| PART I | Page |
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| Item 1 | Business | 5 |
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| Item 1A | Risk Factors | 16 |
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| Item 1B | Unresolved Staff Comments | 29 |
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| Item 1C | Cybersecurity | 30 |
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| Item 2 | Properties | 31 |
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| Item 3 | Legal Proceedings | 31 |
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| Item 4 | Mine Safety Disclosures | 31 |
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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 | 32 |
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| Item 6 | Reserved | 34 |
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| Item 7 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 35 |
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| Item 7A | Quantitative and Qualitative Disclosures about Market Risk | 59 |
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| Item 8 | Financial Statements and Supplementary Data | 60 |
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| Item 9 | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 119 |
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| Item 9A | Controls and Procedures | 119 |
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| Item 9B | Other Information | 119 |
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| Item 9C | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 119 |
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| PART III |
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| Item 10 | Directors, Executive Officers and Corporate Governance | 120 |
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| Item 11 | Executive Compensation | 120 |
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| Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 121 |
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| Item 13 | Certain Relationships and Related Transactions and Director Independence | 121 |
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| Item 14 | Principal Accountant Fees and Services | 121 |
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| PART IV |
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| Item 15 | Exhibits and Financial Statement Schedules | 122 |
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| Signatures | 126 | |
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NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report includes forward-looking statements, which may include forecasts of our financial results and condition, expectations for our operations and business, and our assumptions for those forecasts and expectations. Do not rely unduly on forward-looking statements. Actual results might differ significantly compared to our forecasts and expectations. See Part I, Item 1A. “Risk Factors,” and the other risks described in this report for factors to be considered when reading any forward-looking statements in this filing.
This report includes forward-looking statements, which are subject to the “safe harbor” created by section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. We may make forward-looking statements in our Securities and Exchange Commission (“SEC”) filings, press releases, news articles and when we are speaking on behalf of the Company. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Often, they include the words “believe,” “expect,” “target,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “potential,” “project,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” or “may.” These forward-looking statements are intended to provide investors with additional information with which they may assess our future potential. All of these forward-looking statements are based on assumptions about an uncertain future and are based on information available to us at the date of these statements. We do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions or events that occur after the date the forward-looking statements are made.
In this document, for example, we make forward-looking statements, which discuss our expectations about:
| ● | Our business objectives, strategies and initiatives, our organizational structure, the growth of our business and our competitive position and prospects, and the effect of competition on our business and strategies |
| ● | Our assessment of significant factors and developments that have affected or may affect our results |
| ● | Legal and regulatory actions, and future legislative and regulatory developments |
| ● | Regulatory and compliance controls, processes and requirements and their impact on our business |
| ● | The costs and effects of legal or regulatory actions |
| ● | Expectations regarding draws on performance letters of credit and liabilities that may result from recourse provisions in standby letters of credit |
| ● | Our intent to sell or hold, and the likelihood that we would be required to sell, various investment securities |
| ● | Our regulatory capital requirements, including the capital rules established after the 2008 financial crisis by the U.S. federal banking agencies and our current intention not to elect to use the community bank leverage ratio framework |
| ● | Expectations regarding our non-payment of a cash dividend on our common stock in the foreseeable future |
| ● | Credit quality and provision for credit losses and management of asset quality and credit risk, expectations regarding collections and the timing thereof |
| ● | Our allowances for credit losses, including the conditions we consider in determining the unallocated allowance and our portfolio credit quality, the adequacy of the allowance for credit losses, underwriting standards, and risk grading |
| ● | Our assessment of economic conditions and trends and credit cycles and their impact on our business |
| ● | The seasonal nature of our business |
| ● | The impact of changes in interest rates and our strategy to manage our interest rate risk profile and the possible effect of changes in residential mortgage interest rates on new originations and refinancing of existing residential mortgage loans |
| ● | Loan portfolio composition and risk grade trends, expected charge-offs, portfolio credit quality, loan demand, our strategy regarding loan modifications, delinquency rates and our underwriting standards and our expectations regarding our recognition of interest income on loans that were provided payment deferrals upon completion of the payment forbearance period |
| ● | Our deposit base including renewal of time deposits and the outlook for deposit balances |
| ● | The impact on our net interest income and net interest margin of changes in interest rates |
| ● | The effect of possible changes in the initiatives and policies of the federal and state bank regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, the Securities and Exchange Commission and other standard setters |
| ● | Tax rates and the impact of changes in the U.S. tax laws |
| ● | Our pension and retirement plan costs |
| ● | Our liquidity strategies and beliefs concerning the adequacy of our liquidity, sources and amounts of funds and ability to satisfactorily manage our liquidity |
| ● | Critical accounting policies and estimates, the impact or anticipated impact of recent accounting pronouncements or changes in accounting principles |
| ● | Expected rates of return, maturities, loss exposure, growth rates, yields, and projected results |
| ● | The possible impact of weather-related or other natural conditions, including drought, fire or flooding, seismic events, and related governmental responses, including related electrical power outages, on economic conditions, especially in the agricultural sector |
| ● | Maintenance of insurance coverages appropriate for our operations |
| ● | Threats to the banking sector and our business due to cybersecurity issues and attacks and regulatory expectations related to cybersecurity |
| ● | The possible effects on community banks and our business from the failures of other banks |
| ● | The possible adverse impacts on the banking industry and our business from a period of significant, prolonged inflation |
| ● | Descriptions of assumptions underlying or relating to any of the foregoing |
There are numerous risks and uncertainties that could and will cause actual results to differ materially from those discussed in our forward-looking statements. Many of these factors are beyond our ability to control or predict and could have a material adverse effect on our financial condition and results of operations or prospects. Such risks and uncertainties include but are not limited to those listed in this “Note Regarding Forward-Looking Statements,” Part I, Item 1A “Risk Factors,” Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and in our other reports to the SEC.
Readers of this document should not rely unduly on forward-looking information and should consider all uncertainties and risks disclosed throughout this document and in our other reports to the SEC, including, but not limited to, those discussed below. Any factor described in this report could by itself, or together with one or more other factors, adversely affect our business, future prospects, results of operations, or financial condition. We do not undertake to update forward-looking statements to reflect facts, circumstances, assumptions, or events that occur after the date the forward-looking statements are made.
PART I
