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government securities, the discount rate or the federal funds rate on bank borrowings, and reserve requirements against bank deposits, could lead to increases in the costs associated with our business.
−Removed: In addition, such changes could influence the interest we receive on loans and securities and the amount of interest we pay on deposits.
+Added: Such changes could influence the interest we receive on loans and securities and the amount of interest we pay on deposits.
If the interest rates we pay on deposits increases at a faster rate than the interest we receive on loans and other investments, then our net interest income could be adversely affected.
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In addition, the impact of these changes may be magnified if we do not effectively manage the relative sensitivity of our assets and liabilities to changes in market interest rates, and our ability to manage such relative sensitivity may be adversely impacted by competitive conditions in the banking industry and in the financial markets.
−Removed: Due to the changing conditions in the national economy and uncertainty regarding the rate of inflation and the impacts of governmental policies to combat elevated inflation, we cannot predict with certainty how future changes in interest rates, deposit levels and loan demand will impact our business and profitability.
+Added: Due to the volatility and changing conditions in the national economy and uncertainty regarding the rate of inflation and the impacts of governmental policies to combat elevated inflation, we cannot predict with certainty how future changes in interest rates, deposit levels and loan demand will impact our business and profitability.
Our cost of funds may increase as a result of general economic conditions, interest rates and competitive pressures.
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Also, changes in our deposit mix and growth could adversely affect our profitability and the ability to expand our loan portfolio, as well as our liquidity and funding mix.
−Removed: During 2024 and previous recent years, in response to rising market interest rates, our cost of funds has increased due to customer migration from lower-cost to higher-cost deposit accounts, including interest-bearing transaction accounts and time deposits, which has negatively impacted our cost of funds and net interest margin.
+Added: In recent years, in response to rising market interest rates, our cost of funds has increased due to customer migration from lower-cost to higher-cost deposit accounts, including interest-bearing transaction accounts and time deposits, which has negatively impacted our cost of funds and net interest margin.
Our investment securities portfolio could decline in value and we may incur losses as a result of interest rate changes and changes in issuer credit quality or the strength of the associated collateral.
−Removed: As of December 31, 2024, we owned $6.17 billion of investment securities, which included $3.64 billion in held-to-maturity securities and $2.53 billion in available for sale securities.
+Added: As of December 31, 2025, we owned $3.27 billion in available-for-sale securities.
The fair value of our investment securities may be adversely affected by market conditions, including changes in interest rates, and the occurrence of any events adversely affecting the issuer of particular securities in our investments portfolio, including changes in the issuer’s credit quality.
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We consider the nature of the collateral, potential future changes in collateral values, default rates, delinquency rates, third-party guarantees, credit ratings, interest rate changes since purchase, volatility of the security’s fair value and historical loss information for financial assets secured with similar collateral among other factors.
−Removed: We use a systematic methodology to determine the allowance for credit losses (“ACL”) for investment securities held to maturity.
−Removed: The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on the held-to-maturity portfolio.
+Added: We use a systematic methodology to determine the allowance for credit losses (“ACL”) for any investment securities held to maturity.
+Added: The ACL is a valuation account that is deducted from the amortized cost basis to present the net amount expected to be collected on any held-to-maturity portfolio.
We consider the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of the investment portfolio.
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therefore, our process for determining expected credit losses may result in a range of expected credit losses.
−Removed: We monitor the held-to-maturity portfolio on a quarterly basis to determine whether a valuation account needs to be recorded.
+Added: We would monitor any held-to-maturity portfolio on a quarterly basis to determine whether a valuation account needs to be recorded.
Because of changing economic and market conditions affecting issuers, we may be required to recognize expected credit losses on securities in future periods, which could have a material adverse effect on our business, financial condition or results of operations.
−Removed: As a result of fluctuations in interest rates, the market value of previously issued debt securities in the held-to-maturity portion of our securities portfolio has declined significantly, resulting in unrealized losses.
−Removed: If the Company were required to sell such securities, including to meet liquidity needs, the Company would realize any previously unrealized losses which could adversely impact the Company’s financial condition and results of operations.
A lack of liquidity could impair our ability to fund our business and thereby adversely affect our financial condition and results of operations.
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This could result in a lack of liquidity, which could materially and adversely affect our business.
+Added: We may not be able to maintain a strong core deposit base or access other low-cost funding sources.
+Added: We rely on bank deposits to be a low cost and stable source of funding for our business.
