed: Those conditions include, among others, certain regulatory and stockholder approvals, the absence of orders prohibiting the completion of the Mergers, the effectiveness of a registration statement to be filed Berkshire, which will include a Joint Proxy Statement/Prospectus, the continued accuracy of the representations and warranties by both parties, the performance by both parties of their covenants and agreements, and the receipt by both parties of legal opinions from their respective tax counsels.
−Removed: Any of these conditions to closing of the Mergers may not be fulfilled, and as a result the Mergers may not be completed.
−Removed: The Need for Regulatory Approvals May Delay the Date of Completion of the Mergers or May Diminish the Benefits of the Mergers.
−Removed: Berkshire is required to obtain the approvals of certain regulatory agencies before completing the Mergers.
−Removed: Satisfying any requirements of these regulatory agencies may delay the date of completion of the Mergers.
−Removed: The requisite regulatory approvals may not be received at all (in which case the Mergers could not be completed), may not be received in a timely fashion, or may contain conditions or restrictions on completion of the Mergers that cannot be satisfied.
−Removed: In addition, any conditions or restrictions imposed could have the effect of imposing additional costs on or limiting the revenues of the combined company following the Mergers, which might have an adverse effect on the combined company following the Mergers.
−Removed: Further, it is possible that, among other things, restrictions on the combined operations of the two companies, including divestitures, may be sought by governmental agencies as a condition to obtaining the required regulatory approvals.
−Removed: This may diminish the benefits of the Mergers to the combined company or otherwise have an adverse effect on the combined company following the Mergers.
−Removed: Litigation Against Berkshire or Brookline, or the Members of Berkshire’s or Brookline’s Board of Directors, Could Prevent or Delay the Completion of the Mergers.
−Removed: Berkshire’s stockholders or Brookline’s stockholders may file lawsuits against Brookline, Berkshire, and/or the boards of directors of either company in connection with the Mergers.
−Removed: Such legal proceedings could delay or prevent the Mergers from being completed in a timely manner.
−Removed: The existence of litigation related to the Mergers could affect the likelihood of obtaining the required regulatory and stockholders approvals.
−Removed: Moreover, any litigation could be time-consuming and expensive and could divert Berkshire’s and Brookline’s management’s attention away from their regular business and their focus on a successful integration of the two companies.
−Removed: Any lawsuit adversely resolved against Brookline, Berkshire or members of their respective boards of directors could have a material adverse effect on each company’s business, financial condition and results of operations.
−Removed: Moreover, one of the conditions to the completion of the Mergers is the absence of any restraining order, injunction or decree issued by a court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Mergers, and that no governmental authority or regulatory authority of competent jurisdiction shall have enacted, promulgated or enforced any statute, rule, regulation, judgment, decree, injunction or other order prohibiting consummation of the transactions contemplated by the Merger Agreement or making the Mergers illegal.
−Removed: Consequently, if a settlement or other resolution is not reached in any lawsuit that is filed or any regulatory proceeding and a claimant secures injunctive or other relief or a governmental authority issues an order or other directive restricting, prohibiting or making illegal the consummation of the transactions contemplated by the Merger
−Removed: Agreement (including the Mergers), then such injunctive or other relief may prevent the Mergers from becoming effective in a timely manner or at all.
−Removed: The Future Results of the Combined Company Following the Mergers May Suffer if the Combined Company Does Not Effectively Manage Its Expanded Operations.
−Removed: Following the Mergers, the size of the business of the combined company will increase beyond the current size of either Berkshire’s or Brookline’s business.
−Removed: The combined company’s future success will depend, in part, upon its ability to manage this expanded business, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
−Removed: The combined company may also face increased scrutiny from governmental authorities as a result of the increased size of its business.
−Removed: There can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies, revenue enhancement or other benefits currently anticipated from the Mergers.
−Removed: The Market Price of Berkshire’s Common Stock After the Mergers May Be Affected By Factors Different from Those Currently Affecting Berkshire’s Common Stock.
−Removed: The results of operations of the combined company and the market price of Berkshire’s common stock after the completion of the Mergers may be affected by factors different from those currently affecting the independent results of operations of each of Berkshire and Brookline.
−Removed: In addition, the issuance of shares of Berkshire’s common stock in the Mergers could depress the market price for Berkshire’s common stock.
−Removed: For example, some Brookline stockholders may decide not to hold the shares of Berkshire’s common stock they receive as a result of the Mergers.
−Removed: Other Brookline stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of Berkshire’s common stock they receive as a result of the Mergers.
−Removed: Any such sales of Berkshire’s common stock could depress the market price for Berkshire’s common stock.
−Removed: Current Holders of Berkshire’s Common Stock Will Have a Significantly Reduced Ownership and Voting Interest in the Combined Company After the Mergers and Will Therefore Have Less Voting Influence Over the Combined Company.
−Removed: In the Mergers, each Brookline stockholder will become a holder of common stock of the combined company.
−Removed: As a result of the transaction and the $100 million common stock offering to support the transaction, Berkshire estimates that Berkshire shareholders will own approximately 55% and Brookline shareholders will own approximately 45% of the outstanding shares of the combined company.
−Removed: As a result, Brookline’s current stockholders will have less voting influence on the combined company and may have less influence on its management and policies than they now have.
−Removed: The Market Price of Berkshire Common Stock May Decline in the Future as a Result of the Mergers.
−Removed: The market price of Berkshire common stock may decline in the future as a result of the Mergers for a number of reasons, including:
−Removed: • the unsuccessful integration of Brookline and Berkshire;
−Removed: • the failure of the combined company to achieve the perceived benefits of the Mergers, including financial results, as rapidly as or to the extent anticipated by financial or industry analysts.
−Removed: Many of these factors are beyond the control of Berkshire.
−Removed: As a consequence, Berkshire stockholders could lose the value of their investment in Berkshire common stock.
−Removed: Lending Risks
−Removed: Deterioration in the Housing Sector, Commercial Real Estate, and Related Markets May Adversely Affect Business and Financial Results.
−Removed: Real estate lending is a major business activity for the Company.
−Removed: Real estate market conditions affect the value and marketability of real estate collateral, and they also affect the cash flows, liquidity, and net worth of many borrowers whose operations and finances depend on real estate market conditions.
−Removed: We have a geographic concentration of loans in our market areas.
−Removed: Adverse conditions in the Company's market areas could reduce growth rates, affect the ability of our customers to repay their loans and increase loan losses, and generally affect the Company's financial condition and results of operations.
−Removed: Potential increases in interest rates can lead to increased capitalization rates over time which could adversely affect commercial property appraisals and collateral value.
−Removed: Residential property values may be similarly adversely impacted.
−Removed: As of December 31, 2024, commercial real estate loans comprised approximately 51% of our loan portfolio.
−Removed: Commercial real estate mortgage loans generally involve a greater degree of credit risk than residential real estate mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy.
−Removed: Because payments on loans secured by commercial real estate often depend upon the successful operation and management of the properties and the businesses which operate from within them, repayment of such loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy, changes in government regulations and fiscal policy, or changes in the level of interest rates.
−Removed: Failures in our risk management policies, procedures and controls could adversely affect our ability to manage this portfolio going forward and could result in an increased rate of delinquencies in, and increased losses from, this portfolio, which, accordingly, could have a material adverse effect on our business, financial condition and results of operations.
−Removed: The Company’s Emphasis on Commercial Lending May Expose the Company to Increased Lending Risks, Which Could Hurt Profits.
−Removed: The Company emphasizes commercial lending, which generally exposes the Company to a greater risk of nonpayment and loss because repayment of such loans often depends on the successful operations and income stream of the borrowers.
−Removed: Commercial loans are historically more susceptible to delinquency, default, fraud, and loss during economic downturns.
−Removed: Commercial lending involves larger loan sizes and larger relationship exposures, with greater potential impact on profits in the event of adverse loan performance.
−Removed: The majority of the Company’s commercial loans are secured by real estate and subject to the previously discussed real estate risk factors, as well as risks specific to individual properties and property types.
−Removed: The Company is Subject to a Variety of Risks in Connection With Any Sale of Loans it May Conduct.
−Removed: The Company routinely sells newly originated residential mortgage loans and SBA guaranteed business loans, and may also sell other loans or loans portfolios.
−Removed: It may make certain representations and warranties to the purchaser concerning the loans sold and the procedures under which those loans have been originated and serviced.
−Removed: If any of these representations and warranties are invalid, the Company may be required to refund premiums, indemnify the purchaser for any related costs or losses, or it may be required to repurchase part or all of the affected loans.
−Removed: The Company may also be required to repurchase loans as a result of borrower fraud or in the event of early payment default by the borrower on a loan it has sold.
−Removed: The Company’s ability to maintain seller/servicer relationships with government agencies and government backed entities may be jeopardized in the event of the emergence of one or more of the above risks.
−Removed: Demand for the Company’s loans in the secondary markets could also be affected by these risks, which could lead to a reduction in related business activities.
−Removed: The Company is Exposed to Risk of Environmental Liability When It Takes Title to Property.
−Removed: In the course of its business, the Company may foreclose on and take title to real estate.
−Removed: As a result, the Company could be subject to environmental liabilities with respect to these properties for property damage, personal injury, investigation and clean-up costs.
−Removed: The costs associated with investigation or remediation activities could be substantial.
−Removed: The Company may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property.
−Removed: Operating Risks
−Removed: General Economic Conditions, Either Nationally or in Our Market Areas, Which May Be Affected by Macroeconomic Factors, Including Inflation, Unemployment, Government Policies, Supply Chain Issues, and Geopolitical Risks Associated with International Conflict, May Be Worse Than Expected.
+Added: Before deciding to invest in us or deciding to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this report and in our other filings with the SEC.
+Added: The risks and uncertainties described below and in our other filings are not the only ones facing us.
+Added: Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business.
+Added: If any of these known or unknown risks or uncertainties actually occur, our business, financial condition and results of operations could be seriously harmed.
+Added: In that event, the market price for our common stock could decline and you may lose your investment.
+Added: RISKS RELATED TO OUR BUSINESS AND INDUSTRY
+Added: Changes to interest rates could adversely affect our results of operations and financial condition.
+Added: Our consolidated results of operations depend in large part on net interest income, which is the difference between (i) interest income on interest-earning assets, such as loans, leases and securities, and (ii) interest expense on interest-bearing liabilities, such as deposits and borrowed funds.
