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Bogota Financial Corp. Reports Results for the Three and Twelve Months Ended December 31, 2022

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, 2022 of $1.9 million or $0.14 per basic and diluted share, compared to net income of $2.0 million or $0.15 per basic and $0.14 per diluted share for the comparable prior year period. The Company reported net income for the twelve months ended December 31, 2022 of $6.9 million or $0.51 per basic and diluted share compared to net income of $7.5 million, or $0.55 per basic and $0.52 per diluted share, for the prior year. During the twelve months ended December 31, 2021, the Company recorded a bargain purchase gain of $2.0 million, and merger-related expenses of $392,000, each of which was associated with the acquisition of Gibraltar Bank. Excluding the bargain purchase gain and the merger-related expenses in 2021, net income for the twelve months ended December 31, 2021 was $6.0 million or $0.43 per basic and $0.42 per diluted share.1

On April 12, 2022, the Company announced it completed its initial stock repurchase plan, repurchasing 296,044 shares, or approximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC), at an average cost of $10.82 per share. On September 21, 2022, the Company completed its second stock repurchase plan by repurchasing 292,568 shares, or approximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC), at an average cost of $11.14 per share. On October 3, 2022, the Company announced it had received regulatory approval for the repurchase of up to 556,631 shares of its common stock, which was approximately 10% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC). As of December 31, 2022, 360,372 shares have been repurchased.

Other Financial Highlights:

  • Total assets increased $113.7 million, or 13.6%, to $951.1 million at December 31, 2022 from $837.4 million at December 31, 2021, due to an increase in loans and securities, which was primarily funded by cash and cash equivalents, deposits and borrowings.
  • Net loans increased $148.8 million, or 26.1%, to $719.0 million at December 31, 2022 from $570.2 million at December 31, 2021.
  • Total deposits were $701.4 million, increasing $103.9 million, or 17.4%, as compared to $597.5 million at December 31, 2021, primarily due to a new $38.2 million municipal deposit relationship and $126.2 million in increased certificates of deposit. The average rate paid on deposits at December 31, 2022 increased 121 basis points to 1.82% at December 31, 2022 from 0.61% at December 31, 2021 due to higher interest rates and a larger percentage of deposits consisting of higher-costing certificates of deposit.
  • Return on average assets was 0.77% for the twelve-month period ended December 31, 2022 compared to 1.23% for 2021. Without the bargain purchase gain and merger-related expenses, the return on average assets would have been 0.98%1 for the twelve-month period ended December 31, 2021.
  • Return on average equity was 4.76% for the twelve-month period ended December 31, 2022 compared to 7.06% for 2021. Without the bargain purchase gain and merger-related expenses, the return on average equity would have been 5.60%1 for the twelve-month period ended December 31, 2021.

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

Joseph Coccaro, President and Chief Executive Officer, said, “We are pleased with our results for 2022. We had over $225 million in new loan originations, which increased our loan portfolio by $149 million during the year. We continue to have strong credit quality as non-performing loans and criticized assets remain low. We continue to see improvement in our net interest margin which rose 24 basis points and 26 basis points as compared to the three and twelve months ended December 31, 2021, respectively.“

Mr. Coccaro further stated, "We are pleased to report continued consistent earnings and exceptional loan growth during a challenging economic environment in 2022. We expect loan growth to slow in the first quarter as interest rates continue to increase, higher inflation and the continued low inventory in housing will slow the market. Increased interest rate liability costs may impact future earnings.“

Income Statement Analysis

Comparison of Operating Results for the Three Months Ended December 31, 2022 and December 31, 2021

Net income decreased by $130,000, or 6.4%, to $1.9 million for the three months ended December 31, 2022 from $2.0 million for the three months ended December 31, 2021. The decrease was due to an increase of $150,000 in the provision for loan losses, a decrease in non-interest income of $1.0 million and an increase in income tax expense of $328,000, offset by an increase in net interest income of $1.2 million and a decrease of $167,000 in non-interest expense.

Interest income on cash and cash equivalents decreased $7,000, or 18.9%, to $30,000 for the three months ended December 31, 2022 from $37,000 for the three months ended December 31, 2021 due to a $103.4 million decrease in the average balance of cash and cash equivalents to $3.0 million for the three months ended December 31, 2022 from $106.4 million for the three months ended December 31, 2021, reflecting the use of excess liquidity to fund loan originations and purchase investment securities. This was offset by a 384 basis point increase in the average yield on cash and cash equivalents from 0.14% for the three months ended December 31, 2021 to 3.98% for the three months ended December 31, 2022 due to the higher interest rate environment.

Interest income on loans increased $2.3 million, or 41.5%, to $7.9 million for the three months ended December 31, 2022 compared to $5.6 million for the three months ended December 31, 2021 due primarily to an $139.4 million increase in the average balance of loans to $717.1 million for the three months ended December 31, 2022 from $577.7 million for the three months ended December 31, 2021 and due to a 54 basis point increase in the average yield on loans from 3.81% for the three months ended December 31, 2021 to 4.35% for the three months ended December 31, 2022.

