Southwest Heritage Bank: Bancorp 34, Inc. Reports 1st Quarter Performance

First Quarter 2026 Highlights

• Net Income - $1.7 million

• Bank Net Income - $1.9 million

• TBVPS - $12.56

• Diluted EPS- $0.21

SCOTTSDALE, AZ / ACCESS Newswire / April 27, 2026 / Bancorp 34, Inc. (OTCID:BCTF), the parent company for Southwest Heritage Bank, together, the "Company" reports first quarter of 2026 performance.

Management Comments - Ciaran McMullan, Chairman & CEO

• Core¹ ROATA improved for the sixth consecutive quarter - to 0.65% compared to 0.35% for Q1 2025.

• Non-interest expense declined over the linked and prior year quarters by 1.3% and 6.2%, respectively.

• Driven by our ongoing efforts to make incremental improvements across multiple expenses categories.

• NIM continued to improve, increasing by 21bps over the linked quarter.

• Deposit mix continued to improve with non-maturity deposits increasing from ~73% to ~80% year-over-year.

• Driving continued improvement in our cost for funds, which declined to 2.47% QTD.

• Total loans declined slightly during the quarter (~1.0%) in part due to the intentional exit of a large, purchased participation.

• Purchased participations now represent less than 1.0% of total loans underscoring our focus on relationship-based lending.

1Q26 Highlights

Net Income and NIM

• NIM (and core NIM) improved over the linked and prior year quarters by 21bps (6bps) and 23bps (32bps) driven by declining deposit costs, earning asset mix, and accelerated loan mark accretion.

• Net Operating Income (pre-tax pre-provision) increased over the linked and prior year quarters by 29% and 38% driven primarily by improving NIM.

• Net Income improved over the linked and prior year quarters due to improving margin and declining non-interest expense.

• Non-interest expense declined compared to the linked and prior quarters by 1.3% and 6.2%, respectively.

Balance Sheet

• Total deposits increased by $21 million and our deposit mix improved with a $38 million increase in non-maturity deposits.

• Total loans declined by ~$6 million driven in part by exiting $6 million in non-core purchased participations.

Asset Quality

• NPAs³ increased slightly due to a single $1.3 million relationship downgrade.

• NPAs are expected to decline during Q2 due to improving performance of prior downgrades.

Capital

• TBVPS increased by $0.23 during the quarter including a negative $0.06 AOCI impact.

• The bank's Tier 1 Leverage Ratio increased to 13.16%.

Performance Metrics (Consolidated)			1Q26				4Q25				1Q25
ROATA			0.75	%			0.66	%			1.01	%
ROATE			7.41	%			6.66	%			11.67	%
Core1 ROATA			0.65	%			0.62	%			0.35	%
Core1 ROATE			6.41	%			6.21	%			4.11	%
Net Interest Margin			3.86	%			3.65	%			3.63	%
Cost of Funds			2.47	%			2.54	%			2.70	%
Overhead Ratio2			2.86	%			2.86	%			2.79	%
Efficiency Ratio			75.50	%			81.78	%			81.98	%
NPA3			1.07	%			1.02	%			0.27	%
ACL to Total Loans			1.31	%			1.37	%			1.50	%

Select Metrics (Bank Only)			1Q26				4Q25				1Q25
ROATA			0.86	%			0.82	%			1.13	%
Core1 ROATA			0.77	%			0.77	%			0.47	%
Net Interest Margin			4.02	%			3.81	%			3.73	%
Core Efficiency Ratio			73.36	%			75.82	%			71.72	%

Balance Sheet (in 000s)			1Q26				4Q25				1Q25
Total Assets		$	918,984			$	897,636			$	943,639
Total Loans		$	706,062			$	712,492			$	676,612
Total Deposits		$	781,585			$	760,585			$	814,255
Total Capital		$	98,137			$	96,823			$	90,057
TBVPS		$	12.56			$	12.33			$	11.06

Income Statement (000s except EPS)			1Q26				4Q25				1Q25
Net Interest Income		$	8,206			$	7,856			$	8,020
Non-interest Income		$	230			$	204			$	265
Non-interest Expense		$	6,369			$	6,454			$	6,792
Net Operating Income		$	2,067			$	1,606			$	1,493
Net Income		$	1,654			$	1,490			$	2,308
Core1 Net Income		$	1,430			$	1,387			$	813
Diluted Earnings per Share		$	0.21			$	0.19			$	0.31

