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Bancorp 34, Inc. Reports 2nd Quarter Performance

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

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