Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 1374

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 6
Chunk 1374
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 from seven full-service offices in Arizona and southern New Mexico. The
core system conversion was executed in March 2024.

We accounted for the
CBOA Merger using the acquisition method of accounting in accordance the Financial Accounting Standards Board’s Accounting Standards
Code 805 (“ASC 805”), Business Combinations, and accordingly, the assets and liabilities of CBOA were recorded at their respective
merger date fair values. The fair values of assets and liabilities are preliminary and subject to refinement for up to one year after
the merger date as additional information related to the merger date fair values becomes available. Effective in March 2024, we recognized
a preliminary bargain purchase gain of $5.0 million in connection with the CBOA Merger (not taxable for income tax purposes), which was
recognized in our first quarter 2024 operating results. The core deposit intangible asset of $8.9 million represents the estimated value
of Commerce Bank of Arizona’s long-term deposit relationships with its customers and will be amortized over an estimated weighted
average life of ten years using an accelerated method, which approximates the estimated run-off of the acquired deposits.

For further information
regarding the CBOA Merger, see Note 2 in our consolidated financial statements included in Annual Report on Form 10-K.

61

Results
of Operations

General

Our results of operations
depend substantially on net interest income, which is the difference between interest income on interest-earning assets, consisting primarily
of interest income on loans, investment securities and other short-term investments and interest expense on interest-bearing liabilities,
consisting primarily of deposits and borrowings. Our results of operations are also dependent on our generation of non-interest income,
consisting primarily of income from service charges on deposit accounts, interchange and ATM fees, and gains on sales of SBA loans. Other
factors contributing to our results of operations include our provisions for credit losses, income taxes, and non-interest expenses,
such as salaries and employee benefits, occupancy, amortization of intangible assets and other operating costs.

We had net income of
$1.7 million for the year ended December 31, 2024, compared to a net loss of $3.4 million for the year ended December 31, 2023. Our 2024
net income is comprised of pre-tax income of $0.6 million and an income tax benefit of $1.1 million. Non-recurring merger-related items
also are reflected in our