Bogota Financial Corp. Reports Results for the Three and Six Months Ended June 30, 2024

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 June 30, 2024 of $432,000, or $0.03 per basic and diluted share, compared to net income of $857,000, or $0.07 per basic and diluted share, for the comparable prior year period. The Company reported a net loss for the six months ended June 30, 2024 of $873,000, or $0.07 per basic and diluted share, compared to net income of $1.8 million, or $0.14 per basic and diluted share, for the six months ended June 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, approximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC). The 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 June 30, 2024, 107,323 shares have been repurchased pursuant to the program at a cost of $735,000.

Other Financial Highlights:

	●	Total assets increased $35.4 million, or 3.8%, to $974.7 million at June 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 $7.3 million, or 29.4%, to $17.6 million at June 30, 2024 from $24.9 million at December 31, 2023 as excess funds were used to purchase securities.

	●	Securities increased $46.4 million, or 32.8%, to $187.9 million at June 30, 2024 from $141.5 million at December 31, 2023.

	●	Net loans decreased $7.1 million, or 1.0%, to $707.6 million at June 30, 2024 from $714.7 million at December 31, 2023.

	●	Total deposits at June 30, 2024 were $649.1 million, increasing $23.8 million, or 3.8%, as compared to $625.3 million at December 31, 2023, primarily due to a $21.0 million increase in interest-bearing deposits primarily in certificates of deposit, and also by a $2.8 million increase in non-interest bearing demand accounts. The average rate on deposits increased 145 basis points to 3.91% for the first half of 2024 from 2.46% for 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 $11.7 million, or 7.0% to $179.4 million at June 30, 2024 from $167.7 million as of December 31, 2023.

Kevin Pace, President and Chief Executive Officer, said “We have seen growth in our commercial lending portfolio and deposits. Our credit quality has remained strong through this growth as we continue to be prudent lenders. We remain focused on executing our strategic plan to deliver value to our shareholders and customers. Growth is a key component in our plan as we look to expand our services and technology offerings to attract new customers.”

“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 in our value."

Income Statement Analysis

Comparison of Operating Results for the Three Months Ended June 30, 2024 and June 30, 2023

Net income decreased by $1.3 million, or 150.5%, to a net loss of $432,000 for the three months ended June 30, 2024 from net income of $857,000 for the three months ended June 30, 2023. This decrease was primarily due to a decrease of $1.5 million in net interest income, partially offset by a decrease of $494,000 in income tax expense.

Interest income increased $1.1 million, or 11.3%, from $9.4 million for the three months ended June 30, 2023 to $10.5 million for the three months ended June 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.

Interest income on cash and cash equivalents decreased $22,000, or 14.9%, to $127,000 for the three months ended June 30, 2024 from $149,000 for the three months ended June 30, 2023 due to a $3.8 million decrease in the average balance to $8.6 million for the three months ended June 30, 2024 from $12.4 million for the three months ended June 30, 2023, reflecting the use of excess cash to purchase securities. The decrease was offset by a 110 basis point increase in the average yield from 4.80% for the three months ended June 30, 2023 to 5.90% for the three months ended June 30, 2024 due to the higher interest rate environment.

Interest income on loans increased $157,000, or 1.9%, to $8.3 million for the three months ended June 30, 2024 compared to $8.1 million for the three months ended June 30, 2023 due primarily to an 11 basis point increase in the average yield from 4.59% for the three months ended June 30, 2023 to 4.70% for the three months ended June 30, 2024, offset by a $2.1 million decrease in the average balance to $710.1 million for the three months ended June 30, 2024 from $712.2 million for the three months ended June 30, 2023.

Interest income on securities increased $843,000, or 82.9%, to $1.9 million for the three months ended June 30, 2024 from $1.0 million for the three months ended June 30, 2023 primarily due to a $39.3 million increase in the average balance to $185.5 million for the three months ended June 30, 2024 from $146.2 million for the three months ended June 30, 2023, and due to a 123 basis point increase in the average yield from 2.78% for the three months ended June 30, 2023 to 4.01% for the three months ended June 30, 2024.

