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Bogota Financial Corp. Reports Results for the Three and Twelve Months Ended December 31, 2021

Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported net income for the three months ended December 31, 2021 of $2.0 million, compared to net income of $1.0 million for the comparable prior year period. The Company reported net income for the twelve months ended December 31, 2021 of $7.5 million compared the net income of $2.1 million for the comparable prior year period. During the twelve months ended December 31, 2021, the Company recorded a bargain purchase gain of $1.9 million and merger-related expenses of $392,000, both associated with the acquisition of Gibraltar Bank. The Company contributed cash and stock with a value of $2.9 million ($2.1 million after-tax) to the Bogota Charitable Foundation during the twelve months ended December 31, 2020. Excluding the bargain purchase gain and the merger-related expenses in 2021 and the contribution to the charitable foundation in 2020, net income for the twelve months ended December 31, 2021 and 2020 was $5.9 million and $4.3 million, respectively1.

On January 15, 2020, the Company became the holding company for the Bank when it completed the reorganization of the Bank into a two-tier mutual holding company form of organization. In connection with the reorganization, the Company sold 5,657,735 shares of common stock at a price of $10 per share, for gross proceeds of $56.6 million. The Company also contributed 263,150 shares of common stock and $250,000 in cash to Bogota Savings Bank Charitable Foundation, Inc., and issued 7,236,640 shares of common stock to Bogota Financial, MHC, its New Jersey-chartered mutual holding company.

On February 28, 2021, the Company completed its acquisition of Gibraltar Bank and, as part of the transaction, issued 1,267,916 shares of its common stock to Bogota Financial, MHC. The conversion and consolidation of data processing platforms, systems and customer files was completed in August 2021. The merger added three branches to the Bank’s network. In the third quarter of 2021, the Bank opened a new branch in Hasbrouck Heights, New Jersey, which also include additional offices for staff.

Other Financial Highlights:

  • Total assets increased $96.5 million, or 13.0%, to $837.4 million from $740.9 million at December 31, 2020, primarily due to assets acquired from the Gibraltar Bank acquisition.
  • Net loans increased $12.5 million, or 2.2%, to $570.2 million at December 31, 2021 from $557.7 million at December 31, 2020.
  • Total deposits were $597.5 million, increasing $95.5 million, or 19.0%, as compared to $502.0 million at December 31, 2020, primarily due to acquiring deposits from the Gibraltar Bank acquisition.
  • Return on average assets was 1.23% for the twelve-month period ended December 31, 2021 compared to 0.28% for 2020. Without the bargain purchase gain and merger-related expenses in 2021 and the charitable foundation contribution in 2020, the return on average assets would have been 0.98%1 and 0.55%1 for the twelve-month periods ended December 31, 2021 and 2020, respectively.
  • Return on average equity was 7.06% for the twelve-month period ended December 31, 2021 compared to 1.66% for 2020. Without the bargain purchase gain and merger-related expenses in 2021 and the charitable foundation contribution in 2020, the return on average equity would have been 5.60%2 and 3.25%2 for the twelve months ended December 31, 2021 and 2020, respectively.

Joseph Coccaro, President and Chief Executive Officer, said, "During the year we completed the acquisition of Gibraltar Bank including a successful business system conversion. The Bank opened its sixth branch location in Hasbrouck Heights to provide banking services to the community and added additional office space for the Bank. The new branch was very successful with over $24.0 million in deposits by year end."

“We are pleased with our continued strategy to expand our loan portfolio and its positive overall impacts of on our assets and income. We continue our efforts to expand our market presence, improve and expand our technology platform and offerings and manage our interest rate risk.”

Mr. Coccaro further stated, “We are pleased with our results for the year as our core earnings have shown steady growth despite the COVID-19 disruption. We continue to enjoy strong credit quality as non-performing loans and criticized assets remain very low. We continue to see improvement in our net interest margin which rose 56 basis points year over year. We finished a second round of SBA PPP loans in 2021 and look forward to continuing to serve our communities going forward. The economic impact of the COVID-19 pandemic on the Company’s operations was not material during 2021. Our loan deferrals are down to one residential loan as of December 31, 2021. I am pleased with the achievements during 2021 and I am confident that in 2022 we will see continued growth.”

Paycheck Protection Program

As a qualified Small Business Administration lender, the Company was automatically authorized to originate loans under the Paycheck Protection Program (“PPP”). During 2020, the Company received and processed 113 PPP applications totaling $10.5 million. The Company participated in the second round of PPP loans and during 2021, the Company received and processed 54 PPP applications totaling $6.9 million. The Company had 168 PPP loans outstanding totaling $5.8 million at December 31, 2021

COVID

The Company has provided assistance to individuals and small business clients directly impacted by the COVID-19 pandemic by allowing borrowers to modify their loans to defer principal and/or interest payments. Through December 31, 2020, the Company granted 172 loan modifications totaling $67.9 million. As of December 31, 2021, one residential loan totaling $117,000 was still on deferral.

Income Statement Analysis

Comparison of Operating Results for the Three Months Ended December 31, 2021 and December 31, 2020

Net income increased by $987,000, or 94.3%, to $2.0 million for the three months ended December 31, 2021 from $1.0 million for the three months ended December 31, 2020. The increase was due to increases in net interest income of $1.2 million and non-interest income of $1.2 million offset by an increase in non-interest expense of $1.3 million.

