Bogota Financial Corp.
For the period ended Mar 31, 2025. Filed May 13, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 13, 2025
BSBK$9.38-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001437749-24-035128
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0001437749-25-016407
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 57 current paragraphs.
27 unchanged; 22 reworded; 8 added; 21 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 32 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
***Total Assets.***Assets decreased $41.3 million, or 4.3%, from $971.5 million at December 31, 2024 to $930.2 million at March 31, 2025 due to a $26.6 million, or 51.0%, decrease in cash and cash equivalents, a $10.2 million, or 1.4%, decrease in loans and a $2.6 million, or 1.8%, decrease in securities available for sale.
Current report
Securities Available for Sale. Securities available for sale decreased $2.6 million, or 1.8%, to $137.7 million at March 31, 2025 from $140.3 million at December 31, 2024. The decrease was primarily due to maturing securities of $17.0 million exceeding purchases of $13.5 million of securities.
Current report
Deposits. Deposits decreased $9.2 million, or 1.4%, to $633.0 million at March 31, 2025 from $642.2 million at December 31, 2024. The decrease in deposits reflected a decrease in certificates of deposit of $17.3 million, or 3.5%, to $476.0 million as of March 31, 2025 from $493.3 million at December 31, 2024 and a $1.2 million, or 8.3%, decrease in money market accounts. The decreases were offset by a $6.6 million, or 11.9%, increase in NOW accounts, and by a $2.4 million, or 5.2%, increase in savings accounts. The changes reflected customers’ uncertainty about the lower rate environment and market opportunities.
Current report
Interest income on cash and cash equivalents increased $115,000, or 76.7%, to $265,000 for the three months ended March 31, 2025 from $150,000 for the three months ended March 31, 2024 due to a $6.7 million increase in the average balance to $16.6 million for the three months ended March 31, 2025 from $9.9 million for the three months ended March 31, 2024, reflecting the decrease in loans and securities. The increase was augmented by an 27 basis point increase in the average yield from 6.10% for the three months ended March 31, 2024 to 6.37% for the three months ended March 31, 2025.
Current report
Interest income on loans increased $396,000, or 4.8%, to $8.6 million for the three months ended March 31, 2025 compared to $8.2 million for the three months ended March 31, 2024 due primarily to a 27 basis point increase in the average yield from 4.61% for the three months ended March 31, 2024 to 4.88% for the three months ended March 31, 2025, which was offset by a $8.3 million decrease in the average balance to $705.1 million for the three months ended March 31, 2025 from $713.4 million for the three months ended March 31, 2024.
Current report
Interest income on securities increased $304,000, or 19.9%, to $1.8 million for the three months ended March 31, 2025 from $1.5 million for the three months ended March 31, 2024 primarily due to a 138 basis point increase in the average yield from 3.67% for the three months ended March 31, 2024 to 5.05% for the three months ended March 31, 2025 due to a rebalancing of the balance sheet in the fourth quarter of 2024. This was partially offset by a $21.4 million decrease in the average balance to $145.3 million for the three months ended March 31, 2025 from $166.7 million for the three months ended March 31, 2024.
Current report
Interest expense on interest-bearing deposits decreased $208,000, or 3.5%, to $5.8 million for the three months ended March 31, 2025 from $6.0 million for the three months ended March 31, 2024. The decrease was primarily due to lower average balances on certificates of deposit, which decreased to $484.3 million for the three months ended March 31, 2025 from $516.5 million for the three months ended March 31, 2024. The decrease was offset by an increase in the average balances of NOW and money market accounts, which increased by $10.0 million, from $69.4 million for the three months ended March 31, 2024 to $79.4 million for the three months ended March 31, 2025, and due to higher cost of borrowings for those accounts which increased 40 basis points from 1.94% for the three months ended March 31, 2024, to 2.34% for the three months ended March 31, 2025.
Current report
Non-Interest Expense. For the three months ended March 31, 2025, non-interest expense increased $217,000, or 5.9%, over the comparable 2024 period. This was due to a $300,000, or 80.9%, increase in occupancy and equipment expense, which increased as a result of increased occupancy costs related to the sale leaseback transaction that was completed in the fourth quarter of 2024, offset by a $78,000, or 3.6%, decrease in salaries and benefits costs, which was a result of reduced headcount.
