false Q3 2023 --12-31 0001668340 MD P6Y8M12D P6Y P6Y P2Y6M P4Y6M P2Y4M24D P1Y6M P2Y9M18D P6Y9M18D P2Y6M P2Y4M24D P1Y6M P3Y1M6D P3Y7M6D P2Y10M24D P2Y2M12D P3Y7M6D P6Y6M P4Y3M18D P2Y10M24D P2Y2M12D P4Y4M24D P4Y6M P4Y1M6D P4Y4M24D P4Y6M P3Y7M6D P4Y6M P4Y1M6D P2Y10M24D P3Y9M18D P1Y7M6D P2Y P4Y7M6D P3Y3M18D P2Y10M24D P1Y7M6D 0001668340 2023-01-01 2023-09-30 0001668340 bctf:VotingCommonStockMember 2023-12-27 0001668340 us-gaap:NonvotingCommonStockMember 2023-12-27 0001668340 2023-09-30 0001668340 2022-12-31 0001668340 bctf:VotingCommonStockMember 2023-09-30 0001668340 bctf:VotingCommonStockMember 2022-12-31 0001668340 us-gaap:NonvotingCommonStockMember 2023-09-30 0001668340 us-gaap:NonvotingCommonStockMember 2022-12-31 0001668340 2023-07-01 2023-09-30 0001668340 2022-07-01 2022-09-30 0001668340 2022-01-01 2022-09-30 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2022-06-30 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2022-06-30 0001668340 us-gaap:PreferredStockMember 2022-06-30 0001668340 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001668340 us-gaap:RetainedEarningsMember 2022-06-30 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0001668340 bctf:UnearnedESOPSharesMember 2022-06-30 0001668340 2022-06-30 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2023-06-30 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2023-06-30 0001668340 us-gaap:PreferredStockMember 2023-06-30 0001668340 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001668340 us-gaap:RetainedEarningsMember 2023-06-30 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-06-30 0001668340 bctf:UnearnedESOPSharesMember 2023-06-30 0001668340 2023-06-30 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2021-12-31 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2021-12-31 0001668340 us-gaap:PreferredStockMember 2021-12-31 0001668340 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001668340 us-gaap:RetainedEarningsMember 2021-12-31 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0001668340 bctf:UnearnedESOPSharesMember 2021-12-31 0001668340 2021-12-31 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2022-12-31 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2022-12-31 0001668340 us-gaap:PreferredStockMember 2022-12-31 0001668340 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001668340 us-gaap:RetainedEarningsMember 2022-12-31 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0001668340 bctf:UnearnedESOPSharesMember 2022-12-31 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:RetainedEarningsMember 2022-12-31 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:RetainedEarningsMember 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member 2022-12-31 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2022-07-01 2022-09-30 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2022-07-01 2022-09-30 0001668340 us-gaap:PreferredStockMember 2022-07-01 2022-09-30 0001668340 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0001668340 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-07-01 2022-09-30 0001668340 bctf:UnearnedESOPSharesMember 2022-07-01 2022-09-30 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2023-07-01 2023-09-30 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2023-07-01 2023-09-30 0001668340 us-gaap:PreferredStockMember 2023-07-01 2023-09-30 0001668340 us-gaap:AdditionalPaidInCapitalMember 2023-07-01 2023-09-30 0001668340 us-gaap:RetainedEarningsMember 2023-07-01 2023-09-30 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-07-01 2023-09-30 0001668340 bctf:UnearnedESOPSharesMember 2023-07-01 2023-09-30 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2022-01-01 2022-09-30 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2022-01-01 2022-09-30 0001668340 us-gaap:PreferredStockMember 2022-01-01 2022-09-30 0001668340 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-09-30 0001668340 us-gaap:RetainedEarningsMember 2022-01-01 2022-09-30 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-09-30 0001668340 bctf:UnearnedESOPSharesMember 2022-01-01 2022-09-30 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:RetainedEarningsMember 2023-01-01 2023-01-01 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2023-01-01 2023-01-01 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:RetainedEarningsMember 2023-01-01 2023-01-01 0001668340 us-gaap:AccountingStandardsUpdate201613Member 2023-01-01 2023-01-01 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2023-01-01 2023-09-30 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2023-01-01 2023-09-30 0001668340 us-gaap:PreferredStockMember 2023-01-01 2023-09-30 0001668340 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-09-30 0001668340 us-gaap:RetainedEarningsMember 2023-01-01 2023-09-30 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-09-30 0001668340 bctf:UnearnedESOPSharesMember 2023-01-01 2023-09-30 0001668340 us-gaap:CommonStockMember 2023-01-01 2023-09-30 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2022-09-30 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2022-09-30 0001668340 us-gaap:PreferredStockMember 2022-09-30 0001668340 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001668340 us-gaap:RetainedEarningsMember 2022-09-30 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30 0001668340 bctf:UnearnedESOPSharesMember 2022-09-30 0001668340 2022-09-30 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2023-09-30 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2023-09-30 0001668340 us-gaap:PreferredStockMember 2023-09-30 0001668340 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0001668340 us-gaap:RetainedEarningsMember 2023-09-30 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-09-30 0001668340 bctf:UnearnedESOPSharesMember 2023-09-30 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:RetainedEarningsMember 2023-01-01 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2023-01-01 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:RetainedEarningsMember 2023-01-01 0001668340 us-gaap:AccountingStandardsUpdate201613Member 2023-01-01 0001668340 bctf:CBOAFinancialIncMember 2023-09-30 0001668340 us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember 2023-09-30 0001668340 us-gaap:USTreasurySecuritiesMember 2023-09-30 0001668340 us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2023-09-30 0001668340 us-gaap:USStatesAndPoliticalSubdivisionsMember 2023-09-30 0001668340 us-gaap:CorporateDebtSecuritiesMember 2023-09-30 0001668340 us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember 2022-12-31 0001668340 us-gaap:USTreasurySecuritiesMember 2022-12-31 0001668340 us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2022-12-31 0001668340 us-gaap:USStatesAndPoliticalSubdivisionsMember 2022-12-31 0001668340 us-gaap:CorporateDebtSecuritiesMember 2022-12-31 0001668340 us-gaap:CorporateDebtSecuritiesMember 2023-06-30 0001668340 us-gaap:CorporateDebtSecuritiesMember 2023-07-01 2023-09-30 0001668340 us-gaap:CorporateDebtSecuritiesMember 2023-01-01 0001668340 us-gaap:CorporateDebtSecuritiesMember 2023-01-01 2023-09-30 0001668340 srt:SingleFamilyMember 2023-09-30 0001668340 srt:SingleFamilyMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember 2022-12-31 0001668340 srt:MultifamilyMember 2023-09-30 0001668340 srt:MultifamilyMember 2022-12-31 0001668340 srt:SingleFamilyMember 2023-06-30 0001668340 us-gaap:CommercialLoanMember 2023-06-30 0001668340 us-gaap:ConsumerLoanMember 2023-06-30 0001668340 us-gaap:ConstructionLoansMember 2023-06-30 0001668340 bctf:NonOwnerOccupiedCREMember 2023-06-30 0001668340 bctf:OwnerOccupiedCREMember 2023-06-30 0001668340 srt:MultifamilyMember 2023-06-30 0001668340 srt:SingleFamilyMember 2023-07-01 2023-09-30 0001668340 us-gaap:CommercialLoanMember 2023-07-01 2023-09-30 0001668340 us-gaap:ConsumerLoanMember 2023-07-01 2023-09-30 0001668340 us-gaap:ConstructionLoansMember 2023-07-01 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember 2023-07-01 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember 2023-07-01 2023-09-30 0001668340 srt:MultifamilyMember 2023-07-01 2023-09-30 0001668340 srt:SingleFamilyMember 2023-01-01 2023-09-30 0001668340 us-gaap:CommercialLoanMember 2023-01-01 2023-09-30 0001668340 us-gaap:ConsumerLoanMember 2023-01-01 2023-09-30 0001668340 us-gaap:ConstructionLoansMember 2023-01-01 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember 2023-01-01 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember 2023-01-01 2023-09-30 0001668340 srt:MultifamilyMember 2023-01-01 2023-09-30 0001668340 srt:SingleFamilyMember 2022-06-30 0001668340 us-gaap:CommercialLoanMember 2022-06-30 0001668340 us-gaap:ConsumerLoanMember 2022-06-30 0001668340 us-gaap:ConstructionLoansMember 2022-06-30 0001668340 bctf:NonOwnerOccupiedCREMember 2022-06-30 0001668340 bctf:OwnerOccupiedCREMember 2022-06-30 0001668340 srt:MultifamilyMember 2022-06-30 0001668340 srt:SingleFamilyMember 2022-07-01 2022-09-30 0001668340 us-gaap:CommercialLoanMember 2022-07-01 2022-09-30 0001668340 us-gaap:ConsumerLoanMember 2022-07-01 2022-09-30 0001668340 us-gaap:ConstructionLoansMember 2022-07-01 2022-09-30 0001668340 bctf:NonOwnerOccupiedCREMember 2022-07-01 2022-09-30 0001668340 bctf:OwnerOccupiedCREMember 2022-07-01 2022-09-30 0001668340 srt:MultifamilyMember 2022-07-01 2022-09-30 0001668340 srt:SingleFamilyMember 2022-09-30 0001668340 us-gaap:CommercialLoanMember 2022-09-30 0001668340 us-gaap:ConsumerLoanMember 2022-09-30 0001668340 us-gaap:ConstructionLoansMember 2022-09-30 0001668340 bctf:NonOwnerOccupiedCREMember 2022-09-30 0001668340 bctf:OwnerOccupiedCREMember 2022-09-30 0001668340 srt:MultifamilyMember 2022-09-30 0001668340 srt:SingleFamilyMember 2021-12-31 0001668340 us-gaap:CommercialLoanMember 2021-12-31 0001668340 us-gaap:ConsumerLoanMember 2021-12-31 0001668340 us-gaap:ConstructionLoansMember 2021-12-31 0001668340 bctf:NonOwnerOccupiedCREMember 2021-12-31 0001668340 bctf:OwnerOccupiedCREMember 2021-12-31 0001668340 srt:MultifamilyMember 2021-12-31 0001668340 srt:SingleFamilyMember 2022-01-01 2022-09-30 0001668340 us-gaap:CommercialLoanMember 2022-01-01 2022-09-30 0001668340 us-gaap:ConsumerLoanMember 2022-01-01 2022-09-30 0001668340 us-gaap:ConstructionLoansMember 2022-01-01 2022-09-30 0001668340 bctf:NonOwnerOccupiedCREMember 2022-01-01 2022-09-30 0001668340 bctf:OwnerOccupiedCREMember 2022-01-01 2022-09-30 0001668340 srt:MultifamilyMember 2022-01-01 2022-09-30 0001668340 srt:SingleFamilyMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:FinancialAssetPastDueMember 2023-09-30 0001668340 srt:SingleFamilyMember bctf:FinancingReceivablesNonaccrualMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:FinancialAssetNotPastDueMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancialAssetPastDueMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember bctf:FinancingReceivablesNonaccrualMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancialAssetNotPastDueMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancialAssetPastDueMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember bctf:FinancingReceivablesNonaccrualMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancialAssetNotPastDueMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancialAssetPastDueMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember bctf:FinancingReceivablesNonaccrualMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancialAssetNotPastDueMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancialAssetPastDueMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember bctf:FinancingReceivablesNonaccrualMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancialAssetNotPastDueMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancialAssetPastDueMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember bctf:FinancingReceivablesNonaccrualMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancialAssetNotPastDueMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:FinancialAssetPastDueMember 2023-09-30 0001668340 srt:MultifamilyMember bctf:FinancingReceivablesNonaccrualMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:FinancialAssetNotPastDueMember 2023-09-30 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-09-30 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-09-30 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-09-30 0001668340 us-gaap:FinancialAssetPastDueMember 2023-09-30 0001668340 bctf:FinancingReceivablesNonaccrualMember 2023-09-30 0001668340 us-gaap:FinancialAssetNotPastDueMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2022-12-31 0001668340 srt:SingleFamilyMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2022-12-31 0001668340 srt:SingleFamilyMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2022-12-31 0001668340 srt:SingleFamilyMember us-gaap:FinancialAssetPastDueMember 2022-12-31 0001668340 srt:SingleFamilyMember bctf:FinancingReceivablesNonaccrualMember 2022-12-31 0001668340 srt:SingleFamilyMember us-gaap:FinancialAssetNotPastDueMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancialAssetPastDueMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember bctf:FinancingReceivablesNonaccrualMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:FinancialAssetNotPastDueMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancialAssetPastDueMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember bctf:FinancingReceivablesNonaccrualMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:FinancialAssetNotPastDueMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancialAssetPastDueMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember bctf:FinancingReceivablesNonaccrualMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:FinancialAssetNotPastDueMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancialAssetPastDueMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember bctf:FinancingReceivablesNonaccrualMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:FinancialAssetNotPastDueMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancialAssetPastDueMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember bctf:FinancingReceivablesNonaccrualMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:FinancialAssetNotPastDueMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:FinancingReceivables30To59DaysPastDueMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:FinancingReceivables60To89DaysPastDueMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:FinancialAssetPastDueMember 2022-12-31 0001668340 srt:MultifamilyMember bctf:FinancingReceivablesNonaccrualMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:FinancialAssetNotPastDueMember 2022-12-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember 2022-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember 2022-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2022-12-31 0001668340 us-gaap:FinancialAssetPastDueMember 2022-12-31 0001668340 bctf:FinancingReceivablesNonaccrualMember 2022-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember 2022-12-31 0001668340 us-gaap:CommercialRealEstateMember 2022-12-31 0001668340 us-gaap:CommercialRealEstateMember 2022-01-01 2022-12-31 0001668340 srt:SingleFamilyMember 2022-01-01 2022-12-31 0001668340 us-gaap:CommercialLoanMember 2022-01-01 2022-12-31 0001668340 us-gaap:ConsumerLoanMember 2022-01-01 2022-12-31 0001668340 2022-01-01 2022-12-31 0001668340 srt:SingleFamilyMember us-gaap:PassMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:SpecialMentionMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:SubstandardMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:DoubtfulMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:PassMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:SpecialMentionMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:SubstandardMember 2023-09-30 0001668340 us-gaap:CommercialLoanMember us-gaap:DoubtfulMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:PassMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:SpecialMentionMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:SubstandardMember 2023-09-30 0001668340 us-gaap:ConsumerLoanMember us-gaap:DoubtfulMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:PassMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:SpecialMentionMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:SubstandardMember 2023-09-30 0001668340 us-gaap:ConstructionLoansMember us-gaap:DoubtfulMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:PassMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:SpecialMentionMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:SubstandardMember 2023-09-30 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:DoubtfulMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:PassMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:SpecialMentionMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:SubstandardMember 2023-09-30 0001668340 bctf:OwnerOccupiedCREMember us-gaap:DoubtfulMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:PassMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:SpecialMentionMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:SubstandardMember 2023-09-30 0001668340 srt:MultifamilyMember us-gaap:DoubtfulMember 2023-09-30 0001668340 srt:SingleFamilyMember us-gaap:PassMember 2022-12-31 0001668340 srt:SingleFamilyMember us-gaap:SpecialMentionMember 2022-12-31 0001668340 srt:SingleFamilyMember us-gaap:SubstandardMember 2022-12-31 0001668340 srt:SingleFamilyMember us-gaap:DoubtfulMember 2022-12-31 0001668340 srt:SingleFamilyMember bctf:NotRatedMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:PassMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:SpecialMentionMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:SubstandardMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:DoubtfulMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember bctf:NotRatedMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:PassMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:SpecialMentionMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:SubstandardMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:DoubtfulMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember bctf:NotRatedMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:PassMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:SpecialMentionMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:SubstandardMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:DoubtfulMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember bctf:NotRatedMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:PassMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:SpecialMentionMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:SubstandardMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:DoubtfulMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember bctf:NotRatedMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:PassMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:SpecialMentionMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:SubstandardMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:DoubtfulMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember bctf:NotRatedMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:PassMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:SpecialMentionMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:SubstandardMember 2022-12-31 0001668340 srt:MultifamilyMember us-gaap:DoubtfulMember 2022-12-31 0001668340 srt:MultifamilyMember bctf:NotRatedMember 2022-12-31 0001668340 us-gaap:PassMember 2022-12-31 0001668340 us-gaap:SpecialMentionMember 2022-12-31 0001668340 us-gaap:SubstandardMember 2022-12-31 0001668340 us-gaap:DoubtfulMember 2022-12-31 0001668340 bctf:NotRatedMember 2022-12-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember srt:SingleFamilyMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember srt:SingleFamilyMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember srt:SingleFamilyMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember us-gaap:CommercialLoanMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember us-gaap:CommercialLoanMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:CommercialLoanMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember us-gaap:ConsumerLoanMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember us-gaap:ConsumerLoanMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:ConsumerLoanMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember us-gaap:ConstructionLoansMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember us-gaap:ConstructionLoansMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:ConstructionLoansMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember bctf:NonOwnerOccupiedCREMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember bctf:NonOwnerOccupiedCREMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:NonOwnerOccupiedCREMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember bctf:OwnerOccupiedCREMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember bctf:OwnerOccupiedCREMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OwnerOccupiedCREMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember srt:MultifamilyMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember srt:MultifamilyMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember srt:MultifamilyMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember 2023-09-30 0001668340 us-gaap:SecuredDebtMember 2023-09-30 0001668340 us-gaap:LandMember 2023-09-30 0001668340 us-gaap:LandMember 2022-12-31 0001668340 us-gaap:BuildingMember 2023-09-30 0001668340 us-gaap:BuildingMember 2022-12-31 0001668340 us-gaap:EquipmentMember 2023-09-30 0001668340 us-gaap:EquipmentMember 2022-12-31 0001668340 srt:FederalHomeLoanBankOfDallasMember 2023-09-30 0001668340 srt:FederalHomeLoanBankOfSanFranciscoMember 2023-09-30 0001668340 us-gaap:FederalHomeLoanBankCertificatesAndObligationsFHLBMember 2022-12-31 0001668340 2021-06-28 2021-06-29 0001668340 us-gaap:SubordinatedDebtMember 2023-09-30 0001668340 srt:DirectorMember 2023-09-30 0001668340 srt:DirectorMember 2022-12-31 0001668340 srt:DirectorMember 2023-09-30 0001668340 srt:DirectorMember 2022-12-31 0001668340 bctf:EquityIncentivePlan2017Member 2017-11-17 0001668340 bctf:EquityIncentivePlan2017Member us-gaap:StockOptionMember 2017-11-17 0001668340 bctf:EquityIncentivePlan2017Member us-gaap:EmployeeStockMember 2017-11-17 0001668340 bctf:EquityIncentivePlan2022Member 2022-05-25 0001668340 bctf:EquityIncentivePlan2022Member us-gaap:RestrictedStockMember 2022-05-25 0001668340 bctf:EquityIncentivePlan2022Member us-gaap:EmployeeStockMember 2022-05-25 0001668340 us-gaap:StockOptionMember 2023-01-01 2023-09-30 0001668340 us-gaap:RestrictedStockMember 2023-01-01 2023-09-30 0001668340 us-gaap:StockOptionMember 2022-01-01 2022-09-30 0001668340 us-gaap:RestrictedStockMember 2022-01-01 2022-09-30 0001668340 us-gaap:StockOptionMember 2023-06-30 0001668340 us-gaap:StockOptionMember 2023-04-01 2023-06-30 0001668340 us-gaap:StockOptionMember 2023-07-01 2023-09-30 0001668340 us-gaap:StockOptionMember 2023-09-30 0001668340 us-gaap:StockOptionMember 2022-12-31 0001668340 us-gaap:StockOptionMember 2022-01-01 2022-12-31 0001668340 us-gaap:StockOptionMember 2022-06-30 0001668340 us-gaap:StockOptionMember 2022-04-01 2022-06-30 0001668340 us-gaap:StockOptionMember 2022-07-01 2022-09-30 0001668340 us-gaap:StockOptionMember 2022-09-30 0001668340 us-gaap:StockOptionMember 2021-12-31 0001668340 us-gaap:StockOptionMember 2021-01-01 2021-12-31 0001668340 us-gaap:RestrictedStockMember 2023-06-30 0001668340 us-gaap:RestrictedStockMember 2023-04-01 2023-06-30 0001668340 us-gaap:RestrictedStockMember 2023-07-01 2023-09-30 0001668340 us-gaap:RestrictedStockMember 2023-09-30 0001668340 us-gaap:RestrictedStockMember 2022-12-31 0001668340 us-gaap:RestrictedStockMember 2022-01-01 2022-12-31 0001668340 us-gaap:RestrictedStockMember 2022-06-30 0001668340 us-gaap:RestrictedStockMember 2022-04-01 2022-06-30 0001668340 us-gaap:RestrictedStockMember 2022-07-01 2022-09-30 0001668340 us-gaap:RestrictedStockMember 2022-09-30 0001668340 us-gaap:RestrictedStockMember 2021-12-31 0001668340 us-gaap:RestrictedStockMember 2021-01-01 2021-12-31 0001668340 bctf:EquityIncentivePlan2017Member 2023-01-01 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember srt:SingleFamilyMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember srt:MinimumMember 2023-01-01 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember srt:MaximumMember 2023-01-01 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember bctf:NonOwnerOccupiedCREMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember bctf:NonOwnerOccupiedCREMember srt:MinimumMember 2023-01-01 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember bctf:NonOwnerOccupiedCREMember srt:MaximumMember 2023-01-01 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:ConstructionLoansMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember srt:MultifamilyMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember 2023-09-30 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember srt:MinimumMember 2022-01-01 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember srt:MaximumMember 2022-01-01 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember bctf:NonOwnerOccupiedCREMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember bctf:NonOwnerOccupiedCREMember srt:MinimumMember 2022-01-01 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember bctf:NonOwnerOccupiedCREMember srt:MaximumMember 2022-01-01 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember srt:SingleFamilyMember 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember srt:SingleFamilyMember srt:MinimumMember 2022-01-01 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember srt:SingleFamilyMember srt:MaximumMember 2022-01-01 2022-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember 2022-12-31 0001668340 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-09-30 0001668340 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2022-12-31 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel1Member 2023-09-30 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel1Member 2022-12-31 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel2Member 2023-09-30 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel2Member 2022-12-31 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member 2023-09-30 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember us-gaap:FairValueInputsLevel3Member 2022-12-31 0001668340 2022-01-01 2022-03-31 0001668340 us-gaap:PrivatePlacementMember us-gaap:CommonStockMember 2022-12-01 2023-01-31 0001668340 us-gaap:PrivatePlacementMember us-gaap:PreferredStockMember 2022-12-01 2023-01-31 0001668340 us-gaap:PrivatePlacementMember 2022-12-01 2023-01-31 0001668340 us-gaap:NonvotingCommonStockMember 2023-07-19 0001668340 us-gaap:SubsequentEventMember bctf:CBOAFinancialIncMember 2023-10-01 2023-12-31 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

