Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 971

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 3
Chunk 971
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, approximately $6.8 million of Merger-related expenses.

    94

The primary cause of the $5.1 million
preliminary bargain purchase gain was a decrease in Bancorp 34, Inc.’s common share valuation from April 2023 to March 2024. In
April 2023 and upon the announcement of the Merger, the common share exchange ratio was 0.24, and Bancorp 34, Inc’s common share
valuation was estimated to be $12.16 per share, based upon a third-party fairness opinion obtained in connection with the Merger. As
of the Merger date in March 2024 and before Bancorp 34, Inc. issued its 2.7 million shares for the Merger, the common share exchange
ratio was 0.2628 and Bancorp, Inc’s common share valuation was estimated to be $8.50, based on a March 2024 common share valuation
completed by an independent third party. The common share valuation was based on market multiples of peer community banks rather than
the stock price due to the lack of trading volume. 

The following table includes the:
(i) total consideration paid on March 19, 2024, in connection with the Merger; (ii) fair values of the assets acquired; (iii) fair values
of the liabilities assumed; and (iv) resulting preliminary bargain purchase gain (in thousands).

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed 

    (in thousands) 
    As Recorded by CBOA  
    Estimated  Fair Value Adjustments  
    Estimated  Fair Values as Recorded  by Bancorp 34 
  
    Fair Value of the common stock consideration 

    $23,310 

    Identifiable assets acquired: 

    Cash and cash equivalents 
    $30,927  
    $—  
    $30,927 
  
    Debt securities available-for-sale, at fair value 
     57,844  
     376  
     58,220 
  
    Loans 

    Purchased performing 
     300,080  
     (15,357) 
     284,723 
  
    Purchased credit deteriorated 
     30,425  
     (4,262) 
     26,163 
  
    Allowance for credit losses on loans 
     (3,855) 
     3,855