+Added: In addition, our future growth will largely depend on our ability to maintain and grow a strong core deposit base.
+Added: If we are unable to continue to attract and retain core deposits, to obtain third party financing on favorable terms, or to have access to interbank or other liquidity sources, we may not be able to grow our assets as quickly.
+Added: Core deposit levels may be affected by various industry factors, including general interest rate levels, returns available to customers on alternative investments, conditions in the financial services industry specifically and general economic conditions that impact the amount of liquidity in the economy and savings levels, and also by factors that impact customers’ perception of our financial condition and capital and liquidity levels.
+Added: Core deposit levels may also be affected by our ability to maintain stable relationships within our customer base, and particularly with larger deposit customers.
+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: Recent advances in technology that increase the speed at which deposits can be moved from bank to bank or outside the banking system may facilitate unanticipated deposit outflows, and the speed and reach with which information, concerns, and rumors can spread through media may exacerbate the risk of unanticipated deposit outflows and related 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.
+Added: We also compete with banks and other financial services companies for deposits.
+Added: If our competitors raise the rates they pay on deposits in response to interest rate changes initiated by the FOMC or for other reasons of their choice, our funding costs may increase, either because we raise our rates to retain deposits or because of deposit outflows that require us to rely on more expensive sources of funding.
+Added: Higher funding costs could reduce our net interest margin and net interest income.
+Added: Any decline in available funding could adversely affect our ability to continue to implement our business strategy which could have a material adverse effect on our liquidity, business, financial condition, and results of operations.
Changes in the method pursuant to which benchmark rates are determined, as well as the discontinuance and replacement of reference rates, could adversely impact our business and results of operations.
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Risks Related to the Company’s Lending Activities
−Removed: The mismanagement of our credit risks could result in serious harm to our business.
+Added: Our lending activities expose us to a range of credit risks, which could adversely affect our business, financial condition, and results of operations.
There are a variety of risks inherent in making loans, including, among others, risks inherent with dealing with borrowers and guarantors, risks associated with potential future changes in the value of the collateral supporting the loans, the risk that a loan may not be repaid, and the risks associated with changes in economic or industry conditions.
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However, there can be no assurance that these underwriting and monitoring procedures will reduce these risks, and the inability to properly manage our credit risk could have a material adverse effect on our business, which, in turn, could impact our financial condition and results of operations.
−Removed: Deteriorating credit quality in our credit card portfolio may adversely impact us.
−Removed: We have a sizeable consumer credit card portfolio, and, among other things, the amount of net charge-offs associated with it could worsen.
−Removed: While we continue to experience a better performance with respect to net charge-offs than the national average in our credit card portfolio, our net charge-offs were 2.93% and 2.20% of our average outstanding credit card balances for the years ended December 31, 2024 and 2023, respectively.
−Removed: Future downturns in the economy could adversely affect consumers in a more delayed fashion compared to commercial businesses in general.
−Removed: Increasing unemployment and diminished asset values may prevent our credit card customers from repaying their credit card balances which could result in an increased amount of our net charge-offs that could have a material adverse effect on our unsecured credit card portfolio.
We may not maintain an appropriate allowance for credit losses.
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We maintain an allowance for credit losses, which is a reserve established through a provision for credit losses charged to expense, that results from management’s review of the existing portfolio and management’s assessment of the portfolio’s collectability.
−Removed: Our methodology for establishing the appropriateness of the allowance for credit losses inherently involves a high degree of subjectivity and judgment and requires management to make significant estimates and predictions regarding credit risks, future market conditions, and other factors, all of which are subject to material changes and may not necessarily be in our control.
+Added: Our methodology for establishing the appropriateness of the allowance for credit losses inherently involves a high degree of subjectivity and difficult judgments, requiring management to make significant estimates and predictions regarding credit risks, future market conditions, and other interrelated factors, all of which are subject to material changes and may not necessarily be in our control.
Some assumptions require management to forecast how borrowers will perform in changing and unprecedented economic conditions.
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In addition, prudential regulators also periodically review our allowance for credit losses and have the ability, based on their perspective, which may be different from ours, to require that we make adjustments to the allowance, which could also have a negative effect on our results of operations or financial condition.
+Added: Although we believe our allowance for credit losses are adequate to absorb losses that are inherent in our loan portfolio, we cannot predict the timing or severity of such losses nor give any assurance that our allowance will be adequate in the future.
+Added: Significant portions of our loan portfolio include commercial real estate, construction and development, and commercial and industrial loans, each of which presents heightened lending risks.