false --12-31 2024 Q1 0001668340 P3Y P7Y P15Y P40Y P5Y10M24D P2Y1M6D P8M12D P2Y2M12D P1Y4M24D P3Y10M24D P9Y9M18D P3Y7M6D 0001668340 2024-01-01 2024-03-31 0001668340 2024-05-15 0001668340 2024-03-31 0001668340 2023-12-31 0001668340 bctf:VotingCommonStockMember 2024-03-31 0001668340 bctf:VotingCommonStockMember 2023-12-31 0001668340 us-gaap:NonvotingCommonStockMember 2024-03-31 0001668340 us-gaap:NonvotingCommonStockMember 2023-12-31 0001668340 2023-01-01 2023-03-31 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2022-12-31 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2022-12-31 0001668340 us-gaap:PreferredStockMember 2022-12-31 0001668340 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001668340 us-gaap:RetainedEarningsMember 2022-12-31 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0001668340 bctf:UnearnedESOPSharesMember 2022-12-31 0001668340 2022-12-31 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:RetainedEarningsMember 2022-12-31 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:CommonStockMember bctf:VotingCommonStockMember 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:PreferredStockMember 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0001668340 bctf:UnearnedESOPSharesMember us-gaap:AccountingStandardsUpdate201613Member 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:RetainedEarningsMember 2022-12-31 0001668340 us-gaap:AccountingStandardsUpdate201613Member 2022-12-31 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2023-12-31 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2023-12-31 0001668340 us-gaap:PreferredStockMember 2023-12-31 0001668340 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0001668340 us-gaap:RetainedEarningsMember 2023-12-31 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-12-31 0001668340 bctf:UnearnedESOPSharesMember 2023-12-31 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:RetainedEarningsMember 2023-01-01 2023-01-01 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2023-01-01 2023-01-01 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:RetainedEarningsMember 2023-01-01 2023-01-01 0001668340 us-gaap:AccountingStandardsUpdate201613Member 2023-01-01 2023-01-01 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2023-01-01 2023-03-31 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2023-01-01 2023-03-31 0001668340 us-gaap:PreferredStockMember 2023-01-01 2023-03-31 0001668340 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0001668340 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-03-31 0001668340 bctf:UnearnedESOPSharesMember 2023-01-01 2023-03-31 0001668340 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2024-01-01 2024-03-31 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2024-01-01 2024-03-31 0001668340 us-gaap:PreferredStockMember 2024-01-01 2024-03-31 0001668340 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-03-31 0001668340 us-gaap:RetainedEarningsMember 2024-01-01 2024-03-31 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-01-01 2024-03-31 0001668340 bctf:UnearnedESOPSharesMember 2024-01-01 2024-03-31 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:RetainedEarningsMember 2023-01-01 0001668340 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2023-01-01 0001668340 us-gaap:AccountingStandardsUpdate201613Member us-gaap:RetainedEarningsMember 2023-01-01 0001668340 us-gaap:AccountingStandardsUpdate201613Member 2023-01-01 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2023-03-31 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2023-03-31 0001668340 us-gaap:PreferredStockMember 2023-03-31 0001668340 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0001668340 us-gaap:RetainedEarningsMember 2023-03-31 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-03-31 0001668340 bctf:UnearnedESOPSharesMember 2023-03-31 0001668340 2023-03-31 0001668340 us-gaap:CommonStockMember bctf:VotingCommonStockMember 2024-03-31 0001668340 us-gaap:CommonStockMember us-gaap:NonvotingCommonStockMember 2024-03-31 0001668340 us-gaap:PreferredStockMember 2024-03-31 0001668340 us-gaap:AdditionalPaidInCapitalMember 2024-03-31 0001668340 us-gaap:RetainedEarningsMember 2024-03-31 0001668340 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-03-31 0001668340 bctf:UnearnedESOPSharesMember 2024-03-31 0001668340 us-gaap:EquipmentMember srt:MinimumMember 2024-03-31 0001668340 us-gaap:EquipmentMember srt:MaximumMember 2024-03-31 0001668340 us-gaap:LeaseholdImprovementsMember srt:MinimumMember 2024-03-31 0001668340 us-gaap:LeaseholdImprovementsMember srt:MaximumMember 2024-03-31 0001668340 bctf:AsRecordedByCBOAMember 2024-03-19 0001668340 bctf:EstimatedFairValueAdjustmentsMember 2024-03-19 0001668340 bctf:EstimatedFairValueAsRecordedByBancorp34Member 2024-03-19 0001668340 2024-03-19 0001668340 us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember 2024-03-31 0001668340 us-gaap:USTreasurySecuritiesMember 2024-03-31 0001668340 us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2024-03-31 0001668340 us-gaap:USStatesAndPoliticalSubdivisionsMember 2024-03-31 0001668340 us-gaap:CorporateDebtSecuritiesMember 2024-03-31 0001668340 us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember 2023-12-31 0001668340 us-gaap:USTreasurySecuritiesMember 2023-12-31 0001668340 us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember 2023-12-31 0001668340 us-gaap:USStatesAndPoliticalSubdivisionsMember 2023-12-31 0001668340 us-gaap:CorporateDebtSecuritiesMember 2023-12-31 0001668340 us-gaap:CorporateDebtSecuritiesMember 2024-01-01 2024-03-31 0001668340 srt:SingleFamilyMember 2024-03-31 0001668340 srt:SingleFamilyMember 2023-12-31 0001668340 us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:CommercialLoanMember 2023-12-31 0001668340 us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:ConsumerLoanMember 2023-12-31 0001668340 us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:ConstructionLoansMember 2023-12-31 0001668340 bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 bctf:NonOwnerOccupiedCREMember 2023-12-31 0001668340 bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 bctf:OwnerOccupiedCREMember 2023-12-31 0001668340 srt:MultifamilyMember 2024-03-31 0001668340 srt:MultifamilyMember 2023-12-31 0001668340 srt:SingleFamilyMember 2024-01-01 2024-03-31 0001668340 us-gaap:CommercialLoanMember 2024-01-01 2024-03-31 0001668340 us-gaap:ConsumerLoanMember 2024-01-01 2024-03-31 0001668340 us-gaap:ConstructionLoansMember 2024-01-01 2024-03-31 0001668340 bctf:NonOwnerOccupiedCREMember 2024-01-01 2024-03-31 0001668340 bctf:OwnerOccupiedCREMember 2024-01-01 2024-03-31 0001668340 srt:MultifamilyMember 2024-01-01 2024-03-31 0001668340 srt:SingleFamilyMember 2022-12-31 0001668340 us-gaap:CommercialLoanMember 2022-12-31 0001668340 us-gaap:ConsumerLoanMember 2022-12-31 0001668340 us-gaap:ConstructionLoansMember 2022-12-31 0001668340 bctf:NonOwnerOccupiedCREMember 2022-12-31 0001668340 bctf:OwnerOccupiedCREMember 2022-12-31 0001668340 srt:MultifamilyMember 2022-12-31 0001668340 srt:SingleFamilyMember 2023-01-01 2023-03-31 0001668340 us-gaap:CommercialLoanMember 2023-01-01 2023-03-31 0001668340 us-gaap:ConsumerLoanMember 2023-01-01 2023-03-31 0001668340 us-gaap:ConstructionLoansMember 2023-01-01 2023-03-31 0001668340 bctf:NonOwnerOccupiedCREMember 2023-01-01 2023-03-31 0001668340 bctf:OwnerOccupiedCREMember 2023-01-01 2023-03-31 0001668340 srt:MultifamilyMember 2023-01-01 2023-03-31 0001668340 srt:SingleFamilyMember 2023-03-31 0001668340 us-gaap:CommercialLoanMember 2023-03-31 0001668340 us-gaap:ConsumerLoanMember 2023-03-31 0001668340 us-gaap:ConstructionLoansMember 2023-03-31 0001668340 bctf:NonOwnerOccupiedCREMember 2023-03-31 0001668340 bctf:OwnerOccupiedCREMember 2023-03-31 0001668340 srt:MultifamilyMember 2023-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember srt:SingleFamilyMember 2024-03-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember srt:SingleFamilyMember 2024-03-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember srt:SingleFamilyMember 2024-03-31 0001668340 us-gaap:FinancialAssetPastDueMember srt:SingleFamilyMember 2024-03-31 0001668340 us-gaap:FinancialAssetNotPastDueMember srt:SingleFamilyMember 2024-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:FinancialAssetPastDueMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:FinancialAssetNotPastDueMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:FinancialAssetPastDueMember us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:FinancialAssetNotPastDueMember us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:FinancialAssetPastDueMember us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:FinancialAssetNotPastDueMember us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancialAssetPastDueMember bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancialAssetNotPastDueMember bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancialAssetPastDueMember bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancialAssetNotPastDueMember bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember srt:MultifamilyMember 2024-03-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember srt:MultifamilyMember 2024-03-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember srt:MultifamilyMember 2024-03-31 0001668340 us-gaap:FinancialAssetPastDueMember srt:MultifamilyMember 2024-03-31 0001668340 us-gaap:FinancialAssetNotPastDueMember srt:MultifamilyMember 2024-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember 2024-03-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember 2024-03-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2024-03-31 0001668340 us-gaap:FinancialAssetPastDueMember 2024-03-31 0001668340 us-gaap:FinancialAssetNotPastDueMember 2024-03-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember srt:SingleFamilyMember 2023-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember srt:SingleFamilyMember 2023-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember srt:SingleFamilyMember 2023-12-31 0001668340 us-gaap:FinancialAssetPastDueMember srt:SingleFamilyMember 2023-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember srt:SingleFamilyMember 2023-12-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember us-gaap:CommercialLoanMember 2023-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember us-gaap:CommercialLoanMember 2023-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember us-gaap:CommercialLoanMember 2023-12-31 0001668340 us-gaap:FinancialAssetPastDueMember us-gaap:CommercialLoanMember 2023-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember us-gaap:CommercialLoanMember 2023-12-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember us-gaap:ConsumerLoanMember 2023-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember us-gaap:ConsumerLoanMember 2023-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember us-gaap:ConsumerLoanMember 2023-12-31 0001668340 us-gaap:FinancialAssetPastDueMember us-gaap:ConsumerLoanMember 2023-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember us-gaap:ConsumerLoanMember 2023-12-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember us-gaap:ConstructionLoansMember 2023-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember us-gaap:ConstructionLoansMember 2023-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember us-gaap:ConstructionLoansMember 2023-12-31 0001668340 us-gaap:FinancialAssetPastDueMember us-gaap:ConstructionLoansMember 2023-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember us-gaap:ConstructionLoansMember 2023-12-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember bctf:NonOwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember bctf:NonOwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember bctf:NonOwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancialAssetPastDueMember bctf:NonOwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember bctf:NonOwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember bctf:OwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember bctf:OwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember bctf:OwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancialAssetPastDueMember bctf:OwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember bctf:OwnerOccupiedCREMember 2023-12-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember srt:MultifamilyMember 2023-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember srt:MultifamilyMember 2023-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember srt:MultifamilyMember 2023-12-31 0001668340 us-gaap:FinancialAssetPastDueMember srt:MultifamilyMember 2023-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember srt:MultifamilyMember 2023-12-31 0001668340 us-gaap:FinancingReceivables30To59DaysPastDueMember 2023-12-31 0001668340 us-gaap:FinancingReceivables60To89DaysPastDueMember 2023-12-31 0001668340 us-gaap:FinancingReceivablesEqualToGreaterThan90DaysPastDueMember 2023-12-31 0001668340 us-gaap:FinancialAssetPastDueMember 2023-12-31 0001668340 us-gaap:FinancialAssetNotPastDueMember 2023-12-31 0001668340 srt:SingleFamilyMember us-gaap:PassMember 2024-03-31 0001668340 srt:SingleFamilyMember us-gaap:SpecialMentionMember 2024-03-31 0001668340 srt:SingleFamilyMember us-gaap:SubstandardMember 2024-03-31 0001668340 srt:SingleFamilyMember us-gaap:DoubtfulMember 2024-03-31 0001668340 us-gaap:CommercialLoanMember us-gaap:PassMember 2024-03-31 0001668340 us-gaap:CommercialLoanMember us-gaap:SpecialMentionMember 2024-03-31 0001668340 us-gaap:CommercialLoanMember us-gaap:SubstandardMember 2024-03-31 0001668340 us-gaap:CommercialLoanMember us-gaap:DoubtfulMember 2024-03-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:PassMember 2024-03-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:SpecialMentionMember 2024-03-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:SubstandardMember 2024-03-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:DoubtfulMember 2024-03-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:PassMember 2024-03-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:SpecialMentionMember 2024-03-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:SubstandardMember 2024-03-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:DoubtfulMember 2024-03-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:PassMember 2024-03-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:SpecialMentionMember 2024-03-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:SubstandardMember 2024-03-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:DoubtfulMember 2024-03-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:PassMember 2024-03-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:SpecialMentionMember 2024-03-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:SubstandardMember 2024-03-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:DoubtfulMember 2024-03-31 0001668340 srt:MultifamilyMember us-gaap:PassMember 2024-03-31 0001668340 srt:MultifamilyMember us-gaap:SpecialMentionMember 2024-03-31 0001668340 srt:MultifamilyMember us-gaap:SubstandardMember 2024-03-31 0001668340 srt:MultifamilyMember us-gaap:DoubtfulMember 2024-03-31 0001668340 srt:SingleFamilyMember us-gaap:PassMember 2023-12-31 0001668340 srt:SingleFamilyMember us-gaap:SpecialMentionMember 2023-12-31 0001668340 srt:SingleFamilyMember us-gaap:SubstandardMember 2023-12-31 0001668340 srt:SingleFamilyMember us-gaap:DoubtfulMember 2023-12-31 0001668340 srt:SingleFamilyMember 2023-01-01 2023-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:PassMember 2023-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:SpecialMentionMember 2023-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:SubstandardMember 2023-12-31 0001668340 us-gaap:CommercialLoanMember us-gaap:DoubtfulMember 2023-12-31 0001668340 us-gaap:CommercialLoanMember 2023-01-01 2023-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:PassMember 2023-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:SpecialMentionMember 2023-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:SubstandardMember 2023-12-31 0001668340 us-gaap:ConsumerLoanMember us-gaap:DoubtfulMember 2023-12-31 0001668340 us-gaap:ConsumerLoanMember 2023-01-01 2023-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:PassMember 2023-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:SpecialMentionMember 2023-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:SubstandardMember 2023-12-31 0001668340 us-gaap:ConstructionLoansMember us-gaap:DoubtfulMember 2023-12-31 0001668340 us-gaap:ConstructionLoansMember 2023-01-01 2023-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:PassMember 2023-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:SpecialMentionMember 2023-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:SubstandardMember 2023-12-31 0001668340 bctf:NonOwnerOccupiedCREMember us-gaap:DoubtfulMember 2023-12-31 0001668340 bctf:NonOwnerOccupiedCREMember 2023-01-01 2023-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:PassMember 2023-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:SpecialMentionMember 2023-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:SubstandardMember 2023-12-31 0001668340 bctf:OwnerOccupiedCREMember us-gaap:DoubtfulMember 2023-12-31 0001668340 bctf:OwnerOccupiedCREMember 2023-01-01 2023-12-31 0001668340 srt:MultifamilyMember us-gaap:PassMember 2023-12-31 0001668340 srt:MultifamilyMember us-gaap:SpecialMentionMember 2023-12-31 0001668340 srt:MultifamilyMember us-gaap:SubstandardMember 2023-12-31 0001668340 srt:MultifamilyMember us-gaap:DoubtfulMember 2023-12-31 0001668340 srt:MultifamilyMember 2023-01-01 2023-12-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember srt:SingleFamilyMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember srt:SingleFamilyMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember srt:SingleFamilyMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:ConsumerLoanMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:ConstructionLoansMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:NonOwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OwnerOccupiedCREMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember srt:MultifamilyMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember srt:MultifamilyMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember srt:MultifamilyMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember us-gaap:RealEstateLoanMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember bctf:OtherLoanMember 2024-03-31 0001668340 us-gaap:SecuredDebtMember 2024-03-31 0001668340 us-gaap:LandMember 2024-03-31 0001668340 us-gaap:LandMember 2023-12-31 0001668340 us-gaap:BuildingMember 2024-03-31 0001668340 us-gaap:BuildingMember 2023-12-31 0001668340 us-gaap:EquipmentMember 2024-03-31 0001668340 us-gaap:EquipmentMember 2023-12-31 0001668340 us-gaap:FederalReserveBankAdvancesMember 2024-03-31 0001668340 us-gaap:FederalReserveBankAdvancesMember bctf:FederalReserveBankOfSanFranciscoMember 2024-03-31 0001668340 srt:FederalHomeLoanBankOfSanFranciscoMember 2024-03-31 0001668340 us-gaap:UnsecuredDebtMember 2024-03-31 0001668340 us-gaap:UnsecuredDebtMember 2023-12-31 0001668340 2021-06-28 2021-06-29 0001668340 us-gaap:SubordinatedDebtMember 2024-03-31 0001668340 bctf:FixedMember 2024-03-31 0001668340 bctf:VariableMember 2024-03-31 0001668340 bctf:FixedMember 2023-12-31 0001668340 bctf:VariableMember 2023-12-31 0001668340 us-gaap:StandbyLettersOfCreditMember 2024-03-31 0001668340 srt:DirectorMember 2024-03-31 0001668340 srt:DirectorMember 2023-12-31 0001668340 bctf:EquityIncentivePlan2017Member 2017-11-17 0001668340 bctf:EquityIncentivePlan2017Member us-gaap:StockOptionMember 2017-11-17 0001668340 bctf:EquityIncentivePlan2017Member us-gaap:EmployeeStockMember 2017-11-17 0001668340 bctf:EquityIncentivePlan2022Member 2022-05-25 0001668340 bctf:EquityIncentivePlan2022Member us-gaap:RestrictedStockMember 2022-05-25 0001668340 bctf:EquityIncentivePlan2022Member us-gaap:EmployeeStockMember 2022-05-25 0001668340 us-gaap:StockOptionMember 2024-01-01 2024-03-31 0001668340 us-gaap:RestrictedStockMember 2024-01-01 2024-03-31 0001668340 us-gaap:StockOptionMember 2023-12-31 0001668340 us-gaap:StockOptionMember 2023-01-01 2023-03-31 0001668340 us-gaap:StockOptionMember 2024-03-31 0001668340 us-gaap:RestrictedStockMember 2023-12-31 0001668340 us-gaap:RestrictedStockMember 2023-01-01 2023-03-31 0001668340 us-gaap:RestrictedStockMember 2024-03-31 0001668340 bctf:EquityIncentivePlan2017Member 2024-01-01 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel1Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel2Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel3Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel1Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel3Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel1Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel2Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel3Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel1Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel2Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel3Member 2024-03-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel1Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel2Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:MortgageBackedSecuritiesIssuedByUSGovernmentSponsoredEnterprisesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel1Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USTreasurySecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel1Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel2Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USStatesAndPoliticalSubdivisionsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel1Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel2Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateDebtSecuritiesMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel1Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel2Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsRecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel1Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel2Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:FairValueInputsLevel3Member 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember srt:MinimumMember 2024-01-01 2024-03-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember srt:MaximumMember 2024-01-01 2024-03-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember 2024-03-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember srt:MinimumMember 2023-01-01 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember us-gaap:CommercialLoanMember srt:MaximumMember 2023-01-01 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember bctf:OtherRealEstateOwnedMember 2023-12-31 0001668340 us-gaap:FairValueMeasurementsNonrecurringMember bctf:OtherRealEstateOwnedMember 2023-01-01 2023-12-31 0001668340 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-03-31 0001668340 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2023-12-31 0001668340 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2023-12-31 0001668340 bctf:VotingCommonStockMember 2024-01-01 2024-03-31 0001668340 bctf:VotingCommonStockMember 2023-01-01 2023-03-31 0001668340 us-gaap:NonvotingCommonStockMember 2024-01-01 2024-03-31 0001668340 us-gaap:NonvotingCommonStockMember 2023-01-01 2023-03-31 0001668340 us-gaap:WarrantMember 2024-01-01 2024-03-31 0001668340 us-gaap:WarrantMember 2023-01-01 2023-03-31 0001668340 us-gaap:PrivatePlacementMember us-gaap:CommonStockMember 2022-12-01 2023-01-31 0001668340 us-gaap:PrivatePlacementMember us-gaap:PreferredStockMember 2022-12-01 2023-01-31 0001668340 us-gaap:PrivatePlacementMember 2022-12-01 2023-01-31 0001668340 us-gaap:NonvotingCommonStockMember 2023-07-19 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~☒ QUARTERLY REPORT UNDER SECTION 13 OR 15~~(dMark One) ~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~☒ Quarterly ~~the~~Report ~~quarterly~~Pursuant ~~period~~to ~~ended~~Section 13 ~~September~~or ~~30,~~15(d) of ~~2023~~the Securities Exchange Act of 1934

☐For ~~TRANSITION~~the ~~REPORT~~quarterly ~~PURSUANT~~period TOended March ~~SECTION~~31, ~~13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934~~2024

~~Commission File Number 333-273901~~OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to _______

Commission File Number 001-39068

BANCORP 34, INC.

(Exact ~~Name~~name of ~~Registrant~~registrant as ~~Specified~~specified in ~~Its~~its ~~Charter~~charter)

Maryland	~~74-2819148~~	333-273901	74-2819148
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)
(State or other jurisdiction of incorporation)		(Commission File Number)	(IRS Employer Identification No.)
8777 E. Hartford Dive, Suite 100 Scottsdale, Arizona 85255 (623) 334-6064
(Address, including zip code, and telephone number, including area code of registrant’s principal executive offices)

8777 E. Hartford Drive, Suite 100

Scottsdale, Arizona 85255

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (623) 334-6064

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the ~~past~~preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

~~Yes~~Indicate ~~☐ No~~by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant ~~has~~is ~~submitted~~a ~~electronically~~large ~~every~~accelerated ~~Interactive~~filer, ~~Data~~an ~~File~~accelerated ~~required~~filer, toa benon-accelerated ~~submitted~~filer, ~~pursuant~~a smaller reporting tocompany, ~~Rule~~or ~~405~~an ofemerging ~~Regulation~~growth ~~S-T~~company. ~~during~~See the ~~preceding~~definitions 12of ~~months~~“large ~~(or~~accelerated ~~for~~filer,” ~~such~~“accelerated ~~shorter~~filer,” “smaller ~~period~~reporting ~~that~~company,” ~~the~~and ~~registrant~~“emerging ~~was~~growth ~~required~~company” toin ~~submit such~~Rule 12b-2 ~~files)~~of the Exchange Act.

~~Yes~~ Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated Filer ☒ No Smaller reporting company ☒ Emerging growth company ☐

~~Indicate~~If byan ~~check~~emerging ~~mark~~growth ~~whether the registrant is a large accelerated filer~~company, anindicate ~~accelerated~~by ~~filer,~~check amark ~~non-accelerated~~if ~~filer,~~the ~~smaller~~registrant ~~reporting company,~~has orelected annot ~~emerging~~to ~~growth~~use ~~company. See~~ the ~~definitions~~extended oftransition ~~“large~~period ~~accelerated~~for complying ~~filer,”~~with ~~“accelerated~~any ~~filer,” “smaller~~new ~~reporting~~or ~~company”~~revised ~~and~~financial ~~“emerging~~accounting ~~growth~~standards ~~company”~~provided inpursuant ~~Rule~~to ~~12b-2~~ Section 13(a) of the ~~Securities~~ Exchange Act:. ☐

~~Large~~Indicate by ~~accelerated~~check ~~filer~~mark ☐whether ~~Accelerated~~the ~~filer~~registrant ☐is ~~Non-accelerated~~a ~~filer~~shell ☒company ~~Smaller~~(as ~~reporting~~defined ~~company~~in ☒Rule 12b-2 ~~Emerging~~of ~~growth~~the ~~company~~Exchange Act). Yes ☐ No ☒

~~If an~~As ~~emerging~~of ~~growth~~May ~~company~~15, ~~indicate by check mark if~~ 2024, the registrant ~~has~~had ~~elected~~6,609,428 ~~not~~shares toof ~~use~~common ~~the~~stock, ~~extended~~par ~~transition~~value ~~period~~$0.01 ~~for complying~~per ~~with~~share, ~~any~~issued ~~new~~and ~~or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Exchange Act~~outstanding. o

~~Indicate~~BANCORP by34, ~~check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)~~INC.

~~Yes~~Quarterly ~~☐ No~~Report ☒on Form 10-Q

~~The number of shares outstanding of the issuer’s voting common stock at December 27, 2023, was 3,873,895, and the number of outstanding~~March ~~shares of the issuer’s non-voting common stock at December 27~~31, ~~2023, was 820,115.~~2024

Form 10-Q Quarterly Report

Table of Contents

PART I. FINANCIAL INFORMATION

		Page Number

PART I. FINANCIAL INFORMATION		2

Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	61

PART II. OTHER INFORMATION		62

Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3.	Defaults Upon Senior Securities	62
Item 4.	Mine Safety Disclosures	62
Item 5.	Other Information	62
Item 6.	Exhibits	62

Signature Page		63

Exhibit Index		64

		Page Number
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	65
Item 4.	Controls and Procedures	65
PART II. OTHER INFORMATION
Item 6.	Exhibits	66
Signature Pages		67

Cautionary Note Regarding Forward-Looking Statements

1This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are not statements of historical or current fact nor are they assurances of future performance and generally can be identified by the use of forward-looking terminology, such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “plan,” “predict,” “project,” “forecast,” “guidance,” “goal,” “objective,” “prospects,” “possible” or “potential,” by future conditional verbs such as “assume,” “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, but are not limited to, statements related to our belief that sources of available liquidity are adequate to meet our current and expected liquidity needs, our plans to meet future cash needs through the generation of deposits, and statements regarding our business plan and strategies. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time, are difficult to predict and are generally beyond our control.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are not statements of historical or current fact nor are they assurances of future performance and generally can be identified by the use of forward-looking terminology, such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “plan,” “predict,” “project,” “forecast,” “guidance,” “goal,” “objective,” “prospects,” “possible” or “potential,” by future conditional verbs such as “assume,” “will,” “would,” “should,” “could” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, but are not limited to, statements related to our proposed merger with CBOA Financial, Inc. (“CBOA”), including the expected timing to close the merger, our belief that sources of available liquidity are adequate to meet our current and expected liquidity needs, our plans to meet future cash needs through the generation of deposits, our expectations that many of our unfunded commitments will expire without being drawn, and statements regarding our business plan and strategies. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time, are difficult to predict and are generally beyond our control.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

· the ~~failure~~possibility tothat ~~obtain and maintain~~ the ~~necessary~~anticipated ~~regulatory~~benefits ~~approvals~~of ~~for~~our ~~the~~recently completed merger (the “merger”) ofwith CBOA ~~with and into Bancorp 34~~Financial, Inc. (“~~Bancorp 34~~CBOA”), including anticipated cost savings and strategic gains, are not realized when expected or at all, ~~(and~~including as a result of the ~~risk~~impact ~~that~~of, ~~such~~or ~~approvals~~problems ~~may~~arising from, the integration of the two companies or as a result inof the ~~imposition~~strength of ~~conditions~~the ~~that~~economy, ~~could~~competitive ~~adversely~~factors ~~affect~~in the ~~combined~~areas ~~company~~where the Company and CBOA do business or ~~the~~as ~~expected~~a ~~benefits~~result of ~~the~~other ~~transaction)~~unexpected factors or events;

· the failure of Bancorp 34 or CBOA to obtain the requisite shareholder approval, or the failure of either party to satisfy any of the other closing conditions to the merger on a timely basis or at all;

· the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement;

· the possibility that the anticipated benefits of the merger, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy, competitive factors in the areas where Bancorp 34 and CBOA do business or as a result of other unexpected factors or events;

the impact of purchase accounting with respect to the merger, or any change in the assumptions used regarding the assets purchased and liabilities assumed to determine their fair value;

diversion of management’s attention from ongoing business operations and opportunities;

· potential adverse reactions or changes to business or employee relationships, including those resulting from the ~~announcement or~~ completion of the merger;

the integration of the business and operations of CBOA, which may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to CBOA’s existing business;

challenges retaining or hiring key personnel;

business disruptions resulting from or following the merger;

· delay in closing the merger and the bank merger;

the outcome of pending or threatened litigation or of matters before regulatory agencies, whether currently existing or commencing in the future, including litigation related to the merger;

increased capital requirements, other regulatory requirements or enhanced regulatory supervision;

· the inability to ~~sustain~~grow revenue and earnings ~~growth~~;

the inability to efficiently manage operating expenses;

changes in interest rates and capital markets;

changes in asset quality and credit risk;

changes in deposit costs and liquidity risk;

adverse changes in economic conditions;

· capital management activities;

customer borrowing, repayment, investment and deposit practices;

the impact, extent and timing of technological changes;

changes in legislation, regulation, policies or administrative practices, whether by judicial, governmental or legislative action, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, which we refer to as the Dodd-Frank Act, and other changes pertaining to banking, securities, taxation, rent regulation and housing, financial accounting and reporting, environmental protection and insurance, and the ability to comply with such changes in a timely manner;

changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Department of the Treasury and the Federal Reserve;

· changes in interest rates, which may affect ~~Bancorp~~the 34Company’s ~~and CBOA’s~~ net income and other future cash flows, or the market value of ~~Bancorp~~the 34Company’s ~~or CBOA’s~~ assets, including its investment securities;

changes in accounting principles, policies, practices or guidelines;

· the potential impact of announcement or consummation of the merger on relationships with third parties, including customers, vendors, employees and competitors;

failure to attract new customers and retain existing customers in the manner anticipated;

any interruption or breach of security resulting in failures or disruptions in customer account management, general ledger, deposit, loan or other systems;

· the adverse effects of events beyond each party’s control that may have a destabilizing effect on financial markets and the economy, such as epidemics and pandemics ~~(including COVID-19)~~, war or terrorist activities, essential utility outages, deterioration in the global economy, instability in the credit markets, disruptions in each party’s customers’ supply chains or disruption in transportation; and

other actions of the Federal Reserve and legislative and regulatory actions and reforms.

We caution readers that the foregoing list of factors is not exclusive, is not necessarily in order of importance and readers should ~~not~~ not place undue reliance on any forward-looking statements. You should also consider ~~any~~the risks, assumptions and uncertainties ~~set~~ set forth in the “Risk Factors” section of ~~this Form 10-Q and in~~ our ~~Registration~~2023 ~~Statement~~Annual Report on Form S10-~~4/A (File No~~K. ~~333-273901)~~ ~~filed with the SEC on November 13, 2023 (the “S-4 Registration Statement”).~~ Further, any forward-looking statement speaks only as of the date on which it is made, and we do not intend to and disclaim any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, unless required to do so under the federal securities laws.

PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements

~~Consolidated Balance~~BANCORP ~~Sheets~~34, INC.

~~(Dollars~~CONSOLIDATED inBALANCE ~~Thousands)~~SHEETS

~~September~~(Dollars ~~30,~~in ~~2023, and December 31, 2022~~thousands)

	Unaudited
	(Unaudited) March 31, 2024			December 31, 2023
	2023			2022
ASSETS
Cash and due from banks	$	1266,~~898~~234		$	1627,~~112~~182
Fed funds sold		1,640			835
Federal funds sold		6,510			1,715
Total cash and cash equivalents		1472,~~538~~744			1628,~~947~~897
Available-for-sale securities, at fair value		53102,~~362~~226			5856,~~582~~690
Held-to-maturity securities, at amortized cost, net of allowance for credit losses		5,765			5,832
Held-to-maturity securities, at amoritzed cost, net of allowance for credit losses		5,645			5,684
Loans held for investment		~~480~~750,~~216~~307			~~463~~457,~~360~~027
Allowance for credit losses		(810,~~391~~675	)		(45,~~778~~860	)
Loans held for investment, net		~~471~~739,~~825~~632			~~458~~451,~~582~~167
Premises and equipment, net		7,758			8,077
Other real estate owned		—			3,000
Operating lease right-of-use assets		1,883			2,067
Premises and equipment, net		8,875			7,350
Other investments		2,915			1,277
Operating leases right-of-use assets		4,599			1,819
Accrued interest receivable		1,489			1,505
Other investments		6,097			4,063
Deferred income tax asset, net		5,249			4,924
Accrued interest receivable		2,961			1,597
Bank owned life insurance		11,781			11,598
Deferred income tax asset, net		9,086			4,884
Prepaid and other assets		4,303			4,949
Bank owned life insurance		11,915			11,847
Total assets	$	580,868		$	574,340
Core deposit intangible, net		8,868			—
Prepaid and other assets		7,531			4,267
Total assets	$	980,179		$	581,265

See accompanying notes to unaudited consolidated financial statements.

BANCORP 34, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except par value data)


LIABILITIES AND STOCKHOLDERS’ EQUITY

	(Unaudited) March 31, 2024			December 31, 2023
LIABILITIES
Deposits
Demand deposits	$	220,201		$	88,091
Savings and NOW deposits		371,080			243,505
Time deposits		215,125			128,403
Total deposits		806,406			459,999

Federal Reserve Bank BTFP Advances		49,000			29,000
Subordinate debt, net of issuance costs		23,108			24,595
Subordinated debentures, trust preferred securities		4,145			—
Escrows		274			168
Operating lease liabilities		5,202			2,011
Accrued interest and other liabilities		9,845			4,771
Total liabilities		897,980			520,544

STOCKHOLDERS’ EQUITY
Common stock, $0.01 par value Authorized: 100,000,000 shares, including 1,100,000 shares of non-voting common stock
Voting common stock, $0.01 par value Issued and outstanding: 6,616,152 and 3,873,895 on March 31, 2024, and December 31, 2023, respectively		66			39
Non-voting common stock, $0.01 par value Issued and outstanding: 820,115 and 820,115 on March 31, 2024, and December 31, 2023, respectively		8			8
Additional paid-in capital		66,577			43,279
Retained earnings		22,762			24,301
Accumulated other comprehensive loss		(5,883	)		(5,560	)
Unearned Employee Stock Ownership Plan (ESOP) shares		(1,331	)		(1,346	)
Total stockholders’ equity		82,199			60,721

Total liabilities and stockholders’ equity	$	980,179		$	581,265

See accompanying notes to unaudited consolidated financial statements.

BANCORP 34, INC.

CONSOLIDATED STATEMENTS OF (LOSS) INCOME (Unaudited)

(Dollars in thousands, except per share data)


	Three Months Ended
	March 31,
	2024			2023
Interest and dividend income:
Interest and fees on loans	$	6,890		$	6,110
Interest on securities		470			417
Interest on other interest-earning assets		560			138
Total interest income		7,920			6,665

Interest expense:
Interest on deposits		3,612			2,201
Interest on borrowings		643			395
Total interest expense		4,255			2,596

Net interest income		3,665			4,069

Provision (benefit) for credit losses		3,916			(1	)

Net interest (loss) income after provision for credit losses		(251	)		4,070

Noninterest income:
Service charges on deposit accounts		91			96
Bank owned life insurance		68			59
Loss on sale of other real estate owned		(432	)		—
Preliminary bargain purchase gain on the merger (Note 2)		5,136			—
Other income		3			3
Total noninterest income		4,866			158

Noninterest expense:
Salaries and employee benefits		2,525			2,103
Occupancy		421			258
Data processing		742			617
FDIC and other insurance expense		96			64
Professional Fees		542			267
Merger Costs		3,348			—
Advertising		11			20
Other expenses		472			297
Total noninterest expense		8,157			3,626

(Loss) income before provision for income taxes		(3,542	)		602
(Benefit from) provision for income taxes		(2,003	)		158
Net (loss) income	$	(1,539	)	$	444

Earnings per share:
Basic	$	(0.31	)	$	0.11
Diluted	$	(0.31	)	$	0.11

See accompanying notes to unaudited consolidated financial statements.