Interest expense increased $2.6 million, or 51.2%, from $5.1 million for the three months ended June 30, 2023 to $7.7 million for the three months ended June 30, 2024 due to higher costs and average balances on certificates of deposit and borrowings.

Interest expense on interest-bearing deposits increased $2.0 million, or 48.5%, to $6.2 million for the three months ended June 30, 2024 from $4.2 million for the three months ended June 30, 2023. The increase was due to a 131 basis point increase in the average cost of deposits to 3.99% for the three months ended June 30, 2024 from 2.68% for the three months ended June 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 $23.9 million to $517.9 million for the three months ended June 30, 2024 from $494.0 million for the three months ended June 30, 2023 while the average balance of NOW/money market accounts and savings accounts decreased $20.6 million and $4.8 million for the three months ended June 30, 2024, respectively, compared to the three months ended June 30, 2023.

Interest expense on Federal Home Loan Bank advances increased $574,000, or 63.6%, from $903,000 for the three months ended June 30, 2023 to $1.5 million for the three months ended June 30, 2024. The increase was primarily due to an increase in the average balance of $49.8 million to $170.3 million for the three months ended June 30, 2024 from $120.5 million for the three months ended June 30, 2023. The increase was also due to an increase in the average cost of borrowings of 48 basis points to 3.49% for the three months ended June 30, 2024 from 3.01% for the three months ended June 30, 2023 due to the new borrowings being at higher rates. Cash flow hedges used to manage interest rate risk totaled $115.0 million at June 30, 2024. During the three months ended June 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 $461,000.

Net interest income decreased $1.6 million, or 36.1%, to $2.7 million for the three months ended June 30, 2024 from $4.3 million for the three months ended June 30, 2023. The decrease reflected an 85 basis point decrease in our net interest rate spread to 0.72% for the three months ended June 30, 2024 from 1.57% for the three months ended June 30, 2023. Our net interest margin decreased 75 basis points to 1.21% for the three months ended June 30, 2024 from 1.96% for the three months ended June 30, 2023.

We recorded a $35,000 provision for credit losses for the three months ended June 30, 2024 compared to a $125,000 recovery for credit losses for the three-month period ended June 30, 2023. The entire provision in the second quarter of 2024 was due to an increase in corporate securities. In addition to the recorded provision, the Company reclassified $38,000 from the existing allowance for credit losses related to loans to the allowance for credit losses related to held-to-maturity securities to reflect the changing composition of the balance sheet and related credit risk.

Non-interest income increased by $20,000, or 7.0%, to $303,000 for the three months ended June 30, 2024 from $283,000 for the three months ended June 30, 2023. Bank-owned life insurance income increased $25,000, or 13.1%, due to higher balances during 2024, which was partially offset by a lower gain on sale of loans.

For the three months ended June 30, 2024, non-interest expense increased $94,000, or 2.6%, over the comparable 2023 period. Professional fees increased $146,000, or 128.1%, due to higher consulting expense related to strategic business planning. Data processing expense increased $83,000, or 35.5%, due to higher processing costs. Advertising expense also increased by $19,000, or 19.8%, which was related to promotions for our new branch location. This was offset by a $158,000, or 6.9% 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.

Income tax expense decreased $494,000, or 232.1%, to a benefit of $281,000 for the three months ended June 30, 2024 from a $213,000 expense for the three months ended June 30, 2023. The decrease was due to a reduction of $1.8 million in taxable income.

Comparison of Operating Results for the Six Months Ended June 30, 2024 and June 30, 2023

Net income decreased by $2.7 million, or 147.2%, to a net loss of $873,000 for the six months ended June 30, 2024 from net income of $1.8 million for the six months ended June 30, 2023. This decrease was primarily due to a decrease of $3.4 million in net interest income, partially offset by a decrease of $1.1 million in income tax expense.

