CASH 2018 Annual Report

67 Existing insurance policies may not adequately protect the Company and its subsidiaries. Fidelity, business interruption, cybersecurity, and property insurance policies are in place with respect to the operations of the Company. Should any event triggering such policies occur, however, it is possible that our policies would not fully reimburse us for the losses we could sustain due to deductible limits, policy limits, coverage limits, or other factors. We generally renew our insurance policies on an annual basis. If the cost of coverage becomes too high, we may need to reduce our policy limits, increase the deductibles or agree to certain exclusions from our coverage in order to reduce the premiums to an acceptable amount. The loss of key members of our senior management team or key employees in the Bank's divisions, or our inability to attract and retain qualified personnel, could adversely affect our business. We believe that our success depends largely on the efforts and abilities of our senior executive management team. Their experience and industry contacts significantly benefit us. Our future success also depends in large part on our ability to attract, retain and motivate key management and operating personnel. On October 30, 2018, we announced that J. Tyler Haahr had stepped down as Chief Executive Officer and that Brad Hanson, President of the Company and the Bank, would assume the additional role of Chief Executive Officer. This, and any other management transition in the future, may create uncertainty and involve a diversion of resources and management attention, be disruptive to our daily operations or impact public or market perception, any of which could negatively impact our ability to operate effectively or execute our strategies and result in a material adverse impact on our business, financial condition, results of operations or cash flows. Additionally, as we continue to develop and expand our operations, we may require personnel with different skills and experiences, with a sound understanding of our business and the industries in which we operate. The competition for qualified personnel in the financial services industry is intense, and the loss of any of our key personnel or an inability to continue to attract, retain, and motivate key personnel could adversely affect our business. If we foreclose on and take ownership of real estate collateral property, we may be subject to the increased costs associated with the ownership of real property, resulting in reduced revenues. We may have to foreclose on collateral property to protect our investment and may thereafter own and operate such property. In such case, we would be exposed to the risks inherent in the ownership of real estate. The amount that we, as a mortgagee, may realize after a default is dependent upon factors outside of our control, including, but not limited to: (i) general or local economic conditions; (ii) neighborhood values; (iii) interest rates; (iv) real estate tax rates; (v) operating expenses of the mortgaged properties; (vi) supply of and demand for rental units or properties; (vii) ability to obtain and maintain adequate occupancy of the properties; (viii) zoning laws; (ix) governmental rules, regulations and fiscal policies; and (x) acts of God. Additionally, hazardous substances may be discovered on such foreclosed real estate. In this event, we could be required to remove the substances from and remediate the properties at our own cost and expense. The cost of removal and environmental remediation could be substantial. We may not have adequate remedies against the owners of the properties or other responsible parties and could find it difficult or impossible to sell the affected properties. Expenditures associated with the ownership of real estate, principally real estate taxes and maintenance costs, may have a material adverse effect on our business, financial condition and operating results. Therefore, the cost of operating a real property may exceed the rental income earned from such property, if any, and we may have to advance funds in order to protect our investment or may be required to dispose of the real property at a loss. The foregoing expenditures and costs could adversely affect our ability to generate revenues, resulting in reduced levels of profitability. Our agricultural loans are subject to factors beyond the Company’s control. The agricultural industry is subject to commodity price fluctuations. Extended periods of low commodity prices, higher input costs or poor weather conditions could result in reduced profit margins, reducing demand for goods and services provided by agriculture-related businesses, which, in turn, could affect other businesses in our market area. Any combination of these factors could produce losses within our agricultural loan portfolios.