Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 7

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 7
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 of both owner-occupied and non-owner
occupied commercial real estate loans. The real estate securing our existing commercial real estate loans includes a wide variety of
property types, such as offices, warehouses, production facilities, health care facilities, hotels, mixed-use residential/commercial,
retail centers, assisted living facilities and self-storage facilities. As of December 31, 2024, $151.4 million of our commercial real
estate loan portfolio, or 22.4% of our loan portfolio, was owner-occupied commercial real estate loans, and $258.7 million of our commercial
real estate loan portfolio, or 38.3% of our loan portfolio, was non-owner occupied commercial real estate loans. Commercial real estate
loans are often larger and involve greater risks than other types of lending. Due to the larger average size of commercial real estate
loans, we face the risk that losses incurred on a small number of commercial real estate loans could have a material adverse impact on
our financial condition and results of operations.

Multifamily
Loans. Multifamily loans are those properties that have five or more units with borrowers who
are primarily commercial entities. The bank finances loans in several different multifamily types but does not have a concentration in
any one type and does not do any specialty lending in this area. These loans are made primarily in our marketplace.

9

Residential
Real Estate Loans. Like our commercial real estate loans, our residential real estate loans
are secured by real estate, the value of which may fluctuate significantly over a short period of time as a result of market conditions
in the area in which the real estate is located. We primarily make our residential real estate loans to qualified individuals and investors
in accordance with our real estate lending policies, which detail maximum loan to value ratios and maturities. The repayment of these
loans is also affected by a borrower’s adverse personal circumstances.

Construction
Loans. Our construction real estate loans include commercial construction, land acquisition,
and land development loans and single-family interim construction loans to small- and medium-sized businesses and individuals. We target
experienced local developers to lend to. Construction loans carry a high risk because repayment of these loans is dependent, in part,
on the success of the ultimate project or, to a lesser extent, the ability of the borrower to refinance the loan or sell the property
upon completion of the project, rather than the ability of the borrower or guarantor to repay principal and interest.

Deposit