Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 24

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 24
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the institution from accepting deposits from correspondent banks; (i) requiring the institution to divest certain subsidiaries; (j) prohibiting
the payment of principal or interest on subordinated debt; and (k) ultimately, appointing a receiver for the institution.

21

Dividend
Payments

The primary source of
funds for Bancorp 34 is dividends from the Bank. While the Bank is a “covered savings association”, it continues to be treated
as a federal savings association for purposes of distribution of dividends. Without prior OCC approval, the Bank may not pay dividends
if the Bank would not be at least “well capitalized” or would not be an eligible savings association following the dividend
or in any calendar year that, in the aggregate, exceed the Bank’s year-to-date net income plus the Bank’s retained net income
for the two preceding years, among other limitations. The payment of dividends by any FDIC-insured institution is affected by the requirement
to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and an FDIC-insured institution generally
is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized. As described above,
the Bank exceeded its capital requirements under applicable guidelines as of December 31, 2024. Notwithstanding the availability of funds
for dividends, the OCC may prohibit the payment of dividends by the Bank if it determines such payment would constitute an unsafe or
unsound practice. In addition, under the Basel III Rule, institutions that seek the freedom to pay dividends will have to maintain the
2.5% capital conservation buffer. See “Capital and Related Requirements” above.

 Community
Reinvestment Act and Fair Lending Requirements 

The Bank is subject
to certain fair lending requirements and reporting obligations involving its home mortgage lending operations. Each bank is also subject
to certain requirements and reporting obligations under the Community Reinvestment Act (“CRA”). The CRA generally requires
federal banking agencies to evaluate the record of a financial institution in meeting the credit needs of its local communities, including
low- and moderate-income neighborhoods. The CRA further requires the agencies to take into account a bank’s record of meeting community
credit needs when evaluating applications for, among other things, new branches or mergers. The Bank received a “satisfactory”
CRA Assessment Rating from the OCC in its most recent examination. In addition to substantive penalties and corrective measures that
may be required for a violation of certain fair lending laws, the federal banking agencies may