Interest income on cash and cash equivalents decreased $14,000, or 27.5%, to $37,000 for the three months ended December 31, 2021 from $51,000 for the three months ended December 31, 2020 due to a 13 basis point decrease in the average yield on cash and cash equivalents from 0.27% for the three months ended December 31, 2020 to 0.14% for the three months ended December 31, 2021 due to the lower interest rate environment. The decrease was partially offset by a $33.1 million increase in the average balance of cash and cash equivalents to $106.4 million for the three months ended December 31, 2021 from $73.3 million for the three months ended December 31, 2020, reflecting excess liquidity as deposit growth exceeded loan growth.

Interest income on loans increased $419,000, or 8.2%, to $5.6 million for the three months ended December 31, 2021 from $5.1 million for the three months ended December 31, 2020 due to a 17 basis point increase in the average yield on loans from 3.64% for the three months ended December 31, 2020 to 3.81% for the three months ended December 31, 2021 and a $16.0 million increase in the average balance of loans to $577.7 million for the three months ended December 31, 2021 from $561.7 million for the three months ended December 31, 2020. The increase in the average balance of loans reflected the addition of Gibraltar loans.

Interest income on securities increased $86,000, or 23.3%, to $459,000 for the three months ended December 31, 2021 from $373,000 for the three months ended December 31, 2020 due to a $30.4 million increase in the average balance of securities to $98.3 million for the three months ended December 31, 2021 from $67.9 million for the three months ended December 31, 2020, reflecting the purchase of investments with excess liquidity as deposit growth exceeded loan growth, offset by a 32 basis point decrease in the average yield from 2.19% for the three months ended December 31, 2020 to 1.87% for the three months ended December 31, 2021.

Interest expense on interest-bearing deposits decreased $652,000, or 41.6%, to $916,000 for the three months ended December 31, 2021 from $1.6 million for the three months ended December 31, 2020. The decrease was due primarily to a 65 basis point decrease in the average cost of interest-bearing deposits to 0.65% for the three months ended December 31, 2021 from 1.30% for the three months ended December 31, 2020. The decrease in the average cost of deposits was due to the lower interest rate environment and a larger increase in the average balance of lower-cost transaction accounts than the average balance of higher cost certificates of deposit. This decrease was offset by a $80.8 million increase in the average balance of deposits to $557.6 million for the three months ended December 31, 2021 from $476.8 million for the three months ended December 31, 2020.

Interest expense on Federal Home Loan Bank borrowings decreased $96,000, or 21.9%, from $438,000 for the three months ended December 31, 2020 to $342,000 for the three months ended December 31, 2021. The decrease was due to a decrease in the average cost of borrowings of 15 basis points to 1.56% for the three months ended December 31, 2021 from 1.71% for the three months ended December 31, 2020 due to the lower interest rate environment and a decrease in the average balance of borrowings of $14.7 million to $86.9 million for the three months ended December 31, 2021 from $101.6 million for the three months ended December 31, 2020.

Net interest income increased $1.2 million, or 33.4%, to $4.9 million for the three months ended December 31, 2021 from $3.6 million for the three months ended December 31, 2020. The increase reflected a 50 basis point increase in our net interest rate spread to 2.30% for the three months ended December 31, 2021 from 1.80% for the three months ended December 31, 2020. Our net interest margin increased 41 basis points to 2.44% for the three months ended December 31, 2021 from 2.03% for the three months ended December 31, 2020.

We recorded no provision for loan losses the three months ended December 31, 2021 and recorded a $75,000 credit for the three-month period ended December 31, 2020. Lower balances in residential loans, a more positive economic environment and continued strong asset quality metrics were the reasons for the absence of a provision for the three months ended December 31, 2021. The Bank continues to have a low level of delinquent and non-accrual loans in the portfolio, as well as no charge-offs. Non-performing assets were $1.9 million, or 0.23% of total assets, at December 31, 2021. The allowance for loan losses was $2.2 million, or 0.38% of loans outstanding and 113.9% of nonperforming loans, at December 31, 2021.

Non-interest income increased by $1.2 million, or 1,067.4%, to $1.3 million for the three months ended December 31, 2021 from $109,000 for the three months ended December 31, 2020. The increase was due to $1.0 million higher income on bank owned life insurance due to the purchase of $8.0 million of bank-owned life insurance and $891,000 in death benefit proceeds on bank owned life insurance, and a $139,000 gain on sale of $4.7 million residential loans during the three months ended December 31, 2021.

For the three months ended December 31, 2021, non-interest expense increased $1.3 million to $3.7 million, over the comparable 2020 period. Salaries and employee benefits increased $798,000, or 59.5%, attributable to adding the new Gibraltar employees. Data processing expense increased $38,000, or 17.1%, due to higher data processing expense from the merger. Professional fees decreased $84,000, or 37.6%, due in part to lower legal and merger expenses. The increase of other general operating expenses was mainly due to increase occupancy costs for the acquired Gibraltar Bank branches and the new branch location in Hasbrouck Heights, which opened in August.

Comparison of Operating Results for the Twelve Months Ended December 31, 2021 and December 31, 2020

Net income increased by $5.5 million to $7.5 million for the twelve months ended December 31, 2021 from $2.1 million for the twelve months ended December 31, 2020. The increase was due to increases in net interest income of $5.7 million, a decrease in the provision for loan losses of $288,000 and an increase in non-interest income of $3.4 million, offset by increases in non-interest expense of $2.5 million and income tax expense of $1.4 million.