+Added: As a result, our earnings and growth are significantly affected by interest rates, which are subject to the influence of economic conditions generally, both domestic and foreign, to events in the capital markets, and also to the monetary and fiscal policies of the U.S.
+Added: The nature and timing of any changes in such policies and their effect on us cannot be controlled and are extremely difficult to predict.
+Added: An increase in interest rates could also have a negative impact on our results of operations by reducing the ability of borrowers to repay their current loan obligations, which could not only result in increased loan defaults, foreclosures, and charge-offs, but also necessitate further increases to our allowances for loan losses.
+Added: A decrease in interest rates may trigger loan prepayments, which may serve to reduce net interest income if we are unable to lend those funds to other borrowers or invest the funds at the same or higher interest rates.
+Added: We may be adversely affected by volatility in U.S.
+Added: and global economic conditions and changes in fiscal, monetary, trade and regulatory policies.
+Added: The economy in the U.S.
+Added: and globally has experienced volatility in recent years and may continue to experience such volatility for the foreseeable future.
+Added: Unfavorable or uncertain economic conditions can be caused by declines in economic growth, business activity, or investor or business confidence;
+Added: limitations on the availability of or increases in the cost of credit and capital;
+Added: fluctuations in inflation or interest rates;
+Added: uncertainties regarding fiscal and monetary policies;
+Added: the timing and impact of changing governmental policies, including changes in guidance and interpretation by regulatory authorities;
+Added: changes in trade policies by the U.S.
+Added: or other countries;
+Added: supply chain disruptions;
+Added: consumer spending;
+Added: employment levels;
+Added: labor shortages;
+Added: challenging labor market conditions;
+Added: wage stagnation;
+Added: government shutdowns;
+Added: energy prices;
+Added: commercial property values;
+Added: bankruptcies and a default by a significant market participant or class of counterparties;
+Added: natural disasters;
+Added: climate change;
+Added: terrorist attacks;
+Added: or a combination of these or other factors.
+Added: Volatile business and economic conditions could have adverse effects on our business, including the following:
+Added: • investors may have less confidence in the equity markets in general and in financial services industry stocks in particular, which could place downward pressure on our stock price and resulting market valuation;
+Added: • economic and market developments may further affect consumer and business confidence levels and may cause declines in credit usage and adverse changes in payment patterns, causing increases in delinquencies and default rates;
+Added: • our ability to assess the creditworthiness of our customers may be impaired if the models and approaches we use to select, manage, and underwrite loans become less predictive of future behaviors;
+Added: • we could suffer decreases in demand for loans or other financial products and services or decreased deposits or other investments in accounts with us;
+Added: • competition in the financial services industry could intensify as a result of the increasing consolidation of financial services companies in connection with current market conditions or otherwise; and
+Added: • the value of loans and other assets or collateral securing loans may decrease.
+Added: Inflation can have an adverse impact on our business and on our customers.
+Added: The future rate of inflation and other economic factors remain uncertain, and the FRB may decrease or increase interest rates slower or faster than anticipated.
+Added: If inflation increases and interest rates rise, the value of our investment securities, particularly those with longer maturities, will decrease, although this effect is less pronounced for floating rate instruments.
+Added: Prolonged periods of elevated inflation also may impact our profitability by negatively impacting our costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention, and negatively impacting the demand for our products and services.
+Added: Moreover, our customers are affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans.
+Added: Our business may be adversely affected by changes in economic conditions in our market area.
Generally, our financial performance, and in particular the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of the collateral securing those loans, as well as demand for loans and other products and services we offer, is very dependent on the business environment in the markets we operate in locally and the United States as a whole.
−Removed: Adverse economic conditions may result from a variety of factors, including domestic and global economic and political developments, such as plateauing or decreasing economic growth and business activity, high unemployment rates, recessions, fluctuations in interest rates, inflation, pressures on the commercial real estate market, uncertainty regarding the U.S.
−Removed: government's debt limit, U.S.
−Removed: Government fiscal and monitory policy, a potential U.S.
−Removed: government shutdown, recent stress in the banking sector, international conflict, civil unrest, and natural disasters.
−Removed: A favorable business environment is generally characterized by, among other factors, economic growth, efficient capital markets, low inflation, low unemployment, high business and investor confidence, and strong business earnings.
−Removed: The occurrence of any of these conditions could have a material adverse effect on our financial condition and results of operations.
−Removed: The Effects of any Public Health Emergencies and Pandemic Disease, Natural Disaster, War, Acts of Terrorism, Accident, or Similar Action or Event (Collectively, "an Event") May Adversely Affect, the Company’s Business, Financial Condition, Liquidity, and Results of Operations.
−Removed: Some of the risks the Company faces from an Event include, but are not limited to:
−Removed: the health and availability of our colleagues, the supply of labor, inflationary impacts on operating costs, the financial condition of our clients and the demand for our products and services, changes in interest rates, recognition of credit losses and increases in the allowance for credit losses, impacts if customers draw on their lines of credit or draw down deposits or seek additional loans to help finance their businesses, and a significant deterioration of business conditions in our markets.
−Removed: Sustained adverse effects may also increase our cost of capital, prevent us from satisfying our minimum regulatory capital ratios and other supervisory requirements, or result in downgrades in our credit rating.
−Removed: The extent to which an Event impacts our business, financial condition, liquidity and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of an Event, the continued effectiveness of our business continuity plan, the direct and indirect impact of an Event on our customers, colleagues, counterparties and service providers, and actions taken by governmental authorities and other third parties in response to an Event.
−Removed: The length of a pandemic and the effectiveness of the measures being put in place to address it are unknown and we face possible continued impacts on liquidity, operating revenues, and credit performance.
−Removed: To the extent a pandemic adversely affects our business, financial condition, liquidity, or results of operations, it may also have the effect of heightening many of the other risks described in this Annual Report on Form 10-K.
−Removed: The Company is Subject to Security and Operational Risks Relating to the Use of Technology that Could Damage the Company's Reputation and Business.
−Removed: Security breaches of sensitive information in our technology platforms could expose the Company to possible liability and damage its reputation.
−Removed: Any compromise of data security could also deter customers from using the Company's services.
−Removed: The Company relies on industry standard internet security and authentication systems to effect secure transmission of data.
−Removed: These precautions may not protect the Company's security systems from compromises or breaches and could result in damage to its reputation and business.
−Removed: The Company utilizes third party core banking software, in addition to other outsourced data processing.
−Removed: If third party providers encounter difficulties or if the Company has difficulty in communicating and/or transmitting with such third parties, it could significantly affect its ability to adequately process and account for customer transactions, which could significantly affect its business operations.
−Removed: The Company interfaces with electronic payments systems which are subject to security and operational risks.
−Removed: The Company utilizes file encryption in designated internal systems and networks and is subject to certain state and federal regulations regarding how the Company manages data security.
−Removed: The Company's enterprise governance risk and compliance function includes a framework of controls, policies and technologies to monitor and protect information from cyberattacks, mishandling, and loss, together with safeguards related to the confidentiality, integrity, and availability of information.
−Removed: Natural disasters and disaster recovery risks could affect its operating systems, which could affect its reputation.
−Removed: The Company's business continuity program addresses crisis management, business impact, and data and systems recovery.
−Removed: Potential problems with the management of technology security and operational risks may affect regulatory compliance, which could affect operating costs and expansion plans.
−Removed: Implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, may have unintended consequences due to their limitations, potential manipulation, or our failure to use them effectively.
−Removed: The Company Faces Cybersecurity Risks, Including Denial of Service Attacks, Ransomware, Hacking and Identity Theft that Could Result in the Disclosure of Sensitive Information or the Creation of Unauthorized Transactions, Which Could Adversely Affect the Company’s Business or Reputation and Create Significant Legal and Financial Exposure.
−Removed: Increased levels of remote access resulting from more work from home employees may create additional opportunities for cybercriminals to exploit vulnerabilities, and employees may be more susceptible to phishing and social engineering attempts due to work responsibilities at home.
−Removed: In addition, technological resources may be strained due to the number of remote users.
−Removed: The Company’s computer systems and network infrastructure are subject to security risks and could be susceptible to cyber-attacks, such as denial of service attacks, hacking, terrorist activities or identity theft.
−Removed: Financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to sensitive information, destroy data, steal financial assets, disable or degrade service, or sabotage systems,
−Removed: often through the introduction of computer viruses or malware, cyber-attacks and other means.
−Removed: Denial of service attacks have been launched against a number of large financial services institutions.
−Removed: As a growing regional bank, the Company may be subject to similar attacks in the future.
−Removed: Hacking and identity theft risks could cause serious reputational harm and possible financial loss to the Company.
−Removed: Cyber threats are rapidly evolving and the Company may not be able to anticipate or prevent all such attacks.
−Removed: Advancements in the use of artificial intelligence could lead to adversarial attacks by exploiting vulnerabilities to manipulate model outputs or bypass security controls.
−Removed: The Company may incur increasing costs in an effort to minimize these risks and could be held liable for any security breach or loss.
−Removed: Despite efforts to ensure the integrity of its systems, the Company will not be able to anticipate all security breaches of these types, and the Company may not be able to implement effective preventive measures against such security breaches.
−Removed: The techniques used by cyber criminals change frequently and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments.
−Removed: Those parties may also attempt to fraudulently induce employees, customers or other users of the Company’s systems to disclose sensitive information in order to gain access to its data or that of its clients or to conduct unauthorized financial transactions.
−Removed: These risks may increase in the future as the Company continues to increase its mobile-payment and other internet-based product offerings and expands its internal usage of web-based products and applications.
−Removed: A successful penetration or circumvention of system security could cause serious negative consequences to the Company, including significant disruption of operations, misappropriation of sensitive information of the Company or that of its customers, or damage to computers or systems of the Company or those of its customers and counterparties.
−Removed: A security breach could result in violations of applicable privacy and other laws, financial loss to the Company or to its customers, loss of confidence in the Company’s security measures, significant litigation exposure, and harm to the Company’s reputation, all of which could have a material adverse effect on the Company.
−Removed: Counterparties and Correspondents Expose the Company to Risks.
−Removed: The Company's use of derivative financial instruments exposes us to financial and contractual risks with counterparties.
−Removed: The Company maintains correspondent bank relationships, purchase loans, manages certain loan participations, engage in securities and funding transactions, and undergo other activities with financial counterparties that are customary to its industry.
