Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the
holding company for Bogota Savings Bank (the “Bank”), reported net
income for the three months ended December 31, 2022 of $1.9 million
or $0.14 per basic and diluted share, compared to net income of
$2.0 million or $0.15 per basic and $0.14 per diluted share for the
comparable prior year period. The Company reported net income for
the twelve months ended December 31, 2022 of $6.9 million or $0.51
per basic and diluted share compared to net income of $7.5 million,
or $0.55 per basic and $0.52 per diluted share, for the prior year.
During the twelve months ended December 31, 2021, the Company
recorded a bargain purchase gain of $2.0 million, and
merger-related expenses of $392,000, each of which was associated
with the acquisition of Gibraltar Bank. Excluding the bargain
purchase gain and the merger-related expenses in 2021, net income
for the twelve months ended December 31, 2021 was $6.0 million or
$0.43 per basic and $0.42 per diluted share.1
On April 12, 2022, the Company announced it completed its
initial stock repurchase plan, repurchasing 296,044 shares, or
approximately 5% of its then outstanding common stock (excluding
shares held by Bogota Financial, MHC), at an average cost of $10.82
per share. On September 21, 2022, the Company completed its second
stock repurchase plan by repurchasing 292,568 shares, or
approximately 5% of its then outstanding common stock (excluding
shares held by Bogota Financial, MHC), at an average cost of $11.14
per share. 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 December 31, 2022, 360,372 shares have been
repurchased.
Other Financial Highlights:
- Total assets increased $113.7 million, or 13.6%, to $951.1
million at December 31, 2022 from $837.4 million at December 31,
2021, due to an increase in loans and securities, which was
primarily funded by cash and cash equivalents, deposits and
borrowings.
- Net loans increased $148.8 million, or 26.1%, to $719.0 million
at December 31, 2022 from $570.2 million at December 31, 2021.
- Total deposits were $701.4 million, increasing $103.9 million,
or 17.4%, as compared to $597.5 million at December 31, 2021,
primarily due to a new $38.2 million municipal deposit relationship
and $126.2 million in increased certificates of deposit. The
average rate paid on deposits at December 31, 2022 increased 121
basis points to 1.82% at December 31, 2022 from 0.61% at December
31, 2021 due to higher interest rates and a larger percentage of
deposits consisting of higher-costing certificates of deposit.
- Return on average assets was 0.77% for the twelve-month period
ended December 31, 2022 compared to 1.23% for 2021. Without the
bargain purchase gain and merger-related expenses, the return on
average assets would have been 0.98%1 for the twelve-month period
ended December 31, 2021.
- Return on average equity was 4.76% for the twelve-month period
ended December 31, 2022 compared to 7.06% for 2021. Without the
bargain purchase gain and merger-related expenses, the return on
average equity would have been 5.60%1 for the twelve-month period
ended December 31, 2021.
[1] This number represents a non-GAAP financial measure. Please
see “Reconciliation of GAAP to Non-GAAP” contained at the end of
this release.
Joseph Coccaro, President and Chief Executive Officer, said, “We
are pleased with our results for 2022. We had over $225 million in
new loan originations, which increased our loan portfolio by $149
million during the year. We continue to have strong credit quality
as non-performing loans and criticized assets remain low. We
continue to see improvement in our net interest margin which rose
24 basis points and 26 basis points as compared to the three and
twelve months ended December 31, 2021, respectively.“
Mr. Coccaro further stated, "We are pleased to report continued
consistent earnings and exceptional loan growth during a
challenging economic environment in 2022. We expect loan growth to
slow in the first quarter as interest rates continue to increase,
higher inflation and the continued low inventory in housing will
slow the market. Increased interest rate liability costs may impact
future earnings.“
Income Statement Analysis
Comparison of Operating Results for the Three Months Ended
December 31, 2022 and December 31, 2021
Net income decreased by $130,000, or 6.4%, to $1.9 million for
the three months ended December 31, 2022 from $2.0 million for the
three months ended December 31, 2021. The decrease was due to an
increase of $150,000 in the provision for loan losses, a decrease
in non-interest income of $1.0 million and an increase in income
tax expense of $328,000, offset by an increase in net interest
income of $1.2 million and a decrease of $167,000 in non-interest
expense.
