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Bogota Financial Corp. Reports Results for the Three and Twelve Months Ended December 31, 2023

Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported net loss for the three months ended December 31, 2023 of $1.2 million or ($0.09) per basic and diluted share, compared to net income of $1.9 million or $0.14 per basic and diluted share for the comparable prior year period. The Company reported net income for the twelve months ended December 31, 2023 of $643,000 or $0.05 per basic and diluted share compared to net income of $6.9 million, or $0.51 per basic and diluted share, for the prior year.

On May 24, 2023, the Company announced it had received regulatory approval for the repurchase of up to 249,920 shares of its common stock, which was approximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC). As of December 31, 2023, 216,837 shares have been repurchased under this program at a cost of $1.6 million.

Other Financial Highlights:

  • Total assets decreased $11.8 million, or 1.2%, to $939.3 million at December 31, 2023 from $951.1 million at December 31, 2022, due to a decrease in loans and securities, offset by an increase in cash and cash equivalents.
  • Cash and cash equivalents increased $8.1 million, or 48.0%, to $24.9 million at December 31, 2023 from $16.8 million at December 31, 2022.
  • Securities decreased $21.0 million, or 12.9%, to $141.5 million at December 31, 2023 from $162.5 million at December 31, 2022.
  • Net loans decreased $4.3 million, or 0.6%, to $714.7 million at December 31, 2023 from $719.0 million at December 31, 2022.
  • Total deposits at December 31, 2023 were $625.3 million, decreasing $76.1 million, or 10.8%, as compared to $701.4 million at December 31, 2022, primarily due to a $76.7 million decrease in non-interest-bearing deposits, checking, savings and money market accounts, offset by a $682,000 increase in certificates of deposit. The average rate on deposits increased 200 basis points to 2.85% for 2023 from 0.85% for 2022 due to higher interest rates and a larger percentage of deposits consisting of higher-costing certificates of deposit.
  • Federal Home Loan Bank advances increased $65.4 million, or 63.9% to $167.7 million at December 31, 2023 from $102.3 million as of December 31, 2022.
  • Return on average assets was 0.07% for the twelve-month period ended December 31, 2023 compared to 0.77% for twelve-month period ended December 31, 2022.
  • Return on average equity was 0.46% for the twelve-month period ended December 31, 2023 compared to 4.76% for the twelve-month period ended December 31, 2022.
  • Upon adoption of the CECL method of calculating the allowance for credit losses on January 1, 2023, the Bank recorded a one-time decrease, net of tax, in retained earnings of $220,000, an increase to the allowance for credit losses of $157,000 and an increase in the reserve for unfunded liabilities of $152,000.

Kevin Pace, President and Chief Executive Officer, said “Elevated interest rates have continued to negatively impact funding costs and our net interest margin. Our credit quality remains strong and our net interest margin compression is stabilizing. While the financial results for 2023 were disappointing, we are diligently implementing our strategic plan and taking the necessary steps to improve performance. We realized some significant one-time expenses in the 4th quarter of 2023 that will not impact the Bank going forward. Despite the challenges presented by the economic landscape, we continue to remain positive and resilient with our ability to navigate uncertainties. Growth remains a key focus as we remain committed to delivering value to our shareholders and customers.”

“The Bank recently embarked on an exciting journey becoming the official sponsor of the Fairleigh Dickinson University Men’s basketball program that achieved great success in last years’ NCAA tournament. The team now plays in the newly named Bogota Savings Bank Center. We are enthusiastic that this partnership will help grow the Bank brand and have a positive impact on our community. Our new branch in Upper Saddle River, New Jersey, is nearing completion with an anticipated opening in March 2024.”

Mr. Pace further stated, "I would like to express my gratitude to our talented team, whose unwavering dedication and hard work have been instrumental in our success. We look forward to building on this momentum, embracing new opportunities, and delivering sustained value to all our stakeholders in the years ahead."

Income Statement Analysis

Comparison of Operating Results for the Three Months Ended December 31, 2023 and December 31, 2022

Net income decreased by $3.1 million, or 161.9%, to a net loss of $1.2 million for the three months ended December 31, 2023 from net income of $1.9 million for the three months ended December 31, 2022. This decrease was primarily due to a decrease of $3.1 million in net interest income and a $1.4 million increase in non-interest expense, partially offset by a decrease of $150,000 in the provision for credit losses and a decrease of $1.3 million in income tax expense.

Interest income increased $585,000, or 6.5%, from $9.0 million for the three months ended December 31, 2022 to $9.6 million for the three months ended December 31, 2023 due to higher yields on interest-earning assets.

Interest income on cash and cash equivalents increased $115,000, or 383.3%, to $145,000 for the three months ended December 31, 2023 from $30,000 for the three months ended December 31, 2022 due a 210 basis point increase in the average yield from 3.98% for the three months ended December 31, 2022 to 6.08% for the three months ended December 31, 2023 due to the higher interest rate environment. The increase was also due to a $6.5 million increase in the average balance to $9.4 million for the three months ended December 31, 2023 from $3.0 million for the three months ended December 31, 2022, reflecting the increase of liquidity due to lower loan originations.