Removed paragraphs (21)
Previous report
***Total Assets.***Assets increased $39.6 million, or 4.2%, from $939.3 million at December 31, 2023 to $978.9 million at September 30, 2024 primarily due to a $39.7 million, or 57.6%, increase in securities available for sale and an $7.4 million, or 10.3%, increase in securities held-to-maturity, offset by a $5.8 million, or 0.8%, decrease in loans and a $3.9 million, or 15.8%, decrease in cash and cash equivalents.
Previous report
Securities Available for Sale. Securities available for sale increased $39.7 million, or 57.6%, to $108.6 million at September 30, 2024 from $68.9 million at December 31, 2023. The increase was primarily due to the purchase of mortgage-backed securities that were purchased with excess funds as part of our leveraging strategy.
Previous report
Securities Held to Maturity. Securities held to maturity increased $7.4 million, or 10.3%, to $80.1 million at September 30, 2024 from $72.7 million at December 31, 2023, primarily due to the purchase of mortgage-backed securities with excess funds. At September 30, 2024, the Company's allowance for credit losses related to held-to-maturity securities totaled $108,000 or 0.13% of the total held-to-maturity securities portfolio.
Previous report
Deposits. Deposits increased $3.9 million, or 0.6%, to $629.2 million at September 30, 2024 from $625.3 million at December 31, 2023. The increase in deposits reflected an increase in interest-bearing demand deposits of $1.8 million, or 1.8%, to $103.3 million as of September 30, 2024 from $101.5 million at December 31, 2023 due to the increases of $4.5 million, or 5.2%, in checking and savings accounts, offset by a $2.6 million, or 18.1%, decrease in money market accounts. Certificates of deposit increased $505,000, or 0.1%, to $493.8 million at September 30, 2024 from $493.3 million at December 31, 2023. Non-interest bearing deposits increased $1.5 million, or 5.2%, to $32.1 million as of September 30, 2024 from $30.6 million as of December 31, 2023. The changes reflected customers’ desire for higher-yielding accounts in the higher interest rate environment.
Previous report
Interest income on cash and cash equivalents decreased $30,000, or 17.9%, to $138,000 for the three months ended September 30, 2024 from $168,000 for the three months ended September 30, 2023 due to a $2.6 million decrease in the average balance to $10.2 millionfor the three months ended September 30, 2024 from $12.8 million for the three months ended September 30, 2023, reflecting the use of excess cash to purchase securities. The decrease was offset by an 18 basis point increase in the average yield from 5.21% for the three months ended September 30, 2023 to 5.39% for the three months ended September 30, 2024, due to the higher interest rate environment.
Previous report
Interest income on loans increased $400,000, or 5.0%, to $8.4 million for the three months ended September 30, 2024 compared to $8.0 million for the three months ended September 30, 2023 due primarily to a 24 basis point increase in the average yield from 4.45% for the three months ended September 30, 2023 to 4.69% for the three months ended September 30, 2024, and to a lesser extent, a $876,000 increase in the average balance to $711.6 million for the three months ended September 30, 2024 from $710.7 million for the three months ended September 30, 2023.
Previous report
Interest income on securities increased $889,000, or 88.2%, to $1.9 million for the three months ended September 30, 2024 from $1.0 million for the three months ended September 30, 2023 primarily due to a $48.7 million increase in the average balance to $187.2 million for the three months ended September 30, 2024 from $138.5 million for the three months ended September 30, 2023, and a 114 basis point increase in the average yield from 2.91% for the three months ended September 30, 2023 to 4.05% for the three months ended September 30, 2024 due to the higher interest rate environment.
Previous report
Interest expense on interest-bearing deposits increased $1.3 million, or 27.0%, to $6.2 million for the three months ended September 30, 2024 from $4.9 million for the three months ended September 30, 2023. The increase was due to a 93 basis point increase in the average cost of deposits to 4.04% for the three months ended September 30, 2024 from 3.11% for the three months ended September 30, 2023. The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio to a greater concentration of higher-costing certificates of deposit. The average balances of certificates of deposit decreased $831,000 to $497.3 million for the three months ended September 30, 2024 from $498.1 million for the three months ended September 30, 2023. The average balance of savings accounts decreased by $2.1 million during the quarter, while the average balance of NOW and money market accounts decreased $9.0 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
Previous report
Non-Interest Expense. For the three months ended September 30, 2024, non-interest expense decreased $56,000, or 1.5%, over the comparable 2023 period. This was due to a $171,000, or 7.5% reduction in salaries and employee benefits, which decreased due to lower headcount, and a $40,000, or 31.9%, decrease in advertising expenses. Our FDIC insurance assessment also decreased by $26,000, or 19.8%. These decreases were offset by an increase in professional fees of $99,000, or 70.6%, due to higher consulting expense related to strategic business planning. Data processing expense also increased $100,000, or 48.8%, due to higher processing costs.
