Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 970

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 3
Chunk 970
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 0.2628 shares of Bancorp 34 common stock, for each
share of CBOA common stock owned by the CBOA shareholder, with cash to be paid in lieu of fractional shares. Additionally, each outstanding
CBOA restricted stock unit vested and was cancelled and converted automatically into the right to receive 0.2628 shares of Bancorp 34
common stock with respect to each share of CBOA common stock underlying such restricted stock unit. In connection with the Merger,
Bancorp 34 issued approximately 2.7 million shares of Bancorp 34 common stock, which had a fair value of approximately $23.3 million
based on a common shares valuation as of the Merger date. Each outstanding share of Bancorp 34 common stock remained outstanding and
was unaffected by the Merger. 

Commerce Bank of Arizona operated
five full-service offices serving customers in Gilbert, Green Valley, Oro Valley, Scottsdale and Tucson, Arizona. Completing the Merger
further enhanced the Bank’s Arizona footprint, allowed for greater efficiencies based on size and scale, and strengthened the depth
of the management team. The combined banks operate as Southwest Heritage Bank and serve customers from eight full-service offices in
Arizona and southern New Mexico. The core system conversion was executed in March 2024. 

We accounted for the Merger using the acquisition
method of accounting in accordance the FASB’s Accounting Standards Code 805 (“ASC 805”), Business Combinations,
and accordingly, the assets and liabilities of CBOA were recorded at their respective Merger date estimated fair values. The estimated
fair values of assets and liabilities are preliminary and subject to refinement during the measurement period (which cannot exceed one
year from the Merger date), as additional information relative to the Merger date fair values becomes available. Effective in March 2024,
we recognized a preliminary bargain purchase gain of $5.1 million in connection with the Merger (not taxable for income tax purposes),
which is recognized in our first quarter 2024 operating results. The core deposit intangible asset of $8.9 million represents the estimated
value of Commerce Bank of Arizona’s long-term deposit relationships with its customers and will be amortized over an estimated
weighted average life of ten years using an accelerated method, which approximates the estimated run-off of the acquired deposits. During
2023 and through December 31, 2024, Bancorp 34 incurred, on a cumulative basis