Bogota Financial Corp. Reports Results for the Three and Nine Months Ended September 30, 2024
TEANECK, N.J., Nov. 01, 2024 (GLOBE NEWSWIRE) — Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported a net loss for the three months ended September 30, 2024 of $147,000, or $0.01 per basic and diluted share, compared to a net loss of $29,000, or $0.00 per basic and diluted share, for the comparable prior year period. The Company reported a net loss for the nine months ended September 30, 2024 of $1.0 million, or $0.08 per basic and diluted share, compared to net income of $1.8 million, or $0.14 per basic and diluted share, for the nine months ended September 30, 2023.
On April 24, 2024, the Company announced it had received regulatory approval for the repurchase of up to 237,090 shares of its common stock, or approximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC). The repurchase program does not have a scheduled expiration date and the Board of Directors has the right to suspend or discontinue the program at any time. As of September 30, 2024, 163,790 shares have been repurchased pursuant to the program at a cost of $1.2 million.
Other Financial Highlights:
- Total assets increased $39.5 million, or 4.2%, to $978.8 million at September 30, 2024 from $939.3 million at December 31, 2023, due to an increase in securities, offset by a decrease in cash and cash equivalents and loans.
- Cash and cash equivalents decreased $3.9 million, or 15.8%, to $21.0 million at September 30, 2024 from $24.9 million at December 31, 2023 as excess funds were used to purchase securities.
- Securities increased $47.1 million, or 33.3%, to $188.7 million at September 30, 2024 from $141.5 million at December 31, 2023.
- Net loans decreased $5.8 million, or 0.8%, to $708.9 million at September 30, 2024 from $714.7 million at December 31, 2023.
- Total deposits at September 30, 2024 were $629.3 million, increasing $3.9 million, or 0.6%, as compared to $625.3 million at December 31, 2023, due to a $2.3 million increase in interest-bearing deposits, primarily in certificates of deposit, and a $1.6 million increase in non-interest bearing demand accounts. The average cost of deposits increased 121 basis points to 3.88% for the first three quarters of 2024 from 2.67% for the first nine months of 2023 due to higher interest rates and a larger percentage of deposits consisting of higher-costing certificates of deposit.
- Federal Home Loan Bank advances increased $34.9 million, or 20.8% to $202.6 million at September 30, 2024 from $167.7 million as of December 31, 2023.
Kevin Pace, President and Chief Executive Officer, said “The Bank continues its growth strategy focusing on core deposits and commercial lending. We have seen an uptick in our commercial pipeline this quarter that shows interest remains strong in our market. Offering new desirable technology through partnerships with our providers is a key initiative we are focusing on going into 2025. This will allow us to attract new customers in our competitive environment.”
“The Bank completed its third stock repurchase program earlier this year and promptly began its fourth buyback. We remain diligent in our efforts to show confidence and deliver value to our shareholders.”
Income Statement Analysis
Comparison of Operating Results for the Three Months Ended September 30, 2024 and September 30, 2023
Net income decreased by $118,000 to a net loss of $147,000 for the three months ended September 30, 2024 from a net loss of $29,000 for the three months ended September 30, 2023. This decrease was primarily due to a decrease of $260,000 in net interest income, partially offset by a decrease of $171,000 in salaries and employee benefit costs, an increase of $48,000 in income tax benefit and a $38,000 increase in non-interest income.
Interest income increased $1.3 million, or 14.3%, from $9.3 million for the three months ended September 30, 2023 to $10.6 million for the three months ended September 30, 2024 primarily due to higher yields on interest-earning assets and an increase in the average balance of securities.
Interest income on cash and cash equivalents decreased $30,000, or 17.9%, to $138,000 for the three months ended September 30, 2024 from $168,000 for the three months ended September 30, 2023 due to a $2.6 million decrease in the average balance to $10.2 million for the three months ended September 30, 2024 from $12.8 million for the three months ended September 30, 2023, reflecting the use of excess cash to purchase securities. The decrease was offset by an 18 basis point increase in the average yield from 5.21% for the three months ended September 30, 2023 to 5.39% for the three months ended September 30, 2024 due to the higher interest rate environment.
Interest income on loans increased $401,000, or 5.0%, to $8.4 million for the three months ended September 30, 2024 compared to $8.0 million for the three months ended September 30, 2023 due primarily to a 24 basis point increase in the average yield from 4.45% for the three months ended September 30, 2023 to 4.69% for the three months ended September 30, 2024, and to a lesser extent, a $876,000 increase in the average balance to $711.6 million for the three months ended September 30, 2024 from $710.7 million for the three months ended September 30, 2023.