Interest income on securities increased $521,000, or 113.4%, to $980,000 for the three months ended December 31, 2022 from $459,000 for the three months ended December 31, 2021 due primarily to a $69.4 million increase in the average balance of securities to $167.7 million for the three months ended December 31, 2022 from $98.3 million for the three months ended December 31, 2021, reflecting the purchase of investments with excess liquidity, and to a lesser extent, due to a 47 basis point increase in the average yield from 1.87% for the three months ended December 31, 2021 to 2.34% for the three months ended December 31, 2022.

Interest expense on interest-bearing deposits increased $1.3 million, or 138.0%, to $2.2 million for the three months ended December 31, 2022 from $916,000 for the three months ended December 31, 2021. The increase was due to a 69 basis point increase in the average cost of interest-bearing deposits to 1.34% for the three months ended December 31, 2022 from 0.65% for the three months ended December 31, 2021. The increase in the average cost of deposits was due to the higher interest rate environment and higher average balances of certificates of deposit. The increased expense on interest-bearing deposits was also due to an $89.7 million increase in the average balance of total deposits to $647.3 million for the three months ended December 31, 2022 from $557.6 million for the three months ended December 31, 2021.

Interest expense on Federal Home Loan Bank borrowings increased $417,000, or 121.9%, from $342,000 for the three months ended December 31, 2021 to $759,000 for the three months ended December 31, 2022. The increase was due to an increase in the average cost of borrowings of 91 basis points to 2.47% for the three months ended December 31, 2022 from 1.56% for the three months ended December 31 2021 due to the new borrowings at higher rates. The increase was also due to an increase in the average balance of borrowings of $35.1 million to $122.0 million for the three months ended December 31, 2022 from $86.9 million for the three months ended December 31, 2021.

Net interest income increased $1.2 million, or 24.6%, to $6.0 million for the three months ended December 31, 2022 from $4.8 million for the three months ended December 31, 2021. The increase reflected a 17 basis point increase in our net interest rate spread to 2.47% for the three months ended December 31, 2022 from 2.30% for the three months ended December 31, 2021. Our net interest margin increased 24 basis points to 2.68% for the three months ended December 31, 2022 from 2.44% for the three months ended December 31, 2021.

We recorded a $150,000 provision for loan losses for the three months ended December 31, 2022 compared to no provision for the three-month period ended December 31, 2021. Higher balances in residential and construction loans were the reason for the provision for the three months ended December 31, 2022. 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 decreased by $1.0 million, or 79.8%, to $256,000 for the three months ended December 31, 2022 from $1.3 million for the three months ended December 31, 2021. Gain on sale of loans decreased $139,000 as the Bank decided to portfolio loans rather than sell loans and bank-owned life insurance decreased $860,000, or 82.4%, due to the collections of $1.8 million in death proceeds in the three months ended December 31, 2021.

For the three months ended December 31, 2022, non-interest expense decreased $167,000, or 4.5%, over the comparable 2021 period. Salaries and employee benefits decreased $22,000, or 1.0%, due to a lower employee count. Data processing expense decreased $46,000, or 17.8%, due to lower costs. Professional fees decreased $52,000, or 37.5%, due to lower legal expense. The increase in advertising expense of $28,000, or 28.7%, was due to additional promotions for branch locations and new promotions on deposit and loan products.

Income tax expense increased $328,000, or 81.1%, to $730,000 for the three months ended December 31, 2022 from $404,000 for the three months ended December 31, 2021. The increase was due to $1.0 million of higher taxable income. The effective tax rate for the three months ended December 31, 2022 and 2021 were 27.78% and 16.59%, respectively. For the three-month period ended December 31, 2021 there was $860,000 of additional proceeds from bank owned life insurance which resulted in a lower effective tax rate.

Comparison of Operating Results for the Twelve Months Ended December 31, 2022 and December 31, 2021

Net income decreased by $643,000, or 8.6%, to $6.9 million for the twelve months ended December 31, 2022 from $7.5 million for the twelve months ended December 31, 2021. The decrease was due to a decrease in non-interest income of $3.4 million, an increase in provision for loan losses of $513,000, and an increase of $739,000 in income taxes offset by an increase in net interest income of $3.8 million and a decrease in non-interest expense of $179,000. Excluding the one-time bargain purchase gain of $2.0 million that occurred in 2021 in connection with the Gibraltar Bank acquisition and the $392,000 merger-related expenses, net income would have increased $916,000 for the twelve months ended December 31, 2022 as compared to 2021.1

Interest income on cash and cash equivalents decreased $34,000, or 22.5%, to $117,000 for the twelve months ended December 31, 2022 from $151,000 for the twelve months ended December 31, 2021 due to a $74.8 million decrease in the average balance of cash and cash equivalents to $25.0 million for the twelve months ended December 31, 2022 from $99.8 million for the twelve months ended December 31, 2021, reflecting the use of excess liquidity to fund loan originations and purchase investment securities. This was offset by a 32 basis point increase in the average yield on cash and cash equivalents from 0.15% for the twelve months ended December 31, 2021 to 0.47% for the twelve months ended December 31, 2022 due to the higher interest rate environment.