Previous report
General. Net income decreased by $3.1 million, or 168.1%, to a net loss of $1.2 million for thenine months ended September 30, 2024 from net income of $1.8 million for thenine months ended September 30, 2023. This decrease was primarily due to a decrease of $4.0million in net interest income, partially offset by a decrease of $1.2 million in income tax expense.
Previous report
Interest Income. Interest income increased $3.4 million, or 12.4%, from $27.7 million for thenine months ended September 30, 2023 to $31.1 million for thenine months ended September 30, 2024 due to higher yields on interest-earning assets and an increase in the average balance of securities, partially offset by a decrease in the average balance of loans and cash and cash equivalents.
Previous report
Interest income on cash and cash equivalents decreased $8,000, or 1.9%, to $415,000 for thenine months ended September 30, 2024 from $423,000 for thenine months ended September 30, 2023 due to a $2.3 million decrease in the average balance to $9.1 million for thenine months ended September 30, 2024 from $11.4 million for thenine months ended September 30, 2023, reflecting the decrease of liquidity due to increased securities purchases. This decrease was offset by a 111 basis point increase in the average yield from 4.98% for thenine months ended September 30, 2023 to 6.09% for thenine months ended September 30, 2024 due to the higher interest rate environment.
Previous report
Interest income on loans increased $1.1 million, or 4.5%, to $24.9 million for thenine months ended September 30, 2024 compared to $23.8 million for thenine months ended September 30, 2023 due primarily to a 20 basis point increase in the average yield from 4.46% for thenine months ended September 30, 2023 to 4.66% for thenine months ended September 30, 2024, offset by a $1.9 million decrease in the average balance to $711.7 million for thenine months ended September 30, 2024 from $713.6 million for thenine months ended September 30, 2023.
Previous report
Interest income on securities increased $2.2 million, or 69.4%, to $5.3 million for thenine months ended September 30, 2024 from $3.1 million for thenine months ended September 30, 2023 primarily due to a 112 basis point increase in the average yield from 2.80% for thenine months ended September 30, 2023 to 3.92% for thenine months ended September 30, 2024, and a $31.0 million increase in the average balance to $179.8 million for thenine months ended September 30, 2024 from $148.8 million for thenine months ended September 30, 2023.
Previous report
Interest Expense. Interest expense increased $7.4 million, or 47.4%, from $15.7 million for thenine months ended September 30, 2023 to $23.1 million for thenine months ended September 30, 2024, primarily due to higher costs and higher average balances on certificates of deposit and borrowings.
Previous report
Interest expense on interest-bearing deposits increased $5.6 million, or 43.9%, to $18.4 million for thenine months ended September 30, 2024 from $12.8 million for thenine months ended September 30, 2023. The increase was due to a 128 basis point increase in the average cost of deposits to 3.95% for thenine months ended September 30, 2024 from 2.67% for thenine months ended September 30, 2023. The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio to a greater concentration of higher-costing certificates of deposit. The average balances of certificates of deposit increased $12.0 million to $510.5 million for thenine months ended September 30, 2024 from $498.5 million for thenine months ended September 30, 2023 while average NOW and money market accounts and savings accounts decreased $24.2 million and $5.7 million for thenine months ended September 30, 2024, respectively, compared to thenine months ended September 30, 2023.
Previous report
Interest expense on Federal Home Loan Bank advances increased $1.8 million, or 62.7%, from $2.9 million for thenine months ended September 30, 2023 to $4.7 million for thenine months ended September 30, 2024. The increase was due to an increase in the average balance of $60.7 million to $171.6 million for thenine months ended September 30, 2024. The increase was also due to an increase in the average cost of borrowings of 17 basis points to 3.67% for thenine months ended September 30, 2024 from 3.50% for thenine months ended September 30, 2023 due to the new borrowings being at higher rates.