−Removed: The Company also utilizes services from major vendors of technology, telecommunications, and other essential operating services.
−Removed: There is financial, reputational, and operational risk in these relationships, which the Company seeks to manage through internal controls and procedures, but there are no assurances that the Company will not experience loss or interruption of its business as a result of unforeseen events with these providers.
−Removed: The Company's mortgage banking operations have exposed us to counterparty transactions including the use of third parties to participate in the management of interest rate risk and mortgage sales and hedging, as well as mortgage servicing.
−Removed: Financial, reputational, and operational risks are inherent in these counterparty and correspondent relationships.
−Removed: The Company could experience losses if there are failures in the controls or accounting, including those related to derivatives activities or if there are performance failures by any counterparties.
−Removed: The risk of loss is increased when interest rates change suddenly and if the intended hedging objectives are not achieved as a result of market or counterparty behaviors.
−Removed: The Company’s Business is Reliant on Outside Vendors.
−Removed: The Company’s business is highly dependent on the use of certain outside vendors for its day-to-day operations.
−Removed: The Company’s operations and reputation are exposed to risk that a vendor may not perform in accordance with established performance standards required in its agreements for any number of reasons including a change in their senior management, their financial condition, their product line or mix and how they support existing customers, or a simple change in their strategic focus.
−Removed: While the Company has comprehensive programs, policies and procedures in place to mitigate risk at all phases of vendor management from selection, to performance monitoring and renewals, the failure of a vendor to perform in accordance with contractual agreements could be disruptive to its business, which could have a material adverse effect on its financial condition, strategic objectives, and results of operations.
−Removed: Tailoring The Bank’s Retail Delivery Model to Respond to Consumer Preferences in Banking May Negatively Affect Earnings.
−Removed: The Company’s branch network continues to be a very significant source of new business generation, however, consumers continue to migrate much of their routine banking to self-service channels.
−Removed: In recognition of this shift in consumer patterns, we regularly review the branch network, which has resulted in branch consolidation accompanied by the enhancement of the Bank’s capabilities to serve its customers through alternate delivery
−Removed: The benefits of this strategy will depend on our ability to realize expected benefits without experiencing significant customer attrition, unexpected costs, or unanticipated disruptions to operations.
−Removed: Development of New Products and Services May Impose Additional Costs on the Company and May Expose It to Increased Operational Risk.
−Removed: The Company’s financial performance depends, in part, on its ability to develop and market new and innovative services and to adopt or develop new technologies that differentiate its products or provide cost efficiencies, while avoiding increased related expenses.
−Removed: This dependency is exacerbated in the current “FinTech” environment, where financial institutions are investing significantly in evaluating new technologies, such as artificial intelligence, blockchain applications, and developing potentially industry-changing new products, services and industry standards.
+Added: An economic downturn could result in losses that materially and adversely affect our business.
+Added: Recessionary economic conditions, increased unemployment, inflation, a decline in real estate values or other factors beyond our control may adversely affect the ability of our borrowers to repay their loans, and could result in higher loan and lease losses and lower net income for us.
+Added: In addition, deterioration, or defaults by issuers of the underlying collateral of our investment securities may cause additional credit-related charges to our income statement.
+Added: Our ability to borrow from other financial institutions or to access the debt or equity capital markets on favorable terms or at all could be adversely affected by disruptions in the capital markets or other events, including actions by rating agencies and deteriorating investor expectations.
+Added: If we are unable to access the capital markets, have prolonged net deposit outflows, or our borrowing costs increase, our liquidity and competitive position will be negatively affected.
+Added: Liquidity is essential to our business.
+Added: We must maintain sufficient funds to respond to the needs of depositors and borrowers.
+Added: To manage liquidity, we draw upon a number of funding sources in addition to in-market deposit growth and repayments and maturities of loans and investments.
+Added: Any inability to access the capital markets, illiquidity or volatility in the capital markets, a decrease in value of eligible collateral or an increase in collateral requirements (including as a result of credit concerns for short-term borrowing), changes to our relationships with our funding providers based on real or perceived changes in our risk profile, prolonged federal government shutdowns, or changes in regulations or regulatory guidance, or other events could negatively affect our access to or cost of funding, affecting our ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, or fund asset growth and new business initiatives at a reasonable cost, in a timely manner and without adverse consequences.
+Added: Additionally, our liquidity or cost of funds may be negatively impacted by the unwillingness or inability of the FRB to act as lender of last resort, unexpected simultaneous draws on lines of credit or deposits, the withdrawal of or failure to attract customer deposits, or increased regulatory liquidity, capital and margin requirements.
+Added: Although we maintain a liquid asset portfolio and have implemented strategies to maintain sufficient and diverse sources of funding to accommodate planned, as well as unanticipated, changes in assets, liabilities, and off-balance sheet commitments under various economic conditions, a substantial, unexpected, or prolonged change in the level or cost of liquidity could have a material adverse effect on us.
+Added: If the cost effectiveness or the availability of supply in these credit markets is reduced for a prolonged period of time, our funding needs may require us to access funding and manage liquidity by other means.
+Added: These alternatives may include generating client deposits, extending the maturity of wholesale borrowings, borrowing under certain secured borrowing arrangements, using relationships developed with a variety of fixed income investors, selling or securitizing loans, and further managing loan growth and investment opportunities.
+Added: These alternative means of funding may result in an increase to the overall cost of funds and may not be available under stressed conditions, which would cause us to liquidate a portion of our liquid asset portfolio to meet any funding needs.
+Added: We face significant and increasing competition in the financial services industry.
+Added: We operate in a highly competitive environment that includes financial and non-financial services firms, including traditional banks, online banks, financial technology companies, wealth management companies and others.
+Added: These companies compete on the basis of, among other factors, size, quality and type of products and services offered, price, technology and reputation.
+Added: Emerging technologies, such as artificial intelligence (including machine learning and generative artificial intelligence) and quantum computing, have the potential to intensify competition and accelerate disruption in the financial services industry.
+Added: Financial technology companies now offer services traditionally provided by financial institutions.
+Added: These firms use technology and mobile platforms to enhance the ability of companies and individuals to borrow money, save and invest.
+Added: We may not be as timely or successful in assessing the evolving competitive landscape and developing or introducing new products and services as our competitors.
+Added: Our business may be negatively impacted if we, or our third-party providers, do not timely develop and apply emerging technologies, or if our initiatives in these areas are deficient or fail.
+Added: Our, or our third-party providers’, inability, or resistance to timely innovate or adapt operations, products and services to evolving regulatory and market environments, industry standards and consumer preferences could result in service disruptions, harm our business and adversely affect our results of operations and reputation.
+Added: Development of new products services and technologies may impose additional costs on us and may expose us to increased operational risk.
The introduction of new products and services can entail significant time and resources, including regulatory approvals.
−Removed: Substantial risks and uncertainties are associated with the introduction of new products and services, including technical and control requirements that may need to be developed and implemented, rapid technological change in the industry, the Company’s ability to access technical and other information from its clients, the significant and ongoing investments required to bring new products and services to market in a timely manner at competitive prices and the preparation of marketing, sales and other materials that fully and accurately describe the product or service and its underlying risks.
−Removed: The Company’s failure to manage these risks and uncertainties also exposes it to enhanced risk of operational lapses which may result in the recognition of financial statement liabilities.
−Removed: Regulatory and internal control requirements, capital requirements, competitive alternatives, vendor relationships and shifting market preferences may also determine if such initiatives can be brought to market in a manner that is timely and attractive to the Company’s clients.
−Removed: Products and services relying on internet and mobile technologies may expose the Company to fraud and cybersecurity risks.
−Removed: Failure to successfully manage these risks in the development and implementation of new products or services could have a material adverse effect on the Company’s business and reputation, as well as on its consolidated results of operations and financial condition.
+Added: Substantial risks and uncertainties are associated with the introduction of new products and services, including technical and control requirements that may need to be developed and implemented, rapid technological change in the industry, our ability to access technical and other information from its clients, the significant and ongoing investments required to bring new products and services to market in a timely manner at competitive prices and the preparation of marketing, sales and other materials that fully and accurately describe the product or service and its underlying risks.
+Added: Our failure to manage these risks and uncertainties also exposes it to enhanced risk of operational lapses which may result in the recognition of financial statement liabilities.
+Added: Regulatory and internal control requirements, capital requirements, competitive alternatives, vendor relationships and shifting market preferences may also determine if such initiatives can be brought to market in a manner that is timely and attractive to our clients.
+Added: Implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, may have unintended consequences, including fraud or cybersecurity risk, due to their limitations, potential manipulation, or our failure to use them effectively.
+Added: Failure to successfully manage these risks in the development and implementation of new products or services could have a material adverse effect on our business and reputation, as well as on our consolidated results of operations and financial condition.
+Added: Changes in U.S.
+Added: trade policies, including the imposition of tariffs and retaliatory tariffs, may adversely affect our business, financial condition, and results of operations.
+Added: There have been significant changes to U.S.
+Added: trade policies, including tariffs affecting many countries and there continues to be significant discussion regarding other potential changes to U.S.
+Added: trade policies, treaties, and tariffs, including the potential for additional tariffs.
+Added: In addition, retaliatory tariffs have been imposed and additional retaliatory tariffs are likely.
+Added: Tariffs, retaliatory tariffs or other trade restrictions on products and materials that our customers import or export could cause the prices of our customers’ products to increase.
+Added: RISKS RELATED TO CREDIT
+Added: If our allowance for credit losses is not sufficient to cover actual loan and lease losses, our earnings may decrease.
+Added: We periodically make a determination of an allowance for credit losses based on available information, including, but not limited to, the quality of the loan and lease portfolio as indicated by trends in loan risk ratings, payment performance, economic conditions, the value of the underlying collateral and the level of nonaccruing and criticized loans and leases.
+Added: Management relies on its loan officers and credit quality reviews, its experience, and its evaluation of economic conditions, among other factors, in determining the amount of provision required for the allowance for credit losses.
+Added: Provisions to this allowance result in an expense for the period.
+Added: If, as a result of general economic conditions, previously incorrect assumptions, or an increase in defaulted loans or leases, we determine that additional increases in the allowance for credit losses are necessary, additional expenses may be incurred.
+Added: Determining the allowance for credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and trends, all of which may undergo material changes.