Interest income on securities increased $889,000, or 88.2%, to $1.9 million for the three months ended September 30, 2024 from $1.0 million for the three months ended September 30, 2023 primarily due to a $48.7 million increase in the average balance to $187.2 million for the three months ended September 30, 2024 from $138.5 million for the three months ended September 30, 2023, and a 114 basis point increase in the average yield from 2.91% for the three months ended September 30, 2023 to 4.05% for the three months ended September 30, 2024 due to the higher interest rate environment.
Interest expense increased $1.6 million, or 26.2%, from $6.1 million for the three months ended September 30, 2023 to $7.7 million for the three months ended September 30, 2024 due to higher costs and average balances on certificates of deposit and borrowings.
Interest expense on interest-bearing deposits increased $1.0 million, or 20.8%, to $5.9 million for the three months ended September 30, 2024 from $4.9 million for the three months ended September 30, 2023. The increase was due to a 73 basis point increase in the average cost of deposits to 3.84% for the three months ended September 30, 2024 from 3.11% for the three months ended September 30, 2023. 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 decreased $831,000 to $497.2 million for the three months ended September 30, 2024 from $498.1 million for the three months ended September 30, 2023 while the average balance of NOW/money market accounts and savings accounts decreased $9.0 million and $2.1 million for the three months ended September 30, 2024, respectively, compared to the three months ended September 30, 2023.
Interest expense on Federal Home Loan Bank advances increased $582,000, or 47.7%, from $1.2 million for the three months ended September 30, 2023 to $1.8 million for the three months ended September 30, 2024. The increase was primarily due to an increase in the average balance of $71.6 million to $196.9 million for the three months ended September 30, 2024 from $125.3 million for the three months ended September 30, 2023. The increase was slightly offset by a decrease in the average cost of borrowings of 22 basis points to 3.64% for the three months ended September 30, 2024 from 3.86% for the three months ended September 30, 2023 due to new borrowings being at lower rates. At September 30, 2024, cash flow hedges used to manage interest rate risk had a notional value of $65.0 million, while fair value hedges totaled $60.0 million in notional value. During the three months ended September 30, 2024, the use of the cash flow and fair value hedges reduced the interest expense on the Federal Home Loan Bank advances and certificates of deposit by $498,000.
Net interest income decreased $260,000, or 8.1%, to $3.0 million for the three months ended September 30, 2024 from $3.2 million for the three months ended September 30, 2023. The decrease reflected a 20 basis point decrease in our net interest rate spread to 0.81% for the three months ended September 30, 2024 from 1.01% for the three months ended September 30, 2023. Our net interest margin decreased 19 basis points to 1.28% for the three months ended September 30, 2024 from 1.47% for the three months ended September 30, 2023.
We did not record a provision for credit losses for the three months ended September 30, 2024 or September 30, 2023 due to moderate loan growth and improved economic conditions.
Non-interest income increased by $38,000, or 13.0%, to $327,000 for the three months ended September 30, 2024 from $290,000 for the three months ended September 30, 2023. Bank-owned life insurance income increased $23,000, or 11.6%, due to higher balances during 2024 and gain on sale of loans increased $12,000 compared to no gain on sale of loans for the comparable period last year due to the sale of a $400,000 residential loan in 2024.
For the three months ended September 30, 2024, non-interest expense decreased $56,000, or 1.5%, over the comparable 2023 period. This was due to a $171,000, or 7.5% reduction in salaries and employee benefits, which decreased due to lower headcount and increased expenses in 2023 related to the retirement of the previous Chief Executive Officer, and a $40,000, or 31.9%, decrease in advertising expenses. Our FDIC insurance assessment also decreased by $26,000, or 19.8%. These decreases were partially offset by an increase in professional fees of $99,000, or 66.4%, due to higher consulting expense related to strategic business planning. Data processing expense also increased $100,000, or 48.8%, due to higher processing costs.
Income tax expense decreased $48,000, or 38.3%, to a benefit of $173,000 for the three months ended September 30, 2024 from a $125,000 benefit for the three months ended September 30, 2023. The decrease was due to a reduction of $166,000 in taxable income.
Comparison of Operating Results for the Nine Months Ended September 30, 2024 and September 30, 2023
Net income decreased by $2.8 million, or 156.1%, to a net loss of $1.0 million for the nine months ended September 30, 2024 from net income of $1.8 million for the nine months ended September 30, 2023. This decrease was primarily due to a decrease of $3.7 million in net interest income, partially offset by a decrease of $1.1 million in income tax expense.
Interest income increased $3.4 million, or 12.4%, from $27.7 million for the nine months ended September 30, 2023 to $31.1 million for the nine months ended September 30, 2024 due to higher yields on interest-earning assets and an increase in the average balance of securities, partially offset by a decrease in the average balance of loans and cash and cash equivalents.
