| Industries |
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| Asset Management and Custody Banks |
| Diversified Financial Services |
| Consumer Discretionary |
| Investment Banking and Brokerage |
| Exposures |
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| Military |
| Intelligence |
| Regime |
| Express intent |
| Provide |
| Leadership |
| Event Codes |
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| Solicit support |
| Accident |
| Warn |
| Decline comment |
| Yield to order |
| Promise |
| Sports contest |
| Host meeting |
| Sanction |
| Acknowledge responsibility |
| Force |
| Military blockade |
| Comment |
| Wiki | Wiki Summary |
|---|---|
| Financial condition report | In accounting, a financial condition report (FCR) is a report on the solvency condition of an insurance company that takes into account both the current financial status, as reflected in the balance sheet, and an assessment of the ability of the company to survive future risk scenarios. Risk assessment in an FCR involves dynamic solvency testing, a type of dynamic financial analysis that simulates management response to risk scenarios, to test whether a company could remain solvent in the face of deteriorating economic conditions or major disasters. |
| Financial statement | Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity.\nRelevant financial information is presented in a structured manner and in a form which is easy to understand. |
| Financial ratio | A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. |
| Investment banking | Investment banking denotes certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client's agent in the issuance of debt or equity securities. |
| Interest rate | An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed. |
| Compound interest | Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest. It is the result of reinvesting interest, or adding it to the loaned capital rather than paying it out, or requiring payment from borrower, so that interest in the next period is then earned on the principal sum plus previously accumulated interest. |
| Nominal interest rate | In finance and economics, the nominal interest rate or nominal rate of interest is either of two distinct things: \n\nthe rate of interest before adjustment for inflation (in contrast with the real interest rate); or,\nfor interest rates "as stated" without adjustment for the full effect of compounding (also referred to as the nominal annual rate). An interest rate is called nominal if the frequency of compounding (e.g. |
| Real interest rate | The real interest rate is the rate of interest an investor, saver or lender receives (or expects to receive) after allowing for inflation. It can be described more formally by the Fisher equation, which states that the real interest rate is approximately the nominal interest rate minus the inflation rate. |
| Interest rate parity | Interest rate parity is a no-arbitrage condition representing an equilibrium state under which investors interest rates available on bank deposits in two countries. The fact that this condition does not always hold allows for potential opportunities to earn riskless profits from covered interest arbitrage. |
| Interest rate cap and floor | An interest rate cap is a type of interest rate derivative in which the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price. An example of a cap would be an agreement to receive a payment for each month the LIBOR rate exceeds 2.5%. |
| Effective interest rate | The effective interest rate (EIR), effective annual interest rate, annual equivalent rate (AER) or simply effective rate is the interest rate on a loan or financial product restated from the nominal interest rate and expressed as the equivalent interest rate if compound interest was payable annually in arrears.\nIt is used to compare the interest rates between loans with different compounding periods, such as weekly, monthly, half-yearly or yearly. |
| Alternative investment | An alternative investment (also called an alternative asset) is an investment in any asset class excluding stocks, bonds, and cash. The term is a relatively loose one and includes tangible assets such as precious metals, collectibles (art, wine, antiques, cars, coins, musical instruments, or stamps) and some financial assets such as real estate, commodities, private equity, distressed securities, hedge funds, exchange funds, carbon credits, venture capital, film production, financial derivatives, cryptocurrencies, non-fungible tokens, and tax receivable agreements. |
| Foreign direct investment | A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control. |
| Fidelity Investments | Fidelity Investments Inc., commonly referred to as Fidelity, earlier as Fidelity Management & Research or FMR, is an American multinational financial services corporation based in Boston, Massachusetts. The company was established in 1946 and is one of the largest asset managers in the world with $4.5 trillion in assets under management, now as of December 2021 their assets under administration amounts to $11.8 trillion. |
| Fisher Investments | Fisher Investments is an independent money management firm headquartered in Camas, Washington.\n\n\n== History ==\nKen Fisher founded the firm in 1979, incorporated in 1986, then served as CEO until July 2016, when he was succeeded by long-time Fisher Investments employee Damian Ornani. |
| Porter's five forces analysis | Porter's Five Forces Framework is a method of analysing the operating environment of a competition of a business. It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack thereof) of an industry in terms of its profitability. |
| Competition | Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, individuals, economic and social groups, etc. |
| Abstract syntax tree | In computer science, an abstract syntax tree (AST), or just syntax tree, is a tree representation of the abstract syntactic structure of text (often source code) written in a formal language. Each node of the tree denotes a construct occurring in the text. |
