Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 1117

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 4
Chunk 1117
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 allowance for credit losses on off-balance sheet credit exposures is
adjusted through the Provision for Credit Losses and is recorded in other liabilities. The estimate includes consideration of
the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated
life. The probability of funding is based on historical utilization statistics for unfunded loan commitments that are not unconditionally
cancelable by the Company. The loss rates used are calculated using the same assumptions as the associated funded balance.

Advertising
cost – The Bank conducts direct and non-direct response advertising and purchases prospective
customer lists from various sources. These costs are expensed as incurred. Advertising costs from continuing operations are not material.

Merger expenses –
Merger expenses were those related to the acquisition of CBOA. These costs primarily relate to information technology and professional
service firms that were directly related to the merger and are not expected to reoccur. 

Employee
Stock Ownership Plan (ESOP) – The Bank sponsors an internally leveraged ESOP. The cost
of shares issued to the ESOP but not yet released is shown as unearned ESOP shares, an element of stockholders’ equity in our consolidated
balance sheets. As shares are committed to be released, compensation expense is recorded equal to the market price of the shares, and
the shares become outstanding for purposes of earnings per share calculations. To the extent that the fair value of ESOP shares committed
differs from the cost of such shares, the difference is charged or credited to additional paid-in capital in stockholders’ equity.

Cash dividends on unallocated ESOP
shares may be used to make payments on the ESOP loan and may be allocated to participant accounts in proportion to their account balances.
Cash dividends paid on allocated shares are recorded as a reduction of retained earnings and, at the direction of the employer may be:
a) credited directly to participant accounts in proportion to their account balances, or b) distributed directly to participants
(outside the plan) in proportion to their account balances, or c) used to make payments on the ESOP loan requiring the release of shares
with at least a similar fair market value be allocated to participant accounts. In addition, participants have the right to receive an
immediate distribution of their vested cash dividends paid on shares of common stock credited to their accounts.

Other
stock-based compensation – The Company has stock-based compensation plans which provide
for the award of various benefits to directors and employees, including restricted stock and options to purchase