Company: MGNO
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000927089-25-000061
Chunk: 24

Company: Magnolia Bancorp, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1A
Chunk 24
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 in our control environment, risk assessment, information and communication, and monitoring controls contributed to the following additional material weaknesses.

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      We did not design and maintain effective controls regarding significant accounts, transaction cycles and disclosures to ensure policies and procedures designed to mitigate the risks to the achievement of objectives are carried out; and 

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      We did not design and maintain effective information technology general controls which could result in misstatements potentially impacting all financial statement accounts and disclosures. Specifically, user access controls were not appropriately designed and maintained to adequately restrict user and privileged access to financial applications and data to the appropriate personnel, segregation of duties over preparation and review of journal entries, and access to critical spreadsheets and similar end-user data files is not restricted and is accessible by all personnel of Mutual Savings and Loan Association. 

      39

These material weaknesses could result in a misstatement in the financial statements that would result in a material misstatement in the annual or interim financial statements that would not be prevented or detected.

For additional information, including the remedial actions we have taken to address these material weaknesses, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Internal Control Over Financial Reporting” in Exhibit 13 to this Form 10-K.

Our small number of employees makes it difficult to fully segregate duties within the finance and accounting functions to maintain effective internal controls.

Several of our employees have multiple duties and responsibilities that extend beyond their designated titles. As discussed above, this resulted in material weaknesses in our internal control over financial reporting. When our prior chief financial officer resigned in May 2023, we promoted Ms. Cambre as our current Chief Financial Officer and we also hired a new Director of Compliance and Internal Audit in May 2023. As previously noted, Ms. Cambre announced in September 2024 that she had accepted another full-time job but will continue to stay in her current positions on a part-time basis at least through completion of the conversion. We hired an accounting person in September 2024, and Ms. Cambre is assisting in the training and transition of such person prior to her departure. We believe we will need to hire additional compliance, accounting and financial staff with appropriate public company experience and technical knowledge following completion of the conversion, which will increase our operating expenses.

Changes in management’s estimates and assumptions may have a material impact on our consolidated financial statements and our financial condition or operating results.

In preparing our financial statements, our management is and will be required under applicable rules and regulations to make estimates and assumptions as