BSBK 10-K & 10-Q changes, risk factors and insider trading
Bogota Financial Corp. · Nasdaq · Savings Institutions, Not Federally Chartered · CIK 1787414 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “The failure to maintain current technologies, and the costs to update technology, could negatively impact the Corporation's business and financial results.”
Removed heading “We are a smaller reporting company and, even if we no longer qualify as an emerging growth company, any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors.”
Removed heading “We are an emerging growth company and have elected to comply only with the reduced reporting and disclosure requirements applicable to emerging growth companies. As such, our common stock may be less attractive to investors.”
Removed heading “Even if we no longer qualify as an emerging growth company, as a smaller reporting company, we would still be eligible to use reduced disclosure requirements, which may make our common stock less attractive to investors.”
Largest changes
“We are a smaller reporting company and, even if we no longer qualify as an emerging growth company, any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors.”see in full comparison
“We are an emerging growth company and have elected to comply only with the reduced reporting and disclosure requirements applicable to emerging growth companies. As such, our common stock may be less attractive to investors.”see in full comparison
“Even if we no longer qualify as an emerging growth company, as a smaller reporting company, we would still be eligible to use reduced disclosure requirements, which may make our common stock less attractive to investors.”see in full comparison
“The failure to maintain current technologies, and the costs to update technology, could negatively impact the Corporation's business and financial results.”see in full comparison
Inflation risksee in full comparisoniscanthenegativelyrisk thatimpact the value of assets or income from investmentswill be worth less in the futureas inflation decreases the value of money.InInflationresponserose sharply at the end of 2021 and remained elevated through the first half of calendar 2024, before beginning toa pronounced risemoderate ininflation,the latter half of 2024 and into calendar 2025. However, inflation levels continue to exceed the Federal ReserveBoardBoard’shaslong-termraisedtargetcertainofbenchmark2.0%.interest rates to combat inflation.. As inflation increases and market interest rates rise the value of our investment securities, particularly those with longer maturities, decrease, although this effect can be less pronounced for floating rate instruments. In addition, inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our non-interest expenses. Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us. Sustained higher interest rates by the Federal Reserve Board to tame persistent inflationary price pressures could also push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.
As a result of our historical focus on one- to four-family residential real estate loans, the majority of our loans have fixed interest rates. This can create significant earnings volatility because of changes in market interest rates.see in full comparisonInOur interest-bearing liabilities generally have shorter contractual maturities than our interest-earning assets. Furthermore, the rates we earn on our other interest-earning assets and the rates we pay on our interest-bearing liabilities are generally fixed for a contractual period ofrisingtime. This imbalance can create significant earnings volatility because market interestrates,ratesthechangeinterestoverincome earned on our assets, such as loans and investments, may not increase as rapidly as the interest paid on our liabilities, such as deposits, which have shorter durations.time. In a period of declining interest rates, the interest income earned on our assets may decrease more rapidly than the interest paid on our liabilities, as borrowers prepay mortgage loans, thereby requiring us to reinvest these cash flows at lower interest rates. In a period of rising interest rates, the interest income earned on our assets, such as loans and investments, may not increase as rapidly as the interest paid on our liabilities, such as deposits, which have shorter durations.
Full comparison: every changed paragraph (18)
At December 31, 2024,2025, $192.2$180.9 million, or 26.9%27.8% of our loan portfolio, consisted of commercial and multi-family real estate loans. We are committed to increasing this type of lending. However, commercial and multi-family real estate loans generally expose a lender to a greater risk of loss than one- to four-family residential loans. Repayment of commercial and multi-family real estate loans generally depends, in large part, on sufficient income from the property or business to cover operating expenses and debt service. Commercial and multi-family real estate loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one- to four-family residential mortgage loans. Changes in economic conditions that are beyond the control of the borrower and lender could impact the value of the security for the loan or the future cash flows of the affected property. Additionally, any decline in real estate values may affect commercial and multi-family real estate properties more than residential properties. Also, many of our commercial and multi-family real estate borrowers have more than one loan outstanding with us. Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a residential mortgage loan. If we foreclose on these loans, our holding period for the collateral typically is longer than for a single or multi-family residential property because there are fewer potential purchasers of the collateral. Furthermore, if loans that are collateralized by commercial real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan, which could cause us to increase our provision for credit losses and adversely affect our operating results and financial condition.
As a result of our historical focus on one- to four-family residential real estate loans, the majority of our loans have fixed interest rates. This can create significant earnings volatility because of changes in market interest rates. InOur interest-bearing liabilities generally have shorter contractual maturities than our interest-earning assets. Furthermore, the rates we earn on our other interest-earning assets and the rates we pay on our interest-bearing liabilities are generally fixed for a contractual period of risingtime. This imbalance can create significant earnings volatility because market interest rates,rates thechange interestover income earned on our assets, such as loans and investments, may not increase as rapidly as the interest paid on our liabilities, such as deposits, which have shorter durations.time. In a period of declining interest rates, the interest income earned on our assets may decrease more rapidly than the interest paid on our liabilities, as borrowers prepay mortgage loans, thereby requiring us to reinvest these cash flows at lower interest rates. In a period of rising interest rates, the interest income earned on our assets, such as loans and investments, may not increase as rapidly as the interest paid on our liabilities, such as deposits, which have shorter durations.
Inflation risk iscan thenegatively risk thatimpact the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. InInflation responserose sharply at the end of 2021 and remained elevated through the first half of calendar 2024, before beginning to a pronounced risemoderate in inflation,the latter half of 2024 and into calendar 2025. However, inflation levels continue to exceed the Federal Reserve BoardBoard’s haslong-term raisedtarget certainof benchmark2.0%. interest rates to combat inflation.. As inflation increases and market interest rates rise the value of our investment securities, particularly those with longer maturities, decrease, although this effect can be less pronounced for floating rate instruments. In addition, inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, which increases our non-interest expenses. Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with us. Sustained higher interest rates by the Federal Reserve Board to tame persistent inflationary price pressures could also push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.
Any material interruption in our customers’ supply chains, such as a material interruption of the resources required to conduct their business resulting from interruptions in service by third-party providers, trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions, restrictions in federal subsidies or grants, social or labor unrest, natural disasters, epidemics or pandemics or political disputes and military conflicts, that cause a material disruption in our customers' supply chains, could have a negative impact on their business and ability to repay their borrowings with us. In the event of disruptions in our customers’ supply chains, the labor and materials they rely on in the ordinary course of business may not be available at reasonable rates or at all. Additionally, changes in distribution of federal funds or freezing of federal funds, including reductions in federal workforce causing unemployment, could have an adverse effect on the ability of consumers and businesses to pay debts and/or affect the demand for loans and deposits.
A significant decline in general economic conditions caused by inflation, recession, tariffs, acts of terrorism, civil unrest, an outbreak of hostilities or other international or domestic calamities, an epidemic or pandemic, unemployment or other factors beyond our control could negatively affect the markets in which we do business, the value of our loans, investments, and collateral securing our loans, the level of our classified assets, reduce the demand for our products and services, and/or adversely affect our financial results and our banking operations. Economic conditions, especially local conditions, could have the following consequences, any of which could have a material adverse effect on our business, financial condition, liquidity and results of operations:
Our assets increaseddecreased $32.2$66.5 million, or 3.4%,6.8%, from $939.3 million at December 31, 2023 to $971.5 million at December 31, 2024,2024 to $904.9 million at December 31, 2025, primarily due to increases in cash and cash equivalents and right of use assets connected with new leases signed as part of the Bank's sale leaseback transaction which was completed in the 4th quarter of 2024. The increases were offset by decreases in loans and investments. Over the next several years, we expect to experience moderate organic growth in our total assets and deposits, and the scale of our operations. Achieving our organic growth targets requires us to attract customers that currently bank at other financial institutions in our market. Our ability to grow successfully will depend on a variety of factors, including our ability to attract and retain experienced bankers, the availability of attractive business opportunities and competition from other financial institutions in our market area. While we believe we have the management resources and internal systems in place to successfully manage our future growth, there can be no assurance growth opportunities will be available or that we will successfully manage our growth. If we do not manage our growth effectively, we may not be able to achieve our business plan, which would have an adverse effect on our financial condition and results of operations.
The failure to maintain current technologies, and the costs to update technology, could negatively impact the Corporation's business and financial results.
Our future success depends, in part, on our ability to effectively embrace technology to better serve customers and reduce costs. We have been required, and may be required in the future, to expend additional resources to employ the latest technologies. Failure to keep pace with technological change could potentially have an adverse effect on our business operations and financial condition and results of operations.