~~Consolidated Balance~~BANCORP ~~Sheets (Continued)~~34, INC.

~~(Dollars in~~CONSOLIDATED ~~Thousands,~~STATEMENTS ~~Except~~OF ~~Share~~COMPREHENSIVE ~~Data~~(LOSS) INCOME (Unaudited)

~~September~~(Dollars ~~30,~~in ~~2023, and December 31, 2022~~thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY
	Three Months Ended
	Unaudited
	March 31,
	2023			2022
	2024			2023
LIABILITIES
Net (loss) income	$	(1,539	)	$	444
Deposits
Other comprehensive (loss) gain:
Demand deposits	$	92,377		$	102,699
Unrealized holding (losses) gains on securities available for sale		(427	)		1,300
Savings and NOW deposits		246,739			311,395
Tax effect		105			(374	)
Time deposits		129,275			73,493
Comprehensive (loss) income	$	(1,861	)	$	1,370
Total deposits		468,391			487,587
Federal Home Loan Bank advances		18,000			5,000
Subordinate debt, net of issuance costs		24,581			24,531
Escrows		229			179
Operating lease liabilities		2,076			2,153
Accrued interest and other liabilities		7,189			5,652
Total liabilities		520,466			525,102
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value Authorized: 50,000,000 shares Issued and outstanding: 0 and 521,849 on September 30, 2023, and December 31, 2022, respectively		—			5
Common stock, $0.01 par value Authorized: 100,000,000 shares, including 1,100,000 shares of non-voting common stock
Voting common stock, $0.01 par value Issued and outstanding: 3,874,695 and 3,032,606 on September 30, 2023, and December 31, 2022, respectively		39			30
Non-voting common stock, $0.01 par value Issued and outstanding: 820,115 and 0 on September 30, 2023, and December 31, 2022, respectively		8			—
Additional paid-in capital		43,240			28,369
Retained earnings		25,976			29,013
Accumulated other comprehensive loss		(7,500	)		(6,773	)
Unearned Employee Stock Ownership Plan (ESOP) share		(1,361	)		(1,406	)
Total stockholders’ equity		60,402			49,238
Total liabilities and stockholders’ equity	$	580,868		$	574,340

See accompanying notes to unaudited consolidated financial statements.

~~Consolidated Statements~~BANCORP ~~of Comprehensive Income (Unaudited)~~34, INC.

~~(Dollars in~~CONSOLIDATED ~~Thousands,~~STATEMENTS ~~Except~~OF ~~Per~~SHAREHOLDERS’ ~~Share~~EQUITY ~~Data~~(Unaudited)

~~Three~~(Dollars ~~and~~in ~~nine months ended September 30~~thousands, ~~2023,~~except ~~and~~share ~~2022~~ data)

	Three Months Ended September 30,						Nine Months Ended September 30,
		Shares								Balances
	2023			2022			2023			2022
	Voting Common Shares			Non-voting Common Shares			Series A Preferred Shares			Voting Common Stock			Non-voting Common Stock		Series A Preferred Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net			Unearned ESOP Shares			Total
INTEREST INCOME
BALANCE, JANUARY 1, 2023		3,032,606			—			521,849		$	30		$	—	$	5	$	28,369		$	29,013		$	(6,773	)	$	(1,406	)	$	49,238
Interest and fees on loans	$	6,631		$	5,573		$	19,082		$	16,092
Cumulative adjustment for day one adoption of ASU 2016-13, net of tax		—			—			—			—			—		—		—			(654	)		—			—			(654	)
Interest on securities		395			418			1,218			1,231
																					—									—
Interest on other interest-earning assets		146			71			420			112
																					—									—
Total interest income		7,172			6,062			20,720			17,435
BALANCE, JANUARY 1, 2023(as adjusted for the adoption of ASU 2016-13)		3,032,606			—			521,849		$	30		$	—	$	5	$	28,369		$	28,358		$	(6,773	)	$	(1,406	)	$	48,583
Interest expense
																					—									—
Interest on deposits		2,994			944			7,813			1,758
																					—									—
Interest on borrowings		474			554			1,316			1,261
Net income		—			—			—			—			—		—		—			444			—			—			444
Total interest expense		3,468			1,498			9,129			3,019
Other comprehensive income on AFS securities, net of tax		—			—			—			—			—		—		—			—			926			—			926
Net interest income		3,704			4,564			11,591			14,416
Amortization of equity awards		—			—			—			—			—		—		16			—			—			15			31
Provision for credit losses		3,146			125			3,280			780
Share repurchase		(15,000	)		—			—			—			—		—		(210	)		—			—			—			(210	)
Net interest income after provision for credit losses		558			4,439			8,311			13,636
Issuance of common stock, net of costs		848,089			—			—			8			—		—		10,858			—			—			—			10,866
NON-INTEREST INCOME
Issuance of Series A preferred stock, net of costs		—			—			298,266			—			—		3		4,173			—			—			—			4,176
Service charges and fees		106			119			328			284
Dividends		—			—			—			—			—		—		—			(328	)		—			—			(328	)
Gain on sale of loans		17			—			83			—
BALANCE, MARCH 31, 2023		3,865,695			—			820,115		$	39		$	—	$	8	$	43,205		$	28,474		$	(5,847	)	$	(1,391	)	$	64,488
Bank owned life insurance		63			61			183			180
BALANCE, JANUARY 1, 2024		3,873,895			820,115			—		$	39		$	8	$	—	$	43,279		$	24,301		$	(5,560	)	$	(1,346	)	$	60,721
Other		(22	)		(38	)		(65	)		(78	)
Net loss		—			—			—			—			—		—		—			(1,539	)		—			—			(1,539	)
Total non-interest income		164			142			529			386
Other comprehensive loss on AFS securities, net of tax		—			—			—			—			—		—		—			—			(323	)		—			(323	)
NON-INTEREST EXPENSE
Amortization of equity awards		—			—			—			—			—		—		15			—			—			15			30
Salaries and employee benefits		1,488			1,879			5,144			5,562
Issuance of common stock for the Merger, (Note 2)		2,742,257			—			—			27			—		—		23,283			—			—			—			23,310
Occupancy		293			310			843			939
BALANCE, MARCH 31, 2024		6,616,152			820,115			—		$	66		$	8	$	—	$	66,577		$	22,762		$	(5,883	)	$	(1,331	)	$	82,199
Data processing fees		622			562			1,908			1,592
FDIC and other insurance expense		70			95			224			327
Professional fees		153			93			486			238
Merger Costs		529			—			1,333			—
Advertising		4			22			31			75
Other		441			295			1,023			965
Total non-interest expense		3,600			3,256			10,992			9,698
Income (loss) before provision for income taxes		(2,878	)		1,325			(2,152	)		4,324
Provision for (benefit from) income taxes		(603	)		321			(426	)		1,052
Net income (loss)		(2,275	)		1,004			(1,726	)		3,272
Other comprehensive loss
Other comprehensive loss		(1,423	)		(3,145	)		(906	)		(9,385	)
Tax effect of other comprehensive loss		354			800			179			2,069
Other comprehensive loss, net of tax		(1,069	)		(2,345	)		(727	)		(7,316	)
Comprehensive loss	$	(3,344	)	$	(1,341	)	$	(2,453	)	$	(4,044	)
Earnings per common share - Basic	$	(0.52	)	$	0.42		$	(0.48	)	$	1.38
Earnings per common share - Diluted	$	(0.52	)	$	0.42		$	(0.48	)	$	1.37

See accompanying notes to unaudited consolidated financial statements.

~~Consolidated Statements~~BANCORP ~~of Changes in Stockholders’ Equity (Unaudited)~~34, INC.

~~(Dollars in~~CONSOLIDATED ~~Thousands,~~STATEMENTS ~~Except~~OF ~~Number~~CASH ofFLOWS ~~Shares~~(Unaudited)

~~Three~~(Dollars ~~Months~~in ~~Ended September 30, 2023, and 2022~~thousands)

	Shares																Balances
	Three months ended March,
	Voting Common Shares			Non-voting Common Shares			Series A Preferred Shares			Voting Common Stock		Non-voting Common Stock		Series A Preferred Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net			Unearned ESOP Shares			Total
	2024			2023
BALANCE, JUNE 30, 2022		2,525,198			—			—		$	25	$	—	$	—		$	14,746		$	30,300		$	(5,891	)	$	(1,436	)	$	37,744
CASH FLOWS FROM OPERATING ACTIVITIES
Net income		—			—			—			—		—		—			—			1,004			—			—			1,004
Net (loss) income	$	(1,539	)	$	444
Other comprehensive loss AFS securities		—			—			—			—		—		—			—			—			(2,345	)		—			(2,345	)
Adjustments to reconcile net (loss) income to net cash used in operating activities
Amortization of equity awards		—			—			—			—		—		—			53			—			—			15			68
Depreciation and amortization		189			133
Dividends		—			—			—			—		—		—			—			(175	)		—			—			(175	)
Stock dividends on other investments		—			(32	)
BALANCE, SEPTEMBER 30, 2022		2,525,198			—			—		$	25	$		$			$	14,799		$	31,129		$	(8,236	)	$	(1,421	)	$	36,296
Amortization of premiums and discounts on securities, net		74			65
BALANCE, JUNE 30, 2023		3,875,945			—			820,115		$	39	$		$	8		$	43,249		$	28,251		$	(6,431	)	$	(1,376	)	$	63,740
Amortization of equity awards		30			31
Net loss		—			—			—			—		—		—			—			(2,275	)		—			—			(2,275	)
Loss on sale other real estate owned		432			—
Other comprehensive loss on AFS securities		—			—			—			—		—		—			—			—			(1,069	)		—			(1,069	)
Provision for credit losses		3,916			(1	)
Restricted stock forfeiture		(1,250	)		—			—			—		—		—			(9	)		—			—			—			(9	)
Net appreciation on bank-owned life insurance		(68	)		(59	)
Amortization of equity awards		—			—			—			—		—		—			—			—			—			15			15
Deferred income tax (benefit) expense		(839	)		(1	)
Conversion of Series A preferred stock to non voting common stock		—			820,115			(820,115	)		—		8		(8	)		—			—			—			—			—
Preliminary bargain purchase gain from CBOA Financial, Inc. merger		(5,136	)		—
BALANCE, SEPTEMBER 30, 2023		3,874,695			820,115			—		$	39	$	8	$	—		$	43,240		$	25,976		$	(7,500	)	$	(1,361	)	$	60,402
Accretion of discount on loans		(309	)		—
Core deposit intangible amortization		62			—
Changes in operating assets and liabilities:
Accrued interest receivable		214			62
Prepaid and other assets		(1,705	)		898
Accrued interest and other liabilities		3,435			(781	)
Net cash (used in) provided by operating activities		(1,244	)		759
CASH FLOWS FROM INVESTING ACTIVITIES
CBOA Financial, Inc. merger, cash acquired		30,927			—
Proceeds from calls, sales, maturities, or principal payments on available-for-sale securities		8,354			1,971
Purchases of available-for-sale securities		—			—
Purchases of held-to-maturity securities		—			—
Net (purchase) redemptions of other investments		(184	)		(956	)
Net change in loans held for investment		18,878			(8,650	)
Proceeds from sale of other real estate owned		2,568			—
Proceeds from disposals of premises and equipment		—			—
Purchases of premises and equipment		(100	)		(38	)
Net cash provided by (used in) investing activities		60,443			(7,673	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		(352	)		(26,763	)
Proceeds from Federal Home Loan Bank advances		—			110,399
Repayments of Federal Home Loan Bank advances		—			(98,399	)
Proceeds from Federal Reserve advances		—			—
Repayments of Federal Reserve advances		(15,000	)		—
Common stock repurchases		—			(210	)
Common stock issuance, net		—			10,866
Preferred stock issuance, net		—			4,176
Payment of dividends		—			(328	)
Net cash (used in) financing activities		(15,352	)		(259	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		43,847			(7,173	)
CASH AND CASH EQUIVALENTS, beginning of period		28,897			16,947
CASH AND CASH EQUIVALENTS, end of period	$	72,744		$	9,774
SUPPLEMENTAL DISCLOSURES
Interest on deposits and borrowings paid	$	4,270		$	2,443

See accompanying notes to unaudited consolidated financial statements.

~~Consolidated~~BANCORP ~~Statements~~34, ~~of Changes in Stockholders’ Equity (Unaudited)~~INC.

~~(Dollars in~~NOTES TO ~~Thousands,~~UNAUDITED ~~Except~~CONSOLIDATED ~~Number~~FINANCIAL ~~of Shares)~~STATEMENTS

~~Nine~~MARCH ~~Months Ended September 30~~31, ~~2023, and 2022~~2024

	Shares												Balances
	Voting Common Shares			Non-voting Common Shares		Series A Preferred Shares			Voting Common Stock		Non-voting Common Stock		Series A Preferred Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss), Net			Unearned ESOP Shares			Total
BALANCE, DECEMBER 31, 2021		2,523,398			—		—		$	25	$	—	$	—		$	14,647		$	28,383		$	(920	)	$	(1,465	)	$	40,670
Net income		—			—		—			—		—		—			—			3,272			—			—			3,272
Other comprehensive loss on AFS securities		—			—		—			—		—		—			—			—			(7,316	)		—			(7,316	)
Restricted stock award		9,500			—		—			—		—		—			—			—			—			—			—
Restricted stock forfeiture		(3,439	)		—		—			—		—		—			—			—			—			—			—
Amortization of equity awards		—			—		—			—		—		—			230			—			—			44			274
Share repurchase		(5,297	)		—		—			—		—		—			(78	)		—			—			—			(78	)
Stock option exercise		1,036			—		—			—		—		—			—			—			—			—			—
Dividends		—			—		—			—		—		—			—			(526	)		—			—			(526	)
BALANCE, SEPTEMBER 30, 2022		2,525,198			—		—		$	25	$		$			$	14,799		$	31,129		$	(8,236	)	$	(1,421	)	$	36,296
BALANCE, January 1, 2023		3,032,606			—		521,849		$	30	$	—	$	5		$	28,369		$	29,013		$	(6,773	)	$	(1,406	)	$	49,238
Cumulative adjustment for day one adoption of ASU 2016-13, net of tax		—			—		—			—		—		—			—			(654	)		—			—			(654	)
																				—									—
																				—									—
BALANCE, January 1, 2023 (as adjusted for the adoption of ASU 2016-13)		3,032,606			—		521,849		$	30	$	—	$	5		$	28,369		$	28,358		$	(6,773	)	$	(1,406	)	$	48,583
																				—									—
																				—									—
Net loss		—			—		—			—		—		—			—			(1,726	)		—			—			(1,726	)
Other comprehensive loss on AFS securities		—			—		—			—		—		—			—			—			(727	)		—			(727	)
Restricted stock award		10,250			—		—			—		—		—			—			—			—			—			—
Restricted stock forfeiture		(1,250	)		—		—			—		—		—			(9	)		—			—			—			(9	)
Amortization of equity awards		—			—		—			—		—		—			60			—			—			45			105
Share repurchase		(15,000	)		—		—			—		—		—			(210	)		—			—			—			(210	)
Issuance of common stock, net of cost		848,089			—		—			9		—		—			10,857			—			—			—			10,866
Issuance of Series A preferred stock, net of cost		—			—		298,266			—		—		3			4,173			—			—			—			4,176
Conversion of Series A preferred stock to non voting common stock		—			820,115		(820,115	)		—		8		(8	)		—			—			—			—			—
Dividends		—			—		—			—		—		—			—			(656	)		—			—			(656	)
BALANCE, SEPTEMBER 30, 2023		3,874,695			820,115		—		$	39	$	8	$	—		$	43,240		$	25,976		$	(7,500	)	$	(1,361	)	$	60,402

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

8Bancorp 34, Inc. (“Bancorp 34” or the “Company”) is a Maryland corporation organized in 2016 and owns 100% of Southwest Heritage Bank (formerly Bank 34) (the “Bank”) and CBOA Financial Statutory Trust #1. On March 19, 2024, Bancorp 34 acquired CBOA Financial, Inc. (“CBOA”). Immediately following the acquisition, CBOA’s wholly-owned subsidiary, Commerce Bank of Arizona, was merged with and into Bancorp 34’s wholly-owned subsidiary, Bank 34, a federally chartered stock covered savings association. Bank 34 was subsequently rebranded as Southwest Heritage Bank. Also, as part of the acquisition of CBOA, the company acquired CBOA Financial Statutory Trust #1, a trust formed by CBOA in November 2005 to close a pooled private offering of 5,000 trust preferred securities with a liquidation amount of $1,000 per security. Southwest Heritage Bank provides a variety of banking services to individuals and businesses through its eight full-service community bank branches, three 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.

~~Consolidated~~Basis of presentation ~~Statements~~– The unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of ~~Cash~~Regulation ~~Flows~~S-X and may not include all the information required by U.S. generally accepted accounting principles (~~Unaudited~~“GAAP”) for complete financial statements and related footnote disclosures although the Company believes that the disclosures made are adequate to make the information not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2023 Annual Report on Form 10-K.

(Dollars in Thousands)

	Nine Months Ended September 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(1,726	)	$	3,272
Adjustments to reconcile net income to net cash from operating activities
Depreciation and amortization		419			360
Stock dividends on other investments		(32	)		(21	)
Amortization of premiums and discounts on securities, net		200			285
Amortization of equity awards		105			274
Origination of loans held for sale		(924	)		—
Gain on sale of loans		(83	)		—
Proceeds from sale of loans		1,007			—
Provision for credit losses		3,280			780
Fixed asset impairment		—			17
Net appreciation on bank-owned life insurance		(183	)		(180	)
Deferred income tax expense (benefit)		1			—
Changes in operating assets and liabilities
Accrued interest receivable		16			(10	)
Prepaid and other assets		695			(1,100	)
Accrued interest and other liabilities		1,529			(395	)
Net cash from operating activities		4,304			3,282
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from calls, sales, or principal payments on available-for-sale securities		4,136			6,313
Purchases of available-for-sale securities		—			(8,060	)
Purchases of held-to-maturity securities		—			(500	)
Net (purchase) redemptions of other investments		(1,606	)		(1,962	)
Net change in loans held for investment		(17,173	)		(49,031	)
Purchases of premises and equipment		(100	)		(418	)
Net cash used in investing activities		(14,743	)		(53,658	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in deposits		(19,196	)		28,859
Net change in escrows		50			58
Proceeds from Federal Home Loan Bank advances		242,398			711,500
Repayments of Federal Home Loan Bank advances		(229,398	)		(693,500	)
Common stock repurchases		(210	)		(78	)
Common stock issuance, net		10,866			—
Preferred stock issuance, net		4,176			—
Payment of dividends		(656	)		(526	)
Net cash from financing activities		8,030			46,313
NET CHANGE IN CASH AND CASH EQUIVALENTS		(2,409	)		(4,063	)
CASH AND CASH EQUIVALENTS, beginning of period		16,947			15,501
CASH AND CASH EQUIVALENTS, end of period	$	14,538		$	11,438
SUPPLEMENTAL DISCLOSURES
Interest on deposits and borrowings paid	$	8,867		$	2,940
Income taxes paid (refunds received)	$	124		$	1,219

Bancorp 34, Inc.

Notes to Consolidated Financial Statements

Note 1 – Nature of Operations and Significant Accounting Policies

Bancorp 34, Inc. (“Bancorp 34” or the “Company”) is a Maryland corporation organized in 2016 to be the successor to Alamogordo Financial Corp (“AFC”), a savings and loan holding company, upon completion of the October 2016 second-step conversion of Bank 34 (the “Bank”) from the two-tier mutual holding company structure to the stock holding company structure. Bancorp 34 owns 100% of the Bank. The Bank provides a variety of banking services to individuals and businesses through its full-service branch in Scottsdale, Arizona as well as branches in Alamogordo and Las Cruces, New Mexico.

Basis of presentation – The accompanying interim consolidated financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (GAAP) and have not been audited. In management’s opinion, all accounting adjustments necessary to accurately reflect the financial position and results of operations on the accompanying financial statements have been made. These adjustments are normal and recurring accruals considered necessary for a fair and accurate presentation. The results for interim periods are not necessarily indicative of results for the full year or any other interim periods. The accompanying unaudited consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements that are contained in its Registration Statement on Form S-4/A (file No. 333-273901) filed with the Securities and Exchange Commission on November 13, 2023.

Basis of consolidation – The consolidated financial statements include the accounts of Bancorp 34 and the Bank. All significant intercompany accounts and transactions have been eliminated.

Reclassifications – Certain reclassifications have been made to the prior period’s financial information to conform to the current period presentation. Reclassifications had no effect on Equity or Net Income.

Use of estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant estimates include, but are not limited to, allowance for ~~loan~~credit losses, ~~and~~the fair value ofmarks ~~investment~~used ~~securities.~~in ~~All~~accounting for the ~~investment~~acquisition ~~securities~~of ~~held by~~CBOA ~~the~~and ~~Company~~estimating ~~are~~the ~~categorized~~effective astax ~~level~~rate ~~two~~for ~~investments~~the ~~and~~Company ~~are~~for ~~measured~~2024 onin ~~a recurring basis~~full. The Company holds collateral dependent loans that are categorized as level three investments and are ~~value~~valued on a nonrecurring basis using unobservable inputs further described in Note 1514.

Subsequent events – Subsequent events have been evaluated through the date the consolidated financial statements were issued.

Cash and cash equivalents – Cash and cash equivalents include cash, due from banks, and federal funds sold. Generally, the Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. In monitoring credit risk associated with deposits in other banks, the Bank periodically evaluates the stability of the correspondent financial institutions. Banks may be required to maintain reserve funds in cash or on deposit with the Federal Reserve Bank. No reserves were required at ~~September 30~~March 31, ~~2023,~~2024 and December 31, ~~2022~~2023.

Securities – If management has the intent and the Company has the ability at the time of purchase to hold securities until maturity, they are classified as held-to-maturity and carried at amortized historical cost less the allowance for credit losses. Securities to be held for an undeterminable period of time and not intended to be held until maturity are classified as available-for-sale and carried at fair value, with unrealized gains and losses reported in other comprehensive income or loss, net of tax. Securities classified as available-for-sale include securities that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates, prepayment risk, and other factors. Management determines the appropriate classification of securities at the time of purchase but may reassess the classification.

Net purchase premiums and ~~discounts~~ discounts on securities are recognized in interest income using the level yield method over the estimated life of the security. Premiums are amortized to the earliest call date. Gains and losses on the sale of ~~available-for-sale~~ securities are determined using the specific identification method. ~~Securities are written down to fair value and reflected as a gain or loss.~~

For available-for-sale (AFS) securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that the Company will be required to sell, the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through net income. For AFS securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss), net of applicable taxes.

Allowance for credit losses - held-to-maturity securities: Held-to maturity securities are carried at amortized cost net of allowance for credit losses (“ACL”) when management has the positive intent and ability to hold them to maturity. The Company’s held-to maturity portfolio consists solely of bank subordinated debt. Management measures expected credit losses on held-to-maturity debt securities on an individual basis. When accrued interest is reversed or charged-off in a timely manner, the CECL standard provides a practical expedient to exclude accrued interest from ACL measurement. The Company considers it’s nonaccrual and charge-off policies to be timely for all investments and securities, as such, accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

Loans held for investment, net – Loans the Bank originates and that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding unpaid principal balances reduced by any charge-offs and net of any deferred fees or costs. Loans are considered past due, or delinquent based on the contractual terms in the loan agreement and how recently repayments have been received. Interest income is recognized based upon principal amounts outstanding. The accrual of interest is discontinued at the time the loan is 90 days past due or when, in the opinion of management, there is doubt about the ability of the borrower to pay interest or principal, unless the credit is well secured and in process of collection. Interest previously accrued but uncollected on such loans is reversed and charged against current income. Loans are charged-off as uncollectible when, in the opinion of management, collectability of principal is improbable. If payment is received on a nonaccrual loan, generally the payment is first applied to the remaining principal balance. Payments are then applied to recover any charged-off amounts related to the loan. Finally, if both the principal balance and any charge-offs have been recovered, then the payment will be recorded as fee and interest income. Personal loans are typically charged off when no later than 180 days past due.

Loan origination fees on loans the Bank originates, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. See Note 2 - BUSINESS COMBINATION, for our accounting methodology for the loans acquired in the merger.

Allowance for credit losses - loans: The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The ACL excludes loans held-for-sale and loans accounted for under the fair value option. The Company elected to not measure an ACL for accrued interest receivables, as we write off applicable accrued interest receivable balances in a timely manner when a loan is placed on non-accrual status, in which any accrued but uncollected interest is reversed from current income. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. An industry index is used in the model to provide historical credit loss experience and provides the basis for the estimation of expected credit losses. The Company identified and grouped portfolio segments based on risk characteristics and underlying collateral.

The principal segments of our loan portfolio are discussed below:

Commercial loans. We provide a mix of variable and fixed rate commercial loans. The loans are typically made to small- and medium-sized manufacturing, wholesale, retail and service businesses for working capital needs and business expansion. Commercial loans generally include lines of credit and loans with maturities of five years or less. The loans are generally made with business operations as the primary source of repayment, but may also include collateralization by inventory, accounts receivable, and equipment. Personal guarantees are typically obtained on commercial loans as well.

Commercial real estate loans. Our commercial real estate loans consist of both real estate occupied by the borrower for ongoing operations and non-owner occupied real estate properties. The real estate securing our existing commercial real estate loans includes a wide variety of property types, such as owner and non-owner-occupied offices, warehouses and production facilities, office buildings, hotels, mobile home parks, retail centers, and assisted living facilities.

Multifamily. Our multifamily portfolio includes properties with 5 or more dwellings where the use is primarily residential.

Construction and land development loans. Our construction and land development loans are comprised of residential construction, commercial construction, and land acquisition and development loans.

Residential real estate loans. Our residential real estate loans consist of residential properties that generally do not qualify for secondary market sale.

Consumer loans. Our consumer loans include direct personal loans and automobile loans. Personal loans are generally unsecured or secured by cash held at the bank.

The ACL for pooled loans is estimated using a non-discounted cash flow methodology. The bank then applies probability of default and loss given default to the cash flow methodology to calculate expected losses within the model. This allows the bank to identify the timing of default as compared to when the actual loss event may occur. The results are then aggregated to produce segment level results and reserve requirements for each segment. The Company uses a 12-month forecast that is reasonable and supportable within the ACL calculation and then reverts to historical credit loss experience on a straight-line basis over a one-year timeline. Historical loss experience is then used for the remaining life of the assets. The Company uses several economic variables in the calculation of the ACL, the most significant of which is the economic forecast for the national unemployment rate. Changes in the economic forecast for unemployment rates could significantly affect the estimated credit losses which could potentially lead to materially different allowance levels from one reporting period to the next.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the pooled loan evaluation. When management determines that foreclosure is probable, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Qualitative adjustments to historical loss data are made based on management’s assessment of the risks that may lead to a future loan loss or differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, changes in environmental and economic conditions, or other relevant factors.

