Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 627

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1C
Chunk 627
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 regulators. Failure to meet minimum capital requirements can initiate
certain mandatory and possibly additional discretionary actions by federal banking regulators that, if undertaken, could have a direct
material effect on our financial statements.

73

Regulatory capital
rules adopted in July 2013 and fully phased in as of January 1, 2019, which we refer to as the Basel III rules, impose minimum capital
requirements for bank holding companies and banks. The Basel III rules apply to all national and state banks and savings associations
regardless of size and bank holding companies and savings and loan holding companies with consolidated assets of more than $3 billion.
While Bancorp 34 is not subject to the regulation, the ratios are monitored by management should compliance be required.

To avoid restrictions
on capital distributions or discretionary bonus payments to executives, a covered banking organization must maintain the fully phased
in “capital conservation buffer” of 2.5% on top of its minimum risk-based capital requirements. This buffer must consist
solely of common equity Tier 1 risk-based capital, but the buffer applies to all three measurements (common equity Tier 1 risk-based
capital, Tier 1 capital and total capital). At December 31, 2024, Southwest Heritage Bank exceeded the regulatory minimums and met the
regulatory definition of well-capitalized.

The following table shows the regulatory
capital ratios for Bancorp 34 (consolidated) at the dates indicated:

    Actual  
    Minimum Required For Capital Adequacy Purposes  
    Minimum Required To be Well- Capitalized under Prompt Corrective Action Provisions 
  
    (Dollars in thousands) 
    Amount  
    Ratio  
    Amount  
    Ratio  
    Amount  
    Ratio 
  
    As of December 31, 2024 

    Total risk-based capital to risk-weighted assets 
    $116,518  
     15.58% 
    $59,812  
     8.00% 
    $N/A  
     N/A%
  
    Tier 1 risk-based capital to risk-weighted assets 
     83,691  
     11.19  
     44,859  
     6.00  
     N/A  
     N/A 
  
    Common Equity Tier 1 (CET 1) to risk-weighted assets 
     N/A  
     N/A  
     N/A