Bancorp 34 Reports Significant Growth in Financial Performance Following CBOA Merger

Bancorp 34, Inc. reported significant growth in its financial performance for the period ending September 30, 2024, following its merger with CBOA Financial, Inc. on March 19, 2024. Total assets surged to $939.4 million, up from $581.3 million at the end of 2023. This increase was driven by a substantial rise in cash and cash equivalents, which reached $127.8 million compared to $28.9 million at the end of the previous year.

The company’s loan portfolio also expanded significantly, with loans held for investment increasing to $703.1 million from $457 million. Net loans rose to $692.6 million, reflecting a robust demand for commercial and residential loans. Notably, commercial loans jumped to $120.5 million from $50.2 million, and owner-occupied commercial real estate loans increased to $157.2 million from $82.2 million.

Deposits experienced a similar upward trend, totaling $785.2 million as of September 30, 2024, compared to $460 million at the end of 2023. This growth was largely attributed to the CBOA merger, which enhanced the bank's deposit base. Demand deposits saw a notable increase, rising to $204.4 million from $88.1 million.

Bancorp 34's profitability improved markedly, with net income for the third quarter of 2024 reported at $1.6 million, a turnaround from a net loss of $2.3 million in the same quarter of 2023. For the nine months ended September 30, 2024, net income was $1.5 million, compared to a loss of $1.7 million in the prior year. The earnings per share for the third quarter were $0.22, up from a loss of $0.52 per share in the previous year.

The merger also resulted in a preliminary bargain purchase gain of $5.1 million, contributing to the overall financial improvement. However, merger-related expenses totaled approximately $3.8 million for the nine months ended September 30, 2024.

The company’s net interest income for the third quarter was $8.4 million, significantly higher than $3.7 million in the same period last year. For the nine months, net interest income reached $21 million, up from $11.6 million. The increase in net interest income was driven by higher average earning assets and improved yields.

As of September 30, 2024, the allowance for credit losses stood at $10.5 million, representing 1.52% of loans held for investment, compared to $5.9 million (1.28%) at the end of 2023. The increase in the allowance was primarily due to the impacts of the merger.

Overall, Bancorp 34, Inc. demonstrated a strong recovery and growth trajectory in its financial performance, bolstered by strategic acquisitions and an expanding loan and deposit base.