Interest income on cash and cash equivalents decreased $7,000,
or 18.9%, to $30,000 for the three months ended December 31, 2022
from $37,000 for the three months ended December 31, 2021 due to a
$103.4 million decrease in the average balance of cash and cash
equivalents to $3.0 million for the three months ended December 31,
2022 from $106.4 million for the three months ended December 31,
2021, reflecting the use of excess liquidity to fund loan
originations and purchase investment securities. This was offset by
a 384 basis point increase in the average yield on cash and cash
equivalents from 0.14% for the three months ended December 31, 2021
to 3.98% for the three months ended December 31, 2022 due to the
higher interest rate environment.
Interest income on loans increased $2.3 million, or 41.5%, to
$7.9 million for the three months ended December 31, 2022 compared
to $5.6 million for the three months ended December 31, 2021 due
primarily to an $139.4 million increase in the average balance of
loans to $717.1 million for the three months ended December 31,
2022 from $577.7 million for the three months ended December 31,
2021 and due to a 54 basis point increase in the average yield on
loans from 3.81% for the three months ended December 31, 2021 to
4.35% for the three months ended December 31, 2022.
Interest income on securities increased $521,000, or 113.4%, to
$980,000 for the three months ended December 31, 2022 from $459,000
for the three months ended December 31, 2021 due primarily to a
$69.4 million increase in the average balance of securities to
$167.7 million for the three months ended December 31, 2022 from
$98.3 million for the three months ended December 31, 2021,
reflecting the purchase of investments with excess liquidity, and
to a lesser extent, due to a 47 basis point increase in the average
yield from 1.87% for the three months ended December 31, 2021 to
2.34% for the three months ended December 31, 2022.
Interest expense on interest-bearing deposits increased $1.3
million, or 138.0%, to $2.2 million for the three months ended
December 31, 2022 from $916,000 for the three months ended December
31, 2021. The increase was due to a 69 basis point increase in the
average cost of interest-bearing deposits to 1.34% for the three
months ended December 31, 2022 from 0.65% for the three months
ended December 31, 2021. The increase in the average cost of
deposits was due to the higher interest rate environment and higher
average balances of certificates of deposit. The increased expense
on interest-bearing deposits was also due to an $89.7 million
increase in the average balance of total deposits to $647.3 million
for the three months ended December 31, 2022 from $557.6 million
for the three months ended December 31, 2021.
Interest expense on Federal Home Loan Bank borrowings increased
$417,000, or 121.9%, from $342,000 for the three months ended
December 31, 2021 to $759,000 for the three months ended December
31, 2022. The increase was due to an increase in the average cost
of borrowings of 91 basis points to 2.47% for the three months
ended December 31, 2022 from 1.56% for the three months ended
December 31 2021 due to the new borrowings at higher rates. The
increase was also due to an increase in the average balance of
borrowings of $35.1 million to $122.0 million for the three months
ended December 31, 2022 from $86.9 million for the three months
ended December 31, 2021.
Net interest income increased $1.2 million, or 24.6%, to $6.0
million for the three months ended December 31, 2022 from $4.8
million for the three months ended December 31, 2021. The increase
reflected a 17 basis point increase in our net interest rate spread
to 2.47% for the three months ended December 31, 2022 from 2.30%
for the three months ended December 31, 2021. Our net interest
margin increased 24 basis points to 2.68% for the three months
ended December 31, 2022 from 2.44% for the three months ended
December 31, 2021.
We recorded a $150,000 provision for loan losses for the three
months ended December 31, 2022 compared to no provision for the
three-month period ended December 31, 2021. Higher balances in
residential and construction loans were the reason for the
provision for the three months ended December 31, 2022. The Bank
continues to have a low level of delinquent and non-accrual loans
in the portfolio, as well as no charge-offs.
Non-interest income decreased by $1.0 million, or 79.8%, to
$256,000 for the three months ended December 31, 2022 from $1.3
million for the three months ended December 31, 2021. Gain on sale
of loans decreased $139,000 as the Bank decided to portfolio loans
rather than sell loans and bank-owned life insurance decreased
$860,000, or 82.4%, due to the collections of $1.8 million in death
proceeds in the three months ended December 31, 2021.
