Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 17

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 17
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 essentially the same as those that apply to such
holding company’s bank subsidiary and are described below under “Bank Regulation—Capital and Related Requirements.”

Dividend
Payments 

Our ability to pay dividends
to our stockholders may be affected by both general corporate law considerations and policies of the Federal Reserve applicable to bank
holding companies. Bancorp 34 is a Maryland corporation and subject
to the limitations of the MGCL. The MGCL allows Bancorp 34 to pay dividends from the net earnings of the corporation for the fiscal year
in which the dividend is made, the net earnings of the corporation for the preceding fiscal year, or the sum of net earnings of the corporation
for the preceding eight fiscal quarters. The MGCL provides that no dividends may be made by a corporation if, after giving effect to
the dividend, the corporation would not be able to pay its indebtedness as it becomes due in the usual course of business, or the corporation’s
total assets would be less than the sum of the corporation’s total liabilities plus, unless the charter permits otherwise, the
amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of stockholders whose preferential rights on dissolution are superior to those receiving the distribution.

In addition, as a general
matter, the Federal Reserve has indicated that the board of directors of a bank holding company should eliminate, defer or significantly
reduce dividends to stockholders if: (a) the company’s net income available to stockholders for the past four quarters, net
of dividends previously paid during that period, is not sufficient to fully fund the dividends; (b) the prospective rate of earnings
retention is inconsistent with the company’s capital needs and overall current and prospective financial condition; or (c) the
company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios. Under
Federal Reserve policy, bank holding companies are expected to inform the Federal Reserve reasonably in advance of declaring or paying
a dividend that exceeds earnings for the period (e.g., quarter) for which the dividend is being paid or that could result in a material
adverse change to the organization’s capital structure. The Federal Reserve also possesses enforcement powers over bank
holding companies and their non-bank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations
of applicable statutes and regulations. Among these powers is the ability to proscribe the payment of dividends by