Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 333

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 333
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. Management measures expected credit
losses on held-to-maturity debt securities on an individual basis. When accrued interest is reversed or charged-off in a timely manner,
the CECL standard provides a practical expedient to exclude accrued interest from ACL measurement. The Company considers its nonaccrual
and charge-off policies to be timely for all investments and securities, as such, accrued interest receivable on held-to-maturity debt
securities is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information
that is adjusted for current conditions and reasonable and supportable forecasts.

Loans
held for investment, net – Loans the Bank originates and that management has the intent
and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding unpaid principal balances
reduced by any charge-offs and net of any deferred fees or costs. Loans are considered past due, or delinquent based on the contractual
terms in the loan agreement and how recently repayments have been received. Interest income is recognized based upon principal amounts
outstanding. The accrual of interest is discontinued at the time the loan is 90 days past due or when, in the opinion of management,
there is doubt about the ability of the borrower to pay interest or principal, unless the credit is well secured and in process of collection.
Interest previously accrued but uncollected on such loans is reversed and charged against current income. Loans are charged-off as uncollectible
when, in the opinion of management, collectability of principal is improbable. If payment is received on a nonaccrual loan, generally
the payment is first applied to the remaining principal balance. Payments are then applied to recover any charged-off amounts related
to the loan. Finally, if both the principal balance and any charge-offs have been recovered, then the payment will be recorded as fee
and interest income. Personal loans are typically charged off when no later than 180 days past due.

Loan origination fees on loans
the Bank originates, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield
using the interest method. See Note 2 - Business Combination, for our accounting methodology for the loans acquired in the Merger.

Allowance
for credit losses - loans: The ACL is a valuation account that is deducted from the loans’
amortized cost basis to present the net amount expected to be collected on the loans. The ACL excludes loans held-for-sale and loans
accounted