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Bogota Financial Corp. Reports Results for the Three and Nine Months Ended September 30, 2023

Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported net loss for the three months ended September 30, 2023 of $29,000, or $0.00 per basic and diluted share, compared to net income of $1.9 million, or $0.14 per basic and diluted share, for the three months ended September 30, 2022. The Company reported net income for the nine months ended September 30, 2023 of $1.8 million, or $0.14 per basic and diluted shares, compared to net income of $5.0 million, or $0.36 per basic and diluted share, for the nine months ended September 30, 2022.

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 September 30, 2023, all shares under this program have been repurchased, including the repurchase of 196,259 shares of stock during the nine months ended September 30, 2023 at a cost of $2.1 million.

On May 24, 2023, the Company announced it had received regulatory approval for the repurchase of up to 249,920 shares of its common stock, which was approximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC). As of September 30, 2023, 122,301 shares have been repurchased under this program at a cost of $938,000.

Other Financial Highlights:

  • Total assets decreased $24.1 million, or 2.5%, to $927.0 million at September 30, 2023 from $951.1 million at December 31, 2022, due to a decrease in loans and securities, offset by an increase in cash and cash equivalents.
  • Cash and cash equivalents increased $8.1 million, or 48.3%, to $25.0 million at September 30, 2023 from $16.8 million at December 31, 2022.
  • Securities decreased $28.1 million, or 17.3%, to $134.4 million at September 30, 2023 from $162.5 million at December 31, 2022.
  • Net loans decreased $8.7 million, or 1.2%, to $710.3 million at September 30, 2023 from $719.0 million at December 31, 2022.
  • Total deposits were $645.3 million, decreasing $56.1 million, or 8.0%, as compared to $701.4 million at December 31, 2022, primarily due to a $62.4 million decrease in non-interest-bearing deposits, checking, savings and money market accounts, offset by a $6.3 million increase in certificates of deposit. The average rate paid on deposits at September 30, 2023 increased 126 basis points to 3.08% at September 30, 2023 from 1.82% at December 31, 2022 due to higher interest rates and a larger percentage of deposits consisting of higher-costing certificates of deposit.
  • Federal Home Loan Bank advances increased $33.0 million, or 32.2% to $135.3 million at September 30, 2023 from $102.3 million as of December 31, 2022.
  • Annualized return on average assets was 0.26% for the nine-month period ended September 30, 2023 compared to 0.76% for nine-month period ended September 30, 2022.
  • Annualized return on average equity was 1.75% for the nine-month period ended September 30, 2023 compared to 4.62% for the nine-month period ended September 30, 2022.
  • Upon adoption of the CECL method of calculating the allowance for credit losses on January 1, 2023, the Bank recorded a one-time decrease, net of tax, in retained earnings of $220,000, an increase to the allowance for credit losses of $157,000 and an increase in the reserve for unfunded liabilities of $152,000.

Joseph Coccaro, President and Chief Executive Officer, said, “The impact of higher interest rates continues to impact our net interest margin. Our net income and return on average assets for the first nine months of 2023 are disappointing when compared to prior periods due to the increase in deposit and borrowing costs exceeding our growth in loan revenue. Currently, because of the interest rate environment, loan opportunities, especially residential and construction have significantly diminished. However, we continue to examine opportunities to grow the balance sheet based on loans that meet our risk tolerance and pricing parameters.”

“The Bank continues to be prudent with its lending and interest rate risk management. We remain well-capitalized with substantial reserve sources of liquidity and are managing expenses. We are currently working on a new branch in Upper Saddle River, NJ, which will be the Bank’s seventh stand-alone branch. The Bank anticipates this office will open in December 2023.”

Mr. Coccaro further stated, "We will continue to focus on delivering excellent services to our customers. The Company continues to repurchase shares of our common stock which will drive shareholder value."

Income Statement Analysis

Comparison of Operating Results for the Three Months Ended September 30, 2023 and September 30, 2022

Net income decreased by $2.0 million, or 101.5%, to a net loss of $29,000 for the three months ended September 30, 2023 from net income of $1.9 million for the three months ended September 30, 2022. This decrease was primarily due to a decrease of $3.0 million in net interest income partially offset by a decrease of $175,000 in the provision for credit losses and a decrease of $859,000 in income tax expense.

Interest income increased $1.1 million, or 13.6%, from $8.2 million for the three months ended September 30, 2022 to $9.3 million for the three months ended September 30, 2023 due to increases in the average balances and higher yields on interest earning assets.

Interest income on cash and cash equivalents increased $138,000, or 460.0%, to $168,000 for the three months ended September 30, 2023 from $30,000 for the three months ended September 30, 2022 due a 316 basis point increase in the average yield from 2.05% for the three months ended September 30, 2022 to 5.21% for the three months ended September 30, 2023 due to the higher interest rate environment. The increase was also due to a $6.9 million increase in the average balance to $12.8 million for the three months ended September 30, 2023 from $5.9 million for the three months ended September 30, 2022, reflecting the increase of liquidity due to lower loan originations.

