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| PART I |
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| Item 1. Business | | 4 |
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| Item 1A. Risk Factors | | 24 |
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| Item 1B. Unresolved Staff Comments | | 47 |
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| Item 1C. Cybersecurity | | 47 |
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| Item 2. Properties | | 48 |
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| Item 3. Legal Proceedings | | 48 |
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| Item 4. Mine Safety Disclosures | | 48 |
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| PART II |
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| Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | 49 |
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| Item 6. [Reserved] | | 51 |
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| Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations | | 51 |
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| Item 7A. Quantitative and Qualitative Disclosures About Market Risk | | 78 |
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| Item 8. Financial Statements and Supplementary Data | | 80 |
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| Reports of Independent Registered Public Accounting Firm (RSM US LLP, Auditor Firm ID: 49) | | 80 |
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| Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | 145 |
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| Item 9A. Controls and Procedures | | 145 |
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| Item 9B. Other Information | | 146 |
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| Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | 146 |
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| PART III |
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| Item 10. Directors, Executive Officers and Corporate Governance | | 146 |
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| Item 11. Executive Compensation | | 146 |
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| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | 147 |
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| Item 13. Certain Relationships and Related Transactions, and Director Independence | | 147 |
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| Item 14. Principal Accountant Fees and Services | | 148 |
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| PART IV |
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| Item 15. Exhibits and Financial Statement Schedules | | 148 |
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| Signatures | | 153 |
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Forward-Looking Statements
This Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other comparable words of a future or forward-looking nature. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
| ● | interest rate risk, including the effects of changes in interest rates; |
| ● | effects on the U.S. economy resulting from actions taken by the federal government, including the threat or implementation of tariffs, immigration enforcement and changes in foreign policy; |
| ● | fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; |
| ● | business and economic conditions generally and in the financial services industry, nationally and within our market area, including the level and impact of inflation, and future monetary policies of the Federal Reserve and executive orders in response thereto, and possible recession; |
| ● | credit risk and risks from concentrations (including by type of borrower, geographic area, collateral and industry) within the Company’s loan portfolio or large loans to certain borrowers (including CRE loans); |
| ● | the overall health of the local and national real estate market; our ability to successfully manage credit risk; |
| ● | our ability to maintain an adequate level of allowance for credit losses on loans; |
| ● | new or revised accounting standards as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, Securities and Exchange Commission or Public Company Accounting Oversight Board; |
| ● | the concentration of large deposits from certain clients, including those who have balances above current Federal Deposit Insurance Corporation insurance limits; |
| ● | our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; |
| ● | our ability to raise additional capital to implement our business plan; |
| ● | our ability to implement our growth strategy and manage costs effectively; |
| ● | the composition of our strategic leadership team and our ability to attract and retain key personnel; |
| ● | talent and labor shortages and employee turnover; |
| ● | the occurrence of fraudulent activity, breaches or failures of our or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; |
| ● | interruptions involving our information technology and telecommunications systems or third-party servicers; |
| ● | competition in the financial services industry, including from nonbank competitors such as credit unions, “fintech” companies and digital asset service providers; |
| ● | the effectiveness of our risk management framework; |
| ● | rapid technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence; |
| ● | the commencement, cost and outcome of litigation and other legal proceedings and regulatory actions against us; |
| ● | the impact of recent and future legislative and regulatory changes, domestic or foreign; |
| ● | risks related to climate change and the negative impact it may have on our customers and their businesses; |
| ● | the imposition of tariffs or other governmental policies impacting the global supply chain and the value of products produced by our commercial borrowers; |
| ● | severe weather, natural disasters, wide spread disease or pandemics, acts of war, military conflicts, or terrorism, changes in foreign relations, or other adverse external events, including ongoing conflicts in the Middle East, the Russian invasion of Ukraine and recent military activities in Venezuela and Mexico; |
| ● | potential impairment to the goodwill the Company recorded in connection with acquisitions; |
| ● | changes to U.S. or state tax laws, regulations and governmental policies concerning the Company’s general business, including changes in interpretation or prioritization of such rules and regulations; |
| ● | the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks; and |
| ● | any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission. |
Theforegoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report. In addition, past results of operations are not necessarily indicative of future results. Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