Interest income on loans increased $3.6 million, or 15.8%, to $26.3 million for the twelve months ended December 31, 2022 compared to $22.7 million for the twelve months ended December 31, 2021 due primarily to a $55.3 million increase in the average balance of loans to $638.7 million for the twelve months ended December 31, 2022 from $583.4 million for the twelve months ended December 31, 2021 and due to a 22 basis point increase in the average yield on loans from 3.89% for the twelve months ended December 31, 2021 to 4.11% for the twelve months ended December 31, 2022.

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

Interest income on securities increased $1.7 million, or 86.6%, to $3.7 million for the twelve months ended December 31, 2022 from $2.0 million for the twelve months ended December 31, 2021 due to a $82.0 million increase in the average balance of securities to $168.0 million for the twelve months ended December 31, 2022 from $86.0 million for the twelve months ended December 31, 2021, reflecting the purchase of investments with excess liquidity. The increase was offset by a 10 basis point decrease in the average yield from 2.29% for the twelve months ended December 31, 2021 to 2.19% for the twelve months ended December 31, 2022.

Interest expense on interest-bearing deposits increased $836,000, or 19.6%, to $5.1 million for the twelve months ended December 31, 2022 from $4.3 million for the twelve months ended December 31, 2021. This increase was due to a $60.4 million increase in the average balance of deposits to $597.7 million for the twelve months ended December 31, 2022 from $537.3 million for the twelve months ended December 31, 2021, primarily due to a $35.6 million increase in the average balance of NOW and money market accounts from $104.9 million for the twelve months ended December 31, 2021 to $140.5 million for the twelve months ended December 31, 2022. The increase was also due to a six basis point increase in the average cost of interest-bearing deposits to 0.85% for the twelve months ended December 31, 2022 from 0.79% for the twelve months ended December 31, 2021.

Interest expense on Federal Home Loan Bank borrowings increased $643,000, or 42.3%, from $1.5 million for the twelve months ended December 31, 2021 to $2.2 million for the twelve months ended December 31, 2022. The increase was due to an increase in the average cost of borrowings of 55 basis points to 2.11% for the twelve months ended December 31, 2022 from 1.56% for the twelve months ended December 31, 2021 due to the higher rates on new borrowings. The increase was also due to an increase in the average balance of borrowings of $4.9 million to $102.5 million for the twelve months ended December 31, 2022 from $97.6 million for the twelve months ended December 31, 2021.

Net interest income increased $3.8 million, or 19.7%, to $23.1 million for the twelve months ended December 31, 2022 from $19.3 million for the twelve months ended December 31, 2021. The increase reflected a 26 basis point increase in our net interest rate spread to 2.59% for the twelve months ended December 31, 2022 from 2.33% for the twelve months ended December 31, 2021. Our net interest margin increased 26 basis points to 2.76% for the twelve months ended December 31, 2022 from 2.50% for the twelve months ended December 31, 2021.

We recorded a $425,000 provision for loan losses for the twelve months ended December 31, 2022 compared to a $88,000 credit for the twelve months ended December 31, 2021. Higher balances in residential and construction loans were the reason for the provision for the twelve months ended December 31, 2022. 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 decreased by $3.4 million, or 75.0%, to $1.1 million for the twelve months ended December 31, 2022 from $4.5 million for the twelve months ended December 31, 2021. For the twelve months ended December 31, 2021, there was a $2.0 million bargain purchase gain recognized in the Gibraltar Bank acquisition in 2021. Gain on sale of loans decreased $700,000 or 88.9% to $87,000 for the twelve months ended December 31, 2022 from $786,000 for the twelve months ended December 31, 2021. Bank-owned life insurance income decreased $742,000 or 51.6% to $695,000 for the twelve months ended December 31, 2022 from $1.4 million for the twelve months ended December 31, 2021 due to death proceeds collected during the twelve months ended December 31, 2021.

For the twelve months ended December 31, 2022, non-interest expense decreased $179,000, or 1.2%, to $14.3 million, over 2021. Salaries and employee benefits increased $691,000, or 8.9%, due to the new stock compensation plan adopted in September 2021 and due to more employees associated with the Gibraltar Bank acquisition and the addition of a sixth branch office. Data processing expense increased $97,000, or 9.3%, due to higher data processing expense associated with a larger company. Advertising expense increased $216,000 due to additional promotions for branch locations and new promotions for loan and deposit products. Professional fees decreased $189,000, or 25.7%, due to lower consulting and legal expense. Merger fees and core conversion costs were $1.1 million in 2021. The increase in equipment and occupancy expenses of $129,000, or 10.3%, was mainly due to the additional branch locations.

