Company: BCTF
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0001552781-25-000058
Chunk: 498

Company: Bancorp 34, Inc.
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1B
Chunk 498
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holders’ 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 stock. Each restricted
stock award is separated into vesting tranches and compensation expense is recognized based on the fair value at the date of grant for
each tranche on a straight-line basis over the vesting period reduced for estimated forfeitures. Compensation cost for restricted stock
awards that contain performance conditions is measured based on the grant date fair value, adjusted for the Company’s best estimate
of the outcome of vesting conditions at the end of the performance period. For awards with graded vesting, compensation cost is recognized
on a straight-line basis over the requisite service period for the entire award. Expense for the performance restricted stock awards
are recognized when it is probable that the performance conditions will be achieved. The estimated quantity of awards for which it is
probable that the performance conditions will be achieved will be reevaluated each reporting period. The fair value of stock option awards
granted is estimated using the Black-Scholes-Merton option pricing model using inputs including the option exercise price and risk-free
rate of return, and assumptions for expected dividend yield, expected stock price volatility and the expected life of the awards. The
closing market price of the Company’s