Interest income on cash and cash equivalents decreased $8,000, or 1.9%, to $415,000 for the nine months ended September 30, 2024 from $423,000 for the nine months ended September 30, 2023 due a $2.3 million decrease in the average balance to $9.1 million for the nine months ended September 30, 2024 from $11.4 million for the nine months ended September 30, 2023, reflecting the decrease of liquidity due to increased securities purchases. This decrease was offset by a 111 basis point increase in the average yield due to the higher interest rate environment.
Interest income on loans increased $1.1 million, or 4.5%, to $24.9 million for the nine months ended September 30, 2024 compared to $23.8 million for the nine months ended September 30, 2023 due primarily to a 20 basis point increase in the average yield from 4.46% for the nine months ended September 30, 2023 to 4.66% for the nine months ended September 30, 2024, offset by a $1.9 million decrease in the average balance to $711.7 million for the nine months ended September 30, 2024 from $713.6 million for the nine months ended September 30, 2023.
Interest income on securities increased $2.2 million, or 69.4%, to $5.3 million for the nine months ended September 30, 2024 from $3.1 million for the nine months ended September 30, 2023 primarily due to a 112 basis point increase in the average yield from 2.80% for the nine months ended September 30, 2023 to 3.92% for the nine months ended September 30, 2024, and a $31.0 million increase in the average balance to $179.8 million for the nine months ended September 30, 2024 from $148.8 million for the nine months ended September 30, 2023.
Income from other interest-earning assets, which primarily consisted of Federal Home Loan Bank stock, increased $209,000, or 27.1% to $981,000 for the nine months ended September 30, 2024 from $772,000 for the nine months ended September 30, 2023 due to dividends paid on such stock.
Interest expense increased $7.1 million, or 45.5%, from $15.7 million for the nine months ended September 30, 2023 to $22.8 million for the nine months ended September 30, 2024 due to higher costs and average balances on certificates of deposit and borrowings.
Interest expense on interest-bearing deposits increased $5.3 million, or 41.5%, to $18.1 million for the nine months ended September 30, 2024 from $12.8 million for the nine months ended September 30, 2023. The increase was due to a 121 basis point increase in the average cost of deposits to 3.88% for the nine months ended September 30, 2024 from 2.67% for the nine months ended September 30, 2023. 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 $12.0 million to $510.5 million for the nine months ended September 30, 2024 from $498.5 million for the nine months ended September 30, 2023 while average NOW/money market accounts and savings accounts decreased $24.2 million and $5.7 million for the nine months ended September 30, 2024, respectively, compared to the nine months ended September 30, 2023.
Interest expense on Federal Home Loan Bank advances increased $1.8 million, or 62.7%, from $2.9 million for the nine months ended September 30, 2023 to $4.7 million for the nine months ended September 30, 2024. The increase was primarily due to an increase in the average balance of $60.7 million to $171.6 million for the nine months ended September 30, 2024 from $110.9 million for the nine months ended September 30, 2023. The increase was also due to an increase in the average cost of borrowings of 17 basis points to 3.67% for the nine months ended September 30, 2024 from 3.50% for the nine months ended September 30, 2023 due to new borrowings being at higher rates. At September 30, 2024, cash flow hedges used to manage interest rate risk had a notional value of $65.0 million, while fair value hedges totaled $60.0 million in notional value. During the nine months ended September 30, 2024, the use of the cash flow hedges reduced the interest expense on the Federal Home Loan Bank advances and certificates of deposit by $1.2 million.
Net interest income decreased $3.7 million, or 30.6%, to $8.3 million for the nine months ended September 30, 2024 from $12.0 million for the nine months ended September 30, 2023. The decrease reflected a 68 basis point decrease in our net interest rate spread to 0.73% for the nine months ended September 30, 2024 from 1.41% for the nine months ended September 30, 2023. Our net interest margin decreased 59 basis points to 1.23% for the nine months ended September 30, 2024 from 1.82% for the nine months ended September 30, 2023.
We recorded a $70,000 provision for credit losses for the nine months ended September 30, 2024 compared to a $125,000 recovery for credit losses for the nine-month period ended September 30, 2023, which was due to a decrease in loan balances in 2023. The entire provision in the first three quarters of 2024 was due to an increase in held-to-maturity corporate securities.
Non-interest income increased by $73,000, or 8.5%, to $929,000 for the nine months ended September 30, 2024 from $856,000 for the nine months ended September 30, 2023. The increase was primarily due to bank-owned life insurance income, which increased $74,000, or 12.9%, due to higher balances during 2024.
For the nine months ended September 30, 2024, non-interest expense increased $163,000, or 1.5%, over the comparable 2023 period. Professional fees increased $270,000, or 65.5% due to higher consulting expense related to strategic business planning. Data processing expense increased $210,000, or 29.3%, due to higher processing costs. These were offset by a $333,000, or 4.9%, reduction in salaries and employee benefit, which decreased due to lower headcount and increased expenses in 2023 related to the retirement of the previous Chief Executive Officer.