Interest income on loans increased $363,000, or 4.6%, to $8.2 million for the three months ended December 31, 2023 compared to $7.9 million for the three months ended December 31, 2022 due primarily to 22 basis point increase in the average yield from 4.35% for the three months ended December 31, 2022 to 4.57% for the three months ended December 31, 2023, offset by a $2.7 million decrease in the average balance to $714.4 million for the three months ended December 31, 2023 from $717.1 million for the three months ended December 31, 2022 and a $348,000 reserve for nonaccrual interest on a delinquent construction loan.

Interest income on securities increased $61,000, or 6.2%, to $1.0 million for the three months ended December 31, 2023 from $980,000 for the three months ended December 31, 2022 primarily due to a 78 basis point increase in the average yield from 2.34% for the three months ended December 31, 2022 to 3.12% for the three months ended December 31, 2023, offset by a $34.5 million decrease in the average balance to $133.2 million for the three months ended December 31, 2023 from $167.7 million for the three months ended December 31, 2022.

Interest expense increased $3.7 million, or 125.4%, from $2.9 million for the three months ended December 31, 2022 to $6.6 million for the three months ended December 31, 2023 due to higher costs on interest-bearing liabilities, offset by a decrease in the average balance of interest-bearing liabilities.

Interest expense on interest-bearing deposits increased $3.1 million, or 140.5%, to $5.2 million for the three months ended December 31, 2023 from $2.2 million for the three months ended December 31, 2022. The increase was due to a 207 basis point increase in the average cost of deposits to 3.41% for the three months ended December 31, 2023 from 1.34% for the three months ended December 31, 2022. The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio. The average balances of certificates of deposit increased $29.0 million to $497.1 million for the three months ended December 31, 2023 from $468.1 million for the three months ended December 31, 2022 while NOW and money market accounts and savings accounts decreased $54.6 million and $12.2 million for the three months ended December 31, 2023, respectively, compared to the three months ended December 31, 2022.

Interest expense on Federal Home Loan Bank borrowings increased $623,000, or 82.1%, from $759,000 for the three months ended December 30, 2022 to $1.4 million for the three months ended December 31, 2023. The increase was due to an increase in the average cost of 152 basis points to 3.99% for the three months ended December 31, 2023 from 2.47% for the three months ended December 31, 2022 due to the new borrowings at higher rates. The increase was also due to an increase in the average balance of borrowings of $15.5 million to $137.4 million for the three months ended December 31, 2023 from $122.0 million for the three months ended December 31, 2022.

Net interest income decreased $3.1 million, or 51.4%, to $2.9 million for the three months ended December 31, 2023 from $6.0 million for the three months ended December 31, 2022. The decrease reflected a 159 basis point decrease in our net interest rate spread to 0.88% for the three months ended December 31, 2023 from 2.47% for the three months ended December 31, 2022. Our net interest margin decreased 133 basis points to 1.35% for the three months ended December 31, 2023 from 2.68% for the three months ended December 31, 2022.

We recorded no provision for credit losses for the three months ended December 31, 2023 compared to a $150,000 provision for loan losses for the three-month period ended December 31, 2022. The absence of a provision in the fourth quarter of 2023 reflects the decrease in the loan portfolio.

Non-interest income increased by $27,000, or 10.4%, to $283,000 for the three months ended December 31, 2023 from $256,000 for the three months ended December 31, 2022. Bank-owned life insurance income increased $23,000, or 12.5%, due higher balances during 2023.

For the three months ended December 31, 2023, non-interest expense increased $1.4 million, or 40.9%, over the comparable 2022 period. Salaries and employee benefits increased $895,000, or 40.9%, due to an accrual of a severance contract for the retirement of the previous President. Professional Fees increased $162,000, or 186.5% due to higher legal costs. FDIC insurance premiums increased $40,000, or 69.3%, due to a higher assessment rate in 2023. Data processing expense increased $39,000, or 18.3%, due to higher processing costs. Director fees decreased $51,000, or 26.6%, due to lower pension expense. The decrease in advertising expense of $29,000, or 23.1%, was due to reduced promotions for branch locations and less promotions on deposit and loan products. Other expense increased $376,000, or 128.9%, due to a pending fraud claim that is under review with the insurance company.

Income tax expense decreased $1.3 million, or 174.8%, to a benefit of $548,000 for the three months ended December 31, 2023 from a $732,000 expense for the three months ended December 31, 2022. The decrease was due to $4.4 million of lower taxable income.

Comparison of Operating Results for the Twelve Months Ended December 31, 2023 and December 31, 2022

Net income decreased by $6.2 million, or 90.7%, to $643,000 for the twelve months ended December 31, 2023 from $6.9 million for the twelve months ended December 31, 2022. This decrease was primarily due to a decrease of $8.1 million in net interest income, and an increase of $1.5 million in non-interest expense, offset by a decrease of $550,000 in the provision for credit losses and a decrease of $2.8 million in income tax expense.

Interest income increased $6.9 million, or 22.8%, from $30.3 million for the twelve months ended December 31, 2022 to $37.3 million for the twelve months ended December 31, 2023 due to increases in the average balances of and higher yields on interest-earning assets.

