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Item 1A. Risk Factors

2025-08-06 compared with 2025-05-07 · 40 added, 1 removed, 3 unchanged (93% of the section changed)

1 unchanged sentence

“Risk Factors” in the Annual Report.

There have been no material changes in our risk factors as described in such Annual Report, except for certain heightened risks relating to changing U.S.

Other than as discussed below, there have been no material changes in our risk factors as described in such Annual Report, except for certain heightened risks relating to changing U.S.

trade and tariff policies particularly since the end of first quarter 2025, as discussed in “MD&A – Risk Management – Credit Risk and the Allowance for Credit Losses,” which discussion is incorporated by reference herein.

Our Series A Preferred Stock could adversely affect our liquidity, financial condition and holders of our common stock.

On July 1, 2025, we issued 32,500 shares of our newly designated Series A Preferred Stock.

The relative preferences, rights and limitations of our Series A Preferred Stock are set forth in our Restated Articles of Incorporation, as amended by the Articles of Amendment filed with the Louisiana Secretary of State, which became effective on June 30, 2025 (as amended, the “Restated Articles”), filed as Exhibit 3.1 to this report.

Pursuant to the Restated Articles, subject to certain exceptions, we are prohibited from paying dividends on, or repurchasing or redeeming our common stock, unless full dividends for the Series A Preferred Stock’s most recently completed dividend period have been declared and paid on all outstanding shares of Series A Preferred Stock.

In addition, holders of our Series A Preferred Stock have the right to receive distributions or payments upon any liquidation, dissolution or winding up of our business, or upon the occurrence of specified “Reorganization Events,” as defined in the Restated Articles, before any payment may be made to holders of our common stock.

These and other provisions related to the Series A Preferred Stock could influence our use of cash, which in turn could reduce the amount of cash flows available for dividends on our common stock, working capital, capital expenditures, growth opportunities (including acquisitions) and general corporate purposes.

Our Series A Preferred Stock could also limit our ability to obtain additional financing, which could have an adverse effect on our financial condition and growth strategies.

Further, holders of Series A Preferred Stock have the right, at any time and from time to time, at such holder’s option to convert all or any portion of their Series A Preferred Stock into shares of our common stock at the rate of 47.619 shares of common stock per share of Series A Preferred Stock (subject to certain adjustments) (the “Conversion Rate”), plus cash in lieu of fractional shares of common stock.

In addition, subject to certain conditions, on or after July 1, 2028, we will have the right, at our option, from time to time on any dividend payment date, to cause some or all of the Series A Preferred Stock to be converted into shares of our common stock at the Conversion Rate if, for 20 trading days within a period of 30 consecutive trading days, the closing price of our common stock exceeds $26.25 per share (subject to certain adjustments).

Any conversion of the Series A Preferred Stock into common stock would dilute the ownership interest of existing holders of our common stock, and any sales in the public market of common stock issuable upon such conversion, or the perception that such sales might occur, could adversely affect prevailing market prices of our common stock.

Our issuance of preferred stock in the future could adversely affect holders of our common stock and discourage a takeover.

Our shareholders authorized our Board to issue up to 5,000,000 shares of “blank check” preferred stock without any further action on the part of our shareholders.

The Board also has the power, without shareholder approval, to set the terms of any series of preferred stock that may be issued, including voting rights, dividend rights, preferences over our common stock with respect to dividends or in the event of a dissolution, liquidation or winding up and other terms.

As of the date of this report, 32,500 shares of our newly designated Series A Preferred Stock are outstanding.

Holders of our Series A Preferred Stock have certain rights and preferences over our common stock, including but not limited to, payment of dividends, payment upon liquidation, dissolution or winding up, and such shares are convertible into shares of our common stock upon the occurrence of certain events, subject to the terms and conditions of such Series A Preferred Stock.

Subsequent Events and “—Our Series A Preferred Stock could adversely affect our liquidity, financial condition and holders of our common stock” above for additional information regarding our Series A Preferred Stock.

If we issue new preferred stock in the future that has preference over our common stock with respect to payment of dividends or upon our liquidation, dissolution or winding up, or if we issue preferred stock with voting rights that dilute the voting power of our common stock or that are convertible into common stock, the rights of the holders of our common stock or the market price of our common stock could be adversely affected.

In addition, the ability of our Board to issue shares of preferred stock without any action on the part of our shareholders may impede a takeover of us and prevent a transaction perceived to be favorable to our shareholders.

The proposed merger with WFB is subject to various closing conditions, which may prevent or delay the consummation of the proposed merger, result in additional expenditures of money and resources, reduce the anticipated benefits of the merger or result in the termination of the Merger Agreement.

We recently announced a Merger Agreement with WFB, the holding company for First National Bank, Wichita Falls, Texas, which provides for the merger of WFB with and into the Company, with the Company as the surviving corporation, and the merger of First National Bank with and into the Bank, with the Bank as the surviving bank.

Consummation of the transactions contemplated by the Merger Agreement is subject to various customary conditions, including, without limitation, the approval of the shareholders of each of the Company and WFB;

the receipt of certain regulatory approvals;

the accuracy of the representations and warranties of the parties and compliance by the parties with their respective covenants and obligations under the Merger Agreement;

and the absence of a material adverse change with respect to WFB.

Many of the closing conditions are beyond the parties’ control and may prevent, delay or otherwise materially adversely affect the consummation of the proposed merger.

We cannot predict with certainty whether or when any of these conditions will be satisfied.

Further, regulators may impose conditions on the consummation of the proposed merger that could cause the parties to abandon the proposed merger.

If any of these conditions are not satisfied or waived prior to certain dates (as described in the Merger Agreement), it is possible that the Merger Agreement may be terminated and the proposed merger may not be completed.

In addition, satisfying these conditions could take longer than initially anticipated.

There can be no assurance that the closing conditions will be satisfied or waived in a timely manner or at all.

If the proposed merger is not completed or is delayed, there may be adverse consequences depending on the circumstances, including but not limited to, potential negative reactions from investors and the financial markets, and the price of our common stock may decline materially.

The proposed merger with WFB and the integration of the businesses may be more difficult, costly or time-consuming than expected, and we may fail to realize the anticipated benefits of the proposed merger.

The success of the proposed merger, if completed, will depend in part on our ability to realize anticipated benefits of the proposed merger and on our ability to successfully integrate the businesses.

The anticipated benefits of the proposed merger may not be realized fully, or at all, or may take longer to realize than expected.

For example, WFB’s operations are located in north Texas, which are new markets for our Company.

We may experience unanticipated difficulties in integrating WFB’s business, including potential losses of customers and employees, higher than expected integration costs, and inability to maintain and increase market share at new locations in new markets.

In addition, we may fail to realize anticipated benefits of the proposed merger, including but not limited to lower than expected revenues and profits, inability to achieve expected cost savings and synergies, or higher than expected liabilities and costs.

The pending merger may cause disruptions to our ongoing business and the business of WFB, including difficulties in maintaining relationships with customers, employees or vendors and the diversion of management time on merger-related issues, which could adversely affect our and WFB’s businesses, financial condition and results of operations.

We cannot assure you that we will be able to achieve the expected benefits of the proposed merger with WFB.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors