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Bogota Financial Corp. Reports Results for the Three and Six Months Ended June 30, 2023

Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported net income for the three months ended June 30, 2023 of $857,000, or $0.07 per basic and diluted share, compared to net income of $1.6 million, or $0.12 per basic and diluted share, for the three months ended June 30, 2022. The Company reported net income for the six months ended June 30, 2023 of $1.8 million, or $0.14 per basic and diluted shares, compared to net income of $3.0 million, or $0.22 per basic and diluted share, for the six months ended June 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 June 30, 2023, all shares under this program have been repurchased, including the repurchase of 196,259 shares of stock during the six months ended June 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 June 30, 2023, 20,300 shares have been repurchased under this program at a cost of $165,000.

Other Financial Highlights:

  • Total assets decreased $20.1 million, or 2.1%, to $931.0 million at June 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 $12.2 million, or 72.3%, to $29.0 million at June 30, 2023 from $16.8 million at December 31, 2022.
  • Net loans decreased $13.1 million, or 1.8%, to $705.9 million at June 30, 2023 from $719.0 million at December 31, 2022.
  • Total deposits were $656.6 million, decreasing $44.9 million, or 6.4%, as compared to $701.4 million at December 31, 2022, primarily due to a $67.6 million decrease in checking, savings and money market accounts , offset by an $18.6 million increase in noninterest-bearing deposits and a $4.2 million increase in certificates of deposit. The average rate paid on deposits at June 30, 2023 increased 90 basis points to 2.72% at June 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 $24.9 million, or 24.4% to $127.2 million at June 30, 2023 from $102.3 million as of December 31, 2022.
  • Annualized return on average assets was 0.40% for the six-month period ended June 30, 2023 compared to 0.73% for six-month period ended June 30, 2022.
  • Annualized return on average equity was 2.68% for the six-month period ended June 30, 2023 compared to 4.26% for the six-month period ended June 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, “Higher interest rates along with an inverted yield curve have continued to impact our net interest margin. Our net income and return on average assets for the first six months of 2023 are disappointing when compared to 2022 results due to the increase in deposit costs outpacing our ability to produce offsetting growth in loan revenue.

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

Mr. Coccaro further stated, "Our balance sheet is well positioned for the balance of the year and we will focus on delivering excellent services to our customers. We continue to repurchase shares of our common stock which will drive additional shareholder value."

Income Statement Analysis

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

Net income decreased by $785,000, or 47.8%, to $857,000 for the three months ended June 30, 2023 from $1.6 million for the three months ended June 30, 2022. This decrease was primarily due to a decrease of $1.4 million in net interest income offset by a decrease of $225,000 in the provision for credit losses and a decrease of $410,000 in income tax expense.

Interest income increased $2.5 million, or 36.1%, from $6.9 million for the three months ended June 30, 2022 to $9.4 million for the three months ended June 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 $121,000, or 432.1%, to $149,000 for the three months ended June 30, 2023 from $28,000 for the three months ended June 30, 2022 due a 425 basis point increase in the average yield from 0.55% for the three months ended June 30, 2022 to 4.80% for the three months ended June 30, 2023 due to the higher interest rate environment. This was offset by an $8.3 million decrease in the average balance to $12.4 million for the three months ended June 30, 2023 from $20.7 million for the three months ended June 30, 2022, reflecting the use of excess liquidity to fund loan originations.

Interest income on loans increased $2.3 million, or 39.2%, to $8.1 million for the three months ended June 30, 2023 compared to $5.8 million for the three months ended June 30, 2022 due primarily to $118.5 million increase in the average balance to $712.2 million for the three months ended June 30, 2023 from $593.7 million for the three months ended June 30, 2022 and a 64 basis point increase in the average yield from 3.95% for the three months ended June 30, 2022 to 4.59% for the three months ended June 30, 2023. The increase was offset by a $347,000 reserve for nonaccrual interest on a delinquent construction loan.

Interest income on securities increased $38,000, or 3.9%, to $1.0 million for the three months ended June 30, 2023 from $979,000 for the three months ended June 30, 2022 due primarily due to a 63 basis point increase in the average yield from 2.15% for the three months ended June 30, 2022 to 2.78% for the three months ended June 30, 2023 offset by a $36.1 million decrease in the average balance to $146.2 million for the three months ended June 30, 2023 from $182.3 million for the three months ended June 30, 2022.

Interest expense increased $3.9 million, or 324.0%, from $1.2 million for the three months ended June 30, 2022 to $5.1 million for the three months ended June 30, 2023 due to increases in the average balance and higher costs on interest -bearing liabilities.

Interest expense on interest-bearing deposits increased $3.4 million, or 395.5%, to $4.2 million for the three months ended June 30, 2023 from $850,000 for the three months ended June 30, 2022. The increase was due to a 209 basis point increase in the average cost of deposits to 2.68% for the three months ended June 30, 2023 from 0.59% for the three months ended June 30, 2022. The increase in the average cost of deposits was due to the higher interest rate environment and an increase in the average balances of certificates of deposit of $139.4 million to $494.0 million for the three months ended June 30, 2023 from $354.6 million for the three months ended June 30, 2022.

Interest expense on Federal Home Loan Bank borrowings increased $547,000, or 153.5%, from $356,000 for the three months ended June 30, 2022 to $903,000 for the three months ended June 30, 2023. The increase was due to an increase in the average cost of 142 basis points to 3.01% for the three months ended June 30, 2023 from 1.59% for the three months ended June 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 $34.0 million to $120.5 million for the three months ended June 30, 2023 from $86.4 million for the three months ended June 30, 2022.

Net interest income decreased $1.4 million, or 24.8%, to $4.3 million for the three months ended June 30, 2023 from $5.7 million for the three months ended June 30, 2022. The decrease reflected a 116 basis point decrease in our net interest rate spread to 1.57% for the three months ended June 30, 2023 from 2.73% for the three months ended June 30, 2022. Our net interest margin decreased 89 basis points to 1.96% for the three months ended June 30, 2023 from 2.85% for the three months ended June 30, 2022.

We recorded a $125,000 recovery for credit losses for the three months ended June 30, 2023 compared to a $100,000 provision for loan losses for the three-month period ended June 30, 2022. The Bank had a decrease in the loan portfolio and continues to have a low level of delinquent and non-accrual loans in the portfolio, as well as no charge-offs.

Non-interest income increased by $29,000, or 11.7%, to $283,000 for the three months ended June 30, 2023 from $254,000 for the three months ended June 30, 2022. Gain on sale of loans increased $16,000 and bank-owned life insurance income increased $21,000, or 12.2%, due higher balances during 2023. These increases were partially offset by a decrease in fee and service charges and other income of $7,000.

For the three months ended June 30, 2023, non-interest expense increased $38,000, or 1.1%, over the comparable 2022 period. Salaries and employee benefits increased $202,000, or 9.6%, due to a higher employee count. Director fees decreased $44,000, or 21.7%, due to lower pension expense. FDIC insurance premiums increased $73,000 or 135.4%, due to a higher assessment rate in 2023. The increase in advertising expense of $5,000, or 5.4%, was due to additional promotions for branch locations and new promotions on deposit and loan products. Data processing expense decreased $96,000 or 28.9%, professional fees decreased $37,000 or 24.7% and other expense decreased $81,000, or 25.2% due to lower deferred compensation expense and other various expenses.

Income tax expense decreased $410,000, or 65.8%, to $213,000 for the three months ended June 30, 2023 from $623,000 for the three months ended June 30, 2022. The increase was due to $1.2 million of lower taxable income. The effective tax rate for the three months ended June 30, 2023 and 2022 were 19.91% and 27.51%, respectively.

Comparison of Operating Results for the Six Months Ended June 30, 2023 and June 30, 2022

Net income decreased by $1.2 million, or 39.2%, to $1.8 million for the six months ended June 30, 2023 from $3.0 million for the six months ended June 30, 2022. This decrease was primarily due to a decrease of $2.0 million in net interest income offset by a decrease of $225,000 in the provision for credit losses and a decrease of $637,000 in income tax expense.

Interest income increased $5.2 million, or 39.7%, from $13.2 million for the six months ended June 30, 2022 to $18.4 million for the six months ended June 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 $197,000, or 345.6%, to $254,000 for the six months ended June 30, 2023 from $57,000 for the six months ended June 30, 2022 due a 457 basis point increase in the average yield from 0.25% for the six months ended June 30, 2022 to 4.82% for the six months ended June 30, 2023 due to the higher interest rate environment. This was offset by a $35.4 million decrease in the average balance to $10.6 million for the six months ended June 30, 2023 from $46.0 million for the six months ended June 30, 2022, reflecting the use of excess liquidity to fund loan originations and purchase investment securities.

Interest income on loans increased $4.5 million, or 39.1%, to $15.8 million for the six months ended June 30, 2023 compared to $11.4 million for the six months ended June 30, 2022 due primarily to a $132.3 million increase in the average balance to $715.1 million for the six months ended June 30, 2023 from $582.8 million for the six months ended June 30, 2022 and a 53 basis point increase in the average yield from 3.92% for the six months ended June 30, 2022 to 4.45% for the six months ended June 30, 2023. The increase was offset by a $617,000 reserve for nonaccrual interest on a delinquent construction loan.

Interest income on securities increased $476,000, or 29.1%, to $2.1 million for the six months ended June 30, 2023 from $1.6 million for the six months ended June 30, 2022 due primarily to a 70 basis point increase in the average yield from 2.04% for the six months ended June 30, 2022 to 2.74% for the six months ended June 30, 2023. The increase was offset by a $6.7 million decrease in the average balance of securities to $154.0 million for the six months ended June 30, 2023 from $160.7 million for the six months ended June 30, 2022.

Interest expense increased $7.2 million, or 306.7%, from $2.4 million for the six months ended June 30, 2022 to $9.6 million for the six months ended June 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities.

Interest expense on interest-bearing deposits increased $6.3 million, or 372.9%, to $7.9 million for the six months ended June 30, 2023 from $1.7 million for the six months ended June 30, 2022. The increase was due to a 187 basis point increase in the average cost of interest-bearing deposits to 2.46% for the six months ended June 30, 2023 from 0.59% for the six months ended June 30, 2022. The increase in the average cost of deposits was due to the higher interest rate environment and an increase in the average balances of certificates of deposit of $145.8 million to $498.7 million for the six months ended June 30, 2023 from $352.8 million for the six months ended June 30, 2022.

Interest expense on Federal Home Loan Bank borrowings increased $994,000, or 144.9%, from $686,000 for the six months ended June 30, 2022 to $1.7 million for the six months ended June 30, 2023. The increase was due to an increase in the average cost of 155 basis points to 3.19% for the six months ended June 30, 2023 from 1.64% for the six months ended June 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 $21.7 million to $106.1 million for the six months ended June 30, 2023 from $84.4 million for the six months ended June 30, 2022.

Net interest income decreased $2.0 million, or 18.6%, to $8.8 million for the six months ended June 30, 2023 from $10.8 million for the six months ended June 30, 2022. The increase reflected a 100 basis point decrease in our net interest rate spread to 1.61% for the six months ended June 30, 2023 from 2.61% for the six months ended June 30, 2022. Our net interest margin decreased 74 basis points to 2.01% for the six months ended June 30, 2023 from 2.75% for the six months ended June 30, 2022.

We recorded a $125,000 recovery of credit losses for the six months ended June 30, 2023 compared to a $100,000 provision for loan losses for the six-month period ended June 30, 2022. The Bank had a decrease in the loan portfolio as well as no charge-offs. 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 $31,000, or 5.3%, to $567,000 for the six months ended June 30, 2023 from $598,000 for the six months ended June 30, 2022. Gain on sale of loans decreased $58,000, or 66.2% as loan originations were lower in 2023. Other income decreased $33,000 or 34.0%. These decreases were partially offset by an increase in income from bank-owned life insurance of $51,000, or 15.6%, due to higher balances during 2023.

For the six months ended June 30, 2023, non-interest expense increased $14,000, or 0.2%, over the comparable 2022 period. Salaries and employee benefits increased $301,000, or 7.2%, due to a higher employee count. Director fees decreased $100,000, or 23.8%, due to lower pension expense. FDIC insurance premiums increased $79,000 or 73.3% due to a higher assessment rate in 2023. Data processing decreased $97,000 or 15.9%, due to the timing of an invoice. The increase in advertising expense of $31,000, or 14.6%, was due to additional promotions for branch locations and new promotions on deposit and loan products. Other expense decreased $223,000, or 34.7%, due to lower deferred compensation expense and other various expenses.

Income tax expense decreased $637,000, or 55.5%, to $511,000 for the six months ended June 30, 2023 from $1.1 million for the six months ended June 30, 2022. The increase was due to $1.9 million, or 43.7%, of lower taxable income. The effective tax rate for the six months ended June 30, 2023 and 2022 were 21.65% and 27.40%, respectively.

Balance Sheet Analysis

Total assets were $931.0 million at June 30, 2023, representing an decrease of $20.1 million, or 2.1%, from December 31, 2022. Cash and cash equivalents increased $12.2 million during the period primarily due to loan payments received and proceeds from the call and maturity of securities. Net loans decreased $13.1 million, or 1.8%, due to $45.0 million in repayments, partially offset by new production of $31.9 million, consisting of mainly residential real estate loans and home equity loans. Securities held to maturity decreased $7.6 million or 9.8% and securities available for sale decreased $13.9 million or 16.3%, due to the repayments of mortgage-backed securities and maturities of corporate bonds.

Delinquent loans increased $11.3 million during the six-month period ended June 30, 2023, finishing at $12.8 million or 1.82% of total loans. The increase was 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 $12.9 million and were 1.35% of total assets at June 30, 2023. The Company’s allowance for credit losses was 0.39% of total loans and 21.04% of non-performing loans at June 30, 2023 compared to 0.36% of total loans and 136.3% of non-performing loans at December 31, 2022.

Total liabilities decreased $19.6 million, or 2.4%, to $791.8 million mainly due to a $44.9 million decrease in deposits, offset by a $24.9 million increase in borrowings. Total deposits decreased $44.9 million, or 6.4%, to $656.6 million at June 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 $67.6 million from $170.2 million at December 31, 2022 to $102.5 million at June 30, 2023, offset by an increase in certificate of deposit accounts, which increased by $4.2 million to $496.8 million from $492.6 million at December 31, 2022. At June 30, 2023, uninsured deposits represented 8.4% of the Bank’s total deposits. Federal Home Loan Bank advances increased $24.9 million, or 24.4%, due to new advances for loan funding and to replace the decreasing level of deposits. Total borrowing capacity at the Federal Home Loan Bank is $330.4 million of which $127.0 million is advanced.

Stockholders’ equity decreased $460,000 to $139.2 million, due to increased accumulated other comprehensive loss for securities available for sale of $438,000 and the repurchase of 216,559 shares of stock during the quarter at a cost of $2.2 million, offset by net income of $1.8 million for the six months ended June 30, 2023. At June 30, 2023, the Company’s ratio of stockholders’ equity adjusted for AOCI to total assets adjusted for the allowance was 15.96%, compared to 17.08% at June 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 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

 

 

June 30, 2023

 

December 31, 2022

Assets

 

 

 

 

 

 

Cash and due from banks

 

$

11,182,811

 

 

$

8,160,028

 

Interest-bearing deposits in other banks

 

 

17,830,534

 

 

 

8,680,889

 

Cash and cash equivalents

 

 

29,013,345

 

 

 

16,840,917

 

Securities available for sale, at fair value

 

 

71,214,603

 

 

 

85,100,578

 

Securities held to maturity (fair value of $61,757,095 and $70,699,651, respectively)

 

 

69,809,580

 

 

 

77,427,309

 

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

 

 

705,946,085

 

 

 

719,025,762

 

Premises and equipment, net

 

 

7,794,147

 

 

 

7,884,335

 

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

 

 

6,796,500

 

 

 

5,490,900

 

Accrued interest receivable

 

 

3,530,119

 

 

 

3,966,651

 

Core deposit intangibles

 

 

235,703

 

 

 

267,272

 

Bank-owned life insurance

 

 

30,582,525

 

 

 

30,206,325

 

Other assets

 

 

6,077,643

 

 

 

4,888,954

 

Total Assets

 

$

931,000,250

 

 

$

951,099,003

 

Liabilities and Equity

 

 

 

 

 

 

Non-interest bearing deposits

 

$

57,126,460

 

 

$

38,653,349

 

Interest bearing deposits

 

 

599,430,335

 

 

 

662,758,100

 

Total deposits

 

 

656,556,795

 

 

 

701,411,449

 

FHLB advances-short term

 

 

21,000,000

 

 

 

59,000,000

 

FHLB advances-long term

 

 

106,244,411

 

 

 

43,319,254

 

Advance payments by borrowers for taxes and insurance

 

 

3,678,576

 

 

 

3,174,661

 

Other liabilities

 

 

4,321,990

 

 

 

4,534,516

 

Total liabilities

 

 

791,801,772

 

 

 

811,439,880

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

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

 

 

 

 

 

 

Common stock $0.01 par value, 30,000,000 shares authorized, 13,482,457 issued and outstanding at June 30, 2023 and 13,699,016 at December 31, 2022

 

 

134,824

 

 

 

136,989

 

Additional paid-in capital

 

 

57,301,002

 

 

 

59,099,476

 

Retained earnings

 

 

93,383,881

 

 

 

91,756,673

 

Unearned ESOP shares (423,232 shares at June 30, 2023 and 436,495 shares at December 31, 2022)

 

 

(4,972,400

)

 

 

(5,123,002

)

Accumulated other comprehensive loss

 

 

(6,648,829

)

 

 

(6,211,013

)

Total stockholders’ equity

 

 

139,198,478

 

 

 

139,659,123

 

Total liabilities and stockholders’ equity

 

$

931,000,250

 

 

$

951,099,003

 

 

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

 

 

 

Three Months Ended

June 30,

 

Six months Ended

June 30,

 

 

 

2023

 

2022

 

2023

 

2022

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

$

8,141,719

 

 

$

5,848,522

 

 

$

15,841,157

 

 

$

11,385,602

 

Securities

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

996,338

 

 

 

932,714

 

 

 

2,047,598

 

 

 

1,569,835

 

Tax-exempt

 

 

20,232

 

 

 

46,282

 

 

 

65,134

 

 

 

67,278

 

Other interest-earning assets

 

 

248,914

 

 

 

83,682

 

 

 

470,503

 

 

 

167,495

 

Total interest income

 

 

9,407,203

 

 

 

6,911,200

 

 

 

18,424,392

 

 

 

13,190,210

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

4,210,984

 

 

 

849,808

 

 

 

7,925,981

 

 

 

1,675,992

 

FHLB advances

 

 

902,839

 

 

 

356,203

 

 

 

1,680,193

 

 

 

686,036

 

Total interest expense

 

 

5,113,823

 

 

 

1,206,011

 

 

 

9,606,174

 

 

 

2,362,028

 

Net interest income

 

 

4,293,380

 

 

 

5,705,189

 

 

 

8,818,218

 

 

 

10,828,182

 

(Recovery) provision for credit losses

 

 

(125,000

)

 

 

100,000

 

 

 

(125,000

)

 

 

100,000

 

Net interest income after (recovery) provision for credit losses

 

 

4,418,380

 

 

 

5,605,189

 

 

 

8,943,218

 

 

 

10,728,182

 

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

Fees and service charges

 

 

45,700

 

 

 

50,478

 

 

 

97,852

 

 

 

89,796

 

Gain (loss) on sale of loans

 

 

16,150

 

 

 

(217

)

 

 

29,375

 

 

 

86,913

 

Bank-owned life insurance

 

 

190,147

 

 

 

169,449

 

 

 

376,200

 

 

 

325,442

 

Other

 

 

31,479

 

 

 

34,007

 

 

 

63,328

 

 

 

95,989

 

Total non-interest income

 

 

283,476

 

 

 

253,717

 

 

 

566,755

 

 

 

598,140

 

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

2,301,236

 

 

 

2,098,897

 

 

 

4,463,605

 

 

 

4,162,244

 

Occupancy and equipment

 

 

358,757

 

 

 

342,381

 

 

 

741,544

 

 

 

686,810

 

FDIC insurance assessment

 

 

127,119

 

 

 

54,000

 

 

 

187,119

 

 

 

108,000

 

Data processing

 

 

235,095

 

 

 

330,840

 

 

 

512,192

 

 

 

609,187

 

Advertising

 

 

96,083

 

 

 

91,145

 

 

 

243,383

 

 

 

212,290

 

Director fees

 

 

159,338

 

 

 

203,534

 

 

 

318,675

 

 

 

418,325

 

Professional fees

 

 

114,018

 

 

 

151,490

 

 

 

263,268

 

 

 

295,753

 

Other

 

 

240,562

 

 

 

321,585

 

 

 

419,770

 

 

 

642,538

 

Total non-interest expense

 

 

3,632,208

 

 

 

3,593,872

 

 

 

7,149,556

 

 

 

7,135,147

 

Income before income taxes

 

 

1,069,648

 

 

 

2,265,034

 

 

 

2,360,417

 

 

 

4,191,175

 

Income tax expense

 

 

213,007

 

 

 

623,027

 

 

 

511,069

 

 

 

1,148,271

 

Net income

 

$

856,641

 

 

$

1,642,007

 

 

$

1,849,348

 

 

$

3,042,904

 

Earnings per Share - basic

 

$

0.07

 

 

$

0.12

 

 

$

0.14

 

 

$

0.22

 

Earnings per Share - diluted

 

$

0.07

 

 

$

0.12

 

 

$

0.14

 

 

$

0.22

 

Weighted average shares outstanding - basic

 

 

13,079,302

 

 

 

13,662,222

 

 

 

13,137,522

 

 

 

13,760,002

 

Weighted average shares outstanding - diluted

 

 

13,081,158

 

 

 

13,701,674

 

 

 

13,162,056

 

 

 

13,800,168

 

 

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

(unaudited)

 

 

 

 

 

 

 

At or For the Three Months

Ended June 30,

 

At or For the Six Months

Ended June 30,

 

2023

 

2022

 

2023

 

2022

Performance Ratios (1):

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (2)

 

0.37

%

 

 

0.95

%

 

 

0.40

%

 

 

0.73

%

Return on average equity (3)

 

2.46

%

 

 

5.56

%

 

 

2.68

%

 

 

4.26

%

Interest rate spread (4)

 

1.57

%

 

 

2.73

%

 

 

1.61

%

 

 

2.61

%

Net interest margin (5)

 

1.96

%

 

 

2.85

%

 

 

2.01

%

 

 

2.75

%

Efficiency ratio (6)

 

79.36

%

 

 

60.31

%

 

 

76.18

%

 

 

62.44

%

Average interest-earning assets to average interest-bearing liabilities

 

116.72

%

 

 

120.42

%

 

 

117.09

%

 

 

121.36

%

Net loans to deposits

 

107.52

%

 

 

103.19

%

 

 

107.52

%

 

 

103.19

%

Average equity to assets (7)

 

14.94

%

 

 

16.05

%

 

 

14.82

%

 

 

16.05

%

Capital Ratios:

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital to average assets

 

 

 

 

 

 

 

15.96

%

 

 

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

 

 

 

 

 

 

 

21.04

%

 

 

120.83

%

Net charge-offs to average outstanding loans during the period

 

 

 

 

 

 

 

0.00

%

 

 

0.00

%

Non-performing loans as a percent of total loans

 

 

 

 

 

 

 

1.87

%

 

 

0.29

%

Non-performing assets as a percent of total assets

 

 

 

 

 

 

 

1.42

%

 

 

0.21

%

(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 June 30, 2023 and December 31, 2022:

 

 

June 30,

2023

 

December 31,

2022

Real estate:

 

(unaudited)

 

Residential First Mortgage

 

$

461,055,826

 

 

$

466,100,627

 

Commercial and Multi-Family Real Estate

 

 

167,768,947

 

 

 

162,338,669

 

Construction

 

 

48,678,333

 

 

 

61,825,478

 

Commercial and Industrial

 

 

3,692,425

 

 

 

1,684,189

 

Consumer:

 

 

 

 

 

 

Home Equity and Other Consumer

 

 

27,536,504

 

 

 

29,654,973

 

Total loans

 

 

708,732,035

 

 

 

721,603,936

 

Allowance for credit losses

 

 

(2,785,950

)

 

 

(2,578,174

)

Net loans

 

$

705,946,085

 

 

$

719,025,762

 

 

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

 

 

At June 30,

 

At December 31,

 

 

2023

 

2022

 

 

Amount

 

Percent

 

Average

Rate

 

Amount

 

Percent

 

Average

Rate

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

Noninterest bearing demand accounts

 

$

57,253,453

 

 

 

8.72

%

 

 

%

 

$

38,653,472

 

 

 

5.52

%

 

 

%

NOW accounts

 

 

34,344,305

 

 

 

5.23

 

 

 

1.54

 

 

 

82,720,214

 

 

 

11.79

 

 

0.88

 

Money market accounts

 

 

20,405,960

 

 

 

3.11

 

 

 

0.30

 

 

 

30,037,106

 

 

 

4.28

 

 

 

0.32

 

Savings accounts

 

 

47,790,710

 

 

 

7.28

 

 

1.79

 

 

 

57,407,955

 

 

 

8.18

 

 

0.49

 

Certificates of deposit

 

 

496,762,367

 

 

 

75.66

 

 

 

3.31

 

 

 

492,592,702

 

 

 

70.23

 

 

 

2.37

 

Total

 

$

656,556,795

 

 

 

100.00

%

 

 

2.72

%

 

$

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 June 30,

 

 

2023

 

2022

 

 

Average

Balance

 

Interest and

Dividends

 

Yield/

Cost

 

Average

Balance

 

Interest and

Dividends

 

Yield/

Cost (3)

 

 

(Dollars in thousands)

 

Assets:

 

(unaudited)

 

Cash and cash equivalents

 

$

12,449

 

 

$

149

 

 

 

4.80

%

 

$

20,723

 

 

$

28

 

 

 

0.55

%

Loans

 

 

712,201

 

 

 

8,142

 

 

 

4.59

%

 

 

593,705

 

 

 

5,849

 

 

 

3.95

%

Securities

 

 

146,225

 

 

 

1,017

 

 

 

2.78

%

 

 

182,338

 

 

 

979

 

 

 

2.15

%

Other interest-earning assets

 

 

6,358

 

 

 

99

 

 

 

6.26

%

 

 

4,891

 

 

 

55

 

 

 

4.53

%

Total interest-earning assets

 

 

877,233

 

 

 

9,407

 

 

 

4.30

%

 

 

801,657

 

 

 

6,911

 

 

 

3.46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest-earning assets

 

 

54,156

 

 

 

 

 

 

 

 

 

54,038

 

 

 

 

 

 

 

Total assets

 

$

931,389

 

 

 

 

 

 

 

 

$

855,695

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

88,256

 

 

$

355

 

 

 

1.61

%

 

$

158,552

 

 

$

217

 

 

 

0.55

%

Savings accounts

 

 

48,875

 

 

 

92

 

 

 

0.75

%

 

 

66,095

 

 

 

43

 

 

 

0.26

%

Certificates of deposit

 

 

493,986

 

 

 

3,764

 

 

 

3.06

%

 

 

354,600

 

 

 

590

 

 

 

0.67

%

Total interest-bearing deposits

 

 

631,117

 

 

 

4,211

 

 

 

2.68

%

 

 

579,247

 

 

 

850

 

 

 

0.59

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances (1)

 

 

120,485

 

 

 

903

 

 

 

3.01

%

 

 

86,445

 

 

 

356

 

 

 

1.59

%

Total interest-bearing liabilities

 

 

751,602

 

 

 

5,114

 

 

 

2.73

%

 

 

665,692

 

 

 

1,206

 

 

 

0.73

%

Non-interest-bearing deposits

 

 

38,841

 

 

 

 

 

 

 

 

 

38,132

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

1,768

 

 

 

 

 

 

 

 

 

5,556

 

 

 

 

 

 

 

Total liabilities

 

 

792,211

 

 

 

 

 

 

 

 

 

709,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

139,178

 

 

 

 

 

 

 

 

 

146,315

 

 

 

 

 

 

 

Total liabilities and equity

 

$

931,389

 

 

 

 

 

 

 

 

$

855,695

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

4,293

 

 

 

 

 

 

 

 

$

5,705

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

 

 

 

1.57

%

 

 

 

 

 

 

 

 

2.73

%

Net interest margin (3)

 

 

 

 

 

 

 

 

1.96

%

 

 

 

 

 

 

 

 

2.85

%

Average interest-earning assets to average interest-bearing liabilities

 

 

116.72

%

 

 

 

 

 

 

 

 

120.42

%

 

 

 

 

 

 

1.

 

Cash flow hedges are used to manage interest rate risk. During the three months ended June 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.

 

 

Six Months Ended June 30,

 

 

2023

 

2022

 

 

Average

Balance

 

Interest and

Dividends

 

Yield/

Cost

 

Average

Balance

 

Interest and

Dividends

 

Yield/

Cost (3)

 

 

(Dollars in thousands)

 

 

 

(unaudited)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

10,634

 

 

$

254

 

 

 

4.82

%

 

$

45,991

 

 

$

57

 

 

 

0.25

%

Loans

 

 

715,066

 

 

 

15,841

 

 

 

4.45

%

 

 

582,826

 

 

 

11,386

 

 

 

3.92

%

Securities

 

 

154,049

 

 

 

2,113

 

 

 

2.74

%

 

 

160,688

 

 

 

1,637

 

 

 

2.04

%

Other interest-earning assets

 

 

5,851

 

 

 

216

 

 

 

7.40

%

 

 

4,864

 

 

 

110

 

 

 

4.54

%

Total interest-earning assets

 

 

885,600

 

 

 

18,424

 

 

 

4.18

%

 

 

794,369

 

 

 

13,190

 

 

 

3.33

%

Non-interest-earning assets

 

 

54,482

 

 

 

 

 

 

 

 

 

52,429

 

