Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Bogota Financial Corp. Reports Results for the Three and Nine Months Ended September 30, 2023 By: Bogota Financial Corp. via Business Wire November 01, 2023 at 16:10 PM EDT Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported net loss for the three months ended September 30, 2023 of $29,000, or $0.00 per basic and diluted share, compared to net income of $1.9 million, or $0.14 per basic and diluted share, for the three months ended September 30, 2022. The Company reported net income for the nine months ended September 30, 2023 of $1.8 million, or $0.14 per basic and diluted shares, compared to net income of $5.0 million, or $0.36 per basic and diluted share, for the nine months ended September 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 September 30, 2023, all shares under this program have been repurchased, including the repurchase of 196,259 shares of stock during the nine months ended September 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 September 30, 2023, 122,301 shares have been repurchased under this program at a cost of $938,000. Other Financial Highlights: Total assets decreased $24.1 million, or 2.5%, to $927.0 million at September 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 $8.1 million, or 48.3%, to $25.0 million at September 30, 2023 from $16.8 million at December 31, 2022. Securities decreased $28.1 million, or 17.3%, to $134.4 million at September 30, 2023 from $162.5 million at December 31, 2022. Net loans decreased $8.7 million, or 1.2%, to $710.3 million at September 30, 2023 from $719.0 million at December 31, 2022. Total deposits were $645.3 million, decreasing $56.1 million, or 8.0%, as compared to $701.4 million at December 31, 2022, primarily due to a $62.4 million decrease in non-interest-bearing deposits, checking, savings and money market accounts, offset by a $6.3 million increase in certificates of deposit. The average rate paid on deposits at September 30, 2023 increased 126 basis points to 3.08% at September 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 $33.0 million, or 32.2% to $135.3 million at September 30, 2023 from $102.3 million as of December 31, 2022. Annualized return on average assets was 0.26% for the nine-month period ended September 30, 2023 compared to 0.76% for nine-month period ended September 30, 2022. Annualized return on average equity was 1.75% for the nine-month period ended September 30, 2023 compared to 4.62% for the nine-month period ended September 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, “The impact of higher interest rates continues to impact our net interest margin. Our net income and return on average assets for the first nine months of 2023 are disappointing when compared to prior periods due to the increase in deposit and borrowing costs exceeding our growth in loan revenue. Currently, because of the interest rate environment, loan opportunities, especially residential and construction have significantly diminished. However, we continue to examine opportunities to grow the balance sheet based on loans that meet our risk tolerance and pricing parameters.” “The Bank continues to be prudent with its lending and interest rate risk management. We remain well-capitalized with substantial reserve sources of liquidity and are managing expenses. We are currently working on a new branch in Upper Saddle River, NJ, which will be the Bank’s seventh stand-alone branch. The Bank anticipates this office will open in December 2023.” Mr. Coccaro further stated, "We will continue to focus on delivering excellent services to our customers. The Company continues to repurchase shares of our common stock which will drive shareholder value." Income Statement Analysis Comparison of Operating Results for the Three Months Ended September 30, 2023 and September 30, 2022 Net income decreased by $2.0 million, or 101.5%, to a net loss of $29,000 for the three months ended September 30, 2023 from net income of $1.9 million for the three months ended September 30, 2022. This decrease was primarily due to a decrease of $3.0 million in net interest income partially offset by a decrease of $175,000 in the provision for credit losses and a decrease of $859,000 in income tax expense. Interest income increased $1.1 million, or 13.6%, from $8.2 million for the three months ended September 30, 2022 to $9.3 million for the three months ended September 30, 2023 due to increases in the average balances and higher yields on interest earning assets. Interest income on cash and cash equivalents increased $138,000, or 460.0%, to $168,000 for the three months ended September 30, 2023 from $30,000 for the three months ended September 30, 2022 due a 316 basis point increase in the average yield from 2.05% for the three months ended September 30, 2022 to 5.21% for the three months ended September 30, 2023 due to the higher interest rate environment. The increase was also due to a $6.9 million increase in the average balance to $12.8 million for the three months ended September 30, 2023 from $5.9 million for the three months ended September 30, 2022, reflecting the increase of liquidity due to lower loan originations. Interest income on loans increased $962,000, or 13.7%, to $8.0 million for the three months ended September 30, 2023 compared to $7.0 million for the three months ended September 30, 2022 due primarily to $40.6 million increase in the average balance to $710.7 million for the three months ended September 30, 2023 from $670.1 million for the three months ended September 30, 2022 and a 30 basis point increase in the average yield from 4.15% for the three months ended September 30, 2022 to 4.45% for the three months ended September 30, 2023. The increase was offset by a $348,000 reserve for nonaccrual interest on a delinquent construction loan. Interest income on securities decreased $53,000, or 5.0%, to $1.0 million for the three months ended September 30, 2023 from $1.1 million for the three months ended September 30, 2022 primarily due to a $44.1 million decrease in the average balance to $138.5 million for the three months ended September 30, 2023 from $182.6 million for the three months ended September 30, 2022 offset by a 59 basis point increase in the average yield from 2.32% for the three months ended September 30, 2022 to 2.91% for the three months ended September 30, 2023. Interest expense increased $4.1 million, or 208.7%, from $2.0 million for the three months ended September 30, 2022 to $6.1 million for the three months ended September 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities. Interest expense on interest-bearing deposits increased $3.6 million, or 288.2%, to $4.9 million for the three months ended September 30, 2023 from $1.3 million for the three months ended September 30, 2022. The increase was due to a 229 basis point increase in the average cost of deposits to 3.11% for the three months ended September 30, 2023 from 0.82% for the three months ended September 30, 2022. 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 $94.9 million to $498.1 million for the three months ended September 30, 2023 from $403.2 million for the three months ended September 30, 2022 while NOW and money market accounts and savings accounts decreased $63.2 million and $14.7 million for the three months ended September 30, 2023, respectively, compared to the three months ended September 30, 2022. Interest expense on Federal Home Loan Bank borrowings increased $503,000, or 70.2%, from $717,000 for the three months ended September 30, 2022 to $1.2 million for the three months ended September 30, 2023. The increase was due to an increase in the average cost of 156 basis points to 3.86% for the three months ended September 30, 2023 from 2.30% for the three months ended September 30, 2022 due to the new borrowings at higher rates. The increase was partially offset by a decrease in the average balance of borrowings of $3.2 million to $125.3 million for the three months ended September 30, 2023 from $128.5 million for the three months ended September 30, 2022. Net interest income decreased $3.0 million, or 48.2%, to $3.2 million for the three months ended September 30, 2023 from $6.2 million for the three months ended September 30, 2022. The decrease reflected a 167 basis point decrease in our net interest rate spread to 1.01% for the three months ended September 30, 2023 from 2.68% for the three months ended September 30, 2022. Our net interest margin decreased 138 basis points to 1.47% for the three months ended September 30, 2023 from 2.85% for the three months ended September 30, 2022. We recorded no provision for credit losses for the three months ended September 30, 2023 compared to a $175,000 provision for loan losses for the three-month period ended September 30, 2022. The Bank had a decrease in the loan portfolio and continues to have no charge-offs. Non-interest income increased by $20,000, or 7.5%, to $290,000 for the three months ended September 30, 2023 from $270,000 for the three months ended September 30, 2022. Bank-owned life insurance income increased $13,000, or 7.0%, due higher balances during 2023. The increase was also due to an increase in fee and service charges of $14,000 due to a higher collection of late charges. For the three months ended September 30, 2023, non-interest expense increased $23,000, or 0.6%, over the comparable 2022 period. Salaries and employee benefits increased $120,000, or 5.6%, due to a higher employee count. Director fees decreased $30,000, or 15.9%, due to lower pension expense. FDIC insurance premiums increased $79,000, or 145.5%, due to a higher assessment rate in 2023. The decrease in advertising expense of $30,000, or 19.3%, was due to reduced promotions for branch locations and less promotions on deposit and loan products. Data processing expense decreased $105,000, or 33.9%, due to lower processing costs. Professional fees decreased $14,000, or 8.7%, due to lower legal expense and other expense decreased $21,000, or 8.1%, due to lower deferred compensation expense and other various expenses. Income tax expense decreased $859,000, or 117.1%, to a benefit of $125,000 for the three months ended September 30, 2023 from a $734,000 expense for the three months ended September 30, 2022. The decrease was due to $2.8 million of lower taxable income. Comparison of Operating Results for the Nine Months Ended September 30, 2023 and September 30, 2022 Net income decreased by $3.2 million, or 63.4%, to $1.8 million for the nine months ended September 30, 2023 from $5.0 million for the nine months ended September 30, 2022. This decrease was primarily due to a decrease of $5.0 million in net interest income, offset by a decrease of $400,000 in the provision for credit losses and a decrease of $1.5 million in income tax expense. Interest income increased $6.3 million, or 29.7%, from $21.4 million for the nine months ended September 30, 2022 to $27.7 million for the nine months ended September 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 $334,000, or 375.3%, to $423,000 for the nine months ended September 30, 2023 from $89,000 for the nine months ended September 30, 2022 due a 462 basis point increase in the average yield from 0.36% for the nine months ended September 30, 2022 to 4.98% for the nine months ended September 30, 2023 due to the higher interest rate environment. This was offset by a $21.1 million decrease in the average balance to $11.4 million for the nine months ended September 30, 2023 from $32.5 million for the nine months ended September 30, 2022, reflecting the use of excess liquidity to fund loan originations and purchase investment securities. Interest income on loans increased $5.4 million, or 29.4%, to $23.8 million for the nine months ended September 30, 2023 compared to $18.4 million for the nine months ended September 30, 2022 due primarily to a $101.4 million increase in the average balance to $713.6 million for the nine months ended September 30, 2023 from $612.3 million for the nine months ended September 30, 2022 and a 45 basis point increase in the average yield from 4.01% for the nine months ended September 30, 2022 to 4.46% for the nine months ended September 30, 2023. The increase was offset by a $1.0 million reserve for nonaccrual interest on a delinquent construction loan. Interest income on securities increased $423,000, or 15.7%, to $3.1 million for the nine months ended September 30, 2023 from $2.7 million for the nine months ended September 30, 2022 due primarily to a 66 basis point increase in the average yield from 2.14% for the nine months ended September 30, 2022 to 2.80% for the nine months ended September 30, 2023. The increase was offset by a $19.3 million decrease in the average balance of securities to $148.8 million for the nine months ended September 30, 2023 from $168.1 million for the nine months ended September 30, 2022. Interest expense increased $11.4 million, or 262.2%, from $4.3 million for the nine months ended September 30, 2022 to $15.7 million for the nine months ended September 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities. Interest expense on interest-bearing deposits increased $9.9 million, or 336.7%, to $12.8 million for the nine months ended September 30, 2023 from $2.9 million for the nine months ended September 30, 2022. The increase was due to a 200 basis point increase in the average cost of interest-bearing deposits to 2.67% for the nine months ended September 30, 2023 from 0.67% for the nine months ended September 30, 2022. 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 $128.7 million to $498.5 million for the nine months ended September 30, 2023 from $369.8 million for the nine months ended September 30, 2022 while NOW and money market accounts and savings accounts decreased $54.9 million and $15.0 million for the nine months ended September 30, 2023, respectively, compared to the nine months ended September 30, 2022. Interest expense on Federal Home Loan Bank borrowings increased $1.5 million, or 106.7%, from $1.4 million for the nine months ended September 30, 2022 to $2.9 million for the nine months ended September 30, 2023. The increase was due to an increase in the average cost of 158 basis points to 3.50% for the nine months ended September 30, 2023 from 1.92% for the nine months ended September 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 $13.3 million to $110.9 million for the nine months ended September 30, 2023 from $97.6 million for the nine months ended September 30, 2022. Net interest income decreased $5.0 million, or 29.4%, to $12.0 million for the nine months ended September 30, 2023 from $17.0 million for the nine months ended September 30, 2022. The increase reflected a 122 basis point decrease in our net interest rate spread to 1.41% for the nine months ended September 30, 2023 from 2.63% for the nine months ended September 30, 2022. Our net interest margin decreased 96 basis points to 1.82% for the nine months ended September 30, 2023 from 2.78% for the nine months ended September 30, 2022. We recorded a $125,000 recovery of credit losses for the nine months ended September 30, 2023 compared to a $275,000 provision for loan losses for the nine-month period ended September 30, 2022. The Bank had a decrease in the loan portfolio as well as no charge-offs offset by increased delinquent and non-performing loans. 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 $12,000, or 1.3%, to $856,000 for the nine months ended September 30, 2023 from $868,000 for the nine months ended September 30, 2022. Gain on sale of loans decreased $58,000, or 66.2%, as loan originations were lower in 2023 due to the higher interest rate environment and the decision to slow loan production to preserve capital and liquidity. Other income decreased $40,000 or 29.8%. These decreases were partially offset by an increase in income from bank-owned life insurance of $64,000, or 12.4%, due to higher balances during 2023. For the nine months ended September 30, 2023, non-interest expense increased $37,000, or 0.3%, over the comparable 2022 period. Salaries and employee benefits increased $421,000, or 6.7%, due to a higher employee count. Director fees decreased $130,000, or 21.3%, due to lower pension expense. FDIC insurance premiums increased $158,000, or 97.3%, due to a higher assessment rate in 2023. Data processing decreased $202,000, or 22.0%, due to the timing of invoices. Other expense decreased $244,000, or 27.0%, due to lower deferred compensation expense and other various expenses. Income taxes decreased $1.5 million, or 79.5%, to a benefit of $386,000 for the nine months ended September 30, 2023 from an expense of $1.9 million for the nine months ended September 30, 2022. The decrease was due to $4.7 million, or 67.8%, of lower taxable income. The effective tax rate for the three and nine months ended September 30, 2023 and 2022 was 17.49% and 27.46%, respectively. Balance Sheet Analysis Total assets were $927.0 million at September 30, 2023, representing a decrease of $24.1 million, or 2.5%, from December 31, 2022. Cash and cash equivalents increased $8.1 million during the period primarily due to loan payments received and proceeds from the call and maturity of securities. Net loans decreased $8.7 million, or 1.2%, due to $55.5 million in repayments, partially offset by new production of $46.8 million. 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 decreased $11.5 million, or 14.9%, and securities available for sale decreased $16.6 million or 19.5%, due to the repayments of mortgage-backed securities and maturities of corporate bonds. Delinquent loans increased $18.0 million to $19.5 million, or 2.74% of total loans, at September 30, 2023. The increase was mostly 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 $12.3 million and were 1.33% of total assets at September 30, 2023. The Company’s allowance for credit losses was 0.39% of total loans and 22.62% of non-performing loans at September 30, 2023 compared to 0.36% of total loans and 136.3% of non-performing loans at December 31, 2022. The Bank does not have any exposure to commercial real estate loans secured by office space. Total liabilities decreased $22.1 million, or 2.7%, to $789.4 million mainly due to a $56.1 million decrease in deposits, offset by a $33.0 million increase in borrowings. Total deposits decreased $56.1 million, or 8.0%, to $645.3 million at September 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 $56.2 million from $170.2 million at December 31, 2022 to $114.0 million at September 30, 2023, offset by an increase in certificate of deposit accounts, which increased by $6.3 million to $498.9 million from $492.6 million at December 31, 2022. At September 30, 2023, uninsured deposits represented 8.4% of the Bank’s total deposits. Federal Home Loan Bank advances increased $33.0 million, or 32.2%, to fund loan growth and deposit outflows. Total borrowing capacity at the Federal Home Loan Bank is $320.2 million of which $135.3 million is advanced. Total stockholders’ equity decreased $2.0 million to $137.7 million, due to increased accumulated other comprehensive loss for securities available for sale of $1.4 million and the repurchase of 318,560 shares of stock during the period at a cost of $3.0 million, offset by net income of $1.8 million for the nine months ended September 30, 2023. At September 30, 2023, the Company’s ratio of total stockholders’ equity adjusted for AOCI to total assets adjusted for the allowance for credit losses was 15.67%, compared to 17.08% at September 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, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the impact of a potential government shutdown, 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 September 30, 2023 December 31, 2022 Assets Cash and due from banks $ 7,213,903 $ 8,160,028 Interest-bearing deposits in other banks 17,763,418 8,680,889 Cash and cash equivalents 24,977,321 16,840,917 Securities available for sale, at fair value 68,518,624 85,100,578 Securities held to maturity (fair value of $57,033,705 and $70,699,651, respectively) 65,927,156 77,427,309 Loans, net of allowance of $2,785,949 and $2,578,174, respectively 710,292,859 719,025,762 Premises and equipment, net 7,765,804 7,884,335 Federal Home Loan Bank (FHLB) stock and other restricted securities 7,158,400 5,490,900 Accrued interest receivable 3,672,882 3,966,651 Core deposit intangibles 220,661 267,272 Bank-owned life insurance 30,780,398 30,206,325 Other assets 7,714,828 4,888,954 Total Assets $ 927,028,933 $ 951,099,003 Liabilities and Equity Non-interest bearing deposits $ 33,420,666 $ 38,653,349 Interest bearing deposits 611,857,823 662,758,100 Total deposits 645,278,489 701,411,449 FHLB advances-short term 39,000,000 59,000,000 FHLB advances-long term 96,314,543 43,319,254 Advance payments by borrowers for taxes and insurance 3,460,726 3,174,661 Other liabilities 5,321,920 4,534,516 Total liabilities 789,375,678 811,439,880 Stockholders’ Equity Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at September 30, 2023 and December 31, 2022 — — Common stock $0.01 par value, 30,000,000 shares authorized, 13,373,766 issued and outstanding at September 30, 2023 and 13,699,016 at December 31, 2022 133,737 136,989 Additional paid-in capital 56,688,749 59,099,476 Retained earnings 93,354,828 91,756,673 Unearned ESOP shares (416,491 shares at September 30, 2023 and 436,945 shares at December 31, 2022) (4,897,099 ) (5,123,002 ) Accumulated other comprehensive loss (7,626,960 ) (6,211,013 ) Total stockholders’ equity 137,653,255 139,659,123 Total liabilities and stockholders’ equity $ 927,028,933 $ 951,099,003 BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Interest income Loans, including fees $ 7,980,388 $ 7,018,200 $ 23,821,545 $ 18,403,802 Securities Taxable 994,791 1,013,034 3,042,389 2,582,869 Tax-exempt 13,159 48,027 78,293 115,305 Other interest-earning assets 301,081 96,139 771,584 263,634 Total interest income 9,289,419 8,175,400 27,713,811 21,365,610 Interest expense Deposits 4,851,926 1,249,693 12,777,907 2,925,685 FHLB advances 1,220,166 716,705 2,900,359 1,402,741 Total interest expense 6,072,092 1,966,398 15,678,266 4,328,426 Net interest income 3,217,327 6,209,002 12,035,545 17,037,184 Provision (recovery) for credit losses — 175,000 (125,000 ) 275,000 Net interest income after (recovery) provision for credit losses �� 3,217,327 6,034,002 12,160,545 16,762,184 Non-interest income Fees and service