Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 59

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 59
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/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 order to assess the probability of receiving all contractual principal and interest payments on the security. Because of changing
economic and market conditions affecting issuers, we may be required to recognize credit losses in future periods, which could have a
material adverse effect on our business, financial condition, or results of operations.

Our
deposit insurance premiums could be higher in the future, which could have an adverse effect on our future earnings.

The FDIC insures deposits
at FDIC-insured depository institutions, such as the Bank, up to $250,000 per depositor for each account ownership category. Our regular
assessments are based on average consolidated total assets minus average tangible equity as well as by risk classification, which includes