27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis is designed to provide a better understanding of
various factors related to the results
of operations and financial condition of the Company and the Bank.
This discussion is intended to supplement and
highlight information contained in the accompanying unaudited condensed consolidated
financial statements and related
notes for the quarters ended March 31, 2023 and 2022, as well as the information contained
in our Annual Report on Form
10-K for the year ended December 31, 2022.
Special Cautionary Notice Regarding Forward-Looking Statements
Various
of the statements made herein under the captions “Management’s
Discussion and Analysis of Financial Condition
and Results of Operations”, “Quantitative and Qualitative Disclosures about Market
Risk”, “Risk Factors” “Description of
Property” and elsewhere, are “forward-looking statements” within the
meaning and protections of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”).
Forward-looking statements include statements with respect to our beliefs, plans, objectives,
goals, expectations,
anticipations, assumptions, estimates, intentions and future performance, and involve
known and unknown risks,
uncertainties and other factors, which may be beyond our control, and
which may cause the actual results, performance,
achievements or financial condition of the Company to be materially different
from future results, performance,
achievements or financial condition expressed or implied by such forward-looking
statements.
You
should not expect us to
update any forward-looking statements.
All statements other than statements of historical fact are statements that could be
forward-looking statements.
You
can
identify these forward-looking statements through our use of words such as “may,”
“will,” “anticipate,” “assume,”
“should,” “indicate,” “would,” “believe,” “contemplate,” “expect,”
“estimate,” “continue,” “designed”, “plan,” “point to,”
“project,” “could,” “intend,” “seeks,” “model,” “simulations,” “target” and
other similar words and expressions of the
future.
These forward-looking statements may not be realized due to a variety of factors,
including, without limitation:
●
the effects of future economic, business and market conditions and
changes, foreign, domestic and local, including
inflation, seasonality, natural
disasters or climate change, such as rising sea and water levels, hurricanes and
tornados, COVID-19 or other epidemics or pandemics including supply chain disruptions,
inventory volatility, and
changes in consumer behaviors;
●
the effects of war or other conflicts, acts of terrorism, trade restrictions, sanctions or
other events that may affect
general economic conditions;
●
governmental monetary and fiscal policies, including the continuing effects
of fiscal and monetary stimuli in
response to the COVID-19 crisis, followed by changes in monetary policies beginning
in March 2022 in response
to inflation, including increases in the Federal Reserve’s
target federal funds rate and reductions in the Federal
Reserve’s holdings of securities;
●
legislative and regulatory changes, including changes in banking, securities and tax laws,
regulations and rules and
their application by our regulators, including capital and liquidity requirements, and changes
in the scope and cost
of FDIC insurance, including changes being considered in light of two regional bank
failures in California and
●
the failure of assumptions and estimates, as well as differences in, and changes to,
economic, market and credit
conditions, including changes in borrowers’ credit risks and payment behaviors from
those used in our loan
portfolio reviews;
●
the risks of inflation, changes in market interest rates and the shape of the yield curve on the levels, composition
and costs of deposits and borrowings, the values of our securities and loans, loan demand
and mortgage loan
originations, and the values and liquidity of loan collateral, securities, and interest-sensitive
assets and liabilities,
and the risks and uncertainty of the amounts realizable on collateral; the risks of further increases in market interest rates creating unrealized losses on our securities available for sale,