 

 

 

 

 

 

Total assets

 

$

940,082

 

 

 

 

 

 

 

 

$

846,798

 

 

 

 

 

 

 

Liabilities and equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

$

100,419

 

 

$

735

 

 

 

1.48

%

 

$

151,044

 

 

$

437

 

 

 

0.58

%

Savings accounts

 

 

51,233

 

 

 

162

 

 

 

0.64

%

 

 

66,338

 

 

 

86

 

 

 

0.26

%

Certificates of deposit

 

 

498,652

 

 

 

7,029

 

 

 

2.84

%

 

 

352,824

 

 

 

1,153

 

 

 

0.66

%

Total interest-bearing deposits

 

 

650,304

 

 

 

7,926

 

 

 

2.46

%

 

 

570,206

 

 

 

1,676

 

 

 

0.59

%

Federal Home Loan Bank advances (1)

 

 

106,061

 

 

 

1,680

 

 

 

3.19

%

 

 

84,374

 

 

 

686

 

 

 

1.64

%

Total interest-bearing liabilities

 

 

756,365

 

 

 

9,606

 

 

 

2.56

%

 

 

654,580

 

 

 

2,362

 

 

 

0.73

%

Non-interest-bearing deposits

 

 

38,266

 

 

 

 

 

 

 

 

 

40,545

 

 

 

 

 

 

 

Other non-interest-bearing liabilities

 

 

6,146

 

 

 

 

 

 

 

 

 

6,755

 

 

 

 

 

 

 

Total liabilities

 

 

800,777

 

 

 

 

 

 

 

 

 

701,880

 

 

 

 

 

 

 

Total equity

 

 

139,305

 

 

 

 

 

 

 

 

 

144,918

 

 

 

 

 

 

 

Total liabilities and equity

 

$

940,082

 

 

 

 

 

 

 

 

$

846,798

 

 

 

 

 

 

 

Net interest income

 

 

 

 

$

8,818

 

 

 

 

 

 

 

 

$

10,828

 

 

 

 

Interest rate spread (2)

 

 

 

 

 

 

 

 

1.61

%

 

 

 

 

 

 

 

 

2.61

%

Net interest margin (3)

 

 

 

 

 

 

 

 

2.01

%

 

 

 

 

 

 

 

 

2.75

%

Average interest-earning assets to average interest-bearing liabilities

 

 

117.09

%

 

 

 

 

 

 

 

 

121.36

%

 

 

 

 

 

 

1.

 

Cash flow hedges are used to manage interest rate risk. During the six months ended June 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 June 30,

2023 Compared to Three

Months Ended June 30, 2022

 

Six Months Ended June 30,

2023 Compared to Six Months

Ended June 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

 

$

(81

)

 

$

202

 

 

$

121

 

 

$

(162

)

 

$

359

 

 

$

197

 

Loans receivable

 

 

1,266

 

 

 

1,027

 

 

 

2,293

 

 

 

2,792

 

 

 

1,663

 

 

 

4,455

 

Securities

 

 

(911

)

 

 

949

 

 

 

38

 

 

 

(191

)

 

 

667

 

 

 

476

 

Other interest earning assets

 

 

19

 

 

 

25

 

 

 

44

 

 

 

26

 

 

 

80

 

 

 

106

 

Total interest-earning assets

 

 

293

 

 

 

2,203

 

 

 

2,496

 

 

 

2,465

 

 

 

2,769

 

 

 

5,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW and money market accounts

 

 

(603

)

 

 

741

 

 

 

138

 

 

 

(430

)

 

 

728

 

 

 

298

 

Savings accounts

 

 

(73

)

 

 

122

 

 

 

49

 

 

 

(58

)

 

 

134

 

 

 

76

 

Certificates of deposit

 

 

315

 

 

 

2,859

 

 

 

3,174

 

 

 

654

 

 

 

5,222

 

 

 

5,876

 

Federal Home Loan Bank advances

 

 

167

 

 

 

380

 

 

 

547

 

 

 

213

 

 

 

781

 

 

 

994

 

Total interest-bearing liabilities

 

 

(194

)

 

 

4,102

 

 

 

3,908

 

 

 

379

 

 

 

6,865

 

 

 

7,244

 

Net increase (decrease) in net interest income

 

$

487

 

 

$

(1,899

)

 

$

(1,412

)

 

$

2,086

 

 

$

(4,096

)

 

$

(2,010

)

 

Contacts

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

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