Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 48

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 48
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 has happened several times in the past few years. A flat or inverted yield
curve, which tends to decrease net interest margin, would adversely impact our lending businesses and investment portfolio. The Federal
Reserve, consistent with long-term goals, has been raising rates in response to inflation. We cannot predict how long those conditions
will exist. In 2025 there is significant risk, especially if yield curve inversion remains common and a recession begins, that our net
interest margin could compress.

36

We
are subject to environmental liability and climate change risk associated with our business activities.

We own certain of our
properties, and, in the course of our business, we may purchase real estate, or we may foreclose on and take title to real estate. As
a result, we could be subject to environmental liabilities with respect to these properties. We may be held liable to a governmental
entity or to third parties for property damage, personal injury, investigation and clean-up costs required by these parties in connection
with environmental contamination or may be required to investigate or clean up hazardous or toxic substances or chemical releases at
a property. The costs associated with investigation or remediation activities could be substantial and could exceed the value of the
underlying properties. In addition, if we are the owner or former owner of a contaminated site, we may be subject to common law claims
by third parties based on damages and costs resulting from environmental contamination emanating from the property. Any significant environmental
liabilities could have a material adverse effect on our business, financial condition and results of operations.

In addition, we are
subject to the growing risk of climate change. Among the risks associated with climate change are more frequent severe weather events.
Severe weather events such as droughts, heat waves, fires, hurricanes, tropical storms, tornados, winter storms, freezes, flooding and
other large-scale weather catastrophes in our markets subject us to significant risks and more frequent severe weather events magnify
those risks. Large-scale weather catastrophes or other significant climate change effects that either damage or destroy residential or
multifamily real estate underlying mortgage loans or real estate collateral, or negatively affects the value of real estate collateral
or the ability of borrowers to continue to make payments on loans, could decrease the value of our real estate collateral or increase
our delinquency rates in the affected areas and thus diminish the value of our loan portfolio. Such events could also cause downturns
in economic and market conditions generally, which could have an adverse effect