Interest income on cash and cash equivalents increased $451,000, or 385.5%, to $568,000 for the twelve months ended December 31, 2023 from $117,000 for the twelve months ended December 31, 2022 due a 476 basis point increase in the average yield from 0.47% for the twelve months ended December 31, 2022 to 5.23% for the twelve months ended December 31, 2023 due to the higher interest rate environment. This was offset by a $14.2 million decrease in the average balance to $10.9 million for the twelve months ended December 31, 2023 from $25.0 million for the twelve months ended December 31, 2022, reflecting the use of excess liquidity to fund loan originations.

Interest income on loans increased $5.8 million, or 22.0%, to $32.0 million for the twelve months ended December 31, 2023 compared to $26.3 million for the twelve months ended December 31, 2022 due primarily to a $75.1 million increase in the average balance to $713.8 million for the twelve months ended December 31, 2023 from $638.7 million for the twelve months ended December 31, 2022 and a 38 basis point increase in the average yield from 4.11% for the twelve months ended December 31, 2022 to 4.49% for the twelve months ended December 31, 2023. The increase was offset by a $1.2 million reserve for nonaccrual interest on a delinquent construction loan.

Interest income on securities increased $484,000, or 13.2%, to $4.2 million for the twelve months ended December 31, 2023 from $3.7 million for the twelve months ended December 31, 2022 due primarily to a 68 basis point increase in the average yield from 2.19% for the twelve months ended December 31, 2022 to 2.87% for the twelve months ended December 31, 2023. The increase was offset by a $23.1 million decrease in the average balance of securities to $144.9 million for the twelve months ended December 31, 2023 from $168.0 million for the twelve months ended December 31, 2022.

Interest expense increased $15.0 million, or 206.9%, from $7.3 million for the twelve months ended December 31, 2022 to $22.3 million for the twelve months ended December 31, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities.

Interest expense on interest-bearing deposits increased $12.9 million, or 252.9%, to $18.0 million for the twelve months ended December 31, 2023 from $5.1 million for the twelve months ended December 31, 2022. The increase was due to a 200 basis point increase in the average cost of interest-bearing deposits to 2.85% for the twelve months ended December 31, 2023 from 0.85% for the twelve months ended December 31, 2022. The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio. The average balances of certificates of deposit increased $103.5 million to $498.1 million for the twelve months ended December 31, 2023 from $394.6 million for the twelve months ended December 31, 2022 while NOW and money market accounts and savings accounts decreased $54.8 million and $14.3 million for the twelve months ended December 31, 2023, respectively, compared to the twelve months ended December 31, 2022.

Interest expense on Federal Home Loan Bank borrowings increased $2.1 million, or 98.1%, from $2.2 million for the twelve months ended December 31, 2022 to $4.3 million for the twelve months ended December 31, 2023. The increase was due to an increase in the average cost of 156 basis points to 3.67% for the twelve months ended December 31, 2023 from 2.11% for the twelve months ended December 31, 2022 due to the new borrowings at higher rates. The increase was also due to an increase in the average balance of borrowings of $14.4 million to $116.8 million for the twelve months ended December 31, 2023 from $102.5 million for the twelve months ended December 31, 2022. Cash flow hedges used to manage interest rate risk totaled $20.0 million at December 31, 2023. During the twelve months ended December 31, 2023, the use of the cash flow hedges reduced the interest expense on the Federal Home Loan Bank advances by $364,000.

Net interest income decreased $8.1 million, or 35.1%, to $15.0 million for the twelve months ended December 31, 2023 from $23.1 million for the twelve months ended December 31, 2022. The increase reflected a 130 basis point decrease in our net interest rate spread to 1.28% for the twelve months ended December 31, 2023 from 2.58% for the twelve months ended December 31, 2022. Our net interest margin decreased 105 basis points to 1.71% for the twelve months ended December 31, 2023 from 2.76% for the twelve months ended December 31, 2022.

We recorded a $125,000 recovery of credit losses for the twelve months ended December 31, 2023 compared to a $425,000 provision for loan losses for the twelve-month period ended December 31, 2022. The Bank had a decrease in the loan portfolio as well as no charge-offs offset by increased delinquent and non-performing loans. As of January 1, 2023 the Bank adopted CECL and recorded a one-time adjustment of $157,000 to the allowance for credit losses.

Non-interest income increased by $15,000, or 1.4%. Gain on sale of loans decreased $58,000, or 66.2%, as loan originations were lower in 2023 due to the higher interest rate environment and the decision to slow loan production to preserve capital and liquidity. Other income decreased $41,000 or 25.1%. These decreases were more than offset by an increase in income from bank-owned life insurance of $87,000, or 12.5%, due to higher balances during 2023.

For the twelve months ended December 31, 2023, non-interest expense increased $1.5 million, or 10.3%, over 2022. Salaries and employee benefits increased $1.1 million, or 12.7%, due to an accrual of a severance contract for the retirement of the previous President and a higher employee count. Director fees decreased $181,000, or 22.6%, due to lower pension expense. Professional fees increased $115,000 or 21.1%, due to higher legal expense. FDIC insurance premiums increased $198,000, or 89.9%, due to a higher assessment rate in 2023. Data processing decreased $163,000, or 14.4%, due to the timing of invoices. Other expense increased $341,000, or 34.6%, due to a pending fraud claim that is under review with the insurance company.