Interest income increased $2.1 million, or 11.5%, from $18.4 million for the six months ended June 30, 2023 to $20.5 million for the six months ended June 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.

Interest income on cash and cash equivalents increased $22,000, or 8.7%, to $276,000 for the six months ended June 30, 2024 from $254,000 for the six months ended June 30, 2023 due a 171 basis point increase in the average yield from 4.82% for the six months ended June 30, 2023 to 6.53% for the six months ended June 30, 2024 due to the higher interest rate environment. The increase was partially offset by a $2.1 million decrease in the average balance to $8.5 million for the six months ended June 30, 2024 from $10.6 million for the six months ended June 30, 2023, reflecting the decrease of liquidity due to increased securities purchases.

Interest income on loans increased $666,000, or 4.2%, to $16.5 million for the six months ended June 30, 2024 compared to $15.8 million for the six months ended June 30, 2023 due primarily to 19 basis point increase in the average yield from 4.45% for the six months ended June 30, 2023 to 4.64% for the six months ended June 30, 2024, offset by a $3.3 million decrease in the average balance to $711.7 million for the six months ended June 30, 2024 from $715.1 million for the six months ended June 30, 2023.

Interest income on securities increased $1.3 million, or 60.4%, to $3.4 million for the six months ended June 30, 2024 from $2.1 million for the six months ended June 30, 2023 primarily due to a 111 basis point increase in the average yield from 2.74% for the six months ended June 30, 2023 to 3.85% for the six months ended June 30, 2024, and a $22.0 million increase in the average balance to $176.1 million for the six months ended June 30, 2024 from $154.0 million for the six months ended June 30, 2023.

Interest expense increased $5.5 million, or 57.6%, from $9.6 million for the six months ended June 30, 2023 to $15.1 million for the six months ended June 30, 2024 due to higher costs and average balances on certificates of deposit and borrowings.

Interest expense on interest-bearing deposits increased $4.3 million, or 54.2%, to $12.2 million for the six months ended June 30, 2024 from $7.9 million for the six months ended June 30, 2023. The increase was due to a 145 basis point increase in the average cost of deposits to 3.91% for the six months ended June 30, 2024 from 2.46% for the six months ended June 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 $18.5 million to $517.2 million for the six months ended June 30, 2024 from $498.7 million for the six months ended June 30, 2023 while average NOW/money market accounts and savings accounts decreased $31.9 million and $7.5 million for the six months ended June 30, 2024, respectively, compared to the six months ended June 30, 2023.

Interest expense on Federal Home Loan Bank advances increased $1.2 million, or 73.6%, from $1.7 million for the six months ended June 30, 2023 to $2.9 million for the six months ended June 30, 2024. The increase was primarily due to an increase in the average balance of $54.2 million to $160.3 million for the six months ended June 30, 2024 from $106.1 million for the six months ended June 30, 2023. The increase was also due to an increase in the average cost of borrowings of 47 basis points to 3.66% for the six months ended June 30, 2024 from 3.19% for the six months ended June 30, 2023 due to the new borrowings being at higher rates. Cash flow hedges used to manage interest rate risk totaled $115.0 million at June 30, 2024. During the six months ended June 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 $749,000.

Net interest income decreased $3.4 million, or 38.8%, to $5.4 million for the six months ended June 30, 2024 from $8.8 million for the six months ended June 30, 2023. The decrease reflected a 93 basis point decrease in our net interest rate spread to 0.68% for the six months ended June 30, 2024 from 1.61% for the six months ended June 30, 2023. Our net interest margin decreased 81 basis points to 1.20% for the six months ended June 30, 2024 from 2.01% for the six months ended June 30, 2023.

We recorded a $70,000 provision for credit losses for the six months ended June 30, 2024 compared to a $125,000 recovery for credit losses for the six-month period ended June 30, 2023. The entire provision in the first half of 2024 was due to an increase in held-to-maturity corporate securities. In addition to the recorded provision, the Company reclassified $38,000 from the existing allowance for credit losses related to loans to the allowance for credit losses related to held-to-maturity securities to reflect the changing composition of the balance sheet and related credit risk.