For the three months ended December 31, 2022, non-interest
expense decreased $167,000, or 4.5%, over the comparable 2021
period. Salaries and employee benefits decreased $22,000, or 1.0%,
due to a lower employee count. Data processing expense decreased
$46,000, or 17.8%, due to lower costs. Professional fees decreased
$52,000, or 37.5%, due to lower legal expense. The increase in
advertising expense of $28,000, or 28.7%, was due to additional
promotions for branch locations and new promotions on deposit and
loan products.
Income tax expense increased $328,000, or 81.1%, to $730,000 for
the three months ended December 31, 2022 from $404,000 for the
three months ended December 31, 2021. The increase was due to $1.0
million of higher taxable income. The effective tax rate for the
three months ended December 31, 2022 and 2021 were 27.78% and
16.59%, respectively. For the three-month period ended December 31,
2021 there was $860,000 of additional proceeds from bank owned life
insurance which resulted in a lower effective tax rate.
Comparison of Operating Results for the Twelve Months Ended
December 31, 2022 and December 31, 2021
Net income decreased by $643,000, or 8.6%, to $6.9 million for
the twelve months ended December 31, 2022 from $7.5 million for the
twelve months ended December 31, 2021. The decrease was due to a
decrease in non-interest income of $3.4 million, an increase in
provision for loan losses of $513,000, and an increase of $739,000
in income taxes offset by an increase in net interest income of
$3.8 million and a decrease in non-interest expense of $179,000.
Excluding the one-time bargain purchase gain of $2.0 million that
occurred in 2021 in connection with the Gibraltar Bank acquisition
and the $392,000 merger-related expenses, net income would have
increased $916,000 for the twelve months ended December 31, 2022 as
compared to 2021.1
Interest income on cash and cash equivalents decreased $34,000,
or 22.5%, to $117,000 for the twelve months ended December 31, 2022
from $151,000 for the twelve months ended December 31, 2021 due to
a $74.8 million decrease in the average balance of cash and cash
equivalents to $25.0 million for the twelve months ended December
31, 2022 from $99.8 million for the twelve months ended December
31, 2021, reflecting the use of excess liquidity to fund loan
originations and purchase investment securities. This was offset by
a 32 basis point increase in the average yield on cash and cash
equivalents from 0.15% for the twelve months ended December 31,
2021 to 0.47% for the twelve months ended December 31, 2022 due to
the higher interest rate environment.
Interest income on loans increased $3.6 million, or 15.8%, to
$26.3 million for the twelve months ended December 31, 2022
compared to $22.7 million for the twelve months ended December 31,
2021 due primarily to a $55.3 million increase in the average
balance of loans to $638.7 million for the twelve months ended
December 31, 2022 from $583.4 million for the twelve months ended
December 31, 2021 and due to a 22 basis point increase in the
average yield on loans from 3.89% for the twelve months ended
December 31, 2021 to 4.11% for the twelve months ended December 31,
2022.
[1] This number represents a non-GAAP financial measure. Please
see “Reconciliation of GAAP to Non-GAAP” contained at the end of
this release.
Interest income on securities increased $1.7 million, or 86.6%,
to $3.7 million for the twelve months ended December 31, 2022 from
$2.0 million for the twelve months ended December 31, 2021 due to a
$82.0 million increase in the average balance of securities to
$168.0 million for the twelve months ended December 31, 2022 from
$86.0 million for the twelve months ended December 31, 2021,
reflecting the purchase of investments with excess liquidity. The
increase was offset by a 10 basis point decrease in the average
yield from 2.29% for the twelve months ended December 31, 2021 to
2.19% for the twelve months ended December 31, 2022.
Interest expense on interest-bearing deposits increased
$836,000, or 19.6%, to $5.1 million for the twelve months ended
December 31, 2022 from $4.3 million for the twelve months ended
December 31, 2021. This increase was due to a $60.4 million
increase in the average balance of deposits to $597.7 million for
the twelve months ended December 31, 2022 from $537.3 million for
the twelve months ended December 31, 2021, primarily due to a $35.6
million increase in the average balance of NOW and money market
accounts from $104.9 million for the twelve months ended December
31, 2021 to $140.5 million for the twelve months ended December 31,
2022. The increase was also due to a six basis point increase in
the average cost of interest-bearing deposits to 0.85% for the
twelve months ended December 31, 2022 from 0.79% for the twelve
months ended December 31, 2021.