Previous report
Net Interest Income. Net interest income decreased $3.9 million, or 33.1%, to $8.1 million for thenine months ended September 30, 2024 from $12.0 million for thenine months ended September 30, 2023. The decrease reflected a 73 basis point decrease in our net interest rate spread to 0.68% for thenine months ended September 30, 2024 from 1.41% for thenine months ended September 30, 2023. Our net interest margin decreased 64 basis points to 1.18% for thenine months ended September 30, 2024 from 1.82% for thenine months ended September 30, 2023.
Previous report
Non-Interest Income. Non-interest income increased by $73,000, or 8.5%, to $929,000 for thenine months ended September 30, 2024 from $856,000 for thenine months ended September 30, 2023. Bank-owned life insurance income increased $74,000, or 12.9%, due to higher balances during 2024.
Previous report
Non-Interest Expense. For thenine months ended September 30, 2024, non-interest expense increased $163,000, or 1.5%, over the comparable 2023 period. Professional fees increased $270,000, or 65.5% due to higher consulting expense related to strategic business planning. Data processing expense increased $210,000, or 29.3%, due to higher processing costs. These were offset by a $333,000, or 4.9%, reduction in salaries and employee benefit costs, which decreased due to lower headcount.
Previous report
Income Tax Expense. Income tax expense decreased $1.2 million, or 312.9%, to a benefit of $821,000 for thenine months ended September 30, 2024 from a $386,000 expense for thenine months ended September 30, 2023. The decrease was due to $4.3 million of lower taxable income.
Reworded paragraphs (22)
Previous wording
Management’s discussion and analysis of financial condition and results of operations at September 30, 2024 and December 31, 2023 and for thethree and nine months ended September 30, 2024 and September 30, 2023 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.
Current wording
Management’s discussion and analysis of financial condition and results of operations at March 31, 2025 and December 31, 2024 and for thethree months ended March 31, 2025 and March 31, 2024 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.
Previous wording
***Cash and Cash Equivalents.***Cash and cash equivalents decreased $3.9 million, or 15.8%, to $21.0 million at September 30, 2024 from $24.9 million at December 31, 2023, as excess funds from increases in borrowings and deposits were used to purchase securities.
Current wording
***Cash and Cash Equivalents.***Cash and cash equivalents decreased $26.6 million, or 51.0%, to $25.6 million at March 31, 2025 from $52.2 million at December 31, 2024, as excess funds were used to pay down borrowings.
Previous wording
***Net Loans.***Net loans decreased $5.8 million, or 0.8%, to $708.9 million at September 30, 2024 from $714.7 million at December 31, 2023. The decrease was due to a decrease of $12.6 million, or 2.6%, in one- to four-residential real estate loans to $473.5 million from $486.1 million at December 31, 2023 and a decrease of $9.1 million, or 18.4%, in construction loans to $40.2 million at September 30, 2024 from $49.3 million at December 31, 2023, offset by a $13.1 million, or 13.1%, increase in commercial real estate loans to $112.9 million at September 30, 2024 from $99.8 million at December 31, 2023, and by a $3.6 million, or 53.6%, increase in commercial and industrial loans to $10.2 million at September 30, 2024 from $6.7 million at December 31, 2023. The decreases in one- to four-residential and construction loans reflect less opportunities and decreased demand due to the higher interest rate environment. As of September 30, 2024 and December 31, 2023, the Bank had no loans held for sale.
Current wording
***Net Loans.***Net loans decreased $10.2 million, or 1.4%, to $701.5 million at March 31, 2025 from $711.7 million at December 31, 2024. The decrease was due to a decrease of $6.6 million, or 1.4%, in one- to four-residential real estate loans to $466.1 million from $472.7 million at December 31, 2024, a decrease of $9.7 million, or 22.4%, in construction loans to $33.5 million at March 31, 2025 from $43.2 million at December 31, 2024, and a decrease of $1.1 million, or 17.7%, in commercial and industrial loans to $5.1 million at March 31, 2025 from $6.2 million at December 31, 2024, offset by aby a $7.8 million, or 6.6%, increase in commercial real estate loans to $125.8 million at March 31, 2025 from $118.0 million at December 31, 2024. 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 March 31, 2025 and December 31, 2024, the Bank had no loans held for sale.
