Bancorp 34, Inc Reports 3rd Quarter Performance

Third Quarter 2025 Highlights

• Net Income - $1.7 million

• Bank Net Income - $2.0 million

• TBVPS - $12.07

• Diluted EPS- $0.24

SCOTTSDALE, AZ / ACCESS Newswire / November 3, 2025 / Bancorp 34, Inc. (OTCQB:BCTF), the parent company for Southwest Heritage Bank, together, the "Company" reports third quarter of 2025 performance.

Management Comments - Ciaran McMullan, Chairman & CEO

• Loan growth continued to strengthen with more than $31 million in new commitments¹ booked during the quarter and total loans increasing $14 million, or 2.1%, over the linked quarter.

• Core return on average assets² improved for the fourth consecutive quarter to just under 0.60%, or ~0.70% at bank level.

• Retail certificates of deposit declined by approximately $23 million, improving our deposit mix but contributing to a total deposit decline of $36 million, or ~4.0%.

• TBVPS share increased to $12.07, and we have earned back 79% of the dilution incurred due to the March 2024 acquisition of Commerce Bank of Arizona.

• The bank downgraded one well-collateralized $7.8 million relationship in the transportation sector to non-accrual status. No additional reserve was required. Bank and borrower are working together on a plan to address identified deficiencies.

3Q25 Highlights

Net Income and NIM

• Net income improved by 10.2% over Q3 2024 but declined over the linked quarter due to the impact of a one-time recovery in the prior quarter.

• While NIM declined over the linked quarter due to a reduction in loan mark accretion, core³ NIM has improved by two basis points over the same period.

• Despite the shift away from CDs, cost of funds increased slightly due to several remaining MMDA promotions and normal business DDA fluctuations.

• Non-interest expense declined over the linked and prior year quarter, and our Core Overhead Ratio⁶ improved to 2.54%.

Balance Sheet

• Total deposits declined by $34.9 million during the quarter, driven primarily by a reduction in retail CDs of $23.3 million.

• Total loans increased by $14.1 million, or 2.1%, during the quarter and total new commitments¹ booked YTD are approximately $96 million.

Asset Quality

• NPAs⁴ increased to 1.00% due to the downgrade of a single, well-collateralized $7.8 million relationship.

• We reduced our ACL by $700,000 due to the improvement in metrics used to determine the qualitative factors in our reserve analysis.

Capital

• TBVPS increased by $0.68 during the quarter, $0.26 of which was due to a reduction in AOCI, with a further $0.19 due to ongoing progress towards terminating the bank's ESOP.

• Our Tier 1 Leverage Ratio increased to 12.26%.

Performance Metrics (Consolidated)			3Q25				2Q25				3Q24
ROATA			0.74	%			1.01	%			0.67	%
ROATE			7.91	%			11.14	%			8.14	%
Core2 ROATA			0.59	%			0.51	%			0.49	%
Core2 ROATE			6.18	%			5.56	%			5.78	%
Net Interest Margin			3.47	%			3.66	%			3.79	%
Cost of Funds			2.64	%			2.61	%			2.78	%
Overhead Ratio4			2.79	%			2.84	%			2.84	%
Efficiency Ratio			81.17	%			79.07	%			76.11	%
NPA5			1.00	%			0.18	%			0.38	%
ACL to Total Loans			1.41	%			1.55	%			1.50	%

Select Metrics (Bank Only)			3Q25				2Q25				3Q24
ROATA			0.85	%			1.12	%			0.86	%
Core2 ROATA			0.68	%			0.60	%			0.67	%
Net Interest Margin			3.61	%			3.80	%			3.94	%
Core Efficiency Ratio			74.62	%			77.85	%			73.30	%

Balance Sheet (in 000s)			3Q25				2Q25				3Q24
Total Assets		$	899,621			$	931,267			$	938,997
Total Loans		$	690,519			$	676,389			$	703,135
Total Deposits		$	760,273			$	795,104			$	785,181
Total Capital		$	95,260			$	92,242			$	87,122
TBVPS		$	12.07			$	11.39			$	10.64