+Added: We cannot be sure that we will be able to identify deteriorating credits before they become nonperforming assets or that we will be able to limit losses on those loans and leases that are identified.
+Added: We have in the past been, and in the future may be, required to increase our allowance for credit losses for any of several reasons.
+Added: State and federal regulators, in reviewing our loan and lease portfolio as part of a regulatory examination, may request that we increase the allowance for credit losses.
+Added: Changes in economic conditions or
+Added: individual business or personal circumstances affecting borrowers, new information regarding existing loans and leases, identification of additional problem loans and leases and other factors, both within and outside of our control, may require an increase in the allowance for credit losses.
+Added: In addition, our regulators, as an integral part of their examination process, periodically review the allowance for credit losses and may require us to increase the allowance for credit losses by recognizing additional provisions for loan losses charged to income, or to charge-off loans, which, net of any recoveries, would decrease the allowance for credit losses on loans.
+Added: Any such additional provisions for credit losses or charge-offs could have a material adverse effect on our financial condition and results of operations.
+Added: Our loan and lease portfolios include commercial real estate mortgage loans and commercial loans and leases, including equipment leases, which are generally riskier than other types of loans.
+Added: Our commercial real estate and commercial loan and lease portfolios, including equipment leases, currently comprise 77.4% of total loans and leases.
+Added: Payments on loans secured by commercial real estate are often dependent on the income produced by the underlying properties which, in turn, depends on the successful operation and management of the properties and the businesses that operate within them.
+Added: Accordingly, repayment of these loans is subject to conditions in the real estate market and the local economy.
+Added: Commercial loans and leases generally carry larger balances and involve a higher risk of nonpayment or late payment than residential mortgage loans.
+Added: Most commercial loans and leases are secured by borrower business assets such as accounts receivable, inventory, equipment, and other fixed assets.
+Added: Compared to real estate, these types of collateral are more difficult to monitor, harder to value, may depreciate more rapidly and may not be as readily saleable if repossessed.
+Added: Repayment of commercial loans and leases is largely dependent on the business and financial condition of borrowers.
+Added: Business cash flows are dependent on the demand for the products and services offered by the borrower's business.
+Added: Such demand may be reduced when economic conditions are weak or when the products and services offered are viewed as less valuable than those offered by competitors.
+Added: Because of the risks associated with commercial real estate and commercial loans and leases, including equipment leases, we may experience higher rates of default than if the portfolio were more heavily weighted toward residential mortgage loans.
+Added: While we seek to minimize these risks in a variety of ways, there can be no assurance that these measures will protect against credit-related losses.
+Added: A portion of our loan portfolio consists of loan participations, which may have a higher risk of loss than loans we originate because we are not the lead lender and we have limited control over credit monitoring.
+Added: We occasionally purchase loan participations.
+Added: Although we underwrite these loan participations consistent with our general underwriting criteria, loan participations may have a higher risk of loss than loans we originate because we are limited in our ability to monitor the performance of the loan and rely significantly on the lead lender.
+Added: Moreover, our decisions regarding the classification of a loan participation and loan loss provisions associated with a loan participation are made in part based upon information provided by the lead lender.
+Added: A lead lender also may not monitor a participation loan in the same manner as we would for loans that we originate.
+Added: At December 31, 2025, we held loan participation interests of $855.6 million.
+Added: We are subject to a variety of risks in connection with any sale of loans we may conduct.
+Added: We routinely sell newly originated residential mortgage loans and SBA guaranteed business loans, and may also sell other loans or loans portfolios.
+Added: We may make certain representations and warranties to the purchaser concerning the loans sold and the procedures under which those loans have been originated and serviced.
+Added: If any of these representations and warranties are invalid, we may be required to refund premiums, indemnify the purchaser for any related costs or losses, or it may be required to repurchase part or all of the affected loans.
+Added: We may also be required to repurchase loans as a result of borrower fraud or in the event of early payment default by the borrower on a loan we have sold.
+Added: Our ability to maintain seller/servicer relationships with government agencies and government backed entities may be jeopardized in the event of the emergence of one or more of the above risks.
+Added: Demand for our loans in the secondary markets could also be affected by these risks, which could lead to a reduction in related business activities.
+Added: 44 Business Capital’s SBA 7(a) lending program business is dependent upon the U.S.
+Added: federal government, and we face specific risks associated with originating SBA loans.
+Added: 44 Business Capital’s SBA 7(a) program lending business is dependent upon the U.S.
+Added: federal government.
+Added: Any changes to the SBA program, including but not limited to changes to the level of guarantee provided by the federal government on SBA loans, changes to program specific rules impacting volume eligibility under the guaranty program, as well as changes to the program amounts authorized by Congress or funding for the SBA program may also have a material adverse effect on our business.
+Added: In addition, any default by the U.S.
+Added: government on its obligations or any prolonged government shutdown could, among other things, impede our ability to originate SBA loans or sell such loans in the secondary market, which could materially and adversely affect our business, financial condition, and results of operations.
+Added: In addition, when we originate SBA 7(a) loans, we incur credit risk on the non-guaranteed portion of the loans, and if a customer defaults on a loan, we share any loss and recovery related to the loan pro-rata with the SBA.
+Added: Environmental liability associated with our lending activities could result in losses.
+Added: In the course of business, we may acquire, through foreclosure, properties securing loans originated or purchased that are in default.
+Added: Particularly in commercial real estate lending, there is a risk that material environmental violations could be discovered on these properties.
+Added: In this event, we might be required to remedy these violations at the affected properties at our sole cost and expense.
+Added: The cost of remedial action could substantially exceed the value of affected properties.
+Added: We may not have adequate remedies against the prior owner or other responsible parties and could find it difficult or impossible to sell the affected properties.
+Added: These events could have an adverse effect on our financial condition and results of operations.
+Added: RISKS RELATED TO OUR SECURITIES PORTFOLIO
+Added: The fair value of our investment securities can fluctuate due to factors outside of our control.
+Added: Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities.
+Added: These factors include, but are not limited to, rating agency actions with respect to individual securities, defaults by the issuer or with respect to the underlying securities, and changes in market interest rates and continued instability in the capital markets.
+Added: Any of these factors, among others, could cause impairments and realized and/or unrealized losses in future periods and declines in other comprehensive income, which could materially and adversely affect our business, results of operations, financial condition, and prospects.
+Added: The process for determining whether a security is impaired usually requires complex, subjective judgments about the future financial performance and liquidity of the issuer and any collateral underlying the security in order to assess the probability of receiving all contractual principal and interest payments on the security.
+Added: Significant negative changes to valuations could result in impairments in the value of our securities portfolio, which could have an adverse effect on our financial condition or results of operations.
+Added: Potential downgrades of U.S.
+Added: government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings, and financial condition.
+Added: A possible future downgrade of the sovereign credit rating of the U.S.
+Added: government and a decline in the perceived creditworthiness of U.S.
+Added: government-related obligations could impact our ability to obtain funding that is collateralized by affected instruments, as well as affect the pricing of that funding when it is available.
+Added: A downgrade may also adversely affect the market value of such instruments.
+Added: We cannot predict if, when or how any changes to the credit ratings or perceived creditworthiness of these organizations will affect economic conditions.
+Added: Such ratings actions could result in a significant adverse impact on us.
+Added: Among other things, a downgrade in the U.S.
+Added: government’s credit rating could adversely impact the value of our securities portfolio and may trigger requirements that we post additional collateral for trades relative to these securities.
+Added: A downgrade of the sovereign credit rating of the U.S.
+Added: government or the credit ratings of related institutions, agencies or instruments could significantly exacerbate the other risks to which we are subject and any related adverse effects on the business, financial condition, and results of operations.
+Added: RISKS RELATED TO LIQUIDITY
+Added: Loss of deposits or a change in deposit mix could increase our cost of funding.
+Added: Deposits are a low cost and stable source of funding.
+Added: We compete with banks and other financial institutions for deposits.
+Added: Funding costs may increase if we lose deposits and are forced to replace them with more expensive sources of funding, if clients shift their deposits into higher cost products, or if we need to raise interest rates to avoid losing deposits.
+Added: Higher funding costs reduce our net interest margin, net interest income and net income.
+Added: Wholesale funding sources may prove insufficient to replace deposits at maturity and support our operations and future growth.
+Added: We and the Bank must maintain sufficient funds to respond to the needs of depositors and borrowers.
+Added: To manage liquidity, we draw upon a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments.
+Added: These sources include FHLB advances, proceeds from the sale of investments and loans, and liquidity resources at the holding company.
+Added: Our ability to manage liquidity will be severely constrained if we are unable to maintain access to funding or if adequate financing is not available to accommodate future growth at acceptable costs.
+Added: In addition, if we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs.
+Added: In this case, operating margins and profitability would be adversely affected.
+Added: Turbulence in the capital and credit markets may adversely affect our liquidity and financial condition and the willingness of certain counterparties and customers to do business with us.
+Added: Potential deterioration in the performance or financial position of the FHLB might restrict our funding needs and may adversely impact our financial condition and results of operations.
+Added: Significant components of our liquidity needs are met through our access to funding pursuant to our membership in the FHLB.
+Added: The FHLB is a cooperative that provides services to its member banking institutions.
+Added: The primary reason for joining the FHLB is to obtain funding.
+Added: The purchase of stock in the FHLB is a requirement for a member to gain access to funding.
+Added: Any deterioration in the FHLB’s performance or financial condition may affect our ability to access funding and/or require us to deem the required investment in FHLB stock to be impaired.
+Added: If we are not able to access funding through the FHLB, we may not be able to meet our liquidity needs, which could have an adverse effect on our results of operations or financial condition.
+Added: Similarly, if we deem all or part of our investment in FHLB stock impaired, such action could have an adverse effect on our financial condition or results of operations.
The soundness of other financial institutions could adversely affect us.
−Removed: Financial services institutions are interrelated as a result of clearing, trading, counterparty, or other relationships.
−Removed: We have exposure to many different counterparties and industries, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, and other institutional clients.
−Removed: Many of these transactions expose us to credit risk in the event of a default by our counterparty or client.
−Removed: In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due us.
−Removed: Any such losses could have a material adverse effect on our financial condition and results of operations.
−Removed: Additionally, in early 2023, the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank resulted in decreased confidence in banks among depositors, other counterparties and investors.
