16 unchanged sentences
• Liquidity risk could impair our ability to fund operations and meet our obligations as they become due.
−Removed: • Loss of deposits or a change in deposit mix could increase our cost of funding.
• Limits on our ability to use brokered deposits as part of our funding strategy may affect our profitability.
3 unchanged sentences
• Failure to keep up with the rapid technological changes in the financial services industry could have an adverse effect on our competitive position and profitability.
−Removed: • We follow a relationship-based operating model, and our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance.
+Added: • We follow a relationship-based operating model;
+Added: our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance.
• We are dependent on our management team and key employees.
−Removed: • Changes in interest rates and monetary policy may negatively affect our earnings, income and financial condition, as well as the value of our assets.
−Removed: • We are subject to physical and financial risks associated with climate change impacts.
+Added: • Changes in interest rates and monetary policy may negatively affect our earnings, income, financial condition, and the value of our assets.
+Added: • We are subject to physical and financial risks associated with climate change and other weather impacts.
o Risks Related to Our Operations
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o Risks Related to an Investment in Our Common Stock
−Removed: • We currently qualify as an “emerging growth company”, and the reduced disclosures and relief from certain other significant disclosure requirements that are available to emerging growth companies may make our Common Stock less attractive to investors.
• If we fail to design, implement, and maintain effective internal control over financial reporting or remediate any future material weakness in our internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.
3 unchanged sentences
• Our Bylaws designate the United States District Court for the Eastern District of Virginia, Alexandria Division, or in the event that court lacks jurisdiction, the Circuit Court of the City of Alexandria, Virginia, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which may not be enforced and could discourage lawsuits against us and our directors and officers.
+Added: o Risks Relating to the Consummation of the LNKB Merger and the Company Following the LNKB Merger
+Added: • The Company and LNKB have, and the Company following the closing is expected to, incur substantial costs related to the LNKB Merger and integration.
+Added: • Combining the Company and LNKB may be more difficult, costly, or time-consuming than expected, and the Company and LNKB may fail to realize the anticipated benefits of the LNKB Merger.
+Added: • Our results following the LNKB Merger may suffer if we do not effectively manage our expanded operations.
+Added: • The continuing corporation may be unable to retain Company and/or LNKB personnel successfully after the LNKB Merger is completed.
+Added: • Regulatory approvals necessary for the LNKB Merger may not be received, may take longer than expected, or may impose conditions that are not presently anticipated.
+Added: • The Merger Agreement may be terminated and the LNKB Merger may not be completed.
+Added: • In connection with LNKB Merger, we will assume LNKB’s outstanding debt obligations.
+Added: • The Company and LNKB will be subject to business uncertainties and contractual restrictions while the LNKB Merger is pending.
+Added: • Our shareholders will have reduced ownership and voting interest in the continuing corporation after the consummation of the LNKB Merger and will exercise less influence over management.
+Added: • Interest rate volatility may adversely impact the fair value adjustments of investments and loans acquired in the LNKB Merger.
+Added: • The dilution caused by the issuance of the new shares of the Company’s Common Stock in connection with the LNKB Merger may adversely affect the market price of the Company’s Common Stock.
+Added: • Issuance of shares of the Company’s Common Stock in connection with the LNKB Merger may adversely affect the market price of the Company’s Common Stock.
+Added: • The market price of the Company’s Common Stock after the LNKB Merger may be affected by factors different from those currently affecting the shares of our Common Stock.
+Added: • Shareholder litigation could prevent or delay the completion of the LNKB Merger or otherwise negatively impact the business and operations of the Company and LNKB.
Risk Related to Our Lending Activities
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and identification of additional problem loans, ratings down-grades and other factors, both within and outside of our control, may require an increase in the allowances for credit losses on loans, securities, and off-balance sheet credit exposures.
+Added: There is also the possibility that we have failed or will fail to accurately identify the appropriate economic indicators, to accurately estimate the timing of future changes in economic conditions, or to estimate accurately the impacts of future changes in economic conditions to our borrowers, which similarly could impact the accuracy of our loss forecasts and allowance estimates.
There is no precise method of predicting credit losses, and therefore, we always face the risk that losses in future periods will exceed our allowance for credit losses and that we would need to make additional provisions to our allowance for credit losses, which would reduce our earnings.
1 unchanged sentence
Additionally, federal and state banking regulators, as an integral part of their supervisory function, periodically review the allowance for credit losses.
−Removed: These regulatory agencies may require us to increase our provision for credit
−Removed: losses or to recognize further loan charge-offs based upon their judgments, which may be different from ours.
+Added: These regulatory agencies may require us to increase our provision for credit losses or to recognize further loan charge-offs based upon their judgments, which may be different from ours.
If we need to make significant and unanticipated increases in the loss allowance in the future, or to take additional charge-offs for which we have not established adequate reserves, our business, financial condition, and results of operations could be adversely affected at that time.
−Removed: On January 1, 2023, the Company adopted the Current Expected Credit Loss (“CECL”) methodology as required under ASC 326.
−Removed: The CECL standard requires us to record, at the time of origination, credit losses expected throughout the life of our loans as opposed to the previous approach of recording losses when it became probable that a loss event had occurred.
−Removed: Accordingly, our allowance for credit losses may experience more fluctuations under the CECL model than it has in the past, which could in turn result in more volatility in our provision for credit losses and, therefore, earnings.
−Removed: See “Recent Accounting Pronouncements” under Note 1 — Nature of Business Activities and Significant Accounting Policies of this Form 10-K, for further information regarding the implementation of CECL.
If our non-performing assets increase, our earnings will be adversely affected.
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• Non-interest expense increases when we write down the value of properties in our other real estate owned portfolio to reflect changing market values;
−Removed: • There are legal fees associated with the resolution of problem assets, as well as carrying costs, such as taxes, insurance, and maintenance fees;
−Removed: • The resolution of non-performing assets requires the active involvement of management, which can distract them from more profitable activity.
−Removed: If borrowers become delinquent and do not pay their loans and we are unable to successfully manage our non-performing assets, our losses and troubled assets could increase, which could have a material adverse effect on our financial condition and results of operations.
+Added: • There are legal fees associated with the resolution of non-performing assets, as well as carrying costs, such as taxes, insurance, and maintenance fees;
+Added: • The resolution of non-performing assets requires the active involvement of management, which can distract them from more profitable activity, and
+Added: • An increase in the level of nonperforming assets increases our risk profile and may affect the minimum capital levels our regulators believe are appropriate for us in light of such risks.
+Added: If borrowers become delinquent and do not pay their loans and we are unable to successfully manage our non-performing assets, our losses and non-performing assets could increase, which could have a material adverse effect on our financial condition and results of operations.
Our focus on lending to small to medium-sized businesses may increase our credit risk.
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These businesses generally have fewer financial resources in terms of capital access or borrowing capacity than larger entities, frequently have smaller market shares than their competition, and may be more vulnerable to economic downturns.
−Removed: These businesses also often need substantial additional capital to expand or compete, and may experience substantial volatility in operating results, any of which may impair their ability as a borrower to repay a loan.
+Added: These businesses also often need substantial additional capital to expand or compete, and may experience substantial volatility in operating results.
+Added: Any of these factors may impair their ability as a borrower to repay a loan.
These factors may be especially true given the effects of global macroeconomic conditions, including volatility and market factors related to or caused by any health crises, global political conflict, rising interest rates, labor market volatility, and instability in financial markets.
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A substantial portion of our loans are secured by real estate.