~~Loans~~The ~~held~~allowance ~~for~~is ~~sale~~increased –by ~~Loans~~a ~~held~~provision for ~~sale~~credit ~~includes one- to four-family residential real estate loans~~losses, ~~and~~which ~~periodically,~~is acharged ~~portion of Small Business Administration (“SBA”) or United States Department of Agriculture (USDA) loans the Bank intends~~ to ~~sell.~~expense ~~They are carried at fair value. Gains~~ and ~~losses~~reduced ~~on the sale of mortgage loans are recognized upon sale and are determined~~ by ~~the~~charge-offs, ~~difference between~~net ~~the sales proceeds and carrying value~~ of ~~the loans~~recoveries. ~~Net unrealized losses, if any, are recorded as a valuation allowance and charged to operations. There were no loans held for sale at September 30, 2023, and December 31, 2022.~~

Acquired Loans ~~held~~- ~~for investment,~~At ~~net~~the –purchase ~~Loans~~or ~~that~~acquisition ~~management~~date, ~~has~~loans ~~the~~are ~~intent~~evaluated ~~and ability~~ to ~~hold~~determine ~~for~~whether ~~the~~there ~~foreseeable~~has ~~future~~been ormore ~~until~~than ~~maturity~~insignificant orcredit ~~payoff~~deterioration ~~are~~since ~~reported~~origination. atLoans ~~their~~that ~~outstanding~~have ~~unpaid~~experienced ~~principal~~more ~~balances~~than ~~reduced~~insignificant bycredit ~~any~~deterioration ~~charge-offs~~since ~~and~~origination ~~net~~are ofreferred ~~any~~to as ~~deferred~~purchase ~~fees~~credit ordeteriorated ~~costs~~(PCD) loans. ~~Loans~~ ~~are~~In ~~considered~~its ~~past~~evaluation ~~due~~of orwhether ~~delinquent~~a ~~based~~loan onhas ~~the~~experienced ~~contractual~~more ~~terms~~than insignificant deterioration in ~~the~~credit ~~loan~~quality ~~agreement~~since ~~and~~origination, ~~how~~the ~~recently~~Company ~~repayments~~takes ~~have been~~into ~~received.~~consideration ~~Interest~~loan ~~income~~grades, ispayment ~~recognized~~performance, ~~based~~past ~~upon~~due ~~principal~~status, ~~amounts~~and nonaccrual ~~outstanding~~status. The ~~accrual~~Company ofalso ~~interest~~considered isthe ~~discontinued at~~results ~~the~~of ~~time~~an ~~the~~independent ~~loan~~external iscredit 90review ~~days~~completed ~~past~~during the due ordiligence phase ~~when,~~to inidentify ~~the~~other ~~opinion~~loans ofthat ~~management,~~have ~~there~~experienced isdeterioration. ~~doubt~~At ~~about~~ the ~~ability~~purchase ofor acquisition date, the ~~borrower~~amortized cost basis toof ~~pay~~PCD ~~interest~~loans oris ~~principal,~~equal ~~unless~~to the ~~credit~~purchase isprice ~~well secured~~ and inan ~~process~~initial estimate of ~~collection~~credit losses. ~~Interest~~The ~~previously~~initial ~~accrued~~recognition ~~but~~of expected credit ~~uncollected~~losses on ~~such~~PCD loans ishas ~~reversed~~no ~~and~~impact ~~charged~~on ~~against~~net ~~current~~ income. ~~Subsequent~~When ~~interest~~the ~~collected~~initial measurement of expected credit losses on ~~such~~PCD loans is ~~credited~~calculated toon ~~loan~~a ~~principal~~pooled ifloan basis, in the ~~opinion~~expected ofcredit ~~management,~~losses ~~collectability~~are ofallocated ~~principal~~to iseach ~~doubtful;~~loan ~~otherwise,~~within the ~~interest~~pool. ~~collected is~~Any ~~recognized~~difference asbetween ~~income~~the ~~and~~initial amortized ~~resumption~~cost ofbasis ~~interest~~and ~~accruals~~the ~~may~~unpaid ~~occur.~~principal ~~Loans~~balance ~~are~~of ~~charged-off~~the asloan ~~uncollectible~~represents ~~when,~~a innoncredit ~~the~~discount ~~opinion of~~or ~~management~~premium, ~~collectability~~which ofis ~~principal~~accreted (or isamortized) ~~improbable.~~into Ifinterest ~~payment~~income isover ~~received~~the onlife aof ~~nonaccrual~~the loan,. ~~generally~~Subsequent changes to the ~~payment~~ACL ~~is first~~on ~~applied~~PCD toloans are recorded through the ~~remaining~~provision ~~principal~~for ~~balance~~credits losses. ~~Payments~~For purchased loans that are ~~then~~not ~~applied~~deemed to ~~recover~~have ~~any~~experienced ~~charged-off~~more ~~amounts~~than ~~related~~insignificant tocredit ~~the~~deterioration ~~loan.~~since ~~Finally,~~origination ifand ~~both~~are ~~the~~therefore ~~principal~~not ~~balance~~deemed ~~and~~PCD, any ~~charge-offs~~discounts ~~have~~or ~~been~~premiums ~~recovered,~~included ~~then~~in the ~~payment~~purchase ~~will~~price beare ~~recorded~~accreted ~~as fee~~(or ~~and~~amortized) ~~interest~~over ~~income~~the contractual life of the individual loan. ~~Personal~~See ~~loans~~Note ~~are~~2 ~~typically~~- ~~charged~~BUSINESS ~~off~~COMBINATIONS ~~when~~for nofurther ~~later~~information ~~than~~related ~~180~~to ~~days~~PCD ~~past~~and ~~due~~Non-PCD loans acquired in connection with the merger.

~~Loan~~Premises and ~~origination~~equipment ~~fees,~~– ~~net of~~Land ~~certain~~is ~~direct~~carried ~~origination~~at ~~costs,~~cost. Premises and equipment are ~~deferred~~stated at cost less accumulated depreciation and ~~recognized~~amortization. asDepreciation anand ~~adjustment~~amortization are computed using the straight-line method in amounts sufficient to relate the cost of depreciable assets to operations over the ~~related~~estimated ~~loan~~useful ~~yield~~lives ~~using~~of the ~~interest~~assets which range from three ~~method~~to seven years for equipment and 15 to 40 years for leasehold improvements and buildings. Maintenance and repairs that do not extend the useful lives of premises and equipment are charged to expense as incurred.

The allowance for credit losses (ACL) is maintained at a level which, in management’s judgment, is adequate to absorb expected credit losses inherent in the loan portfolio. Under the recently adopted ASC 326 methodology, management estimates the allowance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Industry historical credit loss experience is a significant input for the estimation of expected credit losses. Additionally, management’s assessment involves evaluating key factors, which include credit and macroeconomic indicators, such as changes in economic growth levels, unemployment rates, property values, and other relevant factors, to account for current and forecasted market conditions that are likely to cause estimated credit losses over the life of the loans to differ from historical credit losses. Expected credit losses are generally estimated over the contractual term of the loans, adjusted by prepayments when appropriate. Because of uncertainties associated with forecasting economic conditions, collateral values, and future cash flows, it is reasonably possible that management’s estimate of expected credit losses within the loan portfolio and the related allowance may change materially. See the recently adopted accounting standards section located within this footnote for additional information.

Prior to the adoption of ASC 326 methodology, the allowance consisted of probably credit losses inherent in the loan portfolio. Allowances for impaired loans were generally determined based on collateral values or the present value of estimated cash flows and made up the specific reserve component of the reserve. The general component of the allowance covered non-impaired loans and had a quantitative component (historical loss) and a qualitative component (current risk factors). The qualitative risk factors included consideration of the following: changes in lending policies and underwriting standards; changes in economic conditions; changes in nature and volume of loans; changes in the depth of lending staff; changes in the volume and severity of past due, non-accrual and adversely classified loans; changes in the levels and trends of charge offs and recoveries; changes in the quality of the loan review system; changes in concentrations of credit; and, the effects of other external factors such as competition and legal and regulatory requirements. The allowance is increased by a provision for loan losses, which is charged to expense and reduced by charge-offs, net of recoveries.

Premises and equipment – Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method in amounts sufficient to relate the cost of depreciable assets to operations over the estimated useful lives of the assets which range from three to seven years for equipment and fifteen to forty years for leasehold improvements and buildings. Maintenance and repairs that do not extend the useful lives of premises and equipment are charged to expense as incurred.

Leases – Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

Other investments – The Bank has investments in The Independent Bankers Bank (TIB), Pacific Coast Bankers’ Bancshares (PCBB) and the Federal Home Loan Bank (FHLB) of Dallas. The Bank is a member of FHLB system. The Bank is required to maintain minimum levels of FHLB stock-based on various factors, including the amount of borrowings outstanding, mortgage assets, and the Bank’s total assets. Financial institution stock is carried at cost, is classified as a restricted security, and is periodically evaluated for impairment based on ultimate recovery. The carrying value of financial institution stocks at ~~September~~March 3031, ~~2023~~2024, and December 31, ~~2022~~2023, was $24,~~005~~948,000 and $~~962~~3,254,000, respectively. Cash and stock dividends are recorded in Other Income in the Consolidated Statement of ~~Comprehensive~~ Comprehensive Income.

The Company invested in the Castle Creek Launchpad Fund I, LP in April 2022. The Company has committed to ~~fund~~funding up to $2 million over a 4-year funding period. As of ~~September 30~~March 31, ~~2023~~2024, the investment ~~totals~~has a carrying value of $~~910~~994,000 compared to $~~315~~828,000 as of December 31, ~~2022~~2023. ~~Given~~As ~~that~~of both dates, the ~~fund~~investment was ~~has~~valued ~~limited~~using ~~seasoning~~the ~~from~~net aasset ~~time~~value ~~and~~practical ~~investment~~expedient. ~~dollar~~The ~~perspective,~~ scope of the ~~investment~~NAV practical expedient is limited to investments without readily determinable fair values in entities that calculate NAV per share consistently with the ~~fund~~measurement isprinciples ~~being~~of ~~carried~~ASC 946, Financial Services — Investment Companies. Both criteria were present at ~~cost~~March 31, 2024, and December 31, 2023.

Transfers of financial assets – Transfers of financial assets are accounted for as sales when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right, free of conditions that constrain it from taking advantage of that right, to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Bank Owned Life Insurance (BOLI) – The Bank holds BOLI representing life insurance on the lives of certain executives of the Bank purchased in order to help offset the costs of the Bank’s benefit expenses. BOLI is carried on our consolidated balance sheets at the net cash surrender value of the policies and increases in the net cash surrender value are recorded in noninterest income in the consolidated statements of comprehensive income (loss) as bank owned life insurance income.

Other real estate owned – Other real estate owned is comprised of properties acquired through a foreclosure proceeding or acceptance of a deed in lieu of foreclosure. Generally, these properties are initially recorded at fair value, less estimated cost to sell at the date of foreclosure, establishing a new cost basis. After foreclosure, valuations are periodically performed by management; other real estate owned is carried at the lower of the carrying amount or fair value, less the estimated cost to sell. Expenses, gains and losses on disposition, and reductions in carrying value are reported as non-interest ~~expense~~expenses. There was no other real estate owned as of ~~September~~March 3031, ~~2023~~2024, and $3,000,000 of other real estate owned at December 31, ~~2022~~2023.

Fair value measurements – Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A three-level fair value hierarchy prioritizes the inputs used to measure fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities; includes certain U.S. Treasury and other U.S. Government agency debt that is highly-liquid and is actively traded in over-the-counter markets.

Level 2 – Inputs that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Escrow accounts – Funds collected from loan customers for insurance, real estate taxes and other purposes are maintained in escrow accounts and carried as a liability in the Consolidated Balance Sheets. These funds are periodically remitted to the appropriate entities to satisfy those claims.

Financial Instruments with off-balance-sheet risk – In the ordinary course of business, the Bank enters into off-balance-sheet financial instruments consisting of commitments to extend credit and letters of credit. Such financial instruments are recorded in The Consolidated Financial Statements when they are funded or related fees are incurred or received. The credit risk associated with these instruments is generally evaluated using the same methodology as for loans held for investment.

Allowance for credit losses - off-balance sheet credit exposures: The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted through the Provision for credit losses and is recorded in Other liabilities. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The probability of funding is based on historical utilization statistics for unfunded loan commitments that are not unconditionally cancelable by the Company. The loss rates used are calculated using the same assumptions as the associated funded balance.

Advertising cost – The Bank conducts direct and non-direct response advertising and purchases prospective customer lists from various sources. These costs are expensed as incurred. Advertising costs from continuing operations are not material.

Employee Stock Ownership Plan (ESOP) – The Bank sponsors an internally leveraged ESOP. The cost of shares issued to the ESOP but not yet released is shown as unearned ~~employee stock ownership plan (~~ESOP) shares, an element of stockholders’ equity in our consolidated balance sheets. As shares are committed to be released, compensation expense is recorded equal to the market price of the shares, and the shares become outstanding for purposes of earnings per share calculations. To the extent that the fair value of ESOP ~~shares~~ shares committed differs from the cost of such shares, the difference is charged or credited to additional paid-in capital in stockholders’ equity.

Cash dividends on unallocated ESOP shares may be used to make payments on the ESOP loan and may be allocated to participant accounts in proportion to their account balances. Cash dividends paid on allocated shares are recorded as a reduction of retained earnings and, at the direction of the employer may be: a) credited directly to participant accounts in proportion to their account balances, or b) distributed directly to participants (outside the plan) in proportion to their account balances, or c) used to make payments on the ESOP loan requiring the release of shares with at least a similar fair market value be allocated to participant accounts. In addition, participants have the right to receive an immediate distribution of their vested cash dividends paid on shares of common stock credited to their accounts.

Other stock-based compensation – The Company has stock-based compensation plans which provide for the award of various benefits to ~~Directors~~directors and employees, including restricted stock and options to purchase stock. Each restricted stock award is separated into vesting tranches and compensation expense is recognized based on the fair value at the date of grant for each tranche on a straight-line basis over the vesting period reduced for estimated forfeitures. Cash dividends on unvested restricted ~~shares~~ shares are charged to compensation expense. The fair value of stock option awards granted is estimated using the Black-Scholes-Merton option pricing model using inputs including the option exercise price and risk-free rate of return, and assumptions for expected ~~dividend~~ dividend yield, expected stock price volatility and the expected life of the awards. The closing market price of the Company’s stock on the date of grant is the exercise price for the stock options and the estimated fair value of the restricted stock awards. Expense is recognized over the required service period, defined as the vesting period. For awards with graded vesting, expense is recognized on a straight-line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize expense net of actual forfeitures.

Employee retention credit –- The Company qualified for identified refunds based upon federal laws that allow an eligible employer to obtain a refundable employment tax credit under ~~Section 2301 of~~ the Coronavirus Aid, Relief, and Economic Security Act ~~(CARES Act)~~, as amended by Taxpayer Certainty and Disaster Tax Relief Act of 2020 ~~(Relief Act)~~, ~~enacted December 27, 2020,~~ the American Rescue Plan Act of 2021 ~~(ARP Act)~~, ~~enacted March 11, 2021,~~ and the Infrastructure Investment and Jobs Act ~~(Infrastructure~~. ~~Act),~~A ~~enacted~~portion ~~November~~of ~~15,~~the credits ~~2021,~~the ifCompany ~~they~~received, ~~experienced~~$254,000, amet ~~significant~~the ~~decline~~substantial inauthority ~~gross~~to ~~receipts~~file ~~or more than~~ a ~~nominal portion~~claim ofwith ~~its~~the ~~business operations are impacted by a governmental order~~IRS. ~~The~~However, ~~Company~~based ~~recorded~~on uncertainty aassociated ~~net~~with ~~benefit~~the ofIRS’s ~~$547,000~~regulation ~~which~~and ~~offset~~notices ~~salary~~associated ~~and~~with ~~benefit~~qualifying ~~expenses~~under inthe ~~2022.~~governmental Anorder ~~additional~~eligibility ~~$254~~criteria,~~000~~ the isCompany ~~held~~has asconcluded ~~deferred~~the ~~income and~~claim ~~included~~meets in the ~~Accrued~~probable ~~interest~~threshold ~~and~~required ~~other~~to ~~liabilities~~recognize ~~section~~the benefits of the ~~balance~~credit. ~~sheet~~As such, ~~given~~the Company ~~its uncertain nature and~~ will ~~be held~~not asrecognize ~~such~~the income until the ~~five-year~~ statute of limitations has elapsed.

Income taxes – Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax basis of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. Accrued interest and penalties associated with uncertain tax positions are recognized as part of the income tax provision. The Company has no uncertain tax positions.

~~Income~~Comprehensive ~~taxes~~income –(loss) ~~Income~~– ~~tax~~Comprehensive ~~expense~~income is(loss) ~~the~~consists ~~total~~solely of ~~the~~unrealized ~~current~~gains ~~year income tax due or refundable~~ and ~~the~~losses ~~change~~on insecurities ~~deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts~~ available-for-sale ~~the~~(net ~~temporary differences between carrying amounts~~of ~~and~~taxes) ~~tax~~as ~~basis~~ of ~~assets~~March ~~and liabilities~~31, ~~computed using enacted tax rates. A valuation allowance~~2024, ~~if needed, reduces deferred tax assets to the amount expected to be realized. Accrued interest~~ and ~~penalties~~December ~~associated~~31, ~~with uncertain tax positions are recognized as part of the income tax provision~~2023. ~~The Company has no uncertain tax provisions.~~

Comprehensive income (loss) – Comprehensive income (loss) consists solely of unrealized gains and losses on securities available-for-sale (net of taxes).

Earnings per common share – Basic earnings per common share is net income divided by the weighted-average number of common shares outstanding during the period. ESOP shares are considered outstanding for this calculation unless unearned. Maryland corporate law does not provide for treasury shares; therefore, shares repurchased are removed from issued and outstanding immediately and would not be considered outstanding. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. Diluted earnings per common share include the dilutive effect of additional potential common shares issuable under stock options. Earnings per share are restated for all stock splits and stock dividends through the date of issuance of the consolidated financial statements. The two-class method is an earnings allocation method under which earnings per share is calculated for each class of common stock and participating security considering both dividends declared (or accumulated) and participation rights in undistributed earnings as if all such earnings had been distributed during the period.

~~Recently~~Recent ~~adopted~~Accounting ~~accounting~~Guidance That ~~pronouncements~~Has -Not Yet Been Adopted – The following ~~reflects~~new ~~recent~~ accounting ~~pronouncements~~standard ~~that~~has ~~were~~yet to be adopted by the Company ~~since~~but ~~the~~may ~~end of~~have ~~the~~an ~~Company’s~~impact ~~fiscal~~on ~~year~~financial ~~ended~~statements ~~December~~and/or ~~31,~~related ~~2022~~disclosures once implemented.

OnIn ~~January~~December 1, 2023, wethe ~~adopted~~Financial Accounting ~~ASC~~Standards ~~326.~~Board ~~The FASB~~ issued ~~ASC~~a ~~326~~final ~~(also~~standard ~~known~~on asimprovements ~~CECL, for Current Expected Credit Losses)~~ to ~~replace~~income ~~the~~tax ~~incurred~~disclosures. ~~loss~~The ~~model~~standard ~~for loans~~requires, ~~and~~among other ~~financial~~things, disaggregated ~~assets~~information ~~with~~regarding aneffective ~~expected~~tax ~~loss~~rate ~~model~~reconciliation ~~that~~components, ~~requires~~as ~~consideration~~well ofas ~~a wider range of reasonable and supportable~~ information toon ~~determine~~income ~~credit~~taxes ~~losses~~paid. This ~~In accordance with ASC 326~~standard, weAccounting ~~have~~Standards ~~developed~~Update anNo. ~~Allowance for Credit Loss (ACL) methodology effective January 1,~~ 2023-9, ~~which~~“Income ~~replaces~~Taxes ~~its~~(Topic ~~previous~~740): ~~allowance~~Improvements ~~for~~to ~~loan~~Income ~~losses~~Tax ~~methodology. The ACL is a valuation account that~~Disclosures”, isapplies ~~deducted from loans’ amortized cost basis~~ to ~~present~~all ~~the~~entities ~~net~~subject ~~amount expected~~ to beincome ~~collected on the loans~~taxes. ~~Loans~~For ~~are charged-off~~public ~~against~~business ~~the~~entities, ~~allowance when management believes~~ the ~~uncollectibility~~new ofrequirements awill ~~loan~~be ~~balance~~effective isfor ~~confirmed. Upon adoption,~~annual weperiods ~~recorded~~beginning anafter ~~increase~~December ~~to the ACL on loans held-for-investment of $604~~15,~~000,~~ ~~established~~2024. anThe ~~ACL~~guidance onwill ~~unfunded~~be ~~commitments~~applied ~~of $164,000, established an ACL~~ on ~~held-to-maturity~~a ~~investments~~prospective ofbasis ~~$38,000,~~with ~~recorded~~the anoption ~~increase~~ to ~~deferred~~apply ~~tax assets of $152,000, and a corresponding one-time cumulative reduction to retained earnings, net of tax, of $654,000 in~~ the ~~consolidated balance sheet as~~standard ofretrospectively. ~~January~~Early 1,adoption ~~2023~~is permitted.

~~Allowance for credit losses~~NOTE 2 – -BUSINESS loans: The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The ACL excludes loans held-for-sale and loans accounted for under the fair value option. The Company elected to not measure an ACL for accrued interest receivables, as we write off applicable accrued interest receivable balances in a timely manner when a loan is placed on non-accrual status, in which any accrued but uncollected interest is reversed from current income. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, related to past events, current conditions, and reasonable and supportable forecasts. An industry index is used in the model to provide historical credit loss experience and provides the basis for the estimation of expected credit losses. The Company identified and grouped portfolio segments based on risk characteristics and underlying collateral.COMBINATION

~~The~~On ~~ACL for pooled loans is~~March ~~estimated~~19, ~~using~~2024, aBancorp ~~non-discounted~~34 ~~cash~~completed ~~flow~~its ~~methodology.~~previously ~~The~~announced ~~bank~~merger ~~then~~with ~~applies~~CBOA ~~probability~~pursuant ~~of default and loss given default~~ to the ~~cash~~Agreement ~~flow~~and ~~methodology~~Plan toof ~~calculate~~Merger, ~~expected~~dated ~~losses~~as ~~within~~of ~~the~~April ~~model.~~27, ~~This~~2023, ~~allows~~as ~~the~~amended ~~bank to identify~~ (the ~~timing~~“Merger ofAgreement”). ~~default~~Under asthe ~~compared~~Merger toAgreement, ~~when~~CBOA ~~the~~was ~~actual~~merged ~~loss~~with ~~event~~and ~~may~~into ~~occur.~~Bancorp ~~The~~34, ~~results~~with ~~are~~Bancorp ~~then~~34 ~~aggregated~~continuing toas ~~produce~~the ~~segment~~surviving ~~level~~entity ~~results~~(the ~~and reserve~~“Merger”). ~~requirements~~Immediately ~~for~~following ~~each~~the ~~segment.~~completion ~~The~~of ~~quantitative~~the ~~model~~Merger, ~~also~~CBOA’s ~~incorporates forward~~wholly-~~looking~~owned ~~macroeconomic~~subsidiary, ~~information~~Commerce ~~over~~Bank aof ~~reasonable and~~Arizona, ~~supportable~~an ~~period~~Arizona state-chartered ofbank, ~~twelve~~was ~~months~~merged with aand ~~reversion~~into tothe ~~historical~~Bank, ~~losses~~with ~~occurring~~the onBank ~~straight~~continuing ~~line~~as ~~basis over~~ the ~~next~~surviving ~~12 months~~bank.

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each CBOA shareholder had the right to receive 0.2628 shares of Bancorp 34 common stock, for each share of CBOA common stock owned by the CBOA shareholder, with cash to be paid in lieu of fractional shares. Additionally, each outstanding CBOA restricted stock unit vested and was cancelled and converted automatically into the right to receive 0.2628 shares of Bancorp 34 common stock with respect to each share of CBOA common stock underlying such restricted stock unit. In connection with the Merger, Bancorp 34 issued 2,742,257 shares of Bancorp 34 common stock, which had a fair value of approximately $23.3 million based on a common shares valuation as of the Merger date. Each outstanding share of Bancorp 34 common stock remained outstanding and was unaffected by the Merger.

Commerce Bank of Arizona operated five full-service offices serving customers in Gilbert, Green Valley, Oro Valley, Scottsdale and Tucson, Arizona. Completing the Merger further enhanced the Bank’s Arizona footprint, allowed for greater efficiencies based on size and scale, and strengthened the depth of the management team. The combined banks operate as Southwest Heritage Bank and serve customers from eight full-service offices in Arizona and southern New Mexico. The core system conversion was executed in March 2024.

~~Loans~~We ~~that~~accounted dofor ~~not~~the ~~share~~Merger ~~risk~~using the ~~characteristics~~acquisition ~~are~~method ~~evaluated~~of onaccounting anin ~~individual~~accordance ~~basis~~the Financial Accounting Standards Board’s Accounting Standards Code 805 (“ASC 805”), Business Combinations, and accordingly, the assets and liabilities of CBOA were recorded at their respective Merger date estimated fair values. ~~Loans~~The ~~evaluated~~estimated ~~individually~~fair values of assets and liabilities are ~~not~~preliminary ~~included~~and insubject to refinement during the ~~pooled~~measurement ~~loan~~period ~~evaluation~~(which cannot exceed one year from the Merger date), as additional information relative to the Merger date fair values becomes available. Effective in March 2024, we recognized a preliminary bargain purchase gain of $5.1 ~~When~~million ~~management~~in ~~determines~~connection ~~that~~with ~~foreclosure~~the isMerger ~~probable~~(not taxable for income tax purposes), ~~expected~~which ~~credit~~is ~~losses~~recognized ~~are~~in ~~based~~our onfirst quarter 2024 operating results. The core deposit intangible asset of $8.9 million represents the ~~fair~~estimated value of ~~the~~Commerce ~~collateral~~Bank of Arizona’s atlong-term deposit relationships with its customers and will be amortized over an estimated weighted average life of ten years using an accelerated method, which approximates the ~~reporting~~estimated ~~date~~run-off of the acquired deposits. During 2023 and through March 31, ~~adjusted~~2024, Bancorp ~~for~~34 ~~selling~~incurred, ~~costs~~on asa ~~appropriate~~cumulative basis, approximately $6.4 million of merger-related expenses.

~~Qualitative~~The ~~adjustments~~primary tocause of the $5.1 million ~~historical~~preliminary ~~loss~~bargain ~~data~~purchase ~~are~~gain ~~made~~was ~~based~~a ondecrease ~~management~~in Bancorp 34, Inc.’s ~~assessment~~common share valuation from April 2023 to March 2024. In April 2023 and upon the announcement of the ~~risks~~Merger, ~~that~~the ~~may~~common ~~lead~~share exchange ratio was 0.24, and Bancorp 34, Inc’s common share valuation was estimated to be $12.16 per share, based upon a ~~future~~third-party ~~loan~~fairness ~~loss~~opinion orobtained ~~differences~~ in ~~current~~connection ~~loan-specific~~with ~~risk~~the Merger. ~~characteristics~~As ~~such~~of asthe ~~differences~~Merger date in ~~underwriting~~March ~~standards,~~2024 ~~portfolio~~and ~~mix~~before Bancorp 34, ~~changes~~Inc. inissued ~~environmental~~its 2.7 million shares for the Merger, the common share exchange ratio was 0.2628 and ~~economic~~Bancorp, ~~conditions~~Inc’s common share valuation was estimated to be $8.50, orbased ~~other~~on ~~relevant~~a ~~factors~~March 2024 common share valuation completed by an independent third party.

Allowance for credit losses - held-to-maturity securities: Held-to maturity securities are carried at amortized cost net of ACL when management has the positive intent and ability to hold them to maturity. The Company’s held-to maturity portfolio consists solely of bank subordinated debt. Management measures expected credit losses on held-to-maturity debt securities on an individual basis. When accrued interest is reversed or charged-off in a timely manner, the CECL standard provides a practical expedient to exclude accrued interest from ACL measurement. The Company considers it’s nonaccrual and charge-off policies to be timely for all investments securities, as such, accrued interest receivable on held-to-maturity debt securities is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326); Troubled Debt Restructurings (“TDR”) and Vintage Disclosures. This ASU was effective for the Company on January 1, 2023. The amendments eliminate the TDR recognition and measurement guidance and instead require an entity to evaluate whether the modification represents a new loan or a continuation of an existing loan (consistent with accounting for other modifications). The amendments also enhance existing disclosure requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. The Company adopted ASU 2022-02 on January 1, 2023. Refer to Note 3 - Loans and Allowance for Credit Losses for additional information on the required disclosures.

Business Combination – On April 26, 2023, the Company and CBOA Financial, Inc. (“CBOA”) entered into an Agreement and Plan of Merger that provides for the merger of CBOA with and into the Company, with the Company as the surviving entity (the “merger”). The parties amended the merger agreement on December 21, 2023. If the merger is completed, each share of CBOA common stock will be converted into the right to receive 0.2628 shares of Company common stock plus cash in lieu of any fractional shares. Completion of the merger, among other things, is subject to the requisite approval of the appropriate regulatory bodies and the Comapny’s stockholders and CBOA’s shareholders, and if approved is expected to close in the first quarter of 2024. At September 30, 2023, CBOA had total assets of $412 million, total liabilities of $382 million, and total stockholders’ equity of $30 million.

~~Note~~The 2following –table ~~Securities~~includes the: (i) total consideration paid on March 19, 2024, in connection with the Merger; (ii) fair values of the assets acquired; (iii) fair values of the liabilities assumed; and (iv) resulting preliminary bargain purchase gain (in thousands).

~~Available-for-sale~~Schedule ~~and~~of ~~held-to-maturity securities~~Recognized ~~have~~Identified ~~been~~Assets ~~classified~~Acquired ~~in the consolidated balance sheets according to management’s intent. The amortized cost of such securities~~ and ~~their~~Liabilities ~~approximate fair values were as follows (dollars in thousands):~~Assumed

Schedule of Available-for-sale and held-to-maturity securities

(in thousands)	As Recorded by CBOA			Estimated Fair Value Adjustments			Estimated Fair Values as Recorded by Bancorp 34
Fair Value of the common stock consideration							$	23,310

Identifiable assets acquired:
Cash and cash equivalents	$	30,927		$	—		$	30,927
Debt securities available for sale, at fair value		57,844			376			58,220
Loans
Purchased performing		300,080			(15,357	)		284,723
Purchased credit deteriorated		30,425			(4,262	)		26,163
Allowance for credit losses on loans		(3,855	)		3,855			—
Deferred loan fees		(1,033	)		1,033			—
Deferred tax on assets acquired		—			1,233			1,233
Operating right-of-use assets		2,866			—			2,866
Core deposit intangibles		—			8,930			8,930
Other assets		6,284			(20	)		6,264
Total identifiable assets acquired	$	423,538		$	(4,212	)	$	419,326

Identifiable liabilities assumed:
Deposits		346,995			(252	)		346,743
Short-term borrowings		35,000			—			35,000
Long-term borrowings		5,155			(1,012	)		4,143
Deferred taxes on liabilities assumed		—			253			253
Other liabilities		4,661			80			4,741
Total identifiable liabilities assumed	$	391,811		$	(931	)	$	390,880

Net identifiable assets acquired	$	31,727		$	(3,281	)	$	28,446

Preliminary bargain purchase gain							$	(5,136	)

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale, September 30, 2023
Mortgage-backed securities	$	36,044	$	—	$	(5,952	)	$	30,092
U.S. Treasuries		3,073		—		(369	)		2,704
U.S. government agencies		304		—		(23	)		281
Municipal obligations		22,941		—		(3,472	)		19,469
Corporate debt		1,000		—		(184	)		816
Total	$	63,362	$	—	$	(10,000	)	$	53,362

As permitted by ASC 805, Business Combinations, the above preliminary estimates may be refined during the measurement period (which cannot exceed one year from the Merger date), to reflect any new information obtained about facts and circumstances existing at the Merger date. Any changes in the above preliminary estimates will be recognized in the period identified.

