Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 247

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 247
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 we
will be able to avoid material adverse effects on our net interest margin in all market conditions.

A
flat or inverted yield curve may reduce our net interest margin and adversely affect our loan and investment portfolios.

The yield curve is a
reflection of interest rates applicable to short and long-term debt. The yield curve is upward sloping when short-term rates are lower
than long-term rates; it is flat when short-term rates and long-term rates are nearly the same; and it is inverted when short-term rates
exceed long-term rates. Historically, the yield curve is usually upward sloping (higher rates for longer terms). However, the yield curve
can be relatively flat or inverted (downward sloping), which 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