Income tax expense increased $739,000, or 39.4%, to $2.6 million for the three months ended December 31, 2022 from $1.9 million for the three months ended December 31, 2021. The increase was due to $735,000 of higher taxable income. The effective tax rate for the three months ended December 31, 2022 and 2021 were 27.55% and 19.96%, respectively. For the three-month period ended December 31, 2021 there was $742,000 additional proceeds from bank-owned life insurance which resulted in a lower effective tax rate.

Balance Sheet Analysis

Total assets were $951.1 million at December 31, 2022, representing an increase of $113.7 million, or 13.6%, from December 31, 2021. Cash and cash equivalents decreased $88.2 million during the period primarily due to funding of loan originations and investment purchases with excess liquidity. Net loans increased $148.8 million, or 26.1%, due to new production of $225.2 million, consisting of a mainly residential real estate loans and construction real estate loans offset by $76.4 million in repayments. Securities held to maturity increased $3.4 million due to the purchase of corporate bonds and mortgage-backed securities with excess cash. Securities available for sale increased $43.3 million or 103.4% due to the purchase of mortgage-backed securities and corporate bonds with excess cash. Bank-owned life insurance increased $5.7 million, or 23.2% due to a $5.0 million new purchase of bank-owned life insurance during the twelve months ended December 31, 2022.

Delinquent loans increased $151,000, or 9.1%, during the twelve-month period ended December 31, 2022, finishing at $1.8 million or 0.26% of total loans. During the same timeframe, non-performing assets remained unchanged at $1.9 million and were 0.26% of total assets at December 31, 2022. The Company’s allowance for loan losses was 0.36% of total loans and 136.3% of non-performing loans at December 31, 2022 compared to 0.38% of total loans and 113.85% of non-performing loans at December 31, 2021.

Total liabilities increased $121.7 million, or 17.6%, to $811.4 million mainly due to an increase in deposits, reflecting a new $38.2 million municipal relationship, and a $126.2 increase in certificates of deposit and a $17.3 million increase in borrowings. Total deposits increased $103.9 million, or 17.4%, to $701.4 million at December 31, 2022 from $597.5 million at December 31, 2021. The increase in deposits reflected an increase in interest-bearing deposits of $104.6 million, or 18.7%, to $662.8 million as of December 31, 2022 from $558.2 million at December 31, 2021, primarily due to increases in certificates of deposit, which increased by $126.2 million from $366.4 million at December 31, 2021 to $492.6 million at December 31, 2022 and in NOW accounts, which increased by $12.7 million to $82.7 million from $69.9 million at December 31, 2021. The increase in certificates of deposit was used to fund loan growth. These increases were offset by a decrease in non-interest bearing deposits of $664,000, or 1.7%, to $38.7 million as of December 31, 2022 from $39.3 million as of December 31, 2021, and a decrease in money market and savings accounts of $34.4 million, or 28.2%, to $87.4 million as of December 31, 2022 from $121.8 million as of December 31, 2021. Federal Home Loan Bank advances increased $17.3 million, or 20.3%, due to new advances for loan funding.

Stockholders’ equity decreased $7.9 million to $139.7 million, due to increased accumulated other comprehensive loss for securities available for sale of $5.9 million and the repurchase of 906,793 shares of stock during the year at a cost of $10.1 million, offset by net income of $6.9 million for the twelve months ended December 31, 2022. At December 31, 2022, the Company’s ratio of average stockholders’ equity-to-total assets was 15.61%, compared to 17.88% at December 31, 2021.

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 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.

In addition, the COVID-19 pandemic has had, and may continue to have, an adverse impact on the Company, its clients and the communities it serves. Given its dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on the Company’s business.

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

 

 

 

As of

 

 

As of

 

 

 

December 31, 2022

 

 

December 31, 2021

 

Assets

 

(unaudited)

 

 

 

 

Cash and due from banks

 

$

8,160,028

 

 

$

14,446,792

 

Interest-bearing deposits in other banks

 

 

8,680,889

 

 

 

90,621,993

 

Cash and cash equivalents

 

 

16,840,917

 

 

 

105,068,785

 

Securities available for sale

 

 

85,100,578

 

 

 

41,838,798

 

Securities held to maturity (fair value of $70,699,651 and $74,081,059,

respectively)

 

 

77,427,309

 

 

 

74,053,099

 

Loans held for sale

 

 

 

 

 

1,152,500

 

Loans, net of allowance of $2,578,174 and $2,153,174, respectively

 

 

719,025,762

 

 

 

570,209,669

 

Premises and equipment, net

 

 

7,884,335

 

 

 

8,127,979

 

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

 

 

5,490,900

 

 

 

4,851,300

 

Accrued interest receivable

 

 

3,966,651

 

 

 

2,712,605

 

Core deposit intangibles

 

 

267,272

 

 

 

336,364

 

Bank-owned life insurance

 

 

30,206,325

 

 

 

24,524,122

 

Other assets

 

 

4,888,954

 

 

 

4,486,366

 

Total Assets

 