We are subject to extensive regulation, supervision and examination by our banking regulators. Such regulation and supervision govern the activities in which a financial institution and its holding company may engage and are intended primarily for the protection of insurance funds and the depositors and borrowers of Bogota Savings Bank rather than for the protection of our stockholders. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the ability to impose restrictions on our operations, classify our assets and determine the level of our allowance for credit losses. These regulations, along with the currently existing tax, accounting, securities, deposit insurance and monetary laws, rules, standards, policies, and interpretations, control the ways financial institutions conduct business, implement strategic initiatives, and prepare financial reporting and disclosures. Any change in such regulation and oversight, whether in the form of regulatory policy, new regulations, executive orders, legislation or supervisory action, may have a material impact on our operations.
In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve Board. An important function of the Federal Reserve Board is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve Board to implement these objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits. Their use also affects interest rates charged on loans or paid on deposits. The Federal Reserve Board’s policies determine in large part the cost of funds for lending and investing and the return earned on those loans and investments, both of which affect our net interest margin. Its policies can also adversely affect borrowers, potentially increasing the risk that they may fail to repay their loans. The monetary policies and regulations of the Federal Reserve Board have had a significant effect on the overall economy and the operating results of financial institutions in the past and are expected to continue to do so in the future.
We are ana emergingsmaller growthreporting company,company and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emergingsmaller growthreporting companies could make our common stock less attractive to investors.
We are an emerging growth company, and we expect that will cease to be an emerging growth company effective December 31, 2025, which is the end of the fifth year after the date of the first sale of our common stock. For as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies, including, but not limited to, reduced disclosure obligations regarding executive compensation in our proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As an emerging growth company, we also are not subject to Section 404(b) of the Sarbanes-Oxley Act of 2002, which would require that our independent auditors review and attest as to the effectiveness of our internal control over financial reporting. We have also elected to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards. Investors may find our common stock less attractive since we have chosen to rely on these exemptions. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.
We are a smaller reporting company and, even if we no longer qualify as an emerging growth company, any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors.
In addition to qualifying as an emerging growth company, weWe qualify as a “smaller reporting company” under the federal securities laws. For as long as we continue to be a smaller reporting company, we may choose to take advantage of exemptions from various reporting requirements applicable to public companies that are not available to companies that are not smaller reporting companies, including, but not limited to, reduced financial disclosure obligations and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.
We are an emerging growth company and have elected to comply only with the reduced reporting and disclosure requirements applicable to emerging growth companies. As such, our common stock may be less attractive to investors.
We are an emerging growth company and for as long as we continue to be an emerging growth company, we plan to take advantage of exemptions from various reporting requirements applicable to other public companies, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors may find our common stock less attractive as we rely on these exemptions.
Even if we no longer qualify as an emerging growth company, as a smaller reporting company, we would still be eligible to use reduced disclosure requirements, which may make our common stock less attractive to investors.
Even if we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company. As such, we plan to take advantage of reduced disclosure obligations, including regarding executive compensation, in our periodic reports and proxy statements. As a result, investors may find our common stock less attractive. As a smaller reporting company that is a non-accelerated filer, we also will not be subject to Section 404(b) of the Sarbanes-Oxley Act, which would require that our independent auditors review and attest to the effectiveness of our internal control over financial reporting.
Management's Discussion & Analysis (MD&A)
Largest changes
“Interest income on cash and cash equivalents increased $38,000, or 6.7%, to $606,000 for the twelve months ended December 31, 2024 from $568,000 for the twelve months ended December 31, 2023 due a 71 basis point increase in the average yield from 5.23% for the twelve months ended December 31, 2023 to 5.94% for the twelve months ended December 31, 2024 due to the higher interest rate environment for most of 2024. …”see in full comparison
see in full comparisonDeposits.InvestmentTotalSecurities.depositsSecurities available for sale increased$16.8$17.8 million, or2.7%,12.7%, to$642.1$158.1 million at December 31,20242025 from$625.3 million at December 31, 2023. The increase in deposits reflected increases in NOW, money market and savings accounts, which increased by $14.7 million from $101.5 million at December 31, 2023 to $116.2 million at December 31, 2024, and an increase in noninterest bearing deposits, which increased by $2.1 million from $30.6 million at December 31, 2023 to $32.7$140.3 million at December 31, 2024. Average yields on securities available for sale increased 143 basis points from 3.88% for the twelve months ended December 31, 2024, to 5.31% for the twelve months ended December 31, 2025, due to the balance sheet restructuring that took place in December 2024.
“Interest income on securities increased $1.0 million, or 14.5%, to $7.9 million for the twelve months ended December 31, 2025 from $6.9 million for the twelve months ended December 31, 2024 due to a 143 basis point increase in the average yield from 3.88% for the twelve months ended December 31, 2024 to 5.31% for the twelve months ended December 31, 2025, offset by a $29.1 million decrease in the average balance of securities to $149.5 million for the twelve months ended December 31, 2025 from $178.7 million for the twelve months ended December 31, 2024. …”see in full comparison
“Net Interest Income. Net interest income decreased $4.4 million, or 29.5%, to $10.6 million for the twelve months ended December 31, 2024 from $15.0 million for the twelve months ended December 31, 2023. The decrease reflected a 62 basis point decrease in our net interest rate spread to 0.66% for the twelve months ended December 31, 2024 from 1.28% for the twelve months ended December 31, 2023. Our net interest margin decreased 55 basis points to 1.16% for the twelve months ended December 31, 2024 from 1.71% for the twelve months ended December 31, 2023. …”see in full comparison
Interest income onsee in full comparisonsecuritiescash and cash equivalents increased$2.7 million,$302,000, or66.7%,49.8%, to$6.9$908,000 for the twelve months ended December 31, 2025 from $606,000 for the twelve months ended December 31, 2024 due to a $7.2 million increase in the average balance to $17.4 million for the twelve months ended December 31,20242025 from$4.2$10.2 million for the twelve months ended December 31,20232024,dueoffsettoby a10172 basis pointincreasedecrease in the average yield from2.87% for the twelve months ended December 31, 2023 to 3.88% for the twelve months ended December 31, 2024, and by a $33.8 million increase in the average balance of securities to $178.7 million5.94% for the twelve months ended December 31, 2024fromto$144.9 million5.22% for the twelve months ended December 31,2023.2025 due to the lower interest rate environment for most of 2025.
“Deposits. Total deposits at December 31, 2025 were $652.4 million, increasing $10.3 million, or 1.6%, as compared to $642.2 million at December 31, 2024, primarily due to a $14.8 million increase in interest-bearing deposits offset by a $4.5 million decrease in non-interest bearing checking accounts. …”see in full comparison
Full comparison: every changed paragraph (43)
PortfolioThe segmentCompany is defined as the level at which an entity develops and documents a systematic methodology to determinedetermines its allowance for credit losses (“ACL”). through an analysis of its loan portfolio segments. The Company has designated six portfolio segments, which are residential, commercial real estate, multi-family, construction, commercial and industrial and consumer. These portfolio segments are further disaggregated into classes, which represent loans and leases of similar type, risk characteristics, and methods for monitoring and assessing credit risk.
Non-Interest Expenses. Our non-interest expenses consist of salaries and employee benefits, net occupancy,occupancy and equipment, data processing, federal deposit insurance premiums, advertising, directors fees, professional fees and other general and administrative expenses.
Continue to emphasize commercial and multi-family real estate lending. We view the growth of commercial real estate and multi-family lending as a means of increasing our interest income and the yield on our loan portfolio, and reducing the average terms of our loans. We believe that local banking consolidation has created opportunities to attract talent with experience originating commercial real estate loans within our market area. Our commercial real estate and multi-family loan portfolio increaseddecreased to $180.9 million, or 27.8% of total loans, at December 31, 2025, from $192.2 million, or 26.9% of total loans, at December 31, 2024, from $175.4 million, or 24.5% of total loans, at December 31, 2023.2024.
Increase lower-cost core deposits. We continue to emphasize offering core deposits (demand deposit accounts, savings accounts and money market accounts) to individuals, businesses and municipalities. We attract and retain transaction accounts by offering competitive products and rates and providing quality customer service. Core deposits are our least costly source of funds, which improves our interest rate spread and also contributes non-interest income from account related services. At December 31, 2024,2025, core deposits increaseddecreased to 24.8%24.3% of our total deposits compared to 21.1%24.8% of our total deposits at December 31, 2023 due to customers moving funds out of certificates of deposits as interest rates have begun to decrease.2024.
