Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 280

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 280
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 and Gilbert; three in Pima County, Arizona, in the cities of Tucson and Green Valley; one branch
in Otero County, New Mexico in the city of Alamogordo; and one branch in Dona Ana County New Mexico, in the city of Las Cruces. Following
the CBOA merger, our retail services offered at the two Scottsdale locations were combined into one branch, reducing the number of branches
from eight to its current seven.

We offer a full range
of relationship-focused services to meet our clients’ business and personal financial objectives. Our product lines include commercial
loans, commercial real estate loans, and a variety of commercial and consumer deposit products, including noninterest bearing accounts,
interest-bearing demand products, savings accounts, money market accounts and certificates of deposit. We also offer online banking and
bill payment services, online cash management, safe deposit box rentals, debit card and ATM card services and the availability of a network
of ATMs for our customers.

We generate
most of our income from interest income on loans, investment securities and deposits in other financial institutions, and service charges
on customer accounts. We incur interest expenses on deposits and other borrowed funds and non-interest expenses such as salaries and
employee benefits, occupancy expenses, and technology expenses. Net interest income is the largest source of revenue. Net interest spread
is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin
is calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as
noninterest-bearing deposits and shareholders’ equity, also fund interest-earning assets, net interest margin includes the benefit
of these noninterest-bearing sources.

Changes in the
market interest rates and interest rates we earn on interest-earning assets or pay on interest-bearing liabilities, as well as the volume
and types of interest-earning assets, interest-bearing and noninterest-bearing liabilities, and shareholders’ equity, are usually
the largest drivers of periodic changes in net interest spread, net interest margin, and net interest income. Fluctuations in market
interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments,
changes in unemployment, the money supply, political and international conditions, and conditions in domestic and foreign financial markets.
Periodic changes in the volume and types of loans in Southwest Heritage Bank’s loan portfolio are affected by, among other factors,
economic and competitive conditions in Arizona and New Mexico, as