Interest income on loans increased $962,000, or 13.7%, to $8.0 million for the three months ended September 30, 2023 compared to $7.0 million for the three months ended September 30, 2022 due primarily to $40.6 million increase in the average balance to $710.7 million for the three months ended September 30, 2023 from $670.1 million for the three months ended September 30, 2022 and a 30 basis point increase in the average yield from 4.15% for the three months ended September 30, 2022 to 4.45% for the three months ended September 30, 2023. The increase was offset by a $348,000 reserve for nonaccrual interest on a delinquent construction loan.

Interest income on securities decreased $53,000, or 5.0%, to $1.0 million for the three months ended September 30, 2023 from $1.1 million for the three months ended September 30, 2022 primarily due to a $44.1 million decrease in the average balance to $138.5 million for the three months ended September 30, 2023 from $182.6 million for the three months ended September 30, 2022 offset by a 59 basis point increase in the average yield from 2.32% for the three months ended September 30, 2022 to 2.91% for the three months ended September 30, 2023.

Interest expense increased $4.1 million, or 208.7%, from $2.0 million for the three months ended September 30, 2022 to $6.1 million for the three months ended September 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities.

Interest expense on interest-bearing deposits increased $3.6 million, or 288.2%, to $4.9 million for the three months ended September 30, 2023 from $1.3 million for the three months ended September 30, 2022. The increase was due to a 229 basis point increase in the average cost of deposits to 3.11% for the three months ended September 30, 2023 from 0.82% for the three months ended September 30, 2022. The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio. The average balances of certificates of deposit increased $94.9 million to $498.1 million for the three months ended September 30, 2023 from $403.2 million for the three months ended September 30, 2022 while NOW and money market accounts and savings accounts decreased $63.2 million and $14.7 million for the three months ended September 30, 2023, respectively, compared to the three months ended September 30, 2022.

Interest expense on Federal Home Loan Bank borrowings increased $503,000, or 70.2%, from $717,000 for the three months ended September 30, 2022 to $1.2 million for the three months ended September 30, 2023. The increase was due to an increase in the average cost of 156 basis points to 3.86% for the three months ended September 30, 2023 from 2.30% for the three months ended September 30, 2022 due to the new borrowings at higher rates. The increase was partially offset by a decrease in the average balance of borrowings of $3.2 million to $125.3 million for the three months ended September 30, 2023 from $128.5 million for the three months ended September 30, 2022.

Net interest income decreased $3.0 million, or 48.2%, to $3.2 million for the three months ended September 30, 2023 from $6.2 million for the three months ended September 30, 2022. The decrease reflected a 167 basis point decrease in our net interest rate spread to 1.01% for the three months ended September 30, 2023 from 2.68% for the three months ended September 30, 2022. Our net interest margin decreased 138 basis points to 1.47% for the three months ended September 30, 2023 from 2.85% for the three months ended September 30, 2022.

We recorded no provision for credit losses for the three months ended September 30, 2023 compared to a $175,000 provision for loan losses for the three-month period ended September 30, 2022. The Bank had a decrease in the loan portfolio and continues to have no charge-offs.

Non-interest income increased by $20,000, or 7.5%, to $290,000 for the three months ended September 30, 2023 from $270,000 for the three months ended September 30, 2022. Bank-owned life insurance income increased $13,000, or 7.0%, due higher balances during 2023. The increase was also due to an increase in fee and service charges of $14,000 due to a higher collection of late charges.

For the three months ended September 30, 2023, non-interest expense increased $23,000, or 0.6%, over the comparable 2022 period. Salaries and employee benefits increased $120,000, or 5.6%, due to a higher employee count. Director fees decreased $30,000, or 15.9%, due to lower pension expense. FDIC insurance premiums increased $79,000, or 145.5%, due to a higher assessment rate in 2023. The decrease in advertising expense of $30,000, or 19.3%, was due to reduced promotions for branch locations and less promotions on deposit and loan products. Data processing expense decreased $105,000, or 33.9%, due to lower processing costs. Professional fees decreased $14,000, or 8.7%, due to lower legal expense and other expense decreased $21,000, or 8.1%, due to lower deferred compensation expense and other various expenses.

Income tax expense decreased $859,000, or 117.1%, to a benefit of $125,000 for the three months ended September 30, 2023 from a $734,000 expense for the three months ended September 30, 2022. The decrease was due to $2.8 million of lower taxable income.

Comparison of Operating Results for the Nine Months Ended September 30, 2023 and September 30, 2022

Net income decreased by $3.2 million, or 63.4%, to $1.8 million for the nine months ended September 30, 2023 from $5.0 million for the nine months ended September 30, 2022. This decrease was primarily due to a decrease of $5.0 million in net interest income, offset by a decrease of $400,000 in the provision for credit losses and a decrease of $1.5 million in income tax expense.