−Removed: Such events and developments could materially and adversely affect our business or financial condition, including through declines in deposits, increased costs of funds, potential liquidity pressures, increased regulation and enforcement activity, and declines and volatility in the price of our common stock.
−Removed: Legal and Regulatory Proceedings and Related Matters Could Adversely Affect Us and the Banking Industry in General.
−Removed: The Company has been, and in the future could be, subject to various regulatory and legal proceedings, including class action litigation.
−Removed: It is inherently difficult to gauge the result of these matters, and there can be no guarantee that we will prevail in any litigation or proceeding.
−Removed: Legal and regulatory matters of any degree of significance could result in significant costs and diversion of our efforts could have a material adverse effect on our financial condition and operating results.
−Removed: As disclosed in Part I, Item 3, “Legal Proceedings,” we currently have ongoing proceedings.
−Removed: If we settle these claims or the litigation is not resolved in our favor, we could suffer reputational damage, incur legal costs, and settlements or judgments that may exceed amounts covered by our existing insurance policies.
−Removed: We cannot provide assurances that our insurer will cover all legal costs, settlements or judgments we incur.
−Removed: If we are not successful in defending ourselves from these claims, or if our insurer does not cover the full amount of legal costs we incur, the outcome could materially adversely affect our business, results of operations and financial condition.
−Removed: Furthermore, adverse determinations in such matters could result in actions by our regulators that could materially adversely affect our business, financial condition or results of operations.
−Removed: There can be no assurance that other proceedings, which may have a material adverse effect on our business, results of operations or financial condition will not arise in the near or long-term future.
−Removed: Loss of Key Employees Could Disrupt Relationships With Certain Customers.
−Removed: Our customer relationships are crucial to the success of our business, and the loss of key employees with significant customer relationships could lead to the loss of business if the customers were to follow that employee to a competitor.
−Removed: While we believe our relationships with key personnel are strong, we cannot guarantee that all of our key personnel will remain with us, which could result in the loss of some customers, which may have a negative impact on our business, financial condition, and results of operations.
−Removed: Mergers, Acquisitions and Dispositions Involve Numerous Risks and Uncertainties.
−Removed: In addition to the proposed Mergers, the Company has in the past and may in the future pursue mergers, acquisitions and disposition opportunities involving financial institutions and financial services companies.
−Removed: Mergers, acquisitions and dispositions involve a number of risks and challenges.
−Removed: Acquisition related risks include the expenses involved;
−Removed: potential diversion of management’s attention from other strategic matters;
−Removed: integration of branches and operations acquired;
−Removed: outflow of customers from the acquired branches;
−Removed: retention of personnel from acquired companies or branches;
−Removed: competing effectively in geographic areas not previously served;
−Removed: managing growth resulting from the transaction;
−Removed: and dilution in the acquirer's book and tangible book value per share.
−Removed: The Company continually looks to optimize its branch network and real estate.
−Removed: The disposition of branches or business operations could result in the loss of some customers or unanticipated costs related to deconversion and transfer.
−Removed: Such dispositions may have an unanticipated adverse impact on operations, earnings or liquidity.
−Removed: Interest Rate Risks
−Removed: Market Interest Rate Conditions Could Adversely Affect Results of Operations and Financial Condition
−Removed: Net interest income is the Company's largest source of income.
−Removed: Changes in interest rates can affect the amount of interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, which may affect our net interest margins and other elements of net income.
−Removed: The Company’s interest rate sensitivity is discussed in more detail in Item 7A of this report and is the primary market risk to its condition and operations.
−Removed: Changes in interest rates can also affect the demand for the Company’s products and services, supply conditions in the U.S.
−Removed: financial and capital markets, loan prepayments, the Company’s ability to originate loans, the value of its assets, its ability to realize gains from the sale of assets, and loan delinquencies and defaults, all of which ultimately affect earnings.
−Removed: Changes in interest rates may also affect the market value of the Company’s investment securities portfolio, which may affect the level and adequacy of its regulatory capital.
−Removed: During 2022 and 2023, in response to accelerated inflation, the Federal Reserve implemented monetary tightening policies, resulting in significantly increased interest rates.
−Removed: In 2024, however, the Federal Reserve implemented several decreased in the Federal Funds rate, resulting in an aggregate decrease of 100 basis points in the latter part of the year.
−Removed: Changes in interest rates are beyond the Company's control and may not be anticipated.
−Removed: If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected.
−Removed: In a rising rate environment, demand for loans may decrease and loans with adjustable interest rates are more likely to experience a higher rate of default.
−Removed: Conversely, if the interest rates received on loans and other investments decline faster than rates paid on deposits and other borrowings, our net interest income, and therefore earnings, could be similarly adversely affected.
−Removed: Changes in interest rates also affect the fair value of the securities portfolio.
−Removed: Generally, the value of securities moves inversely with changes in interest rates.
−Removed: Any substantial, unexpected or prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations.
−Removed: Also, our interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our balance sheet.
−Removed: Liquidity Risks
−Removed: Liquidity is Essential to the Company’s Business and a Lack of Liquidity Could Adversely Affect the Company’s Financial Condition and Results of Operations.
−Removed: Liquidity is essential to the Company’s business.
−Removed: The Company relies on its ability to generate deposits and effectively manage the repayment of its liabilities to ensure that there is adequate liquidity to fund operations.
−Removed: An inability to raise funds through deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative effect on liquidity.
−Removed: The Company’s most important source of funds is its deposits.
−Removed: Deposit balances can decrease when customers perceive alternative investments as providing a better risk
−Removed: adjusted return, which are strongly influenced by such external factors as the direction of interest rates, local and national economic conditions and the availability and attractiveness of alternative investments.
−Removed: Further, the demand for deposits may be reduced due to a variety of factors such as negative trends in the banking sector, the level of and/or composition of our uninsured deposits, demographic patterns, changes in customer preferences, reductions in consumers’ disposable income, the monetary policy of the Federal Reserve or regulatory actions that decrease customer access to particular products.
−Removed: If customers move money out of bank deposits and into other investments such as money market funds, the Company would lose a relatively low-cost source of funds, which would increase its funding costs and reduce net interest income.
−Removed: Any changes made to the rates offered on deposits to remain competitive with other financial institutions may also adversely affect profitability and liquidity.
−Removed: Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and/or loans, brokered deposits, borrowings from the FHLB and/or and the Federal Reserve Bank of Boston discount window, and unsecured borrowings.
−Removed: The Company also may borrow funds from third-party lenders, such as other financial institutions.
−Removed: The Company’s access to funding sources in amounts adequate to finance or capitalize its activities, or on terms that are acceptable, could be impaired by factors that affect the Company directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry, a decrease in the level of the Company’s business activity as a result of a downturn in markets or by one or more adverse regulatory actions against the Company or the financial sector in general.
−Removed: Any decline in available funding could adversely impact the Company’s ability to originate loans, invest in securities, meet expenses, or to fulfill obligations such as meeting deposit withdrawal demands, any of which could have a material adverse impact on its liquidity, business, financial condition and results of operations.
−Removed: Bank Failures and Stresses May Lead to Negative Depositor Confidence in Depository Institutions.
−Removed: Systemic Impacts May have a Material Adverse Effect on our Financial Condition and Results of Operations and Stock Price.
−Removed: In 2023, several large regional banks failed due to deposit runs and liquidity issues.
−Removed: These banks also had elevated levels of uninsured deposits, which may be less likely to remain at the bank over time and less stable as a source of funding than insured deposits.
−Removed: These failures led to volatility and declines in the market for bank stocks and questions about depositor confidence in depository institutions.
−Removed: In 2024, elevated commercial real estate losses at a large bank led to industry stock price declines.
−Removed: Recent events have led to a greater focus by institutions, investors and regulators on the on-balance sheet liquidity of and funding sources for financial institutions, the composition of its deposits, including the amount of uninsured deposits, the amount of accumulated other comprehensive loss, capital levels and interest rate risk management.
−Removed: Impacts on our liquidity, deposits, capital levels and interest rate risk may have a material adverse effect on our financial condition and results of operations.
−Removed: The premiums of the FDIC’s deposit insurance program are subject to increases based on claims on the fund related to bank failures.
−Removed: Banking regulators have signaled further review of regulatory requirements and the potential for changes to laws or regulations governing banks and bank holding companies.
−Removed: Changes resulting from these events could include increased regulatory oversight, higher capital requirements or changes in the way regulatory capital is calculated, and the impositions of additional restrictions through regulatory changes or supervisory or enforcement activities, each of which could have a material impact on our business.
−Removed: The Company's Wholesale Funding Sources May Prove Insufficient to Replace Deposits at Maturity and Support Operations and Future Growth.
−Removed: The Company must maintain sufficient funds to respond to the needs of depositors and borrowers.
−Removed: As a part of its liquidity management, the Company uses a number of funding sources in addition to deposit growth and cash flows from loans and investments.
−Removed: These sources include Federal Home Loan Bank advances, issuance of brokered certificates of deposit, proceeds from the sale of loans, and liquidity resources at the holding company.
−Removed: The Company’s financial flexibility will be severely constrained if the Company is unable to maintain access to wholesale funding or if adequate financing is not available to accommodate future growth at acceptable costs.
−Removed: Turbulence in the capital and credit markets may adversely affect liquidity and financial condition and the willingness of certain counterparties and customers to do business with the Company.
−Removed: The Company's Ability to Service Our Debt, Pay Dividends, and Otherwise Pay Obligations as They Come Due Is Substantially Dependent on Capital Distributions from the Bank, and These Distributions Are Subject to Regulatory Limits and Other Restrictions.
−Removed: The Company’s Stock Repurchase Program is also Dependent on These Distributions.
−Removed: A substantial source of holding company income is the receipt of dividends from the Bank, from which the Company services debt, pays obligations, and pays shareholder dividends.
−Removed: The availability of dividends from the Bank is limited by various statutes and regulations.
−Removed: It is possible, depending upon the financial condition of the Bank and other factors, that the applicable regulatory authorities could assert that payment of dividends from the Bank to the Company or other types of payments are considered an unsafe or unsound practice.
−Removed: If the Bank is unable to pay dividends, the Company may not be able to service debt, pay debt obligations, or pay dividends on its common stock.
−Removed: The Company may also be unable to repurchase common stock under a then outstanding stock repurchase program.
−Removed: Secondary Mortgage Market Conditions Could Have a Material Impact on the Company’s Financial Condition and Results of Operations.