Non-interest income increased by $35,000, or 6.3%, to $602,000 for the six months ended June 30, 2024 from $567,000 for the six months ended June 30, 2023. Bank-owned life insurance income increased $51,000, or 13.5%, due to higher balances during 2024, which was partially offset by a lower gain on sale of loans.

For the six months ended June 30, 2024, non-interest expense increased $219,000, or 3.1%, over the comparable 2023 period. Professional fees increased $194,000, or 73.5% due to higher consulting expense related to strategic business planning. Data processing expense increased $110,000, or 21.5%, due to higher processing costs. These were offset by a $162,000, or 3.6% 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 211.2%, to a benefit of $568,000 for the six months ended June 30, 2024 from a $511,000 expense for the six months ended June 30, 2023. The decrease was due to a reduction of $3.8 million in taxable income.

Balance Sheet Analysis

Total assets were $974.7 million at June 30, 2024, representing an increase of $35.4 million, or 3.8%, from December 31, 2023. Cash and cash equivalents decreased $7.3 million during the period primarily due to the purchase of new securities offset by loan repayments. Net loans decreased $7.0 million, or 1.0%, due to $28.2 million in repayments including a $10.3 million decrease in the balance of residential loans, partially offset by new production of $21.2 million, including $11.0 million and $3.4 million of commercial real estate and commercial and industrial loans, respectively. Due to the interest rate environment, we have seen 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 $8.4 million, or 11.6%, and securities available for sale increased $38.0 million or 55.1%, due to new purchases of mortgage-backed securities.

Delinquent loans increased $888,000 to $13.5 million, or 1.90% of total loans, at June 30, 2024, compared to $12.6 million at December 31, 2023. The increase was mostly due to one commercial real estate loan with a balance of $761,000, which 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 $13.0 million which represented 1.33% of total assets at June 30, 2024. No loans were charged-off during the three or six months ended June 30, 2024 or June 30, 2023. The Company’s allowance for credit losses related to loans was 0.39% of total loans and 21.20% of non-performing loans at June 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 June 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 $36.3 million, or 4.5%, to $838.4 million mainly due to a $21.0 million increase in interest bearing deposits and by an $11.8 million increase in borrowings. Total deposits increased $23.8 million, or 3.8%, to $649.1 million at June 30, 2024 from $625.3 million at December 31, 2023. The increase in deposits reflected an increase in certificate of deposit accounts, which increased by $19.3 million to $512.6 million from $493.3 million at December 31, 2023, an increase in NOW deposit accounts, which increased by $3.5 million to $44.9 million from $41.3 million at December 31, 2023, and by an increase in noninterest bearing demand accounts, which increased by $2.8 million from $30.6 million at December 31, 2023 to $33.3 million at June 30, 2024. At June 30, 2024, brokered deposits were $91.2 million or 14.1% of deposits and municipal deposits were $35.4 million or 5.5% of deposits. At June 30, 2024, uninsured deposits represented 10.7% of the Bank’s total deposits. Federal Home Loan Bank advances increased $11.8 million, or 7.0%, 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 potential for interest rate cuts from the Federal Reserve. Total borrowing capacity at the Federal Home Loan Bank is $304.2 million of which $179.4 million has been advanced.