Interest income increased $6.3 million, or 29.7%, from $21.4 million for the nine months ended September 30, 2022 to $27.7 million for the nine months ended September 30, 2023 due to increases in the average balances of and higher yields on interest-earning assets.

Interest income on cash and cash equivalents increased $334,000, or 375.3%, to $423,000 for the nine months ended September 30, 2023 from $89,000 for the nine months ended September 30, 2022 due a 462 basis point increase in the average yield from 0.36% for the nine months ended September 30, 2022 to 4.98% for the nine months ended September 30, 2023 due to the higher interest rate environment. This was offset by a $21.1 million decrease in the average balance to $11.4 million for the nine months ended September 30, 2023 from $32.5 million for the nine months ended September 30, 2022, reflecting the use of excess liquidity to fund loan originations and purchase investment securities.

Interest income on loans increased $5.4 million, or 29.4%, to $23.8 million for the nine months ended September 30, 2023 compared to $18.4 million for the nine months ended September 30, 2022 due primarily to a $101.4 million increase in the average balance to $713.6 million for the nine months ended September 30, 2023 from $612.3 million for the nine months ended September 30, 2022 and a 45 basis point increase in the average yield from 4.01% for the nine months ended September 30, 2022 to 4.46% for the nine months ended September 30, 2023. The increase was offset by a $1.0 million reserve for nonaccrual interest on a delinquent construction loan.

Interest income on securities increased $423,000, or 15.7%, to $3.1 million for the nine months ended September 30, 2023 from $2.7 million for the nine months ended September 30, 2022 due primarily to a 66 basis point increase in the average yield from 2.14% for the nine months ended September 30, 2022 to 2.80% for the nine months ended September 30, 2023. The increase was offset by a $19.3 million decrease in the average balance of securities to $148.8 million for the nine months ended September 30, 2023 from $168.1 million for the nine months ended September 30, 2022.

Interest expense increased $11.4 million, or 262.2%, from $4.3 million for the nine months ended September 30, 2022 to $15.7 million for the nine months ended September 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities.

Interest expense on interest-bearing deposits increased $9.9 million, or 336.7%, to $12.8 million for the nine months ended September 30, 2023 from $2.9 million for the nine months ended September 30, 2022. The increase was due to a 200 basis point increase in the average cost of interest-bearing deposits to 2.67% for the nine months ended September 30, 2023 from 0.67% for the nine months ended September 30, 2022. The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio. The average balances of certificates of deposit increased $128.7 million to $498.5 million for the nine months ended September 30, 2023 from $369.8 million for the nine months ended September 30, 2022 while NOW and money market accounts and savings accounts decreased $54.9 million and $15.0 million for the nine months ended September 30, 2023, respectively, compared to the nine months ended September 30, 2022.

Interest expense on Federal Home Loan Bank borrowings increased $1.5 million, or 106.7%, from $1.4 million for the nine months ended September 30, 2022 to $2.9 million for the nine months ended September 30, 2023. The increase was due to an increase in the average cost of 158 basis points to 3.50% for the nine months ended September 30, 2023 from 1.92% for the nine months ended September 30, 2022 due to the new borrowings at higher rates. The increase was also due to an increase in the average balance of borrowings of $13.3 million to $110.9 million for the nine months ended September 30, 2023 from $97.6 million for the nine months ended September 30, 2022.

Net interest income decreased $5.0 million, or 29.4%, to $12.0 million for the nine months ended September 30, 2023 from $17.0 million for the nine months ended September 30, 2022. The increase reflected a 122 basis point decrease in our net interest rate spread to 1.41% for the nine months ended September 30, 2023 from 2.63% for the nine months ended September 30, 2022. Our net interest margin decreased 96 basis points to 1.82% for the nine months ended September 30, 2023 from 2.78% for the nine months ended September 30, 2022.

We recorded a $125,000 recovery of credit losses for the nine months ended September 30, 2023 compared to a $275,000 provision for loan losses for the nine-month period ended September 30, 2022. The Bank had a decrease in the loan portfolio as well as no charge-offs offset by increased delinquent and non-performing loans. As of January 1, 2023 the Bank adopted CECL and recorded a one-time adjustment of $157,000 to the allowance for credit losses.

Non-interest income decreased by $12,000, or 1.3%, to $856,000 for the nine months ended September 30, 2023 from $868,000 for the nine months ended September 30, 2022. Gain on sale of loans decreased $58,000, or 66.2%, as loan originations were lower in 2023 due to the higher interest rate environment and the decision to slow loan production to preserve capital and liquidity. Other income decreased $40,000 or 29.8%. These decreases were partially offset by an increase in income from bank-owned life insurance of $64,000, or 12.4%, due to higher balances during 2023.

