Bogota Financial Corp. Announces Sale-Leaseback Transaction and Balance Sheet Restructure

Return to Profitability: Bogota Financial reported a return to profitability in Q2 2025, with GAAP earnings per share of $0.02, driven by a 34.7% increase in net interest income, despite declines in loan balances and deposits.

Challenges and Focus Areas: The bank faced rising loan delinquencies primarily due to a single large commercial loan, while management emphasized the importance of maintaining asset quality and managing funding costs as they aim for growth in consumer and commercial deposits.

Financial Performance: Bogota Financial (BSBK) reported a net income of $224 thousand for the quarter ending June 30, 2025, a turnaround from a loss of $432 thousand in the same period last year, with an increase in net interest income to $3.7 million.

Market Position: The company's net interest margin improved to 1.74%, and BSBK shares are currently trading at $8.29, reflecting a 2.20% increase on NasdaqCM.

Financial Performance Overview: Bogota Financial Corp. reported a net loss of $2.2 million for 2024, a significant decline from a net income of $643,000 in 2023, despite improvements in asset growth and deposit increases. The company also underwent a balance sheet restructuring that included a sale-leaseback transaction and the reinvestment of proceeds into higher-yield securities.

Key Financial Metrics: Total assets increased to $971.5 million, with cash and cash equivalents rising significantly, while net loans slightly decreased. Interest income grew by 12% year-over-year, but net interest income fell by 29.5%, reflecting challenges in maintaining profitability amidst rising interest expenses and a narrowing interest rate spread.

Balance Sheet Restructuring: Bogota Financial Corp. announced a restructuring of its balance sheet, including a sale-leaseback of three branch offices that generated a $9 million pre-tax gain and the sale of securities resulting in an $8.9 million pre-tax loss, aimed at improving future earnings and net interest margin.

Strategic Goals: The transactions are part of the company's strategy to offload underperforming investments, strengthen its balance sheet for future growth, and enhance shareholder value without negatively impacting regulatory capital.

Financial Corrections: Bogota Financial Corp. corrected its financial results for the three and nine months ending September 30, 2024, revealing a $300,000 understatement of interest expenses, leading to increased losses and decreased net interest income compared to the previous year.

Performance Overview: The company reported a net loss of $367,000 for Q3 2024, significantly worse than the prior year's loss, with total assets rising but net interest income declining due to higher interest expenses on deposits and borrowings.

Financial Performance Overview: Bogota Financial Corp. reported a net loss of $147,000 in Q3 2024 and a total net loss of $1.0 million for the first nine months, contrasting sharply with a net income of $1.8 million during the same period in 2023, primarily due to declining net interest income and rising expenses.

Asset and Liability Changes: Total assets increased by 4.2% to $978.8 million, while total liabilities rose by 4.9% to $841.6 million, driven by higher borrowings and deposits; however, cash and cash equivalents decreased as funds were redirected towards securities purchases amidst a challenging interest rate environment.