Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 914

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 3
Chunk 914
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 million. Non-recurring merger-related items
also are reflected in our 2024 results, which include: (i) a one-time preliminary bargain purchase gain on the CBOA Merger of $5.0 million
(none of which is taxable); (ii) $3.8 million of merger expenses (a portion of which is not deductible for income taxes); and (iii) a
Day-2 $4.1 million non-PCD loan provision for credit losses in connection with the CBOA Merger. Our 2023 net loss includes provision for
credit loss of $4.2 million and $3.0 million of merger expenses.

Net
Interest Income

Net interest income,
representing interest income less interest expense, is a significant contributor to our revenues and earnings. We generate interest income
from interest and dividends on interest-earning assets, which are principally comprised of loans, investment securities, and interest-bearing
bank balances. We incur interest expense from interest owed or paid on interest-bearing liabilities, including interest-bearing deposits,
FHLB and FRB advances, as well as other borrowings. Net interest income and margin are shaped by the characteristics of the underlying
products, including volume, term, and structure of each product. We measure and monitor yields on our loans and other interest-earning
assets, the costs of our deposits and other funding sources, our net interest spread and our net interest margin. Net interest spread
is the difference between rates earned on interest-earning assets and rates paid on interest-bearing liabilities. Net interest margin
is calculated as the annualized net interest income divided by average interest-earning assets.

Our net interest income
can be significantly influenced by a variety of factors, including overall loan demand, economic conditions, credit risk, the amount
of non-earning assets including nonperforming loans and OREO, the amounts of and rates at which assets and liabilities reprice, variances
in prepayment of loans and securities, exercise of call options on borrowings or securities, a general rise or decline in interest rates,
changes in the slope of the yield-curve, the relative mix of the various elements of interest earning assets and interest bearing liabilities
and balance sheet growth or contraction.

62

Years
Ended December 31, 2024, and 2023

Our net interest income
was $29.3 million for 2024, an increase of $14.1 million, or 93%, compared to the $15.2 of