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Please refer to the section in this Form 10-K entitled “Special Cautionary Notice Regarding Forward-Looking Statements” for additional information regarding forward-looking statements.
−Removed: Strategic Risks
−Removed: Our business strategy includes strategic growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.
−Removed: We intend to continue pursuing a growth strategy for our business.
−Removed: Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by growing companies such as the continuing need for infrastructure and personnel, the time and costs inherent in integrating a series of different operations and the ongoing expense of acquiring and staffing new banks or branches.
−Removed: We may not be able to expand our presence in our existing markets or successfully enter new markets and any expansion could adversely affect our results of operations.
−Removed: Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations, and could adversely affect our ability to successfully implement our business strategy.
−Removed: Our ability to grow successfully will depend on a variety of factors, including the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market areas and our ability to manage our growth.
−Removed: Although there can be no assurance of success or the availability of branch or financial services acquisitions in the future, we may seek to supplement our internal growth through attractive acquisitions.
−Removed: We cannot predict the number, size or timing of acquisitions, or whether any such acquisition will occur at all.
−Removed: Our acquisition efforts have traditionally focused on targeted entities in markets in which we currently operate and markets in which we believe we can compete effectively.
−Removed: However, as consolidation of the financial services industry continues, the competition for suitable acquisition candidates may increase and, as the number of appropriate targets decreases, the prices for potential acquisitions could increase which could reduce our potential returns, and reduce the attractiveness of these opportunities to us.
−Removed: We may compete with other financial services companies for acquisition opportunities, and many of these competitors have greater financial resources than we do and may be able to pay more for an acquisition than we are able or willing to pay.
−Removed: We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated.
−Removed: If competitors introduce new products and services embodying new technologies, or if new industry standards and practices emerge, our existing product and service offerings, technology and systems may become obsolete.
−Removed: Further, if we fail to adopt or develop new technologies or to adapt our products and services to emerging industry standards, we may lose current and future customers, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: The financial services industry is changing rapidly and in order to remain competitive, we must continue to enhance and improve the functionality and features of our products, services and technologies.
−Removed: These changes may be more difficult or expensive than we anticipate.
−Removed: New lines of business, products or services and technological advancements may subject us to additional risks.
−Removed: From time to time, we implement new lines of business or offer new products and services within existing lines of business.
−Removed: There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed.
−Removed: In developing and marketing new lines of business and/or new products and services we invest significant time and resources.
−Removed: Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible.
−Removed: External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service.
−Removed: The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.
−Removed: Our future success depends, 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, as well as to create additional efficiencies in our operations.
−Removed: Many of our competitors have substantially greater resources to invest in technological improvements.
−Removed: We may not be able to effectively implement new technology driven products and services or be successful in marketing these products and services to our customers.
−Removed: In addition, our implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, in our business processes may have unintended consequences due to their limitations or our failure to use them effectively.
−Removed: In addition, cloud technologies are also critical to the operation of our systems, and our reliance on cloud technologies is growing.
−Removed: Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Furthermore, any new line of business, new product or service and/or new technology could have a significant impact on the effectiveness of our system of internal controls.
−Removed: Failure to successfully manage these risks in the development and implementation of new lines of business, new products or services and/or new technologies could have a material adverse effect on our business, financial condition and results of operations.
−Removed: We may not be able to successfully integrate our acquisitions or to realize the anticipated benefits of them.
−Removed: A successful integration of each acquired business with ours will depend substantially on our ability to successfully consolidate operations, corporate cultures, systems and procedures and to eliminate redundancies and costs.
−Removed: While we have substantial experience in successfully integrating institutions we have acquired, we may encounter difficulties during integration, such as:
−Removed: ● the loss of key employees;
−Removed: ● the disruption of operations and businesses;
−Removed: ● loan and deposit attrition, customer loss and revenue loss;
−Removed: ● possible inconsistencies in standards, control procedures and policies;
−Removed: ● unexpected issues with expected branch closures;
−Removed: ● unexpected issues with costs, operations, personnel, technology and credit;
−Removed: all of which could divert resources from regular banking operations.
−Removed: Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit our successful merger integrations.
−Removed: Further, we acquire businesses with the expectation that these mergers will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, technology, cost savings and operating efficiencies.
−Removed: Achieving the anticipated benefits of these mergers is subject to a number of uncertainties, including whether we integrate these institutions in an efficient and effective manner, and general competitive factors in the marketplace.
−Removed: Failure to achieve these anticipated benefits could result in a reduction in the price of our shares as well as in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy and could materially and adversely affect our business, financial condition and operating results.
−Removed: Operational Risks
−Removed: We rely on third-party vendors to provide key components of our business infrastructure.
−Removed: Third-party vendors provide key components of our business operations such as data processing, recording and monitoring transactions, online banking interfaces and services, Internet connections and network access.
−Removed: We have selected these third-party vendors carefully and have conducted the due diligence consistent with regulatory guidance and best practices.
−Removed: While we have ongoing programs to review third-party vendors and assess risk, we do not control their actions.
−Removed: Any problems caused by these third parties, including those resulting from disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breaches at a vendor, failure of a vendor to provide services for any reason or poor performance of services, could adversely affect our ability to deliver products and services to our customers and otherwise conduct our business.
−Removed: Financial or operational difficulties of a third-party vendor could also hurt our operations if those difficulties interfere with the vendor’s ability to serve us.
−Removed: Furthermore, our vendors could also be sources of operational and information security risk to us, including from breakdowns or failures of their own systems or capacity constraints.
−Removed: Replacing these third-party vendors could also create significant delay and expense.
−Removed: Accordingly, use of such third parties creates an unavoidable inherent risk to our business operations.