−Removed: In addition to being affected by interest rates, the secondary mortgage markets are also subject to investor demand for residential mortgage loans and increased investor yield requirements for these loans.
−Removed: These conditions may fluctuate or worsen in the future.
−Removed: As a result, a prolonged period of secondary market illiquidity may reduce the Company’s loan production volumes and operating results.
−Removed: Secondary markets are significantly affected by Fannie Mae, Freddie Mac and Ginnie Mae (collectively, the “Agencies”) for loan purchases that meet their conforming loan requirements.
−Removed: These agencies could limit purchases of conforming loans due to capital constraints, a change in the criteria for conforming loans or other factors.
−Removed: Proposals to reform mortgage finance could affect the role of the Agencies and the market for conforming loans which comprise the majority of the Company’s mortgage lending and related originations income.
−Removed: Securities Market Values
−Removed: Declines in the Value of Certain Investment Securities Could Require Write-Downs, Which Would Reduce Earnings.
−Removed: Declines in the value of investment securities due to market conditions and/or issuer impairment could result in losses that can reduce capital and earnings.
−Removed: Such declines can result from changes in interest rates and inflation.
−Removed: The Company’s investment in equity securities and non-investment grade or unrated debt securities present heightened credit and price risks.
−Removed: Under applicable accounting standards, equity gains and losses are recorded to current period operating results.
−Removed: The Company has an investment in the stock of the Federal Home Loan Bank of Boston ("FHLBB") which could result in write-down in the event of impairment.
−Removed: Regulatory Matters
−Removed: Legislative and Regulatory Initiatives May Affect Business Activities and Increase Operating Costs.
−Removed: New federal or state laws and regulations could affect lending, funding practices, capital, and liquidity standards.
−Removed: New laws, regulations, and other regulatory changes may also increase compliance costs and affect business and operations.
−Removed: Moreover, the FDIC sets the cost of FDIC insurance premiums, which can affect profitability.
−Removed: Regulatory capital requirements and their impact on the Company may change.
−Removed: The Company may need to raise additional capital in the future to support operations and continued growth.
−Removed: The Company's ability to raise capital, if needed, will depend on its condition and performance, and on market conditions.
−Removed: New laws, regulations, and other regulatory changes, along with negative developments in the financial industry and the domestic and international credit markets, may significantly affect the markets in which the Company does business, the markets for and value of its loans and investments, and ongoing operations, costs and profitability.
−Removed: For more information, see “Regulation and Supervision” in Item 1 of this report.
−Removed: With total assets over $10 billion, the Company and the Bank are subject to closer supervision by their primary regulators and, as to compliance with consumer protection laws and regulations, the Consumer Financial Protection Bureau.
−Removed: The Company and the Bank are subject to capital stress testing expectations which require significant resources and infrastructure.
−Removed: If the Company’s compliance with the enhanced supervision and requirements is insufficient, there can be significant negative consequences for its operations, profitability, and ability to further pursue its strategic growth plan.
+Added: Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions.
+Added: Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships.
+Added: Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
+Added: If such events were to occur again in the future and result in the receivership of financial institutions, there is no guarantee that the systemic risk exception would be invoked to allow the FDIC to complete its resolution of such financial institutions in a manner that fully protects depositors or counterparties.
+Added: We have exposure to a number of different counterparties, and we routinely execute transactions with counterparties in the financial industry, including brokers and dealers, other commercial banks, investment banks, and other financial institutions.
+Added: Many of these transactions expose us to credit risk in the event of default of our counterparty or customer.
+Added: In addition, our credit risk may be exacerbated when the collateral held by us cannot be liquidated or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due to us.
+Added: There is no assurance that any such losses would not materially and adversely affect our results of operations.
+Added: Our ability to service our debt and pay dividends is dependent on capital distributions from the Bank, and these distributions are subject to regulatory limits and other restrictions.
+Added: We are a legal entity that is separate and distinct from the Bank.
+Added: Our revenue (on a parent company only basis) is derived primarily from dividends paid to us by the Bank.
+Added: Our right, and consequently the right of our shareholders, to participate in any distribution of the assets or earnings of the Bank through the payment of such dividends or otherwise is necessarily subject to the prior claims of creditors of the Bank (including depositors), except to the extent that certain claims of ours in a creditor capacity may be recognized.
+Added: It is possible, depending upon the financial condition of the Bank and other factors, that applicable regulatory authorities could assert that payment of dividends or other payments is an unsafe or unsound practice.
+Added: If the Bank is unable to pay dividends to us, we may not be able to service our debt or pay dividends on our common stock.
+Added: Further, our ability to pay dividends on our common stock or service our debt could be restricted if we do not maintain a capital conservation buffer of common equity Tier 1 capital.
+Added: A reduction or elimination of dividends could adversely affect the market price of our common stock and would adversely affect our business, financial condition, results of operations and prospects.
+Added: See Item 1, “Business-Supervision and Regulation-Dividend Restrictions” and “Business-Supervision and Regulation-Capital Adequacy and Safety and Soundness-Regulatory Capital Requirements.”
+Added: RISKS RELATED TO OUR OPERATIONS
+Added: Damage to our reputation could significantly harm our business, including our competitive position and business prospects.
+Added: We are dependent on our reputation within our market area, as a trusted and responsible financial services company, for all aspects of our business with customers, employees, vendors, third-party service providers, and others, with whom we conduct business or potential future businesses.
+Added: Negative public opinion about the financial services industry generally (including the types of banking and other services that we provide) or us specifically could adversely affect our reputation and our ability to keep and attract customers and employees.
+Added: Our actual or perceived failure to address various issues could give rise to negative public opinion and reputational risk that could cause harm to us and our business prospects.
+Added: These issues include, but are not limited to, legal and regulatory requirements;
+Added: properly maintaining customer and employee personal information;
+Added: record keeping;
+Added: money-laundering;
+Added: sales and trading practices;
+Added: ethical issues;
+Added: appropriately addressing potential conflicts of interest;
+Added: and the proper identification of the legal, reputational, credit, liquidity and market risks inherent in our products.
+Added: Failure to appropriately address any of these issues could also give rise to additional regulatory restrictions and legal risks,
+Added: which could, among other consequences, increase the size and number of litigation claims and damages asserted or subject us to enforcement actions, fines and penalties and cause us to incur related costs and expenses.
+Added: The proliferation of social media websites utilized by us and other third parties, as well as the personal use of social media by our employees and others, including personal blogs and social network profiles, also may increase the risk that negative, inappropriate or unauthorized information may be posted or released publicly that could harm our reputation or have other negative consequences, including as a result of our employees interacting with our customers in an unauthorized manner in various social media outlets.
+Added: Any damage to our reputation could affect our ability to retain and develop the business relationships necessary to conduct business, which in turn could negatively impact our financial condition, results of operations, and the market price of our common stock.
+Added: We may be unable to attract and retain qualified key employees, which could adversely affect our business prospects, including our competitive position and results of operations.
+Added: Our success is dependent upon our ability to attract and retain highly skilled individuals.
+Added: There is significant competition for those individuals with the experience and skills required to conduct many of our business activities.
+Added: We may not be able to hire or retain the key personnel that we depend upon for success.
+Added: The unexpected loss of services of one or more of these or other key personnel could have a material adverse impact on our business because of their skills, knowledge of the markets in which we operate, years of industry experience and the difficulty of promptly finding qualified replacement personnel.
+Added: Frequently, we compete in the market for talent with entities that are not subject to comprehensive regulation, including with respect to the structure of incentive compensation.
+Added: Our inability to attract new employees and retain and motivate our existing employees could adversely impact our business.
+Added: We face continuing and growing security risks to our data, including the information we maintain relating to our customers.
+Added: In the ordinary course of business, we rely on electronic communications and information systems to conduct our business and to store sensitive data, including financial information regarding customers.
+Added: Our electronic communications and information systems infrastructure, as well as the systems infrastructures of the third-party vendors we use to meet our data processing and communication needs, could be susceptible to cyberattacks, such as denial of service attacks, hacking, terrorist activities or identity theft.
+Added: Financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disable or degrade service or sabotage systems, often through the introduction of computer viruses or malware, cyber-attacks and other means.
+Added: Denial of service attacks have been launched against a number of large financial services institutions.
+Added: Hacking and identity theft risks, in particular, could cause serious reputational harm.
+Added: Notwithstanding the strength of defensive measures, cybersecurity threats and the tactics, techniques and procedures used in cyberattacks change, develop and evolve rapidly and continuously, including from growth in third-party services that facilitate or carry out cyberattacks and from emerging technologies, including artificial intelligence, which may be used to enhance the tactics, techniques and procedures described above and facilitate new cyber threats.
+Added: Although to date we have not experienced any material losses relating to cyberattacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future.
+Added: A failure or circumvention of our security systems could have a material adverse effect on our business operations and financial condition.
+Added: We regularly assess and test our security systems and disaster preparedness, including back-up systems, but the risks are ongoing.
+Added: As a result, cybersecurity and the continued enhancement of our controls and processes to protect our systems, data and networks from attacks, unauthorized access or significant damage remain a priority.
+Added: Accordingly, we may be required to expend additional resources to enhance our protective measures or to investigate and remediate any information security vulnerabilities or exposures.
+Added: Any breach of our system security could result in disruption of our operations, unauthorized access to confidential customer information, significant regulatory costs, litigation exposure and other possible damages, loss or liability.
+Added: Such costs or losses could exceed the amount of available insurance coverage, if any, and would adversely affect our earnings.
+Added: Also, any failure to prevent a security breach or to quickly and effectively deal with such a breach could negatively impact customer confidence, damaging our reputation and undermining our ability to attract and keep customers.
+Added: We may not be able to successfully implement future information technology system enhancements, which could adversely affect our business operations and profitability.
+Added: We invest significant resources in information technology system enhancements in order to provide functionality and security at an appropriate level.
+Added: We may not be able to successfully implement and integrate future system enhancements, which could adversely impact the ability to provide timely and accurate financial information in compliance with legal and regulatory requirements, which could result in sanctions from regulatory authorities.
+Added: Such sanctions could include fines and suspension of trading in our stock, among others.
+Added: In addition, future system enhancements could have higher than expected
+Added: costs and/or result in operating inefficiencies, which could increase the costs associated with the implementation as well as ongoing operations.
