Economic Impact - As of June 30, 2024, a 100 basis point increase in interest rates is estimated to result in a 9.8% decrease in economic value of equity (EVE) and a 3.7% decrease in net interest income[103]. - The Federal Reserve Board's monetary policies could significantly impact the company's business and financial condition[112]. Competition and Market Position - The company faces significant competition in the banking sector, which may limit growth and profitability, as competitors may offer better terms or lower interest rates[106]. - The company’s asset size may hinder its ability to compete effectively, limiting its capacity to invest in marketing and technology[107]. Regulatory and Compliance Risks - Regulatory changes and compliance costs could adversely affect operations and increase operational costs[108]. - The company is classified as an emerging growth company, which allows it to take advantage of reduced reporting requirements, potentially making its stock less attractive to investors[113]. - The cost of additional finance and accounting systems to meet public company reporting requirements will increase expenses[121]. - Changes in accounting standards could materially impact reported earnings and financial condition[122]. - Legal and regulatory proceedings could have a materially adverse effect on the business and financial condition[124]. - Federal Reserve Board regulations may preclude the payment of dividends on common stock in the foreseeable future[129]. Operational Risks - The company relies on third-party vendors for key services, exposing it to additional cybersecurity risks and operational challenges[119]. - Fraudulent activities pose a risk to the company, potentially leading to financial losses and reputational damage[120]. - Management's estimates and assumptions may significantly affect consolidated financial statements and operating results[123]. Reputation and Market Perception - The company's reputation is critical for success, and any negative impact could adversely affect performance[126]. - Public stockholders own a minority of CFSB Bancorp's common stock, limiting their voting control[127]. - The common stock is not heavily traded, leading to potential price volatility[128]. - Various factors may complicate takeover attempts, including regulatory approval requirements and charter provisions[130]. Societal and Environmental Factors - Societal responses to climate change may lead to cost increases and demand drops for certain products and services[125].
CFSB Bancorp(CFSB) - 2024 Q4 - Annual Report