−Removed: We face significant cyber and data security risk that could result in the disclosure of confidential information, adversely affect our business or reputation and expose us to significant liabilities.
−Removed: As a financial institution, we are under threat of loss due to hacking and cyber-attacks.
−Removed: This risk has increased in recent years, and continues to increase, as we continue to expand customer capabilities to utilize internet and other remote channels to transact business.
−Removed: Two of the most significant cyber-attack risks that we face are e-fraud and loss of sensitive customer data.
−Removed: Loss from e-fraud occurs when cybercriminals breach and extract funds directly from customer or our accounts.
−Removed: The attempts to breach sensitive customer data, such as account numbers and social security numbers, are less frequent but would present significant reputational, legal and/or regulatory costs to us if successful.
−Removed: 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.
−Removed: While we have not experienced any material losses relating to cyber-attacks or other information security breaches since 2017, we have been subject of hacking and cyber-attack and there can be no assurance that we will not suffer additional losses in the future.
−Removed: In response to the COVID-19 pandemic, we have modified our business practices with a portion of our employees working remotely from their homes to have our operations uninterrupted as much as possible.
−Removed: Technology in employees’ homes may not be as robust as in our offices and could cause the networks, information systems, applications, and other tools available to employees to be more limited or less reliable than in our offices.
−Removed: The continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risk.
−Removed: These cyber risks include greater phishing, malware, and other cybersecurity attacks, vulnerability to disruptions of our information technology infrastructure and telecommunications systems for remote operations, increased risk of unauthorized dissemination of confidential information, limited ability to restore the systems in the event of a systems failure or interruption, greater risk of a security breach resulting in destruction or misuse of valuable information, and potential impairment of our ability to perform critical functions, including wiring funds, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations and the operations of any impacted customers.
−Removed: The occurrence of any cyber-attack or information security breach could result in material adverse consequences to us including damage to our reputation and the loss of customers.
−Removed: We also could face litigation or additional regulatory scrutiny.
−Removed: Litigation or regulatory actions in turn could lead to significant liability or other sanctions, including fines and penalties or reimbursement of customers adversely affected by security breach.
−Removed: Even if we do not suffer any material adverse consequences as a result of other future events, successful attacks or systems failures at the Bank or at other financial institutions could lead to a general loss of customer confidence in financial institutions including the Bank.
−Removed: Our ability to mitigate the adverse consequences of occurrences is in part dependent on the quality of our information security procedures and contracts and our ability to anticipate the timing and nature of any such event that occurs.
−Removed: In recent years, we have incurred significant expense towards improving the reliability of our systems and their security from attack.
−Removed: Nonetheless, there remains the risk that we may be materially harmed by cyber-attacks and information security breaches in the future.
−Removed: Methods used to attack information systems change frequently (with generally increasing sophistication), often are not recognized until launched against a target, may be supported by foreign governments or other well-financed entities, and may originate from less regulated and remote areas around the world.
−Removed: As a result, we may be unable to address these methods in advance of attacks, including by implementing adequate preventive measures.
−Removed: If such an attack or breach does occur, we might not be able to fix it timely or adequately.
−Removed: To the extent that such an attack or breach relates to products or services provided by others, we seek to engage in due diligence and monitoring to limit the risk.
−Removed: In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.
−Removed: We are dependent on key personnel and the loss of one or more of those key personnel could impair our relationship with our customers and adversely affect our business.
−Removed: Many community banks attract customers based on the personal relationships that the banks’ officers and customers establish with each other and the confidence that the customers have in the officers.
−Removed: We significantly depend on the continued service and performance of our key management personnel.
−Removed: We also believe our management team’s depth and breadth of experience in the banking industry is integral to executing our business plan.
−Removed: The loss of the services of members of our senior management team or other key employees or the inability to attract additional qualified personnel as needed could have a material adverse effect on our business.
We are subject to risks related to our concentration of construction and land development and commercial real estate loans.
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Our practice, in the majority of instances, is to secure the personal guaranty of individuals in support of our real estate construction and land development loans which provides us with an additional source of repayment.
−Removed: As of December 31, 2021, we did not have any nonperforming construction and land development loans and had $266 thousand of assets that have been foreclosed.
+Added: As of December 31, 2022, we did not have any nonperforming construction and land development loans.
If one or more of our larger borrowers were to default on their construction and land development loans, and we did not have alternative sources of repayment through personal guarantees or other sources, or if any of the aforementioned risks were to occur, we could incur significant losses.
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If loans that are collateralized by real estate become troubled during a time when market conditions are declining or have declined, then we may not be able to realize the full value of the collateral that we anticipated at the time of originating the loan, which could require us to increase our provision for credit losses and adversely affect our financial condition and results of operations.
+Added: As of December 31, 2022, 40.3% of our loan portfolio was comprised of loans secured by commercial real estate, including multi-family residential loans and loans secured by farmland.
As of December 31, 2022, $674.9 million, or approximately 22.9% of our total loans, were secured by single-family residential real estate.
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If housing prices in our market areas do not remain strong or deteriorate, we may experience an increase in nonperforming loans, provision for credit losses and charge-offs.
−Removed: If the value of real estate in our market areas were to decline materially, a significant portion of our loan portfolio could become under-collateralized, which could have a material adverse effect on our asset quality, capital structure and profitability.
−Removed: As of December 31, 2021, 49.1% of our loan portfolio was comprised of loans secured by commercial real estate, including multi-family residential loans and loans secured by farmland.
−Removed: In the majority of these loans, real estate was the primary collateral component.
−Removed: In some cases we take real estate as security for a loan even when it is not the primary component of collateral.
−Removed: The real estate collateral that provides the primary or an alternate source of repayment in the event of default may deteriorate in value during the term of the loan as a result of changes in economic conditions, fluctuations in interest rates and the availability of loans to potential purchasers, changes in tax and other laws and acts of nature.