+Added: Our commercial loan portfolio includes, in significant part, commercial real estate loans, construction and development loans, and commercial and industrial loans.
+Added: Among other things, commercial real estate loans are generally larger than residential real estate loans, often depend on the owner’s cash flows or those of the property’s tenants (which can be adversely affected by changes in economic conditions) as a source for repayment, and are generally perceived as involving a greater degree of risk of default than home equity loans or residential mortgage loans.
+Added: Similarly, construction and development loans pose heightened risk when compared to residential real estate loans due to, for example, the fact that repayment often depends on successful completion of the construction or development project and subsequent financing.
+Added: Additionally, commercial and industrial loans are often dependent upon the successful operation of the borrower’s business.
+Added: If the operating company suffers difficulties, including reduction in sales volume and/or profitability, the borrower’s ability to repay the loan may be impaired, and the collateral associated with these types of loans may have depreciated during the term of the loan or may be difficult to value and/or liquidate.
+Added: For these reasons and others, these types of loans present heightened lending risks that, if realized, may materially and adversely affect our business, financial condition or results of operations.
We rely on the mortgage secondary market from time to time to provide liquidity.
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If we fail to follow any applicable regulations, guidelines or policies associated with a particular guarantee program, any loans we originate as part of that program may lose the associated guarantee, exposing us to credit risk we would not otherwise be exposed to, or result in our inability to continue originating loans under such programs, either of which could have a material adverse effect on our business, financial condition or results of operations.
−Removed: Significant portions of our loan portfolio include commercial real estate, construction and development, and commercial and industrial loans, each of which presents heightened lending risks.
−Removed: Our commercial loan portfolio includes, in significant part, commercial real estate loans, construction and development loans, and commercial and industrial loans.
−Removed: Among other things, commercial real estate loans are generally larger than residential real estate loans, often depend on the owner’s cash flows or those of the property’s tenants (which can be adversely affected by changes in economic conditions) as a source for repayment, and are generally perceived as involving a greater degree of risk of default than home equity loans or residential mortgage loans.
−Removed: Similarly, construction and development loan pose heightened risk when compared to residential real estate loans due to, for example, the fact that repayment often depends on successful completion of the construction or development project and subsequent financing.
−Removed: Additionally, commercial and industrial loans are often dependent upon the successful operation of the borrower’s business.
−Removed: If the operating company suffers difficulties, including reduction in sales volume and/or profitability, the borrower’s ability to repay the loan may be impaired, and the collateral associated with these types of loans may have depreciated during the term of the loan or may be difficult to value and/or liquidate.
−Removed: For these reasons and others, these types of loans present heightened lending risks that, if realized, may materially and adversely affect our business, financial condition or results of operations.
In the event we are required to foreclose on a loan secured by real estate, we may not be able to realize the value of that real estate as indicated in any independent appraisals upon which we relied in extending the loan.
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In making certain of these loans, we rely on estimates concerning the value of the real estate provided by independent appraisers.
−Removed: However, these appraisals are only estimates of value, and mistakes of fact or judgement on the part of the appraiser could adversely affect the reliability of their appraisals.
+Added: However, these appraisals are only estimates of value, and mistakes of fact or judgment on the part of the appraiser could adversely affect the reliability of their appraisals.
Furthermore, the value of the real estate could change (including by declining) based on events occurring after the time of the appraisal, and preparing foreclosed real estate for sale, and then selling such real estate collateral, may impose significant additional costs on us.
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Risks Related to Our Business, Industry, and Markets
−Removed: Our business, financial condition, and results of operations could be adversely affected by developments impacting the financial services industry, such as recent bank failures or concerns involving liquidity.
−Removed: Prior events in the financial services industry, such as the 2023 closures of Silicon Valley Bank, Signature Bank and First Republic Bank, have caused general uncertainty and concern regarding the adequacy of liquidity of the financial services industry generally.
−Removed: While we rely on different sources of funding to meet potential liquidity needs, our business strategies are largely based on access to funding from customer deposits and supplemental funding provided by wholesale or other secondary liquidity sources.
+Added: Our business, financial condition, results of operations and liquidity could be adversely affected by developments impacting the financial services industry.
+Added: Our financial performance and liquidity are highly dependent on conditions in the financial services industry.
+Added: Our business strategies are largely based on access to funding from customer deposits and supplemental funding provided by wholesale or other secondary liquidity sources.
