Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 260

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 260
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 to expand our operations
through internal growth and acquisitions could be materially impaired. In addition, if we decide to raise additional equity capital,
our current stockholders’ interests could be diluted.

Liquidity,
primarily through deposits, is essential to our business model and a lack of liquidity, or an increase in the cost of liquidity could
materially impair our ability to fund our operations and jeopardize our results of operation, financial condition and cash flows.

Liquidity represents
an institution’s ability to provide funds to satisfy demands from depositors, borrowers and other creditors by either converting
assets into cash or accessing new or existing sources of incremental funds. Liquidity risk arises from the possibility that we may be
unable to satisfy current or future funding requirements and needs.

Deposit levels may be
affected by several factors, including rates paid by competitors, general interest rate levels, returns available to customers on alternative
investments, customers seeking to maximize deposit insurance by limiting their deposits at a single financial institution to the maximum
federal deposit insurance level, general economic and market conditions and other factors. Loan repayments are a relatively stable source
of funds but are subject to the borrowers’ ability to repay loans, which can be adversely affected by a number of factors including
changes in general economic conditions, adverse trends or events affecting business industry groups or specific businesses, declines
in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters and other factors. Furthermore,
loans generally are not readily convertible to cash.

From time to time, if
deposits and loan payments are not sufficient to meet our needs, we may be required to rely on secondary sources of liquidity to meet
growth in loans, deposit withdrawal demands or otherwise fund operations. Such secondary sources include FHLB advances, brokered deposits,
secured and unsecured federal funds lines of credit from correspondent banks, Federal Reserve borrowings and/or accessing the equity
or debt capital markets. The availability of these secondary funding sources is subject to broad economic conditions, to regulation and
to investor assessment of our financial strength and, as such, the cost of funds may fluctuate significantly and/or the availability
of such funds may be restricted, thus impacting our net interest income, our immediate liquidity and/or our access to additional liquidity.
Additionally, if we fail to remain “well-capitalized” our ability to utilize brokered deposits may be restricted. We have
somewhat similar risks to the extent high balance core deposits exceed the amount of deposit insurance coverage available.