If we are required to liquidate the collateral securing a loan to satisfy the debt during a period of reduced real estate values, our earnings and capital could be adversely affected.
−Removed: We are subject to increased lending risks in the form of loan defaults as a result of the high concentration of real estate lending in our loan portfolio.
−Removed: A weak real estate market in our primary market areas could have an adverse effect on the demand for new loans, the ability of borrowers to repay outstanding loans, the value of real estate and other collateral securing the loans and the value of real estate owned by us.
−Removed: If real estate values decline, it is also more likely that we would be required to increase our allowance for credit losses, which could adversely affect our financial condition and results of operations.
If our nonperforming assets increase, our earnings will suffer.
−Removed: At December 31, 2021, our nonperforming assets (which consist of nonaccrual loans, loans past due 90 days and accruing and OREO) totaled $16.5 million, or 0.70% of total loans and OREO, which is a decrease of $1.1 million, or 6.1%, compared with non-covered nonperforming assets (which consist of non-covered nonaccrual loans, loans past due 90 days and accruing and OREO), which totaled $17.5 million, or 0.72% of total non-covered loans and OREO at December 31, 2020.
−Removed: At December 31, 2019, our non-covered nonperforming assets were $15.1 million, or 0.69% of total non-covered loans and OREO.
−Removed: Economic and market conditions are unstable, and although our nonperforming assets as a percentage of total loans and OREO has improved, we may incur losses if there is an increase in nonperforming assets in the future.
+Added: At December 31, 2022, our nonperforming assets (which consist of nonaccrual loans, loans past due 90 days and accruing and OREO) totaled $38.8 million, or 1.32% of total loans and OREO, which is an increase of $22.4 million, or 135.8%, compared with nonperforming assets of $16.5 million, or 0.70% of total non-covered loans and OREO at December 31, 2021.
+Added: At December 31, 2020, our non-covered nonperforming assets (which consist of non-covered nonaccrual loans, loans past due 90 days and accruing and OREO) totaled $17.5 million, or 0.72% of total non-covered loans and OREO.
+Added: Economic and market conditions are unstable, and although our nonperforming assets as a percentage of total loans and OREO remains manageable, we may incur losses if there is an increase in nonperforming assets in the future.
Our nonperforming assets adversely affect our net income in various ways.
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Additionally, there are legal fees associated with the resolution of problem assets as well as carrying costs such as taxes, insurance and maintenance related to our OREO.
−Removed: Further, the resolution of nonperforming assets requires the active involvement of management, which can distract
−Removed: them from more profitable activity.
+Added: Further, the resolution of nonperforming assets requires the active involvement of management, which can distract them from more profitable activity.
Finally, an increase in the level of nonperforming assets increases our regulatory risk profile.
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A material addition to the allowance for credit losses could cause our earnings to decrease.
−Removed: Due to the relatively unseasoned nature of our loan portfolio, we may experience an increase in delinquencies and losses as these loans continue to mature.
+Added: Due to the relatively unseasoned nature of portions of our loan portfolio, we may experience an increase in delinquencies and losses as these loans continue to mature.
In addition, federal regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or recognize further charge-offs, based on judgments different than those of our management.
−Removed: Any significant increase in our allowance for credit losses or charge-offs required by these regulatory agencies could have a material adverse effect on our results of operations and financial condition.
+Added: Any significant increase in our allowance for credit losses or charge-offs required by these regulatory agencies would result in a decrease in net income and capital and could have a material adverse effect on our results of operations and financial condition.
We are subject to credit quality risks and our credit policies may not be sufficient to avoid losses.
We are subject to the risk of losses resulting from the failure of borrowers, guarantors and related parties to pay interest and principal amounts on their loans.
−Removed: Although we maintain credit policies and credit underwriting, monitoring and collection procedures, these policies and procedures may not prevent losses, particularly during periods in which the local, regional or national economy suffers a general decline.
+Added: Although we maintain credit policies and credit underwriting, monitoring and
+Added: collection procedures, these policies and procedures may not prevent losses, particularly during periods in which the local, regional or national economy suffers a general decline.
If borrowers fail to repay their loans, our financial condition and results of operations would be adversely affected.
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treasury repurchase market.
+Added: On December 16, 2022, the FRB adopted a final rule that implements the Adjustable Interest Rate (LIBOR) Act by identifying benchmark rates based on SOFR that will replace LIBOR in certain financial contracts after June 30, 2023.
At this time, various iterations of the SOFR index are being used within the market, as are other indices such as the Bloomberg Short-Term Bank Yield index and the American Financial Exchange's AMERIBOR index.
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The manner and impact of this transition, as well as the effect of these developments on our funding costs, loan, and investment and trading securities portfolios, asset liability management and business are uncertain.
+Added: The Company’s mortgage revenue is cyclical and is sensitive to the level of interest rates, changes in economic conditions, decreased economic activity, and slowdowns in the housing market, any of which could adversely impact our profits.
+Added: The Bank originates residential mortgage loans through Primis Mortgage Company which lends to borrowers nationwide.
+Added: The success of our mortgage business is dependent upon its ability to originate loans and sell them to investors, in each case at or near current volumes.
+Added: Loan production levels are sensitive to changes in the level of interest rates and changes in economic conditions.
+Added: Loan production levels may suffer if we experience a slowdown in housing markets, tightening credit conditions or increasing interest rates.
+Added: Any sustained period of decreased activity caused by fewer refinancing transactions, higher interest rates, housing price pressure, or loan underwriting restrictions would adversely
+Added: affect our mortgage originations and, consequently, could significantly reduce our income from mortgage activities.
+Added: As a result, these conditions would also adversely affect the Company’s results of operations.