Income tax expense decreased $1.1 million, or 292.2%, to a benefit of $741,000 for the nine months ended September 30, 2024 from a $386,000 expense for the nine months ended September 30, 2023. The decrease was due to a reduction of $4.0 million in taxable income.
Balance Sheet Analysis
Total assets were $978.8 million at September 30, 2024, representing an increase of $39.5 million, or 4.2%, from December 31, 2023. Cash and cash equivalents decreased $3.9 million during the period primarily due to the purchase of new securities offset by loan repayments. Net loans decreased $5.8 million, or 0.8%, due to $22.5 million in repayments including a $12.6 million decrease in the balance of residential loans, as well as a $9.1 million decrease in the balance of construction loans and a decrease of $915,000 in multifamily loans. The decrease was partially offset by new production of $16.7 million, including $13.1 million and $3.6 million of commercial real estate and commercial and industrial loans, respectively. The Company also purchased a pool of residential loans totaling $10.4 million. Due to the interest rate environment, we have experienced 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 increased $7.4 million, or 10.3%, and securities available for sale increased $40.0 million, or 57.6%, due to new purchases of mortgage-backed securities with excess cash.
Delinquent loans increased $8.9 million to $21.5 million, or 3.0% of total loans, at September 30, 2024, compared to $12.6 million, or 1.8% of total loans, at December 31, 2023. The increase was mostly due to four commercial real estate loans to three customers with a balance of $8.1 million. Three of the past due commercial real estate loans are being actively managed with the customers and are expected to be brought current, while one totaling $758,000 has been placed on nonaccrual, but is considered well-secured with a loan-to-value of 59%. During the same timeframe, non-performing assets increased from $12.8 million at December 31, 2023 to $13.8 million, which represented 1.41% of total assets at September 30, 2024. No loans were charged-off during the three or nine months ended September 30, 2024 or September 30, 2023. The Company’s allowance for credit losses related to loans was 0.39% of total loans and 19.94% of non-performing loans at September 30, 2024 compared to 0.39% of total loans and 21.81% of non-performing loans at December 31, 2023. The Bank does not have any exposure to commercial real estate loans secured by office space. At September 30, 2024, the Company’s allowance for credit losses related to held-to-maturity securities totaled $108,000 or 0.13% of the total held-to-maturity securities portfolio.
Total liabilities increased $39.5 million, or 4.9%, to $841.6 million mainly due to a $34.9 million increase in borrowings and a $3.9 million increase in total deposits. The increase in deposits reflected an increase in certificate of deposit accounts, which increased by $505,000 to $493.8 million from $493.3 million at December 31, 2023, an increase in NOW deposit accounts, which increased by $4.2 million to $45.5 million from $41.3 million at December 31, 2023, and by an increase in noninterest bearing demand accounts, which increased by $1.6 million from $30.6 million at December 31, 2023 to $32.1 million at September 30, 2024. This was offset by a $2.6 million, or 18.1%, decrease in money market accounts. At September 30, 2024, brokered deposits were $101.1 million or 16.1% of deposits and municipal deposits were $36.0 million or 5.7% of deposits. At September 30, 2024, uninsured deposits represented 10.7% of the Bank’s total deposits. Federal Home Loan Bank advances increased $34.9 million, or 20.8%, due to new borrowings, for which the durations have primarily been short-term in nature as we remain mindful of the changing interest rate environment and the potential for further interest rate cuts from the Federal Reserve. Total borrowing capacity at the Federal Home Loan Bank is $297.9 million of which $202.7 million has been advanced.
Total stockholders’ equity decreased $13,000 to $137.2 million, due to a net loss of $1.0 million and the repurchase of 163,790 shares of stock at a cost of $1.2 million, offset by a decrease in accumulated other comprehensive loss for securities available for sale of $1.6 million and stock compensation of $225,000 for the nine months ended September 30, 2024. At September 30, 2024, the Company’s ratio of average stockholders’ equity-to-total assets was 15.05%, compared to 15.32% at December 31, 2023.
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 seven offices located in Bogota, Hasbrouck Heights, Upper Saddle River, 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, real estate market values in the Bank’s lending area, changes in liquidity, including the size and composition of our deposit portfolio and the percentage of uninsured deposits in the portfolio; the availability of low-cost funding; our continued reliance on brokered and municipal deposits; demand for loans in our market area; changes in the quality of our loan and security portfolios, economic assumptions or changes in our methodology, either of which may impact our allowance for credit losses calculation, increases in non-performing and classified loans, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, a failure in or breach of the Company’s operational or security systems or infrastructure, including cyberattacks, the failure to maintain current technologies, failure to retain or attract employees and legislative, accounting and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.