charges 61,529 47,090 159,381 136,886 Gain on sale of loans — — 29,375 86,913 Bank-owned life insurance 197,873 185,085 574,073 510,527 Other 30,332 37,336 93,660 133,325 Total non-interest income 289,734 269,511 856,489 867,651 Non-interest expense Salaries and employee benefits 2,274,347 2,154,654 6,737,952 6,316,898 Occupancy and equipment 372,626 347,036 1,114,170 1,033,846 FDIC insurance assessment 132,571 54,000 319,690 162,000 Data processing 205,721 311,106 717,913 920,293 Advertising 126,000 156,145 369,383 368,435 Director fees 159,336 189,424 478,011 607,749 Professional fees 149,251 163,500 412,519 459,253 Other 241,530 262,890 661,300 905,428 Total non-interest expense 3,661,382 3,638,755 10,810,938 10,773,902 Income (loss) before income taxes (154,321 ) 2,664,758 2,206,096 6,855,933 Income tax (benefit) expense (125,268 ) 734,152 385,801 1,882,423 Net (loss) income $ (29,053 ) $ 1,930,606 $ 1,820,295 $ 4,973,510 Earnings per Share - basic $ (0.00 ) $ 0.14 $ 0.14 $ 0.36 Earnings per Share - diluted $ (0.00 ) $ 0.14 $ 0.14 $ 0.36 Weighted average shares outstanding - basic 13,037,903 13,468,751 13,103,951 13,661,851 Weighted average shares outstanding - diluted 13,037,903 13,529,857 13,103,951 13,704,688 BOGOTA FINANCIAL CORP. SELECTED RATIOS (unaudited) At or For the Three Months At or for the Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Performance Ratios (1): Return (loss) on average assets (2) (0.01 )% 0.95 % 0.26 % 0.76 % Return (loss) on average equity (3) (0.08 )% 5.56 % 1.75 % 4.62 % Interest rate spread (4) 1.01 % 2.68 % 1.41 % 2.63 % Net interest margin (5) 1.47 % 2.85 % 1.82 % 2.78 % Efficiency ratio (6) 104.40 % 56.17 % 83.05 % 60.17 % Average interest-earning assets to average interest-bearing liabilities 116.68 % 118.42 % 117.21 % 120.59 % Net loans to deposits 110.08 % 105.83 % 110.08 % 105.83 % Average equity to assets (7) 15.00 % 14.91 % 14.88 % 16.52 % Capital Ratios: Tier 1 capital to average assets 15.67 % 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 22.62 % 128.84 % Net charge-offs to average outstanding loans during the period 0.00 % 0.00 % Non-performing loans as a percent of total loans 1.73 % 0.27 % Non-performing assets as a percent of total assets 1.33 % 0.20 % (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 September 30, 2023 and December 31, 2022: September 30, December 31, 2023 2022 (unaudited) Real estate: Residential First Mortgage $ 459,635,136 $ 466,100,627 Commercial and Multi-Family Real Estate 167,767,921 162,338,669 Construction 51,537,604 61,825,478 Commercial and Industrial 5,697,696 1,684,189 Consumer: Home Equity and Other Consumer 28,440,451 29,654,973 Total loans 713,078,808 721,603,936 Allowance for credit losses (2,785,949 ) (2,578,174 ) Net loans $ 710,292,859 $ 719,025,762 The following tables set forth the distribution of total deposit accounts, by account type, at the dates indicated. At September 30, At December 31, 2023 2022 Amount Percent Average Rate Amount Percent Average Rate �� (unaudited) Noninterest bearing demand accounts $ 32,353,920 5.01 % — % $ 38,653,472 5.52 % — % NOW accounts 49,142,170 7.62 2.11 82,720,214 11.79 0.88 Money market accounts 17,627,118 2.73 0.31 30,037,106 4.28 0.32 Savings accounts 47,237,005 7.32 1.77 57,407,955 8.18 0.49 Certificates of deposit 498,918,276 77.32 3.60 492,592,702 70.23 2.37 Total $ 645,278,489 100.00 % 3.08 % $ 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 September 30, 2023 2022 Average Balance Interest and Dividends Yield/ Cost Average Balance Interest and Dividends Yield/ Cost (Dollars in thousands) Assets: (unaudited) Cash and cash equivalents $ 12,764 $ 168 5.21 % $ 5,912 $ 31 2.05 % Loans 710,725 7,981 4.45 % 670,145 7,019 4.15 % Securities 138,479 1,008 2.91 % 182,626 1,061 2.32 % Other interest-earning assets 6,620 132 8.04 % 6,629 65 3.99 % Total interest-earning assets 868,588 9,289 4.25 % 865,312 8,176 3.75 % Non-interest-earning assets 54,179 51,273 Total assets $ 922,767 $ 916,585 Liabilities and equity: NOW and money market accounts $ 74,785 $ 354 1.88 % $ 138,015 $ 173 0.50 % Savings accounts 46,177 214 1.83 % 60,912 40 0.26 % Certificates of deposit 498,082 4,284 3.41 % 403,223 1,037 1.02 % Total interest-bearing deposits 619,044 4,852 3.11 % 602,150 1,250 0.82 % Federal Home Loan Bank advances (1) 125,344 1,220 3.86 % 128,534 717 2.30 % Total interest-bearing liabilities 744,388 6,072 3.24 % 730,684 1,967 1.08 % Non-interest-bearing deposits 38,257 40,028 Other non-interest-bearing liabilities 1,727 4,232 Total liabilities 784,372 774,944 Total equity 138,395 141,641 Total liabilities and equity $ 922,767 $ 916,585 Net interest income $ 3,217 $ 6,209 Interest rate spread (2) 1.01 % 2.68 % Net interest margin (3) 1.47 % 2.85 % Average interest-earning assets to average interest-bearing liabilities 116.68 % 118.42 % 1. Cash flow hedges are used to manage interest rate risk. During the three months ended September 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. Nine Months Ended September 30, 2023 2022 Average Balance Interest and Dividends Yield/ Cost Average Balance Interest and Dividends Yield/ Cost (Dollars in thousands) Assets: Cash and cash equivalents $ 11,352 $ 423 4.98 % $ 32,485 $ 88 0.36 % Loans 713,603 23,822 4.46 % 612,252 18,404 4.01 % Securities 148,802 3,121 2.80 % 168,081 2,698 2.14 % Other interest-earning assets 6,110 348 7.62 % 5,458 175 4.30 % Total interest-earning assets 879,867 27,714 4.20 % 818,276 21,365 3.49 % Non-interest-earning assets 54,380 52,040 Total assets $ 934,247 $ 870,316 Liabilities and equity: NOW and money market accounts $ 91,781 $ 1,089 1.59 % $ 146,653 $ 610 0.56 % Savings accounts 49,529 375 1.01 % 64,509 126 0.26 % Certificates of deposit 498,460 11,314 3.03 % 369,808 2,189 0.79 % Total interest-bearing deposits 639,770 12,778 2.67 % 580,970 2,925 0.67 % Federal Home Loan Bank advances (1) 110,875 2,900 3.50 % 97,571 1,403 1.92 % Total interest-bearing liabilities 750,645 15,678 2.79 % 678,541 4,328 0.85 % Non-interest-bearing deposits 38,253 44,256 Other non-interest-bearing liabilities 6,351 3,705 Total liabilities 795,249 726,502 Total equity 138,998 143,814 Total liabilities and equity $ 934,247 $ 870,316 Net interest income $ 12,036 $ 17,037 Interest rate spread (2) 1.41 % 2.63 % Net interest margin (3) 1.82 % 2.78 % Average interest-earning assets to average interest-bearing liabilities 117.21 % 120.59 % 1. Cash flow hedges are used to manage interest rate risk. During the nine months ended September 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 September 30, 2023 Nine Months Ended September 30, 2023 Compared to Compared to Three Months Ended September 30, 2022 Nine Months Ended September 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 $ 59 $ 79 $ 138 $ (129 ) $ 463 $ 334 Loans receivable 439 523 962 3,229 2,189 5,418 Securities (1,076 ) 1,023 (53 ) (487 ) 910 423 Other interest earning assets (1 ) 68 67 23 150 173 Total interest-earning assets (579 ) 1,693 1,114 2,636 3,712 6,348 Interest expense: NOW and money market accounts (517 ) 698 181 (430 ) 909 479 Savings accounts (67 ) 241 174 (54 ) 303 249 Certificates of deposit 296 2,951 3,247 997 8,128 9,125 Federal Home Loan Bank advances (124 ) 627 503 213 1,284 1,497 Total interest-bearing liabilities (412 ) 4,517 4,105 726 10,624 11,350 Net increase (decrease) in net interest income $ (167 ) $ (2,824 ) $ (2,991 ) $ 1,910 $ (6,912 ) $ (5,002 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20231101271237/en/Contacts Joseph Coccaro – President & CEO, 201-862-0660 ext. 1110 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Bogota Financial Corp. Reports Results for the Three and Nine Months Ended September 30, 2023 By: Bogota Financial Corp. via Business Wire November 01, 2023 at 16:10 PM EDT Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported net loss for the three months ended September 30, 2023 of $29,000, or $0.00 per basic and diluted share, compared to net income of $1.9 million, or $0.14 per basic and diluted share, for the three months ended September 30, 2022. The Company reported net income for the nine months ended September 30, 2023 of $1.8 million, or $0.14 per basic and diluted shares, compared to net income of $5.0 million, or $0.36 per basic and diluted share, for the nine months ended September 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 September 30, 2023, all shares under this program have been repurchased, including the repurchase of 196,259 shares of stock during the nine months ended September 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 September 30, 2023, 122,301 shares have been repurchased under this program at a cost of $938,000. Other Financial Highlights: Total assets decreased $24.1 million, or 2.5%, to $927.0 million at September 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 $8.1 million, or 48.3%, to $25.0 million at September 30, 2023 from $16.8 million at December 31, 2022. Securities decreased $28.1 million, or 17.3%, to $134.4 million at September 30, 2023 from $162.5 million at December 31, 2022. Net loans decreased $8.7 million, or 1.2%, to $710.3 million at September 30, 2023 from $719.0 million at December 31, 2022. Total deposits were $645.3 million, decreasing $56.1 million, or 8.0%, as compared to $701.4 million at December 31, 2022, primarily due to a $62.4 million decrease in non-interest-bearing deposits, checking, savings and money market accounts, offset by a $6.3 million increase in certificates of deposit. The average rate paid on deposits at September 30, 2023 increased 126 basis points to 3.08% at September 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 $33.0 million, or 32.2% to $135.3 million at September 30, 2023 from $102.3 million as of December 31, 2022. Annualized return on average assets was 0.26% for the nine-month period ended September 30, 2023 compared to 0.76% for nine-month period ended September 30, 2022. Annualized return on average equity was 1.75% for the nine-month period ended September 30, 2023 compared to 4.62% for the nine-month period ended September 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, “The impact of higher interest rates continues to impact our net interest margin. Our net income and return on average assets for the first nine months of 2023 are disappointing when compared to prior periods due to the increase in deposit and borrowing costs exceeding our growth in loan revenue. Currently, because of the interest rate environment, loan opportunities, especially residential and construction have significantly diminished. However, we continue to examine opportunities to grow the balance sheet based on loans that meet our risk tolerance and pricing parameters.” “The Bank continues to be prudent with its lending and interest rate risk management. We remain well-capitalized with substantial reserve sources of liquidity and are managing expenses. We are currently working on a new branch in Upper Saddle River, NJ, which will be the Bank’s seventh stand-alone branch. The Bank anticipates this office will open in December 2023.” Mr. Coccaro further stated, "We will continue to focus on delivering excellent services to our customers. The Company continues to repurchase shares of our common stock which will drive