Bancorp 34, Inc. and CBOA Financial, Inc. Agree to Combine to Create the Largest Community Bank Headquartered in Arizona

SCOTTSDALE, AZ, JANUARY. 27, 2023 – EIN NEWS

On April 27, 2023, Bancorp 34, Inc. (OTCQB: BCTF) (“BCTF”), the holding company of Bank 34, and CBOA Financial, Inc. (OTCPK: CBOF) (“Commerce”), the holding company of Commerce Bank of Arizona, jointly announced the signing of a definitive merger agreement to combine and form the second largest bank headquartered in Arizona.

Under the terms of the definitive merger agreement, Commerce shareholders will receive 0.24 shares of BCTF common stock for each share of Commerce common stock they own. Based on BCTF’s stock price of $11.25 as of market close on April 26, 2023, the price per share for Commerce shareholders would be $2.70, or approximately $28 million in aggregate deal value. The value of the per share consideration received by Commerce shareholders will rise and fall based on the value of BCTF shares. BCTF shareholders will own approximately 65%, and Commerce shareholders will own approximately 35%, of the pro forma company.

Jim Crotty, CEO of BCTF, said, “This is an exciting combination that will accelerate both companies’ strategic goals by enhancing our ability to serve our customers. Higher lending limits will allow us to tap new opportunities and grow stronger relationships with our existing customers, while increased scale will allow us to more efficiently meet the needs of all our stakeholders. I am excited to partner with the Commerce team and believe we will do great things together.”

Chris Webster, CEO of Commerce, said, “This unique strategic merger is the culmination of months and months of collaboration and consideration with BCTF’s fantastic team. The opportunity to combine the strengths of both management groups while capitalizing on conditions in some of the most exciting markets in the country is very compelling. Together this company will be positioned to fill a prominent role in the southwest banking landscape and we couldn’t be more excited to get started.”

Merger Highlights

• Transformational Earnings Per Share Accretion. Expected annual earnings per share accretion of approximately 50%

• Complementary Leadership Team. The combined leadership team will consist of members from BCTF and Commerce and will bring years of financial services experience and a shared vision to the combined company.

• Robust Capital Levels. The pro forma company is expected to be well capitalized at close with holding company TCE/TA in excess of 8% and a bank level leverage ratio of nearly 11%.

• TBVPS Dilution Discipline. TBVPS dilution of roughly 14% expected at close with an expected earnback period of approximately 3 years.

Directors and Officers

Following closing, the combined company’s Board of Directors will be reduced to eight members, five from the existing BCTF Board (including Jim Crotty) and three from Commerce’s current Board (including Chris Webster). All three members of the Commerce executive management team will join the pro forma management team. Jim Crotty will serve as the CEO of the pro forma company, while Chris Webster will serve as the President, Paul Tees as the Chief Credit Officer and Evan Anderson as the Chief Information Officer and Chief Risk Officer. Additionally, the other members of BCTF’s senior management team are expected to remain in their current roles.

Approval and Timing

The merger is expected to close in the fourth quarter of 2023, subject to the satisfaction of customary closing conditions, including the receipt of regulatory approvals and approvals of shareholders of each company.

MJC Partners, LLC, served as the financial advisor to BCTF with Nelson Mullins Riley & Scarborough LLP serving as legal advisor. Piper Sandler & Co. served as financial advisor to Commerce with Otteson Shapiro LLP serving as legal advisor.

About Bancorp 34, Inc.

Bank 34 is a wholly owned subsidiary of Bancorp 34, Inc. Shares of Bancorp, 34, Inc. common stock trade on the OTCQB market under the symbol “BCTF” with headquarters in Scottsdale, Arizona. We are a community bank founded in 1934 with locations in Scottsdale, Arizona and Alamogordo and Las Cruces, New Mexico. Our customers desire a refreshing and more intimate alternative to the large banks, coupled with a more proven track record than the newer small banks. We offer true relationship banking and do more to earn your business.

About CBOA Financial, Inc.

Commerce Bank of Arizona, established in 2002 in Tucson, Arizona, is a full-service community bank that caters to small-to mid-sized businesses and real estate professionals. CBAZ offers commercial clients with a variety of services ranging from U.S. Small Business Administration (SBA) financing solutions, construction loans, and commercial real estate loans. CBOA Financial, Inc. is a single-bank holding company and parent of the Bank. The company’s stock is quoted on the OTC Pink market under the symbol “CBOF.”

About MJC Partners, LLC

MJC Partners, LLC is a leading Los Angeles-based boutique investment banking and advisory firm providing a full range of strategic, transactional and valuation-related services to clients across multiple industry groups with a focus on financial institutions, blockchain, and fintech companies. For more information about MJC Partners, visit www.mjcpartners.com.