Total stockholders’ equity decreased $830,000 to $136.3 million, due to a net loss of $873,000 and the repurchase of 107,323 shares of stock at a cost of $735,000, offset by a decrease in accumulated other comprehensive loss for securities available for sale of $483,000 and stock compensation of $150,000 for the three months ended June 30, 2024. At June 30, 2024, the Company’s ratio of average stockholders’ equity-to-total assets was 13.65%, 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
	June 30, 2024			December 31, 2023
Assets
Cash and due from banks	$	8,271,970		$	13,567,115
Interest-bearing deposits in other banks		9,319,571			11,362,356
Cash and cash equivalents		17,591,541			24,929,471
Securities available for sale, at fair value		106,861,767			68,888,179
Securities held to maturity, net of allowance for securities credit losses of $108,000 and zero, respectively (fair value - $74,024,249 and $65,374,753, respectively)		81,065,793			72,656,179
Loans, net of allowance for credit losses of $2,747,950 and $2,785,949, respectively		707,645,118			714,688,635
Premises and equipment, net		7,938,263			7,687,387
Federal Home Loan Bank (FHLB) stock and other restricted securities		9,141,200			8,616,100
Accrued interest receivable		4,230,702			3,932,785
Core deposit intangibles		178,513			206,116
Bank-owned life insurance		31,414,865			30,987,851
Other assets		8,681,855			6,731,500
Total Assets	$	974,749,617		$	939,324,203
Liabilities and Equity
Non-interest bearing deposits	$	33,345,648		$	30,554,842
Interest bearing deposits		615,774,225			594,792,300
Total deposits		649,119,873			625,347,142
FHLB advances-short term		60,000,000			37,500,000
FHLB advances-long term		119,449,102			130,189,663
Advance payments by borrowers for taxes and insurance		3,238,297			2,733,709
Other liabilities		6,598,699			6,380,486
Total liabilities		838,405,971			802,151,000

Stockholders’ Equity
Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at June 30, 2024 and December 31, 2023		—			—
Common stock $0.01 par value, 30,000,000 shares authorized, 13,148,824 issued and outstanding at June 30, 2024 and 13,279,230 at December 31, 2023		131,388			132,792
Additional paid-in capital		55,561,684			56,149,915
Retained earnings		91,303,609			92,177,068
Unearned ESOP shares (396,415 shares at June 30, 2024 and 409,750 shares at December 31, 2023)		(4,671,196	)		(4,821,798	)
Accumulated other comprehensive loss		(5,981,839	)		(6,464,774	)
Total stockholders’ equity		136,343,646			137,173,203
Total liabilities and stockholders’ equity	$	974,749,617		$	939,324,203

BOGOTA FINANCIAL CORP.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Interest income
Loans, including fees	$	8,299,404		$	8,141,719		$	16,506,796		$	15,841,157
Securities
Taxable		1,846,717			996,338			3,363,060			2,047,598
Tax-exempt		13,124			20,232			26,272			65,134
Other interest-earning assets		314,964			248,914			639,268			470,503
Total interest income		10,474,209			9,407,203			20,535,396			18,424,392
Interest expense
Deposits		6,253,895			4,210,984			12,223,776			7,925,981
FHLB advances		1,476,600			902,839			2,916,669			1,680,193
Total interest expense		7,730,495			5,113,823			15,140,445			9,606,174
Net interest income		2,743,714			4,293,380			5,394,951			8,818,218
Provision (recovery) for credit losses		35,000			(125,000	)		70,000			(125,000	)
Net interest income after provision (recovery) for credit losses		2,708,714			4,418,380			5,324,951			8,943,218
Non-interest income
Fees and service charges		49,203			45,700			107,790			97,852
Gain on sale of loans		—			16,150			—			29,375
Bank-owned life insurance		215,056			190,147			427,015			376,200
Other		38,945			31,479			67,477			63,328
Total non-interest income		303,204			283,476			602,282			566,755
Non-interest expense
Salaries and employee benefits		2,143,388			2,301,236			4,301,953			4,463,605
Occupancy and equipment		366,908			358,757			738,025			741,544
FDIC insurance assessment		106,716			127,119			207,313			187,119
Data processing		318,520			235,095			622,125			512,192
Advertising		115,100			96,083			225,200			243,383
Director fees		151,549			159,338			307,249			318,675
Professional fees		260,112			114,018			456,897			263,268
Other		263,490			240,562			510,112			419,770
Total non-interest expense		3,725,783			3,632,208			7,368,874			7,149,556
(Loss) income before income taxes		(713,865	)		1,069,648			(1,441,641	)		2,360,417
Income tax (benefit) expense		(281,386	)		213,007			(568,182	)		511,069
Net (loss) income	$	(432,479	)	$	856,641		$	(873,459	)	$	1,849,348
(Loss) earnings per Share - basic	$	(0.03	)	$	0.07		$	(0.07	)	$	0.14
(Loss) earnings per Share - diluted	$	(0.03	)	$	0.07		$	(0.07	)	$	0.14
Weighted average shares outstanding - basic		12,803,925			13,079,302			12,828,428			13,137,522
Weighted average shares outstanding - diluted		12,803,925			13,081,158			12,828,428			13,162,056

