Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 332

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1A
Chunk 332
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 to be held until maturity are classified
as available-for-sale and carried at fair value, with unrealized gains and losses reported in other comprehensive income or loss, net
of tax. Securities classified as available-for-sale include securities that management intends to use as part of its asset/liability
management strategy and that may be sold in response to changes in interest rates, prepayment risk, and other factors. Management determines
the appropriate classification of securities at the time of purchase but may reassess the classification.

Net purchase premiums and discounts
on securities are recognized in interest income using the level yield method over the estimated life of the security. Premiums are amortized
to the earliest call date. Gains and losses on the sale of securities are determined using the specific identification method.

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For available-for-sale (AFS) securities
in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that the Company
will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement
to sell is met, the security’s amortized cost basis is written down to fair value through net income. For AFS securities that do
not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other
factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the
rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this
assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared
to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost
basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value
is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized
in other comprehensive income (loss), net of applicable taxes.

Allowance
for credit losses - held-to-maturity securities: Held-to maturity securities are carried at
amortized cost net of allowance for credit losses (“ACL”) when management has the positive intent and ability to hold them
to maturity. The Company’s held-to maturity portfolio consists solely of bank subordinated debt