−Removed: These concentrations expose us to the risk that adverse developments in the real estate market, or in the general economic conditions in such areas, or the continuation of such adverse developments, could increase the levels of non-performing loans and charge-offs, and reduce loan demand and deposit growth.
+Added: These concentrations expose us to the risk that adverse developments in the real estate market, or in the general economic conditions in the areas where such real
+Added: estate is located, or the continuation of such adverse developments, could increase the levels of non-performing loans and charge-offs, and reduce loan demand and deposit growth.
In that event, we would likely experience lower earnings or losses.
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Our underwriting, review and monitoring cannot eliminate all of the risks related to these loans.
−Removed: In particular, the banking regulatory agencies have expressed concerns about weaknesses in the current commercial real estate market.
−Removed: Banking regulatory authorities typically give commercial real estate lending greater scrutiny and may require banks with higher levels of commercial real estate loans to implement enhanced risk management practices, including stricter
−Removed: underwriting, internal controls, risk management policies, more granular reporting, and portfolio stress testing, as well as possibly higher levels of allowances for losses and capital levels as a result of commercial real estate lending growth and exposure.
+Added: In particular, the banking regulatory agencies have expressed concerns about weaknesses in the commercial real estate market.
+Added: Banking regulatory authorities typically give commercial real estate lending greater scrutiny and may require banks with higher levels of commercial real estate loans to implement enhanced risk management practices, including stricter underwriting, internal controls, risk management policies, more granular reporting, and portfolio stress testing, as well as possibly higher levels of allowances for losses and capital levels as a result of commercial real estate lending growth and exposure.
If our banking regulators determine that our commercial real estate lending activities are particularly risky and are subject to heightened scrutiny, we may incur significant additional costs or be required to restrict certain of our commercial real estate lending activities.
2 unchanged sentences
The amount that we, as a mortgagee, may realize after a foreclosure depends on factors outside of our control, including, but not limited to, general or local economic conditions, environmental cleanup liabilities, assessments, interest rates, real estate tax rates, operating expenses of the mortgaged properties, our ability to obtain and maintain adequate occupancy of the properties, zoning laws, governmental and regulatory rules, and natural disasters.
+Added: For example, we could be subject to environmental liabilities with respect to these properties.
+Added: If hazardous or toxic substances are found, we may be liable for remediation costs, as well as personal injury and property damage.
+Added: Environmental laws may require us to incur substantial expenses and may materially reduce the affected property’s value or limit our ability to use or sell the affected property, which could have a material adverse effect on our business, financial condition and results of operations.
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 other real estate owned (“OREO”) could have an adverse effect on our business, financial condition, and results of operations.
Additionally, consumer protection initiatives or changes in state or federal law may substantially increase the time and expenses associated with the foreclosure process or prevent us from foreclosing at all.
−Removed: A number of states in recent years have either considered or adopted foreclosure reform laws that make it substantially more difficult and expensive for lenders to foreclose on properties in default, including in response to the COVID-19 pandemic.
+Added: A number of states in recent years have either considered or adopted foreclosure reform laws that make it substantially more difficult and expensive for lenders to foreclose on properties in default.
Additionally, federal and state regulators have prosecuted or pursued enforcement action against a number of mortgage servicing companies for alleged consumer law violations.
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In considering whether to make a loan secured by real property, we generally require an appraisal of the property.
−Removed: However, an appraisal is only an estimate of the value of the property at the time the appraisal is made, and, as real estate values may change significantly in value in relatively short periods of time (especially in periods of heightened economic uncertainty), this estimate may not accurately reflect the net value of the collateral after the loan is made.
+Added: However, an appraisal is only an estimate of the value of the property at the time the appraisal is made, and, as real estate values may change significantly in relatively short periods of time (especially in periods of heightened economic uncertainty), this estimate may not accurately reflect the net value of the collateral after the loan is made.
As a result, we may not be able to realize the full amount of any remaining indebtedness when we foreclose on and sell the relevant property.
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Factors that could detrimentally affect our access to liquidity sources may be beyond our control and include, among other things, market disruptions, changes in our credit ratings, lack of sufficient qualifying collateral to support borrowings, competitive dynamics, reputational damage, the confidence of depositors in us or the financial-services industry, generally, a decrease in the level of our business activity as a result of a downturn in the markets in which our loans are concentrated, and an adverse regulatory action against us.
−Removed: Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets, increased inflation, tariffs or other disruptions to global trade, trade agreements or supply chains, rising interest rates, the state of the regulatory environment and monetary and fiscal policies, the possibility of the U.S.
+Added: Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets, increased inflation, tariffs or other disruptions to global trade, trade agreements or supply chains, geopolitical conflicts or tensions, rising interest rates, the state of the regulatory environment and monetary and fiscal policies, the possibility of the U.S.
government defaulting on its debt, or negative views and expectations about the prospects for the financial services industry or the global economy more broadly.
+Added: If a large number of our depositors or depositors with a high concentration of deposits sought to withdraw their deposits suddenly, we could encounter difficulty meeting such a significant deposit outflow, which could negatively impact our profitability, reputation and liquidity.
+Added: Significant unanticipated deposit outflows have occurred at other financial institutions, and may occur in the future, compounded by advances in technology that increase the speed at which deposits can be moved from bank to bank or outside the banking system, as well as the speed and reach with which information, concerns and rumors can spread through media, in each case potentially exacerbating liquidity concerns.
+Added: While we believe our funding sources are adequate to meet any significant unanticipated deposit withdrawal, we may not be able to manage the risk of deposit volatility effectively, which could have a material adverse effect on our liquidity, business, financial condition and results of operations.
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.
Among other sources of funds, we rely heavily on deposits for funds to make loans and provide for our other liquidity needs.
+Added: Core deposits are generally a low-cost and stable source of funding.
However, loan demand may exceed the rate at which we are able to build core deposits for which there is substantial competition from a variety of different competitors, so we may rely on more interest-sensitive deposits, including brokered deposits, as sources of funds.
1 unchanged sentence
Not being able to attract deposits, or to retain or replace them as they mature, would adversely affect our liquidity.
−Removed: Paying higher deposit rates to attract, retain, or replace those deposits could have a negative effect on our net interest margin and operating results.
−Removed: Furthermore, as we and other banking organizations experienced in 2023, the failure of other financial institutions may cause deposit outflows as customers spread deposits among several different banks so as to maximize their amount of FDIC insurance, move deposits to banks deemed “too big to fail” or to remove deposits from the banking system entirely.
−Removed: As of December 31, 2024, approximately 29.6% of our deposits were uninsured and we rely on these deposits for liquidity.
−Removed: Loss of deposits or a change in deposit mix could increase our cost of funding.
−Removed: Deposits are generally a low-cost and stable source of funding.
−Removed: We compete with banks and other financial institutions for deposits.
−Removed: Funding costs may increase if we lose deposits and are forced to replace them with more expensive sources.
+Added: Funding costs may increase if we lose core deposits and are forced to replace them with more expensive sources.
Depending on the interest rate environment and competitive factors, low-cost deposits may need to be replaced with higher cost funding, resulting in a decrease in net interest income and net income.
+Added: As of December 31, 2025, approximately 32.1% of our deposits were uninsured and we rely on these deposits for liquidity.
Limits on our ability to use brokered deposits as part of our funding strategy may affect our profitability.
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Banks may be restricted in their ability to accept brokered deposits, depending on their capital classification.
−Removed: “Well capitalized” banks are permitted to accept brokered deposits, but all banks that are not well capitalized could
−Removed: be restricted from accepting such deposits.
+Added: “Well capitalized” banks are permitted to accept brokered deposits, but all banks that are not well capitalized could be restricted from accepting such deposits.