Grow through opportunistic bank or branch acquisitions or formations. We openedare opening a new branch in UpperPoint Saddle RiverPleasant during the second quarter of 2024, in2026, which depositswe havehope continuedwill tobe growan throughoutadditional thesource year.for deposit growth. We will consider acquisition opportunities that may enhance the value of our franchise and yield potential financial benefits for our stockholders. Although we believe opportunities exist to increase our market share in our market, we expect to expand into contiguous markets. Our capital position affords us the opportunity to acquire smaller institutions or fee-based businesses located in or contiguous to our market area.
Continue to emphasize operating efficiencies and cost controls. We are focused on controlling expenses while increasing our net income. We are disciplined in managing non-interest expenses by identifying cost savings opportunities such as the sale/leaseback transaction we executed, renegotiating key third-party contracts and reducing other operating expenses. Our overhead ratio, defined as non-interest expense to average total assets, was 1.50%1.66% for the year ended December 31, 20242025 compared to 1.69%1.66% for the year ended December 31, 2023.2024. To support our growth in a cost-effective way, we plan to continue to invest prudently in technology to help improve our operational infrastructure.
Maintain disciplined underwriting. We emphasize a disciplined credit culture based on intimate knowledge of the market, close ties to our customers, sound underwriting standards and experienced loan officers. We are committed to actively monitoring and managing our loan portfolio in an effort to proactively identify and mitigate credit risks within the portfolio. At December 31, 2024,2025, non-performing assets totaled $14.0$13.3 million, which represented 1.44%1.47% of total assets. Included in this amount was onea $10.9 million construction loan, which is being actively managed by the Company totaling $10.9 million and is considered well-secured with a loan-to-value of 41% based on an appraisal performed in NovemberMarch 2024.2025. We did not record any specific reserve, or charge-offs for this loan. At December 31, 2023,2024, there were $12.8$14.0 million of non-performing assets, which represented 1.36%1.44% of total assets.
The JOBS Act, which was enacted in 2012, contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an “emerging growth company,” we plan to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our financial statements may not be fully comparable to public companies that comply with such new or revised accounting standards.
Actual credit losses may be significantly more than the allowance we have establishedestablished, which could have a material negative effect on our financial results. See "Overview - Provision for Credit Losses" or Note 1 to the Notes to the consolidated financial statements for a complete discussion of the allowance for loancredit losses.
Total Assets. Total assets decreased $66.6 million, or 6.9%, to $904.9 million at December 31, 2025 from $971.5 million at December 31, 2024. The decrease was primarily due to a $64.1 million decrease in loans and $16.6 million decrease in cash and cash equivalents, offset by a $17.8 million increase in securities available for sale.
Total Assets. Total assets increased $32.2 million, or 3.4%, to $971.5 million at December 31, 2024 from $939.3 million at December 31, 2023. The increase was primarily due to $27.3 million increase in cash and cash equivalents and a $10.8 million increase in right of use assets related to leases that were signed as part of the sale-leaseback transaction that was completed during the fourth quarter of 2024. These increases were partially offset by a $3.0 million decrease in net loans and a $3.0 million decrease in net premises and equipment.
Cash and Cash Equivalents. Total cashCash and cash equivalents increaseddecreased $27.3$16.6 million, or 109.5%,31.8%, to $35.6 million at December 31, 2025 from $52.2 million at December 31, 2024 from $24.9 million at December 31, 2023.2024. This increasedecrease was primarily due to loancash paymentsused received,to proceedspurchase from sales and maturities of securities, additional borrowings and an increase in deposits.securities.
Investment Securities. Total securities available for sale increased $71.4 million, or 103.7%, to $140.3 million at December 31, 2024 from $68.9 million at December 31, 2023. In the fourth quarter of 2024, the Bank sold approximately $66.0 million in amortized cost ($57.1 million in market value) of available-for-sale and held-to-maturity securities with a weighted average life of approximately 5.5 years and a weighted average yield of 1.89% resulting in a pre-tax loss of $8.9 million. $32.7 million of the proceeds from the securities sales were reinvested into securities yielding approximately 5.60% and a weighted average life of approximately 29.6 years. As a result of the sales, the Bank removed the held-to-maturity designation on any remaining held-to-maturity securities. At December 31, 2023, held to maturity securities totaled $72.7 million.
Net Loans. Net loans decreased $3.0 million, or 0.4%, to $711.7 million at December 31, 2024 from $714.7 million at December 31, 2023 due to $90.1 million in repayments, partially offset by new originations of approximately $60.5 million and loan purchases of approximately $26.6 million. Due to the interest rate environment, we have seen a decrease in demand for residential and construction loans, which have been the primary drivers of our loan growth in recent periods.
The decrease in net loans reflected a $13.4 million, or 2.7%, decrease in one- to four-family residential real estate loans and home equity lines of credit to $472.7 million at December 31, 2024 from $486.1 million at December 31, 2023, and a decrease of $6.1 million, or 12.4%, in construction loans to $43.2 million at December 31, 2024 from $49.3 million at December 31, 2023 offset by an increase of $16.7 million, or 9.5%, increase in commercial and multi-family real estate loans to $192.1 million at December 31, 2024 from $175.4 million at December 31, 2023. As of December 31, 2024, the Bank had no loans held for sale.
Bank-Owned Life Insurance. Bank-owned life insurance increased $872,000, or 2.8%, to $31.9 million at December 31, 2024 from $31.0 million at December 31, 2023 due to an increase in the cash surrender value. The was no new bank-owned life insurance purchased in 2024.
Deposits.Investment TotalSecurities. depositsSecurities available for sale increased $16.8$17.8 million, or 2.7%,12.7%, to $642.1$158.1 million at December 31, 20242025 from $625.3 million at December 31, 2023. The increase in deposits reflected increases in NOW, money market and savings accounts, which increased by $14.7 million from $101.5 million at December 31, 2023 to $116.2 million at December 31, 2024, and an increase in noninterest bearing deposits, which increased by $2.1 million from $30.6 million at December 31, 2023 to $32.7$140.3 million at December 31, 2024. Average yields on securities available for sale increased 143 basis points from 3.88% for the twelve months ended December 31, 2024, to 5.31% for the twelve months ended December 31, 2025, due to the balance sheet restructuring that took place in December 2024.
Net Loans. Net loans decreased $64.1 million, or 9.0%, to $647.6 million at December 31, 2025 from $711.7 million at December 31, 2024 due to $105.1 million in repayments, partially offset by new originations of approximately $41.0 million. Due to the interest rate environment, we have seen a decrease in demand for residential and construction loans, which have been the primary drivers of our loan growth in recent periods.
The decrease in net loans reflected a $28.9 million, or 6.1%, decrease in one- to four-family residential real estate loans and home equity lines of credit to $443.9 million at December 31, 2025 from $472.7 million at December 31, 2024, a decrease of $21.1 million, or 48.9%, in construction loans to $22.0 million at December 31, 2025 from $43.2 million at December 31, 2024 and an decrease of $11.3 million, or 5.8%, decrease in commercial and multi-family real estate loans to $180.9 million at December 31, 2025 from $192.1 million at December 31, 2024. As of December 31, 2025, the Bank had no loans held for sale.
Regulatory Stock. Regulatory stock decreased $3.5 million or 39.4% to $5.4 million at December 31, 2025 from $4.7 million as of December 31, 2024, the decrease was due to a reduction in borrowings.
Investment in limited partnership. The Company made a $2.5 million equity investment as part of a $10 million commitment to fund a limited partnership that invests in sale leaseback transactions.
Deposits. Total deposits at December 31, 2025 were $652.4 million, increasing $10.3 million, or 1.6%, as compared to $642.2 million at December 31, 2024, primarily due to a $14.8 million increase in interest-bearing deposits offset by a $4.5 million decrease in non-interest bearing checking accounts. The average rate paid on deposits decreased 43 basis points to 3.30% for 2025 from 3.73% for 2024 due to lower market interest rates and an increase in NOW accounts, which increased $10.5 million, or 19.0%, to $65.5 million at December 31, 2025 from $55.0 million at December 31, 2024 primarily due to a increase in municipal deposits.
Borrowings. Federal Home Loan Bank of New York borrowings increaseddecreased $4.5$78.9 million, or 2.7%,45.8%, to $93.3 million at December 31, 2025 from $172.2 million at December 31, 2024 from $167.7 million at December 31, 2023,2024, due to proceedsrepayments of $57.8$9.5 million from short-term advances,advances offset byand a decrease of $53.4$69.4 million in long-term advances. The weighted average rate paid on borrowings was 4.49%4.35% and 4.54%4.49% as of December 31, 20242025 and December 31, 2023,2024, respectively. The Company uses cash flow hedges are used to manage interest rate risk. At December 31, 2024,2025, the Company had fivesix interest rate swaps with a notional amount of $65.0$85.0 million hedging on certain short-term FHLB advances. Borrowings decrease because of less need for wholesale funding with a decrease in assets and a increase in deposits.