Interest expense on Federal Home Loan Bank borrowings increased
$643,000, or 42.3%, from $1.5 million for the twelve months ended
December 31, 2021 to $2.2 million for the twelve months ended
December 31, 2022. The increase was due to an increase in the
average cost of borrowings of 55 basis points to 2.11% for the
twelve months ended December 31, 2022 from 1.56% for the twelve
months ended December 31, 2021 due to the higher rates on new
borrowings. The increase was also due to an increase in the average
balance of borrowings of $4.9 million to $102.5 million for the
twelve months ended December 31, 2022 from $97.6 million for the
twelve months ended December 31, 2021.
Net interest income increased $3.8 million, or 19.7%, to $23.1
million for the twelve months ended December 31, 2022 from $19.3
million for the twelve months ended December 31, 2021. The increase
reflected a 26 basis point increase in our net interest rate spread
to 2.59% for the twelve months ended December 31, 2022 from 2.33%
for the twelve months ended December 31, 2021. Our net interest
margin increased 26 basis points to 2.76% for the twelve months
ended December 31, 2022 from 2.50% for the twelve months ended
December 31, 2021.
We recorded a $425,000 provision for loan losses for the twelve
months ended December 31, 2022 compared to a $88,000 credit for the
twelve months ended December 31, 2021. Higher balances in
residential and construction loans were the reason for the
provision for the twelve months ended December 31, 2022. The Bank
continues to have a low level of delinquent and non-accrual loans
in the portfolio, as well as no charge-offs.
Non-interest income decreased by $3.4 million, or 75.0%, to $1.1
million for the twelve months ended December 31, 2022 from $4.5
million for the twelve months ended December 31, 2021. For the
twelve months ended December 31, 2021, there was a $2.0 million
bargain purchase gain recognized in the Gibraltar Bank acquisition
in 2021. Gain on sale of loans decreased $700,000 or 88.9% to
$87,000 for the twelve months ended December 31, 2022 from $786,000
for the twelve months ended December 31, 2021. Bank-owned life
insurance income decreased $742,000 or 51.6% to $695,000 for the
twelve months ended December 31, 2022 from $1.4 million for the
twelve months ended December 31, 2021 due to death proceeds
collected during the twelve months ended December 31, 2021.
For the twelve months ended December 31, 2022, non-interest
expense decreased $179,000, or 1.2%, to $14.3 million, over 2021.
Salaries and employee benefits increased $691,000, or 8.9%, due to
the new stock compensation plan adopted in September 2021 and due
to more employees associated with the Gibraltar Bank acquisition
and the addition of a sixth branch office. Data processing expense
increased $97,000, or 9.3%, due to higher data processing expense
associated with a larger company. Advertising expense increased
$216,000 due to additional promotions for branch locations and new
promotions for loan and deposit products. Professional fees
decreased $189,000, or 25.7%, due to lower consulting and legal
expense. Merger fees and core conversion costs were $1.1 million in
2021. The increase in equipment and occupancy expenses of $129,000,
or 10.3%, was mainly due to the additional branch locations.
Income tax expense increased $739,000, or 39.4%, to $2.6 million
for the three months ended December 31, 2022 from $1.9 million for
the three months ended December 31, 2021. The increase was due to
$735,000 of higher taxable income. The effective tax rate for the
three months ended December 31, 2022 and 2021 were 27.55% and
19.96%, respectively. For the three-month period ended December 31,
2021 there was $742,000 additional proceeds from bank-owned life
insurance which resulted in a lower effective tax rate.
Balance Sheet Analysis
Total assets were $951.1 million at December 31, 2022,
representing an increase of $113.7 million, or 13.6%, from December
31, 2021. Cash and cash equivalents decreased $88.2 million during
the period primarily due to funding of loan originations and
investment purchases with excess liquidity. Net loans increased
$148.8 million, or 26.1%, due to new production of $225.2 million,
consisting of a mainly residential real estate loans and
construction real estate loans offset by $76.4 million in
repayments. Securities held to maturity increased $3.4 million due
to the purchase of corporate bonds and mortgage-backed securities
with excess cash. Securities available for sale increased $43.3
million or 103.4% due to the purchase of mortgage-backed securities
and corporate bonds with excess cash. Bank-owned life insurance
increased $5.7 million, or 23.2% due to a $5.0 million new purchase
of bank-owned life insurance during the twelve months ended
December 31, 2022.