Should we lose our “well capitalized” status, these restrictions could materially and adversely affect our ability to access lower costs funds, and thereby decrease our future earnings capacity.
1 unchanged sentence
We operate in a highly competitive market and face increasing competition from a variety of traditional and new financial services providers.
−Removed: We have many competitors.
+Added: We operate in a competitive market for financial services and face intense competition from other financial institutions in making loans and attracting deposits, which can greatly affect pricing for our products and services and could adversely affect our cost of funds.
Our principal competitors are commercial and community banks, credit unions, savings and loan associations, mortgage banking firms, online mortgage lenders, and consumer finance companies, including large national financial institutions that operate in our market.
2 unchanged sentences
Also, many of our non-bank competitors have fewer regulatory constraints and may have lower cost structures.
−Removed: We compete with these other financial institutions, both in attracting deposits and making loans.
+Added: As a result, some of our competitors can offer products and services that we are unable to offer or to offer such products and services at more competitive rates.
We expect competition to continue to increase as a result of legislative, regulatory, and technological changes, the continuing trend of consolidation in the financial services industry, and the continued emergence of alternative banking sources.
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Our financial performance may be negatively affected if we are unable to execute our strategy.
−Removed: Our strategy is to grow organically and supplement that growth with select acquisitions, if available.
+Added: Our strategy is to grow organically and supplement that growth with select acquisitions, if available, such as the merger with Summit and the LNKB Merger.
Our success depends primarily on generating loans and deposits of acceptable risk and expense.
1 unchanged sentence
Our ability to identify appropriate markets for expansion, recruit and retain qualified personnel, and fund growth at reasonable cost depends upon prevailing economic conditions, maintenance of sufficient capital, competitive factors, changes in banking laws, and other factors.
−Removed: Our ability to execute on our strategy will also depend, in part, on our ability to retain the talents and dedication of key employees currently employed by the Company.
−Removed: It is possible that these employees may decide not to remain with the Company.
−Removed: If the Company is unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the Company 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, our ability to manage growth successfully depends on a variety of factors, including whether we can maintain adequate capital levels, maintain cost controls, effectively manage asset quality, effectively manage increasing regulatory compliance requirements, and successfully integrate any businesses acquired into our organization, including the LNKB Merger.
We cannot be certain of our ability to manage increased levels of assets and liabilities without increased expenses and higher levels of non-performing assets.
1 unchanged sentence
Increases in operating expenses or non-performing assets may decrease our earnings and the value of the Company’s capital stock.
−Removed: To the extent we are able to supplement organic growth with one or more acquisitions, we will be subject to risks commonly encountered in such transactions, including risks related to the time and expense of identifying, evaluating, and negotiating potential acquisitions, exposure to unknown or contingent liabilities of the target, difficulty of integrating the operations and personnel of the target, potential disruption of our ongoing business, failure to retain key personnel at the acquired business, and failure to realize any expected revenue increases, cost savings, and other projected benefits from an acquisition.
+Added: Our ability to execute on our strategy will also depend, in part, on our ability to retain the talents and dedication of key employees currently employed by the Company.
+Added: It is possible that these employees may decide not to remain with the Company.
+Added: If the Company is unable to retain key employees, including management, who are critical to the future operations of the Company or, in the case of the LNKB Merger, to the successful integration of the Company and LNKB, the Company could face disruptions in its operations, loss of existing customers, loss of key information, expertise, or know-how, and unanticipated additional recruitment costs.
+Added: To the extent we are able to supplement organic growth with one or more acquisitions, including the LNKB Merger, we are and will be subject to risks commonly encountered in such transactions, including risks related to the time and expense of identifying, evaluating, and negotiating potential acquisitions, exposure to unknown or contingent liabilities of the target, difficulty of integrating the operations and personnel of the target, potential disruption of our ongoing business, failure to retain key personnel at the acquired business, and failure to realize any expected revenue increases, cost savings, and other projected benefits from an acquisition.
Failure to keep up with the rapid technological changes in the financial services industry could have an adverse effect on our competitive position and profitability.
−Removed: The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services.
+Added: The financial services industry is undergoing rapid technological changes with frequent introductions of new technology-driven products and services, and we anticipate that new technologies will continue to emerge.
The effective use of technology increases efficiency and enables financial institutions to better serve customers and reduce costs.
Our future success will depend, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience, as well as to create additional efficiencies in our operations.
−Removed: Many of our competitors
−Removed: have substantially greater resources to invest in technological improvements than we have.
−Removed: We may not be able to implement new technology-driven products and services effectively or be successful in marketing these products and services to our customers.
−Removed: Failure to keep pace successfully with technological change affecting the financial services industry could harm our ability to compete effectively and could have an adverse effect on our business, financial condition, and results of operations.
−Removed: As these technologies improve in the future, we may be required to make significant capital expenditures in order to remain competitive, which may increase our overall expenses and have an adverse effect on our business, financial condition, and results of operations.
−Removed: We follow a relationship-based operating model, and our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance.
+Added: Developing or acquiring access to new technologies and incorporating those technologies into our products and services, or using them to expand our products and services, may require significant investments, may take considerable time to complete, and ultimately, may not be successful.
+Added: If we fail to maintain or enhance our competitive position with respect to technology, whether because of a failure to anticipate customer expectations, substantially fewer resources to invest in technological improvements than our larger competitors, or because our technological developments fail to perform as desired or are not rolled out in a timely manner, we may lose market share or incur additional expense.
+Added: In addition, any future implementation of technological changes and upgrades to maintain current systems may cause operational and customer challenges upon implementation and for some time afterwards.
+Added: Key challenges include service interruptions, transaction processing errors and system conversion delays, which may cause us to lose customers or fail to comply with applicable laws, and may cause us to incur additional expenses, which may be substantial and could have a material adverse effect on our business, financial condition, results of operations, and future prospects.
+Added: Recently, the financial services industry has experienced rapid developments in artificial intelligence, including agentic artificial intelligence.
+Added: The use of artificial intelligence models developed by third parties introduces risks related to how those models are developed, trained, and deployed, including unauthorized material in training data and limited visibility into risk mitigation steps.
+Added: The legal and regulatory environment for artificial intelligence is uncertain and rapidly evolving, potentially increasing compliance costs and risks of noncompliance.
+Added: We may be exposed to the risk that generative artificial intelligence models may produce incorrect outputs, release confidential information, reflect biases, or otherwise cause harm.
+Added: Their complexity may make it challenging to understand all outputs and comply with documentation or explanation requirements.
+Added: Any of these risks could adversely affect our business, expose us to liability or other adverse legal or regulatory consequences, or otherwise adversely affect our financial results.
+Added: We follow a relationship-based operating model.
+Added: Our ability to maintain our reputation is critical to the success of our business, and the failure to do so may materially adversely affect our performance.
We are a community bank, and our reputation is one of the most valuable components of our business.
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The loss of any of our management team or our key employees could adversely affect our ability to execute our strategy, and we may not be able to find adequate replacements on a timely basis, or at all.
+Added: Additionally, the loss of personnel with extensive customer relationships may lead to the loss of business if the customers were to follow the employee to a competitor.
Our future success also depends on our continuing ability to attract, develop, motivate, and retain key employees.
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Among the instruments used by the Federal Reserve to implement these objectives are open market purchases and sales of U.S.
−Removed: government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank
+Added: government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits.
These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits.
4 unchanged sentences
In a rising interest rate environment, there may be an increase in prepayments on loans as borrowers refinance their loans at lower rates.