	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Held-to-maturity, September 30, 2023
Corporate debt	$	5,808		$	—	$	(785	)	$	5,023
Total	$	5,808		$	—	$	(785	)	$	5,023
Allowance for Credit Losses	$	(43	)
Net carrying value of HTM securities	$	5,765

Purchased Performing Loans (Non-Purchased Credit Deteriorated Loans)

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Available-for-sale, December 31, 2022
Mortgage-backed securities	$	39,709	$	—	$	(5,177	)	$	34,532
U.S. Treasuries		3,083		—		(366	)		2,717
U.S. government agencies		396		—		(26	)		370
Municipal obligations		23,500		—		(3,349	)		20,151
Corporate debt		1,000		—		(188	)		812
Total	$	67,688	$	—	$	(9,106	)	$	58,582

Non-purchased credit deteriorated loans (“non-PCD loans”) are loans, of the date of the Merger and based upon management’s assessment, which have not experienced a more-than-insignificant deterioration in credit quality since the date the loans were originated. The loan’s purchase price becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the unpaid principal balance of the loan is a discount, which is comprised of a credit and non-credit component, and is accreted as interest income over the life of the loan.

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Held-to-maturity, December 31, 2022
Corporate debt	$	5,832	$	9	$	(409	)	$	5,432
Total	$	5,832	$	9	$	(409	)	$	5,432

An allowance for credit losses is determined using the same methodology as other loans held for investment. A $4.1 million “Day Two” allowance for credit losses for non-PCD loans was recorded through the provision expense for credit losses. This $4.1 million allowance for credit losses for non-PCD loans represents management’s estimate of lifetime credit losses on these non-PCD loans.

~~Securities~~Purchased ~~with~~Credit ~~unrealized losses~~Deteriorated ~~as of September 30, 2023, and December 31, 2022., that have not been recognized in income are as follows (dollars in thousands):~~Loans

~~Schedule~~Purchased Credit ~~of Securities~~Deteriorated ~~with unrealized losses~~Loans

	Continued Unrealized Loss for Less than 12 Months					Continued Unrealized Loss for 12 Months or More					Total
Description of securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Available-for-sale, September 30, 2023
Mortgage-backed securities	$	326	$	(45	)	$	29,766	$	(5,907	)	$	30,092	$	(5,952	)
U.S. Treasuries		—		—			2,704		(369	)		2,704		(369	)
U.S. government agencies		—		—			281		(23	)		281		(23	)
Municipal obligations		—		—			19,469		(3,472	)		19,469		(3,472	)
Corporate debt		—		—			816		(184	)		816		(184	)
Total temporarily impaired	$	326	$	(45	)	$	53,036	$	(9,955	)	$	53,362	$	(10,000	)

Purchased credit deteriorated loans (“PCD loans”) represent loans, as of the date of the Merger and based upon management’s assessment, which had experienced a more-than-insignificant deterioration in credit quality since the date the loans were originated. An allowance for credit losses for PCD loans was determined using the same methodology as other loans held for investment. The initial allowance for credit losses for PCD loans was determined on a collective basis and was allocated to individual PCD loans. This allowance for credit losses is reflected as a “Day 2” on-balance sheet gross-up to the allowance for credit losses and as an increase to PCD loans. The PCD loans’ purchase price of $26.2 million plus the allowance for credit losses of $1.1 million, becomes the initial amortized cost basis of $27.3 million for the PCD loans. The difference between the initial amortized cost basis and the unpaid principal balance of the PCD loans of $30.4 million, results in a non-credit discount for the PCD loans of $3.1 million, which is accreted as interest income over the life of the PCD loans. Thereafter, the PCD loans are subject to the same interest rate recognition and impairment model as non-PCD loans, with changes to the allowance for credit losses recorded through provision expense.

Held to Maturity September 30, 2023
Corporate debt	$	878	$	(122	)	$	4,145	$	(663	)	5,023	(785	)
Total temporarily impaired	$	878	$	(122	)	$	4,145	$	(663	)	5,023	(785	)

As of the Merger date and as described above, the PCD Loans included the following components (in thousands):

	Continued Unrealized Loss for Less than 12 Months					Continued Unrealized Loss for 12 Months or More					Total
Description of securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
Available-for-sale, December 31, 2022
Mortgage-backed securities	$	21,377	$	(2,080	)	$	13,155	$	(3,097	)	$	34,532	$	(5,177	)
U.S. Treasuries		—		—			2,717		(366	)		2,717		(366	)
U.S. government agencies		171		(10	)		199		(16	)		370		(26	)
Municipal obligations		12,547		(1,698	)		7,104		(1,651	)		19,651		(3,349	)
Corporate debt		—		—			812		(188	)		812		(188	)
Total temporarily impaired	$	34,095	$	(3,788	)	$	23,987	$	(5,318	)	$	58,082	$	(9,106	)

Held to Maturity December 31, 2022
Unpaid principal balance	$	30,425
Corporate debt	$	2,615		$	(202	)	$	1,793	$	(207	)	4,408	(409	)
Allowance for credit losses at acquisition		(1,164	)
Total temporarily impaired	$	2,615		$	(202	)	$	1,793	$	(207	)	4,408	(409	)
Non-credit discount		(3,098	)
Purchase price	$	26,163

~~Unrealized~~Pro ~~losses~~Forma have not been recognized through the income statement, as management believes the issuers are of sound credit quality, management has no intent to sell the securities, the Company can hold the securities to maturity, and the decline in fair value is largely due to changes in market interest rates. The fair value is expected to recover as the securities approach their maturity date. There were 111 and 109 securities in an unrealized loss position at September 30, 2023, and December 31, 2022, respectively. Of the securities in an unrealized loss position as of September 30, 2023, approximately 42% were backed by a government agency.Information

The pro forma revenues and pro forma earnings in the following table combine CBOA’s consolidated operating results and Bancorp 34’s consolidated operating results as if the Merger had occurred at the beginning of each of the periods presented.

The pro forma amounts for the three months ended March 31, 2024, exclude the following pre-tax adjustments, each of which management deemed material, nonrecurring and directly attributable to the Merger: (i) the $5.1 million preliminary bargain purchase gain (not taxable for income tax purposes); (ii) $4 million of combined merger-related expenses, a portion of which is not tax deductible; and (iii) the $4.1 million “Day Two” non-PCD loans’ provision expense for credit losses. These pre-tax adjustments were partially offset by a combined $2 million tax benefit. The pro forma amounts for the three months ended March 31, 2024, include the following recurring “Day 2” items, which initially occurred in March 2024 in connection with the Merger: (i) $309,000 for 13 days of income accretion from the loan-related fair value adjustments; and (ii) $62,000 for 13 days of Core Deposit intangible amortization expense.

Management prepared these pro forma results for comparative purposes only and these pro forma results are not necessarily indicative of the actual results that would have been obtained had the Merger actually occurred at the beginning of each of the periods presented. No assumptions have been applied to the pro forma revenues and pro forma earnings regarding, for example, possible revenue enhancements, expense efficiencies, fixed cost leverage opportunities, or asset dispositions.

Additionally, the pro forma amounts for Bancorp 34’s weighted average basic and diluted common shares outstanding are based upon: (i) Bancorp 34’s actual weighted average basic and diluted common shares outstanding for each of the periods presented; together with (ii) Bancorp’s approximate 2.7 million common shares issued in connection with the Merger, as if the Merger had occurred at the beginning of each of the periods presented.

~~The~~Business ~~were~~Combination noPro ~~sales~~Forma ~~of securities for the nine months ended September 30, 2023, and for the year ended December 31, 2022.~~Information

As of September 30, 2023, the amortized cost and estimated fair value of the debt securities portfolio are shown by contractual maturity dates (dollars in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

	Pro Forma
	Three months ended March 31,
(in thousands, except per share data)	2024			2023
Total revenues (net interest income and non-interest income)	$	6,769		$	8,464
Net (loss) income	$	(589	)	$	1,245
(Loss) earnings per share - basic	$	(0.09	)	$	0.20
(Loss) earnings per share - diluted	$	(0.09	)	$	0.20

Separately, management has determined that it is impractical to report amounts of revenue and earnings of CBOA after the Merger date of March 19, 2024. Bank core systems and related data conversions occurred after the Merger date, from March 22, 2024, through March 25, 2024. Accordingly, management believes that reliable, accurate, separate, and complete revenue and earnings information for CBOA is no longer available.

NOTE 3 – SECURITIES

Available-for-sale and held-to-maturity securities have been classified in the consolidated balance sheets according to management’s intent on March 31, 2024, and December 31, 2023. The amortized cost of such securities and their approximate fair values were as follows (dollars in thousands):


Available-for-sale	March 31, 2024
	Gross		Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost		Gains		Losses			Value
Mortgage-backed securities	$	74,530	$	236	$	(5,003	)	$	69,763
U.S. Treasuries		3,066		—		(296	)		2,770
U.S. government agencies		8,571		28		(14	)		8,585
Municipal obligations		22,902		—		(2,650	)		20,252
Corporate debt		1,000		—		(144	)		856
Total	$	110,069	$	264	$	(8,107	)	$	102,226


Held-to-maturity	March 31, 2024
	Gross			Gross		Gross			Estimated
	Amortized			Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost			Gains		Losses			Value
Corporate debt	$	5,791		$	—	$	(556	)	$	5,235
Total	$	5,791		$	—	$	(556	)	$	5,235
Allowance for Credit Losses	$	(146	)
Net Carrying Value of Held-to-maturity securities	$	5,645


Available-for-sale	December 31, 2023
	Gross		Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost		Gains		Losses			Value
Mortgage-backed securities	$	36,829	$	—	$	(4,362	)	$	32,467
U.S. Treasuries		3,069		—		(277	)		2,792
U.S. government agencies		287		—		(17	)		270
Municipal obligations		22,921		—		(2,593	)		20,328
Corporate debt		1,000		—		(167	)		833
Total	$	64,106	$	—	$	(7,416	)	$	56,690


Held-to-maturity	December 31, 2023
	Gross			Gross		Gross			Estimated
	Amortized			Unrealized		Unrealized			Fair
(Dollars in thousands)	Cost			Gains		Losses			Value
Corporate debt	$	5,799		$	—	$	(692	)	$	5,107
Total	$	5,799		$	—	$	(692	)	$	5,107
Allowance for Credit Losses	$	(115	)
Net Carrying Value of Held-to-maturity securities	$	5,684

There was no allowance for credit losses related to available for sale securities as of March 31, 2024, or December 31, 2023.

Securities with unrealized losses on March 31, 2024, and December 31, 2023, that have not been recognized in income are as follows (dollars in thousands):


	Continued Unrealized Loss for Less than 12 Months					Continued Unrealized Loss for 12 Months or More					Total
Description of securities	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss			Fair Value		Unrealized Loss

Available-for-sale, March 31, 2024
Mortgage-backed securities	$	11,953	$	(88	)	$	29,014	$	(4,915	)	$	40,967	$	(5,003	)
U.S. Treasuries		—		—			2,770		(296	)		2,770		(296	)
U.S. government agencies		454		(1	)		246		(13	)		700		(14	)
Municipal obligations		—		—			20,251		(2,650	)		20,251		(2,650	)
Corporate debt		—		—			856		(144	)		856		(144	)

Total temporarily impaired	$	12,407	$	(89	)	$	53,137	$	(8,018	)	$	65,544	$	(8,107	)


Held to Maturity March 31, 2024
Corporate debt	$	—	$	—	$	5,235	$	(556	)	$	5,235	$	(556	)
Total temporarily impaired	$	—	$	—	$	5,235	$	(556	)	$	5,235	$	(556	)


	Continued Unrealized Loss for Less than 12 Months				Continued Unrealized Loss for 12 Months or More					Total
Description of securities	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss			Fair Value		Unrealized Loss

Available-for-sale, December 31, 2023
Mortgage-backed securities	$	—	$	—	$	30,462	$	(4,362	)	$	30,462	$	(4,362	)
U.S. Treasuries		—		—		2,792		(277	)		2,792		(277	)
U.S. government agencies		—		—		270		(17	)		270		(17	)
Municipal obligations		—		—		20,328		(2,593	)		20,328		(2,593	)
Corporate debt		—		—		833		(167	)		833		(167	)

Total temporarily impaired	$	—	$	—	$	54,685	$	(7,416	)	$	54,685	$	(7,416	)


Held to Maturity December 31, 2023
Corporate debt	$	904	$	(96	)	$	4,203	$	(596	)	$	5,107	$	(692	)
Total temporarily impaired	$	904	$	(96	)	$	4,203	$	(596	)	$	5,107	$	(692	)

Unrealized losses on U.S. Treasury bonds and U.S. Agency bonds have not been recognized through the income statement due to the bonds being backed in full by the United States government. Management has no intent to sell the securities, the Company can hold the securities to maturity, and the decline in fair value is largely due to changes in market interest rates. The fair value is expected to recover as the securities approach their maturity date.

Unrealized losses on mortgage-backed securities have not been recognized into income. At March 31, 2024, 92% of the mortgage-backed securities portfolio were issued by U.S. government sponsored entities or agencies. Because the decline in fair value is attributable to changes in interest rates, and not credit quality, and because the Company does not intend to sell the mortgage-backed securities, it is likely that management will not be required to sell the securities prior to their anticipated recovery as of March 31, 2024.

The remainder of the mortgage-backed securities portfolio includes non-agency structured commercial mortgage-backed securities (CMBS) with a fair value of $5,654,000 which had unrealized losses of $645,000 at March 31, 2024. Each CMBS was rated AAA at March 31, 2024. These bonds have significant credit enhancement and have performed as agreed. Management does not intend to sell the CMBS and it is likely that management will not be required to sell the securities prior to their anticipated recovery.

Unrealized losses on available-for-sale municipal obligation securities have not been recognized through the income statement. As of March 31, 2024, the credit rating for these securities ranges from A+ to AAA. General Obligation bonds represent 30% of the municipal bond portfolio. The remaining 70% of the portfolio consists of revenue bonds, the majority of which are essential purpose or have an insurance wrapper. Management has no intent to sell these securities and can hold the securities to maturity. The decline in fair value is largely due to changes in market interest rates and management expects the fair value to recover as the securities approach their maturity date.

Management evaluated the foregoing available-for-sale securities for potential impairment as of March 31, 2024. Based on this evaluation, including the preceding analysis summary, management has determined that the unrealized losses on available-for-sale securities are primarily attributable to increases in market interest rates and do not reflect credit losses. Accordingly, as of March 31, 2024, management concluded that an allowance for credit losses on available-for-sale securities is not necessary, as the decline in fair value is not indicative of credit losses. Management will continue to monitor the fair value of these available-for-sale securities and reassess the need for an allowance for credit losses if circumstances change.

Certain information concerning the sale of debt securities available-for-sale for the three months ended March 31, 2024, and 2023, was as follows (dollars in thousands):

	3/31/2024		3/31/2023
Proceeds from sale	$	7,471	$	—
Gross realized gains	$	—	$	—
Gross realized losses	$	—	$	—

Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.

As of March 31, 2024, the amortized cost and estimated fair value of the debt securities portfolio are shown by contractual maturity dates (dollars in thousands).

Amortized Cost

Fair Value

Average Yield

Available-for-sale

Due in one year or less

~~806~~1,380

~~785~~1,369

2.~~11%~~68

Due from one to five years

812,~~841~~180

711,~~809~~107

12.~~73%~~11

Due from five to ten years

1721,~~671~~979

1419,~~676~~987

23.~~30%~~10

Due after ten years

—

Mortgage-backed securities

3674,~~044~~530

3069,~~092~~763

23.~~00%~~63

Total

63110,~~362~~069

53102,~~362~~226

23.~~23%~~34

Amortized Cost

Fair Value

Average Yield

Held-to-maturity

Due in one year or less

—

Due from one to five years

—

Due from five to ten years

5,~~808~~791

5,~~023~~235

4.~~27%~~30

Due after ten years

—

Total

5,~~808~~791

5,~~023~~235

4.~~27%~~30

Securities pledged asat ofMarch ~~September 30~~31, ~~2023~~2024, and December 31, ~~2022~~2023, had a carrying ~~amount~~amounts of $1962,~~777~~016,000 and $843,~~193~~070,000, respectively.

The Company had no investment in securities of issuers outside of the United States as of ~~September~~December 3031, 2023, ~~and~~or ~~December 31,~~ 2022.

Allowance for Credit Losses for HTM Securities

Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. The held-to-maturity ~~investment~~ investment portfolio consists solely of bank holding company subordinated debt. Accrued interest receivable on held-to-maturity debt securities totaled $83,000 at ~~September~~March 3031, ~~2023~~2024, and is excluded from the estimate of credit losses. Refer to Note 1 – Nature of Operations and Significant Accounting Policies for additional information on the Company’s methodology on estimating credit losses. The following table presents the activity in the allowance for credit losses for debt securities held-to-maturity by major security type (dollars in thousands):

~~The following table~~Schedule ~~presents~~of ~~the~~Allowance ~~activity in the allowance~~ for ~~credit~~Credit ~~losses~~Losses for ~~debt~~Securities ~~securities held~~Held-toTo-~~maturity by major security type for the three and nine months ended September 30, 2023 (dollars in thousands):~~Maturity

For the three months ended March 31, 2024	Corporate Bonds
Allowance for credit losses:
Beginning balance	$	115
Provision for credit losses		31
Securities charged -off (recoveries)		—
Total ending allowance balance		146

For 3 months ended September 30, 2023	Corporate Bonds
Allowance for credit losses:
Beginning balance	$	41
Provision for credit losses		2
Securities charged -off (recoveries)		—
Total ending allowance balance		43
For 9 months ended September 30, 2023	Corporate Bonds
Allowance for credit losses:
Beginning balance	$	—
Impact of ASU 2016-13 adoption		38
Provision for credit losses		5
Securities charged -off (recoveries)		—
Total ending allowance balance		43

The Company monitors the credit quality of held-to-maturity securities on a quarterly basis. As of March 31, 2024, there were no held-to-maturity securities past due or on non-accrual.

~~The Company monitors the credit quality of held-to-maturity securities on a quarterly basis. As of September 30, 2023, there were no held-to-maturity securities past due or on non-accrual.~~21

~~Note~~NOTE 3 4 – ~~Loans~~LOANS ~~and~~AND ~~Allowance~~ALLOWANCE ~~for~~FOR ~~Credit~~CREDIT ~~Losses~~ LOSSES

On January 1, 2023, the Company adopted the new CECL standard, ASU 2016-13, using the modified retrospective method for all financial assets measured at amortized cost. For comparability, the Company has adjusted certain prior period loan amounts to conform to the current presentation of segmentation under CECL. Refer to Note 1 - ~~Nature~~Summary of ~~Operations and~~ Significant Accounting Policies for additional information related to the Company’s methodology for estimating the allowance for credit losses.

The following presents a summary of the Company’s loans at amortized cost as of the dates noted (dollars in thousands):

Schedule of Company's Loan

	September 30,			December 31,
	March 31,			December 31,
	2023			2022
	2024			2023
1-4 Family residential real estate	$	6372,~~639~~355		$	6361,~~176~~645
Commercial		50127,~~579~~957			4850,~~567~~169
Consumer and other		~~1,021~~872			~~1,048~~698
Construction		3956,~~152~~410			4334,~~664~~538
Non-Owner Occupied (NOO) CRE		~~186~~262,~~366~~623			~~185~~167,~~699~~203
Owner Occupied (OO) CRE		83159,~~144~~376			6182,~~375~~228
Multifamily		5770,~~700~~714			6160,~~201~~546
Gross loans		481,601			464,730
Loans held for investment		750,307			457,027
Deferred loan fees		(1,385	)		(1,370	)
Less: allowance for credit losses		(10,675	)		(5,860	)
Loans held for investment		480,216			463,360
Loans, net	$	739,632		$	451,167
Less: allowance for credit losses		(8,391	)		(4,778	)
Loans, net	$	471,825		$	458,582

Allowance for Credit Losses on Loans

Beginning January 1, 2023, the allowance for credit losses for loans is measured on the loan’s amortized cost basis, excluding interest receivable. Interest receivable excluded at ~~September~~March 3031, ~~2023~~2024, and December 31, ~~2022~~2023, was $12.17 million and $1.23 million, respectively, presented in ~~Accrued~~accrued interest receivable on the Condensed Consolidated Balance Sheets. Refer to Note 1 - ~~Nature~~Summary of ~~Operations and~~ Significant Accounting Policies for additional information related to the Company’s methodology onfor ~~estimated~~estimating ~~credit~~the allowance for credit losses.

Allocation of a portion of the allowance for credit losses to one category of loans does not preclude its availability to absorb losses in other categories. The following table presents the activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2023 and September 30, 2022 (dollars in thousands):22

Allocation of a portion of the allowance for credit losses to one category of loans does not preclude its availability to absorb losses in other categories. The following table presents the activity in the allowance for credit losses by portfolio segment for the three months ended March 31, 2024, and March 31, 2023, (dollars in thousands):

Schedule of Allowance for Credit Losses

	1-4 Family												NOO		OO
	1–4 Family												NOO		OO
	Residential						Consumer						Commercial		Commercial
	Real Estate			Commercial			and Other			Construction			Real Estate		Real Estate		Multifamily			Total
Changes in allowance for credit losses for the three months ended September 30, 2023
Changes in allowance for credit losses for the three months ended March 31, 2024
Beginning balance	$	~~452~~736		$	~~476~~924		$	78		$	~~745~~512		$	21,~~043~~859	$	~~926~~1,201	$	~~571~~620		$	5,~~220~~860
Provision (credit) for loan losses		34			213			—			(167	)		2,880		216		(1	)		3,175
Acquisition of CBOA Financial PCD Loans		34			777			1			258			83		11		—			1,164
Loans charged off		—			(6	)		—			—			—		—		—			(6	)
Provision (credit) for loan losses		126			1,409			1			64			1,165		941		146			3,852
Recoveries		2			—			—			—			—		—		—			2
Loans charged off		—			(208	)		—			—			—		—		—			(208	)
Balance on September 30, 2023	$	488		$	683		$	7		$	578		$	4,923	$	1,142	$	570		$	8,391
Recoveries		2			5			—			—					—		—			7
	1-4 Family												NOO		OO
Balance on March 31, 2024	$	898		$	2,907		$	10		$	834		$	3,107	$	2,153	$	766		$	10,675
	Residential						Consumer						Commercial		Commercial
	Real Estate			Commercial			and Other			Construction			Real Estate		Real Estate		Multifamily			Total
Changes in allowance for credit losses for the nine months ended September 30, 2023
Beginning balance	$	454		$	1,382		$	56		$	222		$	1,680	$	555	$	429		$	4,778
Impact of adopting of ASU 2016-13		(33	)		(307	)		(50	)		441			271		142		140			604
Provision (credit) for loan losses		62			(71	)		1			(85	)		2,972		445		1			3,325
Loans charged off		—			(321	)		—			—			—		—		—			(321	)
Recoveries		5			—			—			—			—		—		—			5
Balance on September 30, 2023	$	488		$	683		$	7		$	578		$	4,923	$	1,142	$	570		$	8,391
Allowance for credit losses - September 30, 2023
Ending balance individually evaluated	$	—		$	259		$	—		$	—		$	2,984	$	—	$	—		$	3,243
Ending balance collectively evaluated		488			424			7			578			1,939		1,142		570			5,148
Total	$	488		$	683		$	7		$	578		$	4,923	$	1,142	$	570		$	8,391
Gross loans - September 30, 2023
Ending balance individually evaluated	$	345		$	2,097		$	—		$	22		$	6,500	$	—	$	963		$	9,927
Ending balance collectively evaluated		63,294			48,482			1,021			39,130			179,866		83,144		56,737			471,674
Total	$	63,639		$	50,579		$	1,021		$	39,152		$	186,366	$	83,144	$	57,700		$	481,601

	1–4 Family											NOO		OO
	Residential						Consumer					Commercial		Commercial
	Real Estate			Commercial			and Other			Construction		Real Estate		Real Estate		Multifamily		Total
Changes in allowance for loan losses for the three months ended March 31, 2023
Beginning balance	$	454		$	1,382		$	56		$	222	$	1,680	$	555	$	429	$	4,778
Impact of adopting of ASU 2016-13		(33	)		(307	)		(50	)		441		271		142		140		604
Provision (credit) for loan losses		—			—			—			—		—		—		—		—
Loans charged off		—			—			—			—		—		—		—		—
Recoveries		1			—			—			—		—		—		—		1
Balance on March 31, 2023	$	422		$	1,075		$	6		$	663	$	1,951	$	697	$	569	$	5,383

	1-4 Family											NOO			OO
	Residential					Consumer						Commercial			Commercial
	Real Estate			Commercial		and Other			Construction			Real Estate			Real Estate			Multifamily		Total
Changes in allowance for loan losses for the three months ended September 30, 2022
Beginning balance	$	602		$	600	$	99		$	389		$	2,761		$	885		$	625	$	5,961
Provision (credit) for loan losses		88			558		(16	)		(48	)		(364	)		(93	)		—		125
Loans charged off		—			—		—			—			—			—			—		—
Recoveries		2			—		—			—			—			—			—		2
Balance on September 30, 2022	$	692		$	1,158	$	83		$	341		$	2,397		$	792		$	625	$	6,088
	1-4 Family											NOO			OO
	Residential					Consumer						Commercial			Commercial
	Real Estate			Commercial		and Other			Construction			Real Estate			Real Estate			Multifamily		Total
Changes in allowance for loan losses for the nine months ended September 30, 2022
Beginning balance	$	470		$	647	$	101		$	282		$	2,565		$	731		$	532	$	5,328
Provision (credit) for loan losses		242			511		(18	)		59			(168	)		61			93		780
Loans charged off		(26	)		—		—			—			—			—			—		(26	)
Recoveries		6			—		—			—			—			—			—		6
Balance on September 30, 2022	$	692		$	1,158	$	83		$	341		$	2,397		$	792		$	625	$	6,088

The following ~~tables~~table presents the aging of the recorded investment in contractually past due ~~and nonaccrual~~ loans, as of ~~September 30~~March 31, ~~2023~~2024, and December 31, ~~2022~~2023. It is shown by class of loans (dollars in thousands):

	Loans Past Due Accruing Interest										Loans Not
	Loans Contractually Past Due
	30-59		60-89		Over 90				Loans on		Past Due or
March 31, 2024	30–59 Days		60–89 Days		Over 90 Days		Total		Loans Not Past Due		Total
September 30, 2023	Days		Days		Days		Total		Non-Accrual		Non-Accrual		Total
1-4 Family residential real estate	$	259	$	—	$	—	$	259	$	72,096	$	72,355
1-4 Family residential real estate	$	—	$	—	$	—	$	—	$	345	$	63,294	$	63,639
Commercial		2,813		885		350		4,048		123,909		127,957
Commercial		—		—		—		—		2,097		48,482		50,579
Consumer and other		—		—		—		—		872		872
Consumer and other		—		—		—		—		—		1,021		1,021
Construction		—		—		—		—		56,410		56,410
Construction		—		—		—		—		22		39,130		39,152
NOO CRE		—		—		—		—		262,623		262,623
NOO CRE		—		—		—		—		6,500		179,866		186,366
OO CRE		—		—		—		—		159,376		159,376
OO CRE		—		—		—		—		—		83,144		83,144
Multifamily		337		—		—		337		70,377		70,714
Multifamily		—		—		—		—		963		56,737		57,700
Total	$	3,409	$	885	$	350	$	4,644	$	745,663	$	750,307
Total	$	—	$	—	$	—	$	—	$	9,927	$	471,674	$	481,601
	Loans Past Due Accruing Interest										Loans Not
	30-59		60-89		Over 90				Loans on		Past Due or
December 31, 2022	Days		Days		Days		Total		Non-Accrual		Non-Accrual		Total
1-4 Family residential real estate	$	536	$	441	$	—	$	977	$	719	$	61,480	$	63,176
Commercial		313		427		292		1,032		1,641		45,894		48,567
Consumer and other		—		—		—		—		—		1,048		1,048
Construction		—		—		—		—		1,591		42,073		43,664
NOO CRE		512		—		—		512		—		185,187		185,699
OO CRE		—		—		—		—		—		61,375		61,375
Multifamily		—		519		—		519		—		60,682		61,201
Total	$	1,361	$	1,387	$	292	$	3,040	$	3,951	$	457,739	$	464,730

Non-accrual loan balances guaranteed by the SBA are $591,000, or 5.9%, and $99,000, or 2.5%, of the nonaccrual loan balances at September 30, 2023, and December 31, 2022, respectively.