For the nine months ended September 30, 2023, non-interest expense increased $37,000, or 0.3%, over the comparable 2022 period. Salaries and employee benefits increased $421,000, or 6.7%, due to a higher employee count. Director fees decreased $130,000, or 21.3%, due to lower pension expense. FDIC insurance premiums increased $158,000, or 97.3%, due to a higher assessment rate in 2023. Data processing decreased $202,000, or 22.0%, due to the timing of invoices. Other expense decreased $244,000, or 27.0%, due to lower deferred compensation expense and other various expenses.

Income taxes decreased $1.5 million, or 79.5%, to a benefit of $386,000 for the nine months ended September 30, 2023 from an expense of $1.9 million for the nine months ended September 30, 2022. The decrease was due to $4.7 million, or 67.8%, of lower taxable income. The effective tax rate for the three and nine months ended September 30, 2023 and 2022 was 17.49% and 27.46%, respectively.

Balance Sheet Analysis

Total assets were $927.0 million at September 30, 2023, representing a decrease of $24.1 million, or 2.5%, from December 31, 2022. Cash and cash equivalents increased $8.1 million during the period primarily due to loan payments received and proceeds from the call and maturity of securities. Net loans decreased $8.7 million, or 1.2%, due to $55.5 million in repayments, partially offset by new production of $46.8 million. Due to the interest rate environment, we have seen a decrease in demand for residential and construction loans, which have been primary drivers of our loan growth in recent periods. Securities held to maturity decreased $11.5 million, or 14.9%, and securities available for sale decreased $16.6 million or 19.5%, due to the repayments of mortgage-backed securities and maturities of corporate bonds.

Delinquent loans increased $18.0 million to $19.5 million, or 2.74% of total loans, at September 30, 2023. The increase was mostly due to one commercial construction loan located in Totowa New Jersey with a balance of $10.9 million with a loan to value ratio of 46%. During the same timeframe, non-performing assets increased to $12.3 million and were 1.33% of total assets at September 30, 2023. The Company’s allowance for credit losses was 0.39% of total loans and 22.62% of non-performing loans at September 30, 2023 compared to 0.36% of total loans and 136.3% of non-performing loans at December 31, 2022. The Bank does not have any exposure to commercial real estate loans secured by office space.

Total liabilities decreased $22.1 million, or 2.7%, to $789.4 million mainly due to a $56.1 million decrease in deposits, offset by a $33.0 million increase in borrowings. Total deposits decreased $56.1 million, or 8.0%, to $645.3 million at September 30, 2023 from $701.4 million at December 31, 2022. The decrease in deposits reflected decreases in NOW, money market and savings accounts, which decreased by $56.2 million from $170.2 million at December 31, 2022 to $114.0 million at September 30, 2023, offset by an increase in certificate of deposit accounts, which increased by $6.3 million to $498.9 million from $492.6 million at December 31, 2022. At September 30, 2023, uninsured deposits represented 8.4% of the Bank’s total deposits. Federal Home Loan Bank advances increased $33.0 million, or 32.2%, to fund loan growth and deposit outflows. Total borrowing capacity at the Federal Home Loan Bank is $320.2 million of which $135.3 million is advanced.

Total stockholders’ equity decreased $2.0 million to $137.7 million, due to increased accumulated other comprehensive loss for securities available for sale of $1.4 million and the repurchase of 318,560 shares of stock during the period at a cost of $3.0 million, offset by net income of $1.8 million for the nine months ended September 30, 2023. At September 30, 2023, the Company’s ratio of total stockholders’ equity adjusted for AOCI to total assets adjusted for the allowance for credit losses was 15.67%, compared to 17.08% at September 30, 2022.

About Bogota Financial Corp.

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

Forward-Looking Statements

This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, inflation, general economic conditions or conditions within the securities markets, potential recessionary conditions, real estate market values in the Bank’s lending area changes in the quality of our loan and security portfolios, increases in non-performing and classified loans, changes in liquidity, including the size and composition of our deposit portfolio, including the percentage of uninsured deposits in the portfolio, 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, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the impact of a potential government shutdown, and legislative, accounting and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.

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

 

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(unaudited)

 

 

 

As of

 

 

As of

 

 

 

September 30, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

7,213,903

 

 

$

8,160,028

 

Interest-bearing deposits in other banks

 

 

17,763,418

 

 

 

8,680,889

 

Cash and cash equivalents

 

 

24,977,321

 

 

 

16,840,917

 

Securities available for sale, at fair value

 

 

68,518,624

 

 

 

85,100,578

 

Securities held to maturity (fair value of $57,033,705 and $70,699,651, respectively)

 

 

65,927,156

 

 

 

77,427,309

 

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

 

 

710,292,859

 

 

 

719,025,762

 

Premises and equipment, net

 

 

7,765,804

 

 

 

7,884,335

 

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

 

 

7,158,400

 

 

 

5,490,900

 

Accrued interest receivable

 

 

3,672,882

 

 

 

3,966,651

 

Core deposit intangibles

 

 

220,661

 

 

 

267,272

 

Bank-owned life insurance

 

 