Income taxes decreased $2.8 million, or 106.2%, to a benefit of $162,000 for the twelve months ended December 31, 2023 from $2.6 million expense for the twelve months ended December 31, 2022. The decrease was due to $9.0 million, or 94.9%, of lower taxable income. The effective tax rate for the twelve months ended December 31, 2023 and 2022 was (33.76%) and 27.55%, respectively.

Balance Sheet Analysis

Total assets were $939.3 million at December 31, 2023, representing a decrease of $11.8 million, or 1.2%, from December 31, 2022. Cash and cash equivalents increased $8.1 million during the period primarily due to loan payments received and proceeds from the call and maturity of securities. Net loans decreased $4.3 million, or 0.6%, due to $69.0 million in repayments, partially offset by new production of $64.7 million. Due to the interest rate environment, we have seen a decrease in demand for residential and construction loans, which have been primary drivers of our loan growth in recent periods. Securities held to maturity decreased $4.8 million, or 6.2%, and securities available for sale decreased $16.2 million or 19.1%, due to the repayments of mortgage-backed securities and maturities of corporate bonds.

Delinquent loans increased $11.1 million to $12.6 million, or 1.76% of total loans, at December 31, 2023. The increase was mostly due to one commercial construction loan (currently non-performing) located in Totowa New Jersey with a balance of $11.1 million with a loan to value ratio of 46%. During the same timeframe, non-performing assets increased to $12.8 million and were 1.36% of total assets at December 31, 2023. The Company’s allowance for credit losses was 0.39% of total loans and 21.81% of non-performing loans at December 31, 2023 compared to 0.36% of total loans and 136.3% of non-performing loans at December 31, 2022. The Bank does not have any exposure to commercial real estate loans secured by office space.

Total liabilities decreased $9.3 million, or 1.1%, to $802.2 million mainly due to a $76.1 million decrease in deposits, offset by a $65.4 million increase in borrowings. Total deposits decreased $76.1 million, or 10.8%, to $625.3 million at December 31, 2023 from $701.4 million at December 31, 2022. The decrease in deposits reflected decreases in NOW, money market and savings accounts, which decreased by $68.7 million from $170.2 million at December 31, 2022 to $101.5 million at December 31, 2023, offset by an increase in certificate of deposit accounts, which increased by $682,000 to $493.3 million from $492.6 million at December 31, 2022. At December 31, 2023, brokered deposits were $53.3 million or 8.5% of deposits and municipal deposits were $48.0 million or 7.7% of deposits. At December 31, 2023, uninsured deposits represented 8.4% of the Bank’s total deposits. Federal Home Loan Bank advances increased $65.4 million, or 63.9%, to fund loan growth and deposit outflows. Total borrowing capacity at the Federal Home Loan Bank is $308.2 million of which $167.7 million is advanced.

Total stockholders’ equity decreased $2.5 million to $137.2 million, due to increased accumulated other comprehensive loss for securities available for sale of $254,000 and the repurchase of 413,097 shares of stock during the period at a cost of $3.7 million, offset by net income of $643,000 for the twelve months ended December 31, 2023. At December 31, 2023, the Company’s ratio of average stockholders’ equity-to-total assets was 15.32%, compared to 15.61% at December 31, 2022.

About Bogota Financial Corp.

Bogota Financial Corp. is a Maryland corporation organized as the mid-tier holding company of Bogota Savings Bank and is the majority-owned subsidiary of Bogota Financial, MHC. Bogota Savings Bank is a New Jersey chartered stock savings bank that has served the banking needs of its customers in northern and central New Jersey since 1893. It operates from six offices located in Bogota, Hasbrouck Heights, Newark, Oak Ridge, Parsippany and Teaneck, New Jersey and operates a loan production office in Spring Lake, New Jersey.

Forward-Looking Statements

This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, inflation, general economic conditions or conditions within the securities markets, potential recessionary conditions, real estate market values in the Bank’s lending area, changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio; changes in the quality of our loan and security portfolios, increases in non-performing and classified loans, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees and legislative, accounting and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.

The Company undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(unaudited)

 

 

 

2023

 

2022

ASSETS

 

 

 

 

Cash and due from banks

 

$

13,567,115

 

 

$

8,160,028

 

Interest-bearing deposits in other banks

 

 

11,362,356

 

 

 

8,680,889

 

Cash and cash equivalents

 

 

24,929,471

 

 

 

16,840,917

 

 

 

 

 

 

Securities available for sale

 

 

68,888,179

 

 

 

85,100,578

 

Securities held to maturity (fair value of $65,374,753 and $70,699,651 respectively)

 

 

72,656,179

 

 

 

77,427,309

 

Loans, net of allowance $2,785,949 and $2,578,174, respectively

 

 

714,688,635

 

 

 

719,025,762

 

Premises and equipment, net

 

 

7,687,387

 

 

 

7,884,335

 

Federal Home Loan Bank (“FHLB”) stock

 

 

8,616,100

 

 

 

5,490,900

 

