Bancorp 34 in Scottsdale, Ariz., revised its third-quarter results, turning a narrow gain into a net loss.
The $575 million-asset company said in a press release that, because of a loan-loss reserve for a commercial real estate loan, it lost nearly $2.3 million in the quarter. The company previously reported net income of $3,000.
“The reserve for the troubled credit was deemed necessary as the company progressed through the legal channels required to manage the credit effectively,” Bancorp 34 said in the release.
Bancorp 34 said the added provision has led it to increase the exchange ratio for its pending purchase of CBOA Financial in Tuscon, Ariz., from 0.24 shares to 0.2628 shares. The companies also extended the closing date to June 28.
“While we had to address a single isolated credit with a specific reserve … significant progress has been made towards completing the merger with CBOA Financial,” Jim Crotty, Bancorp 34’s CEO, said in the release.
Bancorp 34 agreed to buy CBOA Financial in April for $28 million.