30,780,398

 

 

 

30,206,325

 

Other assets

 

 

7,714,828

 

 

 

4,888,954

 

Total Assets

 

$

927,028,933

 

 

$

951,099,003

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Non-interest bearing deposits

 

$

33,420,666

 

 

$

38,653,349

 

Interest bearing deposits

 

 

611,857,823

 

 

 

662,758,100

 

Total deposits

 

 

645,278,489

 

 

 

701,411,449

 

FHLB advances-short term

 

 

39,000,000

 

 

 

59,000,000

 

FHLB advances-long term

 

 

96,314,543

 

 

 

43,319,254

 

Advance payments by borrowers for taxes and insurance

 

 

3,460,726

 

 

 

3,174,661

 

Other liabilities

 

 

5,321,920

 

 

 

4,534,516

 

Total liabilities

 

 

789,375,678

 

 

 

811,439,880

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at September 30, 2023 and December 31, 2022

 

 

 

 

 

 

Common stock $0.01 par value, 30,000,000 shares authorized, 13,373,766 issued and outstanding at September 30, 2023 and 13,699,016 at December 31, 2022

 

 

133,737

 

 

 

136,989

 

Additional paid-in capital

 

 

56,688,749

 

 

 

59,099,476

 

Retained earnings

 

 

93,354,828

 

 

 

91,756,673

 

Unearned ESOP shares (416,491 shares at September 30, 2023 and 436,945 shares at December 31, 2022)

 

 

(4,897,099

)

 

 

(5,123,002

)

Accumulated other comprehensive loss

 

 

(7,626,960

)

 

 

(6,211,013

)

Total stockholders’ equity

 

 

137,653,255

 

 

 

139,659,123

 

Total liabilities and stockholders’ equity

 

$

927,028,933

 

 

$

951,099,003

 

 

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

7,980,388

 

 

$

7,018,200

 

 

$

23,821,545

 

 

$

18,403,802

 

Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

994,791

 

 

 

1,013,034

 

 

 

3,042,389

 

 

 

2,582,869

 

Tax-exempt

 

 

13,159

 

 

 

48,027

 

 

 

78,293

 

 

 

115,305

 

Other interest-earning assets

 

 

301,081

 

 

 

96,139

 

 

 

771,584

 

 

 

263,634

 

Total interest income

 

 

9,289,419

 

 

 

8,175,400

 

 

 

27,713,811

 

 

 

21,365,610

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

4,851,926

 

 

 

1,249,693

 

 

 

12,777,907

 

 

 

2,925,685

 

FHLB advances

 

 

1,220,166

 

 

 

716,705

 

 

 

2,900,359

 

 

 

1,402,741

 

Total interest expense

 

 

6,072,092

 

 

 

1,966,398

 

 

 

15,678,266

 

 

 

4,328,426

 

Net interest income

 

 

3,217,327

 

 

 

6,209,002

 

 

 

12,035,545

 

 

 

17,037,184

 

Provision (recovery) for credit losses

 

 

 

 

 

175,000

 

 

 

(125,000

)

 

 

275,000

 

Net interest income after (recovery) provision for credit losses

��

 

3,217,327

 

 

 

6,034,002

 

 

 

12,160,545

 

 

 

16,762,184

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

 

61,529

 

 

 

47,090

 

 

 

159,381

 

 

 

136,886

 

Gain on sale of loans

 

 

 

 

 

 

 

 

29,375

 

 

 

86,913

 

Bank-owned life insurance

 

 

197,873

 

 

 

185,085

 

 

 

574,073

 

 

 

510,527

 

Other

 

 

30,332

 

 

 

37,336

 

 

 

93,660

 

 

 

133,325

 

Total non-interest income

 

 

289,734

 

 

 

269,511

 

 

 

856,489

 

 

 

867,651

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

2,274,347

 

 

 

2,154,654

 

 

 

6,737,952

 

 

 

6,316,898

 

Occupancy and equipment

 

 

372,626

 

 

 

347,036

 

 

 

1,114,170

 

 

 

1,033,846

 

FDIC insurance assessment

 

 

132,571

 

 

 

54,000

 

 

 

319,690

 

 

 

162,000

 

Data processing

 

 

205,721

 

 

 

311,106

 

 

 

717,913

 

 

 

920,293

 

Advertising

 

 

126,000

 

 

 

156,145

 

 

 

369,383

 

 

 

368,435

 

Director fees

 

 

159,336

 

 

 

189,424

 

 

 

478,011

 

 

 

607,749

 

Professional fees

 

 

149,251

 

 

 

163,500

 

 

 

412,519

 

 

 

459,253

 

Other

 

 

241,530

 

 

 

262,890

 

 

 

661,300

 

 

 

905,428

 

Total non-interest expense

 

 

3,661,382

 

 

 

3,638,755

 

 

 

10,810,938

 

 

 

10,773,902

 

Income (loss) before income taxes

 

 

(154,321

)

