Bancorp 34, Inc. Reports 3rd Quarter Performance

Rhea-AI Summary

Bancorp 34, Inc. (BCTF) reports Q3 2023 performance, with net income of $3,000 and diluted EPS of $0.00, down from $1.0 million and $0.42 in Q3 2022. Total assets increased to $583.1 million from $574.3 million. Merger expenses and higher funding costs impacting profitability. Regulatory approval received for merger with CBOA Financial, Inc.

Positive

• Positive progress towards completing the merger with regulatory approval received from the OCC and the Federal Reserve in August 2023.
• Total assets increased to $583.1 million from $574.3 million, indicating growth.
• President and CEO Jim Crotty expressed satisfaction with the integration preparation and commitment for the merger.

Negative

• Net income and diluted EPS for Q3 2023 decreased significantly from the same period in 2022, potentially impacting investor confidence.
• Profitability continues to be impacted by expenses related to the proposed merger with CBOA Financial, Inc., and higher funding costs, suggesting short-term financial challenges.
• Deposit balances have declined $19.2 million during 2023, reflecting potential customer attrition.

SCOTTSDALE, Ariz., Nov. 7, 2023 /PRNewswire/ -- Bancorp 34, Inc. (OTCQB: BCTF), the parent company for Bank 34, together, the "Company" reports third quarter of 2023 performance.     

Bancorp 34, Inc. reported net income and diluted EPS for the quarter ended September 30, 2023, of $3,000 and $0.00, respectively, compared to $1.0 million and $0.42 for the same period in 2022.  The Company reported consolidated total assets of $583.1 million, up from $574.3 million as of December 31, 2022.

Profitability continues to be impacted by expenses related to the proposed merger with CBOA Financial, Inc. ("CBOA") announced in April 2023, and higher funding costs as market rates and competition for deposits have further increased in 2023.  During the 3^rd quarter, merger related expense totaled $542,000, and for the year totaled $1.3 million. In addition, a portion of the expenses are not tax deductible, which had a negative effect on the bank's taxes paid in relation to pre-tax income. 

Total assets have increased $8.8 million to date in 2023.  Consistent with industry trends, deposit balances have declined $19.2 million during 2023 with increases in capital and borrowings offsetting the decline.  Tangible book value per share closed the quarter at $13.35.

Progress towards completing the merger continues to be positive.  Regulatory approval was received from the OCC and the Federal Reserve in August 2023.  Both the Company and CBOA anticipate seeking shareholder approval of the merger in the 4^th quarter with the merger becoming effective in the 1^st quarter of 2024. 

President and Chief Executive Officer Jim Crotty commented on the latest developments regarding the merger with CBOA, "I am very happy with the integration preparation and commitment that has taken place to date.  Team members from both Bank 34 and CBOA have stepped up in a big way to help prepare us for life together after the legal closing of our merger.  We remain excited about the future prospects and benefits of the merger with CBOA and look forward to unveiling a new brand in the near future.  We are confident in the combined talents of our team members as we will continue to serve our customers as a premiere community bank in our core markets throughout Arizona and New Mexico.  We look forward to completing the merger with CBOA, executing on our vision, and building shareholder value."

Additional Information About the Merger and Where to Find It

This communication is being made in respect of the proposed merger transaction between the Company and CBOA. In connection with the proposed merger, the Company has filed a registration statement on Form S-4 with the SEC to register the Company's shares that will be issued to CBOA's shareholders in connection with the merger. The registration statement will include a proxy statement of the Company and CBOA and a prospectus of the Company, as well as other relevant documents concerning the proposed transaction. INVESTORS AND SHAREHOLDERS OF THE COMPANY AND CBOA ARE URGED TO READ THE REGISTRATION STATEMENT, INCLUDING THE PROXY STATEMENT/PROSPECTUS THAT WILL BE CONTAINED IN THE REGISTRATION STATEMENT REGARDING THE MERGER WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED BY THE COMPANY OR CBOA WITH THE SEC, INCLUDING ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, CBOA AND THE MERGER.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

A free copy of the proxy statement/prospectus, when it becomes available, as well as other documents filed with the SEC by the Company may be obtained at the SEC's Internet site at http://www.sec.gov. The definitive proxy statement/prospectus will also be mailed to shareholders of the Company and CBOA.

