Business Context and Reporting Period
Company: Bogota Financial Corp. (BSBK), a Maryland corporation and bank holding company for Bogota Savings Bank.
Reporting Period: Fiscal year ended December 31, 2025.
Operations: A community bank operating seven branches in northern and central New Jersey. The bank focuses on one- to four-family residential real estate loans, commercial real estate, and multi-family loans. It is a "smaller reporting company" and a "non-accelerated filer."
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Assets | $904.9 million | $971.5 million |
| Total Loans (Gross) | $650.2 million | $714.3 million |
| Total Deposits | $652.4 million | $642.2 million |
| Net Interest Income | $15.5 million | $10.6 million |
| Net Income (Loss) | $2.1 million | ($2.2 million) |
| Net Interest Margin | 1.80% | 1.16% |
| Allowance for Credit Losses | $2.5 million | $2.6 million |
| Non-Performing Assets | $13.3 million (1.47% of assets) | $14.0 million (1.44% of assets) |
| Total Stockholders' Equity | $140.9 million | $137.3 million |
Material Changes vs. Prior Period
- Profitability Turnaround: The Company returned to profitability with net income of $2.1 million in 2025, reversing a net loss of $2.2 million in 2024. This was driven primarily by a $4.9 million increase in net interest income.
- Balance Sheet Contraction: Total assets decreased by $66.6 million (6.9%), primarily due to a $64.1 million decrease in the loan portfolio. Loan repayments ($105.1 million) outpaced new originations ($41.0 million) due to high interest rates.
- Deposit Growth: Total deposits increased by $10.3 million (1.6%), driven by a $14.8 million increase in interest-bearing deposits, partially offset by a decrease in non-interest bearing accounts.
- Cost of Funds: The average rate paid on deposits decreased 43 basis points to 3.30% in 2025 from 3.73% in 2024, contributing to the expansion of the net interest margin.
- Asset Quality: Non-accrual loans decreased slightly to $13.3 million. There were no charge-offs in 2025, and the Company recorded a $130,000 recovery of credit losses.
Guidance, Outlook, and Risks
- Strategy: Management plans to continue focusing on residential real estate lending while emphasizing commercial and multi-family lending to increase yields. The bank intends to grow through opportunistic acquisitions and de novo branching (a new branch in Point Pleasant is planned for Q2 2026).
- Dividend Policy: The Company does not anticipate paying cash dividends in the foreseeable future due to Federal Reserve Board regulations restricting the ability of the mutual holding company (Bogota Financial, MHC) to waive dividends.
- Stock Repurchases: The Company repurchased 76,673 shares in 2025 under a program approved in August 2025. As of year-end, 160,917 shares remained available for repurchase.
- Key Risks:
- Geographic Concentration: 99.5% of the loan portfolio is secured by real estate in New Jersey, making the bank vulnerable to local economic downturns.
- Commercial Real Estate (CRE): CRE and multi-family loans comprise 27.8% of the portfolio. The bank highlights risks related to non-owner occupied properties and potential deterioration in the commercial real estate market.
- Interest Rate Risk: The bank has a significant amount of fixed-rate assets. Rising rates could compress margins if funding costs rise faster than asset yields, while falling rates could reduce reinvestment income.
- Liquidity: Certificates of deposit (CDs) comprise 75.7% of deposits, with 67.6% maturing within one year. The bank relies on brokered deposits (16.8% of total deposits) and FHLB advances to manage liquidity.
Investor Verification Checklist
- Non-Performing Construction Loan: Verify the status of the $10.9 million non-performing construction loan, which is currently well-secured (41% LTV) but represents a significant portion of non-performing assets.
- Deposit Maturity Wall: Assess the risk of $441.3 million in CDs maturing within one year and the bank's ability to retain these funds or replace them at acceptable costs.
- Brokered Deposit Reliance: Review the stability of the $109.7 million in brokered deposits, which represent 77.9% of the bank's total capital.
- Commercial Real Estate Exposure: Analyze the concentration of loans in the retail and office building sectors, which are noted as vulnerable to economic shifts and work-from-home trends.
- Dividend Restrictions: Confirm the ongoing regulatory constraints preventing the payment of dividends to public shareholders due to the mutual holding company structure.