+Added: Failure to properly utilize system enhancements that are implemented in the future could result in impairment charges that adversely impact our financial condition and results of operations and could result in significant costs to remediate or replace the defective components.
+Added: In addition, we may incur significant training, licensing, maintenance, consulting, and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.
+Added: We rely on other companies to provide key components of our business infrastructure.
+Added: Third party vendors provide key components of our business infrastructure, such as internet connections, network access and core application processing.
+Added: While we have selected these third party vendors carefully, we do not control them or their actions.
+Added: Any problems caused by these third parties, including as a result of their not providing us their services for any reason or their performing their services poorly, could adversely affect our ability to deliver products and services to our customers or otherwise conduct our business efficiently and effectively.
+Added: Replacing these third party vendors could also entail significant delay and expense.
+Added: We may incur significant losses as a result of ineffective risk management processes and strategies.
+Added: We seek to monitor and control our risk exposure through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational, compliance, and legal reporting systems;
+Added: internal controls;
+Added: management review processes;
+Added: and other mechanisms.
+Added: In some cases, management of our risks depends upon the use of analytical and/or forecasting tools and techniques, which, in turn, rely on assumptions and estimates.
+Added: If these tools and techniques used to mitigate these risks are inadequate, or the assumption or estimates are inaccurate or otherwise flawed, we may fail to adequately protect against risks and may incur losses.
+Added: While we believe that we have adopted appropriate management and compliance programs, compliance risks will continue to exist, particularly as we anticipate and adapt to new and evolving laws, rules and regulations and evolving interpretations by regulatory authorities.
+Added: In addition there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated, which could lead to unexpected losses and our results of operations or financial condition could be materially adversely affected.
+Added: Our internal controls, procedures and policies may fail or be circumvented.
+Added: Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures.
+Added: Any system of controls, however well-designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.
+Added: Any failure or circumvention of the controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition.
+Added: Changes in tax laws and regulations and differences in interpretation of tax laws and regulations may adversely impact our financial statements.
+Added: From time to time, local, state, or federal tax authorities change tax laws and regulations, which may result in a decrease or increase to our net deferred tax assets.
+Added: Local, state, or federal tax authorities may interpret tax laws and regulations differently than we do and challenge tax positions that we have taken on tax returns.
+Added: This may result in differences in the treatment of revenues, deductions, credits, and/or differences in the timing of these items.
+Added: The differences in treatment may result in payment of additional taxes, interest or penalties that could have a material adverse effect on our results.
+Added: Natural disasters, acts of terrorism, future pandemics and other external events could harm our business.
+Added: Natural disasters can disrupt our operations, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affect the economies in which we operate, which could have a material adverse effect on our results of operations and financial condition.
+Added: A significant natural disaster, such as a tornado, hurricane, earthquake, fire, or flood, could have a material adverse impact on our ability to conduct business, and our insurance coverage may be insufficient to compensate for losses that may occur.
+Added: Acts of terrorism, war, civil unrest, or future pandemics could cause disruptions to our business or the economy as a whole.
+Added: While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition.
+Added: RISKS RELATED TO ACCOUNTING STANDARDS AND ASSUMPTIONS
+Added: Our financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future.
+Added: Pursuant to GAAP, we are required to use certain assumptions and estimates in preparing our financial statements, including in determining loan loss and litigation reserves, goodwill impairment and the fair value of certain assets and liabilities, among other items.
+Added: If assumptions or estimates underlying our financial statements are incorrect, we may experience material losses.
+Added: See the "Critical Accounting Policies" section in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."
+Added: Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.
+Added: Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations.
+Added: From time to time, the Financial Accounting Standards Board, or "FASB", changes the financial accounting and reporting principles that govern the preparation of our financial statements.
+Added: These changes can be hard to anticipate and implement, and can materially impact how we record and report our financial condition and results of operations.
+Added: In some cases, we could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements.
+Added: Additionally, significant changes to accounting standards may require costly technology changes, additional training and personnel, and other expense that will negatively impact our results of operations.
+Added: We may be required to write down goodwill and other acquisition-related identifiable intangible assets.
+Added: When we acquire a business, a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets.
+Added: The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired determines the amount of the purchase price that is allocated to goodwill acquired.
+Added: During 2025, we recorded $110.4 million of goodwill in connection with the Transaction.
+Added: As of December 31, 2025, goodwill and other identifiable intangible assets were $541.2 million.
+Added: Under current accounting guidance, if we determine that goodwill or intangible assets are impaired, we would be required to write down the value of these assets.
+Added: We conduct an annual review to determine whether goodwill and other identifiable intangible assets are impaired.
+Added: We conduct a quarterly review for indicators of impairment of goodwill and other identifiable intangible assets.
+Added: During the year ended December 31, 2025, the Company wrote off the trade name associated with BankRI in connection with the Bank Mergers.
+Added: The expense was recorded in merger and restructuring expense in the accompanying consolidated statements of income.
+Added: There were no impairment losses relating to other acquisition-related intangible assets recorded during the years ended December 31, 2025, 2024 and 2023.
+Added: We cannot provide assurance whether we will be required to take an impairment charge in the future.
+Added: Any impairment charge would have a negative effect on stockholders' equity and financial results and may cause a decline in our stock price.
+Added: RISKS RELATED TO OUR REGULATORY ENVIRONMENT
+Added: We operate in a highly regulated industry, and laws and regulations, or changes in them, could limit or restrict our activities and could have a material adverse effect on our operations.
+Added: We and the Bank are subject to extensive state and federal regulation and supervision.
+Added: Federal and state laws and regulations govern numerous matters affecting us, including changes in the ownership or control of banks and bank holding companies, maintenance of adequate capital and the financial condition of a financial institution, permissible types, amounts and terms of extensions of credit and investments, permissible non-banking activities, the level of reserves against deposits and restrictions on dividend payments.
+Added: The FRB and the state banking regulators have the power to issue cease and desist orders to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulation, and the FRB possesses similar powers with respect to bank holding companies.
+Added: Further, we expect to become subject to future laws, rules, and regulations beyond those currently proposed, adopted or contemplated in the U.S., as well as evolving interpretations of existing and future laws, rules and regulations.
+Added: These and other restrictions limit the manner in which we and our banking subsidiaries may conduct business and obtain financing.
+Added: Various federal banking laws and regulations, including rules adopted by the FRB pursuant to the requirements of the Dodd-Frank Act, impose additional requirements on bank holding companies with total assets of at least $10 billion.
+Added: In addition, banks with total assets of at least $10 billion are primarily examined by the CFPB with respect to federal consumer protection laws and regulations.
+Added: As of December 31, 2025, the Company and the Bank had total assets of $23.2 billion and $23.1 billion, respectively.
+Added: As a result, we are subject to additional requirements including, but not limited to, establishing a dedicated risk committee of our Board of Directors, calculating our FDIC deposit insurance assessment using the large bank pricing rule and more frequent regulatory examinations.
+Added: We have incurred significant expenses in connection with these compliance obligations and expect to continue to incur expenses to address heightened regulatory requirements.
+Added: The laws, rules, regulations, and supervisory guidance and policies applicable to us are subject to regular modification and change.
+Added: These changes could, among other things, subject us to additional costs, including costs of compliance;
+Added: limit the types of financial services and products we may offer;
+Added: and/or increase the ability of non-banks to offer competing financial services and products.
+Added: Failure to comply with laws, regulations, policies, or supervisory guidance could result in enforcement and other legal actions by federal or state authorities, including criminal and civil penalties, the loss of FDIC insurance, revocation of a banking charter, other sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business, financial condition, and results of operations.
+Added: See the "Supervision and Regulation" section of Item 1, "Business."
+Added: We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.
+Added: The CRA, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations impose community investment and nondiscriminatory lending requirements on financial institutions.
+Added: The CFPB, the Department of Justice, and other federal agencies are responsible for enforcing these laws and regulations.
+Added: A successful regulatory challenge to an institution’s performance under the CRA, the Equal Credit Opportunity Act, the Fair Housing Act or other fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions, restrictions on expansion and restrictions on entering new business lines.
+Added: Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation.
+Added: Such actions could have a material adverse effect on our business, financial condition and results of operations.
+Added: We may become subject to enforcements actions even though noncompliance was inadvertent or unintentional.
+Added: The financial services industry is subject to intense scrutiny from bank supervisors in the examination process and aggressive enforcement of federal and state regulations, particularly with respect to mortgage-related practices and other consumer compliance matters, and compliance with anti-money laundering, BSA and OFAC regulations, and economic sanctions against certain foreign countries and nationals.
+Added: Enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices.
+Added: We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations;
+Added: however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there was in place at the time systems and procedures designed to ensure compliance.
+Added: Failure to comply with these and other regulations, and supervisory expectations related thereto, may result in fines, penalties, lawsuits, regulatory sanctions, reputation damage, or restrictions on our business.
+Added: We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.
+Added: As a participant in the financial services industry, many aspects of our business involve substantial risk of legal liability.
+Added: From time to time, customers and others make claims and take legal action pertaining to the performance of our responsibilities.
+Added: Whether customer claims and legal action related to the performance of our responsibilities are founded or unfounded, if such claims and legal actions are not resolved in a manner favorable to us, they may result in significant expenses, attention from management and financial liability.
+Added: Any financial liability or reputational damage could have a material adverse effect on our business, which, in turn, could have a material adverse effect on our financial condition and results of operations.
+Added: There is no assurance that litigation with private parties will not increase in the future.
+Added: Actions currently pending against us may result in judgments, settlements, fines, penalties, or other results adverse to us, which could materially adversely affect our business, financial condition or results of operations, or cause serious reputational harm to us.
+Added: The FRB may require us to commit capital resources to support the Bank.
+Added: Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank and to commit resources to support such subsidiary bank.
+Added: Under the “source of strength” doctrine, the FRB may require a holding company to make capital injections into a troubled subsidiary bank and may charge the holding company with engaging in unsafe and unsound practices for failure to commit resources to a subsidiary bank.
+Added: A capital injection may be required at times when the holding company may not have the resources to provide it and therefore may require the holding company to borrow the funds or raise capital.
+Added: Any loans by a holding company to its subsidiary bank are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank.
+Added: In the event of a holding company’s bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank.
+Added: Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the institution’s general unsecured creditors, including the holders of its note obligations.
+Added: Thus, any borrowing that must be done by us to make a required capital injection becomes more difficult and expensive and could have an adverse effect on our business, financial condition, and results of operations.