Delinquent loans increased $151,000, or 9.1%, during the
twelve-month period ended December 31, 2022, finishing at $1.8
million or 0.26% of total loans. During the same timeframe,
non-performing assets remained unchanged at $1.9 million and were
0.26% of total assets at December 31, 2022. The Company’s allowance
for loan losses was 0.36% of total loans and 136.3% of
non-performing loans at December 31, 2022 compared to 0.38% of
total loans and 113.85% of non-performing loans at December 31,
2021.
Total liabilities increased $121.7 million, or 17.6%, to $811.4
million mainly due to an increase in deposits, reflecting a new
$38.2 million municipal relationship, and a $126.2 increase in
certificates of deposit and a $17.3 million increase in borrowings.
Total deposits increased $103.9 million, or 17.4%, to $701.4
million at December 31, 2022 from $597.5 million at December 31,
2021. The increase in deposits reflected an increase in
interest-bearing deposits of $104.6 million, or 18.7%, to $662.8
million as of December 31, 2022 from $558.2 million at December 31,
2021, primarily due to increases in certificates of deposit, which
increased by $126.2 million from $366.4 million at December 31,
2021 to $492.6 million at December 31, 2022 and in NOW accounts,
which increased by $12.7 million to $82.7 million from $69.9
million at December 31, 2021. The increase in certificates of
deposit was used to fund loan growth. These increases were offset
by a decrease in non-interest bearing deposits of $664,000, or
1.7%, to $38.7 million as of December 31, 2022 from $39.3 million
as of December 31, 2021, and a decrease in money market and savings
accounts of $34.4 million, or 28.2%, to $87.4 million as of
December 31, 2022 from $121.8 million as of December 31, 2021.
Federal Home Loan Bank advances increased $17.3 million, or 20.3%,
due to new advances for loan funding.
Stockholders’ equity decreased $7.9 million to $139.7 million,
due to increased accumulated other comprehensive loss for
securities available for sale of $5.9 million and the repurchase of
906,793 shares of stock during the year at a cost of $10.1 million,
offset by net income of $6.9 million for the twelve months ended
December 31, 2022. At December 31, 2022, the Company’s ratio of
average stockholders’ equity-to-total assets was 15.61%, compared
to 17.88% at December 31, 2021.
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, 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.
In addition, the COVID-19 pandemic has had, and may continue to
have, an adverse impact on the Company, its clients and the
communities it serves. Given its dynamic nature, it is difficult to
predict the full impact of the COVID-19 pandemic on the Company’s
business.
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
As of
As of
December 31, 2022
December 31, 2021
Assets
(unaudited)
Cash and due from banks
$
8,160,028
$
14,446,792
Interest-bearing deposits in other
banks
8,680,889
90,621,993
Cash and cash equivalents
16,840,917
105,068,785
Securities available for sale
85,100,578
41,838,798
Securities held to maturity (fair value of
$70,699,651 and $74,081,059, respectively)
77,427,309
74,053,099
Loans held for sale
—
1,152,500
Loans, net of allowance of $2,578,174 and
$2,153,174, respectively
719,025,762
570,209,669
Premises and equipment, net
7,884,335
8,127,979
Federal Home Loan Bank (FHLB) stock and
other restricted securities
5,490,900
4,851,300
Accrued interest receivable
3,966,651
2,712,605
Core deposit intangibles
267,272
336,364
Bank-owned life insurance
30,206,325
24,524,122
Other assets
4,888,954
4,486,366
Total Assets
$
951,099,003
$
837,361,587
Liabilities and Equity
Non-interest bearing deposits
$
38,653,349
$
39,317,500
Interest bearing deposits
662,758,100
558,162,278
Total deposits
701,411,449
597,479,778
FHLB advances
102,319,254
85,051,736
Advance payments by borrowers for taxes
and insurance
3,174,661
2,856,120
Other liabilities
4,534,516
4,397,742
Total liabilities
811,439,880
689,785,376
Stockholders’ Equity
Preferred stock $0.01 par value 1,000,000