Previous wording
Delinquent loans increased $8.9 million to $21.5 million, or 3.0% of total loans, at September 30, 2024. The increase was mostly due to four commercial real estate loans to three customers with a balance of $8.1 million. Three of the past due commercial real estate loans are being actively managed with the customers and are expected to be brought current, while one totaling $758,000 has been placed on nonaccrual status, but is considered well-secured with a loan-to-value of 59%. We did not record any specific reserves, or charge-offs for these loans. During the same timeframe, non-performing assets increased from $12.8 million at December 31, 2023 to $13.8 million, which represented 1.41% of total assets at September 30, 2024. The Company’s allowance for credit losses was 0.39% of total loans and 19.94% of non-performing loans at September 30, 2024 compared to 0.39% of total loans and 21.81% of non-performing loans at December 31, 2023. The Bank does not have any exposure to commercial real estate loans secured by office space. The majority of the non-performing loans at September 30, 2024 was comprised of one construction loan for construction of 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 September 30, 2024. The Company has commenced legal action against the client.
Current wording
Delinquent loans decreased $842,000 to $13.5 million, or 1.9% of total loans, at March 31, 2025, compared to$14.3 million, or 2.0% of total loans, at December 31, 2024. Thedecrease was mostly due to the payoff of one commercial real estate loan with a balance of $455,000 and residential loans totaling $387,000 being brought current. We did not record any specific reserves or charge-offs for these loans. During the same timeframe, non-performing assets decreased from $14.0 million at December 31, 2024 to $13.9 million, which represented 1.49% of total assets at March 31, 2025. The Company’s allowance for credit losses was 0.37% of total loans and 18.65% of non-performing loans at March 31, 2025 compared to 0.37% of total loans and 18.77% of non-performing loans at December 31, 2024. The Bank does not have any exposure to commercial real estate loans secured by office space. Non-performing loans at March 31, 2025 were primarily comprised of 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 March 31, 2025. The Company has commenced legal action to foreclose on the property, which is ongoing.
Previous wording
Total Liabilities. Total liabilities increased $39.7 million, or 5.0%, to $841.9 million as of September 30, 2024 from $802.2 million as of December 31, 2023, primarily due to a $3.9 million increase in deposits and a $34.9 million increase in borrowings.
Current wording
Total Liabilities. Total liabilities decreased $42.3 million, or 5.1%, to $791.9 million as of March 31, 2025 from $834.2 million as of December 31, 2024, primarily due to a $32.4 million decrease in borrowings and a $9.2 million decrease in deposits.
Previous wording
At September 30, 2024, municipal deposits totaled $36.0 million, which represented 5.7% of total deposits, and brokered deposits totaled $101.1 million, which represented 16.1% of deposits. At December 31, 2023, municipal deposits totaled $57.5 million, which represented 9.2% of deposits, and brokered deposits totaled $53.3 million, which represented 8.5% of total deposits. At September 30, 2024, uninsured deposits totaled $64.1 million, comprised of 296 account holders, which represented 10.2% of total deposits.
Current wording
At March 31, 2025, municipal deposits totaled $39.2 million, which represented 6.2% of total deposits, and brokered deposits totaled $94.2 million, which represented 14.9% of deposits. At December 31, 2024, municipal deposits totaled $30.7 million, which represented 4.8% of deposits, and brokered deposits totaled $101.6 million, which represented 15.8% of total deposits. At March 31, 2025, uninsured deposits totaled $49.8 million, comprised of 224 account holders, which represented 7.9% of total deposits.
Previous wording
***Borrowings.***Federal Home Loan Bank of New York borrowings increased $34.9 million, or 20.8%, to $202.6 million at September 30, 2024 from $167.7 million at December 31, 2023. Specifically short-term advances increased by $16.0 million while long-term advances increased $18.9 million which is part of our leveraging strategy that will allow the Company to better position itself to take advantage of potential rate cuts. The weighted average rate of borrowings was 4.62% and 4.54% as of September 30, 2024 and December 31, 2023, respectively. Total borrowing capacity at the Federal Home Loan Bank was $297.9 million at September 30, 2024, of which $202.6 million was advanced.