+Added: We 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.
+Added: Federal regulations establish minimum capital requirements for insured depository institutions, including minimum risk-based capital and leverage ratios, and define “capital” for calculating these ratios.
+Added: The minimum capital requirements are:
+Added: (i) a common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%.
+Added: The regulations also establish a “capital conservation buffer” of 2.5%, which if complied will result in the following minimum ratios:
+Added: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 to risk-based assets capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%.
+Added: An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital level falls below the capital conservation buffer amount.
+Added: The application of these capital requirements could, among other things, require us to maintain higher capital resulting in lower returns on equity, and we may be required to obtain additional capital to comply or result in regulatory actions if we are unable to comply with such requirements.
+Added: See Item 1, “Business-Supervision and Regulation-Capital Adequacy and Safety and Soundness-Regulatory Capital Requirements.”
+Added: RISKS RELATED TO THE TRANSACTION
+Added: We may fail to realize the anticipated benefits of the Transaction.
+Added: The success of the Transaction will depend on, among other things, the ability to realize the anticipated cost savings.
+Added: To realize the anticipated benefits and cost savings from the Transaction, we must successfully integrate and combine the legacy Brookline and Berkshire businesses in a manner that permits those cost savings to be realized without adversely affecting current revenues and future growth.
+Added: If we are not able to successfully achieve these objectives, the anticipated benefits of the Transaction may not be realized fully or at all or may take longer to realize than expected.
+Added: In addition, the actual cost savings of the Transaction could be less than anticipated, and integration may result in additional and unforeseen expenses.
+Added: It is possible that the integration process could result in the loss of key employees, the disruption of the Company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the Company’s ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits and cost savings of the Transaction.
+Added: Integration efforts may also divert management attention and resources.
+Added: These integration matters could have an adverse effect on the Company for an undetermined period after completion of the Transaction.
+Added: An inability to realize the full extent of the anticipated benefits of the Transaction, as well as any delays and issues encountered in the integration process, could have an adverse effect upon our revenues, levels of expenses and operating results.
+Added: We may be unable to retain personnel successfully following the Transaction.
+Added: The success of the Transaction will depend in part on our ability to retain the talents and dedication of key employees of the legacy Brookline and Berkshire businesses.
+Added: It is possible that these employees may decide not to remain with the Company.
+Added: If we are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, we could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.
+Added: In addition, if key employees terminate their employment, our business activities may be adversely affected and management’s attention may be diverted from successfully integrating the legacy Brookline and Berkshire businesses to hiring suitable replacements, all of which may cause our business to suffer.
+Added: In addition, we may not be able to locate or retain suitable replacements for any key employees who leave.
+Added: Our future results following our recently completed Transaction may suffer if the combined company does not effectively manage its expanded operations.
+Added: The size of our business increased significantly as a result of the Transaction.
+Added: Our future success will depend, in part, upon our ability to manage this expanded business, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.
+Added: We may also face increased scrutiny from governmental authorities as a result of the increased size of our business.
+Added: There can be no assurances that we will be successful or that we will realize the expected operating efficiencies, revenue enhancement or other benefits currently anticipated from the Transaction.
+Added: RISKS RELATED TO OWNING OUR COMMON STOCK
+Added: The market price and trading volume of our common stock may be volatile.
+Added: The market price of our common stock may be volatile.
+Added: In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur.
+Added: We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future.
+Added: Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:
+Added: • quarterly variations in our operating results or the quality of our assets;
+Added: • operating results that vary from the expectations of management, securities analysts and investors;
+Added: • changes in expectations as to our future financial performance;
+Added: • announcements of innovations, new products, strategic developments, significant contracts, acquisitions and other material events by us or our competitors;
+Added: • the operating and securities price performance of other companies that investors believe are comparable to us;
+Added: • our past and future dividend practices;
+Added: • future sales of our equity or equity-related securities;
+Added: • changes in global financial markets and global economies and general market conditions, such as interest rates, stock, commodity or real estate valuations or volatility.
+Added: Future capital offerings may adversely affect the market price of our common stock.
+Added: In the future, we may attempt to increase our capital resources or, if the Bank's capital ratios fall below required minimums, we could be forced to raise additional capital by making additional offerings of debt, common or preferred stock, trust preferred securities, and senior or subordinated notes.
+Added: Upon liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our common stock.
+Added: Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both.
+Added: Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offerings.
+Added: Moreover, we cannot assure you that such capital will be available to us on acceptable terms or at all.
+Added: Our inability to raise sufficient additional capital on acceptable terms when needed could adversely affect our businesses, financial condition, and results of operations.
Provisions of the Company's Certificate of Incorporation, Bylaws, and Delaware Law, as Well as State and Federal Banking Regulations, Could Delay or Prevent a Takeover of Us by a Third Party.
−Removed: Provisions in the Company's certificate of incorporation and bylaws, the corporate law of the State of Delaware, and state and federal regulations could delay, defer or prevent a third party from acquiring us, despite the possible
−Removed: benefit stockholders, or otherwise adversely affect the price of its common stock.
+Added: Provisions in the Company's certificate of incorporation and bylaws, the corporate law of the State of Delaware, and state and federal regulations could delay, defer, or prevent a third party from acquiring us, despite the possible benefit stockholders, or otherwise adversely affect the price of its common stock.
These provisions include:
2 unchanged sentences
the election of directors to terms of one year;
−Removed: and advance notice requirements for nominations for election to the Company's Board of Directors and for proposing matters that stockholders may act on at stockholder meetings.
+Added: and advance notice requirements for nominations for election to the Board of Directors and for proposing matters that stockholders may act on at stockholder meetings.
In addition, the Company is subject to Delaware laws, including one that prohibits engaging in a business combination with any interested stockholder for a period of three years from the date the person became an interested stockholder unless certain conditions are met.
These provisions may discourage potential takeover attempts, discourage bids for the Company's common stock at a premium over market price or adversely affect the market price of, and the voting and other rights of the holders of, its common stock.
−Removed: These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by the Board.
−Removed: Changes in Tax Laws and Accounting Policies and Practices.
−Removed: We are subject to income taxes and complex tax regimes in the United States.
−Removed: We cannot predict future changes in the tax regulations that we are subject to, and any changes could have a material impact on our tax liability or result in increased costs of our tax compliance obligations.
−Removed: Additionally, from time to time, the regulatory agencies and other authoritative bodies, such as the Financial Accounting Standards Board ("FASB"), change the financial accounting and reporting standards that govern the preparation of the Company's financial statements.
−Removed: These changes can be hard to predict and can materially impact how management records and reports the Company's financial condition and results of operations.
−Removed: Significant Accounting Estimates
−Removed: Various Factors May Cause our Allowance for Credit Losses on Loans to Increase.
−Removed: The Company has an allowance for current expected credit losses on loans maintained through a provision for credit losses charged to expense.
−Removed: This represents our estimate of current expected credit losses based on an evaluation of risks within the portfolio of loans.
−Removed: The level of the allowance represents management’s estimate of current expected credit losses over the contractual life of the existing loan portfolio.
−Removed: The determination of the appropriate level of the allowance inherently involves a degree of subjectivity and requires that we make significant estimates of current credit risks and current trends and reasonable and supportable forecasts of future economic conditions, all of which may undergo frequent and material changes.
−Removed: Changes in economic and other conditions affecting borrowers, including inflation and interest rates, along with new information regarding existing loans other factors, may indicate the need for a future increase in the allowance.
−Removed: Fair Value Measurements May Be Affected by Inherent Uncertainties
−Removed: The Company uses fair value measurements to determine fair value disclosures and to record fair value adjustments to certain assets and liabilities, such as interest rate swaps, securities available for sale, and derivatives.
−Removed: Additionally, from time to time, the Company may be required to record certain assets at fair value on a non-recurring basis, such as individually evaluated loans held for investment and capitalized servicing rights.
−Removed: Whenever there is no readily available market data, management uses its best estimate and assumptions in determining fair value, but these estimates involve inherent uncertainties and the application of management’s judgment.
−Removed: As a result, if other assumptions had been used, our recorded earnings or disclosures could have been materially different from those reflected in these financial statements.
−Removed: Trading of the Company's Common Stock
−Removed: The Trading History of the Company’s Common Stock is Characterized By Low Trading Volume.
−Removed: The Value of Shareholder Investments May be Subject to Sudden Decreases Due to the Volatility of the Price of the Common Stock.
−Removed: The level of interest and trading in the Company’s stock depends on many factors beyond the Company's control.
−Removed: The market price of the Company's common stock may be highly volatile and subject to wide fluctuations in response to numerous factors, including, but not limited to, the factors discussed in other risk factors and the following:
−Removed: actual or anticipated fluctuations in operating results;
−Removed: changes in interest rates and inflation;
−Removed: changes in the legal or regulatory environment;
−Removed: press releases, announcements or publicity relating to the Company or its competitors or relating to trends in its industry;
−Removed: changes in expectations as to future financial performance, including financial estimates or recommendations by securities analysts and investors;
−Removed: future sales of its common stock;
−Removed: changes in economic conditions in the marketplace, general conditions in the U.S.
−Removed: economy, financial markets or the banking industry;
−Removed: and other developments.
−Removed: These factors may adversely affect the trading price of the Company's common stock, regardless of actual operating performance, and could prevent stockholders from selling their common stock at a desirable price.
−Removed: In the past, stockholders have brought securities class action litigation against a company following periods of volatility in the market price of their securities.
−Removed: The Company could be the target of similar litigation in the future, which could result in substantial costs and divert management’s attention and resources.
−Removed: Negative Public Opinion Could Damage the Company’s Reputation and Impact Business Operations and Revenues.
−Removed: As a financial institution, the Company’s earnings and capital are subject to risk associated with negative public opinion.
−Removed: Negative public opinion could result from the Company’s actual or alleged conduct in any number of activities, including but not limited to lending practices, failure to meet customer expectations, regulatory or legal issues, corporate governance, merger and acquisitions activity, social media and other marketing activities, or actions taken by government regulators and community organizations in response to any of the foregoing.
−Removed: Negative public opinion could adversely affect the Company’s ability to attract or retain clients, expose the Company to litigation and regulatory action, and have a material adverse effect on the Company’s stock price, result in heightened volatility or hinder efforts to raise capital or pursue strategic transactions.
+Added: These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by the Board of Directors.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.