First Bancorp (FBNC)

Risks

• The COVID-19 (including variants of the virus) pandemic has impacted the local economies in the communities we serve and our business.
• Unfavorable economic conditions could adversely affect our business.
• Cybersecurity incidents could disrupt business operations, result in the loss of critical and confidential information, and adversely impact our reputation and results of operations.
• Our allowance for credit losses may not be adequate to cover actual losses; under CECL our provisions for credit losses may increase significantly and the provisions for credit losses may be more volatile than in the past.
• We are subject to extensive regulation, which could have an adverse effect on our operations.
• We face a risk of noncompliance with the BSA and other AML statutes and regulations and related enforcement actions.
• Consumers may decide not to use banks to complete their financial transactions.
• Negative public opinion regarding our Company and the financial services industry in general, could damage our reputation and adversely impact our earnings.
• The soundness of other financial institutions could adversely affect us.
• We are subject to interest rate risk, which could negatively impact earnings.
• In the normal course of business, we process large volumes of transactions involving millions of dollars. If our internal controls fail to work as expected, we could experience significant losses.
• Liquidity risk could impair our ability to fund operations and jeopardize our financial condition.
• If our goodwill becomes impaired, we may be required to record a significant charge to earnings.
• We might be required to raise additional capital in the future, but that capital may not be available or may not be available on terms acceptable to us when it is needed.
• We may be adversely impacted by the transition from LIBOR as a reference rate.
• We are subject to federal and state fair lending laws, and failure to comply with these laws could lead to material penalties.
• Focus on commercial loans may increase the risk of substantial credit losses.
• The Company's focus on lending to small- to mid-sized community-based businesses may increase its credit risk.
• We could experience losses due to competition with other financial institutions and non-banks.
• Failure to keep pace with technological change could adversely affect our business.
• New lines of business or new products and services may subject us to additional risk.
• Our reported financial results are impacted by management’s selection of accounting methods and certain assumptions and estimates.
• Our business continuity plans or data security systems could prove to be inadequate, resulting in a material interruption in, or disruption to, our business and a negative impact on our results of operations.
• We rely on certain external vendors.
• We are subject to losses due to errors, omissions, or fraudulent behavior by our employees, clients, counterparties, or other third parties.
• Future sales of our stock by our shareholders or the perception that those sales could occur may cause our stock price to decline.
• We may make future acquisitions, which could dilute current shareholders’ stock ownership and expose us to additional risks.
• Risks associated with acquisitions and the resulting integrations may affect costs, revenues, and market value.
• Attractive acquisition or expansion opportunities may not be available to us in the future.