Accrued interest receivable

 

 

3,932,785

 

 

 

3,966,651

 

Core deposit intangibles

 

 

206,116

 

 

 

267,272

 

Bank owned life insurance

 

 

30,987,851

 

 

 

30,206,325

 

Other assets

 

 

6,731,500

 

 

 

4,888,954

 

Total assets

 

$

939,324,203

 

 

$

951,099,003

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Liabilities

 

 

 

 

Deposits

 

 

 

 

Non-interest bearing

 

$

30,554,842

 

 

$

38,653,349

 

Interest bearing

 

 

594,792,300

 

 

 

662,758,100

 

 

 

 

625,347,142

 

 

 

701,411,449

 

 

 

 

 

 

FHLB advances-short term

 

 

37,500,000

 

 

 

59,000,000

 

FHLB advances-long term

 

 

130,189,663

 

 

 

43,319,254

 

Advance payments by borrowers for taxes and insurance

 

 

2,733,709

 

 

 

3,174,661

 

Other liabilities

 

 

6,380,486

 

 

 

4,534,516

 

Total liabilities

 

 

802,151,000

 

 

 

811,439,880

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at December 31, 2023 and 2022

 

 

 

 

 

 

Common stock $0.01 par value, 30,000,000 shares authorized, 13,279,230 issued and outstanding at December 31, 2023 and 13,699,016 at December 31, 2022

 

 

132,792

 

 

 

136,989

 

Additional Paid-In capital

 

 

56,149,915

 

 

 

59,099,476

 

Retained earnings

 

 

92,177,068

 

 

 

91,756,673

 

Unearned ESOP shares (409,750 shares at December 31, 2023 and 436,945 shares at December 31, 2022)

 

 

(4,821,798

)

 

 

(5,123,002

)

Accumulated other comprehensive loss

 

 

(6,464,774

)

 

 

(6,211,013

)

Total stockholders' equity

 

 

137,173,203

 

 

 

139,659,123

 

Total liabilities and stockholders' equity

 

$

939,324,203

 

 

$

951,099,003

 

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

 

 

2023

 

2022

 

2023

 

2022

Interest income

 

 

 

 

 

 

 

 

Loans

 

$

8,224,488

 

 

$

7,860,684

 

$

32,046,033

 

 

$

26,264,486

Securities

 

 

 

 

 

 

 

 

Taxable

 

 

1,027,755

 

 

 

933,963

 

 

 

4,070,144

 

 

 

3,516,832

 

Tax-exempt

 

 

13,135

 

 

 

45,882

 

 

 

91,428

 

 

 

161,187

 

Other interest-earning assets

 

 

300,656

 

 

 

140,335

 

 

 

1,072,240

 

 

 

403,969

 

Total interest income

 

 

9,566,034

 

 

 

8,980,864

 

 

 

37,279,845

 

 

 

30,346,474

 

Interest expense

 

 

 

 

 

 

 

 

Deposits

 

 

5,245,865

 

 

 

2,180,832

 

 

 

18,023,772

 

 

 

5,106,517

 

FHLB advances

 

 

1,382,244

 

 

 

759,476

 

 

 

4,282,603

 

 

 

2,162,217

 

Total interest expense

 

 

6,628,109

 

 

 

2,940,308

 

 

 

22,306,375

 

 

 

7,268,734

 

Net interest income

 

 

2,937,925

 

 

 

6,040,556

 

 

 

14,973,470

 

 

 

23,077,740

 

Provision (credit) for loan losses

 

 

 

 

 

150,000

 

 

 

(125,000

)

 

 

425,000

 

Net interest income after provision (credit) for credit losses

 

 

2,937,925

 

 

 

5,890,556

 

 

 

15,098,470

 

 

 

22,652,740

 

Non-interest income

 

 

 

 

 

 

 

 

Fees and service charges

 

 

47,382

 

 

 

42,848

 

 

 

206,763

 

 

 

179,734

 

Gain on sale of loans

 

 

 

 

 

 

 

 

29,375

 

 

 

86,913

 

Bank-owned life insurance

 

 

207,453

 

 

 

184,373

 

 

 

781,526

 

 

 

694,900

 

Other

 

 

27,711

 

 

 

28,801

 

 

 

121,371

 

 

 

162,126

 

Total non-interest income

 

 

282,546

 

 

 

256,022

 

 

 

1,139,035

 

 

 

1,123,673

 

Non-interest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

3,082,176

 

 

 

2,187,586

 

 

 

9,820,128

 

 

 

8,713,734

 

Occupancy and equipment

 

 

359,937

 

 

 

356,872

 

 

 

1,474,107

 

 

 

1,390,718

 

FDIC insurance assessment

 

 

98,525

 

 

 

58,210

 

 

 

418,215

 

 

 

220,210

 

Data processing

 

 

251,485

 

 

 

212,497

 

 

 

969,398

 

 

 

1,132,790

 

Advertising

 

 

95,681

 

 

 

124,424

 

 

 

465,064

 

 

 

492,859

 

Director fees

 

 

141,639

 

 

 

192,862

 

 

 

619,650

 

 

 

800,611

 

Professional fees

 

 

248,526

 

