BSBK

Business Context and Reporting Period

Bogota Financial Corp. (BSBK), a Maryland corporation and mid-tier stock holding company for Bogota Savings Bank, filed its Form 10-Q for the quarterly period ended September 30, 2025. The Company operates a single retail banking segment, providing residential, commercial, and consumer banking services primarily in New Jersey. As of November 11, 2025, there were 12,968,697 shares of common stock outstanding.

Key Financial Metrics

Material Changes vs. Prior Period

• Profitability Turnaround: The Company reported a net income of $455,000 for Q3 2025, a significant improvement from a net loss of $367,000 in Q3 2024. Year-to-date net income was $1.4 million compared to a $1.2 million loss in the prior year.
• Net Interest Income (NII): NII increased 46.6% to $3.9 million in Q3 2025 from $2.7 million in Q3 2024. This was driven by a 64 basis point expansion in the net interest rate spread to 1.30% and a 65 basis point increase in net interest margin to 1.80%.
• Asset Composition: Total assets decreased 4.7% to $925.8 million from $971.5 million at year-end 2024. This was primarily due to a $21.0 million decrease in cash and cash equivalents and a $42.5 million decrease in net loans, partially offset by a $20.4 million increase in securities available for sale.
• Loan Portfolio: Net loans declined 6.0% year-over-year, driven by decreases in residential real estate (-4.9%), construction (-41.6%), and commercial and industrial loans (-39.9%). Commercial real estate loans increased 4.1%.
• Asset Quality: Non-performing loans increased to $20.5 million (2.2% of total assets) from $14.0 million at year-end 2024. This increase was primarily due to one commercial real estate loan ($7.1 million) and one construction loan ($10.9 million) moving to nonaccrual status. No charge-offs were recorded in 2025.

Outlook, Risks, and Unusual Items

• Unusual Items: Net income for the nine months ended September 30, 2025, included a one-time, non-taxable death benefit of approximately $543,000 from a bank-owned life insurance policy.
• Expense Management: Non-interest expense increased 3.7% in Q3 2025, largely due to a 68.0% increase in occupancy and equipment costs resulting from a lease-buyback transaction completed in late 2024. Professional fees also rose 45.6% due to legal and consulting costs.
• Capital Position: The Company remains "well capitalized" under regulatory guidelines, with a Community Bank Leverage Ratio of 15.42% as of September 30, 2025.
• Risk Factors: Management highlighted risks related to general economic conditions, potential recession, changes in loan delinquencies, and the impact of interest rate fluctuations on margins and asset values. The Company utilizes interest rate swaps to manage exposure to interest rate risk.
• Stock Repurchase: The Company has an active program to repurchase up to 237,590 shares. As of September 30, 2025, 4,821 shares had been repurchased at an average price of $8.78.

Investor Verification Checklist

• Non-Performing Loan Concentration: Verify the status and collateral coverage of the $10.9 million construction loan and the $7.1 million commercial real estate loan that drove the increase in non-performing assets.
• One-Time Income Impact: Assess the sustainability of earnings by excluding the $543,000 one-time BOLI death benefit from the YTD net income calculation.
• Expense Trajectory: Monitor the impact of the lease-buyback transaction on future occupancy costs and whether professional fees will normalize.
• Loan Demand: Evaluate the reasons behind the significant decline in construction and commercial/industrial loan balances and the outlook for loan origination in the current interest rate environment.
• Liquidity Position: Confirm the stability of the deposit base, noting that 68.8% of deposits are certificates of deposit due within one year.