+Added: Events in the financial services industry can cause general uncertainty and concern regarding the adequacy of liquidity in the financial services industry generally, for example following certain significant bank closures during 2023.
Deposit levels may be affected by various industry factors, including interest rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, conditions in the financial services industry specifically and general economic conditions that impact the amount of liquidity in the economy and savings levels, and also by factors that impact customers’ perception of our financial condition and capital and liquidity levels.
−Removed: In response to the closures of Silicon Valley Bank and Signature Bank, in 2023 the Secretary of the U.S.
−Removed: Department of the Treasury approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank and Signature Bank in a manner that fully protected depositors by utilizing the Deposit Insurance Fund, and the Federal Reserve announced it would make available additional funding for eligible depository institutions to help assure banks have the ability to meet the needs of their depositors.
−Removed: While these steps by the banking regulators helped customers’ perception of the financial markets and financial services industry generally, a number of factors, including further bank closures, or deposit outflows (and particularly sudden deposit outflows) from banks, may drive additional deposit outflows, increased borrowing and funding costs, and increased competition for liquidity, any of which could have a material adverse impact on our financial performance or financial condition.
+Added: While steps by the banking regulators to support liquidity in the industry, including following certain significant bank closures during 2023, have helped customers’ perception of the financial markets and financial services industry generally, a number of factors, including further bank closures, or deposit outflows (and particularly sudden deposit outflows) from banks, may drive additional deposit outflows, increased borrowing and funding costs, and increased competition for liquidity, any of which could have a material adverse impact on our financial performance or financial condition.
Our business may be adversely affected by conditions in the financial markets and general economic conditions.
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In addition, because multi-family and commercial real estate loans represent the majority of our real estate loans outstanding, a decline in tenant occupancy due to such factors or for other reasons could adversely impact the ability of our borrowers to repay their loans on a timely basis, which could have a negative impact on our results of operations.
−Removed: We face strong competition from other banks, bank holding companies, and financial services companies.
+Added: We face strong competition from other banks, bank holding companies, financial services companies and nonbank competitors.
In the markets we serve, the businesses of banking and financial services are fiercely competitive.
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Indeed, non-traditional financial services firms, such as financial technology (FinTech) companies, have begun to offer a variety of services traditionally provided by banks and other financial institutions.
−Removed: The resulting increased competition could result in the loss of fee income and customer deposits, which could negatively impact our financial condition, results of operations, and liquidity.
+Added: Consumers can now maintain funds that would have historically been held as bank deposits in brokerage accounts, mutual funds, general-purpose reloadable prepaid cards, or in other types of assets, including crypto currencies or other digital assets.
+Added: The resulting increased competition as trends toward digital financial transactions have accelerated could result in the loss of fee income and customer deposits, which could negatively impact our financial condition, results of operations, and liquidity.
It could also require additional, costly investments in technology to remain competitive.
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Failure to successfully manage these risks in the development and implementation of new lines of business and/or new products or services could have a material adverse effect on our business and, in turn, our financial condition and results of operations.
+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 involving, 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 risk could adversely affect our business, expose us to liability or other adverse legal or regulatory consequences, or otherwise adversely affect our financial results.
Risks Related to the Company’s Operations
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While we seek to be vigilant in the prevention, detection, and remediation of fraud events, some fraud loss is unavoidable, and the risk of major fraud loss cannot be eliminated.
+Added: Our business also depends on our employees, as well as third-party service providers, to process a large number of increasingly complex transactions.
+Added: We could be materially and adversely affected if employees, clients, counterparties, or other third parties caused an operational breakdown or failure, either from human error, fraudulent manipulation, or purposeful damage to any of our operations or systems.
+Added: Our efforts to combat fraud might not be successful in mitigating or reducing fraudulent attempts resulting in financial losses, increased litigation risk and reputational harm.
Our models and estimations may be inadequate, which could lead to significant losses and regulatory scrutiny.
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The models and estimations often take into account assumptions and historical trends and are, in some cases, based on subjective judgments.
+Added: While these quantitative techniques and approaches improve our decision-making, they also create the possibility that faulty data or flawed quantitative approaches could yield adverse outcomes or regulatory scrutiny.
+Added: Additionally, because of the complexity inherent in these approaches, misunderstanding or misuse of their outputs could similarly result in suboptimal decision-making.
+Added: We also rely on model inputs that are provided by third parties which have similar risks.
