What changed in this filing

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Item 1A. Risk Factors

2026-02-26 compared with 2025-03-07 · 34 added, 48 removed, 536 unchanged (13% of the section changed)

70 unchanged sentences

The creditworthiness of a borrower is affected by many factors including local market conditions and general economic conditions.

If the overall economic climate in the United States, generally, or our market areas, specifically, experiences material disruption, our borrowers may experience difficulties in repaying their loans, the collateral we hold may decrease in value or become illiquid, and the level of nonperforming loans, charge-offs and delinquencies could rise and require significant additional provisions for credit losses.

in value or become illiquid, and the level of nonperforming loans, charge-offs and delinquencies could rise and require significant additional provisions for credit losses.

Additional factors related to the credit quality of commercial loans include the quality of the management of the business and the borrower’s ability both to properly evaluate changes in the supply and demand characteristics affecting our market for products and services and to effectively respond to those changes.

23 unchanged sentences

As of December 31, 2025, we held approximately $13.0 million in other real estate owned (“OREO”).

The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our control, including, but not limited to general or local economic conditions, environmental cleanup liability, assessments, interest rates, real estate tax rates, operating expenses of the mortgaged properties, ability to obtain and maintain adequate occupancy of the properties, zoning laws, governmental and regulatory rules, and natural disasters.

The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our

control, including, but not limited to general or local economic conditions, environmental cleanup liability, assessments, interest rates, real estate tax rates, operating expenses of the mortgaged properties, ability to obtain and maintain adequate occupancy of the properties, zoning laws, governmental and regulatory rules, and natural disasters.

Our inability to manage the amount of costs or size of the risks associated with the ownership of real estate, or write-downs in the value of OREO, could have an adverse effect on our business, financial condition and results of operations.

13 unchanged sentences

Along with other risks inherent in our loans, such as the deterioration of the underlying businesses or property securing these loans, the higher average size of our loans presents a risk to our lending operations.

Because we have a large average loan size, if only a few of our largest borrowers become unable to repay their loan

obligations as a result of economic or market conditions or personal circumstances, our nonperforming loans and our provision for credit losses could increase significantly, which could have an adverse effect on our business, financial condition and results of operations.

Because we have a large average loan size, if only a few of our largest borrowers become unable to repay their loan obligations as a result of economic or market conditions or personal circumstances, our nonperforming loans and our provision for credit losses could increase significantly, which could have an adverse effect on our business, financial condition and results of operations.

Our allowance for credit losses may prove to be insufficient to absorb losses inherent in our loan portfolio, which could have a material adverse effect on our business, financial condition and results of operations.

7 unchanged sentences

In addition, our regulators, as an integral part of their periodic examination, review our methodology for calculating, and the adequacy of, our allowance for credit losses and may direct us to make additions to the allowance based on their judgments about information available to them at the time of their examination.

Further, if actual charge-offs in future periods exceed the amounts allocated to the allowance for credit losses, we may need additional provisions for credit losses to restore the adequacy of our allowance for credit losses.

Further, if actual charge-offs in future periods exceed the amounts allocated to the allowance for credit losses, we may need additional provisions for credit losses to restore the

adequacy of our allowance for credit losses.

Finally, the measure of our allowance for credit losses is dependent on the adoption and interpretation of accounting standards.

13 unchanged sentences

Because of the credit profile of our customers, we typically have a substantial amount of total unfunded credit commitments, which is not reflected on our balance sheet.

As of December 31,

2024, we had $1.4 billion in unfunded credit commitments to our customers.

As of December 31, 2025, we had $1.7 billion in unfunded credit commitments to our customers.

Actual borrowing needs of our customers may exceed our expectations, especially during a challenging economic environment when our customers’ companies may be more dependent on our credit commitments due to the lack of available credit elsewhere, the increasing costs of credit, or the limited availability of financings from venture firms.

59 unchanged sentences

Similarly, when interest-earning assets mature or reprice more quickly, or to a greater degree than interest-bearing liabilities, falling interest rates could reduce net interest income.

