Form 8-K - Current report

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

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

 

Date of Report (Date of earliest event reported): December 21, 2023

 

Bancorp 34, Inc.

(Exact name of registrant as specified in its charter)

 

Maryland		333-273901		74-2819178
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification Number)

 

8777 E. Hartford Drive, Suite 100 Scottsdale, Arizona		85255
(Address of principal executive offices)		(Zip Code)

 

[phone]

Registrant’s telephone number, including area code

 

Not Applicable

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

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☒	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		BCTF		OTCQB Venture Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry Into A Material Definitive Agreement.

 

Amendment to Agreement and Plan of Merger

 

Reference is made to the Agreement and Plan of Merger (the “Merger Agreement”) by and between Bancorp 34, Inc. (the “Company”) and CBOA Financial, Inc. (“CBOA”) dated as of April 27, 2023. The Merger Agreement was included as Annex A to the proxy statement prospectus contained in the Company’s Registration Statement on Form S-4 (the “Registration Statement”) filed with the Securities and Exchange Commission (“SEC”) on August 11, 2023 and is incorporated herein by this reference. Capitalized terms used in this report without definition shall have the meanings assigned to them in the Merger Agreement.

 

On December 21, 2023, the Company and CBOA executed Amendment No. 1 to Agreement and Plan of Merger (the “Amendment”) to: (1) revise the Exchange Ratio for common stock to be received by CBOA shareholders upon consummation of the Merger from 0.24 shares of Company common stock to 0.2628 shares of Company common stock for each share of CBOA common stock issued and outstanding; and (2) revise the Outside Date from April 27, 2024 to June 28, 2024 and delete the automatic extension of the Outside Date to June 11, 2024 if all conditions to the Merger have been met other than the receipt of regulatory approvals required to consummate the Merger.

 

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by the terms and conditions of the Amendment, a copy of which is attached hereto as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 2.02

Results of Operations and Financial Condition.

 

On November 7, 2023, prior to the effectiveness of the Registration Statement, the Company issued a press release announcing its third quarter 2023 financial results (the “Original Earnings Release”). A copy of the Original Earnings Release was filed by the Company with the SEC pursuant to Rule 425 on November 13, 2023 and is incorporated herein by this reference. On December 22, 2023, the Company issued the press release that is furnished as Exhibit 99.1 to this Current Report on Form 8-K revising the Original Earnings Release (the “Revised Earnings Release”) to account for an increase in its provision for loan losses taken to reserve for one commercial real estate credit which was placed on non-accrual status. Following continued review of the credit by the Company, as described in the Revised Earnings Release, the Company determined that the credit should be placed on non-accrual status as of September 30, 2023, resulting in the revised third quarter financial results.

 

Additional Information About the Merger and Where to Find It

 

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

 

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

 

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

PARTICIPANTS IN THE TRANSACTION

 

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

 

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

 

Item 9.01

Financial Statements and Exhibits.

 

(d)	Exhibits.
2.1	Amendment No. 1 to Agreement and Plan of Merger, dated December 21, 2023, by and between Bancorp 34, Inc. and CBOA Financial, Inc., to Agreement and Plan of Merger, dated as of April 27, 2023
99.1	Press Release dated December 22, 2023 (furnished only)
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: December 22, 2023	BANCORP 34, INC.
	By:	/s/ James Crotty
	Name:	James Crotty
	Title:	President and Chief Executive Officer

Execution Version

 

AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER

This AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER, dated as of December 21, 2023 (this “Amendment”), is by and between Bancorp 34, Inc., a Maryland corporation (“B34”) and CBOA Financial, Inc., an Arizona corporation (“CBOA” together with B34, the “Parties”).

WITNESSETH:

WHEREAS, the Parties have heretofore entered into that certain Agreement and Plan of Merger, dated as of April 27, 2023 (the “Merger Agreement”);

WHEREAS, Section 10.4 of the Merger Agreement provides that the Merger Agreement may be amended in writing by the Parties; and

WHEREAS, the Parties desire to amend the Merger Agreement in certain respects as set forth in this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the Parties agree as follows:

1.             Defined Terms. Capitalized terms used but not otherwise defined in this Amendment shall have the meanings given to such terms in the Merger Agreement.