$

951,099,003

 

 

$

837,361,587

 

Liabilities and Equity

 

 

 

 

 

 

Non-interest bearing deposits

 

$

38,653,349

 

 

$

39,317,500

 

Interest bearing deposits

 

 

662,758,100

 

 

 

558,162,278

 

Total deposits

 

 

701,411,449

 

 

 

597,479,778

 

FHLB advances

 

 

102,319,254

 

 

 

85,051,736

 

Advance payments by borrowers for taxes and insurance

 

 

3,174,661

 

 

 

2,856,120

 

Other liabilities

 

 

4,534,516

 

 

 

4,397,742

 

Total liabilities

 

 

811,439,880

 

 

 

689,785,376

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

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

issued and outstanding at December 31, 2022 and December 31, 2021

 

 

 

 

 

 

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

13,699,016 issued and outstanding at December 31, 2022 and

14,605,809 at December 31, 2021

 

 

136,989

 

 

 

146,057

 

Additional paid-in capital

 

 

59,099,476

 

 

 

68,247,204

 

Retained earnings

 

 

91,756,673

 

 

 

84,879,812

 

Unearned ESOP shares (436,495 shares at December 31, 2022 and

463,239 shares at December 31, 2021)

 

 

(5,123,002

)

 

 

(5,424,206

)

Accumulated other comprehensive loss

 

 

(6,211,013

)

 

 

(272,656

)

Total stockholders’ equity

 

 

139,659,123

 

 

 

147,576,211

 

Total liabilities and stockholders’ equity

 

$

951,099,003

 

 

$

837,361,587

 

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Year Ended

December 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

7,860,684

 

 

$

5,555,242

 

 

$

26,264,486

 

 

$

22,672,097

 

Securities

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

933,963

 

 

 

439,128

 

 

 

3,516,832

 

 

 

1,912,146

 

Tax-exempt

 

 

45,882

 

 

 

20,094

 

 

 

161,187

 

 

 

58,888

 

Other interest-earning assets

 

 

140,335

 

 

 

91,936

 

 

 

403,969

 

 

 

424,539

 

Total interest income

 

 

8,980,864

 

 

 

6,106,400

 

 

 

30,346,474

 

 

 

25,067,670

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

2,180,832

 

 

 

916,212

 

 

 

5,106,517

 

 

 

4,271,109

 

FHLB advances

 

 

759,476

 

 

 

342,317

 

 

 

2,162,217

 

 

 

1,519,302

 

Total interest expense

 

 

2,940,308

 

 

 

1,258,529

 

 

 

7,268,734

 

 

 

5,790,411

 

Net interest income

 

 

6,040,556

 

 

 

4,847,871

 

 

 

23,077,740

 

 

 

19,277,259

 

Provision (credit) for loan losses

 

 

150,000

 

 

 

 

 

 

425,000

 

 

 

(88,000

)

Net interest income after provision for loan losses

 

 

5,890,556

 

 

 

4,847,871

 

 

 

22,652,740

 

 

 

19,365,259

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

 

42,848

 

 

 

37,222

 

 

 

179,734

 

 

 

136,211

 

Gain on sale of loans

 

 

 

 

 

139,211

 

 

 

86,913

 

 

 

786,424

 

Bargain purchase gain

 

 

 

 

 

17,573

 

 

 

 

 

 

1,950,970

 

Bank-owned life insurance

 

 

184,373

 

 

 

1,044,628

 

 

 

694,900

 

 

 

1,436,453

 

Other

 

 

28,801

 

 

 

28,572

 

 

 

162,126

 

 

 

183,454

 

Total non-interest income

 

 

256,022

 

 

 

1,267,206

 

 

 

1,123,673

 

 

 

4,493,512

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

2,117,836

 

 

 

2,140,286

 

 

 

8,434,734

 

 

 

7,743,694

 

Occupancy and equipment

 

 

356,872

 

 

 

361,529

 

 

 

1,390,718

 

 

 

1,261,306

 

FDIC insurance assessment

 

 

58,210

 

 

 

54,000

 

 

 

220,210

 

 

 

217,300

 

Data processing

 

 

212,497

 

 

 

258,414

 

 

 

1,132,790

 

 

 

1,036,203

 

Advertising

 

 

124,424

 

 

 

96,665

 

 

 

492,859

 

 

 

276,665

 

Director fees

 

 

192,862

 

 

 

250,877

 

 

 

800,611

 

 

 

873,008

 

Professional fees

 

 

86,751

 

 

 

138,787

 

 

 

546,004

 

 

 

735,067

 

Merger fees

 

 

 

 

 

 

 

 

 

 

 

392,197

 

Core conversion costs

 

 

 

 

 

 

 

 

 

 

 

730,000

 

Other

 

 

361,653

 

 

 

377,275

 

 

 

1,267,081

 

 

 

1,198,081

 

Total non-interest expense

 

 

3,511,105

 

 

 

3,677,833

 

 

 

14,285,007

 

 

 

14,463,521

 

