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Southwest Heritage Bank

Scottsdale, AZ · Cert 29087 · Bancorp 34 Inc.

SL · OCC · 8 branches

Q2 2026

Board Package

Performance Trends and Peer Comparison

Part 1Performance Trends, own institution only2
Part 2Peer Comparison, banks under $1B in assets3

Basis

Quarter: Q2 2026, the quarter ended June 30, 2026, on both parts.

Income statement: year to date as filed, annualized, on both parts.

Balance sheet: as filed at quarter end.

Peer group

Banks under $1B in assets (n=581 to 629). Each measure ranks only the institutions that reported it, so n varies by measure.

Peer groups below the disclosure floor are suppressed.

Peer standing

Capital

66

Q2 2024Q2 2026peer median (50)

Asset Quality

25

Q2 2024Q2 2026peer median (50)

Profitability

44

Q2 2024Q2 2026peer median (50)

Liquidity

42

Q2 2024Q2 2026peer median

Efficiency

41

Q2 2024Q2 2026peer median (50)

Growth

No peer data yet

Capital, Asset Quality, Profitability, Efficiency: higher is always a stronger peer standing (▲ better, ▼ worse). Liquidity, Growth: the score reflects closeness to the peer median -- 100 is sitting exactly at the median, falling the same way whether the bank runs above or below it.

Source: FFIEC Call Report (031/041/051), as filed. Dollar figures derived from reported amounts in thousands. Ratios computed by CallReports.ai using published regulatory formulas.

CallReports · callreports.ai · Board PackageGenerated 2026-10-11

Southwest Heritage Bank

Scottsdale, AZ · Cert 29087 · Bancorp 34 Inc.

SL · OCC · 8 branches

Q2 2026

$892.8MAssets
$707.2MLoans
$753.6MDeposits
$122.3MEquity
Loan mix
88%RE $618.2M12%C&I $87.7M0%Consumer $0.1MQ2 2025Q2 2026
Deposit mix
79%Interest-bearing $594.5M21%Noninterest $159.1MQ2 2025Q2 2026

NIM

4.80%Q2 ’245.81%Q2 ’255.73%Q2 ’26+28%+4%

Non-interest income vs. expense

2.81%Q2 ’242.85%Q2 ’252.81%Q2 ’26-3%-4%

Market Position · Phoenix-Mesa-Chandler, AZ · 2026 SOD (annual) · 0.2% share · #27 of 55 inst. · $0.3B of $192.0B

0.2% Maricopa
1.3% Pima
2.9% Dona Ana
12.5% Otero

Executive Summary

  • Earnings: ROA of 0.90%, down 21 bps year over year; NIM at 3.77%.
  • Asset quality: problem loans at 0.67% of loans (+2 bps YoY), with net charge-offs at 0.29%.
  • Capital: tier 1 leverage ratio of 13.36%, up 150 bps from a year ago.
  • Funding: loans stand at 93.84% of deposits as of Q2 2026.

Financial Results

Return on Assets (YTD, annualized)

0.90%-21 bps YoY

Net Interest Margin (YTD, annualized)

3.77%+15 bps YoY

Efficiency Ratio (YTD, annualized)

67.51%-496 bps YoY

Tier 1 Leverage Ratio

13.36%+150 bps YoY

Year to date, annualized, through each quarter.

