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
BCTF@swhb.com

SOURCE: Southwest Heritage Bank

View the original press release on ACCESS Newswire

Bancorp 34, Inc Reports 3rd Quarter Performance