Second Quarter 2026 Highlights

Net Income - $1.9 million
Bank Net Income - $2.1 million
TBVPS - $12.88
Diluted EPS- $0.24

SCOTTSDALE, AZ / ACCESS Newswire / August 3, 2026 / Bancorp 34, Inc. (OTCID:BCTF), the parent company for Southwest Heritage Bank, together, the "Company" reports second quarter of 2026 performance.

Management Comments - Ciaran McMullan, Chairman & CEO

Core¹ ROATA improved for the seventh consecutive quarter.
Core¹ Net Interest Margin also improved over both the linked and prior year quarters.
While total loans increased modestly over the linked quarter, we booked approximately $37.0 million in new commitments.
Non-performing assets declined significantly as we returned a single large relationship to accrual status.
The bank received approval to retire $23.0 million of subordinated debt, effective July 15th, 2026.
As a result, annual interest cost will decline by $920,000.
During the quarter, we appointed a new Market President for our Las Cruces / El Paso market

2Q26 Highlights

Net Income and NIM

Core¹ NIM improved over the linked and prior year quarters, by 8bps and 22bps, respectively driven by declining deposit costs and improved loan portfolio yields.
Net Income improved over the linked quarter driven primarily by increased net interest income and declined over the prior year due to the impact of a large recovery in Q2 2025.
Net Operating Income (pre-tax pre-provision) increased over both the linked and prior year quarters due to improved NIM and non-interest income.
Non-interest expense increased slightly during the quarter due to one-time costs related to the relocation of our Scottsdale Branch.

Balance Sheet

Deposits declined by $29.0 million in line with historical trends primarily due to tax payments coming due in April.
Total loans were up only slightly as elevated payoffs offset the impact of $37.0 million in new loan commitments.

Asset Quality

NPAs³ improved significantly, declining to 0.31% due to the upgrade of a single relationship of approximately $7.0 million.

Capital

TBVPS increased by $0.32, including a modestly negative AOCI impact.
The bank's Tier 1 Leverage Ratio increased to 13.36%.

Performance Metrics (Consolidated)	2Q26		1Q26		2Q25
ROATA	0.83	%	0.75	%	1.01	%
ROATE	8.09	%	7.41	%	11.14	%
Core¹ ROATA	0.68	%	0.65	%	0.51	%
Core¹ ROATE	6.74	%	6.41	%	5.56	%
Net Interest Margin	3.85	%	3.86	%	3.66	%
Cost of Funds	2.46	%	2.47	%	2.61	%
Overhead Ratio²	2.85	%	2.86	%	2.84	%
Efficiency Ratio	73.47	%	75.50	%	79.07	%
NPA³	0.31	%	1.07	%	0.18	%
ACL to Total Loans	1.23	%	1.31	%	1.55	%

Balance Sheet (in 000s)		2Q26		1Q26		2Q25
Total Assets	$	895,991	$	918,984	$	931,267
Total Loans	$	707,154	$	706,062	$	676,389
Total Deposits	$	752,230	$	781,585	$	795,104
Total Capital	$	100,168	$	98,137	$	92,242
TBVPS	$	12.88	$	12.56	$	11.39

Income Statement (000s except EPS)		2Q26		1Q26		2Q25
Net Interest Income	$	8,365	$	8,206	$	8,096
Non-interest Income	$	484	$	230	$	292
Non-interest Expense	$	6,501	$	6,369	$	6,633
Net Operating Income	$	2,348	$	2,067	$	3,005
Net Income	$	1,867	$	1,654	$	2,330
Core¹ Net Income	$	1,560	$	1,430	$	1,163
Diluted Earnings per Share	$	0.24	$	0.21	$	0.32

1 - Non-GAAP, excludes merger related accretion and amortization, as well as material non-recurring income and expense items.

2 - Non-interest expense as a percentage of average assets

3 - NPA is non-performing assets as a % of total assets, net of government guarantees.