Total Equity. Stockholders’Total stockholders’ equity increased $116,000,$3.6 or 0.1%,million to $140.9 million at December 31, 2025, from $137.3 million,million at December 31, 2024. The increase was due to a reduction in the accumulated other comprehensive loss on the securities portfolio of $2.9$1.5 million and net income of $2.1 million, offset by a net loss of $2.2 million and the repurchase of 221,130123,603 shares of stock at a total cost of $1.7$1.1 million. At December 31, 2024,2025, the Company’s ratio of average stockholders’ equity-to-totalequity-to-average total assets was 14.10%,15.30%, compared to 15.24%14.10% at December 31, 2023.2024.
General. Net income decreasedincreased by $2.8$4.3 million, or 437.8%,196.3%, to net income of $2.1 million for the twelve months ended December 31, 2025, compared to a net loss of $2.2 million for the twelve months ended December 31, 2024 from net income of $643,000 for the twelve months ended December 31, 2023.2024. This decreaseincrease was primarily due to aan decreaseincrease of $4.4$4.9 million in net interest income,income offset by a decrease of $1.2 million in non-interest expense,and an increase of $209,000 increase$420,000 in non-interest income offset by an increase of $707,000 in non-interest expense and a $209,000an increase of $353,000 in income tax benefit.tax.
Interest Income. Interest income increased $4.4million,$1.3 million, or 12.0%,3.0%, from $37.3 million for the twelve months ended December 31, 2023 to $41.7$41.8 million for the twelve months ended December 31, 2024 to $43.0 million for the twelve months ended December 31, 2025 due to increases in the average balances of and higher yields on interest-earning assets.assets offset by lower average balances.
Interest income on cash and cash equivalents increased $38,000, or 6.7%, to $606,000 for the twelve months ended December 31, 2024 from $568,000 for the twelve months ended December 31, 2023 due a 71 basis point increase in the average yield from 5.23% for the twelve months ended December 31, 2023 to 5.94% for the twelve months ended December 31, 2024 due to the higher interest rate environment for most of 2024. This was offset by a $671,000 decrease in the average balance to $10.2 million for the twelve months ended December 31, 2024 from $10.9 million for the twelve months ended December 31, 2023, reflecting the use of excess liquidity primarily to fund securities purchases.
Interest income on loans increased $1.4 million, or 4.3%, to $33.4 million for the twelve months ended December 31, 2024 compared to $32.0 million for the twelve months ended December 31, 2023 due primarily to a 20 basis point increase in the average yield from 4.49% for the twelve months ended December 31, 2023 to 4.69% for the twelve months ended December 31, 2024. The increase was offset by a $661,000 decrease in the average balance to $713.1 million for the twelve months ended December 31, 2024 from $713.8 million for the twelve months ended December 31, 2024.
Interest income on securitiescash and cash equivalents increased $2.7 million,$302,000, or 66.7%,49.8%, to $6.9$908,000 for the twelve months ended December 31, 2025 from $606,000 for the twelve months ended December 31, 2024 due to a $7.2 million increase in the average balance to $17.4 million for the twelve months ended December 31, 20242025 from $4.2$10.2 million for the twelve months ended December 31, 20232024, dueoffset toby a 10172 basis point increasedecrease in the average yield from 2.87% for the twelve months ended December 31, 2023 to 3.88% for the twelve months ended December 31, 2024, and by a $33.8 million increase in the average balance of securities to $178.7 million5.94% for the twelve months ended December 31, 2024 fromto $144.9 million5.22% for the twelve months ended December 31, 2023.2025 due to the lower interest rate environment for most of 2025.
Interest income on loans increased $109,000, or 0.3%, to $33.5 million for the twelve months ended December 31, 2025 compared to $33.4 million for the twelve months ended December 31, 2024 primarily due to a 19 basis point increase in the average yield from 4.69% for the twelve months ended December 31, 2024 to 4.88% for the twelve months ended December 31, 2025 offset by a $26.3 million decrease in the average balance to $686.9 million for the twelve months ended December 31, 2025 from $713.1 million for the twelve months ended December 31, 2024.
Interest income on securities increased $1.0 million, or 14.5%, to $7.9 million for the twelve months ended December 31, 2025 from $6.9 million for the twelve months ended December 31, 2024 due to a 143 basis point increase in the average yield from 3.88% for the twelve months ended December 31, 2024 to 5.31% for the twelve months ended December 31, 2025, offset by a $29.1 million decrease in the average balance of securities to $149.5 million for the twelve months ended December 31, 2025 from $178.7 million for the twelve months ended December 31, 2024. Both the increase in the yield and the decrease in the average balance of securities was due to the balance sheet restructuring effected in December 2024.
Interest Expense. Interest expense increaseddecreased $8.9$3.7 million, or 39.9%,11.7%, from $22.3 million for the twelve months ended December 31, 2023 to $31.2 million for the twelve months ended December 31, 2024 to $27.5 million for the twelve months ended December 31, 2025 due to increasesa in thelower average balance of and higherlower costs on interest-bearing liabilities. At December 31, 2024, cash flow hedges used to manage interest rate risk had a notional value of $65.0 million, while fair value hedges totaled $60.0 million in notional value. During the twelve months ended December 31, 2024,2025, the use of the cash flow hedges reduced the interest expense on the Federal Home Loan Bank advances by $644,000, compared to $1.5 million.million for 2024.
Interest expense on interest-bearing deposits increaseddecreased $6.6$2.1 million, or 36.4%,8.7%, to $22.5 million for the twelve months ended December 31, 2025 from $24.6 million for the twelve months ended December 31, 2024 from $18.0 million for the twelve months ended December 31, 2023.2024. The increasedecrease was due to a 11232 basis point increasedecrease in the average cost of interest-bearing deposits to 3.65% for the twelve months ended December 31, 2025 from 3.97% for the twelve months ended December 31, 2024 from 2.85% for the twelve months ended December 31, 2023, offset byand a $12.3$3.9 million decrease in the average balance of interest-bearing deposits. The increasedecrease in the average cost of deposits was due to the higherlower interest rate environmentenvironment, andwhich primarily impacted the rates paid on certificates of deposit, which remain the largest portion of the portfolio. The changes was also due to a slight change in the composition of the deposit portfolio consistingas of a greater proportion of certificates of deposit. Thethe average balancebalances of certificates of deposit increaseddecreased $10.2$15.6 million to $492.8 million for the twelve months ended December 31, 2025 from $508.3 million for the twelve months ended December 31, 2024 from $498.1 million for the twelve months ended December 31, 2023 while NOW and money market accounts and savings accounts decreasedincreased $18.1$6.4 million and $4.4$5.3 million for the twelve months ended December 31, 2024,2025, respectively, compared to the twelve months ended December 31, 2023. At December 31, 2024 $101.6 million of deposits, or 16.4%, of the average balance of deposits were brokered deposits with a weighted average cost of 4.52%.2024.
Interest expense on Federal Home Loan Bank borrowings increaseddecreased $2.3$1.5 million, or 54.4%,23.1%, from $4.3$6.6 million for the twelve months ended December 31, 20232024 to $6.6$5.1 million for the twelve months ended December 31, 2025. The decrease was due to a decrease in the average balance of borrowings of $48.1 million to $127.9 million for the twelve months ended December 31, 2025 from $176.0 million for the twelve months ended December 31, 2024. The increasedecrease was primarilyoffset dueby to a $59.2 millionan increase in the average balancecost of borrowings22 basis points to $176.0 million3.97% for the twelve months ended December 31, 20242025 from $116.8 million for the twelve months ended December 31, 2023. The increase was also due, to a lesser extent, an increase in the average cost of borrowings of nine basis points to 3.76% for the twelve months ended December 31, 2024 fromdue 3.67%to formaturity theof twelvelow monthscost endedborrowings. At December 31, 20232025, duecash flow hedges used to themanage newinterest borrowingsrate beingrisk athad highera rates.notional value of $85.0 million, while fair value hedges totaled $60.0 million in notional value.
Net Interest Income. Net interest income increased $4.9 million, or 46.6%, to $15.5 million for the twelve months ended December 31, 2025 from $10.7 million for the twelve months ended December 31, 2024. The increase reflected a 63 basis point increase in our net interest rate spread to 1.29% for the twelve months ended December 31, 2025 from 0.66% for the twelve months ended December 31, 2024. Our net interest margin increased 64 basis points to 1.80% for the twelve months ended December 31, 2025 from 1.16% for the twelve months ended December 31, 2024.