Interest income on cash and cash equivalents decreased $298,000, or 66.4%, to $151,000 for the twelve months ended December 31, 2021 from $449,000 for the twelve months ended December 31, 2020 due to a 50 basis point decrease in the average yield on cash and cash equivalents from 0.65% for the twelve months ended December 31, 2020 to 0.15% for the twelve months ended December 31, 2021 due to the lower interest rate environment. The decrease was offset by a $31.3 million increase in the average balance of cash and cash equivalents to $99.8 million for the twelve months ended December 31, 2021 from $68.6 million for the twelve months ended December 31, 2020, reflecting excess liquidity as deposit growth exceeded loan growth.

Interest income on loans increased $1.8 million, or 8.6%, to $22.7 million for the twelve months ended December 31, 2021 from $20.9 million for the twelve months ended December 31, 2020 due to a $19.6 million increase in the average balance of loans to $583.4 million for the twelve months ended December 31, 2021 from $563.8 million for the twelve months ended December 31, 2020. The increase in the average balance of loans reflected our continued efforts to increase our loan originations and the loans acquired from Gibraltar Bank. The increase was supplemented by a 19 basis point increase in the average yield on loans from 3.70% for the twelve months ended December 31, 2020 to 3.89% for the twelve months ended December 31, 2021.

Interest income on securities increased $356,000, or 22.0%, to $2.0 million for the twelve months ended December 31, 2021 from $1.6 million for the twelve months ended December 31, 2020 due to a $20.2 million increase in the average balance of securities to $86.0 million for the twelve months ended December 31, 2021 from $65.9 million for the twelve months ended December 31, 2020 offset by a 16 basis point decrease in the average yield from 2.45% for the twelve months ended December 31, 2020 to 2.29% for the twelve months ended December 31, 2021, reflecting the purchase of investment securities at lower interest rates with excess liquidity as deposit growth exceeded loan growth.

Interest expense on interest-bearing deposits decreased $3.5 million, or 45.0%, to $4.3 million for the twelve months ended December 31, 2021 from $7.8 million for the twelve months ended December 31, 2020. The decrease was due primarily to 85 basis point decrease in the average cost of interest-bearing deposits to 0.79% for the twelve months ended December 31, 2021 from 1.64% for the twelve months ended December 31, 2020. The decrease in the average cost of deposits was due to the lower interest rate environment and a larger increase in the average balance of lower-cost transaction accounts than the average balance of higher cost certificates of deposit. This decrease was offset by a $64.6 million increase in the average balance of deposits to $537.3 million for the twelve months ended December 31, 2021 from $472.7 million for the twelve months ended December 31, 2020.

Interest expense on Federal Home Loan Bank borrowings decreased $397,000, or 20.7%, from $1.9 million for the twelve months ended December 31, 2020 to $1.5 million for the twelve months ended December 31, 2021. The decrease was primarily due to the lower interest rate environment, as the average cost of borrowings decreased 27 basis point to 1.56% for the twelve months ended December 31, 2021 from 1.83% for the twelve months ended December 31, 2020.

Net interest income increased $5.7 million, or 23.6%, to $19.3 million for the twelve months ended December 31, 2021 from $13.6 million for the twelve months ended December 31, 2020. The increase reflected a 70 basis point increase in our net interest rate spread to 2.33% for the twelve months ended December 31, 2021 from 1.63% for the twelve months ended December 31, 2020. Our net interest margin increased 57 basis points to 2.50% for the twelve months ended December 31, 2021 from 1.93% for the twelve months ended December 31, 2020.

We recorded a credit for loan losses of $88,000 for the twelve months ended December 31, 2021 compared to a provision for loan losses of $200,000 for the twelve months ended December 31, 2020. Lower balances in residential loans, a more positive economic environment and continued strong asset quality metrics were the reasons for the credit during the twelve months ended December 31, 2020. The Bank continues to have a low level of delinquent and non-accrual loans in the portfolio, as well as no charge-offs.

Non-interest income increased by $3.4 million or 306.4%, to $4.5 million for the twelve months ended December 31, 2021 from $1.1 million for the twelve months ended December 31, 2020. The increase was due to $2.0 million bargain purchase gain for the Gibraltar merger, a $786,000 gain on sale of $26.6 million residential loans sold during the twelve months ended December 31, 2021, and $409,000 higher income on bank owned life insurance due to the purchase of $8.0 million of bank-owned life insurance and collection of $891,000 death benefits proceeds on bank owned life insurance.

For the twelve months ended December 31, 2021, non-interest expense increased $2.5 million to $14.5 million, over 2020. Salaries and employee benefits increased $2.6 million, or 50.9%, attributable to adding the new Gibraltar employees, additional branch offices and normal merit increases. Data processing expense increased $322,000, or 45.1%, due to higher data processing expense from maintaining two core systems until the data processing conversion was completed in August. Professional fees decreased $130,000, or 15.0%, due to lower legal and consulting fees. Merger expenses were $392,000 in 2021 associated with the Gibraltar Bank acquisition. The increase of other general operating expenses was mainly due to increased occupancy costs for the acquired Gibraltar Bank branches and the branch location in Hasbrouck Heights, which opened in August. During the twelve months ended December 31, 2020, the Bank made a $2.9 million contribution to the Bogota Charitable Foundation and there was no contribution for the twelve months ended December 31, 2021.