shareholder value." Income Statement Analysis Comparison of Operating Results for the Three Months Ended September 30, 2023 and September 30, 2022 Net income decreased by $2.0 million, or 101.5%, to a net loss of $29,000 for the three months ended September 30, 2023 from net income of $1.9 million for the three months ended September 30, 2022. This decrease was primarily due to a decrease of $3.0 million in net interest income partially offset by a decrease of $175,000 in the provision for credit losses and a decrease of $859,000 in income tax expense. Interest income increased $1.1 million, or 13.6%, from $8.2 million for the three months ended September 30, 2022 to $9.3 million for the three months ended September 30, 2023 due to increases in the average balances and higher yields on interest earning assets. Interest income on cash and cash equivalents increased $138,000, or 460.0%, to $168,000 for the three months ended September 30, 2023 from $30,000 for the three months ended September 30, 2022 due a 316 basis point increase in the average yield from 2.05% for the three months ended September 30, 2022 to 5.21% for the three months ended September 30, 2023 due to the higher interest rate environment. The increase was also due to a $6.9 million increase in the average balance to $12.8 million for the three months ended September 30, 2023 from $5.9 million for the three months ended September 30, 2022, reflecting the increase of liquidity due to lower loan originations. Interest income on loans increased $962,000, or 13.7%, to $8.0 million for the three months ended September 30, 2023 compared to $7.0 million for the three months ended September 30, 2022 due primarily to $40.6 million increase in the average balance to $710.7 million for the three months ended September 30, 2023 from $670.1 million for the three months ended September 30, 2022 and a 30 basis point increase in the average yield from 4.15% for the three months ended September 30, 2022 to 4.45% for the three months ended September 30, 2023. The increase was offset by a $348,000 reserve for nonaccrual interest on a delinquent construction loan. Interest income on securities decreased $53,000, or 5.0%, to $1.0 million for the three months ended September 30, 2023 from $1.1 million for the three months ended September 30, 2022 primarily due to a $44.1 million decrease in the average balance to $138.5 million for the three months ended September 30, 2023 from $182.6 million for the three months ended September 30, 2022 offset by a 59 basis point increase in the average yield from 2.32% for the three months ended September 30, 2022 to 2.91% for the three months ended September 30, 2023. Interest expense increased $4.1 million, or 208.7%, from $2.0 million for the three months ended September 30, 2022 to $6.1 million for the three months ended September 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities. Interest expense on interest-bearing deposits increased $3.6 million, or 288.2%, to $4.9 million for the three months ended September 30, 2023 from $1.3 million for the three months ended September 30, 2022. The increase was due to a 229 basis point increase in the average cost of deposits to 3.11% for the three months ended September 30, 2023 from 0.82% for the three months ended September 30, 2022. 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 $94.9 million to $498.1 million for the three months ended September 30, 2023 from $403.2 million for the three months ended September 30, 2022 while NOW and money market accounts and savings accounts decreased $63.2 million and $14.7 million for the three months ended September 30, 2023, respectively, compared to the three months ended September 30, 2022. Interest expense on Federal Home Loan Bank borrowings increased $503,000, or 70.2%, from $717,000 for the three months ended September 30, 2022 to $1.2 million for the three months ended September 30, 2023. The increase was due to an increase in the average cost of 156 basis points to 3.86% for the three months ended September 30, 2023 from 2.30% for the three months ended September 30, 2022 due to the new borrowings at higher rates. The increase was partially offset by a decrease in the average balance of borrowings of $3.2 million to $125.3 million for the three months ended September 30, 2023 from $128.5 million for the three months ended September 30, 2022. Net interest income decreased $3.0 million, or 48.2%, to $3.2 million for the three months ended September 30, 2023 from $6.2 million for the three months ended September 30, 2022. The decrease reflected a 167 basis point decrease in our net interest rate spread to 1.01% for the three months ended September 30, 2023 from 2.68% for the three months ended September 30, 2022. Our net interest margin decreased 138 basis points to 1.47% for the three months ended September 30, 2023 from 2.85% for the three months ended September 30, 2022. We recorded no provision for credit losses for the three months ended September 30, 2023 compared to a $175,000 provision for loan losses for the three-month period ended September 30, 2022. The Bank had a decrease in the loan portfolio and continues to have no charge-offs. Non-interest income increased by $20,000, or 7.5%, to $290,000 for the three months ended September 30, 2023 from $270,000 for the three months ended September 30, 2022. Bank-owned life insurance income increased $13,000, or 7.0%, due higher balances during 2023. The increase was also due to an increase in fee and service charges of $14,000 due to a higher collection of late charges. For the three months ended September 30, 2023, non-interest expense increased $23,000, or 0.6%, over the comparable 2022 period. Salaries and employee benefits increased $120,000, or 5.6%, due to a higher employee count. Director fees decreased $30,000, or 15.9%, due to lower pension expense. FDIC insurance premiums increased $79,000, or 145.5%, due to a higher assessment rate in 2023. The decrease in advertising expense of $30,000, or 19.3%, was due to reduced promotions for branch locations and less promotions on deposit and loan products. Data processing expense decreased $105,000, or 33.9%, due to lower processing costs. Professional fees decreased $14,000, or 8.7%, due to lower legal expense and other expense decreased $21,000, or 8.1%, due to lower deferred compensation expense and other various expenses. Income tax expense decreased $859,000, or 117.1%, to a benefit of $125,000 for the three months ended September 30, 2023 from a $734,000 expense for the three months ended September 30, 2022. The decrease was due to $2.8 million of lower taxable income. Comparison of Operating Results for the Nine Months Ended September 30, 2023 and September 30, 2022 Net income decreased by $3.2 million, or 63.4%, to $1.8 million for the nine months ended September 30, 2023 from $5.0 million for the nine months ended September 30, 2022. This decrease was primarily due to a decrease of $5.0 million in net interest income, offset by a decrease of $400,000 in the provision for credit losses and a decrease of $1.5 million in income tax expense. Interest income increased $6.3 million, or 29.7%, from $21.4 million for the nine months ended September 30, 2022 to $27.7 million for the nine months ended September 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 $334,000, or 375.3%, to $423,000 for the nine months ended September 30, 2023 from $89,000 for the nine months ended September 30, 2022 due a 462 basis point increase in the average yield from 0.36% for the nine months ended September 30, 2022 to 4.98% for the nine months ended September 30, 2023 due to the higher interest rate environment. This was offset by a $21.1 million decrease in the average balance to $11.4 million for the nine months ended September 30, 2023 from $32.5 million for the nine months ended September 30, 2022, reflecting the use of excess liquidity to fund loan originations and purchase investment securities. Interest income on loans increased $5.4 million, or 29.4%, to $23.8 million for the nine months ended September 30, 2023 compared to $18.4 million for the nine months ended September 30, 2022 due primarily to a $101.4 million increase in the average balance to $713.6 million for the nine months ended September 30, 2023 from $612.3 million for the nine months ended September 30, 2022 and a 45 basis point increase in the average yield from 4.01% for the nine months ended September 30, 2022 to 4.46% for the nine months ended September 30, 2023. The increase was offset by a $1.0 million reserve for nonaccrual interest on a delinquent construction loan. Interest income on securities increased $423,000, or 15.7%, to $3.1 million for the nine months ended September 30, 2023 from $2.7 million for the nine months ended September 30, 2022 due primarily to a 66 basis point increase in the average yield from 2.14% for the nine months ended September 30, 2022 to 2.80% for the nine months ended September 30, 2023. The increase was offset by a $19.3 million decrease in the average balance of securities to $148.8 million for the nine months ended September 30, 2023 from $168.1 million for the nine months ended September 30, 2022. Interest expense increased $11.4 million, or 262.2%, from $4.3 million for the nine months ended September 30, 2022 to $15.7 million for the nine months ended September 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities. Interest expense on interest-bearing deposits increased $9.9 million, or 336.7%, to $12.8 million for the nine months ended September 30, 2023 from $2.9 million for the nine months ended September 30, 2022. The increase was due to a 200 basis point increase in the average cost of interest-bearing deposits to 2.67% for the nine months ended September 30, 2023 from 0.67% for the nine months ended September 30, 2022. 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 $128.7 million to $498.5 million for the nine months ended September 30, 2023 from $369.8 million for the nine months ended September 30, 2022 while NOW and money market accounts and savings accounts decreased $54.9 million and $15.0 million for the nine months ended September 30, 2023, respectively, compared to the nine months ended September 30, 2022. Interest expense on Federal Home Loan Bank borrowings increased $1.5 million, or 106.7%, from $1.4 million for the nine months ended September 30, 2022 to $2.9 million for the nine months ended September 30, 2023. The increase was due to an increase in the average cost of 158 basis points to 3.50% for the nine months ended September 30, 2023 from 1.92% for the nine months ended September 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 $13.3 million to $110.9 million for the nine months ended September 30, 2023 from $97.6 million for the nine months ended September 30, 2022. Net interest income decreased $5.0 million, or 29.4%, to $12.0 million for the nine months ended September 30, 2023 from $17.0 million for the nine months ended September 30, 2022. The increase reflected a 122 basis point decrease in our net interest rate spread to 1.41% for the nine months ended September 30, 2023 from 2.63% for the nine months ended September 30, 2022. Our net interest margin decreased 96 basis points to 1.82% for the nine months ended September 30, 2023 from 2.78% for the nine months ended September 30, 2022. We recorded a $125,000 recovery of credit losses for the nine months ended September 30, 2023 compared to a $275,000 provision for loan losses for the nine-month period ended September 30, 2022. The Bank had a decrease in the loan portfolio as well as no charge-offs offset by increased delinquent and non-performing loans. 