As such, the models and estimations may not be effective in identifying and managing risks, which could adversely impact our financial condition and results of operations.
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If our risk management framework is not effective, we could suffer unexpected losses and become subject to litigation, negative regulatory consequences, or reputational damage among other adverse consequences, which could materially adversely affect our business, financial condition, results of operations, and prospects.
+Added: Our business is heavily reliant on a variety of third-party service providers.
+Added: We rely on a large number of vendors to provide products and services that we need for our day-to-day operations, particularly in the areas of loan and deposit operations, information technology, and security.
+Added: This reliance exposes us to the risk that the vendors will not perform in accordance with the applicable contractual arrangements or service level agreements, as well as risks resulting from defective products, poor performance of services, disruption in a product or service, vendor contracts, or loss of a product or service if a vendor ceases doing business because of its own financial or operational difficulties.
+Added: These risks, if realized, could result in significant disruptions to our business, which could have a material adverse impact on our financial condition and results of operations.
+Added: While we maintain a vendor management program designed to assist in the oversight and monitoring of our third-party service providers, there can be no assurance that we will not experience service-related issues associated with our vendors.
We may not be able to raise the additional capital we need to grow and, as a result, our ability to expand our operations could be materially impaired.
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and a disruption in those systems, facilities, and processes, or a breach, including cyber-attacks, in the security of our systems, could have significant, negative impacts on our business, result in the disclosure of confidential information, and create significant financial and legal exposure for us.
−Removed: Our businesses are dependent on our ability and the ability of our third-party service providers to process, record and monitor a large number of transactions.
+Added: Our businesses are dependent on our ability and the ability of our third-party service providers to process, record and monitor a large number of transactions and personally identifiable information.
If the financial, accounting, data processing or other operating systems and facilities fail to operate properly, become disabled, experience security breaches or have other significant shortcomings, our results of operations could be materially, adversely affected.
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These “denial-of-service” attacks have not breached our data security systems, but require substantial resources to defend, and may affect customer satisfaction and behavior.
+Added: We, our customers, regulators and other third parties, including other financial services institutions and companies engaged in data processing, have been subject to, and are likely to continue to be the target of, cyber-attacks.
Despite our efforts and those of our third party service providers to ensure the integrity of our systems, it is possible that we may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently or are not recognized until launched, and because security attacks can originate from a wide variety of sources, including persons who are involved with organized crime or associated with external service providers or who may be linked to terrorist organizations or hostile foreign governments.
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If our security systems were penetrated or circumvented, it could cause serious negative consequences for us, including significant disruption of our operations, misappropriation of our confidential information or that of our customers, or damage our computers or systems and those of our customers and counterparties, and could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss of confidence in our security measures, customer dissatisfaction, significant litigation exposure, and harm to our reputation, all of which could have a material adverse effect on us.
+Added: Additionally, as cyber-attacks 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 or incidents.
We depend on qualified employees and key personnel to operate and lead our business, and we may not be able to attract or retain them in the future.
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In many areas of the financial services industry, competition for key personnel is fierce, and the departure of those individuals from our business presents risk that we will be unable to attract, develop and retain suitable successors, which could have a material, adverse impact on our competitive position in the marketplace.
−Removed: Our business is heavily reliant on a variety of third-party service providers.
−Removed: We rely on a large number of vendors to provide products and services that we need for our day-to-day operations, particularly in the areas of loan and deposit operations, information technology, and security.
−Removed: This reliance exposes us to the risk that the vendors will not perform in accordance with the applicable contractual arrangements or service level agreements, as well as risks resulting from defective products, poor performance of services, disruption in a product or service, vendor contracts, or loss of a product or service if a vendor ceases doing business because of its own financial or operational difficulties.
−Removed: These risks, if realized, could result in significant disruptions to our business, which could have a material adverse impact on our financial condition and results of operations.
−Removed: While we maintain a vendor management program designed to assist in the oversight and monitoring of our third-party service providers, there can be no assurance that we will not experience service-related issues associated with our vendors.
Our controls, policies and procedures may fail, or our employees may not adhere to them.
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Errors or mistakes in these activities (including human error and systems error), as well as other failures to mitigate operational risks, can have adverse consequences, including exposing us to liability and loss and, in the case of providing services to our customers, preventing us from receiving certain contractual protections.
+Added: Changes in, or interpretations of, tax rules and regulations or our tax positions may adversely affect our income taxes, financial condition or results of operations.
+Added: Significant judgment is required in determining our provision for income taxes.