Balance Sheet Analysis

Total assets were $837.4 million at December 31, 2021, representing an increase of $96.5 million, or 13.0%, from December 31, 2020. Cash and cash equivalents from banks increased $24.7 million during the period primarily due to $19.6 million in repayments in residential loans and $19.3 million in cash from the Gibraltar Bank acquisition. Net loans increased $12.5 million, or 2.2%, due to new production of $92.6 million, consisting of a relatively equal mix of residential real estate loans and commercial real estate loans and $77.0 million of loans acquired from Gibraltar Bank, which was offset by $157.1 million in repayments. Securities held to maturity increased $16.5 million due to the purchase of corporate bonds and mortgage-backed securities with excess cash. Securities available for sale increased $30.0 million due to the purchase of mortgage backed securities and corporate bonds with excess cash. Bank-owned life insurance increased $7.6 million due to a new purchase of $8.0 million of Bank-owned life insurance offset by death proceeds.

Delinquent loans increased $780,000, or 87.9%, during the twelve-month period ended December 31, 2021, finishing at $1.7 million or 0.3% of total loans. During the same timeframe, non-performing assets increased $1.9 million, or 173.1%, to $1.9 million due to the addition of three loans acquired in the Gibraltar Bank acquisition and were 0.2% of total assets at December 31, 2021. The Company’s allowance for loan losses was 0.38% of total loans and 113.9% of non-performing loans at December 31, 2021.

Total liabilities increased $77.3 million, or 12.6%, to $689.8 million mainly due to deposits acquired from Gibraltar Bank, offset by a decrease in borrowings. Total deposits increased $95.5 million, or 19.0%, to $597.5 million at December 31, 2021 from $502.0 million at December 31, 2020. The increase in deposits reflected an increase in interest-bearing deposits of $83.3 million, or 17.5%, to $558.2 million as of December 31, 2021 from $474.9 million at December 31, 2020 and an increase in non-interest bearing deposits of $12.3 million, or 45.3%, to $39.3 million as of December 31, 2021 from $27.1 million as of December 31, 2020. The increases are primarily due to the $81.4 million of deposits acquired from Gibraltar Bank. Federal Home Loan Bank advances decreased $19.2 million, or 18.4%, as the $10.0 million of borrowings acquired from Gibraltar Bank were offset by $24.2 million of borrowings that matured.

Stockholders’ equity increased $19.1 million to $147.6 million, as a result of $11.5 million of capital acquired from Gibraltar Bank and net income of $7.5 million for the twelve months ended December 31, 2021. At December 31, 2021, the Company’s ratio of average stockholders’ equity-to-total assets was 17.55%, compared to 16.97% at December 31, 2020.

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, general economic conditions or conditions within the securities markets, changes in the quality of our loan and security portfolios, increases in non-performing and classified loans, and legislative, accounting and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on the Company’s business. The extent of such impact will depend on future developments, which are highly uncertain, including if the coronavirus can continue to be controlled and abated. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, the Company could be subject to any of the following risks, any of which could have a material, adverse effect on the Company’s business, financial condition, liquidity, and results of operations: demand for the Company’s products and services may decline, making it difficult to grow assets and income; if the economy worsens, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; the Company’s allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect the Company’s net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us; the Company’s cyber security risks are increased as the result of an increase in the number of employees working remotely; and FDIC premiums may increase if the agency experience additional resolution costs.

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

[1] This number represents a non-GAAP financial measure. Please see “Reconciliation of GAAP to Non-GAAP” contained at the end of this release.

[2] This number represents a non-GAAP financial measure. Please see “Reconciliation of GAAP to Non-GAAP” contained at the end of this release.

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

 

 

 

As of

 

 

As of

 

 

 

December 31, 2021

 

 

December 31, 2020

 

Assets

 

(unaudited)

 

 

 

 

Cash and due from banks

 

$

14,446,792

 

 

$

5,957,564

 

Interest-bearing deposits in other banks

 

 

90,621,993

 

 

 

74,428,175

 

Cash and cash equivalents

 

 

105,068,785

 

 

 

80,385,739

 

Securities available for sale

 

 

41,838,798

 

 

 

11,870,508

 

Securities held to maturity (fair value of $74,081,059 and $58,872,451,

respectively)

 

 

74,053,099

 

 

 

57,504,443

 

Loans held for sale

 

 

1,152,500

 

 

 

 

Loans, net of allowance of $2,153,174 and $2,241,174, respectively

 

 

570,209,669

 

 

 

557,690,853

 

Premises and equipment, net

 

 

8,127,979

 

 

 

5,671,097

 

Federal Home Loan Bank (FHLB) stock and other restricted securities

 

 

4,851,300

 

 

 

5,858,100

 

Accrued interest receivable

 

 

2,712,605

 

 

 

2,855,425

 

Core deposit intangibles

 

 

336,364

 

 

 

 

Bank-owned life insurance

 

 

24,524,122

 

 

 

16,915,637

 

Other assets

 

 

4,486,366

 

 

 

2,153,076

 

Total Assets

 

$

837,361,587

 

 

$

740,904,878

 

Liabilities and Equity

 

 

 

 

 

 

Non-interest bearing deposits

 

$

39,317,500

 

 

$

27,061,629

 

Interest bearing deposits

 

 

558,162,278

 

 

 

474,911,402

 

Total Deposits

 

 

597,479,778

 

 

 

501,973,031

 

FHLB advances

 

 

85,051,736

 

 

 

104,290,920

 

Advance payments by borrowers for taxes and insurance

 

 

2,916,152

 

 

 

2,560,089

 

Other liabilities

 

 

4,337,710

 

 

 

3,612,762

 

Total liabilities

 

 

689,785,376

 

 

 