| Quantum mechanics | Quantum mechanics is a fundamental theory in physics that provides a description of the physical properties of nature at the scale of atoms and subatomic particles.: 1.1 It is the foundation of all quantum physics including quantum chemistry, quantum field theory, quantum technology, and quantum information science.\nClassical physics, the collection of theories that existed before the advent of quantum mechanics, describes many aspects of nature at an ordinary (macroscopic) scale, but is not sufficient for describing them at small (atomic and subatomic) scales. |
| Theodore Streleski | Theodore Landon "Ted" Streleski (b. 1936) is an American former graduate student in mathematics at Stanford University who murdered his former faculty advisor, Professor Karel de Leeuw, with a ball-peen hammer on August 18, 1978. |
| Six Sigma | Six Sigma (6σ) is a set of techniques and tools for process improvement. It was introduced by American engineer Bill Smith while working at Motorola in 1986.Six Sigma strategies seek to improve manufacturing quality by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. |
| Security (finance) | A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. |
| Profit (economics) | An economic profit is the difference between the revenue a commercial entity has received from its outputs and the opportunity costs of its inputs. It equals to total revenue minus total cost, including both explicit and implicit costs. |
| Profitability index | Profitability index (PI), also known as profit investment ratio (PIR) and value investment ratio (VIR), is the ratio of payoff to investment of a proposed project. It is a useful tool for ranking projects because it allows you to quantify the amount of value created per unit of investment. |
| Customer profitability | Customer profitability (CP) is the profit the firm makes from serving a customer or customer group over a specified period of time, specifically the difference between the revenues earned from and the costs associated with the customer relationship in a specified period. According to Philip Kotler,"a profitable customer is a person, household or a company that overtime, yields a revenue stream that exceeds by an acceptable amount the company's cost stream of attracting, selling and servicing the customer."\nCalculating customer profit is an important step in understanding which customer relationships are better than others. |
| Return on equity | The return on equity (ROE) is a measure of the profitability of a business in relation to the equity. Because shareholder's equity can be calculated by taking all assets and subtracting all liabilities, ROE can also be thought of as a return on assets minus liabilities. |
| Regulatory agency | A regulatory agency (regulatory body, regulator) or independent agency (independent regulatory agency) is a government authority that is responsible for exercising autonomous dominion over some area of human activity in a licensing and regulating capacity.\nThese are customarily set up to strengthen safety and standards, and/or to protect consumers in markets where there is a lack of effective competition. |
| Regulatory state | The term regulatory state refers to the expansion in the use of rulemaking, monitoring and enforcement techniques and institutions by the state and to a parallel change in the way its positive or negative functions in society are being carried out. The expansion of the state nowadays is generally via regulation and less via taxing and spending. |
| Regulatory affairs | Regulatory affairs (RA), also called government affairs, is a profession within regulated industries, such as pharmaceuticals, medical devices, cosmetics, agrochemicals (plant protection products and fertilizers), energy, banking, telecom etc. Regulatory affairs also has a very specific meaning within the healthcare industries (pharmaceuticals, medical devices, biologics and functional foods). |
| Regulatory law | Regulatory law refers to secondary legislation, including regulations, promulgated by an executive branch agency under a delegation from a legislature. It contrasts with statutory law promulgated by the legislative branch, and common law or case law promulgated by the judicial branch. |
| Regulatory T cell | The regulatory T cells (Tregs or Treg cells), formerly known as suppressor T cells, are a subpopulation of T cells that modulate the immune system, maintain tolerance to self-antigens, and prevent autoimmune disease. Treg cells are immunosuppressive and generally suppress or downregulate induction and proliferation of effector T cells. |
| Regulation A | In the United States under the Securities Act of 1933, any offer to sell securities must either be registered with the United States Securities and Exchange Commission (SEC) or meet certain qualifications to exempt it from such registration. Regulation A (or Reg A) contains rules providing exemptions from the registration requirements, allowing some companies to use equity crowdfunding to offer and sell their securities without having to register the securities with the SEC. Regulation A offerings are intended to make access to capital possible for small and medium-sized companies that could not otherwise bear the costs of a normal SEC registration and to allow nonaccredited investors to participate in the offering. |
| Formula One regulations | The numerous Formula One regulations, made and enforced by the FIA and later the FISA, have changed dramatically since the first Formula One World Championship in 1950. This article covers the current state of F1 technical and sporting regulations, as well as the history of the technical regulations since 1950. |
| Regulation of therapeutic goods | The regulation of therapeutic goods, defined as drugs and therapeutic devices, varies by jurisdiction. In some countries, such as the United States, they are regulated at the national level by a single agency. |
| Vehicle emission standard | Emission standards are the legal requirements governing air pollutants released into the atmosphere. Emission standards set quantitative limits on the permissible amount of specific air pollutants that may be released from specific sources over specific timeframes. |
