Bancorp 34, Inc. Reports 1st Quarter Performance
Rhea-AI Summary
Bancorp 34 (OTCID:BCTF) reported 1Q26 results with net income $1.65M and bank net income $1.9M. TBVPS rose to $12.56 and diluted EPS was $0.21. Core 1 ROATA improved to 0.65%, NIM to 3.86%, and cost of funds fell to 2.47%. Total deposits increased $21M while total loans declined ~$6M largely from exiting purchased participations. NPA rose to 1.07% due to a $1.3M downgrade. Tier 1 leverage ratio increased to 13.16%.
Positive
- Net income of $1.65M for 1Q26
- TBVPS increased to $12.56 (up $0.23 QoQ)
- Net interest margin improved to 3.86% (+21bps QoQ)
- Deposit growth of $21M and non-maturity mix up to ~80%
Negative
- Non-performing assets rose to 1.07% due to a $1.3M relationship downgrade
- Total loans declined ~$6M (≈1.0%), partly from exiting purchased participations
- Efficiency ratio remains elevated at 75.50%
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 to0.35% for Q1 2025.Non-interest expense declined over the linked and prior year quarters by
1.3% and6.2% , 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% and38% 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% and6.2% , 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 | Loan Mark | CDI Amortization | Non-Recurring | Core Net | ||||||||||||
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
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
(623) 334-6064
BCTF@swhb.com
SOURCE: Southwest Heritage Bank
View the original press release on ACCESS Newswire