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 $12,000, or 1.3%, to $856,000 for the nine months ended September 30, 2023 from $868,000 for the nine months ended September 30, 2022. Gain on sale of loans decreased $58,000, or 66.2%, as loan originations were lower in 2023 due to the higher interest rate environment and the decision to slow loan production to preserve capital and liquidity. Other income decreased $40,000 or 29.8%. These decreases were partially offset by an increase in income from bank-owned life insurance of $64,000, or 12.4%, due to higher balances during 2023. For the nine months ended September 30, 2023, non-interest expense increased $37,000, or 0.3%, over the comparable 2022 period. Salaries and employee benefits increased $421,000, or 6.7%, due to a higher employee count. Director fees decreased $130,000, or 21.3%, due to lower pension expense. FDIC insurance premiums increased $158,000, or 97.3%, due to a higher assessment rate in 2023. Data processing decreased $202,000, or 22.0%, due to the timing of invoices. Other expense decreased $244,000, or 27.0%, due to lower deferred compensation expense and other various expenses. Income taxes decreased $1.5 million, or 79.5%, to a benefit of $386,000 for the nine months ended September 30, 2023 from an expense of $1.9 million for the nine months ended September 30, 2022. The decrease was due to $4.7 million, or 67.8%, of lower taxable income. The effective tax rate for the three and nine months ended September 30, 2023 and 2022 was 17.49% and 27.46%, respectively. Balance Sheet Analysis Total assets were $927.0 million at September 30, 2023, representing a decrease of $24.1 million, or 2.5%, from December 31, 2022. Cash and cash equivalents increased $8.1 million during the period primarily due to loan payments received and proceeds from the call and maturity of securities. Net loans decreased $8.7 million, or 1.2%, due to $55.5 million in repayments, partially offset by new production of $46.8 million. 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 decreased $11.5 million, or 14.9%, and securities available for sale decreased $16.6 million or 19.5%, due to the repayments of mortgage-backed securities and maturities of corporate bonds. Delinquent loans increased $18.0 million to $19.5 million, or 2.74% of total loans, at September 30, 2023. The increase was mostly 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 $12.3 million and were 1.33% of total assets at September 30, 2023. The Company’s allowance for credit losses was 0.39% of total loans and 22.62% of non-performing loans at September 30, 2023 compared to 0.36% of total loans and 136.3% of non-performing loans at December 31, 2022. The Bank does not have any exposure to commercial real estate loans secured by office space. Total liabilities decreased $22.1 million, or 2.7%, to $789.4 million mainly due to a $56.1 million decrease in deposits, offset by a $33.0 million increase in borrowings. Total deposits decreased $56.1 million, or 8.0%, to $645.3 million at September 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 $56.2 million from $170.2 million at December 31, 2022 to $114.0 million at September 30, 2023, offset by an increase in certificate of deposit accounts, which increased by $6.3 million to $498.9 million from $492.6 million at December 31, 2022. At September 30, 2023, uninsured deposits represented 8.4% of the Bank’s total deposits. Federal Home Loan Bank advances increased $33.0 million, or 32.2%, to fund loan growth and deposit outflows. Total borrowing capacity at the Federal Home Loan Bank is $320.2 million of which $135.3 million is advanced. Total stockholders’ equity decreased $2.0 million to $137.7 million, due to increased accumulated other comprehensive loss for securities available for sale of $1.4 million and the repurchase of 318,560 shares of stock during the period at a cost of $3.0 million, offset by net income of $1.8 million for the nine months ended September 30, 2023. At September 30, 2023, the Company’s ratio of total stockholders’ equity adjusted for AOCI to total assets adjusted for the allowance for credit losses was 15.67%, compared to 17.08% at September 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, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the impact of a potential government shutdown, 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 September 30, 2023 December 31, 2022 Assets Cash and due from banks $ 7,213,903 $ 8,160,028 Interest-bearing deposits in other banks 17,763,418 8,680,889 Cash and cash equivalents 24,977,321 16,840,917 Securities available for sale, at fair value 68,518,624 85,100,578 Securities held to maturity (fair value of $57,033,705 and $70,699,651, respectively) 65,927,156 77,427,309 Loans, net of allowance of $2,785,949 and $2,578,174, respectively 710,292,859 719,025,762 Premises and equipment, net 7,765,804 7,884,335 Federal Home Loan Bank (FHLB) stock and other restricted securities 7,158,400 5,490,900 Accrued interest receivable 3,672,882 3,966,651 Core deposit intangibles 220,661 267,272 Bank-owned life insurance 30,780,398 30,206,325 Other assets 7,714,828 4,888,954 Total Assets $ 927,028,933 $ 951,099,003 Liabilities and Equity Non-interest bearing deposits $ 33,420,666 $ 38,653,349 Interest bearing deposits 611,857,823 662,758,100 Total deposits 645,278,489 701,411,449 FHLB advances-short term 39,000,000 59,000,000 FHLB advances-long term 96,314,543 43,319,254 Advance payments by borrowers for taxes and insurance 3,460,726 3,174,661 Other liabilities 5,321,920 4,534,516 Total liabilities 789,375,678 811,439,880 Stockholders’ Equity Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at September 30, 2023 and December 31, 2022 — — Common stock $0.01 par value, 30,000,000 shares authorized, 13,373,766 issued and outstanding at September 30, 2023 and 13,699,016 at December 31, 2022 133,737 136,989 Additional paid-in capital 56,688,749 59,099,476 Retained earnings 93,354,828 91,756,673 Unearned ESOP shares (416,491 shares at September 30, 2023 and 436,945 shares at December 31, 2022) (4,897,099 ) (5,123,002 ) Accumulated other comprehensive loss (7,626,960 ) (6,211,013 ) Total stockholders’ equity 137,653,255 139,659,123 Total liabilities and stockholders’ equity $ 927,028,933 $ 951,099,003 BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Interest income Loans, including fees $ 7,980,388 $ 7,018,200 $ 23,821,545 $ 18,403,802 Securities Taxable 994,791 1,013,034 3,042,389 2,582,869 Tax-exempt 13,159 48,027 78,293 115,305 Other interest-earning assets 301,081 96,139 771,584 263,634 Total interest income 9,289,419 8,175,400 27,713,811 21,365,610 Interest expense Deposits 4,851,926 1,249,693 12,777,907 2,925,685 FHLB advances 1,220,166 716,705 2,900,359 1,402,741 Total interest expense 6,072,092 1,966,398 15,678,266 4,328,426 Net interest income 3,217,327 6,209,002 12,035,545 17,037,184 Provision (recovery) for credit losses — 175,000 (125,000 ) 275,000 Net interest income after (recovery) provision for credit losses �� 3,217,327 6,034,002 12,160,545 16,762,184 Non-interest income Fees and service charges 61,529 47,090 159,381 136,886 Gain on sale of loans — — 29,375 86,913 Bank-owned life insurance 197,873 185,085 574,073 510,527 Other 30,332 37,336 93,660 133,325 Total non-interest income 289,734 269,511 856,489 867,651 Non-interest expense Salaries and employee benefits 2,274,347 2,154,654 6,737,952 6,316,898 Occupancy and equipment 372,626 347,036 1,114,170 1,033,846 FDIC insurance assessment 132,571 54,000 319,690 162,000 Data processing 205,721 311,106 717,913 920,293 Advertising 126,000 156,145 369,383 368,435 Director fees 159,336 189,424 478,011 607,749 Professional fees 149,251 163,500 412,519 459,253 Other 241,530 262,890 661,300 905,428 Total non-interest expense 3,661,382 3,638,755 10,810,938 10,773,902 Income (loss) before income taxes (154,321 ) 2,664,758 2,206,096 6,855,933 Income tax (benefit) expense (125,268 ) 734,152 385,801 1,882,423 Net (loss) income $ (29,053 ) $ 1,930,606 $ 1,820,295 $ 4,973,510 Earnings per Share - basic $ (0.00 ) $ 0.14 $ 0.14 $ 0.36 Earnings per Share - diluted $ (0.00 ) $ 0.14 $ 0.14 $ 0.36 Weighted average shares outstanding - basic 13,037,903 13,468,751 13,103,951 13,661,851 Weighted average shares outstanding - diluted 13,037,903 13,529,857 13,103,951 13,704,688 BOGOTA FINANCIAL CORP. SELECTED RATIOS (unaudited) At or For the Three Months At or for the Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Performance Ratios (1): Return (loss) on average assets (2) (0.01 )% 0.95 % 0.26 % 0.76 % Return (loss) on average equity (3) (0.08 )% 5.56 % 1.75 % 4.62 % Interest rate spread (4) 1.01 % 2.68 % 1.41 % 2.63 % Net interest margin (5) 1.47 % 2.85 % 1.82 % 2.78 % Efficiency ratio (6) 104.40 % 56.17 % 83.05 % 60.17 % Average interest-earning assets to average interest-bearing liabilities 116.68 % 118.42 % 117.21 % 120.59 % Net loans to deposits 110.08 % 105.83 % 110.08 % 105.83 % Average equity to assets (7) 15.00 % 14.91 % 14.88 % 16.52 % Capital Ratios: Tier 1 capital to average assets 15.67 % 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 22.62 % 128.84 % Net charge-offs to average outstanding loans during the period 0.00 % 0.00 % Non-performing loans as a percent of total loans 1.73 % 0.27 % Non-performing assets as a percent of total assets 1.33 % 0.20 % (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 September 30, 2023 and December 31, 2022: September 30, December 31, 2023 2022 (unaudited) Real estate: Residential First Mortgage $ 459,635,136 $ 466,100,627 Commercial and Multi-Family Real Estate 167,767,921 162,338,669 Construction 51,537,604 61,825,478 Commercial and Industrial 5,697,696 1,684,189 Consumer: Home Equity and Other Consumer 28,440,451 29,654,973 Total loans 713,078,808 721,603,936 Allowance for credit losses (2,785,949 ) (2,578,174 ) Net loans $ 710,292,859 $ 719,025,762 The following tables set forth the distribution of total deposit accounts, by account type, at the dates indicated. At September 30, At December 31, 2023 2022 Amount Percent Average Rate Amount Percent Average Rate �� (unaudited) Noninterest bearing demand accounts $ 32,353,920 5.01 % — % $ 38,653,472 5.52 % — % NOW accounts 49,142,170 7.62 2.11 82,720,214 11.79 0.88 Money market accounts 17,627,118 2.73 0.31 30,037,106 4.28 0.32 Savings accounts 47,237,005 7.32 1.77 57,407,955 8.18 0.49 Certificates of deposit 498,918,276 77.32 3.60 492,592,702 70.23 2.37 Total $ 645,278,489 100.00 % 3.08 % $ 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 September 30, 2023 2022 Average Balance Interest and Dividends Yield/ Cost Average Balance Interest and Dividends Yield/ Cost (Dollars in thousands) Assets: (unaudited) Cash and cash equivalents $ 12,764 $ 168 5.21 % $ 5,912 $ 31 2.05 % Loans 710,725 7,981 4.45 % 670,145 7,019 