 

 

2,664,758

 

 

 

2,206,096

 

 

 

6,855,933

 

Income tax (benefit) expense

 

 

(125,268

)

 

 

734,152

 

 

 

385,801

 

 

 

1,882,423

 

Net (loss) income

 

$

(29,053

)

 

$

1,930,606

 

 

$

1,820,295

 

 

$

4,973,510

 

Earnings per Share - basic

 

$

(0.00

)

 

$

0.14

 

 

$

0.14

 

 

$

0.36

 

Earnings per Share - diluted

 

$

(0.00

)

 

$

0.14

 

 

$

0.14

 

 

$

0.36

 

Weighted average shares outstanding - basic

 

 

13,037,903

 

 

 

13,468,751

 

 

 

13,103,951

 

 

 

13,661,851

 

Weighted average shares outstanding - diluted

 

 

13,037,903

 

 

 

13,529,857

 

 

 

13,103,951

 

 

 

13,704,688

 

 

 

 

 

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

(unaudited)

 

 

 

At or For the Three Months

 

 

At or for the Nine Months

 

 

 

Ended September 30,

 

 

Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Performance Ratios (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return (loss) on average assets (2)

 

 

(0.01

)%

 

 

0.95

%

 

 

0.26

%

 

 

0.76

%

Return (loss) on average equity (3)

 

 

(0.08

)%

 

 

5.56

%

 

 

1.75

%

 

 

4.62

%

Interest rate spread (4)

 

 

1.01

%

 

 

2.68

%

 

 

1.41

%

 

 

2.63

%

Net interest margin (5)

 

 

1.47

%

 

 

2.85

%

 

 

1.82

%

 

 

2.78

%

Efficiency ratio (6)

 

 

104.40

%

 

 

56.17

%

 

 

83.05

%

 

 

60.17

%

Average interest-earning assets to average interest-bearing liabilities

 

 

116.68

%

 

 

118.42

%

 

 

117.21

%

 

 

120.59

%

Net loans to deposits

 

 

110.08

%

 

 

105.83

%

 

 

110.08

%

 

 

105.83

%

Average equity to assets (7)

 

 

15.00

%

 

 

14.91

%

 

 

14.88

%

 

 

16.52

%

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital to average assets

 

 

 

 

 

 

 

 

 

 

15.67

%

 

 

17.08

%

Asset Quality Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses as a percent of total loans

 

 

 

 

 

 

 

 

 

 

0.39

%

 

 

0.36

%

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

 

 

 

 

 

 

 

 

 

 

22.62

%

 

 

128.84

%

Net charge-offs to average outstanding loans during the period

 

 

 

 

 

 

 

 

 

 

0.00

%

 

 

0.00

%

Non-performing loans as a percent of total loans

 

 

 

 

 

 

 

 

 

 

1.73

%

 

 

0.27

%

Non-performing assets as a percent of total assets

 

 

 

 

 

 

 

 

 

 

1.33

%

 

 

0.20

%

(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 yield 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%.

(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 September 30, 2023 and December 31, 2022:

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

Real estate:

 

 

 

 

 

 

 

 

Residential First Mortgage

 

$

459,635,136

 

 

$

466,100,627

 

Commercial and Multi-Family Real Estate

 

 

167,767,921

 

 

 

162,338,669

 

Construction

 

 

51,537,604

 

 

 

61,825,478

 

Commercial and Industrial

 

 

5,697,696

 

 

 

1,684,189

 

Consumer:

 

 

 

 

 

 

 

 

Home Equity and Other Consumer

 

 

28,440,451

 

 

 

29,654,973

 

Total loans

 

 

713,078,808

 

 

 

721,603,936

 

Allowance for credit losses

 

 

(2,785,949

)

 

 

(2,578,174

)

Net loans

 

$

710,292,859

 

 

$

719,025,762

 

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

 

 

At September 30,

 

 

At December 31,

 

 

 

2023

 

 

2022

 

 

 

Amount

 

 

Percent

 

 

Average Rate

 

 

Amount

 

 

Percent

 

 

Average Rate

 

��

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

Noninterest bearing demand accounts

 

$

32,353,920

 

 

 

5.01

%

 

 

%

 

$

38,653,472

 

 

 

5.52

%

 

 

%

NOW accounts

 

 

49,142,170

 

 

 

7.62

 

 

 

2.11

 

 

 

82,720,214

 

 

 

11.79

 

 

 

0.88

 

Money market accounts

 

 

17,627,118

 

 

 

2.73

 

 

 

0.31

 

 

 

30,037,106

 

 

 

4.28

 

 

 

0.32

 

Savings accounts

 

 

47,237,005

 

 

 

7.32

 

 

 

1.77

 

 

 

57,407,955

 

 

 

8.18

 

 

 

0.49

 

Certificates of deposit

 

 

498,918,276

 

 

 

77.32

 

 

 

3.60

 

 

 

492,592,702

 

 

 