Net Interest Income. Net interest income decreased $4.4 million, or 29.5%, to $10.6 million for the twelve months ended December 31, 2024 from $15.0 million for the twelve months ended December 31, 2023. The decrease reflected a 62 basis point decrease in our net interest rate spread to 0.66% for the twelve months ended December 31, 2024 from 1.28% for the twelve months ended December 31, 2023. Our net interest margin decreased 55 basis points to 1.16% for the twelve months ended December 31, 2024 from 1.71% for the twelve months ended December 31, 2023. The Bank entered into a sale-leaseback transaction whereby the Bank sold three of its branch offices resulting in a $9.0 million pre-tax gain. Subsequently, the Bank realized a pre-tax loss of $8.9 million on the sale of approximately $66.0 million in amortized cost ($57.1 million in market value) of securities with a weighted average life of approximately 5.5 years and a weighted average yield of 1.89%. The Bank reinvested $32.7 million of these proceeds into securities with a weighted average life of approximately 29.6 years and a weighted average yield of 5.60%.
Provision for (recovery of) Credit Losses. We recorded a $148,000$130,000 recovery of credit losses for the yeartwelve months ended December 31, 20232025 compared to a $125,000$148,000 recovery offor credit losses for the twelve-month period ended December 31, 2023.2024 Thewhich Bankreflected hada decreasesdecrease in the loan andportfolio, securitiesas portfolioswell andas no charge-offs during the years. This 2024 recovery in 2024 was inclusive of the effect ofdue to the transfer of certain securities from the held to maturity portfolio to the available for sale portfolio, which resulted in a $108,000 recovery for credit losses. Additionally, we recorded a $17,000 recovery of credit losses for contingent liabilities for the twelve2024 months ended December 31, 2024.period.
Non-Interest Income. Non-interest income increased by $420,000, or 31.1%, primarily due to an increase in bank owned life insurance of $564,000, or 64.7%, due to collection of death proceeds in 2025 offset by a decrease of $84,000 in other income due to a net loss on the investment in a limited partnership.
Non-Interest Income. Non-interest income increased by $209,000, or 18.4%. The Bank entered into a sale-leaseback transaction during the fourth quarter of 2024 whereby the Bank sold three of its branch offices resulting in a $9.0 million pre-tax gain. Subsequently, the Bank realized a pre-tax loss of $8.9 million on the sale of approximately $66.0 million in amortized cost ($57.1 million in market value) of available-for-sale and held-to-maturity securities. Gain on sale of assets increased $74,000, while fee and service charge income increased $22,000, or 10.6%, and income related to bank owned life insurance increased $90,000, or 11.5%, due to higher balances during 2024.
Non-Interest Expenses. For the twelve months ended December 31, 2024,2025, non-interest expensesexpense decreasedincreased $707,000, or 4.8%, compared to the twelve months ended December 31, 2024. Occupancy and equipment increased $1.2 million, or 7.4%,82.7%, overdue 2023.to higher lease expense associated with the sale leaseback transaction that took place in December 2024. Salaries and employee benefits decreased $1.1 million,$251,000, or 10.9%,2.9%, asdue 2023 amounts reflected an accrual of $966,000 forto a severance contract for the retirement of the previous President and a higherlower employee count when compared to 2024. Advertising decreased by $199,000 or 53.5% due to less promotion events taking place. Professional fees increased $129,000,$265,000 or 19.5%,33.5%, due to higher legal expense primarily related to the sale-leaseback transaction.expense. Data processing increaseddecreased $234,000,$47,000, or 24.1%,3.9%, due to higherlower processing costs. Other non-interest expensesexpense decreased $369,000,$168,000, or 27.8%,17.5%, asdue 2023to amountslower includedmiscellaneous charges for a pending fraud claim that is under review with the insurance company.expenses.
Income Tax Expense. Income tax expense increased $353,000, to a benefit of $18,000 for the twelve months ended December 31, 2025 from a benefit of $372,000 for the twelve months ended December 31, 2024. The increase in expense was due to $4.1 million, or 118.0%, of higher taxable income. The effective tax rate for the twelve months ended December 31, 2025 and December 31, 2024 were (0.88%) and (14.62%), respectively.
Income Tax Expense. Income tax benefit increased $209,000, or 129.1%, to a benefit of $372,000 for the twelve months ended December 31, 2024 from a $162,000 benefit for the twelve months ended December 31, 2023. The increase in benefit was due to $3.0 million of lower taxable income. The benefit would have been higher, but we recorded valuation reserves on certain deferred tax assets as of December 31, 2024.
At December 31, 2024,2025, we had $7.9$1.3 million of commitments to originate loans, comprised of $562,000 of residential loans, $7.0$1.3 million of commitments for commercial real estate loans and $299,000 of commitments of home equity loans and lines of credit. See Note 15 in the Notes to the consolidated financial statements for further information.
What changed in the latest 10-Q
Risk Factors
There have been no material changes in the risk factors applicable to the Company from those disclosed in “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Proposed Acquisition of GSL”
New heading “Comparison of Operating Results for the Six Months Ended June 30, 2026 and June 30, 2025”
Largest changes
“Comparison of Operating Results for the Six Months Ended June 30, 2026 and June 30, 2025”see in full comparison
“Interest expense on interest-bearing deposits decreased $772,000, or 13.4%, to $5.0 million for the three months ended March 31, 2026 from $5.8 million for the three months ended March 31, 2025. The decrease was due to a 45-basis point decrease in the average cost of deposits to 3.38% for the three months ended March 31, 2026 from 3.83% for the three months ended March 31, 2025. The decrease in the average cost of deposits was due to the lower interest rate environment and a decrease in the rate paid on certificates of deposit offset by an increase in the rate paid on transactional accounts. …”see in full comparison
“Interest expense on interest-bearing deposits decreased $910,000, or 16.5%, to $4.6 million for the three months ended June 30, 2026 from $5.5 million for the three months ended June 30, 2025. The decrease was due to a 39 basis point decrease in the average cost of deposits to 3.28% for the three months ended June 30, 2026 from 3.67% for the three months ended June 30, 2025. The decrease in the average cost of deposits was due to the lower interest rate environment and a decrease in the rate paid on certificates of deposit offset by an increase in the rate paid on savings accounts. …”see in full comparison
“Interest expense on interest-bearing deposits decreased $1.7 million, or 14.9%, to $9.6 million for the six months ended June 30, 2026 from $11.3 million for the six months ended June 30, 2025. The decrease was due to a 42 basis point decrease in the average cost of deposits to 3.33% for the six months ended June 30, 2026 from 3.75% for the six months ended June 30, 2025. The decrease in the average cost of deposits was due to the lower interest rate environment and a decrease in the rate paid on certificates of deposit offset by an increase in the rate paid on transactional accounts. …”see in full comparison
“Interest income on cash and cash equivalents decreased $142,000, or 53.6%, to $123,000 for the three months ended March 31, 2026 from $265,000 for the three months ended March 31, 2025 due to a $5.3 million decrease in the average balance to $11.3 million for the three months ended March 31, 2026 from $16.6 million for the three months ended March 31, 2025, reflecting an increase in securities and a reduction of borrowings. …”see in full comparison
Full comparison: every changed paragraph (66)
Management’s discussion and analysis of financial condition and results of operations at MarchJune 31,30, 2026 and December 31, 2025 and for the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 is intended to assist in understanding the financial condition and results of operations of Bogota Financial Corp. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q.
These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. This includes statements regarding the planned merger of GSL Savings Bank (“GSL”) with and into the Company’s wholly owned subsidiary, the Bank, with the Bank as the surviving financial institution (the “Merger”). The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:
Proposed Acquisition of GSL
On June 1, 2026, the Bank and GSL entered into a definitive agreement pursuant to which the Bank will acquire GSL. Under the terms of the Merger Agreement, depositors of GSL will become depositors of the Bank and will have the same rights and privileges in Bogota Financial, MHC, as if their accounts had been established in the Bank on the date established at GSL. As part of the transaction, the Company will issue additional shares of its common stock to Bogota Financial, MHC in an amount equal to the fair value of GSL as determined by an independent appraisal. These shares are expected to be issued immediately prior to completion of the Merger.
As of June 30, 2026, GSL had approximately $151.2 million of assets, gross loans of $119.7 million and deposits of $120.4 million and operated from two offices located in Guttenberg and Fairview, New Jersey. The Merger is expected to close in the second half of 2026, subject to receipt of all regulatory approvals, GSL receiving the requisite approval of its members (if required), and fulfillment of other customary closing conditions.
Comparison of Financial Condition at MarchJune 31,30, 2026 and December 31, 2025
Total Assets. Assets decreased $27.7$30.0 million, or 3.1%,3.3%, from $904.9 million at December 31, 2025 to $877.2$875.0 million at MarchJune 31,30, 2026, due largely to a $7.7$5.7 million, or 21.6%,16.6%, decrease in cash and cash equivalents, an $8.2$10.3 million, or 1.3%,1.6%, decrease in loans and a $13.2$17.7 million, or 8.4%,11.2% decrease in securities available for sale.