Income Statement (000s except EPS)			3Q25				2Q25				3Q24
Net Interest Income		$	7,740			$	8,096			$	8,387
Non-interest Income		$	242			$	292			$	239
Non-interest Expense		$	6,494			$	6,633			$	6,575
Pre-tax Pre-Provision		$	1,488			$	1,755			$	2,051
Net Income		$	1,733			$	2,330			$	1,573
Core Net Income		$	1,355			$	1,163			$	1,118
Diluted Earnings per Share		$	0.24			$	0.32			$	0.22

^{1 - Includes new loan balances disbursed and new unfunded commitments. Source: Internal Reporting
2 - Non-GAAP, excludes merger related accretion and amortization, as well as material non-recurring income and expense items.
3 - Non-GAAP, excludes merger related fair value mark accretion and amortization.
4 - Non-interest expense as a percentage of average assets
5 - NPA is non-performing assets as a % of total assets, net of government guarantees.
6 - Non-GAAP, excludes merger related accretion and amortization, as well as material non-recurring income and expense items.}

ABOUT BANCORP 34, INC. - Bancorp 34 is the holding company for Southwest Heritage Bank. The bank's headquarters are located at 8777 East Hartford Drive, Suite 100, Scottsdale, Arizona 85255. In addition, we operate seven full-service community bank branches, two in Maricopa County, Arizona, in the cities of Scottsdale and Gilbert; three in Pima County, Arizona, in the cities of Tucson and Green Valley; one branch in Otero County, New Mexico in the city of Alamogordo; and one branch in Dona Ana County New Mexico, in the city of Las Cruces.

FORWARD-LOOKING STATEMENTS - Certain statements herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as "believes," "will," "expects," "project," "may," "could," "developments," "strategic," "launching," "opportunities," "anticipates," "estimates," "intends," "plans," "targets" and similar expressions. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, general economic conditions, changes in interest rates, the effects of any health pandemic, regulatory considerations, competition and the other risks. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Forward-looking statements speak only as of the date they are made, and we assume no obligation to update any of these statements in light of new information, future events or otherwise unless required under federal securities laws.

NON-GAAP FINANCIAL MEASURES- Some of the financial measures included in this release are not measures of financial performance recognized in accordance with generally accepted accounting principles in the United States ("GAAP"). These non-GAAP financial measures include: (i) core net income; (ii) core net interest margin; (iii) core ROAA; (iv) core ROAE (v) core ROATA; (vi) core ROATE; (vii) core NIE to average assets; and (viii) core efficiency ratio. We believe these non-GAAP financial measures provide investors and management with a more complete understanding of our financial position and performance. These non-GAAP financial measures are supplemental and are not a substitute for any analysis based on GAAP financial measures. Not all companies use the same calculation of these measures; therefore, this presentation may not be comparable to other similarly titled measures as presented by other companies. A reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

Select Financial Ratios			3Q25				2Q25				3Q24
Return on Average Assets (ROAA)			0.74	%			1.01	%			0.67	%
Core6 ROAA			0.58	%			0.50	%			0.48	%
Return on Average Tangible Assets (ROATA)			0.75	%			1.01	%			0.68	%
Core6 ROATA			0.59	%			0.51	%			0.49	%
Return on Average Equity (ROAE)			7.35	%			9.93	%			7.27	%
Core6 ROAE			5.74	%			5.23	%			5.17	%
Return on Average Tangible Equity			7.91	%			11.14	%			8.14	%
Core6 ROATE			6.18	%			5.56	%			5.78	%
Overhead Ratio			2.79	%			2.84	%			2.84	%
Core6 Overhead Ratio			2.54	%			2.65	%			2.66	%
Efficiency Ratio			81.17	%			79.07	%			76.11	%
Core6 Efficiency Ratio			77.85	%			82.26	%			75.19	%
Net Interest Margin			3.47	%			3.66	%			3.79	%
Core7 Net Interest Margin			3.30	%			3.28	%			3.34	%
Cost of Funds			2.64	%			2.61	%			2.78	%
Earnings Per Share (EPS)		$	0.24			$	0.32			$	0.22
Diluted EPS		$	0.24			$	0.32			$	0.22

Bank Regulatory Capital Ratios			3Q25				2Q25				3Q24
Tier 1 Leverage Capital Ratio			12.26	%			11.86	%			10.98	%
Common Equity Tier 1 Capital Ratio			14.28	%			14.18	%			13.03	%
Tier 1 Capital Ratio			14.28	%			14.18	%			13.03	%
Total Risk-based Capital Ratio			15.54	%			15.44	%			14.28	%