70.23

 

 

 

2.37

 

Total

 

$

645,278,489

 

 

 

100.00

%

 

 

3.08

%

 

$

701,411,449

 

 

 

100.00

%

 

 

1.82

%

Average Balance Sheets and Related Yields and Rates

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

 

 

Three Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

 

Average Balance

 

 

Interest and Dividends

 

 

Yield/ Cost

 

 

Average Balance

 

 

Interest and Dividends

 

 

Yield/ Cost

 

 

 

(Dollars in thousands)

 

Assets:

 

(unaudited)

 

Cash and cash equivalents

 

$

12,764

 

 

$

168

 

 

 

5.21

%

 

$

5,912

 

 

$

31

 

 

 

2.05

%

Loans

 

 

710,725

 

 

 

7,981

 

 

 

4.45

%

 

 

670,145

 

 

 

7,019

 

 

 

4.15

%

Securities

 

 

138,479

 

 

 

1,008

 

 

 

2.91

%

 

 

182,626

 

 

 

1,061

 

 

 

2.32

%

Other interest-earning assets

 

 

6,620

 

 

 

132

 

 

 

8.04

%

 

 

6,629

 

 

 

65

 

 

 

3.99

%

Total interest-earning assets

 

 

868,588

 

 

 

9,289

 

 

 

4.25

%

 

 

865,312

 

 

 

8,176

 

 

 

3.75

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-earning assets

 

 

54,179

 

 

 

 

 

 

 

 

 

 

 

51,273

 

 

 

 

 

 

 

 

 

Total assets

 

$

922,767

 

 

 

 

 

 

 

 

 

 

$

916,585

 

 

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

74,785

 

 

$

354

 

 

 

1.88

%

 

$

138,015

 

 

$

173

 

 

 

0.50

%

Savings accounts

 

 

46,177

 

 

 

214

 

 

 

1.83

%

 

 

60,912

 

 

 

40

 

 

 

0.26

%

Certificates of deposit

 

 

498,082

 

 

 

4,284

 

 

 

3.41

%

 

 

403,223

 

 

 

1,037

 

 

 

1.02

%

Total interest-bearing deposits

 

 

619,044

 

 

 

4,852

 

 

 

3.11

%

 

 

602,150

 

 

 

1,250

 

 

 

0.82

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances (1)

 

 

125,344

 

 

 

1,220

 

 

 

3.86

%

 

 

128,534

 

 

 

717

 

 

 

2.30

%

Total interest-bearing liabilities

 

 

744,388

 

 

 

6,072

 

 

 

3.24

%

 

 

730,684

 

 

 

1,967

 

 

 

1.08

%

Non-interest-bearing deposits

 

 

38,257

 

 

 

 

 

 

 

 

 

 

 

40,028

 

 

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

1,727

 

 

 

 

 

 

 

 

 

 

 

4,232

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

784,372

 

 

 

 

 

 

 

 

 

 

 

774,944

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

138,395

 

 

 

 

 

 

 

 

 

 

 

141,641

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

922,767

 

 

 

 

 

 

 

 

 

 

$

916,585

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

3,217

 

 

 

 

 

 

 

 

 

 

$

6,209

 

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

 

 

 

 

 

1.01

%

 

 

 

 

 

 

 

 

 

 

2.68

%

Net interest margin (3)

 

 

 

 

 

 

 

 

 

 

1.47

%

 

 

 

 

 

 

 

 

 

 

2.85

%

Average interest-earning assets to average interest-bearing liabilities

 

 

116.68

%

 

 

 

 

 

 

 

 

 

 

118.42

%

 

 

 

 

 

 

 

 

1.

Cash flow hedges are used to manage interest rate risk. During the three months ended September 30, 2023, the net effect on interest expense on the Federal Home Loan Bank advances was a reduced expense of $92,000.

2.

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

3.

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

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

 

Average Balance

 

 

Interest and Dividends

 

 

Yield/ Cost

 

 

Average Balance

 

 

Interest and Dividends

 

 

Yield/ Cost

 

 

 

(Dollars in thousands)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

11,352

 

 

$

423

 

 

 

4.98

%

 

$

32,485

 

 

$

88

 

 

 

0.36

%

Loans

 

 

713,603

 

 

 

23,822

 

 

 

4.46

%

 

 

612,252

 

 

 

18,404

 

 

 

4.01

%

Securities

 

 

148,802

 

 

 

3,121

 

 

 

2.80

%

 

 

168,081

 

 

 

2,698

 

 

 

2.14

%

Other interest-earning assets

 

 

6,110

 

 

 

348

 

 

 

7.62

%

 

 

5,458

 

 

 

175

 

 

 

4.30

%

Total interest-earning assets

 

 

879,867

 

 

 

27,714

 

 

 

4.20

%

 

 

818,276

 

 

 

21,365

 

 

 

3.49

%

Non-interest-earning assets

 

 

54,380

 

 

 

 

 

 