+Added: In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.
+Added: We are subject to audit by various tax authorities.
+Added: In accordance with U.S.
+Added: GAAP, we recognize income tax benefits, net of required valuation and uncertain tax position allowances.
+Added: Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different than reflected in historical income tax provisions and accruals.
+Added: Should additional taxes be assessed as a result of an audit or litigation, an adverse effect on our income tax provision and net income in the period or periods for which that determination is made could result.
+Added: During the third quarter of 2025, we completed a balance sheet repositioning focused on our investment securities portfolio in which we reclassified our held-to-maturity securities to available-for-sale and then sold approximately $3.2 billion (amortized cost basis) of investment securities.
+Added: The sale of investment securities resulted in a realized after-tax loss of approximately $625.6 million (based on actual tax rate of 21.946%).
+Added: We expect that the losses described above should be entitled to ordinary treatment.
+Added: However, the Internal Revenue Service could determine that the losses described above should not be entitled to ordinary treatment, in which case we could be subject to material amounts of taxes which would have a material adverse effect on our financial condition and results of operations.
Accounting standards periodically change, and the application of our accounting policies and methods may require management to make estimates about matters that are uncertain.
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We are charged with maintaining compliance with all applicable banking laws and regulations, including, among others, fair lending, CRA, consumer compliance, BSA and anti-money laundering, capital, and other regulations described herein under “Item 1.
−Removed: Business - Supervision and Regulation.” Various agencies, including, without limitation, the FRB, CFPB, Arkansas State Bank Department, and the Department of Justice, have the ability to institute proceedings to address compliance failures.
+Added: Business - Supervision and Regulation.” Our compliance with these laws is costly and potentially restricts certain of our activities, including payment of dividends, mergers and acquisitions, investments, loans, and interest rates charged, interest rates paid and deposits and locations of our offices.
+Added: Various agencies, including, without limitation, the FRB, CFPB, Arkansas State Bank Department, and the Department of Justice, have the ability to institute proceedings to address compliance failures.
Should those agencies be successful in the case of such a proceeding, we could become subject to material sanctions, including, among other things, monetary penalties and restrictions on our ability to engage in mergers and acquisitions and other growth-oriented activities.
Compliance failures may also result in litigation instituted by private parties, including consumers, which could result in material adverse impacts on our business.
−Removed: We are subject to litigation in the ordinary course of our business, and adverse rulings, judgements, settlements, and other outcomes of such litigation, as well as our associated legal expenses, may adversely affect our results.
+Added: We are subject to litigation in the ordinary course of our business, and adverse rulings, judgments, settlements, and other outcomes of such litigation, as well as our associated legal expenses, may adversely affect our results.
From time to time, we are subject to litigation.
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Our ability to pay dividends depends on the following factors, among others:
−Removed: • We may not have sufficient earnings since our primary source of income, the payment of dividends to us by our subsidiary bank, is subject to federal and state laws that limit the ability of the bank to pay dividends, and recently we have had to apply for state regulatory approval for certain dividends paid by the Bank to the Company;
+Added: • We may not have sufficient earnings since our primary source of income, the payment of dividends to us by our subsidiary bank, is subject to federal and state laws that limit the ability of the bank to pay dividends, and recently we have had to apply for state and federal regulatory approval for certain dividends paid by the Bank to the Company;
• FRB policy requires bank holding companies to pay cash dividends on common stock only out of net income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition;
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In addition, in the event our subsidiary bank becomes unable to pay dividends to us, we may not be able to service our debt or pay our other obligations or pay dividends on our common stock.
+Added: For more information on these regulatory restrictions on the ability of the Bank to pay dividends to the Company, see “ Supervision and Regulation - The Company ” above.
Accordingly, our inability to receive dividends from our subsidiary bank could also have a material adverse effect on our business, financial condition and results of operations and the value of your investment in our common stock.
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Severe weather events or earthquakes could also impact the value of any collateral we hold, or significantly disrupt the local economies in the markets that we serve, manifesting in a decline in loan originations, as well as an increase in the risk of delinquencies, defaults, and foreclosures.
+Added: Those disruptions could result in declines in economic conditions in our geographic markets or industries in which our borrowers and customers operate and impact their ability to repay loans or maintain deposits.
+Added: In recent years, federal banking regulators have focused on the physical and financial risks to financial institutions associated with climate change;
+Added: although, expectations with respect to these matters have been shifting, 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.
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.