Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 37

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 37
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 rates;

    ·
    a decrease in the value of the collateral securing
    our residential or commercial real estate loans;

    ·
    a permanent impairment of our assets; or

    ·
    an increase in the number of customers or other
    counterparties who default on their loans or other obligations to us, which could result in a higher level of nonperforming assets,
    net charge-offs, and provision for credit losses.

Inflationary
pressures present a potential threat to our results of operation and financial condition.

The United States generally
and the regions in which we operate specifically have in recent years experienced significant inflationary pressures, evidenced by higher
gas prices, higher food prices and higher prices for other consumer items. Accordingly, while inflation has since moderated, it can result
in material adverse effects upon our customers, their businesses and, as a result, our financial position and results of operation. Inflation
also can and does generally lead to higher interest rates, which have their own separate risks. Decreased deposit balances could result
in our reliance upon higher cost funding sources. See Lending and Interest
Rate Risks included in these Risk Factors below.

The
Federal Reserve has implemented significant economic strategies that have affected interest rates, inflation, asset values, and the shape
of the yield curve. These strategies have had, and will continue to have, a significant impact on our business and on many of our clients.

To illustrate: in response
to the recession in 2008-09 and the following uneven recovery, the Federal Reserve implemented a series of domestic monetary initiatives
designed to lower rates and make credit easier to obtain. The Federal Reserve changed course in 2015, raising rates several times through
2018. The last raise in 2018 was accompanied by a substantial and broad stock market decline. In 2019, the Federal Reserve began to lower
rates. In 2020, in response to economic disruption associated with the COVID-19 pandemic, the Federal Reserve quickly reduced short-term
rates to extremely low levels and acted to influence the markets to reduce long-term rates as well. During 2021, the Federal Reserve
significantly reduced its “easing” actions that held down long-term rates. During 2022, the Federal Reserve switched to a
tightening policy. It raised short term rates significantly and rapidly over most of the year. Those actions triggered a significant
decline in the values of most categories of U.S. stocks and bonds; impacted