1380712--3/31/2009--1st_Pacific

related topics

{stock, price, share}

{loan, real, estate}

{condition, economic, financial}

{acquisition, growth, future}

{regulation, government, change}

{loss, insurance, financial}

{competitive, industry, competition}

{regulation, change, law}

{financial, litigation, operation}

{capital, credit, financial}

{control, financial, internal}

{personnel, key, retain}

{tax, income, asset}

We have reported a substantial net loss for the year ended December 2008. Although we were profitable in each of the previous five years, no assurance can be given as to when or if we will return to profitability. Our loan portfolio suffered substantial deterioration during 2008 and we continue to work through significant non-performing loans or loans otherwise adversely classified. No assurance can be given that the portfolio will not experience further weakness or loss. We face lending risks, especially with respect to our small- and medium-sized business clients. We could suffer losses if we do not properly assess lending risks. Our ability to raise deposits will be impaired because the Bank will most likely be deemed to be adequately capitalized for regulatory purposes. We are limited in the amount we can lend to any individual borrower. The current changing economic environment poses significant challenges for us. Declines in Southern California real estate values could materially impair profitability and financial condition. Our valuation and write-downs of other real estate owned may not accurately reflect current market values or be adequate to address current and future losses, which could affect our financial condition and profitability. Changing interest rates may adversely affect our financial performance. We are limited in our ability to pay cash dividends. Our ability to service our debt, pay dividends, and otherwise satisfy our obligations as they come due is substantially dependent on capital distributions from 1st Pacific Bank of California which we have agreed with the California Department of Financial Institutions and the Federal Reserve Bank of San Francisco not to take. We are reliant upon brokered deposits and other funding alternatives that may increase our cost of funds, adversely affect our operating results and may result in a shortage of financing sources. We rely on Federal Home Loan Bank system borrowings for secondary and contingent liquidity sources. Our future growth may be limited if we are not able to raise additional capital. Our ability to grow may be impacted by our capital levels. We compete against larger banks and other institutions. We compete against banks and other institutions that have received Federal capital. Current banking laws and regulations affect activities. The requirements of being a public company may strain our resources and distract management. Economic conditions either nationally or locally in areas in which our operations are concentrated may adversely affect our business. The efforts of the federal government to stabilize the financial institution sector could result in more rigorous competition for 1st Pacific Bank of California. The efforts of the federal government to stabilize the financial institution sector could result in more costs than benefits to 1st Pacific Bank of California. Legislative or other government action to provide mortgage relief may negatively impact our business. Our financial condition and results of operations would be adversely affected if our allowance for loan losses is not sufficient to absorb actual losses or if we are required to increase our allowance. We rely on our management and other key personnel, and the loss of any of them may adversely affect our operations. Failure to implement new technologies in our operations may adversely affect our growth or profits. We may be subject to an increased likelihood of class action litigation and additional regulatory enforcement. We can issue common stock and preferred stock without your approval, diluting your proportional ownership interest. The price of our common stock may decrease, preventing you from selling your shares at a profit. Penny Stock rules may make buying or selling our common stock difficult. An investment in our common stock is not an insured deposit.

Full 10-K form ▸

1380712--3/31/2009--1st_Pacific_Bancorp