612,436,802

 

Commitments and Contingencies

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

Preferred stock $0.01 par value 1,000,000 shares authorized, none issued

and outstanding at December 31, 2021 and December 31, 2020

 

 

 

 

 

 

Common stock $0.01 par value, 30,000,000 shares authorized,

14,605,700 issued and outstanding at December 31, 2021 and

13,157,525 at December 31, 2020

 

 

146,057

 

 

 

131,575

 

Additional paid-in capital

 

 

68,247,204

 

 

 

56,975,187

 

Retained earnings

 

 

84,879,812

 

 

 

77,359,737

 

Unearned ESOP shares (463,239 shares at December 31, 2021 and

489,983 shares at December 31, 2020)

 

 

(5,424,206

)

 

 

(5,725,410

)

Accumulated other comprehensive loss

 

 

(272,656

)

 

 

(273,013

)

Total stockholders’ equity

 

 

147,576,211

 

 

 

128,468,076

 

Total liabilities and stockholders’ equity

 

$

837,361,587

 

 

$

740,904,878

 

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 

 

 

Three months ended

December 31,

 

 

Year ended

December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

5,555,242

 

 

$

5,136,396

 

 

$

22,672,097

 

 

$

20,870,655

 

Securities

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

439,128

 

 

 

359,665

 

 

 

1,912,146

 

 

 

1,563,721

 

Tax-exempt

 

 

20,094

 

 

 

12,836

 

 

 

58,888

 

 

 

50,853

 

Other interest-earning assets

 

 

91,936

 

 

 

130,541

 

 

 

424,539

 

 

 

791,033

 

Total interest income

 

 

6,106,400

 

 

 

5,639,438

 

 

 

25,067,670

 

 

 

23,276,262

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

916,212

 

 

 

1,568,182

 

 

 

4,271,109

 

 

 

7,762,642

 

FHLB advances

 

 

342,317

 

 

 

437,559

 

 

 

1,519,302

 

 

 

1,915,991

 

Total interest expense

 

 

1,258,529

 

 

 

2,005,741

 

 

 

5,790,411

 

 

 

9,678,633

 

Net interest income

 

 

4,847,871

 

 

 

3,633,697

 

 

 

19,277,259

 

 

 

13,597,629

 

Provision (credit) for loan losses

 

 

 

 

 

(75,000

)

 

 

(88,000

)

 

 

200,000

 

Net interest income after provision (credit) for loan losses

 

 

4,847,871

 

 

 

3,708,697

 

 

 

19,365,259

 

 

 

13,397,629

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

 

37,222

 

 

 

13,495

 

 

 

136,211

 

 

 

58,946

 

Gain on sale of loans

 

 

139,211

 

 

 

 

 

 

786,424

 

 

 

 

Bargain purchase gain

 

 

17,573

 

 

 

 

 

 

1,950,970

 

 

 

 

Bank-owned life insurance

 

 

1,044,628

 

 

 

88,543

 

 

 

1,436,453

 

 

 

1,027,703

 

Other

 

 

28,572

 

 

 

6,516

 

 

 

183,454

 

 

 

18,986

 

Total non-interest income

 

 

1,267,206

 

 

 

108,554

 

 

 

4,493,512

 

 

 

1,105,635

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

2,140,286

 

 

 

1,341,846

 

 

 

7,743,694

 

 

 

5,132,372

 

Occupancy and equipment

 

 

361,529

 

 

 

163,345

 

 

 

1,261,306

 

 

 

658,854

 

FDIC insurance assessment

 

 

54,000

 

 

 

45,000

 

 

 

217,300

 

 

 

161,000

 

Data processing

 

 

258,414

 

 

 

220,670

 

 

 

1,036,203

 

 

 

714,109

 

Advertising

 

 

96,665

 

 

 

45,959

 

 

 

276,665

 

 

 

177,773

 

Director fees

 

 

250,877

 

 

 

186,011

 

 

 

873,008

 

 

 

733,102

 

Professional fees

 

 

138,787

 

 

 

222,321

 

 

 

735,067

 

 

 

865,209

 

Merger fees

 

 

 

 

 

 

 

 

392,197

 

 

 

 

Core conversion costs

 

 

 

 

 

 

 

 

730,000

 

 

 

 

Contribution to charitable foundation

 

 

 

 

 

 

 

 

 

 

 

2,881,500

 

Other

 

 

377,275

 

 

 

146,256

 

 

 

1,198,081

 

 

 

673,815

 

Total non-interest expense

 

 

3,677,833

 

 

 

2,371,408

 

 

 

14,463,521

 

 

 

11,997,734

 

Income before income taxes

 

 

2,437,244

 

 

 

1,445,843

 

 

 

9,395,250

 

 

 

2,505,530

 

Income tax expense

 

 

404,372

 

 

 

399,524

 

 

 

1,875,175

 

 

 

437,305

 

Net income

 

$

2,032,872

 

 

$

1,046,319

 

 

$

7,520,075

 

 

$

2,068,225

 

Earnings per Share - basic

 

$

0.15

 

 

$

0.08

 

 

$

0.55

 

 

$

0.09

 

Earnings per Share - diluted

 

$

0.14

 

 

$

0.08

 

 

$

0.52

 

 

$

0.09

 

Weighted average shares outstanding

 

 

13,900,769

 

 

 

12,664,194

 

 

 

13,725,884

 

 

 

12,170,610

 

Weighted average shares outstanding - diluted

 

 

14,222,841

 

 

 

12,664,194

 

