FKYS

MKT CAP $120.1MP/E 15.1DIV YIELD 5.90%FCF YIELD 8.40%REV TTM —NET INCOME $7.9M +2.1%NET CASH $143M52W 16.25 – 20.20SEC XBRL · TTM TO Invalid Date

How FKYS rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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New in FY2025

As of December 31, 2025, approximately 90.2% of the Corporation’s loan portfolio was secured by real estate (including construction loans).
At December 31, 2025, the allowance for credit losses totaled $9.4 million, representing 0.98% of average total loans.
The Corporation’s operations of its business, including its transactions with customers, are increasingly done electronically, and this has increased its risks related to cybersecurity.
Increasingly, financial transactions are processed electronically, both by the Corporation and its customers, via online, mobile, and cloud technologies.
Operational systems are progressively becoming cloud-based.
Conducting business in this environment depends on secure transmission and storage of data in digital form as well as procedures and systems to prevent or ensure the resiliency against system failures, interruptions or breaches in security.
As a result, the Corporation is exposed to the risk of cyber-attacks in the normal course of business, which may be perpetrated against the Corporation, or its third-party service providers and its customers.
Further, the Corporation may face unknown or contingent liabilities arising from cybersecurity incidents or data breaches that previously occurred at companies it acquires.
Such incidents may not have been discovered, disclosed, or if previously discovered fully remediated before closing, and the acquired company’s representations, warranties, and indemnities may be limited in scope, duration, or recoverability.
As a result, the Corporation could incur costs or liabilities after an acquisition relating to regulatory investigations, litigation, remediation efforts, reputational harm, or customer and partner claims, which could adversely affect its business, financial condition, and results of operations.
In general, cyber incidents can result from deliberate attacks or unintentional events.
The Corporation has observed an increased level of attention in the industry focused on cyber-attacks that include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption.
While the Corporation maintains insurance coverage that may, subject to policy terms and conditions including significant self-insured deductibles, cover or ameliorate certain financial aspects of cyber risks, such insurance coverage may be insufficient to cover all losses.
The Corporation maintains policies and procedures designed to prevent or limit the effects of possible security breaches of its information systems.
However, the techniques used for cyber-attacks are becoming increasingly sophisticated, including the use of AI, and there can be no assurance that preventive and detective measures are fail-safe.
While the Corporation has not incurred any material losses related to cyber-attacks, nor is it aware of any specific or threatened material cyber incidents as of the date of this report, it may incur substantial costs and suffer other negative consequences if it falls victim to successful cyber-attacks.
Such negative consequences could include remediation costs that may include liability for stolen assets or information and repairing system damage that may have been caused; deploying additional personnel and protection technologies, training employees, and engaging third-party experts and consultants; lost revenues resulting from unauthorized use of proprietary information or the failure to retain or attract customers following an attack; disruption or failures of physical infrastructure, operating systems or networks that support the Corporation’s business and customers resulting in the loss of customers and business opportunities; additional regulatory scrutiny and possible regulatory penalties; litigation; and, reputational damage adversely affecting customer or investor confidence.
If the Corporation and the Bank are required to maintain higher levels of capital, the Corporation and the Bank may have fewer opportunities to invest capital into interest-earning assets, which could limit the profitable business operations available to the Corporation and the Bank and adversely impact its financial condition and results of operations. If the Corporation concludes that any debt securities are carrying a potential loss, the Corporation will be required to establish an allowance for expected credit losses.
Changes to trade policies and tariffs can have an adverse impact on the Corporation’s business and its customers.
Changes in trade policies, including the imposition of tariffs or the escalation of a trade war, could negatively impact the economic conditions in the markets the Corporation serves.
The Corporation’s customers-particularly local businesses engaged in agriculture, manufacturing, and retail-may face higher costs for imported goods and materials, reduced export demand, and supply chain disruptions due to increased tariffs.
These challenges could lead to lower revenues, reduced profitability, and potential layoffs, all of which may impair the Corporation’s customers' ability to meet their financial obligations.
Furthermore, prolonged trade tensions and economic uncertainty could lead to market volatility, declining asset values, and weakened consumer confidence.
If its customers experience financial stress, the Corporation could see an increase in loan delinquencies and credit losses, negatively affecting its asset quality and overall financial performance.
Additionally, any decline in local economic activity could reduce loan demand, deposit growth, and fee income, which are critical to the Corporation’s long-term success.
While it actively monitors economic and policy developments, the Corporation cannot predict the outcome of trade negotiations or the full impact of tariffs and trade restrictions on its business, customers, and the broader economy.
Any adverse effects from tariffs or a trade war could materially and negatively impact its financial condition, results of operations, and future growth prospects.
We identified material weaknesses in our internal control over financial reporting at December 31, 2023 and December 31, 2025 and cannot assure you that additional material weaknesses will not be identified in the future.
The material weakness had no impact upon our reported financial condition or results of operation at and for the fiscal year ended December 31, 2023, any prior periods or subsequent periods.
Our management identified an additional material weakness in our internal control over financial reporting at December 31, 2025 that had a material impact on our reported financial condition and results of operation for the fiscal year ended December 31, 2025, but did not impact any prior periods or subsequent periods.
Financial results for the fiscal year ended December 31, 2025 were revised and restated accordingly.
We cannot assure you that additional significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future.
The increasing use of social media platforms presents risks and challenges and our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could materially adversely impact our business.
The use of social media platforms, including weblogs (blogs), social media websites, and other forms of Internet-based communications allows individuals access to a broad audience of consumers and other interested persons.
Social media practices in the banking industry are continually evolving, which creates uncertainty and risk of noncompliance with regulations applicable to our business.

Gone since FY2024

As of December 31, 2024, approximately 89.8% of the Corporation’s loan portfolio was secured by real estate (including construction loans).
At December 31, 2024, the allowance for credit losses totaled $7.7 million, representing 0.83% of average total loans.
If the Corporation and the Bank are required to maintain higher levels of capital, the Corporation and the Bank may have fewer opportunities to invest capital into interest-earning assets, which could limit the profitable business operations available to the Corporation and the Bank and adversely impact its financial condition and results of operations.
If the Corporation concludes that any debt securities are carrying a potential loss, the Corporation will be required to establish an allowance for expected credit losses.
We identified a material weakness in our internal control over financial reporting at December 31, 2023 and cannot assure you that additional material weaknesses will not be identified in the future.
See Item 9A, "Controls and Procedures." While the material weakness had no impact upon our reported financial condition or results of operation at and for the fiscal year ended December 31, 2023, any prior periods or subsequent periods, we cannot assure you that additional significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future.
The increasing use of social media platforms presents new risks and challenges and our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could materially adversely impact our business.
There has been a marked increase in the use of social media platforms, including weblogs (blogs), social media websites, and other forms of Internet-based communications which allow individuals access to a broad audience of consumers and other interested persons.
Social media practices in the banking industry are evolving, which creates uncertainty and risk of noncompliance with regulations applicable to our business.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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