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		2Q26			1Q26			2Q25
Return on Average Assets (ROAA)		0.82	%		0.74	%		1.01	%
Core⁴ ROAA		0.68	%		0.64	%		0.50	%
Return on Average Tangible Assets (ROATA)		0.83	%		0.75	%		1.01	%
Core⁴ ROATA		0.69	%		0.65	%		0.51	%
Return on Average Equity (ROAE)		7.52	%		6.84	%		9.93	%
Core⁴ ROAE		6.27	%		5.91	%		5.23	%
Return on Average Tangible Equity		8.09	%		7.41	%		11.14	%
Core⁴ ROATE		6.74	%		6.41	%		5.56	%
Overhead Ratio		2.85	%		2.86	%		2.84	%
Core⁴ Overhead Ratio		2.71	%		2.65	%		2.65	%
Efficiency Ratio		73.47	%		75.50	%		79.07	%
Core⁴ Efficiency Ratio		76.14	%		76.92	%		82.26	%
Net Interest Margin		3.85	%		3.86	%		3.66	%
Core⁵ Net Interest Margin		3.50	%		3.42	%		3.28	%
Cost of Funds		2.46	%		2.47	%		2.61	%
Earnings Per Share (EPS)	$	0.25		$	0.22		$	0.32
Diluted EPS	$	0.24		$	0.21		$	0.32

Bank Regulatory Capital Ratios	2Q26		1Q26		2Q25
Tier 1 Leverage Capital Ratio	13.36	%	13.16	%	11.86	%
Common Equity Tier 1 Capital Ratio	15.11	%	14.71	%	14.18	%
Tier 1 Capital Ratio	15.11	%	14.71	%	14.18	%
Total Risk-based Capital Ratio	16.26	%	15.93	%	15.44	%

Credit Quality⁶		2Q26			1Q26
Total Classified Loans	$	16,311		$	18,299
Classified - Accrual Loans	$	13,522		$	7,339
Classified - Non-Accrual Loans	$	2,789		$	10,960
Non-Performing Assets	$	2,789		$	10,960
Total Classified / Total Loans		2.31	%		2.59	%
Adversely Classified Items/Total Capital		12.09	%		14.39	%

Period	GAAP Net Income		Loan Mark Accretion		CDI Amortization		Non-Recurring Items⁷		Core Net Income⁸
2Q26	$	1,867	$	-679	$	349	$	-84	$	1,556
1Q26	$	1,654	$	-855	$	360	$	196	$	1,430
2Q25	$	2,330	$	-758	$	399	$	-1,197	$	1,163

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

BALANCE SHEET (in 000s)	2Q26	1Q26	2Q25
Assets
Cash and due from banks	3,244	3,494	3,645
Fed funds sold & repos	5,540	1,040	5,430
Interest bearing deposits with banks	38,657	61,403	95,086
Investment securities	97,413	103,815	104,455
Loans, net of unearned income	707,154	706,062	676,389
Allowance for credit losses	-8,710	-9,258	-10,492
Premises and equipment, net	8,832	11,040	11,565
Accrued interest receivable	2,689	2,645	2,559
Core deposit intangible	5,328	5,677	6,791
Other assets	35,844	33,066	35,839
Total Assets	895,991	918,984	931,267
Liabilities
Non-interest bearing deposits	157,766	165,202	168,931
Interest bearing demand deposits	100,000	104,519	105,630
Savings and money market deposits	339,574	353,244	307,474
Time deposits - retail	152,350	155,721	207,999
Time deposits - wholesale	2,540	2,540	5,070
Total Deposits	752,230	781,226	795,104
Accrued expenses and other liabilities	16,273	12,322	16,680
Other borrowings	27,319	27,299	27,241
Total Liabilities	795,822	820,847	839,025
Equity
Common stock	74	74	75
Capital surplus	66,610	66,402	67,652
Retained earnings	33,850	33,850	25,989
Accumulated other comprehensive loss	-3,887	-3,843	-4,849
Net income	3,522	1,654	4,638
Unearned ESOP shares	0	0	-1,263
Total Equity	100,169	98,137	92,242
Total Liabilities & Equity	895,991	918,984	931,267

			UNAUDITED
INCOME STATEMENT (in 000s)	2Q26	1Q26		2Q25
Interest Income
Interest on Loans	11,659	11,338		11,008
Fees on Loans	69	133		173
Interest on federal funds sold	32	33		49
Interest on deposits with banks	479	310		1,095
Investment Securities - Taxable	1,028	1,218		1,162
Total Interest Income	13,267	13,032		13,487
Interest Expense
Interest bearing demand deposits	369	349		373
Savings and Money Market Deposits	2,835	2,640		2,498
Time Deposits - Retail	1,336	1,469		2,124
Time Deposits - Wholesale	25	31		52
Total Interest Expense on Deposits	4,565	4,489		5,047
Interest on other borrowings	337	337		344
Total Interest Expense	4,902	4,826		5,391
Net Interest Income	8,365	8,206		8,096
Provision for Credit Losses	0	0		-1,250
Net In. Inc. After Prov. for Credit Losses	8,365	8,206		9,346
Non Interest Income
Service charges and fees	146	125		148
Mortgage loan and related fees	53	31		-9
Other noninterest income	285	74		153
Total Non Interest Income	484	230		292
Non Interest Expense
Salaries and employee benefits	3,420	3,451		3,323
Occupancy	773	725		726
Other noninterest expense	2,308	2,193		2,584
Total Non Interest Expense	6,501	6,369		6,633
Income Before Taxes	2,348	2,067		3,005
Income taxes	481	413		675
Net Income	1,867	1,654		2,330