+Added: Deteriorating economic conditions may also cause home buyers to default on their mortgages.
+Added: In certain cases, where the we have originated loans and sold them to investors, we may be required to repurchase loans or provide a financial settlement to investors if it is proven that the borrower failed to provide full and accurate information on, or related to, their loan application, if appraisals for such properties have not been acceptable or if the loan was not underwritten in accordance with the loan program specified by the loan investor.
+Added: In the ordinary course of business, we record an indemnification reserve relating to mortgage loans previously sold based on historical statistics and loss rates.
+Added: If such reserves were insufficient to cover claims from investors, such repurchases or settlements would adversely affect our results of operations.
Our profitability depends significantly on local economic conditions in the areas where our operations and loans are concentrated, and our geographic concentration makes us vulnerable to local weather catastrophes, public health issues, and other external events, which could adversely affect our results of operations and financial condition.
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Unlike larger banks that are more geographically diversified, we provide banking and financial services to clients primarily in these market areas.
−Removed: As of December 31, 2021, substantially all of our commercial real estate, real estate construction and residential real estate loans were made to borrowers in our market area.
+Added: As of December 31, 2022, a significant portion of our commercial real estate, real estate construction and residential real estate loans were made to borrowers in our market area.
The local economic conditions in this area have a significant impact on our commercial, real estate and construction and consumer loans, the ability of the borrowers to repay these loans and the value of the collateral securing these loans.
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The majority of our assets and liabilities are monetary in nature and subject us to significant risk from changes in interest rates.
−Removed: Fluctuations in interest rates are not predictable or controllable.
+Added: These rates are highly sensitive to many factors beyond our control, including general economic conditions and the policies of the Federal Reserve and other governmental and regulatory agencies.
Like most financial institutions, changes in interest rates can impact our net interest income as well as the valuation of our assets and liabilities, which is the difference between interest earned from interest-earning assets, such as loans and investment securities, and interest paid on interest-bearing liabilities, such as deposits and borrowings.
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In either event, if market interest rates should move contrary to our position, this “gap” will negatively impact our earnings.
−Removed: Many factors impact interest rates, including governmental monetary policies, inflation, recession, changes in unemployment, the money supply, and international disorder and instability in domestic and foreign financial markets.
−Removed: Based on our analysis of the interest rate sensitivity of our assets, an increase in the general level of interest rates may negatively affect the market value of the portfolio equity, but will positively affect our net interest income since most of our assets have floating rates of interest that adjust fairly quickly to changes in market rates of interest.
−Removed: Additionally, an increase in interest rates may, among other things, reduce the demand for loans and our ability to originate loans.
−Removed: A decrease in the general level of interest rates may affect us through, among other things, increased prepayments on our loan and mortgage-backed securities portfolios and increased competition for deposits.
−Removed: Accordingly, changes in the level of market interest rates affect our net yield on interest-earning assets, loan origination volume, loan and mortgage-backed securities portfolios, and our overall results.
−Removed: Although our asset liability management strategy is designed to control our risk from changes in market interest rates, it may not be able to prevent changes in interest rates from having a material adverse effect on our results of operations and financial condition.
+Added: Based on our analysis of the interest rate sensitivity of our assets, an increase in the general level of interest rates may negatively affect the market value of the portfolio equity as well as negatively affect our net interest income since a majority of our assets are fixed rate loans.
+Added: Additionally, an increase in interest rates may, among other things, reduce the demand for loans and our ability to originate loans as well as increase our funding costs.
+Added: A decrease in the general level of interest rates may affect us through, among other things, increased prepayments on our loan and mortgage-backed securities portfolios, but also allow us to reduce funding costs.
+Added: Accordingly, changes in the level of market interest rates affect our net yield on interest-earning assets, loan origination volume, loan and mortgage-backed securities portfolios, funding, and our overall results.
+Added: While it is expected that the FRB will continue to increase the target federal funds rate in 2023 to combat recent inflationary trends, we are unable to predict changes in interest rates, which are affected by factors beyond our control, including inflation, deflation, recession, unemployment, money supply, and other changes in financial markets.
+Added: Although our asset liability management strategy is designed to keep our risk within acceptable parameters, it may not be able to prevent changes in interest rates from having a material adverse effect on our results of operations and financial condition.
+Added: Unstable global economic conditions may have serious adverse consequences on our business, financial condition, and operations.
+Added: We are operating in an uncertain economic environment.
+Added: The global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence declines in economic growth, increases in unemployment rates, high rates of inflation, and uncertainty about economic stability and a potential recession.
+Added: government's decisions regarding its debt ceiling and the possibility that the U.S.
+Added: could default on its debt obligations may cause further interest rate increases, disrupt access to capital markets, and deepen recessionary conditions.
+Added: While our management team continually monitors market conditions and economic factors, throughout our footprint, we are unable to predict the duration or severity of such conditions or factors.
+Added: If conditions were to worsen nationally, regionally, or locally, then we could see a sharp increase in our total net charge-offs and also be required to significantly increase our allowance for credit losses.
+Added: Furthermore, the demand for loans and our other products and services could decline.
+Added: An increase in our non-performing assets and related increases in our provision for loan losses, coupled with a potential decrease in the demand for loans and other products and services, could negatively affect our business and could have a material adverse effect on our capital, financial condition, results of operations, and future growth.
+Added: Our clients may also be adversely impacted by changes in regulatory, trade (including tariffs), and tax policies and laws, all of which could reduce demand for loans and adversely impact our borrowers' ability to repay our loans.
+Added: There can be no assurance that further deterioration in markets and confidence in economic conditions will not occur.
+Added: Our general business strategy may be adversely affected by any such economic downturn or recession, volatile business environment, hostile third-party action, or continued unpredictable and unstable market conditions.
