Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 258

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 258
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 banking areas. Through digital marketing and service platforms, many banks are making
client inroads unrelated to physical presence. This competitive risk is especially pronounced from the largest U.S. banks, and from online-only
banks, due in part to the investments they are able to sustain in their digital platforms. Companies as disparate as PayPal, Coinbase
and Starbucks provide payment and exchange services which compete directly with banks in ways not possible traditionally.

The
nature of technology-driven disruption to our industry is changing, in some cases seeking to displace traditional financial service providers
rather than merely enhance traditional services or their delivery.

A number of recent technologies
have worked with the existing financial system and traditional banks, such as the evolution of ATM cards into debit/credit cards and
the evolution of debit/credit cards into smart phones. These sorts of technologies often have expanded the market for banking services
overall while siphoning a portion of the revenues from those services away from banks and disrupting prior methods of delivering those
services. Additionally, some recent innovations may tend to replace traditional banks as financial service providers rather than merely
augmenting those services.

We
may be adversely affected by the lack of soundness of other financial institutions.

Financial services institutions
are interrelated as a result of trading, clearing, counterparty, or other relationships. We have exposure to many different industries
and counterparties, and routinely execute transactions with counterparties in the financial services industry, including commercial banks,
brokers and dealers, investment banks, and other institutional clients. Many of these transactions expose us to credit risk in the event
of a default by a counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized
or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due to us. Any such losses
could have a material adverse effect on our financial condition and results of operations.

The
value of securities in our investment portfolio may decline in the future.

As of December 31, 2024,
we had a carrying amount of $90.5 million of investment securities. The value of our investment securities may be adversely affected
by market conditions, including changes in interest rates, and the occurrence of any events adversely affecting the issuer of particular
securities in our investments portfolio. The Company evaluates all securities on a quarterly basis to determine if a credit loss exists.
The process for determining credit losses usually requires complex, subjective judgments about the future financial performance of the
issuer in