−Removed: In addition to the other information contained in this Quarterly Report on Form 10-Q, we refer to the risk factors previously disclosed in our Annual Report on Form 10- K for the fiscal year ended December 31, 2021 as filed with the Securities and Exchange Commission.
−Removed: Additional risks not presently known to us, or that we currently deem immaterial, may also adversely affect our business, financial condition or results of operations.
−Removed: Further, to the extent that any of the information contained in this Quarterly Report on Form 10-Q constitutes forward-looking statements, the cautionary statement identifying important factors that could cause our actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of us.
+Added: The following discussion supplements the discussion of risk factors affecting us as set forth in Part I, Item 1A.
+Added: Risk Factors, of our 2022 Annual Report on Form 10-K.
+Added: The discussion of risk factors, as so supplemented, provides a description of some of the important risk factors that could affect our actual results and could cause our results to vary materially from those expressed in public statements or documents.
+Added: However, other factors besides those included in the discussion of risk factors, as so supplemented, or discussed elsewhere in other of our reports filed with or furnished to the SEC could affect our business or results.
+Added: Recent negative developments affecting the banking industry, and resulting media coverage, have eroded customer confidence in the banking system.
+Added: The recent high-profile bank failures involving Silicon Valley Bank, Signature Bank and First Republic Bank have generated significant market volatility among publicly traded bank holding companies and, in particular, regional banks like the Company.
+Added: These market developments have negatively impacted customer confidence in the safety and soundness of regional banks.
+Added: As a result, customers may choose to maintain deposits with larger financial institutions or invest in higher yielding short-term fixed income securities, all of which could materially adversely impact the Company’s liquidity, loan funding capacity, net interest margin, capital and results of operations.
+Added: While the Department of the Treasury, the Federal Reserve, and the FDIC have made statements ensuring that depositors of these recently failed banks would have access to their deposits, including uninsured deposit accounts, there is no guarantee that such actions will be successful in restoring customer confidence in regional banks and the banking system more broadly.
+Added: Rising interest rates have decreased the value of the Company’s securities portfolio, and the Company would realize losses if it were required to sell such securities to meet liquidity needs.
+Added: As a result of inflationary pressures and the resulting rapid increases in interest rates over the last year, the trading value of previously issued government and other fixed income securities has declined significantly.
+Added: These securities make up a majority
+Added: of the securities portfolio of most banks in the U.S., including the Company’s.
+Added: While the Company does not currently intend to sell these securities, if the Company were required to sell such securities to meet liquidity needs, it may incur losses, which could impair the Company’s capital, financial condition, and results of operations and require the Company to raise additional capital on unfavorable terms, thereby negatively impacting its profitability.
+Added: While the Company has taken actions to maximize its funding sources, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs.
+Added: Furthermore, while the Federal Reserve Board has announced a Bank Term Funding Program available to eligible depository institutions secured by U.S.
+Added: treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral at par, to mitigate the risk of potential losses on the sale of such instruments, there is no guarantee that such programs will be effective in addressing liquidity needs as they arise.
+Added: Any regulatory examination scrutiny or new regulatory requirements arising from the recent events in the banking industry could increase the Company’s expenses and affect the Company’s operations.
+Added: The Company also anticipates increased regulatory scrutiny – in the course of routine examinations and otherwise – and new regulations directed towards banks of similar size to the Company, designed to address the recent negative developments in the banking industry, all of which may increase the Company’s costs of doing business and reduce its profitability.
+Added: Among other things, there may be an increased focus by both regulators and investors on deposit composition and the level of uninsured deposits.
+Added: As primarily a commercial bank, the Company has a high degree of uninsured deposits compared to larger national banks or smaller community banks with a stronger focus on retail deposits.
+Added: As a result, the Company could face increased scrutiny or be viewed as higher risk by regulators and the investor community.
+Added: We could experience an unexpected inability to obtain needed liquidity which could adversely affect our business, financial condition, and results of operation.
+Added: Liquidity measures the ability to meet current and future cash flow needs as they become due.
+Added: The liquidity of a financial institution reflects its ability to meet loan requests, to accommodate possible outflows in deposits, and to take advantage of interest rate market opportunities and is essential to a financial institution’s business.
+Added: The ability of a financial institution to meet its current financial obligations is a function of its balance sheet structure, its ability to liquidate assets, and its access to alternative sources of funds.
+Added: The bank failures in March 2023 exemplify the potential serious results of the unexpected inability of insured depository institutions to obtain needed liquidity to satisfy deposit withdrawal requests, including how quickly such requests can accelerate once uninsured depositors lose confidence in an institutions ability to satisfy its obligations to depositors.
+Added: We seek to ensure our funding needs are met by maintaining a level of liquidity through asset and liability management.
+Added: If we become unable to obtain funds when needed, it could have a material adverse effect on our business, financial condition, and results of operations.
+Added: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
+Added: During the three months ended March 31, 2023, the Company did not repurchase or retire any shares.
+Added: DEFAULTS UPON SENIOR SECURITIES
+Added: None to report.
+Added: MINE SAFETY DISCLOSURES
+Added: None to report.
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