Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 15

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 15
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 regulatory review before
any company may acquire “control” of a bank or a bank holding company. Under the BHC Act, control is deemed to exist if a
company acquires 25% or more of any class of voting securities of a bank holding company; controls the election of a majority of the
members of the board of directors; or exercises a controlling influence over the management or policies of a bank or bank holding company.
On January 30, 2020, the Federal Reserve issued a final rule (which became effective September 30, 2020) that clarified and codified
the Federal Reserve’s standards for determining whether one company has control over another. The final rule established four categories
of tiered presumptions of noncontrol that are based on the percentage of voting shares held by the investor (less than 5%, 5-9.9%, 10-14.9%
and 15-24.9%) and the presence of other indicia of control. As the percentage of ownership increases, fewer indicia of control are permitted
without falling outside of the presumption of noncontrol. These indicia of control include nonvoting equity ownership, director representation,
management interlocks, business relationship and restrictive contractual covenants. Under the final rule, investors can hold up to 24.9%
of the voting securities and up to 33% of the total equity of a company without necessarily having a controlling influence.

Under the
Change in Bank Control Act, a person or company is generally required to file a notice with the Federal Reserve if it will,
as a result of the transaction, own or control 10% or more of any class of voting securities or direct the management or
policies of a bank or bank holding company and either if the bank or bank holding company has registered securities or if the
acquirer would be the largest holder of that class of voting securities after the acquisition. Transactions subject to the
BHC Act are exempt from Change in Bank Control Act requirements.

Source
of Strength

There are a number of
obligations and restrictions imposed by law and regulatory policy on bank holding companies with regard to their depository institution
subsidiaries that are designed to minimize potential loss to depositors and to the FDIC insurance funds in the event that the depository
institution becomes in danger of defaulting under its obligations to repay deposits. Under a policy of the Federal Reserve and the Dodd-Frank
Act, a bank holding company is required to serve as a source