Current wording
***Borrowings.***Federal Home Loan Bank of New York borrowings decreased $32.4 million, or 18.8%, to $139.8 million at March 31, 2025 from $172.2 million at December 31, 2024. Specifically short-term advances decreased by $5.0 million while long-term advances decreased $27.4 million. The weighted average rate of borrowings was 4.52% and 4.49% as of March 31, 2025 and December 31, 2024, respectively. The increased rate in the lower rate environment reflected shorter maturities of the borrowings. Total borrowing capacity at the Federal Home Loan Bank was $261.9 million at March 31, 2025, of which $139.8 million has been advanced.
Previous wording
***Total Equity.***Stockholders’ equity decreased $233,000 to $136.9 million, primarily due to a net loss of $1.2 million and the repurchase of 196,873 shares of stock during thenine months ended September 30, 2024 at a cost of $1.4 million, offset by a decrease in accumulated other comprehensive loss for securities available for sale of $1.6 million and stock compensation of $668,000 for thenine months ended September 30, 2024. At September 30, 2024, the Company’s ratio of average stockholders’ equity-to-average total assets was 14.01%, compared to 15.24% at December 31, 2023.
Current wording
***Total Equity.***Stockholders’ equity increased $965,000 to $138.3 million, primarily due to net income of $731,000 andby a decrease in accumulated other comprehensive loss of $360,000, offset by the repurchase of 50,211 shares at a cost of $398,000. At March 31, 2025, the Company’s ratio of average stockholders’ equity-to-average total assets was 14.59%, compared to 13.99% at December 31, 2024.
Previous wording
(1) Cash flow and fair value hedges are used to manage interest rate risk. During the three months ended September 30, 2024 and 2023, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expenseof $498,000 and $115,000 respectively.
Current wording
(1) Cash flow and fair value hedges are used to manage interest rate risk. During the three months ended March 31, 2025 and 2024, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expenseof $177,000 and $288,000 respectively.
Previous wording
General. Net income decreased by $338,000 to a net loss of $367,000 for the three months ended September 30, 2024 from a net loss of $29,000 for the three months ended September 30, 2023. This decrease was primarily due to a decrease of $560,000 in net interest income, partially offset by a decrease of $56,000 in non-interest expense, an increase of $128,000 in income tax benefit and a $38,000 increase in non-interest income.
Current wording
General. Net income increased by $1.2 million to $731,000 for the three months ended March 31, 2025 from a net loss of $441,000 for the three months ended March 31, 2024. The increase was primarily due to an increase of $942,000 in net interest income, and a $590,000 increase in non-interest income, partially offset by an increase of $300,000 in occupancy and equipment costs, and a decrease of $259,000 in income tax benefit.
Previous wording
Interest Income. Interest income increased $1.3 million, or 14.3%, from $9.3 million for the three months ended September 30, 2023 to $10.6 million for the three months ended September 30, 2024 primarily due to higher yields on interest-earning assets and an increase in the average balance of securities.
Current wording
Interest Income. Interest income increased $862,000, or 8.6%, from $10.1 million for the three months ended March 31, 2024 to $10.9 million for the three months ended March 31, 2025 primarily due to higher yields on interest-earning assets.
Previous wording
Interest Expense. Interest expense increased $1.9 million, or 31.1%, from $6.1 million for the three months ended September 30, 2023 to $8.0 million for the three months ended September 30, 2024 due to higher costs and average balances on interest-bearing liabilities.
Current wording
Interest Expense. Interest expense decreased $80,000, or 1.1%, from $7.4 million for the three months ended March 31, 2024 to $7.3 million for the three months ended March 31, 2025 due to lower average balances on certificates of deposit, offset by an increase in average borrowing and borrowing costs.
Previous wording
Interest expense on Federal Home Loan Bank advances increased $582,000, or 47.7%, from $1.2 million for the three months ended September 30, 2023 to $1.8 million for the three months ended September 30, 2024. The increase was due to an increase in the average balance of $71.6 million to $196.9 million for the three months ended September 30, 2024. The increase was offset by a 22 basis point decrease in the average cost of borrowings to 3.64% for the three months ended September 30, 2024 from 3.86% for the three months ended September 30, 2023 due to the new borrowings being at lower rates.