The Company undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.
| BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (unaudited) | ||||||||
| As of | As of | |||||||
| September 30, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Cash and due from banks | $ | 10,630,086 | $ | 13,567,115 | ||||
| Interest-bearing deposits in other banks | 10,372,434 | 11,362,356 | ||||||
| Cash and cash equivalents | 21,002,520 | 24,929,471 | ||||||
| Securities available for sale, at fair value | 108,560,811 | 68,888,179 | ||||||
| Securities held to maturity, net of allowance for securities credit losses of $108,000 and zero, respectively (fair value – $74,603,097 and $65,374,753, respectively) | 80,103,753 | 72,656,179 | ||||||
| Loans, net of allowance for credit losses of $2,747,949 and $2,785,949, respectively | 708,896,566 | 714,688,635 | ||||||
| Premises and equipment, net | 7,853,076 | 7,687,387 | ||||||
| Federal Home Loan Bank (FHLB) stock and other restricted securities | 10,180,100 | 8,616,100 | ||||||
| Accrued interest receivable | 4,352,967 | 3,932,785 | ||||||
| Core deposit intangibles | 165,454 | 206,116 | ||||||
| Bank-owned life insurance | 31,635,988 | 30,987,851 | ||||||
| Other assets | 6,058,029 | 6,731,500 | ||||||
| Total Assets | $ | 978,809,264 | $ | 939,324,203 | ||||
| Liabilities and Equity | ||||||||
| Non-interest bearing deposits | $ | 32,125,742 | $ | 30,554,842 | ||||
| Interest bearing deposits | 597,141,995 | 594,792,300 | ||||||
| Total deposits | 629,267,737 | 625,347,142 | ||||||
| FHLB advances-short term | 53,500,000 | 37,500,000 | ||||||
| FHLB advances-long term | 149,065,610 | 130,189,663 | ||||||
| Advance payments by borrowers for taxes and insurance | 3,265,262 | 2,733,709 | ||||||
| Other liabilities | 6,550,898 | 6,380,486 | ||||||
| Total liabilities | 841,649,507 | 802,151,000 | ||||||
| Stockholders’ Equity | ||||||||
| Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at September 30, 2024 and December 31, 2023 | — | — | ||||||
| Common stock $0.01 par value, 30,000,000 shares authorized, 13,092,357 issued and outstanding at September 30, 2024 and 13,279,230 at December 31, 2023 | 130,823 | 132,792 | ||||||
| Additional paid-in capital | 55,315,975 | 56,149,915 | ||||||
| Retained earnings | 91,156,649 | 92,177,068 | ||||||
| Unearned ESOP shares (389,674 shares at September 30, 2024 and 409,750 shares at December 31, 2023) | (4,595,895 | ) | (4,821,798 | ) | ||||
| Accumulated other comprehensive loss | (4,847,795 | ) | (6,464,774 | ) | ||||
| Total stockholders’ equity | 137,159,757 | 137,173,203 | ||||||
| Total liabilities and stockholders’ equity | $ | 978,809,264 | $ | 939,324,203 | ||||
| BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 8,381,581 | $ | 7,980,388 | $ | 24,888,377 | $ | 23,821,545 | ||||||||
| Securities | ||||||||||||||||
| Taxable | 1,884,276 | 994,791 | 5,247,336 | 3,042,389 | ||||||||||||
| Tax-exempt | 13,137 | 13,159 | 39,409 | 78,293 | ||||||||||||
| Other interest-earning assets | 341,268 | 301,081 | 980,536 | 771,584 | ||||||||||||
| Total interest income | 10,620,262 | 9,289,419 | 31,155,658 | 27,713,811 | ||||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 5,860,547 | 4,851,926 | 18,084,323 | 12,777,907 | ||||||||||||
| FHLB advances | 1,802,387 | 1,220,166 | 4,719,056 | 2,900,359 | ||||||||||||
| Total interest expense | 7,662,934 | 6,072,092 | 22,803,379 | 15,678,266 | ||||||||||||
| Net interest income | 2,957,328 | 3,217,327 | 8,352,279 | 12,035,545 | ||||||||||||
| Provision (recovery) for credit losses | — | — | 70,000 | (125,000 | ) | |||||||||||
| Net interest income after provision (recovery) for credit losses | 2,957,328 | 3,217,327 | 8,282,279 | 12,160,545 | ||||||||||||
| Non-interest income | ||||||||||||||||
| Fees and service charges | 56,610 | 61,529 | 164,400 | 159,381 | ||||||||||||
| Gain on sale of loans | 11,710 | — | 11,710 | 29,375 | ||||||||||||
| Bank-owned life insurance | 221,122 | 197,873 | 648,137 | 574,073 | ||||||||||||