 

 

86,751

 

 

 

661,045

 

 

 

546,004

 

Other

 

 

668,220

 

 

 

291,903

 

 

 

1,329,520

 

 

 

988,081

 

Total non-interest expense

 

 

4,946,189

 

 

 

3,511,105

 

 

 

15,757,127

 

 

 

14,285,007

 

(Loss) income before income taxes

 

 

(1,725,718

)

��

 

2,635,473

 

 

 

480,378

 

 

 

9,491,406

 

Income tax (benefit) expense

 

 

(547,958

)

 

 

732,122

 

 

 

(162,157

)

 

 

2,614,545

 

Net (loss) income

 

$

(1,177,760

)

 

$

1,903,351

 

 

$

642,535

 

 

$

6,876,861

 

Earnings (loss) per Share - basic

 

$

(0.09

)

 

$

0.14

 

 

$

0.05

 

 

$

0.51

 

Earnings (loss) per Share - diluted

 

$

(0.09

)

 

$

0.14

 

 

$

0.05

 

 

$

0.51

 

Weighted average shares outstanding - basic

 

 

12,766,872

 

 

 

13,299,055

 

 

 

12,891,847

 

 

 

13,570,407

 

Weighted average shares outstanding - diluted

 

 

12,766,872

 

 

 

13,330,553

 

 

 

12,891,847

 

 

 

13,576,934

 

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

(unaudited)

 

 

 

At or For the Three Months Ended December 31,

 

At or For the Twelve Months Ended December 31,

 

 

2023

 

2022

 

2023

 

2022

Performance Ratios (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) return on average assets (2)

 

 

(0.51

)%

 

 

0.80

%

 

 

0.07

%

 

 

0.77

%

(Loss) return on average equity (3)

 

 

(3.43

)%

 

 

5.42

%

 

 

0.46

%

 

 

4.76

%

Interest rate spread (4)

 

 

0.88

%

 

 

2.47

%

 

 

1.28

%

 

 

2.58

%

Net interest margin (5)

 

 

1.35

%

 

 

2.68

%

 

 

1.71

%

 

 

2.76

%

Efficiency ratio (6)

 

 

153.59

%

 

 

55.76

%

 

 

97.04

%

 

 

59.03

%

Average interest-earning assets to average interest-bearing liabilities

 

 

115.71

%

 

 

116.23

%

 

 

116.95

%

 

 

119.60

%

Net loans to deposits

 

 

114.29

%

 

 

102.51

%

 

 

114.29

%

 

 

102.51

%

Equity to assets (7)

 

 

14.94

%

 

 

14.80

%

 

 

14.89

%

 

 

16.06

%

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital to average assets

 

 

 

 

 

 

 

 

 

 

15.24

%

 

 

15.61

%

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses as a percent of total loans

 

 

 

 

 

 

 

 

 

 

0.39

%

 

 

0.36

%

Allowance for loan losses as a percent of non-performing loans

 

 

 

 

 

 

 

 

 

 

21.81

%

 

 

136.32

%

Net charge-offs to average outstanding loans during the period

 

 

 

 

 

 

 

 

 

 

0.00

%

 

 

0.00

%

Non-performing loans as a percent of total loans

 

 

 

 

 

 

 

 

 

 

1.79

%

 

 

0.26

%

Non-performing assets as a percent of total assets

 

 

 

 

 

 

 

 

 

 

1.36

%

 

 

0.20

%

(1)

Certain performance ratios for the three-months are annualized.

(2)

Represents net income divided by average total assets.

(3)

Represents net income divided by average stockholders’ equity.

(4)

Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of average interest-bearing liabilities. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rate of 27.5%.

(5)

Represents net interest income as a percent of average interest-earning assets. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rate of 27.5% for 2023 and 2022.

(6)

Represents non-interest expenses divided by the sum of net interest income and non-interest income.

(7)

Represents average stockholders’ equity divided by average total assets.

LOANS

Loans are summarized as follows at December 31, 2023 and December 31, 2022:

 

 

2023

 

2022

Real estate:

 

 

 

 

Residential First Mortgage

 

$

456,647,592

 

 

$

466,100,627

 

Commercial and Multi-Family Real Estate

 

 

175,443,080

 

 

 

162,338,669

 

Construction

 

 

49,302,040

 

 

 

61,825,478

 

Commercial & Industrial

 

 

6,658,370

 

 

 

1,684,189

 

Consumer:

 

 

 

 

Home equity and other

 

 

29,423,503

 

 

 

29,654,973

 

 

 

 

 

 

Total loans

 

 

717,474,585

 

 

 

721,603,936

 

 

 

 

 

 

Allowance for loan losses

 

 

(2,785,950

)

 

 

(2,578,174

)

 

 

$

714,688,635

 

 

$

719,025,762

 

The following tables set forth the distribution of total deposit accounts, by account type, at the dates indicated (unaudited).