Current wording
Interest expense on Federal Home Loan Bank advances increased $128,000, or 8.9%, from $1.4 million for the three months ended March 31, 2024 to $1.6 million for the three months ended March 31, 2025. The increase was due to an increase in the average balance of $4.8 million to $158.1 million for the three months ended March 31, 2025. The increase was also due to a 24 basis point increase in the average cost of borrowings to 4.02% for the three months ended March 31, 2025 from 3.78% for the three months ended March 31, 2024 due to the new borrowings being shorter durations at higher rates.
Previous wording
Net Interest Income. Net interest income decreased $560,000, or 17.4%, to $2.7 million for the three months ended September 30, 2024 from $3.2 million for the three months ended September 30, 2023. The decrease reflected a 35 basis point decrease in our net interest rate spread to 0.66% for the three months ended September 30, 2024 from 1.01% for the three months ended September 30, 2023. Our net interest margin decreased 32 basis points to 1.15% for the three months ended September 30, 2024 from 1.47% for the three months ended September 30, 2023.
Current wording
Net Interest Income. Net interest income increased $942,000, or 35.5%, to $3.6 million for the three months ended March 31, 2025 from $2.7 million for the three months ended March 31, 2024. The increase reflected a 44 basis point increase in our net interest rate spread to 1.12% for the three months ended March 31, 2025 from 0.68% for the three months ended March 31, 2024. Our net interest margin increased 48 basis points to 1.66% for the three months ended March 31, 2025 from 1.18% for the three months ended March 31, 2024.
Previous wording
Provision for Credit Losses. We recorded a $70,000 provision for credit losses for thenine months ended September 30, 2024 compared to a $125,000 recovery for credit losses for thenine-month period ended September 30, 2023. The entire provision during the period was due to a $108,000 provision for held-to-maturity securities due to an increase in corporate securities, which was offset by a$38,000 credit to the provision for loans due to a decrease in the loan portfolio.
Current wording
Provision for Credit Losses. We recorded an $80,000 recovery of credit losses for the three months ended March 31, 2025 compared to a $35,000 provision for credit losses for the three months ended March 31, 2024. The decrease in the allowance for credit losses was due to the decrease in loans and held-to-maturity securities.
Previous wording
Non-Interest Income. Non-interest income increased by $37,000, or 13.0%, to $327,000 for the three months ended September 30, 2024 from $290,000 for the three months ended September 30, 2023. Bank-owned life insurance income increased $23,000, or 11.7%, due to higher balances during 2024, and gain on sale of loans increased $12,000 compared to no gain on sale of loans for the three months ended September 30, 2023.
Current wording
Non-Interest Income. Non-interest income increased by $590,000, or 197.4%, to $889,000 for the three months ended March 31, 2025 from $299,000 for the three months ended March 31, 2024. Bank-owned life insurance income increased $550,000, or 259.5%, due to a death benefit receivable related to a former employee and higher balances during 2025. Additionally, we had a gain on the sale of one loan of $29,000 compared to no gain on sale of loans for the three months ended March 31, 2024.
Previous wording
Income Tax Expense. Income tax benefit increased $128,000, or 102.1%, to a benefit of $253,000 for the three months ended September 30, 2024 from a $125,000 benefit for the three months ended September 30, 2023. The decrease was due to $466,000 of lower taxable income.
Current wording
Income Tax Expense. Income tax benefit decreased $259,000, or 90.2%, to a benefit of $28,000 for the three months ended March 31, 2025 from a $287,000 benefit for the three months ended March 31, 2024. The decrease was due to an increase of $1.4 million of taxable income.
Previous wording
General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of loans and securities, have longer maturities than our liabilities, consisting primarily of deposits and borrowings. As a result, a principal part of our business strategy is to manage our exposure to changes in market interest rates. Accordingly, our board of directors has established an Asset/Liability Management Committee (the “ALCO”), which is comprised of three members of executive management and two independent directors, which oversees the asset/liability management processes and related procedures. The ALCO meets on at least a quarterly basis and reviews asset/liability strategies, liquidity positions, alternative funding sources, interest rate risk measurement reports, capital levels and economic trends at both national and local levels. Our interest rate risk position is also monitored quarterly by the board of directors.