4.15 % Securities 138,479 1,008 2.91 % 182,626 1,061 2.32 % Other interest-earning assets 6,620 132 8.04 % 6,629 65 3.99 % Total interest-earning assets 868,588 9,289 4.25 % 865,312 8,176 3.75 % Non-interest-earning assets 54,179 51,273 Total assets $ 922,767 $ 916,585 Liabilities and equity: NOW and money market accounts $ 74,785 $ 354 1.88 % $ 138,015 $ 173 0.50 % Savings accounts 46,177 214 1.83 % 60,912 40 0.26 % Certificates of deposit 498,082 4,284 3.41 % 403,223 1,037 1.02 % Total interest-bearing deposits 619,044 4,852 3.11 % 602,150 1,250 0.82 % Federal Home Loan Bank advances (1) 125,344 1,220 3.86 % 128,534 717 2.30 % Total interest-bearing liabilities 744,388 6,072 3.24 % 730,684 1,967 1.08 % Non-interest-bearing deposits 38,257 40,028 Other non-interest-bearing liabilities 1,727 4,232 Total liabilities 784,372 774,944 Total equity 138,395 141,641 Total liabilities and equity $ 922,767 $ 916,585 Net interest income $ 3,217 $ 6,209 Interest rate spread (2) 1.01 % 2.68 % Net interest margin (3) 1.47 % 2.85 % Average interest-earning assets to average interest-bearing liabilities 116.68 % 118.42 % 1. Cash flow hedges are used to manage interest rate risk. During the three months ended September 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. Nine Months Ended September 30, 2023 2022 Average Balance Interest and Dividends Yield/ Cost Average Balance Interest and Dividends Yield/ Cost (Dollars in thousands) Assets: Cash and cash equivalents $ 11,352 $ 423 4.98 % $ 32,485 $ 88 0.36 % Loans 713,603 23,822 4.46 % 612,252 18,404 4.01 % Securities 148,802 3,121 2.80 % 168,081 2,698 2.14 % Other interest-earning assets 6,110 348 7.62 % 5,458 175 4.30 % Total interest-earning assets 879,867 27,714 4.20 % 818,276 21,365 3.49 % Non-interest-earning assets 54,380 52,040 Total assets $ 934,247 $ 870,316 Liabilities and equity: NOW and money market accounts $ 91,781 $ 1,089 1.59 % $ 146,653 $ 610 0.56 % Savings accounts 49,529 375 1.01 % 64,509 126 0.26 % Certificates of deposit 498,460 11,314 3.03 % 369,808 2,189 0.79 % Total interest-bearing deposits 639,770 12,778 2.67 % 580,970 2,925 0.67 % Federal Home Loan Bank advances (1) 110,875 2,900 3.50 % 97,571 1,403 1.92 % Total interest-bearing liabilities 750,645 15,678 2.79 % 678,541 4,328 0.85 % Non-interest-bearing deposits 38,253 44,256 Other non-interest-bearing liabilities 6,351 3,705 Total liabilities 795,249 726,502 Total equity 138,998 143,814 Total liabilities and equity $ 934,247 $ 870,316 Net interest income $ 12,036 $ 17,037 Interest rate spread (2) 1.41 % 2.63 % Net interest margin (3) 1.82 % 2.78 % Average interest-earning assets to average interest-bearing liabilities 117.21 % 120.59 % 1. Cash flow hedges are used to manage interest rate risk. During the nine months ended September 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 September 30, 2023 Nine Months Ended September 30, 2023 Compared to Compared to Three Months Ended September 30, 2022 Nine Months Ended September 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 $ 59 $ 79 $ 138 $ (129 ) $ 463 $ 334 Loans receivable 439 523 962 3,229 2,189 5,418 Securities (1,076 ) 1,023 (53 ) (487 ) 910 423 Other interest earning assets (1 ) 68 67 23 150 173 Total interest-earning assets (579 ) 1,693 1,114 2,636 3,712 6,348 Interest expense: NOW and money market accounts (517 ) 698 181 (430 ) 909 479 Savings accounts (67 ) 241 174 (54 ) 303 249 Certificates of deposit 296 2,951 3,247 997 8,128 9,125 Federal Home Loan Bank advances (124 ) 627 503 213 1,284 1,497 Total interest-bearing liabilities (412 ) 4,517 4,105 726 10,624 11,350 Net increase (decrease) in net interest income $ (167 ) $ (2,824 ) $ (2,991 ) $ 1,910 $ (6,912 ) $ (5,002 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20231101271237/en/Contacts Joseph Coccaro – President & CEO, 201-862-0660 ext. 1110
Bogota Financial Corp. (NASDAQ: BSBK) (the “Company”), the holding company for Bogota Savings Bank (the “Bank”), reported net loss for the three months ended September 30, 2023 of $29,000, or $0.00 per basic and diluted share, compared to net income of $1.9 million, or $0.14 per basic and diluted share, for the three months ended September 30, 2022. The Company reported net income for the nine months ended September 30, 2023 of $1.8 million, or $0.14 per basic and diluted shares, compared to net income of $5.0 million, or $0.36 per basic and diluted share, for the nine months ended September 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 September 30, 2023, all shares under this program have been repurchased, including the repurchase of 196,259 shares of stock during the nine months ended September 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 September 30, 2023, 122,301 shares have been repurchased under this program at a cost of $938,000. Other Financial Highlights: Total assets decreased $24.1 million, or 2.5%, to $927.0 million at September 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 $8.1 million, or 48.3%, to $25.0 million at September 30, 2023 from $16.8 million at December 31, 2022. Securities decreased $28.1 million, or 17.3%, to $134.4 million at September 30, 2023 from $162.5 million at December 31, 2022. Net loans decreased $8.7 million, or 1.2%, to $710.3 million at September 30, 2023 from $719.0 million at December 31, 2022. Total deposits were $645.3 million, decreasing $56.1 million, or 8.0%, as compared to $701.4 million at December 31, 2022, primarily due to a $62.4 million decrease in non-interest-bearing deposits, checking, savings and money market accounts, offset by a $6.3 million increase in certificates of deposit. The average rate paid on deposits at September 30, 2023 increased 126 basis points to 3.08% at September 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 $33.0 million, or 32.2% to $135.3 million at September 30, 2023 from $102.3 million as of December 31, 2022. Annualized return on average assets was 0.26% for the nine-month period ended September 30, 2023 compared to 0.76% for nine-month period ended September 30, 2022. Annualized return on average equity was 1.75% for the nine-month period ended September 30, 2023 compared to 4.62% for the nine-month period ended September 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, “The impact of higher interest rates continues to impact our net interest margin. Our net income and return on average assets for the first nine months of 2023 are disappointing when compared to prior periods due to the increase in deposit and borrowing costs exceeding our growth in loan revenue. Currently, because of the interest rate environment, loan opportunities, especially residential and construction have significantly diminished. However, we continue to examine opportunities to grow the balance sheet based on loans that meet our risk tolerance and pricing parameters.” “The Bank continues to be prudent with its lending and interest rate risk management. We remain well-capitalized with substantial reserve sources of liquidity and are managing expenses. We are currently working on a new branch in Upper Saddle River, NJ, which will be the Bank’s seventh stand-alone branch. The Bank anticipates this office will open in December 2023.” Mr. Coccaro further stated, "We will continue to focus on delivering excellent services to our customers. The Company continues to repurchase shares of our common stock which will drive shareholder value." Income Statement Analysis Comparison of Operating Results for the Three Months Ended September 30, 2023 and September 30, 2022 Net income decreased by $2.0 million, or 101.5%, to a net loss of $29,000 for the three months ended September 30, 2023 from net income of $1.9 million for the three months ended September 30, 2022. This decrease was primarily due to a decrease of $3.0 million in net interest income partially offset by a decrease of $175,000 in the provision for credit losses and a decrease of $859,000 in income tax expense. Interest income increased $1.1 million, or 13.6%, from $8.2 million for the three months ended September 30, 2022 to $9.3 million for the three months ended September 30, 2023 due to increases in the average balances and higher yields on interest earning assets. Interest income on cash and cash equivalents increased $138,000, or 460.0%, to $168,000 for the three months ended September 30, 2023 from $30,000 for the three months ended September 30, 2022 due a 316 basis point increase in the average yield from 2.05% for the three months ended September 30, 2022 to 5.21% for the three months ended September 30, 2023 due to the higher interest rate environment. The increase was also due to a $6.9 million increase in the average balance to $12.8 million for the three months ended September 30, 2023 from $5.9 million for the three months ended September 30, 2022, reflecting the increase of liquidity due to lower loan originations. Interest income on loans increased $962,000, or 13.7%, to $8.0 million for the three months ended September 30, 2023 compared to $7.0 million for the three months ended September 30, 2022 due primarily to $40.6 million increase in the average balance to $710.7 million for the three months ended September 30, 2023 from $670.1 million for the three months ended September 30, 2022 and a 30 basis point increase in the average yield from 4.15% for the three months ended September 30, 2022 to 4.45% for the three months ended September 30, 2023. The increase was offset by a $348,000 reserve for nonaccrual interest on a delinquent construction loan. Interest income on securities decreased $53,000, or 5.0%, to $1.0 million for the three months ended September 30, 2023 from $1.1 million for the three months ended September 30, 2022 primarily due to a $44.1 million decrease in the average balance to $138.5 million for the three months ended September 30, 2023 from $182.6 million for the three months ended September 30, 2022 offset by a 59 basis point increase in the average yield from 2.32% for the three months ended September 30, 2022 to 2.91% for the three months ended September 30, 2023. Interest expense increased $4.1 million, or 208.7%, from $2.0 million for the three months ended September 30, 2022 to $6.1 million for the three months ended September 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities. Interest expense on interest-bearing deposits increased $3.6 million, or 288.2%, to $4.9 million for the three months ended September 30, 2023 from $1.3 million for the three months ended September 30, 2022. The increase was due to a 229 basis point increase in the average cost of deposits to 3.11% for the three months ended September 30, 2023 from 0.82% for the three months ended September 30, 2022. 