Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 935

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 3
Chunk 935
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 order for our assets and liabilities to be managed in a manner that
we believe will meet our immediate and long-term funding requirements. We seek to manage our liquidity position to meet the daily cash
flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return-on-investment objectives
of our stockholders. We also monitor our liquidity requirements in light of interest rate trends, changes in the economy, and the scheduled
maturity and interest rate sensitivity of our securities, loan portfolios and deposits. Liquidity management is made more complicated
because different balance sheet components are subject to varying degrees of management control. For example, the timing of maturities
of our investment portfolio is fairly predictable and subject to a high degree of control when we make investment decisions.

Our liquidity
position is supported by management of our liquid assets and liabilities and access to alternative sources of funds. Our short-term and
long-term liquidity requirements are primarily to fund on-going operations, including payment of interest on deposits and debt, extensions
of credit to borrowers and capital expenditures. These liquidity requirements are met primarily through our deposits, FHLB advances,
subordinated debt and the principal and interest payments we receive on loans and investment securities. Cash, interest-bearing deposits
in third party banks, securities available-for-sale and maturing or prepaying balances in our investment and loan portfolios are our
most liquid assets. Other sources of liquidity that are available to us include the sale of loans we hold for investment, the ability
to acquire additional national market non-core deposits, borrowings through the Federal Reserve’s discount window and the issuance
of additional debt.

At December 31, 2024,
Southwest Heritage Bank’s cash and cash equivalents were $113.6 million, or 12.4% of Southwest Heritage Bank’s total assets,
compared to $28.9 million, or 5.0% of total assets, at December 31, 2023. The increase in Southwest Heritage Bank’s liquid
assets during 2024 reflects cash acquired in the CBOA Merger, proceeds from the sale of the marked investment portfolio acquired in the
CBOA Merger, and loan payoffs. These cash increases were partially offset by the decline in deposit balances and the payoff of borrowings
since the CBOA Merger.

The liability portion
of our balance sheet serves as a primary source of liquidity. We plan to meet our future cash needs primarily through the generation
of deposits. Customer deposits have historically provided a