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			1Q26				4Q25				1Q25
Return on Average Assets (ROAA)			0.74	%			0.66	%			1.00	%
Core4 ROAA			0.64	%			0.62	%			0.35	%
Return on Average Tangible Assets (ROATA)			0.75	%			0.66	%			1.01	%
Core4 ROATA			0.77	%			0.62	%			0.36	%
Return on Average Equity (ROAE)			6.84	%			6.18	%			10.63	%
Core4 ROAE			5.91	%			5.71	%			3.77	%
Return on Average Tangible Equity			7.41	%			6.66	%			11.67	%
Core4 ROATE			6.41	%			6.21	%			4.15	%
Overhead Ratio			2.86	%			2.86	%			2.90	%
Core4 Overhead Ratio			2.65	%			2.68	%			2.64	%
Efficiency Ratio			75.50	%			81.78	%			81.98	%
Core4 Efficiency Ratio			76.92	%			80.46	%			86.06	%
Net Interest Margin			3.86	%			3.65	%			3.63	%
Core5 Net Interest Margin			3.42	%			3.36	%			3.10	%
Cost of Funds			2.47	%			2.54	%			2.70	%
Earnings Per Share (EPS)		$	0.22			$	0.19			$	0.31
Diluted EPS		$	0.21			$	0.19			$	0.31

Bank Regulatory Capital Ratios			1Q26				4Q25				1Q25
Tier 1 Leverage Capital Ratio			13.16	%			12.89	%			11.10	%
Common Equity Tier 1 Capital Ratio			14.71	%			14.15	%			13.56	%
Tier 1 Capital Ratio			14.71	%			14.15	%			13.56	%
Total Risk-based Capital Ratio			15.93	%			15.40	%			14.81	%

Credit Quality6			1Q26				4Q25
Total Classified Loans		$	18,299			$	12,592
Classified - Accrual Loans		$	7,339			$	3,434
Classified - Non-Accrual Loans		$	10,960			$	9,158
Non-Performing Assets		$	10,960			$	9,158
Total Classified / Total Loans			2.59	%			1.77	%
Adversely Classified Items/Total Capital			14.39	%			10.02	%

Period			GAAP Net Income			Loan Mark Accretion			CDI Amortization			Non-Recurring Items7			Core Net Income8
	1Q26		$	1,654		$	-855		$	360		$	196		$	1,430
	4Q25		$	1,490		$	-540		$	371		$	33		$	1,387
	1Q25		$	2,308		$	-1,103		$	414		$	-1,384		$	746

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)			1Q26				4Q25				1Q25
Assets
Cash and due from banks			3,494				3,208				3,652
Fed funds sold & repos			1,040				1,055				6,020
Interest bearing deposits with banks			61,403				30,494				118,722
Investment securities			103,815				107,850				94,818
Loans, net of unearned income			706,062				712,492				676,612
Allowance for credit losses			-9,258				-9,734				-10,180
Premises and equipment, net			11,040				10,721				11,984
Accrued interest receivable			2,645				2,728				2,572
Core deposit intangible			5,677				6,038				7,184
Other assets			33,066				32,786				32,255
Total Assets			918,984				897,636				943,639
Liabilities
Non-interest bearing deposits			165,202				163,620				182,376
Interest bearing demand deposits			104,519				102,390				114,505
Savings and money market deposits			353,244				318,823				294,820
Time deposits - retail			155,721				170,682				217,484
Time deposits - wholesale			2,540				5,070				5,070
Total Deposits			781,226				760,585				814,255
Accrued expenses and other liabilities			12,322				12,948				11,605
Other borrowings			27,299				27,280				27,722
Total Liabilities			820,847				800,813				853,582
Equity
Common stock			74				74				74
Capital surplus			66,402				66,274				67,529
Retained earnings			33,850				25,989				25,989
Accumulated other comprehensive loss			-3,843				-3,375				-4,570
Net income			1,654				7,861				2,308
Unearned ESOP shares			0				0				-1,273
Total Equity			98,137				96,823				90,057
Total Liabilities & Equity			918,984				897,636				943,639

INCOME STATEMENT (in 000s)			1Q26				4Q25				1Q25
Interest Income
Interest on Loans			11,338				11,167				11,155
Fees on Loans			133				97				151
Interest on federal funds sold			33				46				52
Interest on deposits with banks			310				404				1,264
Investment Securities - Taxable			1,218				1,190				973
Total Interest Income			13,032				12,904				13,595
Interest Expense
Interest bearing demand deposits			349				408				328
Savings and Money Market Deposits			2,640				2,600				2,389
Time Deposits - Retail			1,469				1,645				2,446
Time Deposits - Wholesale			31				53				62
Total Interest Expense on Deposits			4,489				4,706				5,225
Interest on other borrowings			337				342				350
Total Interest Expense			4,826				5,048				5,575
Net Interest Income			8,206				7,856				8,020
Provision for Credit Losses			0				-157				-1,500
Net In. Inc. After Prov. for Credit Losses			8,206				8,013				9,520
Non Interest Income
Service charges and fees			125				139				154
Mortgage loan and related fees			31				21				33
Other noninterest income			74				44				78
Total Non Interest Income			230				204				265
Non Interest Expense
Salaries and employee benefits			3,451				3,422				3,578
Occupancy			725				724				700
Other noninterest expense			2,193				2,308				2,514
Total Non Interest Expense			6,369				6,454				6,792
Income Before Taxes			2,067				1,763				2,993
Income taxes			413				273				685
Net Income			1,654				1,490				2,308