shares authorized, none issued and outstanding at December 31, 2022
and December 31, 2021
—
—
Common stock $0.01 par value, 30,000,000
shares authorized, 13,699,016 issued and outstanding at December
31, 2022 and 14,605,809 at December 31, 2021
136,989
146,057
Additional paid-in capital
59,099,476
68,247,204
Retained earnings
91,756,673
84,879,812
Unearned ESOP shares (436,495 shares at
December 31, 2022 and 463,239 shares at December 31, 2021)
(5,123,002
)
(5,424,206
)
Accumulated other comprehensive loss
(6,211,013
)
(272,656
)
Total stockholders’ equity
139,659,123
147,576,211
Total liabilities and stockholders’
equity
$
951,099,003
$
837,361,587
BOGOTA FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF
INCOME
(unaudited)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
2022
2021
Interest income
Loans
$
7,860,684
$
5,555,242
$
26,264,486
$
22,672,097
Securities
Taxable
933,963
439,128
3,516,832
1,912,146
Tax-exempt
45,882
20,094
161,187
58,888
Other interest-earning assets
140,335
91,936
403,969
424,539
Total interest income
8,980,864
6,106,400
30,346,474
25,067,670
Interest expense
Deposits
2,180,832
916,212
5,106,517
4,271,109
FHLB advances
759,476
342,317
2,162,217
1,519,302
Total interest expense
2,940,308
1,258,529
7,268,734
5,790,411
Net interest income
6,040,556
4,847,871
23,077,740
19,277,259
Provision (credit) for loan losses
150,000
—
425,000
(88,000
)
Net interest income after provision for
loan losses
5,890,556
4,847,871
22,652,740
19,365,259
Non-interest income
Fees and service charges
42,848
37,222
179,734
136,211
Gain on sale of loans
—
139,211
86,913
786,424
Bargain purchase gain
—
17,573
—
1,950,970
Bank-owned life insurance
184,373
1,044,628
694,900
1,436,453
Other
28,801
28,572
162,126
183,454
Total non-interest income
256,022
1,267,206
1,123,673
4,493,512
Non-interest expense
Salaries and employee benefits
2,117,836
2,140,286
8,434,734
7,743,694
Occupancy and equipment
356,872
361,529
1,390,718
1,261,306
FDIC insurance assessment
58,210
54,000
220,210
217,300
Data processing
212,497
258,414
1,132,790
1,036,203
Advertising
124,424
96,665
492,859
276,665
Director fees
192,862
250,877
800,611
873,008
Professional fees
86,751
138,787
546,004
735,067
Merger fees
—
—
—
392,197
Core conversion costs
—
—
—
730,000
Other
361,653
377,275
1,267,081
1,198,081
Total non-interest expense
3,511,105
3,677,833
14,285,007
14,463,521
Income before income taxes
2,635,473
2,437,244
9,491,406
9,395,250
Income tax expense
732,122
404,372
2,614,545
1,875,175
Net income
$
1,903,351
$
2,032,872
$
6,876,861
$
7,520,075
Earnings per Share - basic
$
0.14
$
0.15
$
0.51
$
0.55
Earnings per Share - diluted
$
0.14
$
0.14
$
0.51
$
0.52
Weighted average shares outstanding -
basic
13,299,055
13,900,769
13,570,407
13,725,884
Weighted average shares outstanding -
diluted
13,330,553
14,222,841
13,576,934
14,350,788
BOGOTA FINANCIAL CORP.
SELECTED RATIOS
(unaudited)
At or For the Three Months
Ended December 31,
At or For the Twelve Months
Ended December 31,
2022
2021
2022
2021
Performance Ratios (1):
Return on average assets (2)
0.80
%
0.97
%
0.77
%
1.23
%
Return on average equity (3)
5.42
%
5.54
%
4.76
%
7.06
%
Interest rate spread (4)
2.73
%
2.30
%
2.59
%
2.33
%
Net interest margin (5)
2.85
%
2.44
%
2.73
%
2.50
%
Efficiency ratio (6)
55.76
%
60.14
%
59.03
%
60.85
%
Average interest-earning assets to average
interest-bearing liabilities
116.23
%
122.19
%
119.60
%
122.40
%
Net loans to deposits
102.51
%
95.44
%
102.51
%
95.44
%
Equity to assets (7)
14.80
%
17.55
%
16.06
%
17.55
%
Capital Ratios:
Tier 1 capital to average assets
15.61
%
17.88
%
Asset Quality Ratios:
Allowance for loan losses as a percent of
total loans
0.36
%
0.38
%
Allowance for loan losses as a percent of
non-performing loans
136.32
%
113.85
%
Net recoveries to average outstanding
loans during the period
0.00
%
0.00
%
Non-performing loans as a percent of total
loans
0.26
%
0.33
%
Non-performing assets as a percent of
total assets
0.20
%
0.23
%
(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 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% for 2022 and 2021.