−Removed: In 2024, the Federal Reserve’s interest rate policy shifted as inflationary pressure began to ease and economic growth moderated.
−Removed: Following a period of aggressive rate hikes in 2022 and 2023 aimed at curbing inflation, the Federal Reserve began lowering rates in 2024, with the Federal Funds target rate ranging from 5.25% to 5.5% at year-end 2023, compared to its range of 4.25% to 4.50% at year end 2024.
+Added: In late 2024, the Federal Reserve’s interest rate policy shifted as inflationary pressure began to ease and economic growth moderated.
+Added: Following a period of aggressive rate hikes aimed at curbing inflation in 2022 and 2023, the Federal Reserve began lowering rates in 2024, with the Federal Funds target rate ranging from 5.25% to 5.5% at year-end 2023, compared to its range of 4.25% to 4.50% at year-end 2024.
+Added: Rate cuts continued through 2025, bringing the Federal Funds target rate down to a range of 3.5% to 3.75% as of December 31, 2025.
Interest rate decreases can lead to increased prepayments of loans and mortgage-backed securities as borrowers refinance their loans to reduce borrowing costs.
6 unchanged sentences
Interest-earning assets may be more responsive to changes in interest rates than interest-bearing liabilities, or vice versa (repricing risk).
−Removed: Individual interest rates or rate indices underlying various interest-earning assets and interest-bearing liabilities may not change in the same degree over a given time period (basis risk), and interest rate relationships may change across the spectrum of interest-earning asset and interest-bearing liability maturities (yield curve risk), including a prolonged flat or inverted yield curve environment.
+Added: Individual interest rates or rate indices underlying various interest-earning assets and interest-bearing liabilities may not change in the same degree over a given time period (basis risk), and interest rate
+Added: relationships may change across the spectrum of interest-earning asset and interest-bearing liability maturities (yield curve risk), including a prolonged flat or inverted yield curve environment.
Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations.
9 unchanged sentences
Climate change could also impact our assets or employees directly or lead to changes in customer preferences that could negatively affect our growth or business strategies.
−Removed: In addition, our reputation and customer relationships could be damaged due to our practices related to climate change, including our or our customers’ involvement in certain industries or projects associated with causing or exacerbating climate change.
−Removed: Moreover, over the past few years, federal banking regulators increasingly focused on the physical and financial risks to financial institutions associated with climate change, which may result in increased requirements regarding the disclosure and management of climate risks and related lending activities, as well as increased compliance costs.
−Removed: While federal regulators are expected to focus less on climate-related risks given the change in the U.S.
−Removed: presidential administration in January 2025, some states are more active in climate-related regulation.
+Added: In addition, our reputation and customer relationships could be damaged due to our practices related to climate change, including our or our customers’ involvement in certain industries or projects.
+Added: Moreover, over the past few years, federal banking regulators increasingly focused on the physical and financial risks to financial institutions associated with climate change;
+Added: although, expectations with respect to these matters has been changing, and it is difficult to predict changes in priorities and requirements with respect to these matters, including any changes in compliance costs relating to such changes.
+Added: Additionally, some states have been, and may continue to be, active in climate-related regulation.
Risks Related to Our Operations
1 unchanged sentence
Our ability to grow and compete is dependent on the Bank’s ability to build or acquire the necessary operational and technological infrastructure and to manage the cost of that infrastructure as we expand.
−Removed: In our case, operational risk can manifest itself in many ways, such as errors related to failed or inadequate processes, faulty or disabled computer systems, fraud by employees or outside persons, and exposure to external events.
+Added: In our case, operational risk can manifest itself in many ways, such as errors related to failed or inadequate processes, faulty or disabled computer systems, fraud by employees or outside persons, which may take many forms including check fraud, electronic fraud, wire fraud, social engineering, phishing and other dishonest acts, and exposure to external events.
As discussed below, we are dependent on our operational infrastructure to help manage these risks.
6 unchanged sentences
These third parties may experience errors or disruptions, including cyber-attacks, that could adversely impact the Bank and over which the Bank may have limited control.
−Removed: We also face risk from the integration of new infrastructure platforms and/or new third-party providers of such platforms into the Bank’s existing businesses.
+Added: We also face risk from the integration of new infrastructure platforms, including in connection with acquisitions, such as the LNKB Merger, and/or new third-party providers of such platforms into the Bank’s existing businesses.
Many of our larger competitors have substantially greater resources to invest in technological improvements.
2 unchanged sentences
System failure or breaches of our network security, including as a result of cyber-attacks or data security breaches, could subject us to increased operating costs, as well as litigation and other liabilities.
−Removed: The computer systems and network infrastructure we use may be vulnerable to physical theft, fire, power loss, telecommunications failure, or a similar catastrophic event, as well as security breaches, denial of service attacks, viruses, worms, and other disruptive problems caused by hackers or malicious actors.
+Added: The computer systems and network infrastructure we use, as well as those of third parties on which we are highly dependent, may be vulnerable to physical theft, fire, power loss, telecommunications failure, or a similar catastrophic event, as well as security breaches, denial of service attacks, viruses, worms, and other disruptive problems caused by hackers or malicious actors.
Any damage or failure that causes breakdowns or disruptions in our customer relationship management, general ledger, deposit, loan, and other systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny for failure to comply with required information security standards, or expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on us.
1 unchanged sentence
Information security risks have generally increased in recent years in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists, activists, and other external parties.
−Removed: Our operations rely on the secure processing, transmission, and storage of confidential information in our computer systems and networks.
+Added: Our operations rely on the secure processing, transmission, and storage of confidential information in our computer systems and networks and the computer systems and networks of third parties.
In addition, to access our products and services, our customers may use devices that are beyond our control systems.
−Removed: Although we believe we have robust information security procedures and controls, our technologies, systems, networks, and our customers’ devices may become the target of cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss, or destruction of the Bank’s or our customers’ confidential, proprietary, and other information, or otherwise disrupt the Bank’s or our customers’ or other third parties’ business operations.
−Removed: As cyber threats continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
+Added: Although we believe we have robust information security procedures and controls, our technologies, systems, networks, and our customers’ devices have been subject to, and are likely to continue to be, the target of cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss, or destruction of the Bank’s or our customers’ confidential, proprietary, and other information, or otherwise disrupt the Bank’s or our customers’ or other third parties’ business operations.
+Added: As cyber threats continue to evolve, we may be required to expend significant
+Added: additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
The Bank is under continuous threat of loss due to hacking and cyber-attacks, especially as we continue to expand customer capabilities to utilize internet and other remote channels to transact business.
1 unchanged sentence
Loss from e-fraud occurs when cybercriminals extract funds directly from our customer accounts.
−Removed: Attempts to breach sensitive customer data,
−Removed: such as account numbers and social security numbers, present significant reputational, legal, and/or regulatory costs to us, if successful.
+Added: Attempts to breach sensitive customer data, such as account numbers and social security numbers, present significant reputational, legal, and/or regulatory costs to us, if successful.
Our risk and exposure to these matters remains heightened because of the evolving nature and complexity of these threats from cybercriminals and hackers, our plans to continue to provide internet banking and mobile banking channels, and our plans to develop additional remote connectivity solutions to serve our customers.
1 unchanged sentence
The occurrence of any cyber-attack or information security breach could result in potential liability to customers, reputational damage, and the disruption of our operations, and regulatory concerns, all of which could adversely affect our business, financial condition, or results of operations.
+Added: In addition, one or more of our third-party service providers may become subject to cyber-attacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our or our customers’ confidential, proprietary and other information, or otherwise disrupt our or our customers’ or other third parties’ business operations.