+Added: The effects of any economic downturn or recession could continue for many years after the downturn or recession is considered to have ended.
Declines in asset values may result in impairment charges and adversely affect the value of our investment securities, financial performance and capital.
−Removed: We maintain an investment securities portfolio that includes, but is not limited to, collateralized mortgage obligations, agency mortgage-backed securities and pooled trust preferred securities.
+Added: We maintain an investment securities portfolio that includes, but is not limited to, collateralized mortgage obligations, agency mortgage-backed securities and municipal securities.
The market value of investment securities may be affected by factors other than the underlying performance of the issuer or composition of the bonds themselves, such as ratings downgrades, adverse changes in the business climate and a lack of liquidity for resales of certain investment securities.
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Additionally, inflation may lead to a decrease in consumer and client’s purchasing power and negatively affect the need or demand for our products and services.
−Removed: If significant inflation continues, our business could be negatively affected by, among other things, increased default rates leading to credit losses which could
−Removed: decrease our appetite for new credit extensions.
+Added: If significant inflation continues, our business could be negatively affected by, among other things, decreases in loan collateral values and increased default rates leading to credit losses which could decrease our appetite for new credit extensions.
These inflationary pressures could result in missed earnings and budgetary projections causing our stock price to suffer.
−Removed: Changes in the policies of monetary authorities and other government action could adversely affect our profitability.
−Removed: Interest rates and our financial performance are affected by credit policies of monetary authorities, particularly the Federal Reserve.
−Removed: The instruments of monetary policy employed by the Federal Reserve include open market transactions in U.S.
−Removed: government securities, changes in the discount rate or the federal funds rate on bank borrowings and changes in reserve requirements against bank deposits.
−Removed: In view of changing conditions in the national economy and in the money markets, we cannot predict the potential impact of future changes in interest rates, deposit levels, and loan demand on our business and earnings.
−Removed: Furthermore, the actions of the U.S.
−Removed: government and other governments may result in currency fluctuations, exchange controls, market disruption, material decreases in the values of certain of our financial assets and other adverse effects.
−Removed: The Federal Reserve reduced rates to near zero in March 2020 in response to economic disruption that occurred at the outset of the COVID-19 pandemic, which has continued into 2022.
−Removed: The prolonged period of low interest rates has and is expected to continue to cause downward pressure on our net interest margin, including reduced yield on our variable rate loans and on new loans, and realized yields on investments securities.
−Removed: Further rate changes are dependent on the Federal Reserve’s assessment of economic data as it becomes available.
−Removed: We expect the Federal Reserve to raise rates more than once in the next twelve months.
−Removed: Historically, when the Federal Reserve Board increases the Fed Funds rate, overall interest rates have also risen, which may negatively impact the U.S.
−Removed: economy, and could have a negative impact on our business by reducing the amount of money our customers borrow or by adversely affecting their ability to repay outstanding loan balances that may increase due to adjustments in their variable rates.
−Removed: In addition, in a rising interest rate environment we may have to offer more attractive interest rates to depositors to compete for deposits, or pursue other sources of liquidity, such as wholesale funds.
−Removed: Further, when interest-bearing liabilities reprice or mature more quickly than interest-earning assets, an increase in interest rates generally would tend to result in a decrease in net interest income.
−Removed: Changes in monetary policy, including changes in interest rates, could influence (i) the amount of interest we receive on loans and securities, (ii) the amount of interest we pay on deposits and borrowings, (iii) our ability to originate loans and obtain deposits, (iv) the fair value of our assets and liabilities, and (v) the reinvestment risk associated with changes in the duration of our mortgage-backed securities portfolio.
+Added: ESG risks could adversely affect our reputation and shareholder, employee, client, and third party relationships and may negatively affect our stock price.
+Added: Our business faces increasing public scrutiny related to ESG activities.
+Added: We risk damage to our brand and reputation if we fail to act responsibly in a number of areas, such as DEI, environmental stewardship, including with respect to climate change, human capital management, support for our local communities, corporate governance, and transparency, or fail to consider ESG factors in our business operations.
+Added: Furthermore, as a result of our diverse base of clients and business partners, we may face potential negative publicity based on the identity of our clients or business partners and the public’s (or certain segments of the public’s) view of those entities.
+Added: Such publicity may arise from traditional media sources or from social media and may increase rapidly in size and scope.
+Added: If our client or business partner relationships were to become intertwined in such negative publicity, our ability to attract and retain clients, business partners, and employees may be negatively impacted, and our stock price may also be negatively impacted.
+Added: Additionally, we may face pressure to not do business in certain industries that are viewed as harmful to the environment or are otherwise negatively perceived, which could impact our growth.
+Added: Additionally, investors and shareholder advocates are placing ever increasing emphasis on how corporations address ESG issues in their business strategy when making investment decisions and when developing their investment theses and proxy recommendations.
+Added: We may incur meaningful costs with respect to our ESG efforts and if such efforts are negatively perceived, our reputation and stock price may suffer.
+Added: Operational Risks
+Added: Our business strategy includes strategic growth, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.
+Added: We intend to continue pursuing a growth strategy for our business.
+Added: Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by growing companies such as the continuing need for infrastructure and personnel, the time and costs inherent in integrating a series of different operations and the ongoing expense of acquiring and staffing new banks or branches.
+Added: We may not be able to expand our presence in our existing markets or successfully enter new markets and any expansion could adversely affect our results of operations.
+Added: Failure to manage our growth effectively could have a material adverse effect on our business, future prospects, financial condition or results of operations, and could adversely affect our ability to successfully implement our business strategy.
+Added: Our ability to grow successfully will depend on a variety of factors, including the continued availability of desirable business opportunities, the competitive responses from other financial institutions in our market areas and our ability to manage our growth.