PARTICIPANTS IN THE TRANSACTION

The Company and CBOA and certain of their respective directors and executive officers, under the rules of the SEC may be deemed to be participants in the solicitation of proxies from the Company's and CBOA's shareholders in favor of the approval of the merger agreement. Information about the directors and officers of the Company and CBOA and their ownership of Company and CBOA common stock will be contained in the registration statement and proxy statement/prospectus pertaining to the transaction if and when it becomes available. Free copies of this document may be obtained as described above.

ABOUT BANCORP 34, INC. - Bank 34 has three full-service community bank branches, one in Maricopa County, Arizona in the city of Scottsdale and one each in Otero and Dona Ana Counties in the cities of Alamogordo and Las Cruces in southern New Mexico.

FORWARD-LOOKING STATEMENTS - Certain statements herein that are not historical facts may 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 and in this press release include our expectations regarding shareholder approval for and completion of the merger with CBOA. 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, possible delays in the effectiveness of the Company's registration statement on Form S-4 regarding the merger, the failure of either the Company's or CBOA's shareholders to approve the merger or the failure of other conditions to the merger, and general economic conditions. 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.

BANCORP 34, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(in 000s)
			Sep. 30, 2023			Dec. 31, 2022
ASSETS
Total cash and cash equivalents			$           14,538			$           16,947
Available-for-sale securities, at fair value			53,362			58,582
Held-to-maturity securities, amortized cost, net			5,765			5,832
Loans held for investment, net			474,826			458,582
Other Assets			34,655			34,397
TOTAL ASSETS			$         583,146			$         574,340
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Total deposits			$         468,391			$         487,587
Other Borrowings			18,000			5,000
Sub Debt			24,581			24,531
Accrued interest and other liabilities			9,494			7,984
Total liabilities			520,466			525,102
Total stockholders' equity			62,680			49,238
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$         583,146			$         574,340
Tangible Book Value Per Share			$13.35			$13.85
Equity to Assets			10.75 %			8.57 %
Non-Performing Assets to Total Assets			1.70 %			0.73 %
Shares Outstanding			4,694,810			3,554,455

 

BANCORP 34, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(in 000s)
		Nine Months Ended Sep. 30,				Three Months Ended Sep. 30,
		2023		2022		2023		2022
Total interest income		$          20,719		$          17,435		$            7,173		$            6,062
Total interest expense		9,129		3,019		$            3,468		$            1,498
Net interest income		11,590		14,416		3,705		4,564
Provision for credit losses		280		780		147		125
Total noninterest income		529		386		164		142
Total noninterest expense		10,991		9,698		3,600		3,256
Pre-Tax Income		848		4,324		122		1,325
Provision for income taxes		296		1,052		119		321
NET INCOME		$               552		$            3,272		$                   3		$            1,004
Diluted EPS		$            0.11		$            1.37		$           0.00		$            0.42
Return on Average Assets		0.19 %		0.77 %		0.00 %		0.70 %
Return on Average Equity		1.76 %		10.97 %		0.02 %		10.64 %
Net Interest Margin		2.82 %		3.55 %		2.66 %		3.31 %

 

Contact: Kevin Vaughn
Chief Financial Officer
(623) 334-6064
BCTF@Bank34.com

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SOURCE Bancorp 34, Inc.

FAQ

What are Bancorp 34, Inc.'s Q3 2023 net income and diluted EPS?

The net income for Q3 2023 was $3,000, and the diluted EPS was $0.00, down from $1.0 million and $0.42 in Q3 2022.

What is the total assets of Bancorp 34, Inc. as of Q3 2023?

The total assets increased to $583.1 million from $574.3 million as of Q3 2022.

What is the status of the merger with CBOA Financial, Inc.?

Regulatory approval was received from the OCC and the Federal Reserve in August 2023, with anticipation of seeking shareholder approval in the 4th quarter and the merger becoming effective in the 1st quarter of 2024.