	Loans Contractually Past Due
December 31, 2023	30–59 Days		60–89 Days		Over 90 Days		Total		Loans Not Past Due		Total
1-4 Family residential real estate	$	409	$	—	$	—	$	409	$	61,236	$	61,645
Commercial		—		—		589		589		49,580		50,169
Consumer and other		—		—		—		—		698		698
Construction		—		—		—		—		34,538		34,538
NOO CRE		—		—		—		—		167,203		167,203
OO CRE		—		—		—		—		82,228		82,228
Multifamily		—		—		—		—		60,546		60,546

Total	$	409	$	—	$	589	$	998	$	456,029	$	457,027

2124

~~Impaired~~Credit ~~Loans:~~quality ~~The~~indicators – The following ~~table~~tables ~~includes~~represent the ~~unpaid~~credit ~~principal~~exposure ~~balances~~by ~~and~~internally ~~recorded~~assigned ~~investment~~grades. ~~(unpaid~~This ~~principal~~grading ~~balance~~analysis ~~net~~estimates the capability of ~~charge-offs)~~the ~~for impaired~~borrower ~~loans~~to ~~with~~repay the ~~associated~~contractual ~~allowance~~obligations ~~amount,~~of ifthe ~~applicable,~~loan asagreements ofin ~~December~~accordance ~~31,~~with ~~2022~~the loan terms. The ~~Management~~Bank’s ~~determined~~internal ~~the~~credit ~~allocated allowance~~risk ~~based~~grading onsystem ~~the~~is ~~present~~based ~~value~~on ofmanagement’s ~~expected~~experiences ~~future~~with ~~cash~~similarly ~~flows,~~graded ~~discounted~~loans. atCredit risk ~~the~~grades ~~loan’s~~are ~~effective~~reassessed ~~interest~~each ~~rate,~~quarter ~~except when~~based ~~the~~on ~~remaining~~any ~~source~~recent ofdevelopments ~~repayment~~potentially ~~for~~impacting the ~~loan~~creditworthiness isof the ~~operation~~borrower, as orwell ~~liquidation~~as ofother ~~the~~external ~~collateral.~~statistics Inand ~~those cases~~factors, ~~the~~which ~~current fair~~may ~~value~~affect of the ~~collateral,~~risk ~~less~~characteristics ~~selling~~of ~~costs~~the ~~was~~respective ~~used~~loan. toThe ~~determine~~Company uses the ~~allocated~~following ~~allowance~~definitions ~~recorded.~~for risk ratings:

Schedule of Average Recorded Investment and Interest Income Recognized

December 31, 2022	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment
With no related allowance recorded:
Commercial Real Estate	$	1,591	$	1,591	$	—	$	1,464
1-4 Family Residential RE		719		719		—		739
Commercial and Industrial		—		—		—		—
Consumer		—		—		—		—
With an allowance recorded:
Commercial Real Estate		—		—		—		—
1-4 Family Residential RE		—		—		—		—
Commercial and Industrial		4,546		1,641		99		4,333
Consumer		—		—		—		—
Total	$	6,856	$	3,951	$	99	$	6,536

Credit quality indicators – The following table represents the credit exposure by internally assigned grades at September 30, 2023, and December 31, 2022. This grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements in accordance with the loan terms. The Bank’s internal credit risk grading system is based on management’s experiences with similarly graded loans. Credit risk grades are reassessed each quarter based on any recent developments potentially impacting the creditworthiness of the borrower, as well as other external statistics and factors, which may affect the risk characteristics of the respective loan. The Company uses the following definitions for risk ratings:

Pass: Strong credit with no existing or known potential weaknesses deserving of management’s close attention.

Special Mention: Potential weaknesses that deserve management’s close attention. Borrower and guarantor’s capacity to meet all financial obligations is marginally adequate or deteriorating.

Substandard: ~~Inadequately~~ Inadequately protected by the paying capacity of the ~~Borrower~~borrower and/or collateral pledged. The borrower or guarantor is unwilling or unable to meet loan terms or loan covenants for the foreseeable future.

Doubtful: All the weakness inherent in one classified as substandard with the added characteristic that those weaknesses in place make the collection or liquidation in full, on the basis of current conditions, highly questionable and improbable.

Loss – Considered uncollectible or no longer a bankable asset. This classification does not mean that the asset has no recoverable value. In fact, a certain salvage value is inherent in these loans. Nevertheless, it is not practical or desirable to defer writing off a portion or whole of a perceived asset even though partial recovery may be collected in the future.

The following ~~table~~tables ~~presents~~present the amortized cost basis of loans by credit quality indicator, by class of financing receivable, and year of origination for term loans as of ~~September~~March 3031, 2024, and December 31, 2023. For revolving lines of credit that are converted to term loans, if the conversion involved a credit decision, such loans are included in the origination year in which the credit decision was made. If revolving lines of credit converted to term loans without a credit decision, such lines of credit are included in the “Revolving lines of credit converted to term” column in the following ~~table~~tables (dollars in thousands).

2225

	Term Loans Amortized Cost by Origination
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
September 30, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
March 31, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
1-4 Family
Pass	$	31,~~753~~517	$	245,~~494~~870	$	1227,~~494~~070	$	812,~~116~~402	$	17,~~534~~842	$	913,~~968~~501	$	23,~~382~~738	$	—	$	6271,~~741~~940
Special Mention		—		—		—		—		—		~~553~~350		—		—		~~553~~350
Substandard		—		—		—		—		—		~~345~~65		—		—		~~345~~65
Doubtful		—		—		—		—		—		—		—		—		—
Total 1-4 Family		3,753		24,494		12,494		8,116		1,534		10,866		2,382		—		63,639
Total 1-4 Familly		1,517		5,870		27,070		12,402		7,842		13,916		3,738		—		72,355
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Commercial
Pass		~~12,504~~708		1535,~~416~~204		331,~~390~~210		510,~~498~~140		~~156~~3,546		14,~~314~~501		1035,~~152~~597		—		48120,~~430~~907
Special Mention		—		—		—147		—		—1,944		—88		—101		—		—2,280
Substandard		—		—571		—2,365		~~1,704~~491		96653		—97		97341		—		14,~~897~~518
Doubtful		—		—		—		—		252		—		—		—		252
Total Commercial		~~12,504~~708		1535,~~416~~775		333,~~390~~722		710,~~202~~631		~~504~~6,395		14,~~314~~686		1036,~~249~~039		—		50127,~~579~~957
Current year-to-date gross write-offs		—		—		—		—		~~321~~208		—		—		—		~~321~~208
Consumer and other
Pass		40—		~~148~~—		0129		7—		123		340		~~811~~700		—		~~1,021~~872
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Consumer and Other		40—		~~148~~—		0129		7—		123		340		~~811~~700		—		~~1,021~~872
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		61,~~845~~855		2615,~~821~~914		426,~~022~~371		426,439		~~321~~723		~~630~~2,318		~~450~~18		—		3953,~~130~~639
Special Mention		—		—1,681		—		—		—		—		—		—		—1,681
Substandard		—		21—		—		—		—		—1,090		—		—		211,090
Doubtful		—		—		—		—		—		—		—		—		—
Total Construction		61,~~845~~855		2617,~~842~~595		426,~~022~~371		426,439		~~321~~723		~~630~~3,408		~~450~~18		—		3956,~~152~~410
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
NOO CRE
Pass		~~7,223~~587		3834,~~313~~328		5652,~~167~~822		2172,~~337~~306		1432,~~057~~988		3863,~~396~~014		46,~~081~~206		—		~~179~~262,~~574~~252
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		~~6,500~~—		—		—		~~293~~—		—		—371		—		—		~~6,793~~371
Doubtful		—		—		—		—		—		—		—		—		—
Total NOO CRE		~~13,723~~587		3834,~~313~~328		5652,~~167~~822		2172,~~630~~306		1432,~~057~~988		3863,~~396~~385		46,~~081~~206		—		~~186~~262,~~366~~623
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
OO CRE
Pass		~~20,971~~879		1237,~~140~~994		2030,~~998~~487		838,~~224~~286		512,~~859~~414		428,~~496~~899		25199		—		72149,~~712~~158
Special Mention		—		—226		~~7,240~~—		—7,099		—		1,~~705~~676		—		—		89,~~945~~001
Substandard		—		—		—		39—		~~1,205~~37		~~243~~1,180		—		—		1,~~487~~217
Doubtful		—		—		—		—		—		—		—		—		—
Total OO CRE		~~20,971~~879		1238,~~140~~220		2830,~~237~~487		845,~~262~~385		712,~~064~~451		631,~~444~~755		25199		—		83159,~~144~~376
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Multi Family
Pass		99—		~~12,065~~500		2219,~~149~~853		724,~~634~~811		6,~~580~~478		716,~~825~~238		~~386~~860		—		5668,~~737~~739
Special Mention		—		—		—		—		—1,023		—		—		—		—1,023
Substandard		—		—		~~963~~—		—952		—		—		—		—		~~963~~952
Doubtful		—		—		—		—		—		—		—		—		—
Total Multi Family		99—		~~12,065~~500		2319,~~112~~853		725,~~634~~763		67,~~580~~501		716,~~825~~238		~~386~~860		—		5770,~~700~~714
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Total	$	575,~~935~~547	$	~~129~~132,~~418~~289	$	~~127~~190,~~423~~455	$	52172,~~892~~925	$	3067,~~072~~903	$	65133,~~478~~428	$	1847,~~384~~760	$	—	$	~~481~~750,~~601~~307
Total year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	~~321~~208	$	—	$	—	$	—	$	~~321~~208

2326

As of December 31, 2022, the risk category of loans by class of loans was as follows (dollars in thousands):


	Term Loans Amortized Cost by Origination
December 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
1-4 Family
Pass	$	4,244	$	24,009	$	12,236	$	7,928	$	1,466	$	9,622	$	1,717	$	—	$	61,222
Special Mention		—		—		—		—		—		357		—		—		357
Substandard		—		—		—		—		—		67		—		—		67
Doubtful		—		—		—		—		—		—		—		—		—
Total 1-4 Family		4,244		24,009		12,236		7,928		1,466		10,045		1,717		—		61,645
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Commercial
Pass		13,150		15,405		3,234		3,176		87		1,546		10,139		779		46,737
Special Mention		—		163		—		2,018		—		—		—		—		2,181
Substandard		—		—		—		903		96		—		—		—		999
Doubtful		—		—		—		—		252		—		—		—		252
Total Commercial		13,150		15,568		3,234		6,097		435		1,546		10,139		779		50,169
Current year-to-date gross write-offs		—		—		—		—		321		—		—		—		321
Consumer and other
Pass		43		138		—		5		10		3		499		—		698
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Consumer and Other		43		138		—		5		10		3		499		—		698
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		7,788		21,551		3,938		38		310		592		321		—		34,538
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total Construction		7,788		21,551		3,938		38		310		592		321		—		34,538
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
NOO CRE
Pass		7,187		35,899		52,241		21,091		13,491		30,911		6,140		—		166,960
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		243		—		—		—		—		243
Doubtful		—		—		—		—		—		—		—		—		—
Total NOO CRE		7,187		35,899		52,241		21,334		13,491		30,911		6,140		—		167,203
Current year-to-date gross write-offs		3,382		—		—		—		—		—		—		—		3,382
OO CRE
Pass		20,726		12,365		20,807		7,966		5,806		4,214		—		—		71,884
Special Mention		228		—		7,196		—		—		1,690		—		—		9,114
Substandard		—		—		—		37		1,193		—		—		—		1,230
Doubtful		—		—		—		—		—		—		—		—		—
Total OO CRE		20,954		12,365		28,003		8,003		6,999		5,904		—		—		82,228
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Multi Family
Pass		500		15,652		22,007		7,572		6,369		7,105		371		—		59,575
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		970		—		—		—		—		—		970
Doubtful		—		—		—		—		—		—		—		—		—
Total Multi Family		500		15,652		22,977		7,572		6,369		7,105		371		—		60,546
Current year-to-date gross write-offs		—		—		—		—		—		—		—		—		—
Total	$	53,866	$	125,182	$	122,629	$	50,977	$	29,080	$	56,106	$	19,187	$	779	$	457,027
Current year-to-date gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

			Special						Not Risk
December 31, 2022	Pass		Mention		Substandard		Doubtful		Rated		Total
1-4 Family	$	62,517	$	—	$	659	$	—	$	—	$	63,176
Commercial		46,474		377		1,716		—		—		48,567
Consumer and other		993		—		—		—		55		1,048
Construction		42,073		—		1,591		—		—		43,664
NOO CRE		185,699		—		—		—		—		185,699
OO CRE		57,407		3,685		283		—		—		61,375
Multi Family		61,201		—		—		—		—		61,201
Total	$	456,364	$	4,062	$	4,249	$	—	$	55	$	464,730

Non-accrual loans – The accrual of interest on loans is discontinued at the time the loan becomes 90 or more days delinquent unless the loan is well secured and in the process of collection or renewal due to maturity. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on non-accrual status or charged off if collection of interest or principal is considered doubtful. There was no interest income recognized from non-accrual loans in the income statement for the ~~nine~~three months ending ~~September~~March 3031, ~~2023~~2024, ~~and~~or ~~September~~March 3031, ~~2022~~2023. The following presents the amortized cost basis of loans on non-accrual status and loans past ~~due~~ due over 89 days still accruing by class as of the date noted (dollars in thousands).

Schedule of Nonaccrual Loans

	As of September 30, 2023
	As of March 31, 2024
	Non-accrual loans				Loans past due
	Non-accrual loans with no ACL		Total non-accrual loans		Loans past due over 89 days and still accruing
	with		Total non-accrual		over 89 days and
1-4 Family residential real estate	$	65	$	65	$	—
	no ACL		loans		still accruing
Commercial		1,412		2,046		—
1-4 Family residential real estate	$	345	$	345	$	—
Commercial		1,723		2,097		—
Consumer and other		—		—		—
Construction		22—		22—		—
NOO CRE		—371		~~6,500~~371		—
OO CRE		—		—		—
Multifamily		~~963~~953		~~963~~953		—
Total	$	32,~~053~~801	$	93,~~927~~435	$	—
	As of December 31, 2022
	As of December 31, 2023
	Non-accrual loans				Loans past due
	Non-accrual loans with no ACL		Total non-accrual loans		Loans past due over 89 days and still accruing
	with		Total non-accrual		over 89 days and
1-4 Family residential real estate	$	66	$	66	$	—
	no ACL		loans		still accruing
Commercial		847		1,208		—
1-4 Family residential real estate	$	719	$	719	$	—
Commercial		—		1,641		292
Consumer and other		—		—		—
Construction		~~1,591~~—		~~1,591~~—		—
NOO CRE		—		—		—
OO CRE		—		—		—
Multifamily		—970		—970		—
Total	$	21,~~310~~883	$	32,~~951~~244	$	~~292~~—

Non-accrual loan balances guaranteed by the SBA are $1,145,000, or 33.3%, and $589,000, or 26.3%, of the nonaccrual loan balances at March 31, 2024, and December 31, 2023, respectively.

Collateral dependent loans – Non-accrual loans, excluding loans held for investment measured at fair value, are classified as collateral dependent loans and are individually evaluated. The following presents the amortized cost basis of collateral-dependent loans, which are individually evaluated to determine expected credit losses by class of loans as of the date noted (dollars in thousands):

Schedule of Collateral Dependent Loans

	As of September 30, 2023
	As of March 31, 2024 Collateral Dependent Loans
	Collateral Dependent Loans
	Secured by Real Estate		Secured by Other		Total
	Secured by		Secured by
1-4 Family residential real estate	$	65	$	—	$	65
	Real Estate		Other		Total
Commercial		—		2,046		2,046
1-4 Family residential real estate	$	345	$	—	$	345
Commercial		—		2,097		2,097
Consumer and other		—		—		—
Construction		22—		—		22—
NOO CRE		~~6,500~~371		—		~~6,500~~371
OO CRE		—		—		—
Multifamily		~~963~~953		—		~~963~~953
Total	$	71,~~830~~389	$	2,~~097~~046	$	93,~~927~~435

2528

Loan Modifications Made to Borrowers Experiencing Financial Difficulty – The ACL incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination. The analysis includes losses from modifications of receivables to borrowers experiencing ~~financial~~ financial difficulty. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the ACL allowance for credit losses, a change to the ACL is generally not recorded when a loan is modified. ~~During~~ Currently, the ~~nine~~bank does ~~months~~not ~~ended~~hold ~~September~~any ~~30,~~loans ~~2023,~~having nomodified ~~loans~~terms ~~received~~related ato ~~material~~economic ~~modification~~distress ~~based~~and onnone ~~borrower~~were ~~financial~~modified ~~difficulty~~during the three months ended March 31, 2024, and 2023.

~~Note~~NOTE 45 – ~~Premises~~PREMISES ~~and~~AND ~~Equipment~~EQUIPMENT, ~~Net~~NET

Components of premises and equipment, net included in the consolidated balance sheets ~~at September 30, 2023, and December 31, 2022,~~ were as follows (dollars in thousands):

Schedule of Premises and equipment

	September 30,			December 31,
	March 31,			December 31,
	2023			2022
	2024			2023
Land and improvements	$	23,~~169~~316		$	21,~~170~~806
Buildings and improvements		12,~~482~~578			12,~~439~~482
Furniture and equipment		13,~~834~~622			1,~~776~~953
Total cost		1619,~~485~~516			16,~~385~~241
Accumulated depreciation and amortization		(810,~~727~~641	)		(8,~~308~~891	)
Net book value	$	78,~~758~~875		$	87,~~077~~350

Depreciation and amortization ~~expense~~expenses ~~was~~were $~~419~~189,000 and $~~360~~133,000 for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, and ~~September 30~~2023, ~~2022,~~ respectively.

~~Note~~NOTE 6 – 5TIME ~~– Time Deposits~~ DEPOSITS

Following are maturities of time deposits at ~~September~~March 3031, ~~2023~~2024, and December 31, ~~2022~~2023, (dollars in thousands):

Schedule of Maturities of Time Deposits

	September 30,		December 31,
	March 31,		December 31,
	2023		2022
Maturity	2024		2023
Maturity
One year or less	$	178,632	$	93,675
One year or less	$	90,700	$	50,025
Over one through three years		31,817		30,390
Over one through three years		34,378		21,627
Over three through five years		4,676		4,338
Over three through five years		4,197		1,841
Totals	$	215,125	$	128,403
Total	$	129,275	$	73,493

On ~~September 30~~March 31, ~~2023~~2024, and December 31, ~~2022~~ 2023, the Bank had $4976.69 million and $2343.49 million, respectively, in time deposits of $250,000 or more. On ~~September~~March 3031, ~~2023~~2024, and December 31, ~~2022~~2023, $3158.51 million and $1927.85 million, respectively, of such time deposits mature within one year.

As of ~~September~~March 3031, ~~2023~~2024, and December 31, ~~2022~~2023, certificate of deposits includes brokered CD balances of $198,~~531~~082,000 and $519,~~000~~531,000, respectively. ~~This~~The ~~growth~~decline in ~~our~~ brokered CD deposits ~~in 2023 has been used to supplement deposit growth, assist in the management of interest rate risk through~~ ~~the~~is ~~fixing~~due ~~of funding costs, and~~ to ~~reduce the reliance on short-term FHLB borrowings~~maturities.

2629

~~Note 6~~ NOTE 7 – ~~Borrowings~~ BORROWINGS

AsOn ofMarch ~~September 30~~12, 2023, the ~~Bank~~Federal ~~had~~Reserve Board aannounced ~~borrowing~~it ~~line~~would ~~with~~make ~~the~~additional ~~FHLB~~funding ofavailable ~~Dallas.~~to ~~Effective~~eligible ~~October~~depository 2,institutions ~~2023,~~to ~~the~~help ~~Bank~~ensure ~~converted~~banks ~~from~~could meet the needs ~~FHLB~~ of ~~Dallas~~depositors to made available through the ~~FHLB~~creation of ~~San~~a ~~Francisco.~~new AsBank ofTerm ~~September~~Funding ~~30,~~Program ~~2023,~~(“BTFP”). ~~the~~The ~~Bank~~BTFP ~~had~~is ~~one~~a liquidity ~~outstanding~~resource ~~advance~~with ~~totaling~~capacity ~~$18.0~~based ~~million~~on ~~carrying~~the anpledging ~~interest rate~~ of 5high-quality securities.~~63%~~ ~~with~~The intention of the ~~FHLB~~program ofwas ~~Dallas.~~to Aseliminate ofan institution’s ~~September~~need ~~30,~~to ~~2023,~~quickly ~~loans~~sell ~~with~~those asecurities ~~carrying~~in ~~value~~times of ~~$389~~stress.0 ~~million~~Effective ~~were~~March ~~pledged~~11, to 2024, the ~~FHLB~~Federal ~~San~~Reserve ~~Francisco~~ceased lending tounder ~~prepare~~the ~~for~~programs ~~the~~terms. ~~conversion~~Outstanding ~~and~~borrowings ~~$19~~were not impacted.8 ~~million~~As of ~~securities~~March ~~were~~31, ~~pledged~~2024, to the ~~FHLB~~Bank ofhad ~~Dallas~~security pledges totaling $52.1 million to secure ~~the~~ ~~single~~two ~~remaining~~outstanding ~~borrowing.~~borrowings: ~~Upon~~(i) ~~conversion~~a toborrowing in the ~~FHLB~~amount of ~~San~~$29 ~~Francisco,~~million ~~the~~at ~~Bank~~a ~~had~~rate aof ~~remaining~~4.76% ~~borrowing~~with ~~availability~~a ofJanuary ~~$127.3~~10, ~~million~~2025, ~~based~~maturity ondate; ~~the~~and, ~~FHLB~~(ii) ofa ~~San~~second ~~Francisco’s~~BTFP borrowing, ~~limit~~originally ~~being~~entered ~~capped~~into atby ~~25%~~Commerce Bank of ~~the~~Arizona ~~Bank’s~~prior ~~total~~to ~~assets.~~the ~~At December 31~~Merger, ~~2022,~~in ~~FHLB~~the ~~borrowings~~amount ~~totaled~~of $~~5.0~~20 million, ~~carrying~~at ~~interest~~a ~~rates~~rate of 15.404%. Aswith ofa ~~December~~March 314, ~~2022~~2025, ~~loans~~maturity ~~and securities~~date. ~~with~~Additionally, aas ~~carrying~~of ~~value~~March of31, 2024, the Bank had approximately $~~264~~16.10 million ~~were~~in ~~pledged~~availability toat ~~secure~~the ~~FHLB~~Federal ~~advances,~~Reserve ~~with~~Bank ~~remaining availability~~ of ~~$198.1 million~~San atFrancisco’s ~~year~~Discount ~~end~~Window.

OnThe ~~June~~Bank ~~29,~~has ~~2021,~~established ~~the Company completed~~ a ~~private placement of $25.0~~borrowing ~~million~~line ofat 10the ~~year,~~Federal ~~fixed-to-floating~~Home ~~rate~~Loan ~~subordinated~~Bank ~~notes.~~of ~~The~~San ~~subordinated notes will initially bear interest at 4~~Francisco.~~00%~~ ~~per~~As ~~annum~~of ~~for~~March ~~five~~31, ~~years~~2024, ~~floating~~borrowing atcapacity ~~Three-Month~~totaled ~~SOFR~~$144.8 ~~plus~~million ~~328~~and ~~basis~~collateral consists ~~points~~of ~~quarterly~~a ~~thereafter.~~blanket ~~The ten-year~~lien ~~notes~~on ~~mature~~the onloan ~~July~~portfolio. ~~15,~~There ~~2031,~~were ~~and~~no ~~are~~outstanding ~~callable~~borrowings aton the ~~Company’s~~borrowing ~~option~~line ~~after~~as ~~five~~of ~~years.~~March ~~The~~31, ~~subordinated notes have~~2024, ~~unamortized~~or ~~origination~~December ~~fees of $419~~31,~~000~~ ~~at September 30,~~ 2023.

~~The~~As ~~following~~of ~~are~~March ~~maturities~~31, 2024, and ofDecember ~~outstanding~~31, ~~borrowings~~2023, asthe Bank had available unsecured Federal Funds lines of ~~September~~credit ~~30,~~at ~~2023~~correspondent banks totaling $52.8 million and $39.8 million, ~~(dollars~~respectively. inThe ~~thousands):~~terms of the borrowings are overnight at the applicable fed funds borrowing rate.

On June 29, 2021, the Company completed a private placement of $25.0 million of 10 year, fixed-to-floating rate subordinated notes. The subordinated notes will initially bear interest at 4.00% per annum for five years, floating at Three-Month SOFR plus 328 basis points quarterly thereafter. The ten-year notes mature on July 15, 2031, and are callable at the Company’s option after five years. The subordinated notes have unamortized origination fees of $392,000 at March 31, 2024. As part of the Merger with CBOA $1.5 million of the subordinated debt was acquired in the transaction and subsequently retired.

As part of the Merger with CBOA, the Company acquired CBOA Financial Statutory Trust #1, a trust formed by CBOA in November 2005. The trust closed a pooled private offering of 5,000 trust preferred securities with a liquidation amount of $1,000 per security. CBOA made a required equity contribution of $155,000 to form the trust and issued $5 million of subordinated debentures to the trust in exchange for ownership of all of the common securities of the trust and the proceeds of the preferred securities sold by the trust. The Company is able to redeem the subordinated debentures, in whole or in part, in a principal amount with integral multiples of $1,000, at 100% of the principal amount, plus accrued and unpaid interest until maturity in 2036. The subordinated debentures are also redeemable in whole or in part from time to time, upon the occurrence of specific events defined within the trust indenture. Bancorp 34 has the option to defer interest payments on the subordinated debentures from time to time, for a period not to exceed five consecutive years. Bancorp 34 has elected not to defer interest payments on the subordinated debentures. The trust preferred securities have a variable rate of interest, reset quarterly on the 23rd of each February, May, August, and November, equal to the sum of 3-month CME term SOFR plus 1.70%. As of March 31, 2024, the rate was 7.28%. Bancorp 34’s investment in the common stock of the trust is $155,000, which is included in other assets and is accounted for as an unconsolidated cost-method investment. Bancorp 34 is not considered the primary beneficiary of this trust, and therefore the trust is not consolidated in the financial statements. Rather the subordinated debentures are shown as a liability.

The following are maturities of outstanding borrowings as of March 31, 2024, (dollars in thousands):

Maturity
One year or less	$	1849,000
Over one through three years		—0
Over three through five years		—0
Over five through ten years		2523,~~000~~500
Totals	$	43,000
Over ten years		5,000
Totals	$	77,500

~~Note 7 – Financial Instruments with Off-Balance-Sheet Risk~~ 30

~~In the normal course of business,~~NOTE 8 – ~~the~~FINANCIAL ~~Bank~~INSTRUMENTS ~~has~~WITH ~~outstanding~~OFF ~~commitments~~BALANCE toSHEET extend credit and standby letters of credit which are not included in the accompanying consolidated financial statements. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual or notional amount of those instruments. The Bank uses the same credit policies in making commitments as it does for instruments that are included in the consolidated balance sheets.RISK

~~Financial~~In ~~instruments~~the ~~whose~~normal course of business, ~~contract~~and ~~amounts~~from ~~represent~~time ~~off-balance-sheet~~to ~~credit~~time, ~~risk~~the ~~are~~Bank ashas ~~follows~~had asoutstanding commitments to extend credit and standby letters of ~~September~~credit 30which, ~~2023~~consistent with U.S. GAAP, are not reflected in the accompanying consolidated financial statements. The Bank’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and ~~December~~standby ~~31,~~letters of ~~2022,~~credit ~~(dollars~~is represented by the contractual or notional amounts of those instruments. The Bank uses the same credit policies in making commitments as it does for instruments that are included in ~~thousands):~~the consolidated balance sheets.

Contractual or notional amounts of financial instruments representing off-balance-sheet credit risk are as follows as of the dates indicated (dollars in thousands):

	September 30,		December 31,
	March 31,				December 31,
	2023		2022
	2024				2023
Commitments to extend credit	$	16,876	$	23,202
	Fixed		Variable		Fixed		Variable
Unused lines of credit		25,225		18,706
Commitments to extend credit	$	15,981	$	17,032	$	5,327	$	6,966
Totals	$	42,101	$	41,908
Unused lines of credit		3,673		49,483		3,962		18,859
Totals	$	19,654	$	66,515	$	9,289	$	25,825

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

	Three Months Ended			Nine Months Ended
	September 30, 2023			September 30, 2023
Beginning Balance		145,000			0
Impact of Adopting ASU 2016-13		0			165,000
(Release) provision for credit losses		(30,000	)		(50,000	)
Ending Balance		115,000			115,000

	For the three months ended March 31, 2024
Beginning Balance:	$	135,000
Impact of merger with CBOA Financial, Inc.		222,000
(Release) provision for credit losses		33,000
Ending Balance	$	390,000

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation Collateral held varies by and may include accounts receivable, inventory, property and equipment, and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third-party. Standby letters of credit generally have fixed expiration dates or other termination clauses and may require payment of a fee. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank’s ~~policy~~ policy for obtaining collateral, and the nature of such collateral, is essentially the same as that involved in making commitments to to extend credit. ~~There~~The ~~are~~Bank nohad one standby ~~letters~~letter of credit totaling $75,000 at ~~September~~March 3031, ~~2023~~2024, orand no standby letters of credit at December 31, ~~2022~~2023.

~~Note 8~~ NOTE 9 – ~~Leases~~ LEASES

The Bank has noncancelable ~~operating~~ operating leases for office space that expire over the next seven years that require the payment of base lease amounts and executory ~~costs~~ costs such as taxes, maintenance, and insurance. At ~~September~~March 3031, ~~2023~~2024, the bank ~~had~~has ~~one~~6 active operating lease. Rental ~~expense~~ expenses for leases were ~~was~~ $~~270~~166,000 and $~~363~~85,000 for ~~the~~three ~~nine~~ months ended ~~September~~years 30ended March 31, ~~2023~~2024, and ~~September 30~~2023, ~~2022,~~ respectively.