+Added: Although there can be no assurance of success or the availability of branch or financial services acquisitions in the future, we may seek to supplement our internal growth through attractive acquisitions.
+Added: We cannot predict the number, size or timing of acquisitions, or whether any such acquisition will occur at all.
+Added: Our acquisition efforts have traditionally focused on targeted entities in markets in which we currently operate and markets in which we believe we can compete effectively.
+Added: However, as consolidation of the financial services industry continues, the competition for suitable acquisition candidates may increase and, as the number of appropriate targets decreases, the prices for potential acquisitions could increase which could reduce our potential returns, and reduce the attractiveness of these opportunities to us.
+Added: We may compete with other financial services companies for acquisition opportunities, and many of these competitors have greater financial resources than we do and may be able to pay more for an acquisition than we are able or willing to pay.
+Added: We must respond to rapid technological changes and these changes may be more difficult or expensive than anticipated.
+Added: If competitors introduce new products and services embodying new technologies, or if new industry standards and practices emerge, our existing product and service offerings, technology and systems may become obsolete.
+Added: Further, if we fail to adopt or develop new technologies or to adapt our products and services to emerging industry standards, we may lose current and future customers, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: The financial services industry is changing rapidly and in order to remain competitive, we must continue to enhance and improve the functionality and features of our products, services and technologies.
+Added: These changes may be more difficult or expensive than we anticipate.
+Added: New lines of business, products or services and technological advancements may subject us to additional risks.
+Added: From time to time, we implement new lines of business or offer new products and services within existing lines of business.
+Added: There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed.
+Added: In developing and marketing new lines of business and/or new products and services we invest significant time and resources.
+Added: Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible.
+Added: External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business or a new product or service.
+Added: The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.
+Added: Our future success depends, 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, as well as to create additional efficiencies in our operations.
+Added: Many of our competitors have substantially greater resources to invest in technological improvements.
+Added: We may not be able to effectively implement new technology driven products and services or be successful in marketing these products and services to our customers.
+Added: In addition, our implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, in our business processes may have unintended consequences due to their limitations or our failure to use them effectively.
+Added: In addition, cloud technologies
+Added: are also critical to the operation of our systems, and our reliance on cloud technologies is growing.
+Added: Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse effect on our business, financial condition and results of operations.
+Added: Furthermore, any new line of business, new product or service and/or new technology could have a significant impact on the effectiveness of our system of internal controls.
+Added: Failure to successfully manage these risks in the development and implementation of new lines of business, new products or services and/or new technologies could have a material adverse effect on our business, financial condition and results of operations.
+Added: We may not be able to successfully integrate our acquisitions or to realize the anticipated benefits of them.
+Added: A successful integration of each acquired business with ours will depend substantially on our ability to successfully consolidate operations, corporate cultures, systems and procedures and to eliminate redundancies and costs.
+Added: While we have substantial experience in successfully integrating institutions we have acquired, we may encounter difficulties during integration, such as:
+Added: ● the loss of key employees;
+Added: ● the disruption of operations and businesses;
+Added: ● loan and deposit attrition, customer loss and revenue loss;
+Added: ● possible inconsistencies in standards, control procedures and policies;
+Added: ● unexpected issues with expected branch closures;
+Added: ● unexpected issues with costs, operations, personnel, technology and credit;
+Added: ,all of which could divert resources from regular banking operations.
+Added: Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit our successful merger integrations.
+Added: Further, we acquire businesses with the expectation that these mergers will result in various benefits including, among other things, benefits relating to enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, technology, cost savings and operating efficiencies.
+Added: Achieving the anticipated benefits of these mergers is subject to a number of uncertainties, including whether we integrate these institutions in an efficient and effective manner, and general competitive factors in the marketplace.
+Added: Failure to achieve these anticipated benefits could result in a reduction in the price of our shares as well as in increased costs, decreases in the amount of expected revenues and diversion of management's time and energy and could materially and adversely affect our business, financial condition and operating results.
+Added: The carrying value of goodwill and other intangible assets may be adversely affected.
+Added: When the Company completes an acquisition, goodwill and other intangible assets are often recorded on the date of acquisition as an asset.
+Added: Current accounting guidance requires goodwill to be tested for impairment, and we perform such impairment analysis at least annually.
+Added: A significant adverse change in expected future cash flows or sustained adverse change in the value of our common stock could require the asset to become impaired.
+Added: If impaired, we would incur a charge to earnings that would have a significant impact on the results of operations.
+Added: Our carrying value of goodwill and net amortizable intangibles were approximately $104.6 million and $3.3 million, respectively, at December 31, 2022.
+Added: We rely on third-party vendors to provide key components of our business infrastructure.
+Added: Third-party vendors provide key components of our business operations such as data processing, recording and monitoring transactions, online banking interfaces and services, Internet connections and network access.
+Added: We have selected these third-party vendors carefully and have conducted the due diligence consistent with regulatory guidance and best practices.
+Added: While we have ongoing programs to review third-party vendors and assess risk, we do not control their actions.
+Added: Any problems caused by these third parties, including those resulting from disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breaches at a vendor, failure of a vendor to provide services for any reason or poor performance of services, could adversely affect our ability
+Added: to deliver products and services to our customers and otherwise conduct our business.
+Added: Financial or operational difficulties of a third-party vendor could also hurt our operations if those difficulties interfere with the vendor’s ability to serve us.
+Added: Furthermore, our vendors could also be sources of operational and information security risk to us, including from breakdowns or failures of their own systems or capacity constraints.
+Added: Replacing these third-party vendors could also create significant delay and expense.
+Added: Accordingly, use of such third parties creates an unavoidable inherent risk to our business operations.
