Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 269

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 269
---
 practices
for failure to commit resources to such a subsidiary bank. In addition, the Dodd-Frank Act directs the federal bank regulators to require
that all companies that directly or indirectly control an insured depository institution serve as a source of strength for the institution.
Under these requirements, in the future, we could be required to provide financial assistance the Bank if it experiences financial distress.

A capital injection
may be required at times when we do not have the resources to provide it, and therefore we may be required to borrow the funds. In the
event of a bank holding company’s bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to a federal
bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such
commitment will be entitled to a priority of payment over the claims of the holding company’s general unsecured creditors, including
the holders of its note obligations. Thus, any borrowing that must be done by the holding company in order to make the required capital
injection becomes more difficult and expensive and will adversely impact the holding company’s cash flows, financial condition,
and results of operations.

49

We
are party to various claims and lawsuits incidental to our business. Litigation is subject to many uncertainties such that the expenses
and ultimate exposure with respect to many of these matters cannot be ascertained.

From time to time, we,
our directors and our management are the subject of various claims and legal actions by customers, employees, stockholders and others.
Whether such claims and legal actions are legitimate or unfounded, if such claims and legal actions are not resolved in our favor, they
may result in significant financial liability and/or adversely affect our reputation and our products and services as well as impact
customer demand for those products and services. In light of the potential cost and uncertainty involved in litigation, we have in the
past and may in the future settle matters even when we believe we have a meritorious defense. Certain claims may seek injunctive relief,
which could disrupt the ordinary conduct of our business and operations or increase our cost of doing business. Our insurance or indemnities
may not cover all claims that may be asserted against us. Any judgments or settlements in any pending litigation or future claims, litigation
or investigation could have a material adverse effect on our business, reputation, financial condition and results of operations.

The
expanding body of federal, state and local regulations and/or the licensing of loan servicing, collections or other aspects of our