(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 December 31,
2022 and December 31, 2021:
December 31, 2022
December 31, 2021
Real estate:
(unaudited)
Residential First Mortgage
$
466,100,627
$
319,968,234
Commercial and Multi-Family Real
Estate
162,338,669
175,375,419
Construction
61,825,478
41,384,687
Commercial and Industrial
1,684,189
7,905,524
Consumer:
Home Equity and Other Consumer
29,654,973
27,728,979
Total loans
721,603,936
572,362,843
Allowance for loan losses
(2,578,174
)
(2,153,174
)
Net loans
$
719,025,762
$
570,209,669
The following tables set forth the distribution of total deposit
accounts, by account type, at the dates indicated.
At December 31,
At December
2022
2021
Amount
Percent
Average Rate
Amount
Percent
Average Rate
(Dollars in thousands)
(unaudited)
Noninterest bearing demand accounts
$
38,699
6.93
%
—
%
$
39,318
6.58
%
—
%
NOW accounts
82,674
11.79
0.88
69,940
11.71
0.82
Money market accounts
30,037
4.28
0.32
57,541
9.63
0.34
Savings accounts
57,408
8.18
0.49
64,285
10.76
0.26
Certificates of deposit
492,593
70.23
2.37
366,396
61.32
0.74
Total
$
701,411
100.00
%
1.82
%
$
597,480
100.00
%
0.61
%
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 December
31,
2022
2021
Average Balance
Interest and Dividends
Yield/ Cost (3)
Average Balance
Interest and Dividends
Yield/ Cost (3)
(Dollars in thousands)
Assets:
(unaudited)
Cash and cash equivalents
$
2,962
$
30
3.98
%
$
106,400
$
37
0.14
%
Loans
717,096
7,861
4.35
%
577,699
5,555
3.81
%
Securities
167,708
980
2.34
%
98,307
459
1.87
%
Other interest-earning assets
6,327
110
6.99
%
5,077
55
4.33
%
Total interest-earning assets
894,093
8,981
3.99
%
787,483
6,106
3.08
%
Non-interest-earning assets
53,969
48,406
Total assets
$
948,062
$
835,889
Liabilities and equity:
NOW and money market accounts
$
122,136
$
177
0.57
%
$
121,764
$
198
0.65
%
Savings accounts
57,038
57
0.40
%
64,363
41
0.25
%
Certificates of deposit
468,138
1,947
1.65
%
371,490
677
0.72
%
Total interest-bearing deposits
647,312
2,181
1.34
%
557,617
916
0.65
%
Federal Home Loan Bank advances (4)
121,961
759
2.47
%
86,855
342
1.56
%
Total interest-bearing liabilities
769,273
2,940
1.52
%
644,472
1,258
0.77
%
Non-interest-bearing deposits
36,105
39,703
Other non-interest-bearing liabilities
2,296
5,030
Total liabilities
807,674
689,205
Total equity
140,388
146,684
Total liabilities and equity
$
948,062
$
835,889
Net interest income
$
6,041
$
4,848
Interest rate spread (1)
2.47
%
2.30
%
Net interest margin (2)
2.68
%
2.44
%
Average interest-earning assets to average
interest-bearing liabilities
116.23
%
122.19
%
1.
Interest rate spread represents the
difference between the weighted average yield on interest-earning
assets and the weighted average cost of interest-bearing
liabilities.
2.
Net interest margin represents net
interest income divided by average total interest-earning
assets.
3.
Annualized.
4.
Cash flow hedges are used to manage
interest rate risk.