 

 

14,350,788

 

 

 

12,170,610

 

 

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

 

 

(unaudited)

 

 

(unaudited)

 

 

At or For the Three Months

Ended December 31,

 

 

At or For the Twelve Months

Ended December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Performance Ratios (1):

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (2)

 

0.97

%

 

 

0.57

%

 

 

1.23

%

 

 

0.28

%

Return on average equity (3)

 

5.54

%

 

 

3.27

%

 

 

7.06

%

 

 

1.66

%

Interest rate spread (4)

 

2.30

%

 

 

1.80

%

 

 

2.33

%

 

 

1.63

%

Net interest margin (5)

 

2.44

%

 

 

2.03

%

 

 

2.50

%

 

 

1.93

%

Efficiency ratio (6)

 

60.14

%

 

 

63.37

%

 

 

60.85

%

 

 

81.60

%

Average interest-earning assets to average interest-bearing liabilities

 

122.19

%

 

 

122.54

%

 

 

122.40

%

 

 

122.01

%

Net loans to deposits

 

95.44

%

 

 

111.10

%

 

 

95.44

%

 

 

111.10

%

Equity to assets (7)

 

17.55

%

 

 

16.97

%

 

 

17.55

%

 

 

16.97

%

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital to average assets

 

 

 

 

 

 

 

17.88

%

 

 

17.25

%

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses as a percent of total loans

 

 

 

 

 

 

 

0.38

%

 

 

0.40

%

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

 

 

 

 

 

 

 

113.85

%

 

 

323.60

%

Net recoveries to average outstanding loans during the period

 

 

 

 

 

 

 

0.00

%

 

 

0.00

%

Non-performing loans as a percent of total loans

 

 

 

 

 

 

 

0.33

%

 

 

0.12

%

Non-performing assets as a percent of total assets

 

 

 

 

 

 

 

0.23

%

 

 

0.09

%

 

 

 

 

 

 

 

 

 

 

 

 

(1) Performance ratios 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 30%.

(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 30% for 2021 and 2020.

(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 (unaudited)

Loans are summarized as follows at December 31, 2021 and December 31, 2020:

 

 

December 31,

2021

 

 

December 31,

2020

 

Real estate:

 

 

 

 

 

 

Residential

 

$

319,968,234

 

 

$

340,000,989

 

Commercial and multi-family real estate

 

 

175,375,419

 

 

 

171,634,451

 

Construction

 

 

41,384,687

 

 

 

9,930,959

 

Commercial and industrial

 

 

7,905,524

 

 

 

13,652,248

 

Consumer:

 

 

 

 

 

 

Home equity and other

 

 

27,728,979

 

 

 

24,713,380

 

Total loans

 

 

572,362,843

 

 

 

559,932,027

 

Allowance for loan losses

 

 

(2,153,174

)

 

 

(2,241,174

)

Net loans

 

$

570,209,669

 

 

$

557,690,853

 

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

 

 

At December 31,

 

At December

 

 

 

2021

 

 

2020

 

 

 

Amount

 

 

Percent

 

 

Average

Rate

 

 

Amount

 

 

Percent

 

 

Average

Rate

 

 

 

(Dollars in thousands)

 

 

 

(unaudited)

 

Noninterest bearing demand accounts

 

$

39,318

 

 

 

6.58

%

 

 

%

 

$

27,062

 

 

 

5.39

%

 

 

%

NOW accounts

 

 

69,940

 

 

 

11.71

 

 

 

0.82

 

 

 

28,672

 

 

 

5.71

 

 

0.74

 

Money market accounts

 

 

57,541

 

 

 

9.63

 

 

 

0.34

 

 

 

58,114

 

 

 

11.58

 

 

 

0.47

 

Savings accounts

 

 

64,285

 

 

 

10.76

 

 

0.26

 

 

 

31,761

 

 

 

6.33

 

 

1.25

 

Certificates of deposit

 

 

366,396

 

 

 

61.32

 

 

 

0.74

 

 

 

356,364

 

 

 

70.99

 

 

 

1.33

 

Total

 

$

597,480

 

 

 

100.00

%

 

 

0.61

%

 

$

501,973

 

 

 

100.00

%

 

 

1.06

%

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,

 

 

 

2021

 

 

2020

 

 

 

Average

Balance

 

 

Interest and

Dividends

 

 

Yield/

Cost (3)

 

 

Average

Balance

 

 

Interest and

Dividends

 

 

Yield/

Cost (3)

 

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

106,400

 

 

$

37

 

 

 

0.14

%

 

$

73,312

 

 

$

51

 

 

 

0.27

%

Loans

 

 

577,699

 

 

 

5,555

 

 

 

3.81

%

 

 

561,710

 

 

 

5,136

 

 

 

3.64

%

Securities

 

 

98,307

 

 

 

459

 

 

 

1.87

%

 

 

67,931

 

 

 

373

 

 

 

2.19

%

Other interest-earning assets

 

 

5,077

 

 

 

55

 

 

 

4.33

%

 

 

5,803

 

 

 

80

 

 

 

5.51

%

Total interest-earning assets

 

 

787,483

 

 

 

6,106

 

 

 

3.08

%

 

 

708,756

 

 

 

5,640

 

 

 

3.17

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-earning assets

 

 

48,406

 

 

 

 

 

 

 

 

 

30,293

 

 

 

 

 

 

 

Total assets

 

$

835,889

 

 

 

 

 

 

 

 

$

739,049

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

121,764

 

 

