CHFC 2017 Annual Report

activities could be material and could require us to use a substantial amount of common stock, cash, other liquid assets, and/or incur debt. Acquisitions and mergers typically involve the payment of a premium over book value, and, therefore, dilution of our tangible book value and ownership interest may occur in connection with any future transaction. Furthermore, failure to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from an acquisition could have a material adverse effect on our financial condition and results of operations, including net income per common share. Our acquisition activities could involve a number of additional risks, including the risks of: • delay in completing an acquisition or merger due to litigation or the regulatory approval process; • the recording of assets and liabilities of the acquired or merged company at fair value may materially dilute shareholder value at the transaction date and could have amaterial adverse effect on our financial condition and results of operations; • incurring the time and costs associated with identifying and evaluating potential acquisition or merger targets; • difficulty or unanticipated expense associatedwith converting the operating systems of the acquired ormerged company into ours: • potential exposure to unknown or contingent liabilities of the acquired or merged company; • our estimates and judgments used to evaluate credit, operations, management and market risks with respect to the acquired or merged company may not be accurate; • our exposure to potential asset quality issues of the acquired or merged company; • the time and costs of evaluating new markets, hiring experienced local management and opening new offices, and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the expansion; • diversion of our management's attention to the negotiation of a transaction, and the integration of the operations and personnel of the combining businesses; • the introduction of new products and services into our business; • potential disruption to our business; • the incurrence and possible impairment of goodwill and other intangible assets associated with an acquisition or merger and possible adverse short-term effects on our results of operations; • the possible loss of key employees and customers of the acquired or merged company; • difficulty in estimating the value of the acquired or merged company; and • potential changes in banking or tax laws or regulations that may affect the acquired or merged company. Failure to successfully address these and other issues related to acquisitions and mergers could have a material adverse effect on our financial condition and results of operations, and could adversely affect our ability to successfully implement our business strategy. Future acquisitions may be delayed, impeded, or prohibited due to regulatory issues. Our future acquisitions, particularly those of financial institutions, are subject to approval by a variety of federal and state regulatory agencies. The process for obtaining these required regulatory approvals has become substantially more difficult in recent years. Regulatory approvals could be delayed, impeded, restrictively conditioned or denied due to existing or new regulatory issues we have, or may have, with regulatory agencies, including, without limitation, issues related to anti-money laundering/ Bank Secrecy Act compliance, fair lending laws, fair housing laws, consumer protection laws, unfair, deceptive, or abusive acts or practices regulations, Community Reinvestment Act issues, and other similar laws and regulations. We may fail to pursue, evaluate or complete strategic and competitively significant acquisition opportunities as a result of our inability, or perceived or anticipated inability, to obtain regulatory approvals in a timely manner, under reasonable conditions or at all. Difficulties associated with potential acquisitions that may result from these factors could have a material adverse effect on our business, and, in turn, our financial condition and results of operations. 17