Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 50

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 50
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 addition, a disruption in our operations resulting from failure
of transportation and telecommunication systems, loss of power, interruption of other utilities, natural disaster, fire, global climate
changes, computer hacking or viruses, failure of technology, terrorist activity or the domestic and foreign response to such activity
or other events outside of our control could have an adverse impact on the financial services industry as a whole and/or on our business.
Our business recovery plan may not be adequate and may not prevent significant interruptions of our operations or substantial losses.
The increased number of cyberattacks during the past few years has further heightened our attention to this risk.

Fraud
is a major, and increasing operational risk for us and all banks.

Two traditional areas,
deposit fraud (check kiting, wire fraud, etc.) and loan fraud, continue to be major sources of fraud attempts and loss, and we incurred
a $0.7 million expense related to a check kiting incident in the fourth quarter of 2024. The sophistication and methods used to perpetrate
fraud continue to evolve as technology changes. In addition to cybersecurity risk (discussed below), new technologies have made it easier
for bad actors to obtain and use client personal information, mimic signatures and otherwise create false documents that look genuine.
The industry fraud threat continues to evolve, including but not limited to card fraud, check fraud, social engineering and phishing
attacks for identity theft and account takeover. Our anti-fraud measures are both preventive and, when necessary, responsive; however,
some level of fraud loss is unavoidable, and the risk of a major loss cannot be eliminated.

Our
ability to conduct and grow our businesses profitability is dependent in part upon our ability to create, maintain, expand, and evolve
an appropriate operational and organizational infrastructure, manage expenses, and recruit and 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