BOGOTA FINANCIAL CORP.SELECTED RATIOS(unaudited)

	At or For the Three Months						At or for the Six Months
	Ended June 30,						Ended June 30,
	2024			2023			2024			2023
Performance Ratios (1):
(Loss) return on average assets (2)		(0.18	)%		0.37	%		(0.18	)%		0.40	%
(Loss) return on average equity (3)		(1.32	)%		2.46	%		(1.32	)%		2.68	%
Interest rate spread (4)		0.76	%		1.57	%		0.68	%		1.61	%
Net interest margin (5)		1.24	%		1.96	%		1.20	%		2.01	%
Efficiency ratio (6)		122.28	%		79.36	%		122.87	%		76.18	%
Average interest-earning assets to average interest-bearing liabilities		114.12	%		116.72	%		114.56	%		117.09	%
Net loans to deposits		106.74	%		107.52	%		113.07	%		107.52	%
Average equity to average assets (7)		13.48	%		14.94	%		14.71	%		14.82	%
Capital Ratios:
Tier 1 capital to average assets								13.52	%		15.96	%
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								21.20	%		21.04	%
Net charge-offs to average outstanding loans during the period								0.00	%		0.00	%
Non-performing loans as a percent of total loans								1.82	%		1.87	%
Non-performing assets as a percent of total assets								1.33	%		1.42	%

(1	)	Certain performance ratios for the three and six months ended June 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 June 30, 2024 and December 31, 2023:

	June 30,			December 31,
	2024			2023
	(unaudited)
Real estate:
Residential First Mortgage	$	475,726,924		$	486,052,422
Commercial Real Estate		110,832,807			99,830,514
Multi-Family Real Estate		75,230,316			75,612,566
Construction		38,492,041			49,302,040
Commercial and Industrial		10,067,071			6,658,370
Consumer		43,909			18,672
Total loans		710,393,068			717,474,584
Allowance for credit losses		(2,747,950	)		(2,785,949	)
Net loans	$	707,645,118		$	714,688,635

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

	At June 30,								At December 31,
	2024								2023
	Amount		Percent			Average Rate			Amount		Percent			Average Rate

	(unaudited)
Noninterest bearing demand accounts	$	33,345,648		5.14	%		—	%	$	30,555,546		4.89	%		—	%
NOW accounts		44,855,584		6.91	%		2.29			41,320,723		6.61	%		1.90
Money market accounts		12,619,901		1.94	%		0.29			14,641,000		2.34	%		0.30
Savings accounts		45,698,159		7.04	%		1.81			45,554,964		7.28	%		1.76
Certificates of deposit		512,600,581		78.97	%		4.38			493,274,767		78.88	%		4.00
Total	$	649,119,873		100.00	%		3.75	%	$	625,347,000		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 June 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	$	8,644		$	127		5.90	%	$	12,449		$	149		4.80	%
Loans		710,058			8,299		4.70	%		712,201			8,142		4.59	%
Securities		185,497			1,860		4.01	%		146,225			1,017		2.78	%
Other interest-earning assets		8,689			188		8.66	%		6,358			99		6.26	%
Total interest-earning assets		912,888			10,474		4.61	%		877,233			9,407		4.30	%