+Added: We do not control such service providers’ day-to-day operations and a successful attack or security breach at one or more of such third-party service providers is not within our control.
+Added: The occurrence of any such breaches, disruption in services provided by such third parties or other failures could damage our reputation, result in a loss of customer business, and expose us to additional regulatory scrutiny, civil litigation, and possible financial liability, any of which could have a material adverse effect on our financial condition and results of operations.
We rely on third parties to provide key components of our business infrastructure, and a failure of these parties to perform for any reason could disrupt our operations.
36 unchanged sentences
The Chief Risk Officer has oversight responsibility for credit risk, enterprise risk, including regulatory risk, and asset and liability management risk, directly reporting to the Chief Executive Officer.
−Removed: Our risk management framework is comprised of various processes, systems, and strategies, and is designed to manage the types of risk to which we are subject, including, among others, credit, market, liquidity, interest rate, and compliance.
+Added: Our risk management framework is comprised of various processes, systems, and strategies, and is designed to manage the types of risk to which we are subject, including, among others, credit, market, liquidity, interest rate, operational, technology, and compliance.
Our framework also includes financial or other modeling methodologies that involve management assumptions and judgment.
1 unchanged sentence
Our risk management framework may not adequately mitigate any risk or loss to us.
−Removed: If our risk management framework is not effective, we could suffer unexpected losses and our business, financial condition, and results of operations could be adversely affected.
+Added: If our risk management framework is not effective, we could suffer unexpected losses and our business, financial condition,
+Added: and results of operations could be adversely affected.
We may also be subject to potentially adverse regulatory consequences.
−Removed: Demand for the Company’s services is influenced by general economic and consumer trends beyond the Company’s control, including disruptions in the financial services industry, in general, and events such as global pandemics and geopolitical conflict.
+Added: Demand for the Company’s services is influenced by general economic and consumer trends beyond the Company’s control, including disruptions in the financial services industry, in general, and events such as geopolitical conflict and global pandemics.
There can be no assurance that our business and corresponding financial performance will not be adversely affected by general economic or consumer trends or events, including those affecting the financial services industry.
Over the past few years, global markets have seen extensive volatility owing to a variety of factors, including high inflation, trade policies and tariffs, volatility in the capital markets, the failure of financial institutions, volatility in the housing market, interest and currency rate fluctuations, labor availability, supply chain disruptions, global pandemics and public health crises and the responses thereto, weather catastrophes and geopolitical instability, including shutdowns and threats of shutdowns of the U.S.
−Removed: federal government, growing tensions between China and the U.S., the Russia-Ukraine war, conflict in the Middle East, and acts of terrorism.
+Added: federal government, growing geopolitical tensions and conflicts, and acts of terrorism.
These events have created, and may continue to create, significant disruption of the global economy and financial and labor markets.
If such conditions continue, recur or worsen, this may have a material adverse effect on the Company’s business, financial condition, and results of operations.
−Removed: Furthermore, such economic conditions have produced downward pressure on
−Removed: share prices and on the availability of credit for financial institutions and corporations, while also driving up interest rates, further complicating borrowing and lending activities.
−Removed: Additionally, the change in the U.S.
−Removed: presidential administration has given rise to uncertainty regarding the potential impact of certain policies and regulatory approaches on the broader economy, particularly in the areas of immigration and trade.
−Removed: For example, any significant new tariffs which may be imposed by the U.S.
−Removed: may increase the cost of raw materials used in construction, which can have an adverse effect on commercial and residential real-estate markets through increased production costs, production delays, and challenges in launching new projects.
+Added: Furthermore, such economic conditions have produced downward pressure on share prices and on the availability of credit for financial institutions and corporations, while also driving up interest rates, further complicating borrowing and lending activities.
If current levels of market disruption and volatility continue or increase, the Company might experience reductions in business activity, increases in funding costs, decreases in asset values, additional write-downs and impairment charges, and lower profitability.
1 unchanged sentence
The Company may face increased scrutiny from governmental authorities as a result of the size of its business, including if the total assets of the Company grow to exceed $10 billion as of December 31 of any calendar year.
+Added: As a result of the LNKB Merger, the Company and the Bank are expected to have total assets exceeding $10 billion.
Banks with $10 billion or more in total assets are, among other things:
12 unchanged sentences
Various consumer compliance laws also affect our operations.
+Added: Our compliance with these regulations is costly and potentially restricts certain of our activities, including payment of dividends, mergers and acquisitions, investments, loans, interest rates charged, and locations of our offices.
Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets, and determination of the level of our allowance for credit losses.
16 unchanged sentences
The BSA, the USA PATRIOT Act, and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and to file reports, such as suspicious activity reports and currency transaction reports.
−Removed: We are required to comply with these and other anti-money
−Removed: laundering requirements.
+Added: We are required to comply with these and other anti-money laundering requirements.
Our federal and state banking regulators, the Financial Crimes Enforcement Network, and other government agencies are authorized to impose significant civil money penalties for violations of anti-money laundering requirements.
22 unchanged sentences
We expect our regulators to hold us responsible for deficiencies in our oversight or control of our third-party vendor relationships and in the performance of the parties with which we have these relationships.
−Removed: As a result, if our regulators conclude that we have not exercised adequate oversight and control over our third-party vendors or that such vendors have not
−Removed: performed adequately, we could be subject to administrative penalties or fines as well as requirements for consumer remediation, any of which could have a material adverse effect on our business, financial condition, and results of operations.
+Added: As a result, if our regulators conclude that we have not exercised adequate oversight and control over our third-party vendors or that such vendors have not performed adequately, we could be subject to administrative penalties or fines as well as requirements for consumer remediation, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Regulatory requirements affecting our loans secured by commercial real estate could limit our ability to leverage our capital and adversely affect our growth and profitability.
4 unchanged sentences
As of December 31, 2025, acquisition, construction & development loans were 39.2% of our total risk-based capital, and commercial real estate, including owner-occupied loans, were 340.9% of our total risk-based capital.
−Removed: Commercial real estate loans, including acquisition, construction & development and owner-occupied loans, have increased 193.5% during the prior 36 months, mostly due to the Merger.
+Added: Commercial real estate loans, including acquisition, construction & development and owner-occupied loans, have increased 181.7% during the prior 36 months, mostly due to the merger with Summit.
+Added: If the LNKB Merger closes, our commercial real estate loans will further increase.
We cannot guarantee that any risk management practices we implement will be effective in preventing losses relating to our commercial real estate portfolio.
7 unchanged sentences
presidential administration has moved to overturn and reject all efforts aimed at promoting diversity, equity and inclusion in the federal government and has advocated for the same in the private sector.
−Removed: While federal regulators have in past years called for increased ESG disclosure, it is expected that any federal ESG-related regulations under the U.S.
+Added: While federal regulators have in past years called for increased ESG disclosure, it is expected that any federal ESG-related regulations under the current U.S.
presidential administration will call for less disclosure or mandate the abandonment of ESG programs, while regulations at the state level will vary.
−Removed: Failure to adapt to or comply with regulatory requirements or investor or stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain customers and business partners, and stock price.
+Added: Failure to adapt to or comply with regulatory requirements or investor or
+Added: stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain customers and business partners, and stock price.
Risks Related to an Investment in Our Common Stock
−Removed: We currently qualify as an “emerging growth company”, and the reduced disclosures and relief from certain other significant disclosure requirements that are available to emerging growth companies may make our Common Stock less attractive to investors.
−Removed: We are an “emerging growth company,” as defined in the federal securities laws, and we intend to continue to take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not emerging growth companies.
