Announcement • Mar 20

Bancorp 34, Inc. (OTCPK:BCTF) completed the acquisition of CBOA Financial, Inc. (OTCPK:CBOF).

Bancorp 34, Inc. (OTCPK:BCTF) entered into a definitive merger agreement to acquire CBOA Financial, Inc. (OTCPK:CBOF) for $28.3 million on April 26, 2023. Under the terms of the agreement, CBOA shareholders will receive 0.24 shares of Bancorp common stock for each share of CBOA common stock they own. The value of the per share consideration received by Commerce shareholders will rise and fall based on the value of BCTF shares. Under the merger agreement, CBOA will merge with and into Bancorp 34, with Bancorp 34 remaining as the surviving entity. Immediately following the completion of the merger, CBOA’s wholly-owned subsidiary, Commerce Bank of Arizona, an Arizona chartered banking corporation, will merge with and into Bancorp 34’s wholly-owned subsidiary, Bank 34, a covered savings association, with Bank 34 as the surviving bank. BCTF shareholders will own approximately 65%, and CBOA shareholders will own approximately 35%, of the pro forma company. As of December 21, 2023, Bancorp 34 and CBOA executed Amendment No. 1 to Agreement and Plan of Merger 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. Following closing, 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 and 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 CBOA's current Board (including Chris Webster). Commerce and Bank 34 will keep their current branches and employees, and the banks will operate under a new name that has yet to be decided, as per Paul Tees, Tucson market president and chief credit officer at Commerce Bank. All three members of the CBOA executive management team will join the pro forma management team. Jim Crotty will serve as the Chief Executive Officer 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. In case of termination of agreement, CBOA will pay BCTF a termination fee of $1,200,000 and BCTF will pay CBOA a termination fee of $1,200,000. The transaction is subject to the satisfaction of customary closing conditions, including the approval of the merger agreement by the requisite vote of CBOA and BCTF shareholders; the receipt and effectiveness of the requisite regulatory approvals and the expiration of all statutory waiting periods in respect thereof; effectiveness of the registration statement on Form S-4; authorization of the Bancorp 34 common stock to be issued in the merger for listing on the primary exchange; receipt by each party’s tax advisors of an opinion that (a) the merger will be treated as a reorganization within the meaning of Section 368(a) of the Code; holders of no more than 7.5% of the issued and outstanding shares of CBOA Common Stock shall have taken the actions required under the ABCA to qualify their CBOA Common Stock as Dissenting Shares. The CBOA board of directors and BCTF board of directors have unanimously approved the merger agreement and unanimously recommends that their respective shareholders vote for the merger. The transaction is expected to close in the fourth quarter of 2023. As of October 16, 2023, BCTF and CBOA expect to complete the merger in the first quarter of 2024. As per filling on March 8, 2024, BCTF and CBOA expect to complete the merger later this month. The transaction has transformational Earnings Per Share Accretion i.e., expected annual earnings per share accretion of approximately 50%. MJC Partners, LLC acted as financial advisor and provided fairness opinion to BCTF Board. J. Brennan Ryan, John M. Willis, Maurice D. Holloway, Benjamin A. Barnhill and Ann E. Murray of Nelson Mullins Riley & Scarborough LLP acted as legal advisors to BCTF. Adam Keefer and Chris Sieck of Piper Sandler & Co. acted as financial advisor and provided fairness opinion to CBOA Board. Christian Otteson and Bo Anderson of Otteson Shapiro LLP acted as legal advisors to CBOA. Piper Sandler will receive a fee for financial advisory services in an amount equal to 2.00% of the aggregate purchase price, which advisory fee is contingent upon the closing of the merger. At the time of announcement of the transaction Piper Sandler’s fee was approximately $662,000. Piper Sandler also received a $100,000 fee from CBOA upon rendering its opinion, which opinion fee will be credited in full towards the advisory fee which will become payable to Piper Sandler upon closing of the transaction. MJC received a fee of $100,000 for rendering its written opinion to the BCTF board of directors. This fee is creditable against a transaction success fee equal to $400,000 which MJC will be entitled to receive if the merger is completed. Bancorp 34, Inc. (OTCPK:BCTF) completed the acquisition of CBOA Financial, Inc. (OTCPK:CBOF) on March 19, 2024.

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Bancorp 34, Inc. (OTCPK:BCTF) completed the acquisition of CBOA Financial, Inc. (OTCPK:CBOF).

Bancorp 34, Inc. (OTCPK:BCTF) completed the acquisition of CBOA Financial, Inc. (OTCPK:CBOF).

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