Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 86

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 86
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 cash flows, future growth rates, repayment rates, default rates and losses assuming default, discount
rates, and realizable collateral values. The ACL for PCD loans is recognized as part of the acquisition accounting. The ACL for non-PCD
loans is recognized as provision for credit losses in the same reporting period as the merger or acquisition. Fair value adjustments
are amortized or accreted into the income statement over the estimated lives of the acquired assets and assumed liabilities. The purchase
date valuations and any subsequent adjustments determine the amount of bargain purchase gain or goodwill recognized in connection with
the merger or acquisition.

Preliminary estimates
of fair values may be adjusted for a period of no greater than one year subsequent to the merger or acquisition date if new information
is obtained about facts and circumstances that existed as of the merger or acquisition date that, if known, would have affected the measurement
of the amounts recognized as of that date. Adjustments recorded during this measurement period are recognized in the current reporting
period. For further information regarding the CBOA Merger, see Note 2 in our consolidated financial statements included in this
Annual Report on Form 10-K.

Fair
Value Measurements

Fair value is defined
as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. Fair value is based on quoted market prices, or if market prices are not available, is estimated using models
employing various techniques.

The significant assumptions
used in the models are independently verified against observable market data where possible. When observable market data is not available,
the estimate of fair value becomes more subjective and involves a high degree of judgment. In this circumstance, fair value is estimated
based on our judgment regarding the value that market participants would assign to the asset or liability. Therefore, the results cannot
be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Also, there
are inherent limitations to any valuation technique, and changes in the underlying assumptions used, including discount rates and estimates
of future cash flows, could significantly affect the results of current or future values.

60

A portion of our assets
and liabilities are carried at fair value on our consolidated balance sheet. The majority of these assets and liabilities are measured
at fair value on a recurring basis, however, certain assets are measured at fair value on a nonrecurring basis based on the fair value
of the underlying collateral.

For