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 $94.9 million to $498.1 million for the three months ended September 30, 2023 from $403.2 million for the three months ended September 30, 2022 while NOW and money market accounts and savings accounts decreased $63.2 million and $14.7 million for the three months ended September 30, 2023, respectively, compared to the three months ended September 30, 2022. Interest expense on Federal Home Loan Bank borrowings increased $503,000, or 70.2%, from $717,000 for the three months ended September 30, 2022 to $1.2 million for the three months ended September 30, 2023. The increase was due to an increase in the average cost of 156 basis points to 3.86% for the three months ended September 30, 2023 from 2.30% for the three months ended September 30, 2022 due to the new borrowings at higher rates. The increase was partially offset by a decrease in the average balance of borrowings of $3.2 million to $125.3 million for the three months ended September 30, 2023 from $128.5 million for the three months ended September 30, 2022. Net interest income decreased $3.0 million, or 48.2%, to $3.2 million for the three months ended September 30, 2023 from $6.2 million for the three months ended September 30, 2022. The decrease reflected a 167 basis point decrease in our net interest rate spread to 1.01% for the three months ended September 30, 2023 from 2.68% for the three months ended September 30, 2022. Our net interest margin decreased 138 basis points to 1.47% for the three months ended September 30, 2023 from 2.85% for the three months ended September 30, 2022. We recorded no provision for credit losses for the three months ended September 30, 2023 compared to a $175,000 provision for loan losses for the three-month period ended September 30, 2022. The Bank had a decrease in the loan portfolio and continues to have no charge-offs. Non-interest income increased by $20,000, or 7.5%, to $290,000 for the three months ended September 30, 2023 from $270,000 for the three months ended September 30, 2022. Bank-owned life insurance income increased $13,000, or 7.0%, due higher balances during 2023. The increase was also due to an increase in fee and service charges of $14,000 due to a higher collection of late charges. For the three months ended September 30, 2023, non-interest expense increased $23,000, or 0.6%, over the comparable 2022 period. Salaries and employee benefits increased $120,000, or 5.6%, due to a higher employee count. Director fees decreased $30,000, or 15.9%, due to lower pension expense. FDIC insurance premiums increased $79,000, or 145.5%, due to a higher assessment rate in 2023. The decrease in advertising expense of $30,000, or 19.3%, was due to reduced promotions for branch locations and less promotions on deposit and loan products. Data processing expense decreased $105,000, or 33.9%, due to lower processing costs. Professional fees decreased $14,000, or 8.7%, due to lower legal expense and other expense decreased $21,000, or 8.1%, due to lower deferred compensation expense and other various expenses. Income tax expense decreased $859,000, or 117.1%, to a benefit of $125,000 for the three months ended September 30, 2023 from a $734,000 expense for the three months ended September 30, 2022. The decrease was due to $2.8 million of lower taxable income. Comparison of Operating Results for the Nine Months Ended September 30, 2023 and September 30, 2022 Net income decreased by $3.2 million, or 63.4%, to $1.8 million for the nine months ended September 30, 2023 from $5.0 million for the nine months ended September 30, 2022. This decrease was primarily due to a decrease of $5.0 million in net interest income, offset by a decrease of $400,000 in the provision for credit losses and a decrease of $1.5 million in income tax expense. Interest income increased $6.3 million, or 29.7%, from $21.4 million for the nine months ended September 30, 2022 to $27.7 million for the nine months ended September 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 $334,000, or 375.3%, to $423,000 for the nine months ended September 30, 2023 from $89,000 for the nine months ended September 30, 2022 due a 462 basis point increase in the average yield from 0.36% for the nine months ended September 30, 2022 to 4.98% for the nine months ended September 30, 2023 due to the higher interest rate environment. This was offset by a $21.1 million decrease in the average balance to $11.4 million for the nine months ended September 30, 2023 from $32.5 million for the nine months ended September 30, 2022, reflecting the use of excess liquidity to fund loan originations and purchase investment securities. Interest income on loans increased $5.4 million, or 29.4%, to $23.8 million for the nine months ended September 30, 2023 compared to $18.4 million for the nine months ended September 30, 2022 due primarily to a $101.4 million increase in the average balance to $713.6 million for the nine months ended September 30, 2023 from $612.3 million for the nine months ended September 30, 2022 and a 45 basis point increase in the average yield from 4.01% for the nine months ended September 30, 2022 to 4.46% for the nine months ended September 30, 2023. The increase was offset by a $1.0 million reserve for nonaccrual interest on a delinquent construction loan. Interest income on securities increased $423,000, or 15.7%, to $3.1 million for the nine months ended September 30, 2023 from $2.7 million for the nine months ended September 30, 2022 due primarily to a 66 basis point increase in the average yield from 2.14% for the nine months ended September 30, 2022 to 2.80% for the nine months ended September 30, 2023. The increase was offset by a $19.3 million decrease in the average balance of securities to $148.8 million for the nine months ended September 30, 2023 from $168.1 million for the nine months ended September 30, 2022. Interest expense increased $11.4 million, or 262.2%, from $4.3 million for the nine months ended September 30, 2022 to $15.7 million for the nine months ended September 30, 2023 due to increases in the average balance of and higher costs on interest-bearing liabilities. Interest expense on interest-bearing deposits increased $9.9 million, or 336.7%, to $12.8 million for the nine months ended September 30, 2023 from $2.9 million for the nine months ended September 30, 2022. The increase was due to a 200 basis point increase in the average cost of interest-bearing deposits to 2.67% for the nine months ended September 30, 2023 from 0.67% for the nine months ended September 30, 2022. 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 $128.7 million to $498.5 million for the nine months ended September 30, 2023 from $369.8 million for the nine months ended September 30, 2022 while NOW and money market accounts and savings accounts decreased $54.9 million and $15.0 million for the nine months ended September 30, 2023, respectively, compared to the nine months ended September 30, 2022. Interest expense on Federal Home Loan Bank borrowings increased $1.5 million, or 106.7%, from $1.4 million for the nine months ended September 30, 2022 to $2.9 million for the nine months ended September 30, 2023. The increase was due to an increase in the average cost of 158 basis points to 3.50% for the nine months ended September 30, 2023 from 1.92% for the nine months ended September 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 $13.3 million to $110.9 million for the nine months ended September 30, 2023 from $97.6 million for the nine months ended September 30, 2022. Net interest income decreased $5.0 million, or 29.4%, to $12.0 million for the nine months ended September 30, 2023 from $17.0 million for the nine months ended September 30, 2022. The increase reflected a 122 basis point decrease in our net interest rate spread to 1.41% for the nine months ended September 30, 2023 from 2.63% for the nine months ended September 30, 2022. Our net interest margin decreased 96 basis points to 1.82% for the nine months ended September 30, 2023 from 2.78% for the nine months ended September 30, 2022. We recorded a $125,000 recovery of credit losses for the nine months ended September 30, 2023 compared to a $275,000 provision for loan losses for the nine-month period ended September 30, 2022. The Bank had a decrease in the loan portfolio as well as no charge-offs offset by increased delinquent and non-performing loans. 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 $12,000, or 1.3%, to $856,000 for the nine months ended September 30, 2023 from $868,000 for the nine months ended September 30, 2022. Gain on sale of loans decreased $58,000, or 66.2%, as loan originations were lower in 2023 due to the higher interest rate environment and the decision to slow loan production to preserve capital and liquidity. Other income decreased $40,000 or 29.8%. These decreases were partially offset by an increase in income from bank-owned life insurance of $64,000, or 12.4%, due to higher balances during 2023. For the nine months ended September 30, 2023, non-interest expense increased $37,000, or 0.3%, over the comparable 2022 period. Salaries and employee benefits increased $421,000, or 6.7%, due to a higher employee count. Director fees decreased $130,000, or 21.3%, due to lower pension expense. FDIC insurance premiums increased $158,000, or 97.3%, due to a higher assessment rate in 2023. Data processing decreased $202,000, or 22.0%, due to the timing of invoices. Other expense decreased $244,000, or 27.0%, due to lower deferred compensation expense and other various expenses. Income taxes decreased $1.5 million, or 79.5%, to a benefit of $386,000 for the nine months ended September 30, 2023 from an expense of $1.9 million for the nine months ended September 30, 2022. The decrease was due to $4.7 million, or 67.8%, of lower taxable income. The effective tax rate for the three and nine months ended September 30, 2023 and 2022 was 17.49% and 27.46%, respectively. Balance Sheet Analysis Total assets were $927.0 million at September 30, 2023, representing a decrease of $24.1 million, or 2.5%, from December 31, 2022. Cash and cash equivalents increased $8.1 million during the period primarily due to loan payments received and proceeds from the call and maturity of securities. Net loans decreased $8.7 million, or 1.2%, due to $55.5 million in repayments, partially offset by new production of $46.8 million. 