Cash and Cash Equivalents. Cash and cash equivalents decreased $7.7$5.7 million, or 21.6%,16.6%, to $27.9$29.9 million at MarchJune 31,30, 2026 from $35.6 million at December 31, 2025, as excess funds from increased borrowings, security maturities and loan payments were used to offset deposit outflows.
Investment in Limited Partnership. Net equity investments wereincreased $2.4$1.6 million, or 64.2% to $4.0 million, at MarchJune 31,30, 2026 andfrom $2.4 million at December 31, 2025. This investment was part of a $10 million commitment to fund a limited partnership which invests in sale leaseback transactions.
Securities Available for Sale. Securities available for sale decreased $13.2$17.7 million, or 8.4%,11.2%, to $144.9$140.4 million at MarchJune 31,30, 2026 from $158.1 million at December 31, 2025, due to principal repayments of mortgage-backed securities and maturities of corporate bonds.
Net Loans. Net loans decreased $8.2$10.3 million, or 1.3%,1.6%, to $639.4$637.3 million at MarchJune 31,30, 2026 from $647.6 million at December 31, 2025. The decrease was due to a decrease of $5.4$7.9 million, or 1.2%,1.8%, in one- to four-residential real estate loans to $438.5$436.0 million from $443.9 million at December 31, 2025, a decrease of $3.2 million, or 14.5%,14.4%, in construction loans to $18.9 million at MarchJune 31,30, 2026 from $22.0 million at December 31, 2025, a decrease of $394,000,$717,000, or 12.3%,22.3%, in commercial and industrial loans to $2.8$2.5 million at MarchJune 31,30, 2026 from $3.2 million at December 31, 2025, and a decrease of $4.4$5.1 million, or 3.6%,4.2%, in commercial real estate loans to $117.6$116.9 million at MarchJune 31,30, 2026 from $122.0 million at December 31, 2025, offset by a $5.2$6.6 million, or 8.8%,11.2%, increase in multi-family real estate loans to $64.1$65.5 million at MarchJune 31,30, 2026 from $58.9 million at December 31, 2025. The decreases in one- to four-residential real estate loans and construction loans reflected a decrease in demand for such loans due to the interest rate environment. As of MarchJune 31,30, 2026 and December 31, 2025, the Bank had no loans held for sale.
Asset Quality. Delinquent loans increased $1.3$1.1 million to $28.1$27.9 million, or 4.4% of total loans, at MarchJune 31,30, 2026, compared to $26.8 million, or 4.2%4.1% of total loans, at December 31, 2025. The increase was primarily due to an increase of $1.1 million in commercial real estate loans. All delinquent loans are considered well-secured. During the same timeframe, non-performing assets increased from $13.3 million at December 31, 2025 to $13.4$27.8 million, which represented 1.5%3.2% of total assets at MarchJune 31,30, 2026. The Company’s allowance for credit losses was 0.40% of total loans and 19.69% of non-performing loans at March 31, 2026 compared to 0.39% of total loans and 19.38% of non-performing loans at December 31, 2025. The Bank has limited exposure to commercial real estate loans secured by office space. Non-performing loans at MarchJune 31,30, 2026 were primarily comprised ofincluded one construction loan for a catering hall that is 99% complete, with a balance of $10.9 million and a loan to value ratio of 45%. Based on the well-secured nature of the loan, there was no associated specific reserve at MarchJune 31,30, 2026. The Company has commenced legal action to foreclose on the property, which is ongoing. Non-performing loans also included two commercial real estate loans totaling $12.5 million that had previously been 60 days delinquent. We did not record any specific reserves or charge-offs for our nonaccrual loans. The Company did not record any charge-offs for the three months ended March 31, 2026 or 2025.
The Company’s allowance for credit losses was 0.40% of total loans and 9.29% of non-performing loans at June 30, 2026 compared to 0.39% of total loans and 19.29% of non-performing loans at December 31, 2025. The Bank has limited exposure to commercial real estate loans secured by office space. The Company did not record any charge-offs for the three and six months ended June 30, 2026 or 2025.
Total Liabilities. Total liabilities decreased $28.8$31.0 million, or 3.8%,4.1%, to $735.2$733.0 million as of MarchJune 31,30, 2026 from $764.0 million as of December 31, 2025, primarily due to a $51.6$78.2 million decrease in deposits, offset by a $22.6$47.7 million increase in borrowings.
Deposits. Deposits decreased $51.6$78.2 million, or 7.9%,12.0%, to $600.9$574.2 million at MarchJune 31,30, 2026 from $652.4 million at December 31, 2025. The decrease in deposits was due to an decrease in certificates of deposit of $65.4$91.4 million, or 13.2%,18.5%, to $428.6$402.5 million as of MarchJune 31,30, 2026 from $493.9 million at December 31, 2025, offset by an increase of $6.5 million, or 9.9%, in NOW accounts to $72.0 million as of June 30, 2026 from $65.5 million at December 31, 2025, an increase in savings accounts of $5.3$10.9 million, or 9.6%,19.9%, to $58.8$65.4 million as of MarchJune 31,30, 2026 from $54.6 million at December 31, 2025,2025; a increase in money market deposit accounts of $1.3 million,$121,000, or 12.6%,1.2%, to $11.5$10.4 million as of MarchJune 31,30, 2026 from $10.2 million at December 31, 2025,2025 and a $763,000,$2.3 million, or 2.7%, an8.2%, increase in noninterest bearing accounts to $28.9$30.5 million as of MarchJune 31,30, 2026 from $28.2 million at December 31, 2025, and by a $6.5 million, or 9.9%, increase in NOW accounts to $72.0 million as of March 31, 2026 from $65.5 million at December 31, 2025. The overall changes reflected the Company's efforts to move certificates of deposit intoincrease core deposit accounts.accounts and to decrease certificate of deposits until loan demand and investment rates increase.
At MarchJune 31,30, 2026, municipal deposits totaled $48.5$41.3 million, which represented 8.1%7.2% of total deposits, and brokered deposits totaled $89.6$98.9 million, which represented 14.9%17.2% of deposits. At December 31, 2025, municipal deposits totaled $45.1 million, which represented 6.9% of deposits, and brokered deposits totaled $109.7 million, which represented 16.8% of total deposits. At MarchJune 31,30, 2026, uninsured deposits totaled $52.3$59.3 million, comprised of 303 account holders, which represented 8.7% of total deposits.
Borrowings. Federal Home Loan Bank of New York borrowings increased $22.6$47.7 million, or 24.2%,51.1%, to $115.9$141.0 million at MarchJune 31,30, 2026 from $93.3 million at December 31, 2025. Long-term advances decreased $15.9$33.3 million, while short-term advances increased by $38.5$81.0 million. The weighted average rate of borrowings was 4.17%4.01% and 4.35% as of MarchJune 31,30, 2026 and December 31, 2025, respectively. Total borrowing capacity at the Federal Home Loan Bank was $236.4 million at MarchJune 31,30, 2026, of which $115.9$141.0 million has been advanced.advanced and $5.2 million was utilized as collateral for letters of credit issued to secure municipal deposits. The increase in borrowings was largely attributable to the outflow of deposits during the threesix months ended MarchJune 31,30, 2026.
Total Equity. Stockholders’ equity increased $1.1 million to $142.1$142.0 million, primarily due to net income of $706,000$1.5 million and less changes in accumulated other comprehensive income of $283,000$378,000 and stock-based compensation of $225,000,$451,000, offset by stock repurchases of $125,000.$1.3 million. At MarchJune 31,30, 2026, the Company’s ratio of average stockholders’ equity-to-average total assets was 16.28%,16.20%, compared to 15.13% at December 31, 2025.
(1) Cash flow and fair value hedges are used to manage interest rate risk. During the three months ended MarchJune 31,30, 2026 and 2025, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was an increased expense of $37,000$44,000 and a reduced expense of $177,000$186,000 respectively.
(2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average total interest-earning assets.
(1) Cash flow and fair value hedges are used to manage interest rate risk. During the six months ended June 30, 2026 and 2025, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was an increased expense of $21,000 and a reduced expense of $363,000 respectively.
Comparison of Operating Results for the Three Months Ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025
General. Net income decreasedincreased $25,000$523,000 to $706,000$748,000 for the three months ended MarchJune 31,30, 2026 fromcompared ato net income of $731,000$224,000 for the three months ended MarchJune 31,30, 2025. This decreaseincrease was primarily due to a decrease of $568,000 in non-interest income and an increase of $240,000$329,000 in non-interest income, a $145,000 increase in net interest income taxes,and a $201,000 decrease in non-interest expenses partially offset by ana $152,000 increase of $703,000 in netincome interest income, an increase $130,000 in the provision for credit losses and a decrease of $80,000 in non-interest expense.taxes.
