Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 248

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 248
---
, 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 on our business and results of operations. The potential
losses and costs associated with climate change related risks are difficult to predict and could have a material adverse effect on our
business, financial condition and results of operation.

Operational
Risks

We
are subject to losses due to errors, omissions or fraudulent behavior by our employees, clients, counterparties or other third parties.

We are exposed to many
types of operational risk, including the risk of fraud by employees and third parties, clerical recordkeeping errors and transactional
errors. Our business is dependent on our employees as well as third-party service providers to process a large number of increasingly
complex transactions. We could be materially and adversely affected if employees, clients, counterparties or other third parties caused
an operational breakdown or failure, either as a result of human error, fraudulent manipulation or purposeful damage to any of our operations
or systems.

In deciding whether
to extend credit or enter into other transactions with clients and counterparties, we may rely on information furnished to us by or on
behalf of clients and counterparties, including financial statements and other financial information. We also may rely on representations
of clients and counterparties as to the accuracy and completeness of that information and, with respect to financial statements, on reports
of independent auditors. For example, in deciding whether to extend credit to clients, we may assume that a customer’s audited
financial statements conform to GAAP and present fairly, in all material respects, the financial condition, results of operations and
cash flows of the customer. Our operating results are significantly affected by our ability to properly originate, underwrite and service
loans. Our financial condition and results of operations could be negatively impacted to the extent we incorrectly assess the creditworthiness
of our