| New York Codes, Rules and Regulations | The New York Codes, Rules and Regulations (NYCRR) contains New York state rules and regulations. The NYCRR is officially compiled by the New York State Department of State's Division of Administrative Rules. |
| Risk Factors |
|---|
| FIRST OAK BROOK BANCSHARES INC ITEM 1A Risk Factors Our business, financial condition and results of operations are subject to various risks, including those discussed below, which may affect the value of our securities |
| Set forth below are certain risk factors which we believe to be relevant to an understanding of our business |
| This list should not be considered a comprehensive list of all potential risks |
| You should also refer to the other information included in this Form 10-K, including our consolidated financial statements and related notes and our “Forward Looking Statement” for additional information |
| Significant risk factors include: Credit Risk |
| Our earnings, financial condition, and reputation may be adversely affected if we fail to manage our credit risk satisfactorily |
| Originating and underwriting loans is integral to the success of our business |
| This business requires us to take “credit risk,” which is the risk of losing principal and interest income because borrowers fail to repay their loans |
| Such losses or defaults may be mitigated by the existence of adequate collateral and/or our loan loss reserves or aggravated by their inadequacy |
| While most of our loans are secured by collateral, some are not |
| The capacity of borrowers to repay their debts and the value of any collateral that may be pledged to secure their obligations can be adversely affected by many factors outside our control, including local or national economic downturns, supply and demand in a specific industry or business segment, and increases in interest rates |
| The factors we consider in calculating the adequacy of our allowance for loan losses, which we describe in greater detail in the section titled “Allowance for Loan Losses,” is subject to considerable judgment by management; if our assumptions turn out to be incorrect, the result could have an adverse affect on our earnings and financial condition and financial condition |
| To a lesser extent, we also face credit risk in the non US Government securities in the investment portfolio |
| We have the risk that securities’ issuers may default on their obligations and the risk that very few non 11 _________________________________________________________________ [64]Table of Contents US Government securities are backed by collateral |
| An investment default could have an adverse effect on our earnings |
| Interest Rate and Duration Risk |
| Our earnings and financial condition can be adversely affected by changes in interest rates |
| Our earnings and financial condition are highly dependent upon our “net interest income,” which is the difference between interest earned from loans and investments and interest paid on deposits and borrowings |
| The narrowing of interest-rate spreads between the interest we earn and the interest we pay (This narrowing is often referred to as “margin compression” or “margin pressure |
| ”) can adversely affect our earnings and financial condition |
| Interest rate levels themselves are highly sensitive to many national and global factors, including the rate of inflation, the rate of economic growth, employment levels, the relationship between and/or instability in domestic and foreign economies and financial markets, and government revenues and expenditures |
| Interest rate levels are also highly sensitive to competitive factors within our local markets |
| See “Geographic Risk” below |
| While the foregoing national, global and local factors are largely beyond our control, interest rate risk is also dependent on our asset and liability management |
| We currently have a mismatch, commonly called a “negative gap,” whereby our rate-sensitive liabilities (mostly deposits) substantially exceed our rate sensitive assets (mostly loans and investments) for at least the next year |
| This arises because more of our deposit liabilities reprice or have the potential to reprice more frequently than our loan and investment assets |
| See “Interest Rate Sensitive Position” |
| In a rising interest rate environment, such as has existed since June 2004, governmental monetary policy and competitive forces have put upward pressure on deposit rates |
| At the same time, longer contractual maturities on certain fixed rate loans and fixed rate investments have limited our ability to increase rates on these loans and investments |
| The result has been a squeeze on our net interest margin |
| We cannot predict when interest rate increases will cease or when margin pressure will ease |
| Potential profits are also affected by the shape of the “yield curve” for fixed-income securities, especially US Government and Agency debt |
| This phenomenon permits financial intermediaries to borrow at lower shorter-term rates (for example, by issuing one-year CDs to depositors) and investing in securities for longer terms at higher rates, thus garnering “spread” income |
| This sort of mismatch creates “duration risk |
| ” The normal upward sloping yield curve has recently flattened and inverted — whereby rates on shorter-term debt equals or exceeds rates on longer-term debt |
| We cannot predict when the “yield curve” will return to its more normal upward slope and profit-making opportunities from borrowing short-term and lending longer-term will return |
| Over the last 25 years inverted yield curves have occurred only infrequently and have lasted only for relatively short periods |
| Geographic Risks |
| Increased competition in this Chicago market or any prolonged economic downturn in this Chicago market could adversely affect our profitability and financial condition |
| Although our Chicago market is extremely large, there is now excess competition in it among financial institutions and other financial service providers |
| The effects of this intense competition have been higher costs for deposits, lower pricing and weaker terms on loans, higher compensation needed to attract and retain bankers, and higher costs to buy branch sites and fewer attractive branch sites |