Interest Income. Interest income decreased $435,000, or 4.0%, to $10.5 million for the three months ended March 31, 2025 compared to $10.9 million for the three months ended March 31, 2026.
Interest income on cash and cash equivalents decreased $142,000, or 53.6%, to $123,000 for the three months ended March 31, 2026 from $265,000 for the three months ended March 31, 2025 due to a $5.3 million decrease in the average balance to $11.3 million for the three months ended March 31, 2026 from $16.6 million for the three months ended March 31, 2025, reflecting an increase in securities and a reduction of borrowings. This was also due to a 203-basis point decrease in the average yield from 6.37% for the three months ended March 31, 2025 to 4.34% for the three months ended March 31, 2026 resulting from the lower interest rate environment.
Interest income on loans decreased $615,000, or 7.1%, to $8.0 million for the three months ended March 31, 2026 compared to $8.6 million for the three months ended March 31, 2025 due to a $57.2 million decrease in the average balance to $647.9 million for the three months ended March 31, 2026 from $705.1 million for the three months ended March 31, 2025, slightly offset by a five basis point increase in the average yield from 4.88% for the three months ended March 31, 2025 to 4.93% for the three months ended March 31, 2026.
Interest income on securities increased $431,000, or 23.5%, to $2.3 million for the three months ended March 31, 2026 from $1.8 million for the three months ended March 31, 2025 primarily due to a 88 basis point increase in the average yield from 5.05% for the three months ended March 31, 2025, to 5.93% for the three months ended March 31, 2026. The increase was also due to a $7.6 million increase in the average balance to $152.9 million for the three months ended March 31, 2026 from $145.3 million for the three months ended March 31, 2025.
Interest Expense. Interest expense decreased $1.3 million, or 17.3%, from $7.3 million for the three months ended March 31, 2025 to $6.1 million for the three months ended March 31, 2026 due to lower costs on deposits and lower balances on borrowings. During the three months ended March 31, 2026, the use of hedges increased the interest expense on the FHLB advances and brokered deposits by $37,000. At March 31, 2026, cash flow hedges used to manage interest rate risk had a notional value of $67.5 million, while fair value hedges totaled $30.0 million in notional value.
Interest expense on interest-bearing deposits decreased $772,000, or 13.4%, to $5.0 million for the three months ended March 31, 2026 from $5.8 million for the three months ended March 31, 2025. The decrease was due to a 45-basis point decrease in the average cost of deposits to 3.38% for the three months ended March 31, 2026 from 3.83% for the three months ended March 31, 2025. The decrease in the average cost of deposits was due to the lower interest rate environment and a decrease in the rate paid on certificates of deposit offset by an increase in the rate paid on transactional accounts. Our rates on certificates of deposit decreased 60 basis points to 3.65% for the three months ended March 31, 2026 from 4.25% for the three months ended March 31, 2025 and the average balances of certificates of deposit decreased $24.9 million to $459.3 million for the three months ended March 31, 2026 from $484.3 million for the three months ended March 31, 2025. The average balance of NOW/money market accounts and savings accounts increased $4.6 million and $9.3 million for the three months ended March 31, 2026, respectively, compared to the three months ended March 31, 2025.
Interest expense on FHLB advances decreased $496,000, or 31.6%, from $1.6 million for the three months ended March 31, 2025 to $1.1 million for the three months ended March 31, 2026. The decrease was primarily due to a decrease in the average balance of $61.1 million to $97.1 million for the three months ended March 31, 2026 from $158.1 million for the three months ended March 31, 2025. The decrease was offset by an increase in the average cost of borrowings of 46 basis points to 4.48% for the three months ended March 31, 2026 from 4.02% for the three months ended March 31, 2025 due to the new borrowings being shorter durations at higher rates.
Net Interest Income. Net interest income increased $833,000, or 23.2%, to $4.4 million for the three months ended March 31, 2026 from $3.6 million for the three months ended March 31, 2025. The increase reflected a 48-basis point increase in our net interest rate spread to 1.60% for the three months ended March 31, 2026 from 1.12% for the three months ended March 31, 2025. Our net interest margin increased 54 basis points to 2.20% for the three months ended March 31, 2026 from 1.66% for the three months ended March 31, 2025.
Provision for Credit Losses. We recorded a $50,000 provision for credit losses for the three months ended March 31, 2026 compared to $80,000 recovery for credit losses for the three months ended March 31, 2025 due to higher delinquent commercial loan balances.
Non-InterestInterest Income. Non-interestInterest income decreased $568,000,$916,000, or 63.9%,8.7%, to $321,000$9.6 million for the three months ended MarchJune 31,30, 20262026, fromcompared $889,000to $10.5 million for the three months ended MarchJune 31,30, 2025 due to a death benefit received last year related to a former employee.2025.
Interest income on cash and cash equivalents increased $1,000, or 0.9%, to $107,000 for the three months ended June 30, 2026 from $106,000 for the three months ended June 30, 2025 due to a seven basis point increase in the average yield from 4.26% for the three months ended June 30, 2025 to 4.33% for the three months ended June 30, 2026 resulting from a higher short-term interest rate environment. This was offset by a $114,000 decrease in the average balance to $9.9 million for the three months ended June 30, 2026 from $10.0 million for the three months ended June 30, 2025.
Interest income on loans decreased $770,000, or 9.3%, to $7.5 million for the three months ended June 30, 2026 compared to $8.3 million for the three months ended June 30, 2025 due primarily to a $57.5 million decrease in the average balance to $640.3 million for the three months ended June 30, 2026 from $697.8 million for the three months ended June 30, 2025 and a six basis point decrease in the average yield from 4.77% for the three months ended June 30, 2025 to 4.71% for the three months ended June 30, 2026.
Interest income on securities decreased $87,000, or 4.5%, to $1.9 million for the three months ended June 30, 2026, primarily due to a 24-basis point decrease in the average yield from 5.52% for the three months ended June 30, 2025, to 5.28% for the three months ended June 30, 2026. The decrease was also due to a $404,000 decrease in the average balance to $140.7 million for the three months ended June 30, 2026, from $141.1 million for the three months ended June 30, 2025.
Interest Expense. Interest expense decreased $1.1 million, or 15.6%, from $6.8 million for the three months ended June 30, 2025 to $5.7 million for the three months ended June 30, 2026, due to lower average balances of certificates of deposits and borrowings and decreased cost of certificates of deposits. During the three months ended June 30, 2026, the use of hedges increased the interest expense on the FHLB advances and brokered deposits by $37,000. At June 30, 2026, cash flow hedges used to manage interest rate risk had a notional value of $67.5 million, while fair value hedges totaled $30.0 million in notional value.
Interest expense on interest-bearing deposits decreased $910,000, or 16.5%, to $4.6 million for the three months ended June 30, 2026 from $5.5 million for the three months ended June 30, 2025. The decrease was due to a 39 basis point decrease in the average cost of deposits to 3.28% for the three months ended June 30, 2026 from 3.67% for the three months ended June 30, 2025. The decrease in the average cost of deposits was due to the lower interest rate environment and a decrease in the rate paid on certificates of deposit offset by an increase in the rate paid on savings accounts. The rates on certificates of deposit decreased 44 basis points to 3.57% for the three months ended June 30, 2026 from 4.01% for the three months ended June 30, 2025 and the average balances of certificates of deposit decreased $59.8 million to $422.7 million for the three months ended June 30, 2026 from $482.5 million for the three months ended June 30, 2025. The average balance of NOW/money market accounts and savings accounts increased $8.2 million and $11.9 million for the three months ended June 30, 2026, respectively, compared to the three months ended June 30, 2025.
Interest expense on FHLB advances decreased $151,000, or 11.7%, from $1.3 million for the three months ended June 30, 2025 to $1.1 million for the three months ended June 30, 2026. The decrease was primarily due to a decrease in the average balance of $20.2 million to $110.0 million for the three months ended June 30, 2026 from $130.3 million for the three months ended June 30, 2025. The decrease was offset by an increase in the average cost of borrowings of 18 basis points to 4.14% for the three months ended June 30, 2026 from 3.96% for the three months ended June 30, 2025 due to the new borrowings being shorter durations at higher rates.