| Other | 37,943 | 30,332 | 105,420 | 93,660 | ||||||||||||
| Total non-interest income | 327,385 | 289,734 | 929,667 | 856,489 | ||||||||||||
| Non-interest expense | ||||||||||||||||
| Salaries and employee benefits | 2,102,993 | 2,274,347 | 6,404,946 | 6,737,952 | ||||||||||||
| Occupancy and equipment | 380,714 | 372,626 | 1,118,739 | 1,114,170 | ||||||||||||
| FDIC insurance assessment | 106,313 | 132,571 | 313,626 | 319,690 | ||||||||||||
| Data processing | 306,167 | 205,721 | 928,292 | 717,913 | ||||||||||||
| Advertising | 85,750 | 126,000 | 310,950 | 369,383 | ||||||||||||
| Director fees | 159,851 | 159,336 | 467,100 | 478,011 | ||||||||||||
| Professional fees | 248,420 | 149,251 | 682,517 | 412,519 | ||||||||||||
| Other | 214,686 | 241,530 | 747,598 | 661,300 | ||||||||||||
| Total non-interest expense | 3,604,894 | 3,661,382 | 10,973,768 | 10,810,938 | ||||||||||||
| (Loss) income before income taxes | (320,181 | ) | (154,321 | ) | (1,761,822 | ) | 2,206,096 | |||||||||
| Income tax (benefit) expense | (173,221 | ) | (125,268 | ) | (741,403 | ) | 385,801 | |||||||||
| Net (loss) income | $ | (146,960 | ) | $ | (29,053 | ) | $ | (1,020,419 | ) | $ | 1,820,295 | |||||
| (Loss) earnings per Share – basic | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.08 | ) | $ | 0.14 | |||||
| (Loss) earnings per Share – diluted | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.08 | ) | $ | 0.14 | |||||
| Weighted average shares outstanding – basic | 12,702,683 | 13,037,903 | 12,702,683 | 13,103,951 | ||||||||||||
| Weighted average shares outstanding – diluted | 12,717,904 | 13,037,903 | 12,734,624 | 13,103,951 | ||||||||||||
| BOGOTA FINANCIAL CORP. SELECTED RATIOS (unaudited) | ||||||||||||||||
| At or For the Three Months | At or for the Nine Months | |||||||||||||||
| Ended September 30, | Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Performance Ratios (1): | ||||||||||||||||
| (Loss) return on average assets (2) | (0.09 | )% | (0.01 | )% | (0.17 | )% | 0.26 | % | ||||||||
| (Loss) return on average equity (3) | (0.72 | )% | (0.08 | )% | (1.23 | )% | 1.75 | % | ||||||||
| Interest rate spread (4) | 0.81 | % | 1.01 | % | 0.73 | % | 1.41 | % | ||||||||
| Net interest margin (5) | 1.24 | % | 1.47 | % | 1.23 | % | 1.82 | % | ||||||||
| Efficiency ratio (6) | 109.75 | % | 104.40 | % | 118.23 | % | 83.05 | % | ||||||||
| Average interest-earning assets to average interest-bearing liabilities | 114.30 | % | 116.68 | % | 114.62 | % | 117.21 | % | ||||||||
| Net loans to deposits | 110.67 | % | 110.08 | % | 114.43 | % | 110.08 | % | ||||||||
| Average equity to average assets (7) | 14.03 | % | 15.00 | % | 14.14 | % | 14.88 | % | ||||||||
| Capital Ratios: | ||||||||||||||||
| Tier 1 capital to average assets | 13.47 | % | 15.67 | % | ||||||||||||
| Asset Quality Ratios: | ||||||||||||||||
| Allowance for credit losses as a percent of total loans | 0.39 | % | 0.39 | % | ||||||||||||
| Allowance for credit losses as a percent of non-performing loans | 19.94 | % | 22.62 | % | ||||||||||||
| Net charge-offs to average outstanding loans during the period | 0.00 | % | 0.00 | % | ||||||||||||
| Non-performing loans as a percent of total loans | 1.94 | % | 1.73 | % | ||||||||||||
| Non-performing assets as a percent of total assets | 1.41 | % | 1.33 | % | ||||||||||||
| (1) | Certain performance ratios for the three and nine months ended September 30, 2024 and 2023 are annualized. | |
| (2) | Represents net (loss) income divided by average total assets. | |
| (3) | Represents net (loss) 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% for 2024 and 2023. | |
| (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 2024 and 2023. | |
| (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, 2024 and December 31, 2023:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (unaudited) | ||||||||
| Real estate: | ||||||||
| Residential First Mortgage | $ | 473,492,871 | $ | 486,052,422 | ||||
| Commercial Real Estate | 112,899,496 | 99,830,514 | ||||||