Income before income taxes

 

 

2,635,473

 

 

 

2,437,244

 

 

 

9,491,406

 

 

 

9,395,250

 

Income tax expense

 

 

732,122

 

 

 

404,372

 

 

 

2,614,545

 

 

 

1,875,175

 

Net income

 

$

1,903,351

 

 

$

2,032,872

 

 

$

6,876,861

 

 

$

7,520,075

 

Earnings per Share - basic

 

$

0.14

 

 

$

0.15

 

 

$

0.51

 

 

$

0.55

 

Earnings per Share - diluted

 

$

0.14

 

 

$

0.14

 

 

$

0.51

 

 

$

0.52

 

Weighted average shares outstanding - basic

 

 

13,299,055

 

 

 

13,900,769

 

 

 

13,570,407

 

 

 

13,725,884

 

Weighted average shares outstanding - diluted

 

 

13,330,553

 

 

 

14,222,841

 

 

 

13,576,934

 

 

 

14,350,788

 

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

(unaudited)

 

 

 

 

 

 

 

At or For the Three Months

Ended December 31,

 

 

At or For the Twelve Months

Ended December 31,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Performance Ratios (1):

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (2)

 

0.80

%

 

 

0.97

%

 

 

0.77

%

 

 

1.23

%

Return on average equity (3)

 

5.42

%

 

 

5.54

%

 

 

4.76

%

 

 

7.06

%

Interest rate spread (4)

 

2.73

%

 

 

2.30

%

 

 

2.59

%

 

 

2.33

%

Net interest margin (5)

 

2.85

%

 

 

2.44

%

 

 

2.73

%

 

 

2.50

%

Efficiency ratio (6)

 

55.76

%

 

 

60.14

%

 

 

59.03

%

 

 

60.85

%

Average interest-earning assets to average interest-bearing liabilities

 

116.23

%

 

 

122.19

%

 

 

119.60

%

 

 

122.40

%

Net loans to deposits

 

102.51

%

 

 

95.44

%

 

 

102.51

%

 

 

95.44

%

Equity to assets (7)

 

14.80

%

 

 

17.55

%

 

 

16.06

%

 

 

17.55

%

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital to average assets

 

 

 

 

 

 

 

15.61

%

 

 

17.88

%

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses as a percent of total loans

 

 

 

 

 

 

 

0.36

%

 

 

0.38

%

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

 

 

 

 

 

 

 

136.32

%

 

 

113.85

%

Net recoveries to average outstanding loans during the period

 

 

 

 

 

 

 

0.00

%

 

 

0.00

%

Non-performing loans as a percent of total loans

 

 

 

 

 

 

 

0.26

%

 

 

0.33

%

Non-performing assets as a percent of total assets

 

 

 

 

 

 

 

0.20

%

 

 

0.23

%

(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 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 2022 and 2021.

(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, 2022 and December 31, 2021:

 

 

December 31,

2022

 

 

December 31,

2021

 

Real estate:

 

(unaudited)

 

Residential First Mortgage

 

$

466,100,627

 

 

$

319,968,234

 

Commercial and Multi-Family Real Estate

 

 

162,338,669

 

 

 

175,375,419

 

Construction

 

 

61,825,478

 

 

 

41,384,687

 

Commercial and Industrial

 

 

1,684,189

 

 

 

7,905,524

 

Consumer:

 

 

 

 

 

 

Home Equity and Other Consumer

 

 

29,654,973

 

 

 

27,728,979

 

Total loans

 

 

721,603,936

 

 

 

572,362,843

 

Allowance for loan losses

 

 

(2,578,174

)

 

 

(2,153,174

)

Net loans

 

$

719,025,762

 

 

$

570,209,669

 

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

 

 

At December 31,

 

 

At December

 

 

 

2022

 

 

2021

 

 

 

 

 

 

Amount

 

 

Percent

 

 

Average

Rate

 

 

Amount

 

 

Percent

 

 

Average

Rate

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand accounts

 

$

38,699

 

 

 

6.93

%

 

 

%

 

$

39,318

 

 

 

6.58

%

 

 

%

NOW accounts

 

 

82,674

 

 

 

11.79

 

 

 

0.88

 

 

 

69,940

 

 

 

11.71

 

 

0.82

 

Money market accounts

 

 

30,037

 

 

 

4.28

 

 

 

0.32

 

 

 

57,541

 

 

 

9.63

 

 

 

0.34

 

Savings accounts

 

 

57,408

 

 

 

8.18

 

 

0.49

 

 

 

64,285

 

 

 

10.76

 

 

0.26

 

Certificates of deposit

 

 

492,593

 

 

 

70.23

 

 

 

2.37

 

 

 

366,396

 

 

 

61.32

 

 

 

0.74

 

Total

 

$

701,411

 

 

 

100.00

%

 

 

1.82

%

 

$

597,480

 

 

 

100.00

%

 

 

0.61

%

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,

 

 

 

2022

 

 

2021

 

 