$

198

 

 

 

0.65

%

 

$

86,449

 

 

$

144

 

 

 

0.66

%

Savings accounts

 

 

64,363

 

 

 

41

 

 

 

0.25

%

 

 

30,708

 

 

 

20

 

 

 

0.26

%

Certificates of deposit

 

 

371,490

 

 

 

677

 

 

 

0.72

%

 

 

359,614

 

 

 

1,404

 

 

 

1.55

%

Total interest-bearing deposits

 

 

557,617

 

 

 

916

 

 

 

0.65

%

 

 

476,771

 

 

 

1,568

 

 

 

1.30

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

 

86,855

 

 

 

342

 

 

 

1.56

%

 

 

101,601

 

 

 

438

 

 

 

1.71

%

Total interest-bearing liabilities

 

 

644,472

 

 

 

1,258

 

 

 

0.77

%

 

 

578,372

 

 

 

2,006

 

 

 

1.38

%

Non-interest-bearing deposits

 

 

39,703

 

 

 

 

 

 

 

 

 

26,637

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

5,030

 

 

 

 

 

 

 

 

 

6,100

 

 

 

 

 

 

 

Total liabilities

 

 

689,205

 

 

 

 

 

 

 

 

 

611,109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

146,684

 

 

 

 

 

 

 

 

 

127,940

 

 

 

 

 

 

 

Total liabilities and equity

 

$

835,889

 

 

 

 

 

 

 

 

$

739,049

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

4,848

 

 

 

 

 

 

 

 

$

3,634

 

 

 

 

Interest rate spread (1)

 

 

 

 

 

 

 

 

2.30

%

 

 

 

 

 

 

 

 

1.80

%

Net interest margin (2)

 

 

 

 

 

 

 

 

2.44

%

 

 

 

 

 

 

 

 

2.03

%

Average interest-earning assets to average interest-bearing liabilities

 

 

122.19

%

 

 

 

 

 

 

 

 

122.54

%

 

 

 

 

 

 

  1. Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
  2. Net interest margin represents net interest income divided by average total interest-earning assets.
  3. Annualized.

 

 

Twelve Months Ended December 31,

 

 

 

2021

 

 

2020

 

 

 

Average

Balance

 

 

Interest and

Dividends

 

 

Yield/

Cost (3)

 

 

Average

Balance

 

 

Interest and

Dividends

 

 

Yield/

Cost (3)

 

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

99,842

 

 

$

151

 

 

 

0.15

%

 

$

68,553

 

 

$

449

 

 

 

0.65

%

Loans

 

 

583,362

 

 

 

22,672

 

 

 

3.89

%

 

 

563,769

 

 

 

20,871

 

 

 

3.70

%

Securities

 

 

86,035

 

 

 

1,971

 

 

 

2.29

%

 

 

65,871

 

 

 

1,615

 

 

 

2.45

%

Other interest-earning assets

 

 

5,606

 

 

 

273

 

 

 

4.87

%

 

 

6,008

 

 

 

341

 

 

 

5.68

%

Total interest-earning assets

 

 

774,845

 

 

 

25,067

 

 

 

3.24

%

 

 

704,201

 

 

 

23,276

 

 

 

3.31

%

Non-interest-earning assets

 

 

42,252

 

 

 

 

 

 

 

 

 

28,804

 

 

 

 

 

 

 

Total assets

 

$

817,097

 

 

 

 

 

 

 

 

$

733,005

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

104,945

 

 

$

625

 

 

 

0.60

%

 

$

59,984

 

 

$

530

 

 

 

0.88

%

Savings accounts

 

 

58,880

 

 

 

127

 

 

 

0.22

%

 

 

30,005

 

 

 

77

 

 

 

0.26

%

Certificates of deposit

 

 

373,490

 

 

 

3,519

 

 

 

0.94

%

 

 

382,696

 

 

 

7,155

 

 

 

1.87

%

Total interest-bearing deposits

 

 

537,315

 

 

 

4,271

 

 

 

0.79

%

 

 

472,685

 

 

 

7,762

 

 

 

1.64

%

Federal Home Loan Bank advances

 

 

97,621

 

 

 

1,519

 

 

 

1.56

%

 

 

104,479

 

 

 

1,916

 

 

 

1.83

%

Total interest-bearing liabilities

 

 

634,936

 

 

 

5,790

 

 

 

0.91

%

 

 

577,164

 

 

 

9,678

 

 

 

1.68

%

Non-interest-bearing deposits

 

 

30,952

 

 

 

 

 

 

 

 

 

22,109

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

8,822

 

 

 

 

 

 

 

 

 

9,371

 

 

 

 

 

 

 

Total liabilities

 

 

674,710

 

 

 

 

 

 

 

 

 

608,644

 

 

 

 

 

 

 

Total equity

 

 

142,387

 

 

 

 

 

 

 

 

 

124,361

 

 

 

 

 

 

 

Total liabilities and equity

 

$

817,097

 

 

 

 

 

 

 

 

$

733,005

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

19,277

 

 

 

 

 

 

 

 

$

13,598

 

 

 

 

Interest rate spread (1)

 

 

 

 

 

 

 

 

2.33

%

 

 

 

 

 

 

 

 

1.63

%

Net interest margin (2)

 

 

 

 

 

 

 

 

2.50

%

 

 

 

 

 

 

 

 

1.93

%

Average interest-earning assets to average interest-bearing liabilities

 

 

122.04

%

 

 

 

 

 

 

 

 

122.01

%

 

 

 

 

 

 

  1. Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
  2. Net interest margin represents net interest income divided by average total interest-earning assets.
  3. Annualized.

