Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 176

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1
Chunk 176
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 had federal operating loss carry-forwards of approximately $13.0 million, $2.8 million of which are subject to Internal Revenue
Code (“IRC”) Section 382 limitations, which limit the annual use of acquired losses to $250,000 per year, and begin to expire
in 2028. At December 31, 2024, the Company recorded deferred tax assets of $2.7 million related to the Federal net operating loss
carry-forwards.

It is the Company’s
policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether
a tax benefit is more likely than not to be sustained upon examination by tax authorities. As of December 31, 2024, and 2023, there were
no material uncertain tax positions related to federal and state income tax matters. The Company does not expect the amounts of unrecognized
tax benefits to significantly increase or decrease within the next twelve months.

The Company files consolidated U.S. federal
and various state income/franchise tax returns. The Company is no longer subject to examination by U.S. federal taxing authorities for
years before 2021 and is no longer subject to examination by state taxing authorities for years before 2020. Our federal and state tax
returns have not been audited for the past seven years. 

111

NOTE
12 – DERIVATIVES AND HEDGING ACTIVITIES

The Company is exposed to certain risks
relating to its ongoing business operations. As such, from time to time, the Company will enter into interest rate derivatives as part
of its asset liability management strategy to help manage interest rate risk. Derivative instruments represent contracts between parties
that result in one party delivering cash to the other party based on a notional amount and an underlying term (such as a rate, security
price or price index) as specified in the derivative contract. The amount of cash delivered from one party to the other is determined
based on the interaction of the notional amount of the contract with the underlying term. Derivatives may also be implicit in certain
contracts and commitments.

Derivative financial instruments in the
consolidated financial statements are recognized at fair value regardless of the purpose or intent for holding the instrument. Derivative
assets and derivative liabilities on the balance sheet are recorded within other assets and other liabilities, respectively. Changes
in the fair value of derivative financial instruments are either recognized in income or in shareholders’ equity as a component
of accumulated other comprehensive