 

 

 

 

 

52,040

 

 

 

 

 

 

 

 

 

Total assets

 

$

934,247

 

 

 

 

 

 

 

 

 

 

$

870,316

 

 

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

91,781

 

 

$

1,089

 

 

 

1.59

%

 

$

146,653

 

 

$

610

 

 

 

0.56

%

Savings accounts

 

 

49,529

 

 

 

375

 

 

 

1.01

%

 

 

64,509

 

 

 

126

 

 

 

0.26

%

Certificates of deposit

 

 

498,460

 

 

 

11,314

 

 

 

3.03

%

 

 

369,808

 

 

 

2,189

 

 

 

0.79

%

Total interest-bearing deposits

 

 

639,770

 

 

 

12,778

 

 

 

2.67

%

 

 

580,970

 

 

 

2,925

 

 

 

0.67

%

Federal Home Loan Bank advances (1)

 

 

110,875

 

 

 

2,900

 

 

 

3.50

%

 

 

97,571

 

 

 

1,403

 

 

 

1.92

%

Total interest-bearing liabilities

 

 

750,645

 

 

 

15,678

 

 

 

2.79

%

 

 

678,541

 

 

 

4,328

 

 

 

0.85

%

Non-interest-bearing deposits

 

 

38,253

 

 

 

 

 

 

 

 

 

 

 

44,256

 

 

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

6,351

 

 

 

 

 

 

 

 

 

 

 

3,705

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

795,249

 

 

 

 

 

 

 

 

 

 

 

726,502

 

 

 

 

 

 

 

 

 

Total equity

 

 

138,998

 

 

 

 

 

 

 

 

 

 

 

143,814

 

 

 

 

 

 

 

 

 

Total liabilities and equity

 

$

934,247

 

 

 

 

 

 

 

 

 

 

$

870,316

 

 

 

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

12,036

 

 

 

 

 

 

 

 

 

 

$

17,037

 

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

 

 

 

 

 

1.41

%

 

 

 

 

 

 

 

 

 

 

2.63

%

Net interest margin (3)

 

 

 

 

 

 

 

 

 

 

1.82

%

 

 

 

 

 

 

 

 

 

 

2.78

%

Average interest-earning assets to average interest-bearing liabilities

 

 

117.21

%

 

 

 

 

 

 

 

 

 

 

120.59

%

 

 

 

 

 

 

 

 

1.

Cash flow hedges are used to manage interest rate risk. During the nine months ended September 30, 2023, the net effect on interest expense on the Federal Home Loan Bank advances was a reduced expense of $139,000.

2.

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

3.

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

Rate/Volume Analysis

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

 

 

Three Months Ended September 30, 2023

 

 

Nine Months Ended September 30, 2023

 

 

 

Compared to

 

 

Compared to

 

 

 

Three Months Ended September 30, 2022

 

 

Nine Months Ended September 30, 2022

 

 

 

Increase (Decrease) Due to

 

 

Increase (Decrease) Due to

 

 

 

Volume

 

 

Rate

 

 

Net

 

 

Volume

 

 

Rate

 

 

Net

 

 

 

(In thousands)

 

Interest income:

 

(unaudited)

 

Cash and cash equivalents

 

$

59

 

 

$

79

 

 

$

138

 

 

$

(129

)

 

$

463

 

 

$

334

 

Loans receivable

 

 

439

 

 

 

523

 

 

 

962

 

 

 

3,229

 

 

 

2,189

 

 

 

5,418

 

Securities

 

 

(1,076

)

 

 

1,023

 

 

 

(53

)

 

 

(487

)

 

 

910

 

 

 

423

 

Other interest earning assets

 

 

(1

)

 

 

68

 

 

 

67

 

 

 

23

 

 

 

150

 

 

 

173

 

Total interest-earning assets

 

 

(579

)

 

 

1,693

 

 

 

1,114

 

 

 

2,636

 

 

 

3,712

 

 

 

6,348

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

 

(517

)

 

 

698

 

 

 

181

 

 

 

(430

)

 

 

909

 

 

 

479

 

Savings accounts

 

 

(67

)

 

 

241

 

 

 

174

 

 

 

(54

)

 

 

303

 

 

 

249

 

Certificates of deposit

 

 

296

 

 

 

2,951

 

 

 

3,247

 

 

 

997

 

 

 

8,128

 

 

 

9,125

 

Federal Home Loan Bank advances

 

 

(124

)

 

 

627

 

 

 

503

 

 

 

213

 

 

 

1,284

 

 

 

1,497

 

Total interest-bearing liabilities

 

 

(412

)

 

 

4,517

 

 

 

4,105

 

 

 

726

 

 

 

10,624

 

 

 

11,350

 

Net increase (decrease) in net interest income

 

$

(167

)

 

$

(2,824

)

 

$

(2,991

)

 

$

1,910

 

 

$

(6,912

)

 

$

(5,002

)

 

Contacts

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

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