MetricQ2 2025Q3 2025Q4 2025Q1 2026Q2 2026YoY ΔTrend
Earnings
Return on Assets1.11%1.04%0.98%0.85%0.90%-21 bps
Return on Equity9.51%8.62%8.01%6.46%6.74%-276 bps
Net Interest Margin3.62%3.56%3.68%3.81%3.77%+15 bps
Efficiency Ratio72.47%72.82%72.45%68.21%67.51%-496 bps
Non-Interest Burden2.75%2.72%2.79%2.71%2.63%-12 bps
Growth
Asset Growth (YoY)1.06%-4.25%-2.24%-2.64%-3.74%-481 bps
Loan Growth (YoY)-8.04%-1.79%5.38%4.35%4.55%+1,258 bps
Deposit Growth (YoY)3.08%-3.34%-4.31%-4.31%-5.61%-868 bps
Asset Quality
Nonperforming Loans / Loans0.64%1.73%1.60%1.83%0.67%+2 bps
Net Charge-Offs / Loans-0.91%-0.58%-0.42%0.27%0.29%+120 bps
Allowance / Loans1.55%1.41%1.37%1.31%1.23%-32 bps
Allowance Coverage of NPLs2.4x0.8x0.9x0.7x1.8x-0.6x
Capital
Tier 1 Leverage Ratio11.86%12.26%12.90%13.16%13.36%+150 bps
Total Risk-Based Capital15.44%15.54%15.42%15.93%16.25%+82 bps
Equity / Assets12.01%12.97%13.24%13.11%13.70%+168 bps
Liquidity & Funding
Loans / Deposits84.73%90.52%93.41%90.19%93.84%+912 bps
Liquid Assets / Assets10.76%5.83%3.89%7.07%4.70%-606 bps
CRE / Total Capitaln/a460%474%469%n/an/a

Source: FFIEC Call Report (031/041/051), as filed. Dollar figures derived from reported amounts in thousands. Ratios computed by CallReports.ai using published regulatory formulas. Income-statement figures are year-to-date as filed, annualized (the UBPR convention). Each quarter includes the ones before it.

CallReports · callreports.ai· Performance TrendsGenerated 2026-10-11

Southwest Heritage Bank

Scottsdale, AZ · Cert 29087 · Peer group: banks under $1B in assets (n=581-629) · Bancorp 34 Inc.

SL · OCC · 8 branches

Q2 2026

$892.8MAssets
$707.2MLoans
$753.6MDeposits
$122.3MEquity

Executive Summary

  • Strongest standing: equity / assets outperforms 74% of banks under $1B in assets (rank 163 of 629).
  • Widest gap: net charge-offs / loans trails 91% of banks under $1B in assets (rank 527 of 581).
  • Overall: at or above the peer median on 4 of 9 directional measures.

Return on Assets

0.91%

Rank 368 of 629

Net Interest Margin

3.77%

Rank 246 of 629

Efficiency Ratio

71.46%

Rank 373 of 629

Equity / Assets

13.70%

Rank 163 of 629

Non-interest income vs. expense

$1.7M$25.7MINCOMEEXPENSE
Unfavorable gap of $24.0M · efficiency ratio beats 41% of banks under $1B in assets
Bank 71.46%Peer median 67.8%Q3 2024Q2 2026Shaded: peer 25th to 75th percentile
MetricYour BankPeer 25thPeer MedianPeer 75thStandingRankPeer Position
Earnings
Return on Assets0.91%0.60%1.01%1.45%Beats 41%368 / 629
Return on Equity6.63%5.38%9.30%13.28%Beats 31%433 / 629
Net Interest Margin3.77%3.03%3.54%4.05%Beats 61%246 / 629
Efficiency Ratio71.46%58.35%67.79%79.08%Beats 41%373 / 629
Asset Quality
Nonperforming Loans / Loans0.67%0.09%0.46%1.20%Beats 40%349 / 581
Net Charge-Offs / Loans0.18%n/a0.01%0.06%Beats 9%527 / 581
Capital
Tier 1 Capital Ratio15.11%11.24%13.84%18.77%Beats 61%248 / 629
Total Risk-Based Capital Ratio16.25%11.58%14.43%19.66%Beats 63%234 / 629
Equity / Assets13.70%9.09%10.65%13.80%Beats 74%163 / 629
Liquidity & Funding
Loans / Deposits93.84%67.24%80.90%93.48%76th pctl142 / 594
Loans / Assets79.21%53.31%67.71%78.15%80th pctl128 / 629
Brokered Deposits / Depositsn/aNot reported for this institution