As of December 31, 2024, 45.0% of our earning assets and 67.5% of our

interest-bearing liabilities were variable rate.

As of December 31, 2025, 49.7% of our earning assets and 67.7% of our interest-bearing liabilities were variable rate.

As of December 31, 2025, our modeled interest sensitivity is modestly asset sensitive.

2 unchanged sentences

Interest rates increased rapidly during 2022 and 2023 to levels that we have not experienced in recent history.

Interest rates subsequently declined in 2024, but have not returned to pre-2022 levels.

Interest rates subsequently declined in 2024 and 2025, but have not returned to pre-2022 levels.

An increase or stabilization in interest rates could have a number of effects on our business, which may include reduced loan demand, increased delinquencies and increased loan paydowns and payoffs.

50 unchanged sentences

As of December 31, 2025, $754.3 million, or approximately 11.3%, of our total deposits consisted of deposit accounts of public bodies, such as state or local municipalities, or public funds.

These types of deposits are often secured

and typically fluctuate on a seasonal basis due to timing differences between tax collection and expenditures.

These types of deposits are often secured and typically fluctuate on a seasonal basis due to timing differences between tax collection and expenditures.

Municipal deposits are also generally more sensitive to interest rates and may require competitive rates at placement and subsequent rollover dates, which may make it more difficult for the Bank to attract and retain public and municipal deposits.

5 unchanged sentences

We may need to raise additional capital in the future to provide us with sufficient capital resources and liquidity to meet our commitments and business needs, which could include the possibility of financing acquisitions.

In addition, we, on a consolidated basis, and b1BANK, on a stand-alone basis, must meet certain regulatory capital requirements and maintain sufficient liquidity in such amounts as the regulators may require from time to time.

In addition, we, on a consolidated basis, and b1BANK, on a stand-alone basis, must meet certain regulatory capital requirements and maintain sufficient liquidity in

such amounts as the regulators may require from time to time.

Importantly, regulatory capital requirements could increase from current levels, which could require us to raise additional capital or reduce our operations.

13 unchanged sentences

For example, fixed-rate securities are generally subject to decreases in market value when interest rates rise.

The Federal Open Market Committee raised the target federal funds rate several times in 2022 and 2023 and reduced them three times in 2024.

The Federal Open Market Committee raised the target federal funds rate several times in 2022 and 2023 and reduced them several times in 2024 and 2025.

In addition to market interest rates, other factors that could cause adverse changes to the fair value of our securities include, but are not limited to, rating agency actions with respect to the securities, defaults by the issuer with respect to the underlying securities, and continued instability in the capital markets.

7 unchanged sentences

failure to comply with regulations related to controls and procedures could have a material adverse effect on our reputation, business, financial condition and results of operations.

We have identified a material weakness in our internal control over financial reporting.

Failure to remediate, improve and maintain the quality of internal control over financial reporting could result in material misstatements in our financial statements and could materially and adversely affect our ability to provide timely and accurate financial information about the Company, which could harm our reputation and share price.

In January 2025, we identified control deficiencies involving the design and operation of information technology general controls (“ITGCs”) around change management segregation of duties with respect to certain information technology (“IT”) systems that support our financial reporting process, which we have outsourced to a third party service provider.

Specifically, user access controls at our third party service provider lacked sufficient segregation of duties as multiple end users had the ability to both install changes into the production environment and develop application source code via permissions inherited through group membership.

Management concluded that these control deficiencies constituted a material weakness in our internal control over financial reporting, as the identified deficiencies could have had a direct or indirect impact on some of our financial reporting controls that relied on certain IT system reports.

For further discussion of this material weakness, see “Item 9A, Controls and Procedures.”

A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Management cannot be certain that other deficiencies or material weaknesses will not arise or be identified or that the Company will be able to correct and maintain adequate controls over financial processes and reporting in the future.

Management, with oversight from the Audit Committee, is committed to maintaining a strong internal control environment, and has taken, and will continue to take, actions necessary to remediate the material weakness.