+Added: We face significant cyber and data security risk that could result in the disclosure of confidential information, adversely affect our business or reputation and expose us to significant liabilities.
+Added: As a financial institution, we are under threat of loss due to hacking and cyber-attacks.
+Added: This risk has increased in recent years, and continues to increase, as we continue to expand customer capabilities to utilize internet and other remote channels to transact business.
+Added: Two of the most significant cyber-attack risks that we face are e-fraud and loss of sensitive customer data.
+Added: Loss from e-fraud occurs when cybercriminals breach and extract funds directly from customer or our accounts.
+Added: The attempts to breach sensitive customer data, such as account numbers and social security numbers, are less frequent but would present significant reputational, legal and/or regulatory costs to us if successful.
+Added: 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.
+Added: While we have not experienced any material losses relating to cyber-attacks or other information security breaches, we have been subject to hacking and cyber-attack and there can be no assurance that we will not suffer additional losses in the future.
+Added: Due to changing behaviors since the COVID-19 pandemic, we have allowed a portion of our employees to work remotely from their homes on a full-time or hybrid schedule.
+Added: Technology in employees’ homes may not be as robust as in our offices and could cause the networks, information systems, applications, and other tools available to employees to be more limited or less reliable than in our offices.
+Added: The continuation of these work-from-home measures also introduces additional operational risk, including increased cybersecurity risk.
+Added: These cyber risks include greater phishing, malware, and other cybersecurity attacks, vulnerability to disruptions of our information technology infrastructure and telecommunications systems for remote operations, increased risk of unauthorized dissemination of confidential information, limited ability to restore the systems in the event of a systems failure or interruption, greater risk of a security breach resulting in destruction or misuse of valuable information, and potential impairment of our ability to perform critical functions, including wiring funds, all of which could expose us to risks of data or financial loss, litigation and liability and could seriously disrupt our operations and the operations of any impacted customers.
+Added: The occurrence of any cyber-attack or information security breach could result in material adverse consequences to us including damage to our reputation and the loss of customers.
+Added: We also could face litigation or additional regulatory scrutiny.
+Added: Litigation or regulatory actions in turn could lead to significant liability or other sanctions, including fines and penalties or reimbursement of customers adversely affected by security breach.
+Added: Even if we do not suffer any material adverse consequences as a result of other future events, successful attacks or systems failures at the Bank or at other financial institutions could lead to a general loss of customer confidence in financial institutions including the Bank.
+Added: Our ability to mitigate the adverse consequences of occurrences is in part dependent on the quality of our information security procedures and contracts and our ability to anticipate the timing and nature of any such event that occurs.
+Added: In recent years, we have incurred significant expense towards improving the reliability of our systems and their security from attack.
+Added: Nonetheless, there remains the risk that we may be materially harmed by cyber-attacks and information security breaches in the future.
+Added: Methods used to attack information systems change frequently (with generally increasing sophistication), often are not recognized until launched against a target, may be supported by foreign governments or other well-financed entities, and may originate from less regulated and remote areas around the world.
+Added: As a result, we may be unable to address these methods in advance of attacks, including by implementing adequate preventive measures.
+Added: If such an attack or breach does occur, we might not be able to fix it timely or adequately.
+Added: To the extent that such an attack or breach relates to products or services provided by others, we seek to engage in due diligence and monitoring to limit the risk.
+Added: In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and constantly changing requirements applicable to our business, compliance with those requirements could also result in additional costs.
+Added: We are dependent on key personnel and the loss of one or more of those key personnel could impair our relationship with our customers and adversely affect our business.
+Added: Many community banks attract customers based on the personal relationships that the banks’ officers and customers establish with each other and the confidence that the customers have in the officers.
+Added: We significantly depend on the continued service and performance of our key management personnel.
+Added: We also believe our management team’s depth and breadth of experience in the banking industry is integral to executing our business plan.
+Added: The loss of the services of members of our senior management team or other key employees or the inability to attract additional qualified personnel as needed could have a material adverse effect on our business.
+Added: The ongoing COVID-19 pandemic has adversely impacted, and could continue to adversely impact, our business, financial condition, liquidity, capital, and results of operations.
+Added: While the level of disruption caused by, and the economic impact of, the COVID-19 pandemic lessened in 2022, there is no assurance that the pandemic will not worsen again, included as a result of the emergence of new strains of the virus, or another health related emergency will not emerge.
+Added: Any worsening of the pandemic, a new health related emergency, and their effects on the economy could further impact our business, our provision and allowance for credit losses, and the value of certain assets that we carry on our balance sheet such as goodwill.
+Added: Our clients, business partners, and third-party providers, including those who perform critical services for our business, may also be adversely affected.
Liquidity Risks
7 unchanged sentences
Our ability to borrow could also be impaired by factors that are not specific to us, such as a disruption in the financial markets or negative views and expectations about the prospects for the financial services industry.
+Added: Access to liquidity may also be negatively impacted by the value of our securities portfolio, if liquidity and/or business strategy necessitate the sales of securities in a loss position.
To the extent we are not successful in obtaining such funding, we will be unable to implement our strategy as planned which could have a material adverse effect on our financial condition, results of operations and cash flows.
+Added: Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and its financial condition and results of operations.
+Added: Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
+Added: For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver.
+Added: Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp.
+Added: were each swept into receivership.
+Added: Although a statement by the Department of the Treasury, the Federal Reserve and the FDIC stated that all depositors of SVB would have access to all of their money after only one business day of
+Added: closure, including funds held in uninsured deposit accounts, borrowers under credit agreements, letters of credit and certain other financial instruments with SVB, Signature Bank or any other financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder.
+Added: If any parties with whom we conduct business are unable to access deposits with another financial institution, funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ credit quality, ability to pay their obligations to us, or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.