−Removed: These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, less extensive disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements to hold non-binding advisory votes on executive compensation and shareholder approval of any golden parachute payments not previously approved.
−Removed: We could remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the first sale of our common equity securities in an offering registered under the Securities Act, though we may cease to be an emerging growth company earlier, if our gross revenues exceed $1.235 billion, if we issue more than $1.0 billion in non-convertible debt in a three-year period, or if the market value of our Common Stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31.
−Removed: Investors and securities analysts may find it more difficult to evaluate our Common Stock because we rely on one or more of these exemptions.
−Removed: If, as a result, some investors find our Common Stock less attractive, there may be a less active trading market for our Common Stock, which could result in reductions and greater volatility in the prices of our Common Stock.
If we fail to design, implement and maintain effective internal control over financial reporting or remediate any future material weakness in our internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud.
3 unchanged sentences
We may not be able to identify all significant deficiencies and/or material weaknesses in our internal control over financial reporting in the future, and our failure to maintain effective internal control over financial reporting could have an adverse effect on our business, financial condition, and results of operations.
+Added: Moreover, as we continue to grow, our controls and procedures may become more complex and require additional resources to ensure they remain effective amid dynamic regulatory and other guidance.
In the normal course of our operations, we may identify deficiencies that would have to be remediated to satisfy the SEC rules for certification of our internal control over financial reporting.
1 unchanged sentence
As a consequence, we would have to disclose in periodic reports we file with the SEC any material weakness in our internal control over financial reporting.
−Removed: The existence of a material weakness would preclude management from concluding that our internal control over financial reporting is effective, and when we cease to be an emerging growth company under the JOBS Act, preclude our independent registered public accounting firm from rendering their report addressing an assessment of the effectiveness of our internal control over financial reporting.
+Added: The existence of a material weakness would preclude management from concluding that our internal control over financial reporting is effective, and preclude our independent registered public accounting firm from rendering their report addressing an assessment of the effectiveness of our internal control over financial reporting.
In addition, disclosures of deficiencies of this type in our SEC reports could cause investors to lose confidence in our financial reporting, and may negatively affect the market price of our Common Stock, and could result in the delisting of our securities from the securities exchanges on which they trade.
16 unchanged sentences
Holders of our junior subordinated debentures and preferred stock have rights that are senior to those of our common stockholders.
−Removed: We have three statutory business trusts for which we became sponsors in connection with the Merger.
+Added: We have three statutory business trusts for which we became sponsors in connection with the merger with Summit.
The trusts have issued mandatorily redeemable securities (the “capital securities”) for which we are obligated to third-party investors related, and hold our junior subordinated debentures (the “debentures”).
13 unchanged sentences
In addition, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.
−Removed: As a result of these provisions, the exclusive forum provisions may not apply to, and there is uncertainty as to whether a court would enforce such exclusive forum provisions with respect to, suits brought to enforce any duty or liability created by the Exchange Act or the Securities Act or any other claim for which the federal and state courts have concurrent jurisdiction, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
+Added: As a result of these provisions, the exclusive forum provisions may not apply to, and there is uncertainty as to whether a court would enforce such exclusive forum provisions with respect to, suits brought to enforce any duty or liability created by the Exchange Act or the Securities Act or any other claim for which the federal and state courts have
+Added: concurrent jurisdiction, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to this provision of our Bylaws.
1 unchanged sentence
Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, results of operations, and financial condition.
+Added: Risks Relating to the Consummation of the LNKB Merger and the Company Following the LNKB Merger
+Added: The Company and LNKB have, and the Company following the closing is expected to, incur substantial costs related to the LNKB Merger and integration.
+Added: The Company and LNKB have incurred and expect to incur significant non-recurring costs associated with the LNKB Merger.
+Added: 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, printing costs, and other related costs.
+Added: Some of these costs are payable regardless of whether the LNKB Merger is completed and may adversely impact the Company’s earnings.
+Added: Following the closing, the Company is expected to incur substantial costs related to the integration of Burke & Herbert’s and LNKB’s businesses, including facilities and systems consolidation costs and employment-related costs.
+Added: The Company and LNKB may also incur additional costs to maintain employee morale and to retain key employees.
+Added: There are a large number of processes, policies, procedures, operations, technologies, and systems that may need to be integrated, including purchasing, accounting and finance, payroll, compliance, treasury management, branch operations, vendor management, risk management, lines of business, pricing, and benefits.
+Added: While the Company and LNKB have assumed that a certain level of costs will be incurred, there are many factors beyond our control that could affect the total amount or the timing of the integration costs, and additional unanticipated costs may be incurred in the integration of the businesses of the Company and LNKB.
+Added: Moreover, many of the costs that will be incurred are, by their nature, difficult to estimate accurately.
+Added: There can be no assurances that the expected benefits and efficiencies related to the integration of the businesses will be realized to offset these transaction and integration costs over time.
+Added: Anticipated future merger and integration-related pre-tax costs are currently estimated to be approximately $52.1 million.
+Added: Combining the Company and LNKB may be more difficult, costly, or time-consuming than expected, and the Company and LNKB may fail to realize the anticipated benefits of the LNKB Merger.
+Added: The success of the LNKB Merger will depend, in part, on the ability to realize the anticipated cost savings from combining the businesses of the Company and LNKB.
+Added: To realize the anticipated benefits and cost savings from the LNKB Merger, the Company and LNKB must successfully integrate and combine their businesses in a manner that permits those cost savings to be realized without adversely affecting current revenues and future growth.
+Added: If the Company and LNKB are not able to successfully achieve these objectives, the anticipated benefits of the LNKB Merger may not be realized fully, or at all, or may take longer to realize than expected.
+Added: A successful integration of LNKB’s business with the Company’s business will depend on the ability to consolidate operations, corporate cultures, systems and procedures and to eliminate redundancies and costs.
+Added: The Company may not be able to combine each company’s business without encountering difficulties that could adversely affect the ability to maintain relationships with existing clients, customers, depositors and employees, such as:
+Added: • the loss of key employees;
+Added: • the disruption of operations and business;
+Added: • inability to maintain and increase competitive presence;
+Added: • loan and deposit attrition, customer loss and revenue loss;
+Added: • possible inconsistencies in standards, control procedures and policies;
+Added: • additional costs or unexpected problems with operations, personnel, technology and credit;
+Added: • problems with the assimilation of new operations, systems, sites or personnel, which could divert resources from banking operations.
+Added: Any disruption to the businesses could cause customers to remove their accounts and move their business to a competing financial institution.
+Added: Integration efforts between the two companies may also divert management attention and resources.
+Added: Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit the successful integration of the Company and LNKB.
+Added: The Company and LNKB entered into the Merger Agreement with the expectation that the acquisition of LNKB by the Company will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the continuing corporation, cross-selling opportunities, technological efficiencies, and operating efficiencies.
+Added: Achieving the anticipated benefits of the transactions contemplated by the Merger Agreement is subject to a number of uncertainties including whether the integration is completed in a timely, effective and efficient manner and general competitive conditions in the marketplace.
+Added: An inability to realize the full extent of the anticipated benefits of the LNKB Merger and the other transactions contemplated by the Merger Agreement, as well as delays encountered in the integration process, could have an adverse effect upon the revenues, levels of expenses and operating results of the continuing corporation following the completion of the LNKB Merger, which may adversely affect the value of the common stock of the continuing corporation following the completion of the LNKB Merger.
+Added: Additionally, upon consummation of the transactions contemplated by the Merger Agreement, the Company will make fair value estimates of certain assets and liabilities in recording the acquisition.
