Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 1118

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 4
Chunk 1118
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 stock. Each restricted
stock award is separated into vesting tranches and compensation expense is recognized based on the fair value at the date of grant for
each tranche on a straight-line basis over the vesting period reduced for estimated forfeitures. Compensation cost for restricted stock
awards that contain performance conditions is measured based on the grant date fair value, adjusted for the Company’s best estimate
of the outcome of vesting conditions at the end of the performance period. For awards with graded vesting, compensation cost is recognized
on a straight-line basis over the requisite service period for the entire award. Expense for the performance restricted stock awards
are recognized when it is probable that the performance conditions will be achieved. The estimated quantity of awards for which it is
probable that the performance conditions will be achieved will be reevaluated each reporting period. The fair value of stock option awards
granted is estimated using the Black-Scholes-Merton option pricing model using inputs including the option exercise price and risk-free
rate of return, and assumptions for expected dividend yield, expected stock price volatility and the expected life of the awards. The
closing market price of the Company’s stock on the date of grant is the exercise price for the stock options and the estimated
fair value of the restricted stock awards. Expense is recognized over the required service period, defined as the vesting period. The
Company’s accounting policy is to recognize expense net of actual forfeitures.

Employee
retention credit – The Company qualified for identified refunds based upon federal laws
that allow an eligible employer to obtain a refundable employment tax credit under the Coronavirus Aid, Relief, and Economic Security
Act, as amended by Taxpayer Certainty and Disaster Tax Relief Act of 2020, the American Rescue Plan Act of 2021, and the Infrastructure
Investment and Jobs Act. A portion of the credits the Company received, $254,000, met the substantial authority to file a claim with
the IRS. However, based on uncertainty associated with the IRS’s regulation and notices associated with qualifying under the governmental
order eligibility criteria, the Company has concluded the claim does not meet the probable threshold required to recognize the benefits
of the credit. As such, the Company will not recognize the income until the statute of limitations has elapsed.

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Income
taxes – Income tax expense is the total of the current year income tax due or refundable
and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future