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New words:
addressed, artificial, bond, climate, compromised, dealer, declared, deed, fraud, guideline, HTM, intelligence, judgement, November, pressure, profile, repaid, repay, solvency, study, transparency, unanticipated
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adjustment, advanced, attempt, CDs, clearing, controlled, creditor, delay, desire, division, eliminate, EMC, enhance, entry, feel, fewer, foreclosed, forfeiture, half, heightened, interdependent, led, maintained, media, member, mirror, obtaining, onboarding, owed, pandemic, parent, paydown, physical, possession, ratably, reassessed, redeemable, redeemed, redemption, reinsurance, remained, resumed, routine, slight, slowdown, smaller, social, speed, subscription, TDR, temporary, Teton, transitioning, troubled, unanimously, uncertainty, vest, Vintage, volatile, voted, withdraw
Financial report summary
?Risks
- Our banking, trust and wealth advisory operations are geographically concentrated in Colorado, Arizona, Wyoming Montana, and California, leading to significant exposure to those markets.
- The soundness of other financial institutions could adversely affect us.
- Changes in interest rates could reduce our net interest margins and net interest income.
- If we are unable to continue to originate residential real estate loans and sell them into the secondary market for a profit, our earnings could decrease.
- Our loan portfolio includes a significant number of commercial loans, which involve risks specific to commercial borrowers.
- We may be subject to claims and litigation pertaining to our fiduciary responsibilities.
- We may be adversely affected by the soundness of certain securities brokerage firms.
- The investment management contracts we have with our clients are terminable without cause and on relatively short notice by our clients, which makes us vulnerable to short-term declines in the performance of the securities under our management.
- Fee revenue represents a significant portion of our consolidated revenue and is subject to decline, among other things, in the event of a reduction in, or changes to, the level or type of investment activity by our clients.
- The trust wealth management fees we receive may decrease as a result of poor investment performance, in either relative or absolute terms, which could decrease our revenues and net earnings.
- Our allowance for credit losses may not be adequate to cover actual losses.
- Our business and operations may be adversely affected in numerous and complex ways by external business disruptors in the financial services industry.
- Liquidity risk could adversely affect our ability to fund operations and hurt our financial condition.
- We may not be able to maintain a strong core deposit base or other low-cost funding sources.
- We receive substantial deposits and assets under management as a result of referrals by professionals, such as attorneys, accountants, and doctors, and such referrals are dependent upon the continued positive interaction with and financial health of those referral sources.
- Our largest trust client accounts for 37.0% of our total assets under management.
- The success of our business depends on achieving our strategic objectives, including through acquisitions which may not increase our profitability and may adversely affect our future operating results.
- We face intense competition from other banks and financial institutions and other wealth and investment management firms that could hurt our business.
- We may not be successful in implementing our internal growth strategy or be able to manage the risks associated with our anticipated growth through opening new boutique private trust bank offices, which could have a material adverse effect on our business, financial condition and results of operations.
- We may be required to recognize a significant charge to earnings if our goodwill or other intangible assets become impaired, which could have a material adverse effect on our financial condition and results of operations.
- We are required to make significant estimates and assumptions in the preparation of our financial statements and our estimates and assumptions may not be accurate.
- The occurrence of fraudulent activity, breaches of our information security, and cybersecurity attacks could adversely affect our ability to conduct our business, manage our exposure to risk or expand our businesses, result in the disclosure or misuse of confidential or proprietary information, increase our costs to maintain and update our operational and security systems and infrastructure, and adversely impact our results of operations, liquidity and financial condition, as well as cause legal or reputational harm.
- We rely on communications, information, operating and financial control systems technology and related services from third-party service providers and we may suffer an interruption in those systems.
- Our ability to attract and retain clients and key associates could be adversely affected if our reputation is harmed.
- We may incur significant losses due to ineffective risk management processes and strategies.
- New lines of business or new products and services may subject us to additional risks.
- We rely on customer and counterparty information, which subjects us to risks if that information is not accurate or is incomplete.
- The risk of another pandemic could adversely impact our business and financial results.
- Economic and trade sanctions against targeted foreign countries and regimes could adversely affect us.
- The financial services industry is highly regulated, and legislative or regulatory actions taken now or in the future may have a significant adverse effect on our operations.
- Federal and state banking agencies periodically conduct examinations of our business, including compliance with laws and regulations, and our failure to comply with any supervisory actions which we are, or may become, subject to as a result of such examinations may adversely affect us.
- We are subject to stringent capital requirements.
- The level of our commercial real estate loan portfolio may subject us to heightened regulatory scrutiny.
- We face a risk of noncompliance and enforcement action with the Bank Secrecy Act and other anti-money laundering statutes and regulations.
- Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities.
- We can be subject to legal and regulatory proceedings, investigations and inquiries related to conduct risk.
- The trading volume in our common stock is less than other larger financial institutions.
- The obligations associated with being a public company require significant resources and management attention, which increases our costs of operations and may divert focus from our business operations.
- If we fail to maintain effective internal control over financial reporting, we may not be able to report our financial results accurately and timely.
- Securities analysts may not initiate or continue coverage on us.
- We may issue new debt securities, which would be senior to our common stock and may cause the market price of our common stock to decline.
- Our common stock is subordinate to our existing and future indebtedness, and is effectively subordinated to all the indebtedness and other non-common equity claims against our subsidiaries.
- We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our common stock, which could depress the price of our common stock.
- We are dependent upon the Bank for cash flow, and the Bank’s ability to make cash distributions is restricted.
- Our corporate organizational documents and provisions of federal and state law to which we are subject contain certain provisions that could have an anti-takeover effect and may delay, make more difficult or prevent an attempted acquisition that you may favor or an attempted replacement of our board of directors or management.
- An investment in our common stock is not an insured deposit and is subject to risk of loss.
Management Discussion
- The three months ended March 31, 2024 compared with the three months ended March 31, 2023. We reported net income available to common shareholders of $2.5 million for the three months ended March 31, 2024, compared to $3.8 million of net income available to common shareholders for the three months ended March 31, 2023, a $1.3 million, or 34.2% decrease. For the three months ended March 31, 2024, our income before income tax was $3.6 million, a $1.6 million, or 30.7% decrease from the three months ended March 31, 2023. The decrease was primarily driven by a decrease in Net interest income as a result of higher Interest expense due to higher deposit costs, offset partially by higher Interest income, higher Non-interest income and lower Non-interest expense.