Average Balance Sheet and Yields
For the Three Months Ended
		March 31, 2026												December 31, 2025
		Average Balance				Interest				Average Yield/Rate				Average Balance				Interest				Average Yield/Rate
Interest Earning Assets:
Federal funds sold		$	3,649,944			$	33,244				3.61	%		$	4,594,293			$	46,392				4.01	%
Deposits with banks			36,988,630				309,723				3.32	%			43,357,135				404,053				3.70	%
Investment securities			110,477,352				1,218,027				4.37	%			113,686,437				1,189,745				4.15	%
Loans			710,396,489				11,471,365				6.41	%			696,214,926				11,264,177				6.42	%
Total Interest Earning Assets		$	861,512,415			$	13,032,359				6.00	%		$	857,852,791			$	12,904,367				5.97	%
Non-Interest Earning Assets		$	41,417,194											$	44,357,743
Total Assets		$	902,929,609											$	902,210,534
Interest Bearing Liabilities:
Interest bearing demand		$	102,078,048			$	349,075				1.36	%		$	105,364,026			$	407,755				1.54	%
Savings and Money Market			327,965,659				2,639,522				3.19	%			311,440,354				2,600,467				3.31	%
Time deposits - Retail			165,714,505				1,468,887				3.52	%			173,597,584				1,645,161				3.76	%
Time Deposits - Wholesale			3,158,444				31,554				3.96	%			5,070,000				52,697				4.12	%
Total Interest Bearing Deposits			598,916,656				4,489,038				2.97	%			595,471,964				4,706,080				3.14	%
Total Borrowed Funds			27,287,777				336,978				4.90	%			27,268,568				342,568				4.98	%
Total Interest Bearing Liabilities			626,204,433				4,826,016				3.06	%			622,740,532				5,048,648				3.22	%
Non-Interest Bearing Deposits			165,855,529				-				0.00	%			166,241,386				-				0.00	%
Total Funding Sources/Cost			792,059,962				4,826,016				2.42	%			788,981,918				5,048,648				2.54	%
Non-Interest Bearing Liabilities			12,781,143												16,823,824
Equity			98,088,504												96,404,792
Total Liabilities and Equity		$	902,929,609											$	902,210,534
Net Interest Income						$	8,206,343											$	7,855,719
Net Interest Margin											3.86	%											3.65	%

Average Balance Sheet and Yields
For the Three Months Ended
		March 31, 2026												March 31, 2025
		Average Balance				Interest				Average Yield/Rate				Average Balance				Interest				Average Yield/Rate
Interest Earning Assets:
Federal funds sold		$	3,649,944			$	33,244				3.61	%		$	4,750,056			$	51,553				4.32	%
Deposits with banks			36,988,630				309,723				3.32	%			118,085,194				1,264,169				4.26	%
Investment securities			110,477,352				1,218,027				4.37	%			98,541,177				973,739				3.93	%
Loans			710,396,489				11,471,365				6.41	%			675,337,980				11,306,055				6.66	%
Total Interest Earning Assets		$	861,512,415			$	13,032,359				6.00	%		$	896,714,407			$	13,595,516				6.03	%
Non-Interest Earning Assets		$	41,417,194											$	39,993,536
Total Assets		$	902,929,609											$	936,707,943
Interest Bearing Liabilities:
Interest bearing demand		$	102,078,048			$	349,075				1.36	%		$	104,439,161			$	328,216				1.25	%
Savings and Money Market			327,965,659				2,639,522				3.19	%			283,562,606				2,388,384				3.35	%
Time deposits - Retail			165,714,505				1,468,887				3.52	%			231,697,095				2,446,269				4.20	%
Time Deposits - Wholesale			3,158,444				31,554				3.96	%			6,146,267				62,259				4.03	%
Total Interest Bearing Deposits			598,916,656				4,489,038				2.97	%			625,845,129				5,225,128				3.32	%
Total Borrowed Funds			27,287,777				336,978				4.90	%			27,710,793				350,045				4.94	%
Total Interest Bearing Liabilities			626,204,433				4,826,016				3.06	%			653,555,922				5,575,173				3.39	%
Non-Interest Bearing Deposits			165,855,529				-				0.00	%			183,537,223				-				0.00	%
Total Funding Sources/Cost			792,059,962				4,826,016				2.42	%			837,093,145				5,575,173				2.65	%
Non-Interest Bearing Liabilities			12,781,143												12,025,510
Equity			98,088,504												87,589,288
Total Liabilities and Equity		$	902,929,609											$	936,707,943
Net Interest Income						$	8,206,343											$	8,020,343
Net Interest Margin											3.86	%											3.63	%

CONTACT:
Kevin Vaughn
Chief Financial Officer
[phone]
[e-mail]

SOURCE: Southwest Heritage Bank

View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/banking-and-financial-services/bancorp-34-inc.-reports-1st-quarter-performance-1161586