| Multi-Family Real Estate | 74,697,352 | 75,612,566 | ||||||
| Construction | 40,243,916 | 49,302,040 | ||||||
| Commercial and Industrial | 10,229,503 | 6,658,370 | ||||||
| Consumer | 81,377 | 18,672 | ||||||
| Total loans | 711,644,515 | 717,474,584 | ||||||
| Allowance for credit losses | (2,747,949 | ) | (2,785,949 | ) | ||||
| Net loans | $ | 708,896,566 | $ | 714,688,635 | ||||
The following tables set forth the distribution of total deposit accounts, by account type, at the dates indicated:
| At September 30, | At December 31, | |||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||
| Amount | Percent | Average Rate | Amount | Percent | Average Rate | |||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Noninterest bearing demand accounts | $ | 32,125,742 | 5.11 | % | — | % | $ | 30,554,842 | 4.89 | % | — | % | ||||||||||||
| NOW accounts | 45,493,204 | 7.23 | % | 2.21 | 41,320,723 | 6.61 | % | 1.90 | ||||||||||||||||
| Money market accounts | 12,003,291 | 1.91 | % | 0.30 | 14,641,846 | 2.34 | % | 0.30 | ||||||||||||||||
| Savings accounts | 45,865,501 | 7.29 | % | 1.82 | 45,554,964 | 7.28 | % | 1.76 | ||||||||||||||||
| Certificates of deposit | 493,779,999 | 78.47 | % | 4.15 | 493,274,767 | 78.88 | % | 4.00 | ||||||||||||||||
| Total | $ | 629,267,737 | 100.00 | % | 3.55 | % | $ | 625,347,142 | 100.00 | % | 3.42 | % | ||||||||||||
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, | ||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||
| Average Balance | Interest and Dividends | Yield/ Cost | Average Balance | Interest and Dividends | Yield/ Cost | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Assets: | (unaudited) | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 10,195 | $ | 138 | 5.39 | % | $ | 12,764 | $ | 168 | 5.21 | % | ||||||||||||
| Loans | 711,601 | 8,382 | 4.69 | % | 710,725 | 7,981 | 4.45 | % | ||||||||||||||||
| Securities | 187,212 | 1,897 | 4.05 | % | 138,479 | 1,008 | 2.91 | % | ||||||||||||||||
| Other interest-earning assets | 9,908 | 203 | 8.20 | % | 6,620 | 132 | 8.04 | % | ||||||||||||||||
| Total interest-earning assets | 918,916 | 10,620 | 4.60 | % | 868,588 | 9,289 | 4.25 | % | ||||||||||||||||
| Non-interest-earning assets | 56,061 | 54,179 | ||||||||||||||||||||||
| Total assets | $ | 974,977 | $ | 922,767 | ||||||||||||||||||||
| Liabilities and equity: | ||||||||||||||||||||||||
| NOW and money market accounts | $ | 65,767 | $ | 329 | 1.99 | % | $ | 74,785 | $ | 354 | 1.88 | % | ||||||||||||
| Savings accounts | 44,029 | 205 | 1.85 | % | 46,177 | 214 | 1.83 | % | ||||||||||||||||
| Certificates of deposit (1) | 497,251 | 5,327 | 4.26 | % | 498,082 | 4,284 | 3.41 | % | ||||||||||||||||
| Total interest-bearing deposits | 607,047 | 5,861 | 3.84 | % | 619,044 | 4,852 | 3.11 | % | ||||||||||||||||
| Federal Home Loan Bank advances (1) | 196,885 | 1,802 | 3.64 | % | 125,344 | 1,220 | 3.86 | % | ||||||||||||||||
| Total interest-bearing liabilities | 803,932 | 7,663 | 3.79 | % | 744,388 | 6,072 | 3.24 | % | ||||||||||||||||
| Non-interest-bearing deposits | 31,679 | 38,257 | ||||||||||||||||||||||
| Other non-interest-bearing liabilities | 2,614 | 1,727 | ||||||||||||||||||||||
| Total liabilities | 838,225 | 784,372 | ||||||||||||||||||||||
| Total equity | 136,752 | 138,395 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 974,977 | $ | 922,767 | ||||||||||||||||||||
| Net interest income | $ | 2,957 | $ | 3,217 | ||||||||||||||||||||
| Interest rate spread (2) | 0.81 | % | 1.01 | % | ||||||||||||||||||||
| Net interest margin (3) | 1.28 | % | 1.47 | % | ||||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 114.30 | % | 116.68 | % | ||||||||||||||||||||
| 1. | Cash flow and fair value hedges are used to manage interest rate risk. During the three months ended September 30, 2024 and 2023, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $498,000 and $92,000, respectively. |
| 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, | ||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||