Twelve Months Ended December
31,
2022
2021
Average Balance
Interest and Dividends
Yield/ Cost (3)
Average Balance
Interest and Dividends
Yield/ Cost (3)
(Dollars in thousands)
(unaudited)
Assets:
Cash and cash equivalents
$
25,044
$
117
0.47
%
$
99,842
$
151
0.15
%
Loans
638,679
26,264
4.11
%
583,362
22,672
3.89
%
Securities
167,987
3,678
2.19
%
86,035
1,971
2.29
%
Other interest-earning assets
5,677
288
5.05
%
5,606
273
4.87
%
Total interest-earning assets
837,387
30,347
3.62
%
774,845
25,067
3.24
%
Non-interest-earning assets
52,525
42,252
Total assets
$
889,912
$
817,097
Liabilities and equity:
NOW and money market accounts
$
140,473
$
787
0.56
%
$
104,945
$
625
0.60
%
Savings accounts
62,626
184
0.29
%
58,880
127
0.22
%
Certificates of deposit
394,593
4,136
1.05
%
373,490
3,519
0.94
%
Total interest-bearing deposits
597,692
5,107
0.85
%
537,315
4,271
0.79
%
Federal Home Loan Bank advances (4)
102,458
2,162
2.11
%
97,621
1,519
1.56
%
Total interest-bearing liabilities
700,150
7,269
1.04
%
634,936
5,790
0.91
%
Non-interest-bearing deposits
41,501
30,952
Other non-interest-bearing liabilities
3,914
8,822
Total liabilities
745,565
674,710
Total equity
144,347
142,387
Total liabilities and equity
$
889,912
$
817,097
Net interest income
$
23,078
$
19,277
Interest rate spread (1)
2.59
%
2.33
%
Net interest margin (2)
2.76
%
2.50
%
Average interest-earning assets to average
interest-bearing liabilities
119.60
%
122.04
%
1.
Interest rate spread represents the
difference between the weighted average yield on interest-earning
assets and the weighted average cost of interest-bearing
liabilities.
2.
Net interest margin represents net
interest income divided by average total interest-earning
assets.
3.
Annualized.
4.
Cash flow hedges are used to manage
interest rate risk.
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 December
31, 2022 Compared to Three Months Ended December 31, 2021
Twelve Months Ended December
31, 2022 Compared to Twelve Months Ended December 31, 2021
Increase (Decrease) Due
to
Increase (Decrease) Due
to
Volume
Rate
Net
Volume
Rate
Net
(In thousands)
Interest income:
(unaudited)
Cash and cash equivalents
$
(280
)
$
273
$
(7
)
$
(175
)
$
141
$
(34
)
Loans receivable
1,453
853
2,306
2,250
1,342
3,592
Securities
384
137
521
1,797
(90
)
1,707
Other interest earning assets
16
39
55
4
11
15
Total interest-earning assets
1,573
1,302
2,875
3,876
1,404
5,280
Interest expense:
NOW and money market accounts
4
(25
)
(21
)
205
(43
)
162
Savings accounts
(28
)
44
16
9
48
57
Certificates of deposit
213
1,057
1,270
201
416
617
Federal Home Loan Bank advances
171
246
417
79
564
643
Total interest-bearing liabilities
360
1,322
1,682
494
985
1,479
Net increase (decrease) in net interest
income
$
1,213
$
(20
)
$
1,193
$
3,382
$
419
$
3,801
BOGOTA FINANCIAL CORP. RECONCILIATION
OF GAAP TO NON-GAAP (Unaudited)
The Company’s management believes that the presentation of net
income on a non-GAAP basis, excluding nonrecurring items, provides
useful information for evaluating the Company’s operating results
and any related trends that may be affecting the Company’s
business. These disclosures should not be viewed as a substitute
for operating results determined in accordance with GAAP.
Twelve months ended December
31, 2021
Income Before
Income Taxes
Provision for
Income Taxes
Net Income
GAAP basis
$
9,395,250
$
1,875,175
$
7,520,075
Add: merger and acquisition related
expenses
392,197
—
392,197
Add: Charitable Foundation
Contribution
—
—
—
Less: Bargain purchase gain
(1,950,970
)
—
(1,950,970
)
Non-GAAP basis
$
7,836,477
$
1,875,175
$
5,961,302
Twelve months ended December
31,
Return on average assets (annualized):
2022
2021
GAAP
0.77
%
1.23
%
Adjustments
0.00
%
0.25
%
Non-GAAP
0.77
%
0.98
%
Return on average equity (annualized):
GAAP
4.76
%
7.06
%
Adjustments
0.00
%
1.46
%
Non-GAAP
4.76
%
5.60
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230130005732/en/
Joseph Coccaro – President & CEO, 201-862-0660 ext. 1110
Bogota Financial (NASDAQ:BSBK)
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