 

Average

Balance

 

 

Interest and

Dividends

 

 

Yield/

Cost (3)

 

 

Average

Balance

 

 

Interest and

Dividends

 

 

Yield/

Cost (3)

 

 

 

(Dollars in thousands)

 

Assets:

 

(unaudited)

 

Cash and cash equivalents

 

$

2,962

 

 

$

30

 

 

 

3.98

%

 

$

106,400

 

 

$

37

 

 

 

0.14

%

Loans

 

 

717,096

 

 

 

7,861

 

 

 

4.35

%

 

 

577,699

 

 

 

5,555

 

 

 

3.81

%

Securities

 

 

167,708

 

 

 

980

 

 

 

2.34

%

 

 

98,307

 

 

 

459

 

 

 

1.87

%

Other interest-earning assets

 

 

6,327

 

 

 

110

 

 

 

6.99

%

 

 

5,077

 

 

 

55

 

 

 

4.33

%

Total interest-earning assets

 

 

894,093

 

 

 

8,981

 

 

 

3.99

%

 

 

787,483

 

 

 

6,106

 

 

 

3.08

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-earning assets

 

 

53,969

 

 

 

 

 

 

 

 

 

48,406

 

 

 

 

 

 

 

Total assets

 

$

948,062

 

 

 

 

 

 

 

 

$

835,889

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

122,136

 

 

$

177

 

 

 

0.57

%

 

$

121,764

 

 

$

198

 

 

 

0.65

%

Savings accounts

 

 

57,038

 

 

 

57

 

 

 

0.40

%

 

 

64,363

 

 

 

41

 

 

 

0.25

%

Certificates of deposit

 

 

468,138

 

 

 

1,947

 

 

 

1.65

%

 

 

371,490

 

 

 

677

 

 

 

0.72

%

Total interest-bearing deposits

 

 

647,312

 

 

 

2,181

 

 

 

1.34

%

 

 

557,617

 

 

 

916

 

 

 

0.65

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances (4)

 

 

121,961

 

 

 

759

 

 

 

2.47

%

 

 

86,855

 

 

 

342

 

 

 

1.56

%

Total interest-bearing liabilities

 

 

769,273

 

 

 

2,940

 

 

 

1.52

%

 

 

644,472

 

 

 

1,258

 

 

 

0.77

%

Non-interest-bearing deposits

 

 

36,105

 

 

 

 

 

 

 

 

 

39,703

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

2,296

 

 

 

 

 

 

 

 

 

5,030

 

 

 

 

 

 

 

Total liabilities

 

 

807,674

 

 

 

 

 

 

 

 

 

689,205

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

140,388

 

 

 

 

 

 

 

 

 

146,684

 

 

 

 

 

 

 

Total liabilities and equity

 

$

948,062

 

 

 

 

 

 

 

 

$

835,889

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

6,041

 

 

 

 

 

 

 

 

$

4,848

 

 

 

 

Interest rate spread (1)

 

 

 

 

 

 

 

 

2.47

%

 

 

 

 

 

 

 

 

2.30

%

Net interest margin (2)

 

 

 

 

 

 

 

 

2.68

%

 

 

 

 

 

 

 

 

2.44

%

Average interest-earning assets to average interest-bearing liabilities

 

 

116.23

%

 

 

 

 

 

 

 

 

122.19

%

 

 

 

 

 

 

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.

4.

Cash flow hedges are used to manage interest rate risk.

 

 

Twelve Months Ended December 31,

 

 

 

2022

 

 

2021

 

 

 

Average

Balance

 

 

Interest and

Dividends

 

 

Yield/

Cost (3)

 

 

Average

Balance

 

 

Interest and

Dividends

 

 

Yield/

Cost (3)

 

 

 

(Dollars in thousands)

 

 

 

(unaudited)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

25,044

 

 

$

117

 

 

 

0.47

%

 

$

99,842

 

 

$

151

 

 

 

0.15

%

Loans

 

 

638,679

 

 

 

26,264

 

 

 

4.11

%

 

 

583,362

 

 

 

22,672

 

 

 

3.89

%

Securities

 

 

167,987

 

 

 

3,678

 

 

 

2.19

%

 

 

86,035

 

 

 

1,971

 

 

 

2.29

%

Other interest-earning assets

 

 

5,677

 

 

 

288

 

 

 

5.05

%

 

 

5,606

 

 

 

273

 

 

 

4.87

%

Total interest-earning assets

 

 

837,387

 

 

 

30,347

 

 

 

3.62

%

 

 

774,845

 

 

 

25,067

 

 

 

3.24

%

Non-interest-earning assets

 

 

52,525

 

 

 

 

 

 

 

 

 

42,252

 

 

 

 

 

 

 

Total assets

 

$

889,912

 

 

 

 

 

 

 

 

$

817,097

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

140,473

 

 

$

787

 

 

 

0.56

%

 

$

104,945

 

 

$

625

 

 

 

0.60

%

Savings accounts

 

 

