Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 1534

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 7
Chunk 1534
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, merger consulting fees, investment banker success fees, and legal
expenses.

For the year, and
in connection with the CBOA Merger, we expensed $1.3 million of amortization expense on the merger-related core deposit intangible. For
more information on the CBOA Merger, see Note 2 in our consolidated financial statements included in this Annual Report on Form 10-K.

Efficiency
ratio

The efficiency ratio
is one measure of profitability in the banking industry. This ratio measures the cost of generating one dollar of revenue. That is, the
ratio is designed to reflect the percentage of one dollar which must be expended to generate that dollar of revenue. We calculate this
ratio by dividing non-interest expense by the sum of net interest income, before provision expense for credit losses, and non-interest
income.

Our efficiency ratio
was 87.26% and 97.69% for the years ended December 31, 2024, and 2023. This improvement is partially reflective of the CBOA Merger and
related non-recurring material financial impacts in connection with the CBOA Merger. For more information on the CBOA Merger, see Note
2 in our consolidated financial statements included in this Annual Report on Form 10-K. 

Return
on equity and assets

The following
table sets forth our ROAA, ROAE, dividend payout and average stockholders’ equity to average assets ratio for the periods ended:

    December 31, 

    2024  
    2023 
  
    Return on average total assets (ROAA) 
     0.20% 
     -0.59%
  
    Return on average stockholders’ equity (ROAE) 
     2.09% 
     -5.48%
  
    Dividend payout ratio 
     0.00% 
     -15.91%
  
    Average stockholders’ equity to average assets 
     9.44% 
     10.72%

Income
Taxes

We had an income tax
benefit for the year ended 2024 of $1.1 million compared to an income tax benefit of $0.5 million for the year ended 2023. The 2024 income
tax benefit was due to the non-taxable $5.0 bargain purchase gain which caused the book pre-tax income to be reflected as a loss
for tax purposes. Our effective tax