Lakeland Financial (LKFN)

Risks

• A downturn in general economic or business conditions, nationally or in markets where our business is concentrated, could have an adverse effect on our business, results of operations and financial condition.
• The COVID-19 pandemic, including the spread of new variants, has had and may continue to have an adverse impact on our business and results of operations, and could have an adverse impact on our financial condition or capital levels, any of which could be material.
• Continued elevated levels of inflation could adversely impact our business and results of operations.
• Labor shortages and failure to attract and retain qualified employees could negatively impact our business, results of operations and financial condition.
• Interest rate shifts may reduce net interest income and otherwise negatively impact our financial condition and results of operations.
• If we do not effectively manage our credit risk, we may experience increased levels of nonperforming loans, charge offs and delinquencies, which could require further increases in our provision for credit losses.
• If our allowance for credit losses is not sufficient to absorb losses that may occur in our loan portfolio, our financial condition and liquidity could suffer.
• Commercial and industrial loans make up a significant portion of our loan portfolio.
• Our loan portfolio includes commercial real estate loans, which involve risks specific to real estate value.
• Our loan portfolio has a notable concentration in agri-business, which has a higher level of uncontrolled risk.
• Our consumer loans generally have a higher degree of risk of default than our other loans.
• Nonperforming assets take significant time to resolve and adversely affect our results of operations and financial condition and could result in further losses in the future.
• Liquidity risks could affect operations and jeopardize our business, results of operations and financial condition.
• Any action or steps to change coverages or eliminate Indiana’s Public Deposit Insurance Fund could require us to find alternative, higher-cost funding sources to replace public fund deposits or to provide for collateralization of these deposits.
• Declines in asset values may result in impairment charges and adversely affect the value of our investments, financial performance and capital.
• We may be adversely impacted by the discontinuance of LIBOR as a short-term interest rate utilized for loans and other financing agreements.
• We may need to raise additional capital in the future to achieve our growth plans, but that capital may not be available when it is needed.
• We may experience difficulties in managing our growth, and our growth strategy involves risks that may negatively impact our net income.
• We face intense competition in all phases of our business from other banks, financial institutions and nonbank financial service providers.
• Attractive acquisition opportunities may not be available to us in the future.
• We may be materially and adversely affected by the highly regulated environment in which we operate.
• Monetary policies and regulations of the Federal Reserve could adversely affect our business, financial condition and results of operations.
• We may be adversely affected by changes in U.S. tax laws and regulations.
• We are required to maintain capital to meet regulatory requirements, and, if we fail to maintain sufficient capital, whether due to losses, an inability to raise additional capital or otherwise, our financial condition, liquidity and results of operations, as well as our ability to maintain regulatory compliance, would be adversely affected.
• We may be subject to a higher consolidated effective tax rate if there is a change in tax laws relating to LCB Investments II, Inc. or if LCB Funding, Inc. fails to qualify as a real estate investment trust.
• Our accounting policies and methods are the basis for how we prepare our consolidated financial statements and how we report our financial condition and results of operations, and they require management to make estimates about matters that are inherently uncertain.
• We may experience increases to, and volatility in, the balance of the allowance for credit losses and related provision expense due to the adoption of the CECL methodology.
• Our ability to attract and retain management and key personnel and any damage to our reputation may affect future growth and earnings.
• We have a continuing need to adapt to technological change and we may not have the resources to effectively implement new technology.
• The Company’s information systems may experience an interruption or breach in security and cyber-attacks, all of which could have a material adverse effect on the Company’s business.
• We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data processing system failures and errors.