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 decreased $11.5 million, or 14.9%, and securities available for sale decreased $16.6 million or 19.5%, due to the repayments of mortgage-backed securities and maturities of corporate bonds. Delinquent loans increased $18.0 million to $19.5 million, or 2.74% of total loans, at September 30, 2023. The increase was mostly 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 $12.3 million and were 1.33% of total assets at September 30, 2023. The Company’s allowance for credit losses was 0.39% of total loans and 22.62% of non-performing loans at September 30, 2023 compared to 0.36% of total loans and 136.3% of non-performing loans at December 31, 2022. The Bank does not have any exposure to commercial real estate loans secured by office space. Total liabilities decreased $22.1 million, or 2.7%, to $789.4 million mainly due to a $56.1 million decrease in deposits, offset by a $33.0 million increase in borrowings. Total deposits decreased $56.1 million, or 8.0%, to $645.3 million at September 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 $56.2 million from $170.2 million at December 31, 2022 to $114.0 million at September 30, 2023, offset by an increase in certificate of deposit accounts, which increased by $6.3 million to $498.9 million from $492.6 million at December 31, 2022. At September 30, 2023, uninsured deposits represented 8.4% of the Bank’s total deposits. Federal Home Loan Bank advances increased $33.0 million, or 32.2%, to fund loan growth and deposit outflows. Total borrowing capacity at the Federal Home Loan Bank is $320.2 million of which $135.3 million is advanced. Total stockholders’ equity decreased $2.0 million to $137.7 million, due to increased accumulated other comprehensive loss for securities available for sale of $1.4 million and the repurchase of 318,560 shares of stock during the period at a cost of $3.0 million, offset by net income of $1.8 million for the nine months ended September 30, 2023. At September 30, 2023, the Company’s ratio of total stockholders’ equity adjusted for AOCI to total assets adjusted for the allowance for credit losses was 15.67%, compared to 17.08% at September 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, the current or anticipated impact of military conflict, terrorism or other geopolitical events, the impact of a potential government shutdown, 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 September 30, 2023 December 31, 2022 Assets Cash and due from banks $ 7,213,903 $ 8,160,028 Interest-bearing deposits in other banks 17,763,418 8,680,889 Cash and cash equivalents 24,977,321 16,840,917 Securities available for sale, at fair value 68,518,624 85,100,578 Securities held to maturity (fair value of $57,033,705 and $70,699,651, respectively) 65,927,156 77,427,309 Loans, net of allowance of $2,785,949 and $2,578,174, respectively 710,292,859 719,025,762 Premises and equipment, net 7,765,804 7,884,335 Federal Home Loan Bank (FHLB) stock and other restricted securities 7,158,400 5,490,900 Accrued interest receivable 3,672,882 3,966,651 Core deposit intangibles 220,661 267,272 Bank-owned life insurance 30,780,398 30,206,325 Other assets 7,714,828 4,888,954 Total Assets $ 927,028,933 $ 951,099,003 Liabilities and Equity Non-interest bearing deposits $ 33,420,666 $ 38,653,349 Interest bearing deposits 611,857,823 662,758,100 Total deposits 645,278,489 701,411,449 FHLB advances-short term 39,000,000 59,000,000 FHLB advances-long term 96,314,543 43,319,254 Advance payments by borrowers for taxes and insurance 3,460,726 3,174,661 Other liabilities 5,321,920 4,534,516 Total liabilities 789,375,678 811,439,880 Stockholders’ Equity Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at September 30, 2023 and December 31, 2022 — — Common stock $0.01 par value, 30,000,000 shares authorized, 13,373,766 issued and outstanding at September 30, 2023 and 13,699,016 at December 31, 2022 133,737 136,989 Additional paid-in capital 56,688,749 59,099,476 Retained earnings 93,354,828 91,756,673 Unearned ESOP shares (416,491 shares at September 30, 2023 and 436,945 shares at December 31, 2022) (4,897,099 ) (5,123,002 ) Accumulated other comprehensive loss (7,626,960 ) (6,211,013 ) Total stockholders’ equity 137,653,255 139,659,123 Total liabilities and stockholders’ equity $ 927,028,933 $ 951,099,003 BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Interest income Loans, including fees $ 7,980,388 $ 7,018,200 $ 23,821,545 $ 18,403,802 Securities Taxable 994,791 1,013,034 3,042,389 2,582,869 Tax-exempt 13,159 48,027 78,293 115,305 Other interest-earning assets 301,081 96,139 771,584 263,634 Total interest income 9,289,419 8,175,400 27,713,811 21,365,610 Interest expense Deposits 4,851,926 1,249,693 12,777,907 2,925,685 FHLB advances 1,220,166 716,705 2,900,359 1,402,741 Total interest expense 6,072,092 1,966,398 15,678,266 4,328,426 Net interest income 3,217,327 6,209,002 12,035,545 17,037,184 Provision (recovery) for credit losses — 175,000 (125,000 ) 275,000 Net interest income after (recovery) provision for credit losses �� 3,217,327 6,034,002 12,160,545 16,762,184 Non-interest income Fees and service charges 61,529 47,090 159,381 136,886 Gain on sale of loans — — 29,375 86,913 Bank-owned life insurance 197,873 185,085 574,073 510,527 Other 30,332 37,336 93,660 133,325 Total non-interest income 289,734 269,511 856,489 867,651 Non-interest expense Salaries and employee benefits 2,274,347 2,154,654 6,737,952 6,316,898 Occupancy and equipment 372,626 347,036 1,114,170 1,033,846 FDIC insurance assessment 132,571 54,000 319,690 162,000 Data processing 205,721 311,106 717,913 920,293 Advertising 126,000 156,145 369,383 368,435 Director fees 159,336 189,424 478,011 607,749 Professional fees 149,251 163,500 412,519 459,253 Other 241,530 262,890 661,300 905,428 Total non-interest expense 3,661,382 3,638,755 10,810,938 10,773,902 Income (loss) before income taxes (154,321 ) 2,664,758 2,206,096 6,855,933 Income tax (benefit) expense (125,268 ) 734,152 385,801 1,882,423 Net (loss) income $ (29,053 ) $ 1,930,606 $ 1,820,295 $ 4,973,510 Earnings per Share - basic $ (0.00 ) $ 0.14 $ 0.14 $ 0.36 Earnings per Share - diluted $ (0.00 ) $ 0.14 $ 0.14 $ 0.36 Weighted average shares outstanding - basic 13,037,903 13,468,751 13,103,951 13,661,851 Weighted average shares outstanding - diluted 13,037,903 13,529,857 13,103,951 13,704,688 BOGOTA FINANCIAL CORP. SELECTED RATIOS (unaudited) At or For the Three Months At or for the Nine Months Ended September 30, Ended September 30, 2023 2022 2023 2022 Performance Ratios (1): Return (loss) on average assets (2) (0.01 )% 0.95 % 0.26 % 0.76 % Return (loss) on average equity (3) (0.08 )% 5.56 % 1.75 % 4.62 % Interest rate spread (4) 1.01 % 2.68 % 1.41 % 2.63 % Net interest margin (5) 1.47 % 2.85 % 1.82 % 2.78 % Efficiency ratio (6) 104.40 % 56.17 % 83.05 % 60.17 % Average interest-earning assets to average interest-bearing liabilities 116.68 % 118.42 % 117.21 % 120.59 % Net loans to deposits 110.08 % 105.83 % 110.08 % 105.83 % Average equity to assets (7) 15.00 % 14.91 % 14.88 % 16.52 % Capital Ratios: Tier 1 capital to average assets 15.67 % 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 22.62 % 128.84 % Net charge-offs to average outstanding loans during the period 0.00 % 0.00 % Non-performing loans as a percent of total loans 1.73 % 0.27 % Non-performing assets as a percent of total assets 1.33 % 0.20 % (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 September 30, 2023 and December 31, 2022: September 30, December 31, 2023 2022 (unaudited) Real estate: Residential First Mortgage $ 459,635,136 $ 466,100,627 Commercial and Multi-Family Real Estate 167,767,921 162,338,669 Construction 51,537,604 61,825,478 Commercial and Industrial 5,697,696 1,684,189 Consumer: Home Equity and Other Consumer 28,440,451 29,654,973 Total loans 713,078,808 721,603,936 Allowance for credit losses (2,785,949 ) (2,578,174 ) Net loans $ 710,292,859 $ 719,025,762 The following tables set forth the distribution of total deposit accounts, by account type, at the dates indicated. At September 30, At December 31, 2023 2022 Amount Percent Average Rate Amount Percent Average Rate �� (unaudited) Noninterest bearing demand accounts $ 32,353,920 5.01 % — % $ 38,653,472 5.52 % — % NOW accounts 49,142,170 7.62 2.11 82,720,214 11.79 0.88 Money market accounts 17,627,118 2.73 0.31 30,037,106 4.28 0.32 Savings accounts 47,237,005 7.32 1.77 57,407,955 8.18 0.49 Certificates of deposit 498,918,276 77.32 3.60 492,592,702 70.23 2.37 Total $ 645,278,489 100.00 % 3.08 % $ 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 September 30, 2023 2022 Average Balance Interest and Dividends Yield/ Cost Average Balance Interest and Dividends Yield/ Cost (Dollars in thousands) Assets: (unaudited) Cash and cash equivalents $ 12,764 $ 168 5.21 % $ 5,912 $ 31 2.05 % Loans 710,725 7,981 4.45 % 670,145 7,019 4.15 % Securities 138,479 1,008 2.91 % 182,626 1,061 2.32 % Other interest-earning assets 6,620 132 8.04 % 6,629 65 3.99 % Total interest-earning assets 868,588 9,289 4.25 % 865,312 8,176 3.75 % Non-interest-earning assets 54,179 51,273 Total assets $ 922,767 $ 916,585 Liabilities and equity: NOW and money market accounts $ 74,785 $ 354 1.88 % $ 138,015 $ 173 0.50 % Savings accounts 46,177 214 1.83 % 60,912 40 0.26 % Certificates of deposit 498,082 4,284 3.41 % 403,223 1,037 1.02 % Total interest-bearing deposits 619,044 4,852 3.11 % 602,150 1,250 0.82 % Federal Home Loan Bank advances (1) 125,344 1,220 3.86 % 128,534 717 2.30 % Total interest-bearing liabilities 744,388 6,072 3.24 % 730,684 1,967 1.08 % Non-interest-bearing deposits 38,257 40,028 Other non-interest-bearing liabilities 1,727 4,232 Total liabilities 784,372 774,944 Total equity 138,395 141,641 Total liabilities and equity $ 922,767 $ 916,585 Net interest income $ 3,217 $ 6,209 Interest rate spread (2) 1.01 % 2.68 % Net interest margin (3) 1.47 % 2.85 % Average interest-earning assets to average interest-bearing liabilities 116.68 % 118.42 % 1. Cash flow hedges are used to manage interest rate risk. During the three months ended September 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. Nine Months Ended September 30, 2023 2022 Average Balance Interest and Dividends Yield/ Cost Average Balance Interest and Dividends Yield/ Cost (Dollars in thousands) Assets: Cash and cash equivalents $ 11,352 $ 423 4.98 % $ 32,485 $ 88 0.36 % Loans 713,603 23,822 4.46 % 612,252 18,404 4.01 % Securities 148,802 3,121 2.80 % 168,081 2,698 2.14 % Other interest-earning assets 6,110 348 7.62 % 5,458 175 4.30 % Total interest-earning assets 879,867 27,714 4.20 % 818,276 21,365 3.49 % Non-interest-earning assets 54,380 52,040 Total assets $ 934,247 $ 870,316 Liabilities and equity: NOW and money market accounts $ 91,781 $ 1,089 1.59 % $ 146,653 $ 610 0.56 % Savings accounts 49,529 375 1.01 % 64,509 126 0.26 % Certificates of deposit 498,460 11,314 3.03 % 369,808 2,189 0.79 % Total interest-bearing deposits 639,770 12,778 2.67 % 580,970 2,925 0.67 % Federal Home Loan Bank advances (1) 110,875 2,900 3.50 % 97,571 1,403 1.92 % Total interest-bearing liabilities 750,645 15,678 2.79 % 678,541 4,328 0.85 % Non-interest-bearing deposits 38,253 44,256 Other non-interest-bearing liabilities 6,351 3,705 Total liabilities 795,249 726,502 Total equity 138,998 143,814 Total liabilities and equity $ 934,247 $ 870,316 Net interest income $ 12,036 $ 17,037 Interest rate spread (2) 1.41 % 2.63 % Net interest margin (3) 1.82 % 2.78 % Average interest-earning assets to average interest-bearing liabilities 117.21 % 120.59 % 1. Cash flow hedges are used to manage interest rate risk. During the nine months ended September 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 September 30, 2023 Nine Months Ended September 30, 2023 Compared to Compared to Three Months Ended September 30, 2022 Nine Months Ended September 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 $ 59 $ 79 $ 138 $ (129 ) $ 463 $ 334 Loans receivable 439 523 962 3,229 2,189 5,418 Securities (1,076 ) 1,023 (53 ) (487 ) 910 423 Other interest earning assets (1 ) 68 67 23 150 173 Total interest-earning assets (579 ) 1,693 1,114 2,636 3,712 6,348 Interest expense: NOW and money market accounts (517 ) 698 181 (430 ) 909 479 Savings accounts (67 ) 241 174 (54 ) 303 249 Certificates of deposit 296 2,951 3,247 997 8,128 9,125 Federal Home Loan Bank advances (124 ) 627 503 213 1,284 1,497 Total interest-bearing liabilities (412 ) 4,517 4,105 726 10,624 11,350 Net increase (decrease) in net interest income $ (167 ) $ (2,824 ) $ (2,991 ) $ 1,910 $ (6,912 ) $ (5,002 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20231101271237/en/