Credit Quality8			3Q25				2Q25
Total Classified Loans		$	15,131			$	9,663
Classified - Accrual Loans		$	5,835			$	7,978
Classified - Non-Accrual Loans		$	9,296			$	1,685
Non-Performing Assets		$	9,296			$	1,685
Total Classified / Total Loans			2.19	%			1.43	%
Adversely Classified Items/Total Capital			12.25	%			8.23	%

	Period				GAAP Net Income				Loan Mark Accretion				CDI Amortization				Non-Recurring Items9				Core Net Income10
		3Q25			$	1,733			$	-571			$	386			$	-319			$	1,355
		2Q25			$	2,330			$	-758			$	399			$	-1,197			$	1,163
		3Q24			$	1,575			$	-936			$	501			$	-174			$	1,118

^{6 - Non-GAAP, excludes merger related accretion and amortization, as well as material non-recurring income and expense items.
7 - Non-GAAP, excludes merger related fair value mark accretion and amortization.
8 - Classified and non-performing assets are net of government guarantees
9 - Includes ACL reverse provision
10 - Non-GAAP, Assumes 25% tax rate}

BALANCE SHEET (in 000s)			3Q25				2Q25				3Q24
Assets
Cash and due from banks			3,158				3,645				4,783
Fed funds sold & repos			4,200				5,430				60,860
Interest bearing deposits with banks			47,123				95,086				62,155
Investment securities			109,151				104,455				64,967
Loans, net of unearned income			690,519				676,389				703,135
Allowance for credit losses			-9,733				-10,492				-10,523
Premises and equipment, net			11,085				11,565				12,742
Accrued interest receivable			2,543				2,559				2,619
Core deposit intangible			6,409				6,791				8,004
Other assets			35,166				35,839				30,255
Total Assets			899,621				931,267				938,997
Liabilities
Non-interest bearing deposits			163,339				168,931				172,976
Interest bearing demand deposits			105,347				105,630				104,167
Savings and money market deposits			301,835				307,474				270,389
Time deposits - retail			184,682				207,999				229,567
Time deposits - wholesale			5,070				5,070				8,082
Total Deposits			760,273				795,104				785,181
Accrued expenses and other liabilities			16,828				16,680				12,010
Other borrowings			27,261				27,241				54,684
Total Liabilities			804,362				839,025				851,875
Equity
Common stock			74				75				74
Capital surplus			66,482				67,652				66,705
Retained earnings			25,989				25,989				24,300
Accumulated other comprehensive loss			-3,656				-4,849				-4,195
Net income			6,371				4,638				1,540
Unearned ESOP shares			0				-1,263				-1,302
Total Equity			95,260				92,242				87,122
Total Liabilities & Equity			899,621				931,267				938,997

INCOME STATEMENT (in 000s)			3Q25				2Q25				3Q24
Interest Income
Interest on Loans			10,836				11,008				12,159
Fees on Loans			119				173				155
Interest on federal funds sold			49				49				550
Interest on deposits with banks			997				1,095				723
Investment Securities - Taxable			1,199				1,162				581
Total Interest Income			13,200				13,487				14,168
Interest Expense
Interest bearing demand deposits			404				373				332
Savings and Money Market Deposits			2,690				2,498				2,353
Time Deposits - Retail			1,967				2,124				2,316
Time Deposits - Wholesale			53				52				85
Total Interest Expense on Deposits			5,114				5,047				5,086
Interest on other borrowings			345				344				695
Total Interest Expense			5,460				5,391				5,781
Net Interest Income			7,740				8,096				8,387
Provision for Credit Losses			-700				-1,250				0
Net In. Inc. After Prov. for Credit Losses			8,440				9,346				8,387
Non Interest Income
Service charges and fees			141				148				180
Mortgage loan and related fees			26				-9				-21
Other noninterest income			75				153				81
Total Non Interest Income			242				292				239
Non Interest Expense
Salaries and employee benefits			3,418				3,323				3,129
Occupancy			540				726				700
Other noninterest expense			2,536				2,584				2,746
Total Non Interest Expense			6,494				6,633				6,575
Income Before Taxes			2,188				3,005				2,051
Income taxes			455				675				478
Net Income			1,733				2,330				1,573

