Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 919

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 3
Chunk 919
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 of
loans held for investment, respectively. We maintain the ACL at a level that management believes is adequate to absorb expected credit
losses over the lifetime of our loans held-for-investment. Specifically, identifiable and quantifiable losses are immediately charged
against the allowance; and recoveries are generally recorded only when sufficient cash payments are received subsequent to the charge-off.

The provision for credit
losses, from time to time, includes a charge to our operating results in order to maintain the ACL at a level consistent with management’s
assessment of the collectability of the loans held-for-investment in light of current economic conditions and market trends. Our provision
for credit losses was $3.8 million and $4.2 million for 2024 and 2023, respectively. The 2024 $3.8 million provision for credit loss
expense primarily reflects the merger-related $4.1 million charge for Non-PCD loans. The 2023 provision for credit losses reflects one
problem credit which resulted in $3 million of provision for credit losses and was reflective of management’s best estimate, at
the time, of the real estate value underlying this one problem credit. The impact from our CECL adoption effective January 1, 2023, resulted
in a one-time net of income tax charge to retained earnings of $654,000.

Noninterest
Income

The following
table presents our noninterest income for the years ended December 31, 2024, and 2023.

    Year Ended December 31, 
  
    (In thousands) 
    2024  
    2023 
  
    Service charges on deposit accounts 
    $545  
    $463 
  
    Bank owned life insurance 
     370  
     248 

    Gain on sale of loans, net 
     28  
     32 
  
    Loss on sale of other real estate owned 
     (432) 
     — 
  
    Bargain purchase gain on the merger (Note 2) 
     5,018  
     — 
  
    Other income 
     29  
     (13)
  
    Total noninterest income 
    $5,558  
    $730 

Our non-interest
income increased $4.8 million to $5.6 million in 2024, from $0.7 million in the prior year. The increase in noninterest income for 2024,
comp