~~The following presents the classification of the right-of-use assets and corresponding liabilities as of the dates noted (dollars in thousands):~~31

The following presents the classification of the right-of-use assets and corresponding liabilities as of the dates presented (dollars in thousands):

Schedule of Lease Information

	September 30,		December 31,
	March 31,		December 31,
	2023		2022
	2024		2023
Lease right-of-use assets
Operating lease right-of-use assets	$	14,~~883~~599	$	21,~~067~~819
Lease Liabilities
Operating lease liabilities	$	25,~~076~~202	$	2,~~153~~011

28Approximate future minimum rental commitments under noncancelable leases as of March 31, 2024, are (dollars in thousands):

Approximate future minimum rental commitments under noncancelable leases as of September 30, 2023, are (dollars in thousands):

2023	$	58
2024	$	657
2024		354
2025		902
2025		360
2026		851
2026		366
2027		740
2027		372
2028		621
2028		377
2029		652
2029		383
2030		640
2030		161
2031		119
Total minimum lease payments		2,431
2032		20
Amounts representing interest (present value discount)		(355	)
Operating lease liabilities (present value of minimum lease payments)	$	5,202
Operating lease liabilities (present value of minimum lease payments)		2,076
Weighted-average remaining term (in years)		5.9
Weighted-average remaining term (in years)		6.7
Weighted-average discount rate		2.83	%
Weighted-average discount rate		4.7	%

~~Note~~NOTE 910 –-- ~~Employee~~INCOME ~~Retirement Benefit Plans~~ TAXES

~~Profit~~For ~~sharing~~the ~~plan~~first quarter –of ~~The~~2024 ~~Company~~and ~~has~~2023, ~~established~~income atax ~~profit-sharing 401~~(kbenefit) ~~type~~expense ~~salary~~differs ~~reduction~~from ~~plan~~the ~~(Plan)~~amounts ~~for~~computed ~~all~~by ~~employees~~applying ~~that meet~~ the ~~necessary~~ ~~eligibility~~federal ~~requirements~~income ~~and~~tax ~~participants~~rate ~~are~~of ~~fully~~21% ~~vested~~to ~~after~~(loss) income ~~six~~before ~~years~~federal ofincome ~~service~~tax expense. ~~For~~These ~~Company~~differences, ~~matching~~historically, ~~contributions made~~are ~~for~~primarily ~~plan~~caused ~~years~~by ~~prior~~state toincome ~~2014~~taxes, ~~annual~~net ~~Company~~of ~~contributions~~federal tax ~~were~~benefit, atincome ~~the~~that ~~discretion~~is ofnot ~~the Board~~taxable offor ~~Directors.~~federal ~~From~~and ~~2014~~state ~~through~~income ~~2019~~tax purposes, ~~the~~expenses ~~Company~~that ~~adopted~~are anot ~~Safe~~deductible ~~Harbor~~for ~~matching~~tax ~~contribution~~purposes and ~~provision,~~tax ~~whereby~~adjustments itrelated ~~agreed~~ to ~~match~~prior ~~100%~~federal ofincome ~~participant’s~~tax ~~contributions~~returns. upSpecifically, tofor the first 3%quarter of ~~salary and 50% of the next 2%~~2024, ~~for~~these adifferences ~~total maximum Company~~also ~~matching~~include ~~contribution~~a ofnon-taxable 4%preliminary ofbargain ~~participant~~purchase ~~salary,~~gain asin ~~defined~~connection bywith the ~~Plan.~~Merger, ~~The~~and ~~Safe~~non-deductible ~~Harbor~~merger ~~matching~~costs, ~~contribution~~including ~~was guaranteed.~~success-based ~~The~~fees ~~Company elected not to adopt a safe harbor matching contribution~~ for ~~2022~~completing orthe ~~2023~~Merger.

~~Employee~~Income ~~Stock~~tax ~~Ownership Plan~~(benefit) –expense ~~The~~calculated at ~~ESOP~~the ~~covers~~statutory ~~substantially~~federal ~~all~~income ~~employees~~tax ~~that~~rate ~~meet~~of ~~certain~~21% ~~age~~for ~~and service requirements. Under~~ the ~~plan,~~first ~~annual retirement~~quarter ~~expense is generally defined as a percentage~~ of ~~employee~~2024 ~~compensation~~and 2023, ~~net~~differs ~~of forfeitures~~ from ~~employees~~actual ~~who~~income ~~have~~tax ~~terminated~~(benefit) expense ~~employment.~~as follows:

~~In October 2016, the ESOP~~Schedule ~~borrowed $1.5 million from the Company to purchase 150,358 shares~~ of ~~common~~Income ~~stock~~Tax ~~from~~Rate the Company at $10 per share. Bancorp 34 accepted a $1.8 million note from the ESOP secured by all unallocated shares in the plan with a 30-year repayment term. The principal balance includes $1.5 million used to purchase stock in 2016 and $266,000 used to pay off already outstanding ESOP loans used to purchase shares in 2012 and 2014. Principal and interest payments on the note are made every December 31 and the interest rate on the loan adjusts annually on January 1st to the prime rate of interest as published in the Wall Street Journal. The Bank makes at least annual discretionary contributions to the ESOP and the ESOP uses all funds it receives to repay the loan. When loan payments are made, ESOP shares are allocated to participants based on relative compensation for that plan year. At the discretion of the employer, participants may receive the shares, cash, or a combination of stock and cash at the end of employment.Reconciliation

Since the Bank is the primary source of repayment on ESOP loans, the Bank records the note payable and an equal contra-equity account on its balance sheet and interest expense and ESOP benefit plan expense on its statement of comprehensive income equal to the annual loan payments. As inter-company borrowings, all bank-recorded balance sheet items, Bancorp 34 interest income and Bank 34 interest expense on the ESOP loan are eliminated in consolidation. Bancorp 34 consolidated financial statements include a contra-equity account with a balance equal to the purchase price of all unallocated shares in the ESOP.


	Three months ended
	March 31,
	2024			2023
(in thousands)
Income tax at statutory federal tax rate	$	(744	)	$	126
State income taxes, net of federal tax benefit		(140	)		26
Non-taxable preliminary bargain purchase gain on the Merger		(1,281	)		—
Non-deductible merger costs, including success based-fees		174			—
Other income tax items, net		(12	)		6
Totals	$	(2,003	)	$	158

29NOTE 11 – REGULATORY MATTERS

~~Deferred~~Southwest ~~compensation~~Heritage ~~and director’s~~Bank ~~fee~~is ~~plans~~subject –to various Aregulatory ~~deferred~~capital ~~compensation~~requirements ~~plan~~administered ~~covers~~by ~~all~~the ~~senior~~federal ~~officers~~banking ~~and~~agencies. aFailure ~~deferred~~to ~~director’s fee~~meet ~~plan~~minimum ~~covers~~capital ~~all~~requirements can ~~directors.~~initiate ~~Under~~certain ~~these~~mandatory ~~plans,~~and ~~the~~discretionary ~~company~~actions ~~pays~~by ~~each~~regulators ~~participant~~ that ~~elects~~if ~~to defer~~undertaken, orcould ~~their~~have ~~beneficiary, the amount deferred plus interest over~~ a ~~pre-selected~~direct ~~period~~material upeffect ~~to 10 years, beginning with~~ on the ~~participant~~Bank’s ~~termination of~~financial ~~service~~statements. AUnder ~~liability~~capital isadequacy ~~accrued~~guidelines ~~monthly~~and ~~for~~ the ~~deferred~~regulatory ~~amount~~framework ~~plus~~for ~~interest~~prompt ~~earned.~~corrective ~~The interest rate on deferred balances~~action, ~~is determined annually on January 1st at~~ the ~~greater~~Bank ofmust ~~Wall~~meet ~~Street~~specific ~~Journal~~capital ~~Prime~~guidelines orinvolving ~~5%,~~quantitative ~~and~~measures ~~was~~of ~~7.5% for~~ the ~~period~~Bank’s ~~ended September 30~~assets, ~~2023~~liabilities, and ~~5.0%~~certain off-balance-sheet ~~for~~items ~~the~~as ~~period~~calculated ~~ended~~under ~~December~~regulatory ~~31,~~accounting ~~2022~~practices. ~~Interest~~The ~~expense~~Bank’s ~~for~~capital ~~the deferred plans was $109~~amounts,~~000~~ and ~~$72,000 for~~classification ~~the~~are ~~periods~~also ~~ended~~subject ~~September~~to ~~30,~~qualitative ~~2023,~~judgments ~~and~~by ~~September 30, 2022, respectively. Deferred plan liabilities, included in accrued interest and other liabilities on~~ the ~~consolidated~~regulators ~~balance~~about ~~sheet~~components, ~~were $1~~risk-weightings,~~994,000~~ and ~~$1,949,000~~other ~~as of September 30, 2023, and December 31, 2022, respectively~~factors.

~~Note~~Quantitative measures established 10by –regulation ~~Board~~to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of ~~Directors’~~total ~~Retirement~~risk-based ~~Program~~capital and Tier 1 capital to risk-weighted assets, and Tier 1 capital to adjusted total assets. Management believes, as of March 31, 2024, and December 31, 2023, the Bank meets all capital adequacy requirements to which it is subject.

The Board previously had a retirement plan to compensate Board members for their service to the Company. The retirement date for directors was the later of the last month in which they reached age 70 or completion of their term if they were elected to the Board during the annual meeting resulting in service beyond age 70. Upon retirement, Board members receive deferred compensation for the remainder of their life up to a maximum of $2,000 per month. Board members vested in the retirement plan based on service as follows: zero to four years of service (20%), five years of service (40%), six years of service (60%), seven years of service (80%) and eight years of service (100%). On September 21, 2011, the Board rescinded this retirement policy for current directors.32

The total liability for the combined retirement plan and agreements was $235,000 and $256,000 at September 30, 2023, and December 31, 2022, respectively.

Note 11 – Income Taxes

During the three and nine months ended September 30, 2023, the Company recorded a benefit from income tax provision of ($603,000) and ($426,000), respectively, reflecting an effective tax rate of 21.0% and 19.8%, respectively. The lower tax rate in nine months ended September 30, 2023, are related to a small favorable adjustment to the year-to-date tax accrual. During the three and nine months ended September 30, 2022, the Company recorded an income tax provision of $321,000 and $1,052,000, respectively, reflecting an effective tax rate of 24.2% and 24.3%, respectively.

Note 12 – Regulatory Matters

Bank 34 is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by regulators that if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts, and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total risk-based capital and Tier 1 capital to risk-weighted assets, and Tier 1 capital to adjusted total assets. Management believes, as of September 30, 2023, and December 31, 2022, the Bank meets all capital adequacy requirements to which it is subject.

Banks are also subject to certain restrictions on the dollar amount of dividends that they may declare without prior regulatory approval.

As of ~~September~~March 3031, ~~2023~~2024, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank has to maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as disclosed in the table below. There are no conditions or events that management believes have changed the Bank’s prompt corrective action category. The Bank has not opted into the Community Bank Leverage Ratio (“CBLR”) and therefore is required to continue calculating and reporting risk-based capital ratios.

The Bank’s actual and required capital amounts and ratios are as follows (dollars in thousands):

											Minimum Required to Be
	Actual					Minimum Required For Capital Adequacy Purposes					Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations
						Minimum Required for Capital					Well Capitalized Under Prompt
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	Actual					Adequacy Purposes					Corrective Action Regulations
March 31, 2024
September 30, 2023	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total Capital to risk-weighted assets:	$	96,253		11.66	%	$	66,040		8	%	$	82,550		10	%
Total Capital to risk-weighted assets	$	75,346		15.26	%		39,500		8	%		49,375		10	%
Tier 1 (Core) Capital to risk weighted assets:	$	85,913		10.40	%	$	49,565		6	%	$	66,087		8	%
Tier 1 (Core) Capital to risk-weighted assets	$	69,144		14.00	%		29,633		6	%		39,511		8	%
Common Tier 1 Capital to risk weighted assets (CET1):	$	85,913		10.40	%	$	37,174		4.50	%	$	53,696		6.50	%
Common Tier 1 Capital to risk-weighted assets (CET1)	$	69,144		14.00	%		22,225		4.50	%		32,103		6.50	%
Tier 1 (Core) Capital to average assets:	$	85,913		8.78	%	$	39,140		4	%	$	48,295		5	%
Tier 1 (Core) Capital to average assets	$	69,144		11.80	%		23,439		4	%		29,298		5	%
	Actual					Minimum Required For Capital Adequacy Purposes					Minimum Required To Be Well Capitalized Under Prompt Corrective Action Regulations
											Minimum Required to Be
	Amount		Ratio			Amount		Ratio			Amount		Ratio
						Minimum Required for Capital					Well Capitalized Under Prompt
December 31, 2023
	Actual					Adequacy Purposes					Corrective Action Regulations
Total Capital to risk-weighted assets:	$	74,142		14.79	%	$	40,114		8	%	$	50,143		10	%
December 31, 2022	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tier 1 (Core) Capital to risk weighted assets:	$	68,032		13.57	%	$	30,086		6	%	$	40,114		8	%
Total Capital to risk-weighted assets	$	64,942		13.57	%	$	38,286		8	%	$	47,857		10	%
Common Tier 1 Capital to risk weighted assets (CET1):	$	68,032		13.57	%	$	22,564		4.50	%	$	32,593		6.50	%
Tier 1 (Core) Capital to risk-weighted assets	$	60,163		12.57	%	$	28,717		6	%	$	38,290		8	%
Tier 1 (Core) Capital to average assets:	$	68,032		11.66	%	$	23,347		4	%	$	29,184		5	%
Common Tier 1 Capital to risk-weighted assets (CET1)	$	60,163		12.57	%	$	21,538		4.50	%	$	31,111		6.50	%
Tier 1 (Core) Capital to average assets	$	60,163		10.34	%	$	23,274		4	%	$	29,092		5	%

~~Note~~NOTE 12 – 13RELATED ~~–Related-Party~~PARTY ~~Transactions~~ TRANSACTIONS

The Bank periodically enters ~~into~~ into transactions with its executive officers, directors, significant stockholders, and their affiliates (related parties). Transactions with such related parties included (dollars in thousands):

Schedule of Related Party Transactions

	September 30,		December 31,
	March 31, 2024		December 31, 2023
	2023		2022
Fees and bonuses paid to directors during the period	$	69	$	65
Fees and bonuses paid to directors during the period	$	203	$	231
Deposits from related parties held by the bank at the end of period		2,047		2,607
Deposits from related parties held by the bank at the end of period		2,587		4,568

There ~~were~~was noone ~~loans~~line of credit with a $0 balance, $100,000 limit, to ~~related~~one ~~parties~~insider at ~~September~~March 3031, ~~2023,~~2024. orThere were no loans to related parties as of December 31, ~~2022~~2023.

Note 14 – Stock-Based Compensation

Stock-based expense, net of forfeitures for the nine months ended September 30, 2023, and September 30, 2022, was $96,000 and $274,000, respectively.

The Company accounts for forfeitures when they occur by reversing any previously accrued compensation expense on forfeited options in accordance with ASC 718, Compensation – Stock Compensation.

On November 17, 2017, the stockholders approved the adoption of the 2017 Equity Incentive Plan (“2017 Plan”). The 2017 Plan provides for the grant of a maximum of 263,127 shares of the Company’s common stock of which up to 187,948 shares of common stock may be granted for stock options and 75,179 shares of common stock may be issued as restricted stock to Directors and employees of the Company. Stock options and restricted stock awards currently issued under the 2017 Plan vest at 20% per year beginning on the first anniversary of date of grant and the options expire seven years after the grant date.

On May 25, 2022, the stockholders approved the adoption of the 2022 Equity Incentive Plan (“2022 Plan”). The 2022 Plan provides for the grant of a maximum of 252,340 shares of the Company’s common stock of which up to 168,227 shares of common stock may be issued as restricted stock and 84,113 shares of common stock may be granted for stock options to Directors and employees of the Company. The Board of Director’s compensation committee specifies the vesting schedules for the restricted stock and options. Option expiration dates are flexible as well but cannot exceed ten years from the grant date. No restricted stock or stock options have been granted under the 2022 plan.

The stock option plans allow for net settlement of vested options. In a net settlement, the Company, at the direction of the optionee, net settles the options by issuing new shares to the optionee with a value, at the current per share trading price, equal to the total in-the-money or intrinsic value of the options less any necessary tax withholdings on the disqualifying disposition of Incentive Stock Options. The optionee is granted newly issued shares and a small amount of cash in lieu of partial shares. There were zero net settlements in the nine months ended September 30, 2023. There was one net settlement in the nine months ended September 30, 2022.

For the nine months ended September 30, 2023, 10,250 stock options were granted and 10,250 shares of restricted stock were issued. In the nine months ended September 30, 2022, 15,000 stock options were granted and 9,500 shares of restricted stock were issued. Stock option grant-date fair values for 2022 and 2023 were computed using the Black Scholes Merton options pricing model with the following weighted-average inputs and assumptions:

Schedule of Weighted Average Inputs and Assumptions

	September 30,			September 30,
	2023			2022
Grant date stock price and exercise price	$	12.03		$	15.80
Dividend yield		2.89	%		2.48	%
Expected stock price volatility		23.37	%		23.59	%
Risk-free interest rate		3.50	%		2.17	%
Expected option life in years		6			6
Total weighted-average fair value of options granted	$	2.42		$	3.00

Historical data is used to estimate expected volatility and the term of options expected to be outstanding and takes into account that options are not transferable. The risk-free interest rate is based on the U.S. Treasury yield curve for the expected term in effect at the date of grant.

A summary of stock option activity in 2023 is presented below (Intrinsic Value in 000s):

						Weighted-
				Weighted-		Average
	Shares			Average		Remaining		Aggregate
	Subject to			Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
Outstanding at June 30, 2023		145,750		$	14.08		2.5 Years	$	29
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited or expired		(1,250	)	$	12.03		4.5 Years		—
Outstanding at September 30, 2023		144,500		$	13.91		2.4 Years	$	—
Exerciseable at September 30, 2023		111,700		$	14.46		1.5 Years	$	—

						Weighted-
				Weighted-		Average
	Shares			Average		Remaining		Aggregate
	Subject to			Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
Outstanding at December 31, 2022		144,020		$	14.07		2.8 Years	$	95
Granted		10,250			12.03		6.8 years		—
Exercised		—			—		—		—
Forfeited or expired		(9,770	)	$	14.26		2.5 Years		—
Outstanding at September 30, 2023		144,500		$	13.91		2.4 Years	$	—
Exerciseable at September 30, 2023		111,700		$	14.46		1.5 Years	$	—

A summary of stock option activity in 2022 is presented below (Intrinsic Value in 000s):

						Weighted-
				Weighted-		Average
	Shares			Average		Remaining		Aggregate
	Subject to			Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
Outstanding at June 30, 2022		156,820		$	13.94		3.1 Years	$	123
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited or expired		(4,200	)		14.63		3.6 Years		—
Outstanding at September 30, 2022		152,620		$	14.07		2.9 Years	$	125
Exerciseable at September 30, 2022		118,020		$	14.45		2.2 Years	$	56
						Weighted-
				Weighted-		Average
	Shares			Average		Remaining		Aggregate
	Subject to			Exercise		Contractual		Intrinsic
	Options			Price		Term		Value
Outstanding at December 31, 2021		163,600		$	13.94		3.6 Years	$	118
Granted		15,000			15.80		6.5 Years		—
Exercised		(13,200	)		14.90		—		17
Forfeited or expired		(12,780	)		13.57		4.3 Years		—
Outstanding at September 30, 2022		152,620		$	14.07		2.9 Years	$	125
Exerciseable at September 30, 2022		118,020		$	14.45		2.2 Years	$	56

No stock options were exercised in the three or nine months ending September 30, 2023. No stock options were exercised during the three months ending September 30, 2022. During the nine months ending September 30, 2022, stock options totaling NOTE 13~~,200 shares were exercised with a weighted average~~ – ~~exercise~~STOCK ~~price~~BASED ~~of $14.90 and an intrinsic value of $17,000.~~COMPENSATION

AStock-based ~~summary~~expense ~~of restricted stock activity~~ for the three months ~~and~~ended ~~nine~~March ~~months~~31, ~~ended~~2024, ~~September~~and 30March 31, 2023, iswas ~~presented~~$30,000 ~~below:~~and $31,000, respectively.

~~Schedule~~The ofCompany ~~Non-Vested~~accounts ~~Restricted~~for forfeitures when they occur by reversing any previously accrued compensation expense on forfeited options in accordance with ASC 718, Compensation – Stock ~~Activity~~Compensation.

				Weighted-		Average
				Average		Remaining
				Grant Date		Contractual
	Shares			Fair Value		Term
Non-vested on June 30, 2023		15,450		$	12.99	4.4 Years
Granted		—			—
Vested		—			—
Forfeited		(1,250	)		12.03	4.5 years
Non-vested on September 30, 2023		14,200		$	13.08	4.1 years
				Weighted-		Average
				Average		Remaining
				Grant Date		Contractual
	Shares			Fair Value		Term
Non-vested on December 31, 2022		6,500		$	14.89	4.1 years
Granted		10,250			12.03	4.5 years
Vested		(1,300	)		14.89	3.6 years
Forfeited		(1,250	)		12.03	4.5 years
Non-vested on September 30, 2023		14,200		$	13.08	4.1 years

On November 17, 2017, the Company’s stockholders approved the adoption of the 2017 Equity Incentive Plan (“2017 Plan”). The 2017 Plan provides for the grant of a maximum of 263,127 shares of the Company’s common stock of which up to 187,948 shares of common stock may be granted for stock options and 75,179 shares of common stock may be issued as restricted stock to Directors and employees of the Company. Stock options and restricted stock awards currently issued under the 2017 Plan vest at 20% per year beginning on the first anniversary of date of grant and the options expire seven years after the grant date.

On May 25, 2022, the Company’s stockholders approved the adoption of the 2022 Equity Incentive Plan (“2022 Plan”). The 2022 Plan provides for the grant of a maximum of 252,340 shares of the Company’s common stock of which up to 168,227 shares of common stock may be issued as restricted stock and 84,113 shares of common stock may be granted for stock options to directors and employees of the Company. The board of directors’ compensation committee specifies the vesting schedules for the restricted stock and options. Option expiration dates are flexible as well but cannot exceed ten years from the grant date.

The stock option plans allow for net settlement of vested options. In a net settlement, the Company, at the direction of the optionee, net settles the options by issuing new shares to the optionee with a value, at the current per share trading price, equal to the total in-the-money or intrinsic value of the options less any necessary tax withholdings on the disqualifying disposition of Incentive Stock Options. The optionee is granted newly issued shares and a small amount of cash in lieu of partial shares. There were no net settlements for the first three months of 2024 or 2023.

For the three months ended March 31, 2024, and March 31, 2023, no stock compensation was issued under any equity incentive plan.

A summary of stock option activity for the first three months of 2024 is presented below (Aggregate Intrinsic Value in thousands):

	Shares Subject to Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value

Outstanding at beginning of year		137,500		$	13.86		2.1 years		—
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited or expired		(25,000	)		14.90		0.7 years		—
Outstanding on March 31, 2024		112,500		$	13.63		2.2 years	$	—

Exercisable on March 31, 2024		86,500		$	14.07		1.4 years	$	—

A summary of restricted stock activity for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2024, is presented below:

				Weighted-		Average
				Average		Remaining
				Grant Date		Contractual
	Shares			Fair Value		Term
Non-vested on June 30, 2022		18,750		$	14.02	2.9 years
Granted		—			—
Vested		(500	)		12.24	3.8 years
Forfeited		—			—
Non-vested on September 30, 2022		18,250		$	14.61	2.6 Years
				Weighted-		Average
				Average		Remaining
				Grant Date		Contractual
	Shares			Fair Value		Term
Non-vested on December 31, 2021		12,774		$	14.02	2.0 years
Granted		9,500			14.92	4.6 years
Vested		(585	)		14.75	3.3 years
Forfeited		(3,439	)		12.59	2.9 years
Non-vested on September 30, 2022		18,250		$	14.61	2.6 Years

As of September 30, 2023 there was $73,000 and $163,000 of total unrecognized equity-based expense related to unvested stock options and restricted stock awards, respectively, granted under the 2017 Equity Incentive Plan that is expected to be recognized over the next 5 years as follows (dollars in thousands):


	Shares			Weighted- Average Grant Date Fair Value		Average Remaining Contractual Term

Non-vested on January 1, 2024		13,400		$	12.97		3.9 years
Granted		—			—		—
Vested		(900	)		14.97		2.8 years
Forfeited		—			—		—
Non-vested on March 31, 2024		12,500		$	12.82		3.6 years

As of March 31, 2024, there was $60,000 and $134,000 of total unrecognized equity-based expense related to unvested stock options and restricted stock awards, respectively, granted under the equity plans that is expected to be recognized over the next five years as follows (dollars in thousands):

Year
2023	$	17
2024	$	48
2024		67
2025		61
2025		64
2026		49
2026		52
2027		29
2027		30
2028		7
2028		6
Totals	$	194
Totals	$	236

35NOTE 14 – FAIR VALUE INFORMATION

~~Note~~The following table presents information 15about –assets ~~Fair~~and ~~Value~~liabilities ~~Information~~measured at fair value on a recurring and non-recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair values (dollars in thousands):

The following table presents information about assets and liabilities measured at fair value on a recurring and non-recurring basis and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair values as of September 30, 2023, and December 31, 2022 (dollars in thousands).

September 30, 2023	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Fair Value
March 31, 2024	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Fair Value
Recurring
Recurring:
Assets
Assets:
Securities available-for-sale
Securities available-for-sale:
Mortgage-backed securities	$	—	$	3069,~~093~~763	$	—	$	3069,~~093~~763
U.S. Treasuries		—		2,~~704~~770		—		2,~~704~~770
U.S. Government Agencies		—		~~280~~8,585		—		~~280~~8,585
Municipal obligations		—		1920,~~469~~252		—		1920,~~469~~252
Corporate debt		—		~~816~~856		—		~~816~~856
Total available-for-sale	$	—	$	53,362	$	—	$	53,362
Total available-for-sale:	$	—	$	102,226	$	—	$	102,226
Nonrecurring basis
Nonrecurring basis:
Collateral dependent loans		—		—	$	5,338	$	5,338
Collateral Dependent Loans	$	—	$	—	$	1,193	$	1,193
December 31, 2022	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Fair Value
Recurring
Assets
Securities available-for-sale
Mortgage-backed securities	$	—	$	34,532	$	—	$	34,532
U.S. Treasuries		—		2,717		—		2,717
U.S. Government Agencies		—		370		—		370
Municipal obligations		—		20,151		—		20,151
Corporate debt		—		812		—		812
Total available-for-sale	$	—	$	58,582	$	—	$	58,582
Nonrecurring basis
Collateral dependent loans	$	—	$	—	$	3,951	$	3,951

The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.35

There were no transfers between levels of the fair value hierarchy during the periods presented.

December 31, 2023	Quoted Prices in Active Markets for Identical Assets Level 1		Significant Other Observable Inputs Level 2		Significant Unobservable Inputs Level 3		Fair Value
Recurring:
Assets:
Securities available-for-sale:
Mortgage-backed securities	$	—	$	32,467	$	—	$	32,467
U.S. Treasuries		—		2,792		—		2,792
U.S. Government Agencies		—		270		—		270
Municipal obligations		—		20,328		—		20,328
Corporate debt		—		833		—		833
Total available-for-sale:	$	—	$	56,690	$	—	$	56,690

Nonrecurring basis:
Collateral dependent loans	$	—	$	—	$	1,071	$	1,071
Other Real Estate Owned	$	—	$	—	$	3,000	$	3,000

36The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments and because management does not intend to sell these financial instruments, the Bank does not know whether the fair values shown represent values at which the respective financial instruments could be sold individually or in the aggregate.

There were no transfers between levels of the fair value hierarchy during the three months ended March 31, 2024, or the year ended December 31, 2023.