Net Interest Income. Net interest income increased $145,000, or 3.9%, to $3.8 million for the three months ended June 30, 2026 from $3.7 million for the three months ended June 30, 2025. The increase reflected a 20 basis point increase in our net interest rate spread to 1.40% for the three months ended June 30, 2026 from 1.20% for the three months ended June 30, 2025. Our net interest margin increased 20 basis points to 1.94% for the three months ended June 30, 2026 from 1.74% for the three months ended June 30, 2025.
Provision for Credit Losses. We recorded no provision for credit losses for the three months ended June 30, 2026 and June 30, 2025. The lack of a provision reflects a decrease in loans and the absence of any charge-offs. Further the increase in non-performing loans were loans that were impaired with adequate collateral and required no additional provisions.
Non-Interest Income. Non-interest income increased $329,000, or 99.2%, to $661,000 for the three months ended June 30, 2026 from $332,000 for the three months ended June 30, 2025 due to a $300,000 collection on an insurance claim from a previous year fraud loss.
Non-Interest Expense. For the three months ended MarchJune 31,30, 2026, non-interest expense decreased $80,000,$200,000, or 2.1%,5.2%, compared to the comparablesame Marchperiod 31,ended 2025June period.30, 2025. Salaries and employee benefits decreased $27,000,$75,000, or 1.3%,3.7%, due to lower headcount. FDIC insurance premiums decreased $8,000,$18,000, or 7.1%,16.9%, due to lower deposit balances in 2026. Data processing expense decreasedincreased $45,000,$13,000, or 14.2%,4.3%, due to lowerhigher processing costs. Director fees decreased $21,000,$44,000, or 13.1%,25.9%, due to fewer members on the board. The decreaseincrease in advertising expense of $54,000,$23,000, or 50.7%,140.6%, was due to reducedincreased promotions for branch locations and lessmore promotions on deposit and loan products. Professional fees increaseddecreased $44,000,$125,000, or 21.9%,33.6%, due to higherlower legal costs in 2026. Occupancy and equipment increased $31,000, or 4.6%, due to higher snow removal costs in 2026.
Income Tax Expense. Income tax expense increased $240,000$151,000 to an expense of $212,000$99,000 for the three months ended MarchJune 31,30, 2026 from a $28,000$53,000 benefit for the three months ended MarchJune 31,30, 2025. The increase was due to an increase of $755,000$674,000 in pre-tax income.
Comparison of Operating Results for the Six Months Ended June 30, 2026 and June 30, 2025
General. Net income increased $498,000 to $1.5 million for the six months ended June 30, 2026 from net income of $955,000 for the six months ended June 30, 2025. This increase was primarily due to an increase of $978,000 in net interest income and a decrease of $280,000 in non-interest expense, partially offset by a decrease of $239,000 in non-interest income, an increase of $130,000 in the provision for credit losses and an increase of $391,000 in income taxes.
Interest Income. Interest income decreased $1.4 million, or 6.3%, to $20.1 million for the six months ended June 30, 2026 compared to $21.4 million for the six months ended June 30, 2025.
Interest income on cash and cash equivalents decreased $141,000, or 38.0%, to $230,000 for the six months ended June 30, 2026 from $371,000 for the six months ended June 30, 2025 due to a $2.7 million decrease in the average balance to $10.6 million for the six months ended June 30, 2026 from $13.3 million for the six months ended June 30, 2025, reflecting a decrease in deposits and a reduction of borrowings. The decrease was also due to a 124 basis point decrease in the average yield from 5.58% for the six months ended June 30, 2025 to 4.34% for the six months ended June 30, 2026 resulting from the lower interest rate environment.
Interest income on loans decreased $1.4 million, or 8.2%, to $15.5 million for the six months ended June 30, 2026 compared to $16.9 million for the six months ended June 30, 2025, due to a $57.3 million decrease in the average balance to $644.1 million for the six months ended June 30, 2026 from $701.4 million for the six months ended June 30, 2025.
Interest income on securities increased $344,000, or 9.1%, to $4.1 million for the six months ended June 30, 2026, from $3.8 million for the six months ended June 30, 2025, primarily due to a 34 basis point increase in the average yield from 5.28% for the six months ended June 30, 2025, to 5.62% for the six months ended June 30, 2026. The increase was also due to a $3.6 million increase in the average balance to $146.8 million for the six months ended June 30, 2026, from $143.2 million for the six months ended June 30, 2025.
Interest Expense. Interest expense decreased $2.3 million, or 16.5%, from $14.1 million for the six months ended June 30, 2025 to $11.8 million for the six months ended June 30, 2026, due to lower averages balances of certificates of deposits and borrowing and the lower costs of certificates of deposits. During the six months ended June 30, 2026, the use of hedges increased the interest expense on FHLB advances and brokered deposits by $21,000. At June 30, 2026, cash flow hedges used to manage interest rate risk had a notional value of $67.5 million, while fair value hedges totaled $30.0 million in notional value.
Interest expense on interest-bearing deposits decreased $1.7 million, or 14.9%, to $9.6 million for the six months ended June 30, 2026 from $11.3 million for the six months ended June 30, 2025. The decrease was due to a 42 basis point decrease in the average cost of deposits to 3.33% for the six months ended June 30, 2026 from 3.75% for the six months ended June 30, 2025. The decrease in the average cost of deposits was due to the lower interest rate environment and a decrease in the rate paid on certificates of deposit offset by an increase in the rate paid on transactional accounts. The rates on certificates of deposit decreased 52 basis points to 3.61% for the six months ended June 30, 2026 from 4.13% for the six months ended June 30, 2025 and the average balances of certificates of deposit decreased $42.5 million to $440.9 million for the six months ended June 30, 2026 from $483.4 million for the six months ended June 30, 2025. The average balance of NOW/money market accounts and savings accounts increased $6.4 million and $10.6 million for the six months ended June 30, 2026, respectively, compared to the six months ended June 30, 2025.
Interest expense on FHLB advances decreased $647,000, or 22.7%, from $2.9 million for the six months ended June 30, 2025 to $2.2 million for the six months ended June 30, 2026. The decrease was primarily due to a decrease in the average balance of $40.5 million to $103.6 million for the six months ended June 30, 2026 from $144.1 million for the six months ended June 30, 2025. The decrease was offset by an increase in the average cost of borrowings of 31 basis points to 4.30% for the six months ended June 30, 2026 from 3.99% for the six months ended June 30, 2025 due to the new borrowings being shorter durations at higher rates.
Net Interest Income. Net interest income increased $978,000, or 13.4%, to $8.3 million for the six months ended June 30, 2026 from $7.3 million for the six months ended June 30, 2025. The increase reflected a 34 basis point increase in our net interest rate spread to 1.49% for the six months ended June 30, 2026 from 1.15% for the six months ended June 30, 2025. Our net interest margin increased 36 basis points to 2.06% for the six months ended June 30, 2026 from 1.70% for the six months ended June 30, 2025.
Provision for Credit Losses. We recorded a $50,000 provision for credit losses for the six months ended June 30, 2026 compared to an $80,000 recovery for credit losses for the six months ended June 30, 2025 due to higher delinquent commercial loan balances, offset by a decrease in loans and the absence of any charge-offs.
Non-Interest Income. Non-interest income decreased $239,000, or 19.6%, to $982,000 for the six months ended June 30, 2026 from $1.2 million for the six months ended June 30, 2025 due to a death benefit received related to a former employee last year of $564,000, offset by $300,000 collection on an insurance claim during 2026 related to a previous year fraud loss.
Non-Interest Expense. For the six months ended June 30, 2026, non-interest expense decreased $280,000, or 3.6%, compared to the comparable June 30, 2025 period. Salaries and employee benefits decreased $103,000, or 2.5%, due to lower headcount. FDIC insurance premiums decreased $25,000, or 11.9%, due to lower deposit balances in 2026. Data processing expense decreased $32,000, or 5.1%, due to lower processing costs. Director fees decreased $65,000, or 19.7%, due to fewer members on the board. The decrease in advertising expense of $31,000, or 25.5%, was due to reduced promotions for branch locations and less promotions on deposit and loan products. Professional fees decreased $82,000, or 14.3%, due to lower legal costs in 2026 associated with a construction loan foreclosure in 2025. Occupancy and equipment increased $31,000, or 2.4%, due to higher snow removal costs in 2026.
Income Tax Expense. Income tax expense increased $391,000 to an expense of $311,000 for the six months ended June 30, 2026 from an $81,000 benefit for the six months ended June 30, 2025. The increase was due to an increase of $1.4 million in pre-tax income.
The following table presents the estimated changes in our net portfolio value that would result from changes in market interest rates as of MarchJune 31,30, 2026. All estimated changes presented in the table are within the policy limits approved by the board of directors.
BSBK insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding BSBK (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 60,851 | $549.5K | 0.0% | Added 95% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 21,732 | $196.2K | 0.0% | New position |