The identified material weakness in our internal control over financial reporting will not be considered remediated until the remediated controls operate for a sufficient period of time and can be tested and concluded by management to be designed and operating effectively.

Our remediation efforts include working with our third party service provider to ensure that it has taken steps to address its user access controls that led to the change management segregation of duties deficiencies.

Accordingly, we cannot provide any assurance that our remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts.

As we continue to evaluate operating effectiveness and monitor improvements to our internal control over financial reporting, we may take additional measures to address control deficiencies or modify our remediation efforts.

Unsuccessful remediation efforts could result in material misstatements in, or restatements of, the Company’s financial statements, could cause the Company to fail to meet its reporting obligations and/or could cause investors to lose confidence in the Company’s reported financial information, which would adversely affect the trading price of the Company’s common stock and harm the Company’s reputation.

In addition, such failures could result in violations of applicable securities laws, an inability to meet Nasdaq listing requirements, a default in covenants under the Company’s credit facilities, and/or exposure to lawsuits, investigations or other legal proceedings.

Our financial results depend on management ’ s selection of accounting methods and certain assumptions and estimates.

Our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and with general practices within the financial services industry.

practices within the financial services industry.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities and the reported amount of related revenues and expenses.

Certain accounting policies

inherently are based to a greater extent on estimates, assumptions and judgments of management and, as such, have a greater possibility of producing results that could be materially different than originally reported.

Certain accounting policies inherently are based to a greater extent on estimates, assumptions and judgments of management and, as such, have a greater possibility of producing results that could be materially different than originally reported.

They require management to make subjective or complex judgments, estimates or assumptions, and changes in those estimates or assumptions could have a significant impact on our consolidated financial statements.

20 unchanged sentences

In deciding whether to extend credit or enter into other transactions with clients and counterparties, and the terms of any such transaction, we may rely on information furnished by or on behalf of clients and counterparties, including financial statements, property appraisals, title information, employment and income documentation, account information and other financial information.

We may also rely on representations of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports of independent auditors.

We may also rely on representations of clients and counterparties as to the accuracy and

completeness of that information and, with respect to financial statements, on reports of independent auditors.

Any such misrepresentation or incorrect or incomplete information, whether fraudulent or inadvertent, may not be detected prior to funding.

In addition, one or more of our employees or vendors could cause a significant operational breakdown or failure,

either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our loan documentation, operations or systems.

In addition, one or more of our employees or vendors could cause a significant operational breakdown or failure, either as a result of human error or where an individual purposefully sabotages or fraudulently manipulates our loan documentation, operations or systems.

Whether a misrepresentation is made by the applicant or another third party, we generally bear the risk of loss associated with the misrepresentation.

6 unchanged sentences

It is difficult or impossible to defend against every risk being posed by changing technologies, as well as criminals intent on committing cyber-crime.

Increasing sophistication of cyber-criminals and terrorists make keeping up with new threats difficult and could result in a breach.

Controls employed by our information technology department and our other employees and vendors could prove inadequate.

In the last few years, the number of cyber incidents has drastically increased.

The sophistication of these cyber incidents has also increased, and is expected to increase further, as cyber-criminals utilize artificial intelligence and related emerging technologies.

Increasing sophistication of cyber-criminals and terrorists make keeping up with new threats difficult and could result in a breach.

We could also experience a breach due to intentional or negligent conduct on the part of employees or other internal sources, software bugs or other technical malfunctions, or other causes.

2 unchanged sentences

A breach of our security that results in unauthorized access to our data could expose us to a disruption or challenges relating to our daily operations as well as to data loss, litigation, damages, fines and penalties, significant increases in compliance costs, and reputational damage, any of which could have an adverse effect on our business, results of operations, financial condition, and future prospects.

Additionally, the cyber-resilience of banking organizations has become of increased importance to federal and state banking regulators.

New or revised laws and regulations designed to address cybersecurity risks may impact our current and planned privacy, data protection and information security-related policies, the collection, use, sharing, retention and safeguarding of customer and employee information, and current or planned business activities.