INCOME STATEMENT (in 000s)	6 months ending 2Q26		6 months ending 2Q25
Interest Income
Interest on Loans		22,996		22,165
Fees on Loans		202		323
Interest on federal funds sold		65		101
Interest on deposits with banks		789		2,359
Investment Securities - Taxable		2,247		2,135
Total Interest Income		26,299		27,083
Interest Expense
Interest bearing demand deposits		718		702
Savings and Money Market Deposits		5,475		4,886
Time Deposits - Retail		2,804		4,570
Time Deposits - Wholesale		57		114
Total Interest Expense on Deposits		9,054		10,272
Interest on other borrowings		673		694
Total Interest Expense		9,727		10,966
Net Interest Income		16,572		16,117
Provision for Credit Losses		0		-2,750
Net In. Inc. After Prov. for Credit Losses		16,572		18,867
Non Interest Income
Service charges and fees		272		302
Mortgage loan and related fees		86		27
Other noninterest income		357		227
Total Non Interest Income		715		556
Non Interest Expense
Salaries and employee benefits		6,871		6,901
Occupancy		1,499		1,426
Other noninterest expense		4,501		5,098
Total Non Interest Expense		12,871		13,425
Income Before Taxes		4,416		5,998
Income taxes		894		1,360
Net Income		3,522		4,638

Average Balance Sheet and Yields
For the Three Months Ended
	June 30, 2026							March 31, 2026
	Average Balance		Interest		Average Yield/Rate			Average Balance		Interest		Average Yield/Rate
Interest Earning Assets:
Federal funds sold	$	3,521,978	$	32,189		3.67	%	$	3,649,944	$	33,244		3.69	%
Deposits with banks		54,403,513		479,362		3.53	%		36,988,630		309,723		3.40	%
Investment securities		106,258,336		1,028,148		3.88	%		110,477,352		1,218,027		4.47	%
Loans		708,187,996		11,727,349		6.64	%		710,396,489		11,471,365		6.55	%
Total Interest Earning Assets	$	872,371,823	$	13,267,048		6.10	%	$	861,512,415	$	13,032,359		6.13	%
Non-Interest Earning Assets	$	41,795,279						$	41,417,194
Total Assets	$	914,167,102						$	902,929,609

Interest Bearing Liabilities:
Interest bearing demand	$	104,563,048	$	369,136		1.42	%	$	102,078,048	$	349,075		1.39	%
Savings and Money Market		347,058,899		2,835,039		3.28	%		327,965,659		2,639,522		3.26	%
Time deposits - Retail		155,333,571		1,335,594		3.45	%		165,714,505		1,468,887		3.59	%
Time Deposits - Wholesale		2,540,000		25,650		4.05	%		3,158,444		31,554		4.05	%
Total Interest Bearing Deposits		609,495,518		4,565,419		3.00	%		598,916,656		4,489,038		3.04	%
Total Borrowed Funds		27,307,385		336,310		4.94	%		27,287,777		336,989		5.01	%
Total Interest Bearing Liabilities		636,802,903		4,901,729		3.09	%		626,204,433		4,826,027		3.13	%
Non-Interest Bearing Deposits		162,926,161		-		0.00	%		165,855,529		-		0.00	%
Total Funding Sources/Cost		799,729,064		4,901,729		2.46	%		792,059,962		4,826,027		2.47	%
Non-Interest Bearing Liabilities		14,870,604							12,781,143
Equity		99,567,434							98,088,504
Total Liabilities and Equity	$	914,167,102						$	902,929,609
Net Interest Income			$	8,365,319						$	8,206,332
Net Interest Margin						3.85	%						3.86	%