62,626

 

 

 

184

 

 

 

0.29

%

 

 

58,880

 

 

 

127

 

 

 

0.22

%

Certificates of deposit

 

 

394,593

 

 

 

4,136

 

 

 

1.05

%

 

 

373,490

 

 

 

3,519

 

 

 

0.94

%

Total interest-bearing deposits

 

 

597,692

 

 

 

5,107

 

 

 

0.85

%

 

 

537,315

 

 

 

4,271

 

 

 

0.79

%

Federal Home Loan Bank advances (4)

 

 

102,458

 

 

 

2,162

 

 

 

2.11

%

 

 

97,621

 

 

 

1,519

 

 

 

1.56

%

Total interest-bearing liabilities

 

 

700,150

 

 

 

7,269

 

 

 

1.04

%

 

 

634,936

 

 

 

5,790

 

 

 

0.91

%

Non-interest-bearing deposits

 

 

41,501

 

 

 

 

 

 

 

 

 

30,952

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

3,914

 

 

 

 

 

 

 

 

 

8,822

 

 

 

 

 

 

 

Total liabilities

 

 

745,565

 

 

 

 

 

 

 

 

 

674,710

 

 

 

 

 

 

 

Total equity

 

 

144,347

 

 

 

 

 

 

 

 

 

142,387

 

 

 

 

 

 

 

Total liabilities and equity

 

$

889,912

 

 

 

 

 

 

 

 

$

817,097

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

23,078

 

 

 

 

 

 

 

 

$

19,277

 

 

 

 

Interest rate spread (1)

 

 

 

 

 

 

 

 

2.59

%

 

 

 

 

 

 

 

 

2.33

%

Net interest margin (2)

 

 

 

 

 

 

 

 

2.76

%

 

 

 

 

 

 

 

 

2.50

%

Average interest-earning assets to average interest-bearing liabilities

 

 

119.60

%

 

 

 

 

 

 

 

 

122.04

%

 

 

 

 

 

 

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.

4.

Cash flow hedges are used to manage interest rate risk.

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,

2022 Compared to Three

Months Ended December 31, 2021

 

 

Twelve Months Ended December 31,

2022 Compared to Twelve Months

Ended December 31, 2021

 

 

 

Increase (Decrease) Due to

 

 

Increase (Decrease) Due to

 

 

 

Volume

 

 

Rate

 

 

Net

 

 

Volume

 

 

Rate

 

 

Net

 

 

 

(In thousands)

 

Interest income:

 

(unaudited)

 

Cash and cash equivalents

 

$

(280

)

 

$

273

 

 

$

(7

)

 

$

(175

)

 

$

141

 

 

$

(34

)

Loans receivable

 

 

1,453

 

 

 

853

 

 

 

2,306

 

 

 

2,250

 

 

 

1,342

 

 

 

3,592

 

Securities

 

 

384

 

 

 

137

 

 

 

521

 

 

 

1,797

 

 

 

(90

)

 

 

1,707

 

Other interest earning assets

 

 

16

 

 

 

39

 

 

 

55

 

 

 

4

 

 

 

11

 

 

 

15

 

Total interest-earning assets

 

 

1,573

 

 

 

1,302

 

 

 

2,875

 

 

 

3,876

 

 

 

1,404

 

 

 

5,280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

 

4

 

 

 

(25

)

 

 

(21

)

 

 

205

 

 

 

(43

)

 

 

162

 

Savings accounts

 

 

(28

)

 

 

44

 

 

 

16

 

 

 

9

 

 

 

48

 

 

 

57

 

Certificates of deposit

 

 

213

 

 

 

1,057

 

 

 

1,270

 

 

 

201

 

 

 

416

 

 

 

617

 

Federal Home Loan Bank advances

 

 

171

 

 

 

246

 

 

 

417

 

 

 

79

 

 

 

564

 

 

 

643

 

Total interest-bearing liabilities

 

 

360

 

 

 

1,322

 

 

 

1,682

 

 

 

494

 

 

 

985

 

 

 

1,479

 

Net increase (decrease) in net interest income

 

$

1,213

 

 

$

(20

)

 

$

1,193

 

 

$

3,382

 

 

$

419

 

 

$

3,801

 

BOGOTA FINANCIAL CORP.

RECONCILIATION OF GAAP TO NON-GAAP

(Unaudited)

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.

 

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,

 

Return on average assets (annualized):

2022

 

 

2021

 

 

 

 

GAAP

 

0.77

%

 

 

1.23

%

 

 

 

Adjustments

 

0.00

%

 

 

0.25

%

 

 

 

Non-GAAP

 

0.77

%

 

 

0.98

%

 

 

 

Return on average equity (annualized):

 

 

 

 

 

 

 

 

GAAP

 

4.76

%

 

 

7.06

%

 

 

 

Adjustments

 

0.00

%

 

 

1.46

%

 

 

 

Non-GAAP

 

4.76

%

 

 

5.60

%

 

 

 

 

Contacts

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

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