| Average Balance | Interest and Dividends | Yield/ Cost | Average Balance | Interest and Dividends | Yield/ Cost | |||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 9,072 | $ | 415 | 6.09 | % | $ | 11,352 | $ | 423 | 4.98 | % | ||||||||||||
| Loans | 711,697 | 24,888 | 4.66 | % | 713,603 | 23,822 | 4.46 | % | ||||||||||||||||
| Securities | 179,818 | 5,287 | 3.92 | % | 148,802 | 3,121 | 2.80 | % | ||||||||||||||||
| Other interest-earning assets | 8,903 | 566 | 8.48 | % | 6,110 | 348 | 7.62 | % | ||||||||||||||||
| Total interest-earning assets | 909,490 | 31,156 | 4.57 | % | 879,867 | 27,714 | 4.20 | % | ||||||||||||||||
| Non-interest-earning assets | 58,221 | 54,380 | ||||||||||||||||||||||
| Total assets | $ | 967,711 | $ | 934,247 | ||||||||||||||||||||
| Liabilities and equity: | ||||||||||||||||||||||||
| NOW and money market accounts | $ | 67,628 | $ | 993 | 1.96 | % | $ | 91,781 | $ | 1,089 | 1.59 | % | ||||||||||||
| Savings accounts | 43,824 | 608 | 1.85 | % | 49,529 | 375 | 1.01 | % | ||||||||||||||||
| Certificates of deposit (1) | 510,494 | 16,484 | 4.31 | % | 498,460 | 11,314 | 3.03 | % | ||||||||||||||||
| Total interest-bearing deposits | 621,946 | 18,085 | 3.88 | % | 639,770 | 12,778 | 2.67 | % | ||||||||||||||||
| Federal Home Loan Bank advances (1) | 171,565 | 4,719 | 3.67 | % | 110,875 | 2,900 | 3.50 | % | ||||||||||||||||
| Total interest-bearing liabilities | 793,511 | 22,804 | 3.84 | % | 750,645 | 15,678 | 2.79 | % | ||||||||||||||||
| Non-interest-bearing deposits | 31,225 | 38,253 | ||||||||||||||||||||||
| Other non-interest-bearing liabilities | 6,099 | 6,351 | ||||||||||||||||||||||
| Total liabilities | 830,835 | 795,249 | ||||||||||||||||||||||
| Total equity | 136,876 | 138,998 | ||||||||||||||||||||||
| Total liabilities and equity | $ | 967,711 | $ | 934,247 | ||||||||||||||||||||
| Net interest income | $ | 8,352 | $ | 12,036 | ||||||||||||||||||||
| Interest rate spread (2) | 0.73 | % | 1.41 | % | ||||||||||||||||||||
| Net interest margin (3) | 1.23 | % | 1.82 | % | ||||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities | 114.62 | % | 117.21 | % | ||||||||||||||||||||
| 1. | Cash flow and fair value hedges are used to manage interest rate risk. During the nine months ended September 30, 2024 and 2023, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $1.2 million and $139,000, respectively. |
| 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, 2024 | Nine Months Ended September 30, 2024 | |||||||||||||||||||||||
| Compared to | Compared to | |||||||||||||||||||||||
| Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | |||||||||||||||||||||||
| Increase (Decrease) Due to | Increase (Decrease) Due to | |||||||||||||||||||||||
| Volume | Rate | Net | Volume | Rate | Net | |||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||
| Interest income: | (unaudited) | |||||||||||||||||||||||
| Cash and cash equivalents | $ | (66 | ) | $ | 36 | $ | (30 | ) | $ | (123 | ) | $ | 115 | $ | (8 | ) | ||||||||
| Loans receivable | 9 | 392 | 401 | (101 | ) | 1,167 | 1,066 | |||||||||||||||||
| Securities | 420 | 469 | 889 | 742 | 1,424 | 2,166 | ||||||||||||||||||
| Other interest earning assets | 68 | 3 | 71 | 175 | 43 | 218 | ||||||||||||||||||
| Total interest-earning assets | 432 | 899 | 1,331 | 692 | 2,750 | 3,442 | ||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||
| NOW and money market accounts | (128 | ) | 103 | (25 | ) | (413 | ) | 317 | (96 | ) | ||||||||||||||
| Savings accounts | (24 | ) | 15 | (9 | ) | (73 | ) | 306 | 233 | |||||||||||||||
| Certificates of deposit | (49 | ) | 1,092 | 1,043 | 279 | 4,891 | 5,170 | |||||||||||||||||
| Federal Home Loan Bank advances | 1,031 | (449 | ) | 582 | 1,667 | 152 | 1,819 | |||||||||||||||||
| Total interest-bearing liabilities | 830 | 761 | 1,591 | 1,461 | 5,665 | 7,126 | ||||||||||||||||||
| Net decrease in net interest income | $ | (398 | ) | $ | 138 | $ | (260 | ) | $ | (768 | ) | $ | (2,916 | ) | $ | (3,684 | ) | |||||||
Contacts
Kevin Pace – President & CEO, 201-862-0660 ext. 1110