Non-interest-earning assets		58,933								54,156
Total assets	$	971,821							$	931,389
Liabilities and equity:
NOW and money market accounts	$	67,687		$	329		1.96	%	$	88,256		$	355		1.61	%
Savings accounts		44,093			205		1.87	%		48,875			92		0.75	%
Certificates of deposit (1)		517,882			5,720		4.44	%		493,986			3,764		3.06	%
Total interest-bearing deposits		629,662			6,254		3.99	%		631,117			4,211		2.68	%

Federal Home Loan Bank advances (1)		170,295			1,476		3.49	%		120,485			903		3.01	%
Total interest-bearing liabilities		799,957			7,730		3.89	%		751,602			5,114		2.73	%
Non-interest-bearing deposits		39,162								38,841
Other non-interest-bearing liabilities		1,654								1,768
Total liabilities		840,773								792,211

Total equity		131,048								139,178
Total liabilities and equity	$	971,821							$	931,389
Net interest income				$	2,744							$	4,293
Interest rate spread (2)							0.72	%							1.57	%
Net interest margin (3)							1.21	%							1.96	%
Average interest-earning assets to average interest-bearing liabilities		114.12	%							116.72	%

1.	Cash flow hedges are used to manage interest rate risk. During the three months ended June 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 $461,000 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.

	Six Months Ended June 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	$	8,505		$	276		6.50	%	$	10,634		$	254		4.82	%
Loans		711,744			16,507		4.64	%		715,066			15,841		4.45	%
Securities		176,081			3,389		3.85	%		154,049			2,113		2.74	%
Other interest-earning assets		8,395			363		8.65	%		5,851			216		7.40	%
Total interest-earning assets		904,725			20,535		4.54	%		885,600			18,424		4.18	%
Non-interest-earning assets		59,313								54,482
Total assets	$	964,038							$	940,082
Liabilities and equity:
NOW and money market accounts	$	68,569		$	664		1.95	%	$	100,419		$	735		1.48	%
Savings accounts		43,720			403		1.85	%		51,233			162		0.64	%
Certificates of deposit (1)		517,189			11,157		4.34	%		498,652			7,029		2.84	%
Total interest-bearing deposits		629,478			12,224		3.91	%		650,304			7,926		2.46	%
Federal Home Loan Bank advances (1)		160,282			2,916		3.66	%		106,061			1,680		3.19	%
Total interest-bearing liabilities		789,760			15,140		3.86	%		756,365			9,606		2.56	%
Non-interest-bearing deposits		38,425								38,266
Other non-interest-bearing liabilities		2,763								6,146
Total liabilities		830,948								800,777
Total equity		133,090								139,305
Total liabilities and equity	$	964,038							$	940,082
Net interest income				$	5,395							$	8,818
Interest rate spread (2)							0.68	%							1.61	%
Net interest margin (3)							1.20	%							2.01	%
Average interest-earning assets to average interest-bearing liabilities		114.56	%							117.09	%

1.	Cash flow hedges are used to manage interest rate risk. During the six months ended June 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 $749,000 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 June 30, 2024									Six Months Ended June 30, 2024
	Compared to									Compared to
	Three Months Ended June 30, 2023									Six Months Ended June 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	$	(169	)	$	147		$	(22	)	$	(122	)	$	144		$	22
Loans receivable		(158	)		315			157			(201	)		867			666
Securities		318			525			843			333			943			1,276
Other interest earning assets		43			46			89			106			41			147
Total interest-earning assets		35			1,032			1,067			115			1,996			2,111

Interest expense:
NOW and money market accounts		(331	)		305			(26	)		(507	)		436			(71	)
Savings accounts		(60	)		173			113			(72	)		313			241
Certificates of deposit		189			1,767			1,956			271			3,857			4,128
Federal Home Loan Bank advances		413			160			573			959			277			1,236
Total interest-bearing liabilities		211			2,405			2,616			652			4,882			5,534
Net decrease in net interest income	$	(176	)	$	(1,373	)	$	(1,549	)	$	(537	)	$	(2,886	)	$	(3,423	)