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Risk Overview Q2, 2026
Risk Change Over Time
- Accounting & Financial Operations - Risk 1We Our goodwill may incur impairment to goodwill. become impaired.
In accordance with generally accepted accounting principles (GAAP), we record assets acquired and liabilities assumed in a business combination at their fair value with the excess of the purchase consideration over the net assets acquired resulting in the recognition of goodwill. We perform a goodwill evaluation at least annually to test for goodwill impairment. Our test of goodwill for potential impairment is based on a qualitative assessment by Management that takes into consideration macroeconomic conditions, industry and market conditions, cost or margin factors, financial performance and share price. Our evaluation of the fair value of goodwill involves a substantial amount of judgment. If our judgment was incorrect, or if events or circumstances change, and an impairment of goodwill was deemed to exist, we would be required to record a non-cash charge to earnings in our financial statements during the period in which such impairment is determined to exist. Any such charge could have a material adverse effect on our results of operations.
- Corporate Activity and Growth - Risk 2We pursue a Our strategy of supplementing internal growth by acquiring through acquisitions of other financial companies or their assets and liabilities, which we believe will help us fulfill our strategic objectives and enhance our earnings. We may could be adversely affected by risks associated with growth through such acquisitions.
As part of our general growth strategy, we periodically expand our business through acquisitions. While our primary focus is organic growth, from time to time, we engage in discussions with potential acquisition targets as part of our ordinary business activities. There can be no assurance that we will successfully identify suitable acquisition candidates, complete acquisitions, successfully integrate acquired operations into our existing operations, or expand into new markets. Future acquisitions may dilute shareholder value or may have an adverse effect upon our operating results during the integration process. In addition, acquired operations may fail to achieve the profitability levels of our existing operations or meet performance expectations. Transaction-related expenses may also adversely affect our earnings, which could, in turn, negatively impact the value of our stock. Acquiring banks, bank branches, or businesses involves several risks, including: - exposure to potential asset quality issues or unknown or contingent liabilities of the banks, businesses, assets, and liabilities we acquire;- higher than expected deposit attrition;- potential diversion of our management's time and attention;- fluctuation in market condition affecting the prices at which acquisitions can be made;- complicated or unsuccessful integrations of systems, procedures and personnel of the acquired entity into our company as this integration process is complicated and time-consuming and can also be disruptive to the clients of the acquired business;- potentially increased leverage, diminished liquidity, or additional capital requirements;- unable to sustain our past growth rate or grow at all in the future; and - the acquisition may generate goodwill that must be analyzed for impairment at least annually. If these risks or uncertainties are not properly addressed, our results of operations and financial condition may be negatively affected. If the integration process is not conducted successfully and with minimal adverse effect on the acquired business and its clients, we may not realize the anticipated economic benefits of particular acquisitions within the expected time frame, and we may lose clients or employees of the acquired business. We may also experience greater than anticipated client losses even if the integration process is successful.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 32
- Share Price & Shareholder Rights - Risk 1Anti-takeover provisions could negatively affect our shareholders.
Provisions in our articles of incorporation and bylaws, the corporate laws of the state of Washington and federal laws and regulations could delay or prevent a third party from acquiring us, despite the possible benefit to our shareholders, or otherwise negatively affect the market value of our stock. These provisions, among others, include restrictions on voting shares of our common stock beneficially owned in excess of 10% of total shares outstanding; and advance notice requirements for nominations for election to our Board of Directors; and for proposing matters that shareholders may act on at shareholder meetings. Our articles of incorporation also authorize our Board of Directors to issue preferred or other stock, and preferred or other stock could be issued as a defensive measure in response to a takeover proposal. In addition, because we are a bank holding company, the ability of a third party to acquire us is limited by applicable banking laws and regulations. The Bank Holding Company Act requires any bank holding company to obtain the approval of the Federal Reserve before acquiring 5% or more of any class of our voting securities. Any entity that is a holder of 25% or more of any class of our voting securities, or in some circumstances a holder of a lesser percentage, is subject to regulation as a bank holding company under the Bank Holding Company Act. Under the Change in Bank Control Act of 1978, as amended, any person (or persons acting in concert), other than a bank holding company, is required to notify the Federal Reserve before acquiring 10% or more of any class of our voting securities.
- Share Price & Shareholder Rights - Risk 2Our articles of incorporation contain a provision which could limit the voting rights of a holder of our common stock.
Our charter provides that any person or group who acquires beneficial ownership of our common stock in excess of 10% of the outstanding shares may not vote the excess shares. Accordingly, if a person acquires beneficial ownership of more than 10% of the outstanding shares of our common stock, that person's voting rights with respect to our common stock will not be commensurate with their economic interest in our company.
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