Current wording
General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of loans and securities, have longer maturities than our liabilities, consisting primarily of deposits and borrowings. As a result, a principal part of our business strategy is to manage our exposure to changes in market interest rates. Accordingly, our board of directors has established an Asset/Liability Management Committee (the “ALCO”), which is comprised of three members of executive management and two independent directors, which oversees the asset/liability management processes and related procedures. The ALCO meets on at least a quarterly basis and reviews asset/liability strategies, liquidity position, alternative funding sources, interest rate risk measurement reports, capital levels and economic trends at both national and local levels. Our interest rate risk position is also monitored quarterly by the board of directors.
Previous wording
***Liquidity.***Liquidity describes our ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from calls, maturities and sales of securities and sales of loans. We also borrow from the Federal Home Loan Bank of New York. At September 30, 2024, we had the ability to borrow up to $297.9 million, of which $202.7 million was outstanding and $1.2 million was utilized as collateral for letters of credit issued to secure municipal deposits. At September 30, 2024, we had $54.0 million in unsecured lines of credit with four correspondent banks with no outstanding balance.
Current wording
***Liquidity.***Liquidity describes our ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from calls, maturities and sales of securities and sales of loans. We also borrow from the Federal Home Loan Bank of New York. At March 31, 2025, we had the ability to borrow up to $261.9 million, of which $139.8 million was outstanding and $5.7 million was utilized as collateral for letters of credit issued to secure municipal deposits. At March 31, 2025, we had $54.0 million in unsecured lines of credit with four correspondent banks with no outstanding balance.
Previous wording
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any period. At September 30, 2024, cash and cash equivalents totaled $21.0 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $108.6 million at September 30, 2024.
Current wording
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows, loan prepayments and loan and security sales are greatly influenced by market interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any period. At March 31, 2025, cash and cash equivalents totaled $25.6 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $137.7 million at March 31, 2025.
Previous wording
We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate we will have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of September 30, 2024 totaled $439.7 million, or 69.9% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits and Federal Home Loan Bank of New York advances. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on past experience that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.
Current wording
We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate we will have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of March 31, 2025 totaled $439.7 million, or 69.5% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits and Federal Home Loan Bank of New York advances. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on past experience that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.
Previous wording
Capital Resources. We are subject to various regulatory capital requirements administered by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation. At September 30, 2024, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines. As a result of the Economic Growth, Regulatory Relief, and Consumer Protection Act, as modified in April 2020, the federal banking agencies were required to develop a “Community Bank Leverage Ratio” (the ratio of a bank's Tier 1 “equity capital to average total consolidated assets) for financial institutions with less than $10 billion. A “qualifying community bank” with capital exceeding 9% will be considered compliant with all applicable regulatory capital and leverage requirements, including the capital requirements to be considered "well capitalized” under Prompt Corrective Action statutes. As of September 30, 2024, the Bank is reporting as a qualifying community bank with a ratio of 13.12%.
Current wording
Capital Resources. We are subject to various regulatory capital requirements administered by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation. At March 31, 2025, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines. As a result of the Economic Growth, Regulatory Relief, and Consumer Protection Act, as modified in April 2020, the federal banking agencies were required to develop a “Community Bank Leverage Ratio” (the ratio of a bank's Tier 1 “equity capital to average total consolidated assets) for financial institutions with less than $10 billion. A “qualifying community bank” with capital exceeding 9% will be considered compliant with all applicable regulatory capital and leverage requirements, including the capital requirements to be considered "well capitalized” under Prompt Corrective Action statutes. As of March 31, 2025, the Bank reported as a qualifying community bank with a ratio of 15.00%.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
(1) Cash flow and fair value hedges are used to manage interest rate risk. During thenine months ended September 30, 2024 and 2023, the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $1.2 million and $254,000 respectively.
Previous report — wording carried elsewhere
(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.
Previous report — wording carried elsewhere
(3) Net interest margin represents net interest income divided by average total interest-earning assets.
Previous report — wording carried elsewhere
Provision for Credit Losses. We did not record a provision for credit losses for the three months ended September 30, 2024 or September 30, 2023 due to the decrease in loans.
Previous report — wording carried elsewhere
Comparison of Operating Results for the Nine Months Ended September 30, 2024 and September 30, 2023