+Added: Actual values of these assets and liabilities could differ from such estimates, which could result in the Company not achieving the anticipated benefits of the acquisition.
+Added: Any cost savings that are realized may be offset by losses in revenues or other charges to earnings.
+Added: In addition, the actual cost savings of the LNKB Merger could be less than anticipated, and integration may result in additional and unforeseen expenses.
+Added: The Company and LKNB have operated and, until the completion of the LNKB Merger, must continue to operate, independently.
+Added: It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses, or inconsistencies in standards, controls, procedures, and policies that adversely affect the companies’ ability to maintain relationships with clients, customers, depositors, and employees or to achieve the anticipated benefits and cost savings of the LNKB Merger.
+Added: Integration efforts between the two companies may also divert management attention and resources.
+Added: These integration matters could have an adverse effect on each of the Company and LNKB during this transition period and for an undetermined period after completion of the LNKB Merger on the continuing corporation.
+Added: Our results following the LNKB Merger may suffer if we do not effectively manage our expanded operations, including complying with any enhanced regulatory requirements.
+Added: Should the LNKB Merger successfully close, then following the LNKB Merger, the size of our business will increase beyond the current size of either our or LNKB’s business.
+Added: Our future success as the continuing corporation 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: There can be no assurances that the continuing corporation will be successful or that it will realize the expected operating efficiencies, revenue enhancement, or other benefits currently anticipated from the LNKB Merger.
+Added: The continuing corporation may also face increased scrutiny from governmental authorities as a result of the increased size of its business.
+Added: As a result of the LNKB Merger, the continuing corporation is expected to have total assets exceeding $10 billion.
+Added: Banks with $10 billion or more in total assets are, among other things:
+Added: subject to reduced dividends on any holdings of Federal Reserve Bank of Richmond common stock;
+Added: subject to limits on interchange fees pursuant to the Durbin amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act;
+Added: subject to certain enhanced prudential standards;
+Added: no longer treated as a “small institution” for FDIC deposit insurance assessment purposes;
+Added: examined directly by the CFPB with respect to various federal consumer financial laws;
+Added: and no longer eligible to elect to be subject to the CBLR.
+Added: Compliance with these additional ongoing requirements may necessitate additional personnel, the design and implementation of additional internal controls,
+Added: and the incurrence of significant expenses, which could have a significant adverse effect on the continuing corporation’s financial condition or results of operations.
+Added: The continuing corporation may be unable to retain Company and/or LNKB personnel successfully after the LNKB Merger is completed.
+Added: The success of the LNKB Merger will depend, in part, on our ability to retain the talents and dedication of key employees currently employed by the Company and LNKB.
+Added: It is possible that these employees may decide not to remain with the Company or LNKB, as applicable, while the LNKB Merger is pending or with the continuing corporation after the LNKB Merger is consummated.
+Added: If the Company and LNKB are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, the Company and LNKB could face disruptions in their operations, loss of existing customers, loss of key information, expertise, or know-how, and unanticipated additional recruitment costs.
+Added: In addition, following the LNKB Merger, if key employees terminate their employment, the continuing corporation’s business activities may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the continuing corporation’s business to suffer.
+Added: The Company and LNKB also may not be able to locate or retain suitable replacements for any key employees who leave either company.
+Added: Regulatory approvals for the Holding Company Merger and the Bank Merger may not be received, may take longer than expected, or may impose conditions that are not presently anticipated or that could have an adverse effect on the continuing corporation following the LNKB Merger.
+Added: Before the LNKB Merger may be completed, various approvals, consents and non-objections must be obtained from regulatory authorities.
+Added: In determining whether to grant these approvals, such regulatory authorities consider a variety of factors, including the regulatory standing of each party and other considerations.
+Added: These approvals could be delayed or not obtained at all, including due to any or all of the following:
+Added: an adverse development in either party’s regulatory standing, considerations related to the continuing corporation exceeding $10 billion in total assets, or any other factors considered by regulators when granting such approvals;
+Added: governmental, political, or community group inquiries, investigations, or opposition;
+Added: or changes in legislation or the political environment, generally.
+Added: Even if the approvals are granted, they may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the continuing corporation’s business or require changes to the terms of the transactions contemplated by the Merger Agreement.
+Added: There can be no assurance that regulators will not impose any such conditions, limitations, obligations, or restrictions or that such conditions, limitations, obligations, or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the Merger Agreement, imposing additional material costs on or materially limiting the revenues of the continuing corporation following the LNKB Merger, or otherwise reduce the anticipated benefits of the LNKB Merger.
+Added: In addition, there can be no assurance that any such conditions, limitations, obligations, or restrictions will not result in the delay or abandonment of the LNKB Merger.
+Added: Additionally, the completion of the LNKB Merger is conditioned on the absence of certain orders, injunctions, or decrees by any court or governmental entity of competent jurisdiction that would prohibit or make illegal the completion of the LNKB Merger.
+Added: Despite the parties’ commitments to using their reasonable best efforts to respond to any request for information and resolve any objection that may be asserted by any governmental entity with respect to the Merger Agreement, neither party is required, under the terms of the Merger Agreement, to take any action, commit to take any action, or agree to any condition or restriction in connection with obtaining these approvals that would reasonably be expected to have a material adverse effect on the continuing corporation and its subsidiaries, taken as a whole, after giving effect to the Holding Company Merger and the Bank Merger (measured on a scale relative to LNKB and its subsidiaries, taken as a whole).
+Added: The Merger Agreement may be terminated in accordance with its terms and the LNKB Merger may not be completed.
+Added: Such failure to complete the LNKB Merger could negatively impact the Company or LNKB.
+Added: The Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the LNKB Merger.
+Added: Those conditions include:
+Added: (i) approval by the Company’s and LNKB’s respective shareholders of the Merger Agreement and the transactions contemplated thereby;
+Added: (ii) authorization for listing on Nasdaq of the shares
+Added: of Company Common Stock that will be issuable pursuant to the Merger Agreement, subject to official notice of issuance;
+Added: (iii) the receipt of the requisite regulatory approvals;
+Added: (iv) effectiveness of the registration statement on Form S-4;
+Added: and (v) the absence of any order, injunction, decree, or other legal restraint preventing the completion of the Holding Company Merger or the Bank Merger or making the completion of the Holding Company Merger or the Bank Merger illegal.
+Added: Each party’s obligation to complete the LNKB Merger is also subject to certain additional customary conditions, including (a) subject to applicable materiality standards, the accuracy of the representations, and warranties of the other party, (b) the performance in all material respects by the other party of its obligations under the Merger Agreement, and (c) the receipt by each party of an opinion from its counsel to the effect that the LNKB Merger will qualify as a reorganization within the meaning of Section 368(a) of the Code.
+Added: These conditions to the closing may not be fulfilled in a timely manner or at all, and, accordingly, the LNKB Merger may not be completed.
+Added: In addition, the parties can mutually decide to terminate the Merger Agreement at any time, before or after the receipt of the requisite shareholder approvals, or the Company or LNKB may elect to terminate the Merger Agreement in certain other circumstances.
+Added: If the LNKB Merger is not completed for any reason, including as a result of the Company’s or LNKB’s shareholders failing to approve the Merger Agreement and the transactions contemplated thereby, there may be various adverse consequences and the Company and/or LNKB may experience negative reactions from the financial markets and from their respective customers and employees.
+Added: For example, the Company’s or LNKB’s businesses may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the LNKB Merger, without realizing any of the anticipated benefits of completing the LNKB Merger.
+Added: Additionally, if the Merger Agreement is terminated, the market price of the Company’s Common Stock or LNKB’s common stock could decline to the extent that current market prices reflect a market assumption that the LNKB Merger will be beneficial and will be completed.
