Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 503

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1B
Chunk 503
---
INATION

On March 19, 2024, Bancorp 34 completed
its previously announced merger with CBOA pursuant to the Agreement and Plan of Merger, dated as of April 27, 2023, as amended (the “Merger
Agreement”). Under the Merger Agreement, CBOA was merged with and into Bancorp 34, with Bancorp 34 continuing as the surviving
entity (the “Merger”). Immediately following the completion of the Merger, CBOA’s wholly-owned subsidiary, Commerce
Bank of Arizona, an Arizona state-chartered bank, was merged with and into the Bank, with the Bank continuing as the surviving bank.

Pursuant to the terms of the Merger Agreement,
at the effective time of the Merger, each CBOA shareholder had the right to receive 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