+Added: In this regard, counterparties to SVB credit agreements and arrangements, and third parties such as beneficiaries of letters of credit (among others), may experience direct impacts from the closure of SVB and uncertainty remains over liquidity concerns in the broader financial services industry.
+Added: Additionally, confidence in the safety and soundness of regional banks specifically or the banking system generally could impact where customers choose to maintain deposits, which could materially adversely impact our liquidity, loan funding capacity, ability to raise funds, and results of operations.
+Added: Similar impacts have occurred in the past, such as during the 2008-2010 financial crisis.
+Added: Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates.
+Added: Although the U.S.
+Added: Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program.
+Added: There is no guarantee that the U.S.
+Added: Department of Treasury, FDIC and Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of other banks or financial institutions, or that they would do so in a timely fashion.
+Added: Although we assess our funding relationships as we believe necessary or appropriate, our access to funding sources and other arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, our customers, the financial institutions with which we have arrangements directly, or the financial services industry or economy in general.
+Added: These factors could include, among others, events such as liquidity constraints or failures, the ability to perform our obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.
+Added: These factors could involve financial institutions or financial services industry companies with which we or our customers have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.
+Added: Additionally, we could be impacted by current or future negative perceptions and expectations about the prospects for the financial services industry (including the impact of Moody’s Investors Service’s rating change of the outlook of the US banking system from “stable” to “negative”), which could worsen over time and result in downward pressure on, and continued or accelerated volatility of, bank securities.
Capital Adequacy Risks
6 unchanged sentences
These outcomes could negatively impact our ability to operate or further expand our operations through acquisitions or the establishment of additional branches and may result in increases in operating expenses and reductions in revenues that could have a material adverse effect on our financial condition and results of operations.
−Removed: In addition, in order to raise additional capital, we may need to issue shares of our common stock that would dilute the book value of our common stock and reduce our current shareholders’ percentage ownership interest to the extent they do not participate in future offerings.
+Added: In addition, in order to raise additional capital, we may need to issue shares of our common stock that would
+Added: dilute the book value of our common stock and reduce our current shareholders’ percentage ownership interest to the extent they do not participate in future offerings.
We may issue a new series of preferred stock or debt securities, which would be senior to our common stock and may cause the market price of our common stock to decline.
25 unchanged sentences
Further, bank regulatory authorities have the authority to bring enforcement actions against banks and their holding companies for unsafe or unsound practices in the conduct of their businesses or for violations of any law, rule or regulation, any condition imposed in writing by the appropriate bank regulatory agency or any written agreement with the agency.
−Removed: Possible enforcement actions against us could include the issuance of a cease-and-desist order that could be judicially enforced, the imposition of civil monetary penalties, the issuance of directives to increase capital or enter into a strategic transaction, whether by merger or otherwise, with a third party, the appointment of a conservator or receiver, the termination of insurance on deposits, the issuance of removal and prohibition orders against institution-affiliated parties, and the enforcement of such actions through injunctions or restraining orders.
+Added: Possible enforcement actions against us could include the issuance of a cease-and-desist order that could be judicially enforced, the imposition of civil monetary penalties, the issuance of directives to increase capital or enter into a strategic transaction, whether by merger or otherwise, with a third party, the appointment of a conservator or receiver, the
+Added: termination of insurance on deposits, the issuance of removal and prohibition orders against institution-affiliated parties, and the enforcement of such actions through injunctions or restraining orders.
The exercise of this regulatory discretion and power may have a negative impact on us.
12 unchanged sentences
Under FRB rules, if the Bank ceases to be a well-capitalized institution for bank regulatory purposes, the interest rates that it pays on deposits and its ability to accept, renew or rollover brokered deposits may be restricted.
−Removed: As of December 31, 2021, we did not have any brokered certificates of deposits.
+Added: As of December 31, 2022, we had $100.0 million of brokered certificates of deposits.
Financial Reporting Risks
5 unchanged sentences
Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition.
−Removed: Risks Related to the COVID-19 Pandemic
−Removed: Our business, financial condition, liquidity and results of operations have been, and will likely continue to be, adversely affected by the COVID-19 pandemic.
−Removed: The COVID-19 pandemic has created economic and financial disruptions that have adversely affected, and are likely to continue to adversely affect, our business, financial condition, liquidity and results of operations.
−Removed: The extent to which the COVID-19 pandemic will continue to negatively affect our business, financial condition, liquidity and results of operations will depend on future developments, which are highly uncertain and cannot be predicted and many of which are outside of our control, including the scope and duration of the pandemic, the emergence of new variants, the direct and indirect impact of the pandemic on our employees, customers, clients, counterparties and service providers, as well as other market participants, and actions taken, or that may yet be taken, or inaction, by governmental authorities and other third parties in response to the pandemic.
−Removed: Should the pandemic continue for a more extended period or worsen, we may face additional circumstances such as significant draws on credit lines should customers seek to increase liquidity.
−Removed: Furthermore, should the pandemic continue, we may experience increased rates of employee illness or unavailability, and may experience challenges recruiting new employees.
−Removed: Any disruption to our ability to deliver financial products or services to, or interact with, our clients and customers could result in losses or increased operational costs, regulatory fines, penalties and other sanctions, or harm our reputation.
−Removed: We are also subject to litigation and reputational risk arising from our response to the COVID-19 pandemic.
−Removed: The length of the pandemic and the efficacy of the measures being put in place to address it are unknown as efforts to combat the virus have been complicated by viral variants and uneven access to, and acceptance and effectiveness of, vaccines globally.
−Removed: To the extent the pandemic adversely affects our business, financial condition, liquidity or results of operations, it may also have the effect of heightening many of the other risks described in this report.
Unresolved Staff Comments
2 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.