+Added: The Company and/or LNKB could also be subject to litigation related to any failure to complete the LNKB Merger or to proceedings commenced against the Company or LNKB to perform their respective obligations under the Merger Agreement.
+Added: If the Merger Agreement is terminated under certain circumstances, either the Company or LNKB may be required to pay a termination fee of $14.2 million to the other party.
+Added: Additionally, each of the Company and LNKB has incurred and will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement, as well as the costs and expenses of preparing, filing, printing and mailing the joint proxy statement/prospectus, and all filing and other fees paid in connection with the LNKB Merger.
+Added: If the LNKB Merger is not completed, the Company and LNKB would have to pay these expenses without realizing the expected benefits of the LNKB Merger.
+Added: In connection with the LNKB Merger, we will assume LNKB’s outstanding debt obligations, and our level of indebtedness following the completion of the LNKB Merger could adversely affect our ability to raise additional capital and to meet our obligations under our existing indebtedness.
+Added: In connection with the LNKB Merger, we will assume LNKB’s outstanding indebtedness.
+Added: Our existing debt, together with the assumption of LNKB’s outstanding indebtedness and any future incurrence of additional indebtedness, could have important consequences for the continuing corporation’s creditors and the continuing corporation’s shareholders.
+Added: For example, it could:
+Added: • limit the continuing corporation’s ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions, and general corporate or other purposes;
+Added: • restrict the continuing corporation from making strategic acquisitions or cause the continuing corporation to make non-strategic divestitures;
+Added: • restrict the continuing corporation from paying dividends to its shareholders;
+Added: • increase the continuing corporation’s vulnerability to general economic and industry conditions; and
+Added: • require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on the continuing corporation’s indebtedness, thereby reducing the continuing corporation’s ability to use cash flows to fund its operations, capital expenditures, and future business opportunities.
+Added: The Company and LNKB will be subject to business uncertainties and contractual restrictions while the LNKB Merger is pending.
+Added: Uncertainty about the effect of the LNKB Merger on employees and customers may have an adverse effect on the Company and LNKB.
+Added: These uncertainties may impair the Company’s or LNKB’s ability to attract, retain, and motivate key personnel until the LNKB Merger is completed, and could cause customers and others that deal with the Company or LNKB to seek to change existing business relationships with the Company or LNKB.
+Added: In addition, subject to certain exceptions, the Company and LNKB have each agreed to operate its business in the ordinary course in all material respects and to refrain from taking certain actions that may adversely affect its ability to consummate the transactions contemplated by the Merger Agreement on a timely basis without the consent of the other party.
+Added: These restrictions may prevent the Company and/or LNKB from pursuing attractive business opportunities that may arise prior to the completion of the LNKB Merger.
+Added: Our shareholders and LNKB shareholders will have reduced ownership and voting interest in the continuing corporation after the consummation of the LNKB Merger and will exercise less influence over management.
+Added: Our shareholders and LNKB shareholders currently have the right to vote in the election of the board of directors and on other matters affecting Burke & Herbert and LNKB, respectively.
+Added: When the LNKB Merger is completed, each Burke & Herbert shareholder and each LNKB shareholder will become a holder of common stock of the continuing corporation, with a percentage ownership of the continuing corporation that is smaller than the holder’s percentage ownership of either the Company or LNKB individually, as applicable, prior to the consummation of the LNKB Merger.
+Added: Based on the number of shares of the Company’s Common Stock and LNKB’s common stock outstanding as of the close of business on the respective record dates for each company’s special meeting of shareholders, and based on the number of shares of the Company’s Common Stock expected to be issued in the LNKB Merger, the former LNKB shareholders, as a group, are estimated to own approximately 25% of the fully diluted shares of the continuing corporation immediately after the LNKB Merger and current shareholders of the Company as a group are estimated to own approximately 75% of the fully diluted shares of the continuing corporation immediately after the LNKB Merger.
+Added: Additionally, two LNKB continuing director will join the board of directors of the continuing corporation as of the effective time, and the board of directors of the continuing corporation will be expanded to 17 directors.
+Added: Because of this, LNKB shareholders may have less influence on the management and policies of the continuing corporation than they now have on the management and policies of LNKB, and our shareholders may have less influence on the management and policies of the continuing corporation than they now have on the management and policies of the Company.
+Added: Interest rate volatility may adversely impact the fair value adjustments of investments and loans acquired in the LNKB Merger.
+Added: Upon the closing of the LNKB Merger, the continuing corporation will need to adjust the fair value of LNKB’s investment and loan portfolios.
+Added: Volatility in the interest rate environment could have the effect of increasing the magnitude of the purchase accounting marks relating to such fair value adjustments, thereby increasing initial tangible book value dilution, extending the tangible book value earn-back period, and negatively impacting the continuing corporation’s capital ratios, which may result in the continuing corporation taking steps to strengthen its capital position.
+Added: The dilution caused by the issuance of shares of the Company’s Common Stock in connection with the LNKB Merger may adversely affect the market price of the Company’s Common Stock.
+Added: The dilution caused by the issuance of the new shares of the Company’s Common Stock to LNKB shareholders in connection with the payment of the LNKB Merger consideration may result in fluctuations in the market price of the Company’s Common Stock, including a stock price decrease.
+Added: Issuance of shares of the Company’s Common Stock in connection with the LNKB Merger may adversely affect the market price of the Company’s Common Stock.
+Added: In connection with the payment of the LNKB Merger consideration, the Company expects to issue approximately 5.1 million shares of the Company’s Common Stock to LNKB shareholders.
+Added: The issuance of these new shares of the Company’s Common Stock may result in fluctuations in the market price of the Company’s Common Stock, including a stock price decrease.
+Added: The market price of the Company’s Common Stock after the LNKB Merger may be affected by factors different from those currently affecting the shares of the Company’s Common Stock or LNKB common Stock.
+Added: At the effective time of the LNKB Merger, LNKB shareholders will become shareholders of the Company.
+Added: The Company’s business differs from that of LNKB and certain adjustments may be made to the Company’s business as a result of the LNKB Merger.
+Added: Accordingly, the results of operations of the continuing corporation and the market price of the Company’s Common Stock after the completion of the LNKB Merger may be affected by factors different from those currently affecting the independent results of operations of each of the Company and LNKB.
+Added: Shareholder litigation could prevent or delay the completion of the LNKB Merger or otherwise negatively impact the business and operations of the Company and LNKB.
+Added: Shareholders of the Company and/or of LNKB may file lawsuits against the Company, LNKB and/or the directors and officers of either company in connection with the LNKB Merger.
+Added: One of the conditions to the closing is that no order, injunction or decree issued by any court or governmental entity of competent jurisdiction or other legal restraint preventing the consummation of the Holding Company Merger, the Bank Merger or any of the other transactions contemplated by the Merger Agreement be in effect.
+Added: If any plaintiff were successful in obtaining an injunction prohibiting the Company or LNKB defendants from completing the Holding Company Merger, the Bank Merger or any of the other transactions contemplated by the Merger Agreement, then such injunction may delay or prevent the effectiveness of the LNKB Merger and could result in significant costs to the Company and/or LNKB, including any cost associated with the indemnification of directors and officers of each company.
+Added: The Company and LNKB may incur costs in connection with the defense or settlement of any shareholder lawsuits filed in connection with the LNKB Merger.
+Added: Such litigation could have an adverse effect on the financial condition and results of operations of the Company and LNKB and could prevent or delay the completion of the LNKB Merger.
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.