The following table presents the significant unobservable inputs used in the fair value measurements for Level 3 financial assets measured on a non-recurring basis (dollars in thousands):

Collateral Dependent Loans September 30, 2023	Fair Value		Valuation Methodologies	Valuation Model	Unobservable Input Valuation
Collateral Dependent Loans March 31, 2024	Fair Value		Valuation Methodologies	Valuation Model	Unobservable Input Valuation
1–4 family residential RE	$	—
Commercial		1,193	Appraisal	Receivables Discount/Liquidation Discount	0–50%
Commercial		1,838	Appraisal	Receivables Discount/Liquidation Discount	0–50	%
Total collateral dependent loans	$	1,193
NOO CRE		3,500	Appraisal	Appraisal Discount/Estimated Selling Costs	7–50	%
Collateral Dependent Loans December 31, 2023	Fair Value		Valuation Methodologies	Valuation Model	Unobservable Input Valuation
Construction		—
Commercial		1,071	Appraisal	Receivables Discount/Liquidation Discount	0–50%
Multifamily		—
Total collateral dependent loans	$	1,071
Total impaired loans	$	5,338
Other Assets
Collateral Dependent Loans December 31, 2022	Fair Value		Valuation Methodologies	Valuation Model	Unobservable Input Valuation
Other Real Estate Owned	$	3,000	Appraisal	Appraisal Discount/Estimated Selling Costs	23	%
Commercial	$	1,641	Appraisal	Receivables Discount/Liquidation Discount	0–18	%
NOO CRE		1,591	Appraisal	Appraisal Discount/Estimated Selling Costs	18–50	%
1–4 family residential RE		719	Appraisal	Appraisal Discount/Estimated Selling Costs	0–18	%
Total impaired loans	$	3,951

~~The estimated fair values of the Company’s consolidated financial instruments at September 30, 2023, and December 31, 2022 are as follows (dollars in thousands):~~36

The estimated fair values of the Company’s consolidated financial instruments on the dates noted are as follows (dollars in thousands):

			September 30,								December 31,
				March 31,								December 31,
			2023								2022
				2024								2023
	Fair Value		Carrying				Fair				Carrying				Fair
Financial assets	Fair Value Hierarchy			Carrying Amount				Fair Value				Carrying Amount				Fair Value
	Hierarchy		Amount				Value				Amount				Value
Cash and due from banks		Level 1		$	66,234			$	66,234			$	27,182			$	27,182
Financial assets
Federal funds sold		Level 2			6,510				6,510				1,715				1,715
Cash and due from banks	Level 1		$	12,898			$	12,898			$	16,112			$	16,112
Securities available-for-sale		Level 2			102,226				102,226				56,690				56,690
Federal funds sold	Level 2			1,640				1,640				835				835
Securities held-to-maturity		Level 2			5,645				5,235				5,684				5,107
Securities available-for-sale	Level 2			53,362				53,362				58,582				58,582
Loans held for investment		Level 3			750,307				730,156				457,027				437,878
Securities held-to-maturity	Level 2			5,765				5,023				5,832				5,432
Other investments		Level 2			6,097				6,097				4,063				4,063
Loans	Level 3			480,216				457,406				463,360				419,251
Accrued interest receivable		Level 1			2,961				2,961				1,597				1,597
Other investments	Level 2			2,915				2,915				1,277				1,277
Financial liabilities
Accrued interest receivable	Level 1			1,489				1,489				1,505				1,505
Nonmaturity Deposits		Level 1		$	(591,281	)		$	(591,281	)		$	(331,596	)		$	(331,596	)
Financial liabilities
Time deposits		Level 2			(215,125	)			(214,408	)			(128,403	)			(128,108	)
Nonmaturity Deposits	Level 1		$	(339,116	)		$	(339,116	)		$	(414,094	)		$	(414,094	)
FRB and FHLB advances		Level 2			(49,000	)			(49,000	)			(29,000	)			(29,000	)
Time deposits	Level 2			(129,275	)			(130,588	)			(73,493	)			(71,932	)
Subordinated debentures		Level 3			(23,108	)			(19,383	)			(24,595	)			(20,421	)
FHLB advances	Level 2			(18,000	)			(18,000	)			(5,000	)			(5,292	)
Accrued interest payable		Level 1			(1,337	)			(1,337	)			(521	)			(521	)
Subordinated debentures	Level 3			(24,581	)			(20,277	)			(24,531	)			(21,728	)
Accrued interest payable	Level 1			(357	)			(357	)			(562	)			(562	)

~~The fair value of non-maturity~~NOTE 15 – ~~deposits~~EARNINGS ~~displayed~~PER in the chart above has been revised as of December 31, 2022, to equal the carrying amount. This revision did not materially impact prior financial statements and future filings will reflect the change.SHARE

37For the three months ended March 31, 2024, the Company had voting common stock, restricted stock awards, and non-voting common stock that were all eligible to participate in dividends equal to the voting common stock dividends on a per share basis. For the three months ended March 31, 2023, the Company had voting common stock, restricted stock awards, and non-voting preferred stock that were all eligible to participate in dividends. Securities that participate in dividends are considered “participating securities.” The Company calculates net income available to voting common shareholders using the two-class method required for capital structures that include participating securities.

~~Note~~In applying the two-class method, 16basic –net ~~Earnings~~income ~~Per~~per ~~Share~~share was calculated by dividing net income (less any dividends on participating securities) by the weighted average number of shares of common stock and participating securities outstanding for the period. Diluted earnings per share may include the additional effect of other securities, if dilutive. Potentially dilutive common stock equivalents consist of employee stock options and warrants. Unallocated common shares held by the ESOP are not included in the weighted average number of common shares outstanding for purposes of calculating earnings per common share until they are committed to be released to plan participants. The factors are used in the earnings per share computation follow:

The two-class method is used in the calculation of basic and diluted earnings per share. Under the two-class method, earnings available to common Stockholders for the period are allocated between common Stockholders and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. The factors used in the earnings per share computation follow:

Participating securities are restricted stock awards and preferred stock since they participate in common stock dividends. Stock options and warrants for 339,937 and 141,600 shares of common stock were not considered in computing diluted earnings per common share for 2023 and 2022, respectively, because they were antidilutive.

Schedule of Earning Per Share

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2023			2022			2023			2022
(dollars in thousands, except for earnings per common share amounts)	2024			2023
Basic:
Net (loss) income	$	(1,539	)	$	444
Net income (in 000s)	$	(2,275	)	$	1,004		$	(1,726	)	$	3,272
Less: convertible preferred stock dividends		—			(57	)
Less: earnings allocated to participating securities (in 000s)		8			(8	)		(110	)		(25	)
Less: earnings allocated to participating securities		4			(1	)
Net income allocated to common stockholders (in 000s)		(2,267	)		996			(1,836	)		3,247
Net income allocated to common shareholders	$	(1,535	)	$	386
Weighted-average common shares outstanding including participating securities		4,535,019			2,525,198			4,016,348			2,524,490
Basic weighted average common shares outstanding - Voting		4,127			3,473
Less: average participating securities		(14,852	)		(18,341	)		(12,099	)		(17,768	)
Basic weighted average common shares outstanding - Non-Voting		820			—
Less: average unallocated ESOP shares		(145,922	)		(151,666	)		(145,922	)		(151,666	)
Diluted weighted average common shares outstanding - Voting		4,127			3,478
Average shares		4,374,245			2,355,191			3,858,327			2,355,056
Diluted weighted average common shares outstanding - Non-Voting		820			—
Basic earnings per common share	$	(0.52	)	$	0.42		$	(0.48	)	$	1.38
Basic earnings per common share - Voting	$	(0.31	)	$	0.11
Diluted:
Basic earnings per common share - Non-Voting	$	(0.31	)		—
Net income allocated to common stockholders (in 000s)	$	(2,267	)	$	996		$	(1,836	)	$	3,247
Diluted earnings per common share - Voting	$	(0.31	)	$	0.11
Weighted-average common shares outstanding for basic earnings per common share		4,374,245			2,355,191			3,858,327			2,355,056
Diluted earnings per common share - Non-Voting	$	(0.31	)		—
Add: dilutive effects of assumed exercises of stock options		719			8,826			2,946			8,528
Add: dilutive effects of assumed exercises of warrants		—			—			—			—
Weighted-average shares and dilutive potential common shares		4,374,964			2,364,017			3,861,273			2,363,584
Diluted earnings per common share	$	(0.52	)	$	0.42		$	(0.48	)	$	1.37

3837

~~Note~~Participating securities are restricted 17stock –awards ~~Private~~and ~~Placement~~preferred stock since they participate in common stock dividends. Stock options for 112,500 and 118,820 shares of ~~Common~~common stock and ~~Preferred~~warrants ~~Stock~~totaling 211,667 and 211,667 were not considered in computing diluted earnings per common share for 2024 and 2023, because they were antidilutive.

~~In December 2022 and January~~NOTE 16 – ~~2023,~~REAL ~~the~~ESTATE Company completed one private placement of common and one private placement of preferred stock, respectively. The Company issued a total of 1,359,497 shares of common stock and 820,115 shares of convertible, non-voting Series A perpetual preferred Stock at $14.00 per share each, generating net cash proceeds of approximately $28.6 million. The Company will use the net proceeds from these private placements to fund organic growth, transact on potential acquisition opportunities, enter complementary new business lines, and to enhance capital ratios.OWNED

Real estate owned activity was as follows (dollars in thousands):

Schedule of Other Real Estate Owned

	Three months ended March 31, 2024			Three months ended March 31, 2023
Beginning balance	$	3,000		$	—
Foreclosures and additions		—			—
Loss on sale		(432	)		—
Sales		(2,568	)		—

Ending balance	$	—		$	—

As of September 30, 2023, the Bank experienced a deterioration of one large out of market commercial real estate loan which resulted in this loan becoming nonperforming. As of December 31, 2023, a $3.3 million loss was reflected in the Bank’s operating results, and the remaining $3 million balance was transferred to other real estate owned. During the three months ended March 31, 2024, the note associated with this loan was sold for $2.6 million and a $432,000 pre-tax loss was reflected in the Bank’s operating results.

At March 31, 2024, and December 31, 2023, there were no foreclosed residential real estate properties recorded as a result of obtaining physical possession of the properties. In addition, at March 31, 2024, and December 31, 2023, there were no recorded investments of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process.

NOTE 17 – PRIVATE PLACEMENT OF COMMON AND PREFERRED STOCK

In December 2022 and January 2023, the Company completed one private placement of common stock and one private placement of preferred stock, respectively. The Company issued 1,359,497 shares of common stock and 820,115 shares of convertible, non-voting Series A perpetual preferred stock at $14.00 per share each, generating net cash proceeds of approximately $28.6 million. The Company used the net proceeds from these private placements to support the acquisition of CBOA Financial, Inc. and to enhance capital ratios.

In conjunction with the private placements, the Company issued warrants to purchase up to 211,667 shares of Common Stock at a price of $14.00. The approximate fair value of the warrants was deemed immaterial by management. The Warrants are exercisable at any time after their grant date, and from time to time, in whole or in part, for 7 years from their grant dates, on December 30, 2029, and January 27, 2030. The exercise of such Warrants remains subject to certain contractual provisions and a “cashless exercise” may be executed.

Non-voting common stock – In accordance with the capital raise, and in conjunction with shareholder approval at the Annual Meeting that occurred on June 29, 2023, a class of non-voting common stock was created on July 19, 2023. On said date, the State of Maryland approved the Articles Supplementary to the Articles of Incorporation for Bancorp 34, Inc. in which a class of authorized stock containing 1,100,000 shares of non-voting common stock was established. In accordance with the stipulations established during the capital raise, the preferred stock issued during the raise was converted to the newly established class of non-voting common stock as of the date the class was created. ~~With~~Except ~~the~~for ~~exception of~~ voting privileges, the new class of non-voting common stock is treated pari passu with common stock.

~~Note~~ NOTE 18 – SUBSEQUENT ~~Subsequent Events~~EVENTS

AsIn ~~part~~early April, the remaining $50.8 million of the ~~merger~~investment ~~agreement~~portfolio ~~with~~acquired in the acquisition of CBOA, Financial, Inc., ~~the Company~~was ~~terminated~~liquidated. aA ~~contract~~portion ~~with~~of athe ~~managed~~proceeds were ~~information~~used ~~technology~~to ~~service~~pay ~~provider~~off in$20 ~~November~~million ~~2023.~~in ~~The~~borrowings ~~result~~from to the ~~Company~~Federal ~~was an~~Reserve’s ~~increase~~BTFP toplatform. ~~non-interest~~The ~~expense~~remaining ~~for~~$30.8 ~~the~~million ~~termination~~was held ~~fee~~in ofcash ~~$983,000~~to ~~during~~supplement ~~the~~on ~~fourth~~hand ~~quarter of 2023~~liquidity.

3938

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~The following is a discussion of our~~In ~~financial~~this ~~condition at September 30~~section, ~~2023~~unless ~~and December 31, 2022 and our results of operations for~~ the ~~three~~context ~~and~~suggests ~~nine months ended September 30~~otherwise, ~~2023~~references ~~and 2022. The purpose of this discussion is~~ to ~~focus~~“we,” on“us,” ~~information about~~ “our,” ~~financial condition~~ and ~~results of operations~~ ~~which~~“the isCompany” ~~not~~mean ~~otherwise~~the ~~apparent~~combined ~~from~~business ~~our consolidated financial statements and is intended to provide insight into our results~~ of ~~operations and~~Bancorp ~~financial~~34 ~~condition. The following discussion~~ and ~~analysis~~its ~~should be read along with our consolidated financial statements and related notes included in Part I~~ wholly-owned ~~Item 1 of this Quarterly Report on Form 10-Q~~subsidiary, ~~“Cautionary~~Southwest ~~Note Regarding Forward-Looking Statements”~~Heritage ~~and the risk factors discussed in our S-4 Registration Statement~~Bank.

~~Unless~~The purpose of this discussion and analysis is to focus on significant changes in: (i) the ~~context~~financial ~~otherwise~~condition ~~requires~~of Bancorp 34, Inc. and our wholly owned subsidiary, Southwest Heritage Bank, from December 31, 2023, through March 31, 2024; and (ii) on our results of operations for the ~~terms~~three ~~“we~~months ended March 31,” “2024, and 2023. This discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31,” ~~“us”~~2023, ~~refer~~included in toour ~~Bancorp~~Annual 34Report on aForm ~~consolidated~~10-K, and information presented elsewhere in this Quarterly Report on Form 10-Q, particularly ~~basis.~~the unaudited consolidated financial statements and related notes appearing in Item 1.

Overview

Bancorp 34, headquartered ~~Inc.~~in Scottsdale, aArizona, ~~bank~~is the holding company ~~headquartered~~for inSouthwest ~~Scottsdale~~Heritage Bank (formerly Bank 34). On March 19, ~~Arizona~~2024, Bancorp ~~provides~~34 aacquired ~~full~~CBOA ~~spectrum~~Financial, ofInc. ~~deposit,~~(“CBOA”). ~~lending~~Immediately following the acquisition, ~~treasury management~~CBOA’s wholly-owned subsidiary, Commerce ~~and~~Bank ~~online~~of ~~banking~~Arizona, ~~products~~was merged with and ~~services~~into ~~through~~Bancorp ~~its~~34’s wholly-owned subsidiary—, Bank 34, a federally chartered stock covered savings association. ~~Bancorp~~ Bank 34 ~~manages~~was ~~its~~subsequently ~~operations~~rebranded as ~~one~~Southwest ~~unit~~Heritage Bank. Southwest Heritage Bank provides a variety of banking services to individuals and businesses through its eight full-service community bank branches, three in Maricopa County, Arizona, in the cities of Scottsdale and ~~thus~~Gilbert; ~~does~~three ~~not~~in ~~have~~Pima ~~separate~~County, ~~operating~~Arizona, ~~segments.~~in ~~Our~~the ~~common~~cities ~~stock~~of isTucson ~~currently~~and Green Valley; ~~quoted~~one onbranch in Otero County, New Mexico in the ~~OTC~~city ~~Markets~~of ~~Groups,~~Alamogordo; ~~Inc.’s~~and ~~OTCQB~~one ~~Venture~~branch ~~Market~~in ~~under~~Dona Ana County New Mexico, in the ~~symbol~~city ~~“BCTF~~of Las Cruces.”

~~Bank 34~~We ~~offers~~offer a full range of ~~specialized financial services to business customers as well as~~ relationship-focused services to meet ~~personal,~~ our clients’ business and personal financial objectives ~~for its customers. Bank 34 operates three full-service banking centers~~, ~~one~~with ~~each~~branches in ~~Otero~~Arizona and ~~Dona Ana counties in~~ New Mexico ~~and one in Maricopa County, Arizona~~. ~~Bank~~Our ~~34’s~~product ~~main~~lines ~~office~~include ~~and~~commercial ~~corporate headquarters is located in Scottsdale~~loans, ~~Arizona. Bank 34’s business model focuses on two primary areas. The~~ commercial ~~focus~~real isestate ~~on the credit~~loans, ~~deposit~~ and ~~treasury~~a ~~management~~variety ~~needs~~ of ~~small businesses~~ commercial and ~~real~~consumer ~~estate~~deposit ~~professionals~~products, ~~and~~including ~~investors.~~noninterest ~~Bank~~bearing ~~34 originates conventional~~accounts, ~~SBA and USDA loans within its primary market areas. Commercial loan types offered include: owner and non~~interest-~~owner~~bearing ~~occupied real~~demand ~~estate (including construction loans)~~products, ~~multi-family~~savings ~~loans~~accounts, ~~and~~money market ~~commercial~~accounts and ~~industrial~~certificates ~~loans~~of deposit. ~~The~~We ~~consumer~~also ~~focus~~offer ~~is on deposit,~~ online banking and ~~ancillary~~bill ~~financial~~payment ~~service~~services, ~~needs~~online ofcash ~~families~~management, ~~and businesses served by Bank 34. While most of Bank~~safe ~~34’s~~deposit ~~real~~box ~~estate~~rentals, ~~loans~~debit ~~are~~card ~~secured~~and byATM ~~properties~~card inservices and the ~~counties~~availability ~~served~~of bya ~~its~~network ~~branch offices, it does business in other areas~~ of ~~New~~ATMs ~~Mexico,~~for ~~Arizona~~our ~~and the United States~~customers.

~~Bank~~Bancorp 34 ~~originates~~generates ~~deposits~~most ~~from~~of its ~~business~~income from interest income on loans, investment securities and ~~consumer~~deposits ~~customers~~in ~~predominantly~~other ~~from~~financial ~~the~~institutions, and ~~areas~~service ~~where~~charges ~~its~~on ~~branch~~customer ~~offices~~accounts. ~~are~~Bancorp ~~located~~34 incurs interest expense on deposits and other borrowed funds and noninterest expenses such as salaries and employee benefits, occupancy expenses, and technology expenses. Net interest income is the largest ~~Bank~~source of Bancorp 34’s ~~emphasis~~revenue. Net interest spread is onthe ~~generating~~difference ~~business~~between ~~operating~~rates ~~accounts~~earned on interest-earning assets and rates ~~consumer~~paid ~~checking~~on interest-bearing liabilities. Net interest margin is calculated as net interest income divided by average interest-earning assets. Because noninterest-bearing sources of funds, such as noninterest-bearing deposits and ~~money~~shareholders’ ~~market~~equity, ~~accounts~~also fund interest-earning assets, net interest margin includes the benefit of these noninterest-bearing sources.

AsChanges in the market interest rates and interest rates Bancorp 34 earns on interest-earning assets or pays on interest-bearing liabilities, as well as the volume and types of ~~September~~interest-earning 30assets, ~~2023~~interest-bearing and noninterest-bearing liabilities, weand ~~had~~shareholders’ equity, ~~total~~are ~~assets~~usually the largest drivers of ~~$580.9~~periodic ~~million,~~changes ~~total~~in net ~~loans~~interest ofspread, ~~$471.8~~net ~~million~~interest margin, ~~total~~and ~~deposits~~net ofinterest ~~$468~~income.4 Fluctuations ~~million~~in market interest rates are driven by many factors, including governmental monetary policies, inflation, deflation, macroeconomic developments, changes in unemployment, the money supply, political and ~~total~~international ~~stockholders’~~conditions, ~~equity~~and ofconditions in ~~$60~~domestic and foreign financial markets.4 ~~million~~Periodic changes in the volume and types of loans in Southwest Heritage Bank’s loan portfolio are affected by, among other factors, economic and competitive conditions in Arizona and New Mexico, as well as developments affecting the real estate, technology, financial services, insurance, transportation, manufacturing and homebuilding sectors within Southwest Heritage Bank’s target market.

~~Our~~Bancorp ~~goal~~34 ~~is to~~manages ~~build~~its aoperations ~~premier regional bank serving the key markets of South Central Arizona~~ as ~~well~~one ~~as Southern New Mexico~~unit, ~~primarily by investing in people, technology~~ and ~~infrastructure~~thus todoes ~~create~~not ahave ~~top-tier~~separate ~~banking~~operating ~~platform~~segments. Our business is focused on providing specialized commercial and consumer banking services to our clients, with an emphasis on key growth markets. Our unwavering commitment to serving local communities has led to a high-quality core deposit franchise focused in stable and growing markets that provides a low-cost funding base for our lending opportunities. In addition, our growing treasury management businesses provide revenue diversification and fee income generation.

Leverage our Relationships and Service Capabilities to Drive Organic Growth. Our core competencies include a relationship-centered and multi-line sales approach, a focus on collaboration across a highly skilled and seasoned team of bankers and a dynamic ability to provide our clients with the highest quality services and solutions. This strategy has enabled us to attract business customers across our traditional and expanded geographic footprint. The objective is to be a trusted advisor to our clients as they build their businesses with our resources, support and advice. Successful growth has been achieved in both loans and core deposits over the past three fiscal years.39

Critical Accounting Estimates

Our consolidated financial statements are prepared based on the application of accounting policies in accordance with generally accepted accounting principles, or “GAAP,” and follow general practices within the banking industry. These policies require the reliance on estimates, assumptions and judgments, which may prove inaccurate and are subject to variations. Changes in underlying factors, estimates, assumptions or judgements could have a material impact on our future financial condition and results of operations.

Certain policies inherently have a greater reliance on the use of estimates, assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. We have identified the determination of the allowance for credit losses and fair value measurements to be the accounting areas that require the most subjective or complex judgments and, as such, could be most subject to revision as new or additional information becomes available or circumstances change, including overall changes in the economic climate and/or market interest rates. Therefore, we consider these policies, discussed below, to be critical accounting estimates and discuss them directly with the Audit Committee of our board of directors.

Our significant accounting policies are presented in our audited consolidated financial statements, Note 1—Nature of Operations and Significant Accounting Policies, for the year ended December 31, 2023, included in our Annual Report on Form 10-K. These policies, along with the disclosures presented in the other financial statement notes and, in this discussion, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined. Recent accounting pronouncements and standards that have impacted or could potentially affect us are also discussed in Note 1 of our audited consolidated financial statements, included in our 2023 Annual Report on Form 10-K.

Allowance for credit losses

One significant accounting policy is our accounting policy related to the allowance for credit losses (“ACL”). Effective January 1, 2023, we adopted ASU 2016-13, Financial Instruments – Measurement of Current Expected Credit Losses on Financial Instruments (“CECL”), using the modified retrospective method for our financial assets measured at amortized cost. CECL changed our method of accounting for credit losses from an incurred loss model to an expected credit loss model. Under the prior incurred loss model, credit losses on financial instruments were recognized when a probable loss was incurred, while CECL is an “expected credit loss” model. The expected credit loss model represents management’s estimate of expected credit losses to the full contractual maturity of the financial asset and is based on historical experience, current conditions, and reasonable and supportable forecasts. We believe the determination of the ACL involves a greater amount of judgment and complexity when compared with our other significant accounting policies.

Qualitative factors are used in the CECL model to address various internal and external factors that may not be captured by the quantitative modeling or historical data needed to assess the expected credit losses. Qualitative factors considered include, but may not be limited to, the following: lending policies and procedures; changes in underwriting standards; nature and volume of financial assets; changes in lending staff; volume and severity of past due or adversely classified assets; changes in collateral values; and the internal credit review function.

The Company uses a 12-month forecast that is reasonable and supportable within the ACL calculation and then reverts to historical credit loss experience on a straight-line basis over a one-year timeline. Historical credit loss experience is then used for the remaining life of the assets. The Company uses several economic variables in the calculation of the ACL, the most significant of which is the economic forecast for the national unemployment rate. In the March 31, 2024, estimate, the Company assumed a forecasted unemployment rate of 4.5%, which has improved from the December 31, 2023, forecasted rate of 4.7%. Changes in the economic forecast for unemployment rates could significantly affect the estimated credit losses which could potentially lead to materially different ACL levels from one reporting period to the next.

For our bank, CECL requires a separate ACL for each of: (i) loans held-for-investment; (ii) unfunded commitments; and (iii) held-to-maturity debt securities.

ACL – Loans held-for-investment

The level of the ACL on loans held-for-investment is calculated to maintain a credit loss reserve level that management considers sufficient to absorb estimated credit losses. Management’s determination of the adequacy of the ACL is based on the periodic evaluation of borrowers’ abilities to make loan payments, local and national economic conditions, and other subjective factors. The evaluation has subjective components requiring significant estimates that include default probabilities, expected loss given default, and estimated credit losses based on historical credit loss experience and forecasted economic conditions. All these factors may be susceptible to significant change and when actual results differ from the estimates, additional provisions for credit losses may be required, which would adversely impact profitability.

The ACL for pooled loans is estimated using a non-discounted cash flow methodology. The Bank then applies probability of default and loss given default to the cashflow methodology to calculate expected losses within the model. This allows the Bank to identify the timing of default as compared to when the actual loss event may occur. The results are then aggregated to produce segment level results and reserve requirements for each segment. The quantitative model also incorporates forward-looking macroeconomic information over a reasonable and supportable period of twelve months with a reversion to historical losses occurring on straight line basis over the next 12 months.

~~Continue~~Qualitative adjustments to ~~grow~~historical ~~our~~loss ~~core~~data ~~deposit~~are ~~franchise. The~~made ~~strength~~based ofon ~~our~~management’s ~~deposit~~assessment ~~franchise~~of isthe ~~derived~~risks ~~from~~that ~~strong,~~may ~~lasting~~lead ~~relationships with~~to ~~our~~a ~~clients~~future ~~and~~loan loss aor ~~focus~~differences onin ~~being~~current anloan-specific ~~integral~~risk ~~part~~characteristics ofsuch ~~the~~as ~~communities~~differences. ~~where~~A weratings doscale ~~business.~~is ~~Our~~used ~~deposit~~to ~~footprint~~tie ~~has~~risk ~~provided,~~metrics ~~and~~within welending ~~believe~~policies ~~will~~and ~~continue~~procedures, toeconomic ~~provide,~~factors ~~principal~~note ~~support~~encompassed ~~for~~in the ~~growth~~quantitative ofmodel, ~~our~~changes ~~loan~~in ~~portfolio.~~nature As of ~~September~~the volumes ~~30,~~and ~~2023,~~terms ~~core deposits~~of loans, ~~which~~changes wein ~~define~~the asvolume ~~total~~and ~~deposits~~severity ~~less certificates~~ of ~~deposit~~past ~~greater~~due ~~than $250~~assets,~~000~~ ~~and~~concentrations ~~brokered~~within ~~deposits~~the ~~comprised 85~~loan portfolio.2% ofAdditional factors ~~total~~such ~~deposits~~staffing, ~~driving~~loan areview, ~~total~~collateral ~~average~~values, ~~deposit~~regulatory, ~~cost~~legal, ofand ~~2.53%~~technological ~~for~~risks ~~the~~are ~~quarter~~also ~~ended~~reviewed ~~September~~on ~~30,~~a ~~2023~~more qualitative basis. AThe ~~key~~ratings ~~element of~~scale ~~our~~used ~~funding~~in ~~strategy~~the isqualitative amodeling ~~focus~~is onderived ~~commercial~~from ~~and~~the ~~consumer~~Bank’s ~~banking~~historical ~~relationships~~loss percentages in ~~our~~which ~~markets,~~the ~~specifically~~highest ~~growing~~risk ~~traditional commercial~~metrics ~~and~~would ~~industrial~~align ~~relationships.~~with ~~Additionally,~~the wehighest ~~believe~~historical ~~our~~loss ~~growing~~percentages ~~treasury~~adjusted ~~management~~for ~~business~~the ~~will~~expected ~~continue~~life toof ~~benefit~~the ~~our~~current ~~attractive funding base~~portfolio.

~~Continue~~Management has ~~our~~determined ~~greater~~that ~~Arizona~~calculating ~~and~~an ~~New~~ACL ~~Mexico~~amount ~~market~~for ~~expansion. The~~accrued ~~greater~~interest ~~Phoenix~~receivable ~~market~~on ~~has~~loans ~~been~~held-for-investment awould ~~top~~not ~~strategic~~be ~~priority for~~significant, ~~our~~and ~~organization~~this is excluded from anour ~~organic~~estimate ~~and~~of ~~acquisition~~credit ~~perspective~~losses for loans held-for-investment. ~~The~~Additionally, ~~Arizona~~we ~~market~~write ~~has~~off ~~been~~applicable ~~our~~accrued interest ~~fastest~~receivable ~~growing~~balances ~~market~~in ~~and~~a ~~its~~timely ~~robust~~manner when a loan is placed on non-accrual status, in which any accrued interest, not ~~economy~~received ~~will~~in ~~allow~~cash, ~~for~~is ~~further~~reversed ~~growth~~from ~~opportunity~~interest income.

~~Engage~~The ACL also inexcludes ~~Opportunistic~~loans ~~M&A. Our~~held-for-sale ~~executive~~and ~~team~~loans ~~will~~accounted ~~continue~~for tounder ~~evaluate~~the ~~acquisitions~~fair ~~that~~value weoption. ~~believe~~Assets ~~could~~purchased ~~produce~~with ~~attractive returns~~credit ~~for~~deterioration ~~our~~(“PCD”) assets ~~stockholders.~~represent ~~These~~assets ~~could~~that ~~include~~are ~~fee-based~~acquired ~~businesses,~~with ~~whole~~evidence ~~bank~~of ormore ~~branch~~than ~~acquisitions~~insignificant ~~that~~credit ~~would~~quality ~~improve~~deterioration orsince origination ~~expand~~at ~~our~~the ~~market~~acquisition ~~position~~date. ~~into~~At ~~geographies~~acquisition, ~~with~~the ~~attractive~~allowance ~~demographics~~for ~~and~~credit ~~business~~losses ~~trends,~~on ~~expand~~PCD ~~our~~assets ~~existing~~is ~~branch~~booked ~~network~~directly to the ACL. Any subsequent changes in ~~existing~~the ~~markets,~~ACL ~~enhance~~on ~~our~~PCD ~~earnings~~assets ~~power~~is orrecorded ~~product~~through ~~and~~the ~~service~~provision ~~offerings~~for credit losses.

~~As a~~The ~~general~~ACL ~~matter,~~is ~~our interest~~a contra-~~bearing~~asset ~~liabilities~~on ~~reprice or mature more quickly than~~ our ~~interest-earning~~balance ~~assets,~~sheet

Filing Compare · Bancorp 34, Inc.