Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 250

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 250
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 retain personnel with the ability to manage
a complex business.

Operational risk can
arise in many ways, including: errors related to failed or inadequate physical, operational, information technology, or other processes;
faulty or disabled computer or other technology systems; fraud, theft, physical security breaches, electronic data and related security
breaches, or other criminal conduct by associates or third parties; and exposure to other external events. Inadequacies may present themselves
in myriad ways. Actions taken to manage one risk may be ineffective against others. For example, information technology systems may be
sufficiently redundant to withstand a fire, incursion, malware, or other major casualty, but they may be insufficiently adaptable to
new business conditions or opportunities. Efforts to make systems more robust may make them less adaptable, and vice-versa. Also, our
efforts to control expenses, which is a significant priority for us, increases our operational challenges as we strive to maintain client
service and compliance at high quality and low cost.

A
failure in or breach of our operational or security systems or infrastructure, or those of our third party vendors and other service
providers or other third parties, including as a result of cyber-attacks, could disrupt our businesses, result in the disclosure or misuse
of confidential or proprietary information, damage our reputation, increase our costs and cause losses.

We rely heavily on communications
and information systems to conduct our business. Information security risks for financial institutions such as ours have generally increased
in recent years in part because of the proliferation of new technologies, the use of the internet and telecommunications technologies
to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists, activists,
and other external parties. As client, public, and regulatory expectations regarding operational and information security have increased,
our operational systems and infrastructure must continue to be safeguarded and monitored for potential failures, disruptions, and breakdowns.
Our business, financial, accounting and data processing systems, or other operating systems and facilities may stop operating properly
or become disabled or damaged as a result of a number of factors, including events that are wholly or partially beyond our control. For
example, there could be electrical or telecommunications outages; natural disasters such as earthquakes, tornadoes, and hurricanes; disease
pandemics (such as the COVID-19 pandemic); events arising from local or larger scale political or social matters, including terrorist
acts; and cyber-attacks.

38

As noted above, our
business relies