1179500--3/31/2010--COMMUNITY_FIRST

related topics

{stock, price, share}

{loan, real, estate}

{condition, economic, financial}

{cost, contract, operation}

{personnel, key, retain}

{tax, income, asset}

{regulation, change, law}

{regulation, government, change}

{capital, credit, financial}

{operation, natural, condition}

{debt, indebtedness, cash}

{loss, insurance, financial}

{acquisition, growth, future}

{competitive, industry, competition}

Our loan portfolio includes a significant amount of real estate loans, including construction and development loans, which loans have a greater credit risk than residential mortgage loans. We could sustain losses if our asset quality declines. An inadequate allowance for loan losses would reduce our earnings. Further significant deterioration in our asset quality metrics may require us to raise additional capital or seek further regulatory approvals which, if not obtained, could adversely impact our profitability. We have increased levels of other real estate, primarily as a result of foreclosures, and we anticipate higher levels of foreclosed real estate expense. A decline in our stock price or expected future cash flows, or a material adverse change in our results of operations or prospects, could result in impairment of our goodwill. Liquidity needs could adversely affect our results of operations and financial condition. We rely on dividends from our bank subsidiary as our primary source of liquidity and payment of these dividends is limited under Tennessee law. Recent legislative and regulatory initiatives that were enacted in response to the recent financial crisis are beginning to wind down. Noncore funding represents a large component of our funding base. National or state legislation or regulation may increase our expenses and reduce earnings. Our ability to maintain required capital levels and adequate sources of funding and liquidity could be impacted by changes in the capital markets and deteriorating economic and market conditions. Our business strategy includes the continuation of growth plans, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively. Competition from financial institutions and other financial service providers may adversely affect our profitability. If the federal funds rate remains at current extremely low levels, our net interest margin, and consequently our net earnings, may continue to be negatively impacted. Changes in interest rates could adversely affect our results of operations and financial condition. Loss of our senior executive officers or other key employees could impair our relationship with our customers and adversely affect our business. The limitations on bonuses, retention awards, severance payments and incentive compensation contained in ARRA may adversely affect our ability to retain our highest performing employees. Events beyond our control may disrupt operations and harm operating results. We operate in a highly regulated environment and are supervised and examined by various federal and state regulatory agencies who may adversely affect our ability to conduct business. The Preferred Stock that we have issued to the U.S. Treasury impacts net income available to our common shareholders and our earnings per share. The Senior Preferred and Warrant Preferred shares that we have issued to the Treasury are senior to our shares of Common Stock and holders of these shares have certain rights and preferences that are senior to holders of our Common Stock. Holders of the Preferred Stock that we have issued to the U.S. Treasury may, under certain circumstances, have the right to elect two directors to our Board of Directors. An established public market for our common stock does not currently exist.

Full 10-K form ▸

1179500--3/31/2010--COMMUNITY_FIRST_INC