2.             Amendment of Section 3.1(a) of the Merger Agreement. Section 3.1(a) of the Merger Agreement is hereby amended and restated in its entirety as follows:

“At the Effective Time, subject Section 3.6, by virtue of the Merger and without any action on the part of the Parties, each share of CBOA Common Stock that is issued and outstanding immediately prior to the Effective Time (other than the Extinguished Shares and Dissenting Shares, if any) shall be converted into the right to receive 0.2628 (the “Exchange Ratio”) duly authorized, validly issued, fully paid and non-assessable shares of B34 Common Stock (the “Merger Consideration”).”

3.             Amendment of Section 9.1(f) of the Merger Agreement. Section 9.1(f) of the Merger Agreement is hereby amended and restated in its entirety as follows:

“by either B34 or CBOA if the Merger shall not have been consummated on or before June 28, 2024 (the “Outside Date”), unless the failure of the Closing to occur by such date shall be due to a material breach of this Agreement by the Party seeking to terminate this Agreement; provided, however, that the Outside Date may be extended by the mutual written agreement of the Parties; or

4.             Disclosure Memorandum. In connection with this Amendment, B34 has supplemented the B34 Disclosure Memorandum (the “B34 Disclosure Memorandum Supplement”), a copy of which has been delivered to CBOA, and CBOA, by execution of this Amendment, hereby acknowledges receipt of the B34 Disclosure Memorandum Supplement.

5.             Limited Effect. Except as specifically amended hereby, the terms and provisions of the Merger Agreement shall continue and remain in full force and effect and the valid and binding obligation of the Parties in accordance with its terms. All references in the Merger Agreement to the “Agreement” shall be deemed for all purposes to refer to the Merger Agreement, as amended hereby.

6.             Miscellaneous. Section 10.8 (Governing Law), Section 10.9 (Counterparts), Section 10.11 (Interpretations) and Section 10.13 (Severability) of the Merger Agreement shall apply to this Amendment, mutatis mutandis.

[signature pages follow]

1

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed in counterparts by their respective officers thereunto duly authorized as of the date first above written.

 

	BANCORP 34, INC.
	By:	/s/ James Crotty
	Name:	James Crotty
	Title:	President and Chief Executive Officer

 

[Signature Page to Amendment No. 1 to Agreement and Plan of Merger]

 

	CBOA FINANCIAL, INC.
	By:	/s/Chris Webster
	Name:	Chris Webster
	Title:	President and Chief Executive Officer

 

[Signature Page to Amendment No. 1 to Agreement and Plan of Merger]

 

Filed by Bancorp 34, Inc.

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12 under

of the Securities Exchange Act of 1934

Subject Company: CBOA Financial, Inc.

Commission File No. 001-37912

 

 

BANCORP 34, INC.	Contact: Kevin Vaughn
8777 E. HARTFORD DRIVE	Chief Financial Officer
SUITE 100	[phone]
SCOTTSDALE, AZ 85255	[e-mail]

Bancorp 34, Inc.

Reports Revised 3rd Quarter Performance,

Amends Merger Agreement with CBOA Financial, Inc.

 

Scottsdale, Ariz., Dec. 22, 2023/PRNewswire/ – Bancorp 34, Inc. (OTCQB: BCTF), the parent company for Bank 34, together, the “Company” today reported revised third quarter of 2023 performance.

 

Due primarily to a provision taken to the loan loss reserve for one commercial real estate credit which was placed on non-accrual status on September 30, 2023, the Company reported a revised third quarter 2023 net loss of $2,275,000 or negative $0.52 per diluted share, compared to previously reported third quarter 2023 net income of $3,000 or $0.00 per diluted share. The Company reported a net loss of $1,726,000 or $0.48 per diluted share for the first nine months of 2023 compared to net income of $552,000 or $0.11 per diluted share as previously reported.

 

The reserve for the troubled credit was deemed necessary as the Company progressed through the legal channels required to manage the credit effectively. As management gathered additional information and conducted additional due diligence, the determination was made that the deterioration in the credit and its real estate collateral’s value had been present at September 30, 2023, resulting in the revised third quarter financial statements.

