Certain matters discussed in this Annual Report on Form 10-K may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to our financial condition, results of operations, plans, objectives, future performance or business. Forward-looking statements are not statements of historical fact, are based on certain assumptions and are generally identified by use of the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.” Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about, among other things, expectations of the business environment in which we operate, projections of future performance or financial items, perceived opportunities in the market, potential future credit experience, and statements regarding our mission and vision. These forward-looking statements are based upon current management expectations and may, therefore, involve risks and uncertainties. Our actual results, performance, or achievements may differ materially from those suggested, expressed, or implied by forward- looking statements as a result of a wide variety or range of factors including, but not limited to:
| ● | potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; |
| ● | changes in the interest rate environment, including the recent past increases in the Board of Governors of the Federal Reserve System (“Federal Reserve”) benchmark rate and duration at which such increased interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; |
| ● | the impact of continuing high inflation and the current and future monetary policies of the Federal Reserve in response thereto; |
| ● | the effects of any federal government shutdown; |
| ● | expected revenues, cost savings, synergies and other benefits from our recent acquisition of Pacific Enterprise Bancorp (“PEB”) might not be realized within the expected time frames or at all and costs or difficulties relating to integration matters, including but not limited to client and employee retention, might be greater than expected; |
| ● | the credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and changes in our allowance for credit losses and provision for credit losses; |
| ● | changes in economic conditions in general and in California, Colorado, New Mexico and Washington specifically, including as a result of employment levels and labor shortages, and the effects of inflation, a potential recession or slowed economic growth caused by increasing oil prices and supply chain disruptions; |
| ● | changes in the levels of general interest rates and the relative differences between short and long-term interest rates, loan and deposit interest rates; |
| ● | our net interest margin and funding sources; |
| ● | fluctuations in the demand for loans and the number of unsold homes, land and other properties; |
| ● | fluctuations in real estate values in our market areas; |
| ● | secondary market conditions for loans and our ability to sell loans in the secondary market; |
| ● | results of examinations of us by regulatory authorities and the possibility that any such regulatory authority may, among other things, limit our business activities, require us to change our business mix, increase our allowance for credit losses, write-down asset values or increase our capital levels, affect our ability to borrow funds or maintain or increase deposits; |
| ● | risks related to our acquisition strategy, including our ability to identify future suitable acquisition candidates, exposure to potential asset and credit quality risks and unknown or contingent liabilities, the need for capital to finance such transactions, our ability to obtain required regulatory approvals and possible failures in realizing the anticipated benefits from acquisitions; |
| ● | challenges arising from attempts to expand into new geographic markets, products, or services; |
| ● | future goodwill impairment due to changes in our business, market conditions, or other factors; |
| ● | legislative or regulatory changes that adversely affect our business including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules, |
| ● | and other governmental initiatives affecting the financial services industry; |
| ● | our ability to attract and retain deposits; |
| ● | our ability to control operating costs and expenses; |
| ● | the use of estimates in determining fair value of certain of our assets and liabilities, which estimates may prove to be incorrect and result in significant changes in valuation; |
| ● | difficulties in reducing risk associated with the loans and securities on our balance sheet; |
| ● | staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; |
| ● | the effectiveness of our risk management framework; |
| ● | disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions, which could expose us to litigation or reputational harm; |
| ● | an inability to keep pace with the rate of technological advances; |
| ● | our ability to retain key members of our senior management team and our ability to attract, motivate and retain qualified personnel; |
| ● | costs and effects of litigation, including settlements and judgments; |
| ● | our ability to implement our business strategies and manage our growth; |
| ● | liquidity issues, including our ability to borrow funds or raise additional capital, if necessary; |
| ● | the loss of our large loan and deposit relationships; |
| ● | increased competitive pressures among financial services companies; |
| ● | the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; |
| ● | our ability to pay dividends on our common stock; |
| ● | the quality and composition of our securities portfolio and the impact of any adverse changes in the securities markets; |
| ● | inability of key third-party providers to perform their obligations to us; |
| ● | changes in accounting principles, policies or guidelines and practices, as may be adopted by the financial institution regulatory agencies, the Public Company Accounting Oversight Board or the Financial Accounting Standards Board; |
| ● | the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; |
| ● | other risks described from time to time in our documents filed with or furnished to the U.S. Securities and Exchange Commission (the “SEC”), including this Form 10-K. |
In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this Form 10-K might not occur, and you should not put undue reliance on any forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements. Moreover, you should treat these statements as speaking only as of the date they are made and based only on information then actually known to us.
We do not undertake and specifically disclaim any obligation to revise any forward- looking statements included in this Form 10-K or the reasons why actual results could differ from those contained in such statements, whether as a result of new information or to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2023 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of us and could negatively affect our consolidated financial condition and consolidated results of operations as well as our stock price performance.
