Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 136

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 136
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, which is accreted (or amortized)
into interest income over the life of the loan. Subsequent changes to the ACL on PCD loans are recorded through the provision for credits
losses. For purchased loans that are not deemed to have experienced more than insignificant credit deterioration since origination and
are therefore not deemed PCD, any discounts or premiums included in the purchase price are accreted (or amortized) over the contractual
life of the individual loan. See Note 2 - Business Combination for further information related to PCD and Non-PCD loans acquired in connection
with the Merger.

Premises
and equipment – Land is carried at cost. Premises and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method in amounts sufficient
to relate the cost of depreciable assets to operations over the estimated useful lives of the assets which range from three to seven
years for equipment and 15 to 40 years for leasehold improvements and buildings. Maintenance and repairs that do not extend the useful
lives of premises and equipment are charged to expense as incurred.

    90

Leases
– Leases are classified as operating or finance leases at the lease commencement date.
Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. Right-of-use assets
represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make
lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based
on the estimated present value of lease payments over the lease term.

Other
investments – The Bank has investments in The Independent Bankers Bank (TIB), Pacific Coast
Bankers’ Bancshares (PCBB), and the Federal Home Loan Bank (FHLB) of San Francisco. The Bank is a member of FHLB system. The Bank
is required to maintain minimum levels of FHLB stock-based on various factors, including the amount of borrowings outstanding, mortgage
assets, and the Bank’s total assets. Financial institution stock is carried at cost, is classified as a restricted security, and
is periodically evaluated for impairment based on ultimate recovery. The carrying value of financial institution stocks at December 31,
2024, and December 31, 2023, was $5,048,000 and $3,254,000, respectively. Cash and