Average Balance Sheet and Yields
For the Three Months Ended
	June 30, 2026							June 30, 2025
	Average Balance		Interest		Average Yield/Rate			Average Balance		Interest		Average Yield/Rate
Interest Earning Assets:
Federal funds sold	$	3,521,978	$	32,189		3.67	%	$	4,391,538	$	48,968		4.47	%
Deposits with banks		54,403,513		479,362		3.53	%		101,230,867		1,095,171		4.34	%
Investment securities		106,258,336		1,028,148		3.88	%		109,636,098		1,161,439		4.09	%
Loans		708,187,996		11,727,349		6.64	%		674,518,875		11,181,795		6.65	%
Total Interest Earning Assets	$	872,371,823	$	13,267,048		6.10	%	$	889,777,378	$	13,487,373		6.08	%
Non-Interest Earning Assets	$	41,795,279						$	40,031,708
Total Assets	$	914,167,102						$	929,809,086

Interest Bearing Liabilities:
Interest bearing demand	$	104,563,048	$	369,136		1.42	%	$	107,769,299	$	373,496		1.39	%
Savings and Money Market		347,058,899		2,835,039		3.28	%		296,161,664		2,497,634		3.38	%
Time deposits - Retail		155,333,571		1,335,594		3.45	%		211,751,684		2,123,642		4.02	%
Time Deposits - Wholesale		2,540,000		25,650		4.05	%		5,070,000		52,144		4.13	%
Total Interest Bearing Deposits		609,495,518		4,565,419		3.00	%		620,752,647		5,046,916		3.26	%
Total Borrowed Funds		27,307,385		336,310		4.94	%		27,430,238		344,231		4.96	%
Total Interest Bearing Liabilities		636,802,903		4,901,729		3.09	%		648,182,885		5,391,147		3.33	%
Non-Interest Bearing Deposits		162,926,161		-		0.00	%		178,549,677		-		0.00	%
Total Funding Sources/Cost		799,729,064		4,901,729		2.46	%		826,732,562		5,391,147		2.61	%
Non-Interest Bearing Liabilities		14,870,604							12,197,579
Equity		99,567,434							90,878,946
Total Liabilities and Equity	$	914,167,102						$	929,809,086
Net Interest Income			$	8,365,319						$	8,096,226
Net Interest Margin						3.85	%						3.66	%

Average Balance Sheet and Yields
For the Six Months Ended
	June 30, 2026							June 30, 2025
	Average Balance		Interest		Average Yield/Rate			Average Balance		Interest		Average Yield/Rate
Interest Earning Assets:
Federal funds sold	$	3,585,608	$	65,434		3.68	%	$	4,569,807	$	100,521		4.44	%
Deposits with banks		45,744,179		789,085		3.48	%		109,611,472		2,359,340		4.34	%
Investment securities		108,356,189		2,246,174		4.18	%		104,119,287		2,135,178		4.14	%
Loans		709,286,142		23,198,714		6.60	%		674,926,165		22,487,850		6.72	%
Total Interest Earning Assets	$	866,972,118	$	26,299,407		6.12	%	$	893,226,731	$	27,082,889		6.11	%
Non-Interest Earning Assets	$	41,607,280						$	40,010,655
Total Assets	$	908,579,398						$	933,237,386

Interest Bearing Liabilities:
Interest bearing demand	$	103,327,413	$	718,212		1.40	%	$	106,113,429	$	701,713		1.33	%
Savings and Money Market		337,565,023		5,474,561		3.27	%		289,896,939		4,886,018		3.40	%
Time deposits - Retail		160,495,362		2,804,481		3.52	%		221,669,292		4,569,911		4.16	%
Time Deposits - Wholesale		2,847,514		57,204		4.05	%		5,605,160		114,403		4.12	%
Total Interest Bearing Deposits		604,235,312		9,054,458		3.02	%		623,284,820		10,272,045		3.32	%
Total Borrowed Funds		27,297,635		673,299		4.97	%		27,569,740		694,276		5.08	%
Total Interest Bearing Liabilities		631,532,947		9,727,757		3.11	%		650,854,560		10,966,321		3.40	%
Non-Interest Bearing Deposits		164,382,753		-		0.00	%		181,029,672		-		0.00	%
Total Funding Sources/Cost		795,915,700		9,727,757		2.46	%		831,884,232		10,966,321		2.66	%
Non-Interest Bearing Liabilities		13,831,646							12,112,019
Equity		98,832,052							89,241,135
Total Liabilities and Equity	$	908,579,398						$	933,237,386
Net Interest Income			$	16,571,650						$	16,116,568
Net Interest Margin						3.85	%						3.65	%

Contact:
Kevin Vaughn
Chief Financial Officer
(623) 334-6064
BCTF@swhb.com

SOURCE: Southwest Heritage Bank

View the original press release on ACCESS Newswire