INCOME STATEMENT (in 000s)		9 months ending 3Q25				9 months ending 3Q24
Interest Income
Interest on Loans			33,030				31,714
Fees on Loans			413				524
Interest on federal funds sold			149				831
Interest on deposits with banks			3,357				1,932
Investment Securities - Taxable			3,333				1,718
Total Interest Income			40,282				36,719
Interest Expense
Interest bearing demand deposits			1,106				702
Savings and Money Market Deposits			7,576				6,624
Time Deposits - Retail			6,537				5,984
Time Deposits - Wholesale			167				294
Total Interest Expense on Deposits			15,386				13,604
Interest on other borrowings			1,040				2,086
Total Interest Expense			16,426				15,690
Net Interest Income			23,856				21,029
Provision for Credit Losses			-3,450				3,866
Net In. Inc. After Prov. for Credit Losses			27,306				17,163
Non Interest Income
Service charges and fees			443				485
Mortgage loan and related fees			55				-63
Other noninterest income			301				4,780
Total Non Interest Income			799				5,202
Non Interest Expense
Salaries and employee benefits			10,319				9,057
Occupancy			1,966				1,817
Other noninterest expense			7,634				11,126
Total Non Interest Expense			19,919				22,000
Income Before Taxes			8,186				365
Income taxes			1,815				-1,175
Net Income			6,371				1,540

Average Balance Sheet and Yields
For the Three Months Ended
		September 30, 2025												June 30, 2025
		Average Balance				Interest				Average Yield/Rate				Average Balance				Interest				Average Yield/Rate
Interest Earning Assets:
Federal funds sold		$	4,357,283			$	48,758				4.44	%		$	4,391,538			$	48,968				4.47	%
Deposits with banks			92,046,784				997,294				4.30	%			101,230,867				1,095,171				4.34	%
Investment securities			105,746,137				1,198,727				4.50	%			109,636,098				1,161,439				4.09	%
Loans			680,493,148				10,954,738				6.39	%			674,518,875				11,181,795				6.65	%
Total Interest Earning Assets		$	882,643,352			$	13,199,517				5.93	%		$	889,777,378			$	13,487,373				6.08	%
Non-Interest Earning Assets		$	49,081,977											$	40,031,708
Total Assets		$	931,725,329											$	929,809,086
Interest Bearing Liabilities:
Interest bearing demand		$	106,626,968			$	404,378				1.50	%		$	107,769,299			$	373,496				1.39	%
Savings and Money Market			310,491,189				2,690,248				3.44	%			296,161,664				2,497,634				3.38	%
Time deposits - Retail			199,560,785				1,967,084				3.91	%			211,751,684				2,123,642				4.02	%
Time Deposits - Wholesale			5,070,000				52,697				4.12	%			5,070,000				52,144				4.13	%
Total Interest Bearing Deposits			621,748,942				5,114,407				3.26	%			620,752,647				5,046,916				3.26	%
Total Borrowed Funds			27,249,239				345,256				5.03	%			27,430,238				344,231				4.96	%
Total Interest Bearing Liabilities			648,998,181				5,459,663				3.34	%			648,182,885				5,391,147				3.33	%
Non-Interest Bearing Deposits			172,469,155				-				0.00	%			178,549,677				-				0.00	%
Total Funding Sources/Cost			821,467,336				5,459,663				2.64	%			826,732,562				5,391,147				2.61	%
Non-Interest Bearing Liabilities			16,649,825												12,197,579
Equity			93,608,168												90,878,946
Total Liabilities and Equity		$	931,725,329											$	929,809,086
Net Interest Income						$	7,739,854											$	8,096,226
Net Interest Margin											3.47	%											3.66	%