| In meeting these competitive challenges in the Chicago market, we have fewer financial resources than many of our most aggressive, expansion-minded competitors |
| We cannot predict when or if this excessive competition will subside |
| Regulatory Risk |
| We are subject to extensive federal and state legislation, regulation, and supervision |
| Among other government agencies and private regulatory bodies, we are supervised by the Federal Reserve, FDIC, State of Illinois Department of Financial and Professional Regulation, the SEC, and the National Association of Securities Dealers (at First Oak Brook Capital Markets, Inc |
| The burden of regulatory compliance has increased under current legislation and banking and securities regulations and is likely to continue to have or may have a significant impact on the financial services industry |
| Recent legislation and regulatory changes, changes in enforcement policies, and capital adequacy standards are increasing our costs of doing business and, consequently, may result in an advantage for our less regulated competitors |
| Also, future regulatory changes and capital requirements could adversely affect our future results |
| Additionally, the agencies that regulate us have broad discretionary authority to initiate enforcement action for failure to comply with applicable regulations and laws |
| If 12 _________________________________________________________________ [65]Table of Contents we fail to comply, we can be subject to substantial fines and significant limitations on our operations |
| The significant federal and state regulations that affect us are described in this report under the heading “Regulatory Matters |
| ” In addition to direct banking and securities regulations, we are also impacted by financial accounting standards, federal and state tax laws, and bankruptcy laws |
| These standards, laws and interpretations are constantly changing and evolving |
| The nature, extent and timing of the adoption of significant new laws, regulations and standards, or changes in or repeal of existing laws, regulations or standards, or specific actions of regulators, may have a material impact on our business or on our results |
| It is, however, currently impossible to predict the effect of their impact |
| Effective management of balance sheet liquidity is necessary to fund growth in earning assets, to meet maturing obligations and depositors’ withdrawal requirements, and to pay shareholders’ dividends |
| We currently have numerous sources of liquidity including readily marketable investment securities, shorter-term loans within our loan portfolio, principal and interest cash flows from investments and loans, the ability to attract retail and public fund time deposits and to purchase brokered time deposits and access to various borrowing arrangements (such as Federal Home Loan Bank of Chicago advances and the Federal Reserve discount window) |
| If for any reason sources of liquidity such as these are cut-off when needed, there could be an adverse affect on our earnings and financial condition |
| See “Liquidity” for more information |
| We rely heavily on a number of communications and information systems to conduct our business |
| Any failure or interruptions or breach in the security of these systems could result in failures or disruptions in our customer relationships, financial accounting programs and records, deposits, trust investments, servicing or loan origination systems |
| In addition, we are subject to errors, customer and employee fraud, and catastrophic failures that could result from terrorism or natural disasters |
| We maintain a system of internal controls, back-up systems, and disaster recovery programs to mitigate against some of these occurrences, and we maintain insurance coverage for some risks that are insurable |
| Should such an event occur that is not mitigated, prevented or detected by our internal controls, back-up systems, or recovery programs or is uninsured or underinsured, it could have a significant adverse impact on our business, financial condition or earnings |
| Dividend Payout Restrictions |
| We currently pay a quarterly cash dividend on our common shares |
| However, there can be no assurance that we will be able to pay dividends in the future |
| The declaration of dividends is subject to the discretion of our Board of Directors which takes into account many factors, including our profitability, capital needs, liquidity, cash flows from our subsidiaries, and applicable regulatory limitations |
| The federal and state regulatory framework impacting dividends generally restricts subsidiary banks’ and bank holding companys’ dividends to a formula tied to net profits, prohibits dividends from banks found to be engaging or about to engage in “unsound and unsafe” practices (which can include the payment of dividends, depending on the bank’s financial condition), and requires banks to maintain appropriate levels of capital |
| As a result of such factors, there can be no assurance of the amount, if any, or timing of future dividend payouts |
| Personnel Risk |
| Our success depends heavily upon the continued service of our senior bankers and our ability to attract and retain qualified financial services personnel |
| There is significant competition in the Chicago market among financial service providers to attract front-line bankers |
| Loss of key personnel and the potential difficulty and cost in promptly replacing them in this competitive environment could, for a mid-sized financial institution such as ours, negatively affect our business, profitability and financial condition |
| Strategic Execution Risks |
| Our financial performance and profitability depend on our ability to execute our strategies, including customer retention, branch expansion, loan growth, and private banking initiatives (under the “Chicago Private Bank” brand) |
| Our ability to execute well may be adversely affected by competitive factors, regulatory impediments, changes in interest rates, our ability to retain and attract key personnel, and access to sufficient capital resources |
| See “Branch Expansion” for more information |