ITEM 1A. RISK FACTORS  Difficult economic and market conditions have adversely affected our industry.  Difficult conditions in the housing market over the past few years, with decreased home prices and increased  delinquencies and foreclosures, have negatively impacted the credit performance of mortgage and commercial real estate  loans and resulted in significant write-downs of assets by many financial institutions across the United States. Difficult  economic conditions, reduced availability of commercial credit and heightened levels of unemployment have negatively  impacted the credit performance of commercial and consumer credit, resulting in write-downs. Concerns over the economy,  both by financial institutions and prospective borrowers, have resulted in decreased lending by many financial institutions to  their customers and to each other. These economic conditions have led to heightened commercial and consumer  delinquencies, lack of customer confidence, increased market volatility and inconsistent general business activity. The  resulting economic pressure on consumers and businesses has adversely affected our industry and may adversely affect our  business, results of operations and financial condition. More recently, the economy has begun to stabilize. The housing  market has improved over recent years, and asset write-downs have slowed. However, there remain risks that could  undermine the more recent improvements in the economy's stabilization. In particular, we may face the following risks in  connection with these events:  • We may face further increased regulation of our industry, especially in light of the myriad regulations passed,  and yet to be passed, pursuant to the Dodd-Frank Act, and compliance with such regulation may increase our  costs and limit our ability to pursue business opportunities.  • Customer demand for loans secured by real estate could be reduced due to weaker economic conditions, an  increase in unemployment, a decrease in real estate values or an increase in interest rates.  • The process we use to estimate losses inherent in our credit exposure requires difficult, subjective and  complex judgments, including forecasts of economic conditions and how these economic conditions might  impair the ability of our borrowers to repay their loans. The level of uncertainty concerning economic  conditions may adversely affect the accuracy of our estimates which may, in turn, impact the reliability of the  process.  • The value of the portfolio of investment securities that we hold may be adversely affected.  • Our ability to assess the creditworthiness of our customers may be impaired if the models and approaches we  use to select, manage and underwrite the loans become less predictive of future behaviors.  • Our ability to borrow from other financial institutions or to engage in sales of mortgage loans to third parties  on favorable terms, or at all, could be adversely affected by disruptions in the capital markets or other events,  including deteriorating investor expectations.  • We expect to face increased capital requirements, both at the Company level and at the Bank level. In this  regard, the Collins Amendment to the Dodd-Frank Act requires the federal banking agencies to establish  minimum leverage and risk-based capital requirements that will apply to both insured banks and their holding  companies. Furthermore, the Group of Governors and Heads of Supervision, the oversight body of the Basel  Committee on Banking Supervision, have announced an agreement to a strengthened set of capital  requirements for internationally active banking organizations, known as Basel III. On November 9, 2012, the  U.S. banking organizations announced that the implementation of the proposed rules under Basel III was  indefinitely delayed in the United States. However, these rules may limit our ability to pursue business  opportunities and adversely affect our results of operations and growth prospects in the future.  • Declines in our stock price, as well as changes to other risk factors discussed herein, could result in  impairment of our goodwill which would have an adverse effect on our earnings.  33  An investment in our securities is subject to certain risks inherent in our business. Before making an investment  decision, you should carefully consider the risks and uncertainties described below together with all of the other information  included in this report. In addition to the risks and uncertainties described below, other risks and uncertainties not currently  known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial  condition and results of operations. The value or market price of our securities could decline due to any of these identified  or other risks, and you could lose all or part of your investment. 