Average Balance Sheet and Yields
For the Three Months Ended
		September 30, 2025												September 30, 2024
		Average Balance				Interest				Average Yield/Rate				Average Balance				Interest				Average Yield/Rate
Interest Earning Assets:
Federal funds sold		$	4,357,283			$	48,758				4.44	%		$	39,466,804			$	549,994				5.54	%
Deposits with banks			92,046,784				997,294				4.30	%			57,345,746				723,018				5.02	%
Investment securities			105,746,137				1,198,727				4.50	%			63,427,194				580,633				3.64	%
Loans			680,493,148				10,954,738				6.39	%			716,632,296				12,314,077				6.84	%
Total Interest Earning Assets		$	882,643,352			$	13,199,517				5.93	%		$	876,872,040			$	14,167,722				6.43	%
Non-Interest Earning Assets		$	49,081,977											$	48,818,233
Total Assets		$	931,725,329											$	925,690,273
Interest Bearing Liabilities:
Interest bearing demand		$	106,626,968			$	404,378				1.50	%		$	105,905,713			$	331,679				1.25	%
Savings and Money Market			310,491,189				2,690,248				3.44	%			271,504,334				2,352,872				3.45	%
Time deposits - Retail			199,560,785				1,967,084				3.91	%			208,514,413				2,316,552				4.42	%
Time Deposits - Wholesale			5,070,000				52,697				4.12	%			8,081,748				85,216				4.19	%
Total Interest Bearing Deposits			621,748,942				5,114,407				3.26	%			594,006,208				5,086,319				3.41	%
Total Borrowed Funds			27,249,239				345,256				5.03	%			54,689,264				694,736				4.97	%
Total Interest Bearing Liabilities			648,998,181				5,459,663				3.34	%			648,695,472				5,781,055				3.55	%
Non-Interest Bearing Deposits			172,469,155				-				0.00	%			179,799,483				-				0.00	%
Total Funding Sources/Cost			821,467,336				5,459,663				2.64	%			828,494,955				5,781,055				2.78	%
Non-Interest Bearing Liabilities			16,649,825												11,372,451
Equity			93,608,168												85,822,867
Total Liabilities and Equity		$	931,725,329											$	925,690,273
Net Interest Income						$	7,739,854											$	8,386,667
Net Interest Margin											3.47	%											3.79	%

Average Balance Sheet and Yields
For the Nine Months Ended
		September 30, 2025												September 30, 2024
		Average Balance				Interest				Average Yield/Rate				Average Balance				Interest				Average Yield/Rate
Interest Earning Assets:
Federal funds sold		$	4,498,187			$	149,279				4.44	%		$	20,179,128			$	830,969				5.50	%
Deposits with banks			103,692,236				3,356,634				4.33	%			59,664,771				1,931,763				4.32	%
Investment securities			99,918,850				3,333,906				4.46	%			85,178,623				1,717,846				2.69	%
Loans			676,802,218				33,442,588				6.61	%			756,580,615				32,237,974				5.69	%
Total Interest Earning Assets		$	884,911,491			$	40,282,407				6.09	%		$	921,603,137			$	36,718,552				5.32	%
Non-Interest Earning Assets		$	47,816,337											$	59,106,075
Total Assets		$	932,727,828											$	980,709,212
Interest Bearing Liabilities:
Interest bearing demand		$	106,289,490			$	1,106,091				1.39	%		$	98,343,350			$	701,889				0.95	%
Savings and Money Market			296,837,126				7,576,266				3.41	%			293,566,839				6,623,589				3.01	%
Time deposits - Retail			214,218,806				6,536,995				4.08	%			207,512,473				5,983,906				3.85	%
Time Deposits - Wholesale			5,424,813				167,100				4.12	%			10,209,786				294,401				3.85	%
Total Interest Bearing Deposits			622,770,235				15,386,452				3.30	%			609,632,448				13,603,785				2.98	%
Total Borrowed Funds			27,461,732				1,039,532				4.99	%			70,983,229				2,085,773				3.86	%
Total Interest Bearing Liabilities			650,231,967				16,425,984				3.38	%			680,615,677				15,689,558				3.08	%
Non-Interest Bearing Deposits			178,144,809				-				0.00	%			187,984,450				-				0.00	%
Total Funding Sources/Cost			828,376,776				16,425,984				2.65	%			868,600,127				15,689,558				2.41	%
Non-Interest Bearing Liabilities			13,636,749												12,000,986
Equity			90,714,303												100,108,099
Total Liabilities and Equity		$	932,727,828											$	980,709,212
Net Interest Income						$	23,856,423											$	21,028,994
Net Interest Margin											3.59	%											3.02	%

Contact: Kevin Vaughn
Chief Financial Officer
(623) 334-6064
[email protected]

SOURCE: Southwest Heritage Bank

View the original press release on ACCESS Newswire