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,

2021 Compared to Three

Months Ended December 31, 2020

 

 

Twelve Months Ended December 31,

2021 Compared to Twelve Months

Ended December 31, 2020

 

 

 

Increase (Decrease) Due to

 

 

Increase (Decrease) Due to

 

 

 

Volume

 

 

Rate

 

 

Net

 

 

Volume

 

 

Rate

 

 

Net

 

 

 

(In thousands)

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

46

 

 

$

(60

)

 

$

(14

)

 

$

47

 

 

$

(345

)

 

$

(298

)

Loans receivable

 

 

609

 

 

 

(190

)

 

 

419

 

 

 

762

 

 

 

1,039

 

 

 

1,801

 

Securities

 

 

568

 

 

 

(482

)

 

 

86

 

 

 

462

 

 

 

(106

)

 

 

356

 

Other interest earning assets

 

 

(31

)

 

 

6

 

 

 

(25

)

 

 

(20

)

 

 

(48

)

 

 

(68

)

Total interest-earning assets

 

 

1,192

 

 

 

(726

)

 

 

466

 

 

 

1,251

 

 

 

540

 

 

 

1,791

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

 

230

 

 

 

(176

)

 

 

54

 

 

 

308

 

 

 

(68

)

 

 

240

 

Savings accounts

 

 

84

 

 

 

(63

)

 

 

21

 

 

 

64

 

 

 

6

 

 

 

70

 

Certificates of deposit

 

 

86

 

 

 

(813

)

 

 

(727

)

 

 

(120

)

 

 

(2,113

)

 

 

(2,233

)

Federal Home Loan Bank advances

 

 

(230

)

 

 

134

 

 

 

(96

)

 

 

(108

)

 

 

148

 

 

 

40

 

Total interest-bearing liabilities

 

 

170

 

 

 

(918

)

 

 

(748

)

 

 

144

 

 

 

(2,027

)

 

 

(1,883

)

Net increase (decrease) in net interest income

 

$

1,022

 

 

$

192

 

 

$

1,214

 

 

$

1,107

 

 

$

2,567

 

 

$

3,674

 

BOGOTA FINANCIAL CORP.

RECONCILIATION OF GAAP TO NON-GAAP

The Company’s management believes that the presentation of net income on a non-GAAP basis, excluding nonrecurring items, provides useful information for evaluating the Company’s operating results and any related trends that may be affecting the Company’s business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.

 

Three months ended December 31, 2021

 

 

Income Before

Income Taxes

 

 

Provision for

Income Taxes

 

 

Net Income

 

GAAP basis

$

2,437,244

 

 

$

404,372

 

 

$

2,032,872

 

Add: merger-related expenses

 

 

 

 

 

 

 

 

Non-GAAP basis

$

2,437,244

 

 

$

404,372

 

 

$

2,032,872

 

 

 

 

 

 

 

 

 

 

 

Three months ended December 31, 2020

 

 

Income Before

Income Taxes

 

 

Provision for

Income Taxes

 

 

Net Income

 

GAAP basis

$

1,445,843

 

 

$

399,524

 

 

$

1,046,319

 

Add: merger-related expenses

$

89,069

 

 

$

24,939

 

 

$

64,130

 

Non-GAAP basis

$

1,534,912

 

 

$

424,463

 

 

$

1,110,449

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended December 31, 2021

 

 

Income Before

Income Taxes

 

 

Provision for

Income Taxes

 

 

Net Income

 

GAAP basis

$

9,395,250

 

 

$

1,875,175

 

 

$

7,520,075

 

Add: merger and acquisition related expenses

 

392,197

 

 

 

 

 

 

392,197

 

ADD: Charitable Foundation Contribution

 

 

 

 

 

 

 

 

Less: Bargain purchase gain

 

(1,950,970

)

 

 

 

 

 

(1,950,970

)

Non-GAAP basis

$

7,836,477

 

 

$

1,875,175

 

 

$

5,961,302

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended December 31, 2020

 

 

Income Before

Income Taxes

 

 

Provision for

Income Taxes

 

 

Net Income

 

GAAP basis

$

2,505,530

 

 

$

437,305

 

 

$

2,068,225

 

Add: merger and acquisition related expenses

 

167,675

 

 

 

 

 

 

167,675

 

Add: Charitable Foundation Contribution

 

2,881,500

 

 

 

809,990

 

 

 

2,071,510

 

Less: Bargain purchase gain

 

 

 

 

 

 

 

 

Non-GAAP basis

$

5,554,705

 

 

$

1,247,295

 

 

$

4,307,410

 

 

 

 

 

 

 

 

 

 

 

Twelve months ended December 31,

 

Return on average assets (annualized):

2021

 

 

2020

 

 

 

 

GAAP

 

1.23

%

 

 

0.28

%

 

 

 

Adjustments

 

0.25

%

 

 

0.27

%

 

 

 

Non-GAAP

 

0.98

%

 

 

0.55

%

 

 

 

Return on average equity (annualized):

 

 

 

 

 

 

 

 

GAAP

 

7.06

%

 

 

1.66

%

 

 

 

Adjustments

 

1.46

%

 

 

1.59

%

 

 

 

Non-GAAP

 

5.60

%

 

 

3.25

%

 

 

 

 

Contacts

Joseph Coccaro – President & CEO, 201-862-0660 ext. 1110

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