 

 

At December 31,

 

 

2023

 

2022

 

 

Amount

 

Percent

 

Average Rate

 

Amount

 

Percent

 

Average Rate

 

 

(Dollars in thousands)

Noninterest bearing demand accounts

 

$

30,608

 

4.89

%

 

%

 

$

38,653

 

5.52

%

 

%

NOW accounts

 

 

41,321

 

 

6.61

 

 

1.90

 

 

 

82,720

 

 

11.79

 

 

0.88

 

Money market accounts

 

 

14,622

 

 

2.34

 

 

0.30

 

 

 

30,037

 

 

4.28

 

 

0.32

 

Savings accounts

 

 

45,521

 

 

7.28

 

 

1.76

 

 

 

57,408

 

 

8.18

 

 

0.49

 

Certificates of deposit

 

 

493,275

 

 

78.88

 

 

4.00

 

 

 

492,593

 

 

70.23

 

 

2.37

 

Total

 

$

625,347

 

 

100.00

%

 

3.42

%

 

$

701,411

 

 

100.00

%

 

1.82

%

Average Balance Sheets and Related Yields and Rates

The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances have been calculated using daily balances. Nonaccrual loans are included in average balances only. Loan fees are included in interest income on loans and are not material.

 

 

Three Months Ended December 31,

 

 

2023

 

2022

 

 

Average

 

Interest and

 

Yield/

 

Average

 

Interest and

 

Yield/

 

 

Balance

 

Dividends

 

Cost (3)

 

Balance

 

Dividends

 

Cost (3)

 

 

(Dollars in thousands)

 

 

(unaudited)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

9,433

 

$

145

 

 

6.08

%

 

$

2,962

 

$

30

 

3.98

%

Loans

 

 

714,380

 

 

 

8,224

 

 

 

4.57

%

 

 

717,096

 

 

 

7,861

 

 

4.35

%

Securities

 

 

133,241

 

 

 

1,041

 

 

 

3.12

%

 

 

167,708

 

 

 

980

 

 

2.34

%

Other interest-earning assets

 

 

7,216

 

 

 

156

 

 

 

8.70

%

 

 

6,327

 

 

 

110

 

 

6.99

%

Total interest-earning assets

 

 

864,270

 

 

 

9,566

 

 

 

4.40

%

 

 

894,093

 

 

 

8,981

 

 

3.99

%

Non-interest-earning assets

 

 

56,543

 

 

 

 

 

 

 

 

53,969

 

 

 

 

 

Total assets

 

$

920,813

 

 

 

 

 

 

 

$

948,062

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

67,510

 

 

$

310

 

 

 

1.82

%

 

$

122,136

 

 

$

177

 

 

0.57

%

Savings accounts

 

 

44,855

 

 

 

205

 

 

 

1.81

%

 

 

57,038

 

 

 

57

 

 

0.40

%

Certificates of deposit

 

 

497,147

 

 

 

4,731

 

 

 

3.78

%

 

 

468,138

 

 

 

1,947

 

 

1.65

%

Total interest-bearing deposits

 

 

609,512

 

 

 

5,246

 

 

 

3.41

%

 

 

647,312

 

 

 

2,181

 

 

1.34

%

Federal Home Loan Bank advances (1)

 

 

137,445

 

 

 

1,382

 

 

 

3.99

%

 

 

121,961

 

 

 

759

 

 

2.47

%

Total interest-bearing liabilities

 

 

746,957

 

 

 

6,628

 

 

 

3.52

%

 

 

769,273

 

 

 

2,940

 

 

1.52

%

Non-interest-bearing deposits

 

 

34,835

 

 

 

 

 

 

 

 

36,105

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

1,454

 

 

 

 

 

 

 

 

2,296

 

 

 

 

 

Total liabilities

 

 

783,246

 

 

 

 

 

 

 

 

807,674

 

 

 

 

 

Total equity

 

 

137,567

 

 

 

 

 

 

 

 

140,388

 

 

 

 

 

Total liabilities and equity

 

$

920,813

 

 

 

 

 

 

 

$

948,062

 

 

 

 

 

Net interest income

 

 

 

$

2,938

 

 

 

 

 

 

 

$

6,041

 

 

 

Interest rate spread (2)

 

 

 

 

 

 

0.88

%

 

 

 

 

 

2.47

%

Net interest margin (3)

 

 

 

 

 

 

1.35

%

 

 

 

 

 

2.68

%

Average interest-earning assets to average interest-bearing liabilities

 

 

115.71

%

 

 

 

 

 

 

 

116.23

%

 

 

 

 

1.

Cash flow hedges are used to manage interest rate risk. During the three months ended December 31, 2023, the net effect on interest expense on the Federal Home Loan Bank advances was a reduced expense of $110,000.

2.

Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

3.

Net interest margin represents net interest income divided by average total interest-earning assets.