 

As a result of the additional provision taken to the loan loss reserve in the third quarter of 2023, the Company and CBOA Financial, Inc. have amended the merger agreement between the parties to revise the exchange ratio for common stock to be received by CBOA shareholders upon consummation of the merger from 0.24 shares of Company common stock to 0.2628 shares of Company common stock for each share of CBOA common stock issued and outstanding. The parties also agreed to extend the outside closing date of the merger to June 28, 2024.

Jim Crotty, CEO of the Company commented, “While we had to address a single isolated credit with a specific reserve in the third quarter, significant progress has been made towards completing the merger with CBOA Financial, Inc. (“CBOA”). Both the Company and CBOA anticipate seeking shareholder approval of the merger, and the merger becoming effective, in the 1^st quarter of 2024. The excitement is high amongst our team members as we prepare for this next chapter as a combined best in class bank.”

 

Additional Information About the Merger and Where to Find It

 

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

 

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

 

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

 

PARTICIPANTS IN THE TRANSACTION

 

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

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

 

FORWARD-LOOKING STATEMENTS - Certain statements herein that are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions and in this press release include our expectations regarding shareholder approval for and completion of the merger with CBOA. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, possible delays in the effectiveness of any amendments required to the Company’s registration statement on Form S-4 regarding the merger, the failure of either the Company’s or CBOA’s shareholders to approve the merger or the failure of other conditions to the merger, and general economic conditions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Forward-looking statements speak only as of the date they are made, and we assume no obligation to update any of these statements in light of new information, future events or otherwise unless required under federal securities laws.

BANCORP 34, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

(in 000s)

 

		Sep. 30, 2023				Dec. 31, 2022
ASSETS
Total cash and cash equivalents		$	14,538			$	16,947
Available-for-sale securities, at fair value			53,362				58,582
Held-to-maturity securities, amortized cost, net			5,765				5,832
Loans held for investment, net			471,825				458,582
Other Assets			35,378				34,397
TOTAL ASSETS		$	580,868			$	574,340
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Total deposits		$	468,391			$	487,587
Other Borrowings			18,000				5,000
Sub Debt			24,581				24,531
Accrued interest and other liabilities			9,494				7,984
Total liabilities			520,466				525,102
Total stockholders’ equity			60,402				49,238
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	580,868			$	574,340
Tangible Book Value Per Share		$	12.87			$	13.85
Equity to Assets			10.40	%			8.57	%
Non-Performing Assets to Total Assets			1.71	%			0.73	%
Shares Outstanding			4,694,810				3,554,455

BANCORP 34, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)

(in 000s)

 

		Nine Months Ended Sep. 30,								Three Months Ended Sep. 30,
		2023				2022				2023				2022
Total interest income		$	20,719			$	17,435			$	7,173			$	6,062
Total interest expense			9,129				3,019			$	3,468			$	1,498
Net interest income			11,590				14,416				3,705				4,564
Provision for credit losses			3,280				780				3,147				125
Total noninterest income			529				386				164				142
Total noninterest expense			10,991				9,698				3,600				3,256
Pre-Tax Income			(2,152	)			4,324				(2,878	)			1,325
Provision for income taxes			(426	)			1,052				(603	)			321
NET INCOME		$	(1,726	)		$	3,272			$	(2,275	)		$	1,004
Diluted EPS		$	(0.48	)		$	1.37			$	(0.52	)		$	0.42
Return on Average Assets			-0.40	%			0.77	%			-1.55	%			0.70	%
Return on Average Equity			-3.68	%			10.97	%			-14.08	%			10.64	%
Net Interest Margin			2.82	%			3.55	%			2.66	%			3.31	%

Cover	Dec. 21, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 21, 2023
Entity File Number	333-273901
Entity Registrant Name	Bancorp 34, Inc.
Entity Central Index Key	0001668340
Entity Tax Identification Number	74-2819178
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	8777 E. Hartford Drive
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Scottsdale
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85255
City Area Code	(623)
Local Phone Number	334-6064
Written Communications	true
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false

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