measures will be successful. Any interruption in, or breach in security of, our computer systems and network infrastructure  could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us  to civil litigation and possible financial liability, any of which could have a material adverse effect on our financial  condition and results of operations.  Employee errors and misconduct could subject us to financial losses or regulatory sanctions and seriously harm our  reputation. Misconduct by our employees could include hiding unauthorized activities from us, improper or unauthorized  activities on behalf of our customers or improper use of confidential information. It is not always possible to prevent  employee errors and misconduct, and the precautions we take to prevent and detect this activity may not be effective in all  cases. Employee errors could also subject us to financial claims for negligence.  We maintain a system of internal controls and insurance coverage to mitigate against operational risks, including  data processing system failures and errors and customer or employee fraud. Should our internal controls fail to prevent or  detect an occurrence, or if any resulting loss is not insured or exceeds applicable insurance limits, it could have a material  adverse effect on our business, financial condition and results of operations. Our $16.5 million of subordinated debentures are held by two business trusts that we control. Interest payments on  the debentures must be paid before we pay dividends on our capital stock, including our common stock. We have the right  to defer interest payments on the debentures for up to 20 consecutive quarters. However, if we elect to defer interest  payments, all deferred interest must be paid before we may pay dividends on our capital stock. Deferral of interest  payments could also cause a decline in the market price of our common stock. None  The Company has 22 locations in 17 communities across Kansas: Manhattan (2), Auburn, Dodge City (2), Fort  Scott, Garden City, Great Bend (2), Hoisington, Junction City, LaCrosse, Lawrence (2), Louisburg, Osage City,  Osawatomie, Paola, Topeka (2), Wamego, and Wellsville, Kansas. The Company owns its main office in Manhattan,  Kansas and 19 branch offices and leases two branch offices. The Company leases one of the two Topeka, Kansas locations  and the Wamego, Kansas branch. The Company also leases a parking lot for one of the branch offices it owns.  There are no pending legal proceedings to which the Company or the Bank is a party or of which any of their  property is subject, other than ordinary routine litigation incidental to the Bank’s business. While the ultimate outcome of  current legal proceedings cannot be predicted with certainty, it is the opinion of management that the resolution of these  legal actions should not have a material effect on the Company’s consolidated financial position or results of operations.  Not applicable. 43  ITEM 4. MINE SAFETY DISCLOSURES  ITEM 3. LEGAL PROCEEDINGS ITEM 2. PROPERTIES ITEM 1B. UNRESOLVED STAFF COMMENTS  Failure to pay interest on our debt may adversely impact our ability to pay dividends.  We are subject to certain operational risks, including, but not limited to, customer or employee fraud and data  processing system failures and errors. 