 

 

Twelve Months Ended December 31,

 

 

2023

 

2022

 

 

Average

 

Interest and

 

Yield/

 

Average

 

Interest and

 

Yield/

 

 

Balance

 

Dividends

 

Cost (3)

 

Balance

 

Dividends

 

Cost (3)

 

 

(Dollars in thousands)

 

 

(unaudited)

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

10,868

 

 

$

568

 

5.23

%

 

$

25,044

 

 

$

117

 

0.47

%

Loans

 

 

713,799

 

 

 

32,046

 

 

4.49

%

 

 

638,679

 

 

 

26,264

 

 

4.11

%

Securities

 

 

144,880

 

 

 

4,162

 

 

2.87

%

 

 

167,987

 

 

 

3,678

 

 

2.19

%

Other interest-earning assets

 

 

6,389

 

 

 

505

 

 

7.90

%

 

 

5,677

 

 

 

288

 

 

5.05

%

Total interest-earning assets

 

 

875,936

 

 

 

37,281

 

 

4.26

%

 

 

837,387

 

 

 

30,347

 

 

3.62

%

Non-interest-earning assets

 

 

54,925

 

 

 

 

 

 

 

52,525

 

 

 

 

 

Total assets

 

$

930,861

 

 

 

 

 

 

$

889,912

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

85,663

 

 

$

1,399

 

 

1.63

%

 

$

140,473

 

 

$

787

 

 

0.56

%

Savings accounts

 

 

48,351

 

 

 

580

 

 

1.20

%

 

 

62,626

 

 

 

184

 

 

0.29

%

Certificates of deposit

 

 

498,129

 

 

 

16,046

 

 

3.22

%

 

 

394,593

 

 

 

4,136

 

 

1.05

%

Total interest-bearing deposits

 

 

632,143

 

 

 

18,025

 

 

2.85

%

 

 

597,692

 

 

 

5,107

 

 

0.85

%

Federal Home Loan Bank advances (1)

 

 

116,816

 

 

 

4,283

 

 

3.67

%

 

 

102,458

 

 

 

2,162

 

 

2.11

%

Total interest-bearing liabilities

 

 

748,959

 

 

 

22,308

 

 

2.98

%

 

 

700,150

 

 

 

7,269

 

 

1.04

%

Non-interest-bearing deposits

 

 

38,636

 

 

 

 

 

 

 

41,501

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

4,627

 

 

 

 

 

 

 

3,914

 

 

 

 

 

Total liabilities

 

 

792,222

 

 

 

 

 

 

 

745,565

 

 

 

 

 

Total equity

 

 

138,639

 

 

 

 

 

 

 

144,347

 

 

 

 

 

Total liabilities and equity

 

$

930,861

 

 

 

 

 

 

$

889,912

 

 

 

 

 

Net interest income

 

 

 

$

14,973

 

 

 

 

 

 

$

23,078

 

 

 

Interest rate spread (2)

 

 

 

 

 

1.28

%

 

 

 

 

 

2.58

%

Net interest margin (3)

 

 

 

 

 

1.71

%

 

 

 

 

 

2.76

%

Average interest-earning assets to average interest-bearing liabilities

 

 

116.95

%

 

 

 

 

 

 

119.60

%

 

 

 

 

1.

Cash flow hedges are used to manage interest rate risk. During the twelve months ended December 31, 2023, the net effect on interest expense on the Federal Home Loan Bank advances was a reduced expense of $364,000.

2.

Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

3.

Net interest margin represents net interest income divided by average total interest-earning assets.

Rate/Volume Analysis

The following table sets forth the effects of changing rates and volumes on net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2023 Compared to Three

 

2023 Compared to Twelve Months

 

 

Months Ended December 31, 2022

 

Ended December 31, 2022

 

 

Increase (Decrease) Due to

 

Increase (Decrease) Due to

 

 

Volume

 

Rate

 

Net

 

Volume

 

Rate

 

Net

 

 

(In thousands)

 

 

(unaudited)

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

93

 

 

$

22

 

 

$

115

 

 

$

(102

)

 

$

553

 

 

$

451

 

Loans receivable

 

 

(195

)

 

 

558

 

 

 

363

 

 

 

3,248

 

 

 

2,534

 

 

 

5,782

 

Securities

 

 

(975

)

 

 

1,036

 

 

 

61

 

 

 

(554

)

 

 

1,038

 

 

 

484

 

Other interest earning assets

 

 

17

 

 

 

29

 

 

 

46

 

 

 

39

 

 

 

178

 

 

 

217

 

Total interest-earning assets

 

 

(1,060

)

 

 

1,645

 

 

 

585

 

 

 

2,631

 

 

 

4,303

 

 

 

6,934

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

 

(495

)

 

$

628

 

 

$

133

 

 

 

(406

)

 

 

1,018

 

 

 

612

 

Savings accounts

 

 

(83

)

 

 

231

 

 

 

148

 

 

 

(51

)

 

 

447

 

 

 

396

 

Certificates of deposit

 

 

128

 

 

 

2,656

 

 

 

2,784

 

 

 

1,339

 

 

 

10,571

 

 

 

11,910

 

Federal Home Loan Bank advances

 

 

107

 

 

 

516

 

 

 

623

 

 

 

338

 

 

 

1,783

 

 

 

2,121

 

Total interest-bearing liabilities

 

 

(343

)

 

 

4,031

 

 

 

3,688

 

 

 

1,220

 

 

 

13,819

 

 

 

15,039

 

Net increase (decrease) in net interest income

 

$

(717

)

 

$

(2,386

)

 

$

(3,103

)

 

$

1,411

 

 

$

(9,516

)

 

$

(8,105

)

 

Contacts

Kevin Pace – President & CEO, 201-862-0660 ext. 1110

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