Compliance with current or future privacy, data protection and information security laws may result in additional compliance and technology costs, which could adversely affect our profitability.

We are subject to environmental liability risk associated with our lending activities.

16 unchanged sentences

In certain cases, we may consider entering into licensing agreements for disputed intellectual property, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur.

These licenses may also

significantly increase our operating expenses.

These licenses may also significantly increase our operating expenses.

If legal matters related to intellectual property claims were resolved against us or settled, we could be required to make payments in amounts that could have an adverse effect on our business, financial condition and results of operations.

22 unchanged sentences

Prompt corrective action can include progressively more restrictive constraints on operations, management and capital distributions.

Failure to meet the capital conservation buffer will result in certain limitations on dividends, capital repurchases, and discretionary bonus payments to executive officers.

Failure to meet the capital conservation buffer will result in certain limitations on

dividends, capital repurchases, and discretionary bonus payments to executive officers.

We have submitted a comprehensive capital plan to our regulators for review.

2 unchanged sentences

Business – Supervision and Regulation – b1BANK – Capital Adequacy Requirements.

such examinations could have an adverse effect on our business, financial condition, results of operations and prospects.

The Board of Governors of the Federal Reserve System (the "Federal Reserve"), the Federal Deposit Insurance Corporation (the "FDIC"), and the Louisiana Office of Financial Institutions (the "Louisiana OFI") periodically conduct examinations of various aspects of our business, including our compliance with laws and regulations.

Federal and state banking agencies periodically conduct examinations of our business, including compliance with laws and regulations, and our failure to comply with any supervisory actions to which we are or become subject as a result of such examinations could have an adverse effect on our business, financial condition, results of operations and prospects.

The Federal Reserve, the FDIC, and the Louisiana OFI periodically conduct examinations of various aspects of our business, including our compliance with laws and regulations.

If, as a result of an examination, a federal or state banking agency were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we or the Bank were in violation of any law or regulation, it may take a number of different remedial actions as it deems appropriate.

26 unchanged sentences

The BSA, the USA PATRIOT Act of 2001, and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and file suspicious activity and currency transaction reports as appropriate.

The federal Financial Crimes Enforcement Network is authorized to impose significant civil money penalties for violations of those requirements and has recently engaged in coordinated enforcement efforts with

the individual federal banking regulators, as well as the U.S.

Department of Justice, Drug Enforcement Administration and Internal Revenue Service.

21 unchanged sentences

Loan collection is subject to extensive regulation by federal, state and local governmental authorities as well as to various laws and judicial and administrative decisions imposing requirements and restrictions on those activities.

The volume of new or modified laws and regulations has increased in recent years and, in addition, some individual municipalities have begun to enact laws that restrict loan collection activities including delaying or temporarily preventing

foreclosures or forcing the modification of certain mortgages.

If regulators impose new or more restrictive requirements, we may incur additional significant costs to comply with such requirements which may further adversely affect us.

18 unchanged sentences

Moreover, the FDIC has the unilateral power to change deposit insurance assessment rates and the manner in which deposit insurance is calculated and also to charge special assessments to FDIC-insured institutions.

The FDIC utilized all of these powers during the financial crisis for the purpose of restoring the reserve ratios of the Deposit Insurance Fund.

The FDIC utilized all of these powers during the 2008 Global Financial Crisis for the purpose of restoring the reserve ratios of the Deposit Insurance Fund and again in response to the high-profile bank failures that occurred in 2023.

Any future special assessments, increases in assessment rates or premiums, or required prepayments in FDIC insurance premiums could reduce our profitability or limit our ability to pursue certain business opportunities, which could materially and adversely affect our business, financial condition, and results of operations.

We experienced an increase in FDIC insurance premiums in 2023 due to increased regulatory rates.

The Federal Reserve may require us to commit capital resources to support the Bank.

96 unchanged sentences

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.

What changed 10-K

Item 1A. Risk Factors