Bogota Financial Corp.
For the period ended Dec 31, 2025. Filed Mar 27, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 27, 2026
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-K
Period ended 2024-12-31; filed 2025-03-28.
0001437749-25-009807
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-27.
0001437749-26-010056
ITEM 7. 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 94 previous paragraphs and 94 current paragraphs.
56 unchanged; 29 reworded; 9 added; 9 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 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 (9)
Current report
***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.
Current report
***Cash and Cash Equivalents.***Cash and cash equivalents decreased $16.6 million, or 31.8%, to $35.6 million at December 31, 2025 from $52.2 million at December 31, 2024. This decrease was primarily due to cash used to purchase securities.
Current report
Investment Securities. Securities available for sale increased $17.8 million, or 12.7%, to $158.1 million at December 31, 2025 from $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.
Current report
***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.
Current report
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.
Current report
***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.
Current report
***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.
Current report
***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.
Current report
***Non-Interest Expenses.***For the twelve months ended December 31, 2025, non-interest expense increased $707,000, or 4.8%, compared to the twelve months ended December 31, 2024. Occupancy and equipment increased $1.2 million, or 82.7%, due to higher lease expense associated with the sale leaseback transaction that took place in December 2024. Salaries and employee benefits decreased $251,000, or 2.9%, due to a lower employee count when compared to 2024. Advertising decreased by $199,000 or 53.5% due to less promotion events taking place. Professional fees increased $265,000 or 33.5%, due to higher legal expense. Data processing decreased $47,000, or 3.9%, due to lower processing costs. Other expense decreased $168,000, or 17.5%, due to lower miscellaneous expenses.
Removed paragraphs (9)
Previous report
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.
Previous report
***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.
Previous report
***Cash and Cash Equivalents.***Total cash and cash equivalents increased $27.3 million, or 109.5%, to $52.2 million at December 31, 2024 from $24.9 million at December 31, 2023. This increase was primarily due to loan payments received, proceeds from sales and maturities of securities, additional borrowings and an increase in deposits.
Previous report
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.
Previous report
Bank-Owned Life Insurance. Bank-owned life insur ance 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.
Previous report
Deposits. Total deposits increased $16.8 million, or 2.7%, to $642.1 million at December 31, 2024 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 million at December 31, 2024.
Previous report
***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%.
Previous report
***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.
Previous report
***Non-Interest Expenses.***For the twelve months ended December 31, 2024, non-interest expenses decreased $1.2 million, or 7.4%, over 2023. Salaries and employee benefits decreased $1.1 million, or 10.9%, as 2023 amounts reflected an accrual of $966,000 for a severance contract for the retirement of the previous President and a higher employee count when compared to 2024. Professional fees increased $129,000, or 19.5%, due to higher legal expense primarily related to the sale-leaseback transaction. Data processing increased $234,000, or 24.1%, due to higher processing costs. Other non-interest expenses decreased $369,000, or 27.8%, as 2023 amounts included charges for a pending fraud claim that is under review with the insurance company.
Reworded paragraphs (29)
Previous wording
Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses (“ACL”). 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.
Current wording
The Company determines 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.
Previous wording
Non-Interest Expenses. Our non-interest expenses consist of salaries and employee benefits, net occupancy, equipment, data processing, federal deposit insurance premiums, advertising, directors fees, professional fees and other general and administrative expenses.
Current wording
Non-Interest Expenses. Our non-interest expenses consist of salaries and employee benefits, net occupancy and equipment, data processing, federal deposit insurance premiums, advertising, directors fees, professional fees and other general and administrative expenses.
Previous wording
***Continue to focus on residential real estate lending.***We have been, and will continue to be, primarily a one- to four-family residential real estate lender in our market area. As of December 31, 2024, $472.7 million, or 66.2% of our total loan portfolio, consisted of one- to four-family residential real estate loans. We expect that one- to four-family residential real estate lending will remain our primary lending activity.
Current wording
***Continue to focus on residential real estate lending.***We have been, and will continue to be, primarily a one- to four-family residential real estate lender in our market area. As of December 31, 2025, $443.9 million, or 68.3% of our total loan portfolio, consisted of one- to four-family residential real estate loans. We expect that one- to four-family residential real estate lending will remain our primary lending activity.
Previous wording
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 increased to $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.
Current wording
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 decreased 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.
Previous wording
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, core deposits increased to 24.8% of our total deposits compared to 21.1% 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.
Current wording
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, 2025, core deposits decreased to 24.3% of our total deposits compared to 24.8% of our total deposits at December 31, 2024.
Previous wording
Grow through opportunistic bank or branch acquisitions or formations. We opened a new branch in Upper Saddle River during the second quarter of 2024, in which deposits have continued to grow throughout the year. 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.
Current wording
Grow through opportunistic bank or branch acquisitions or formations. We are opening a new branch in Point Pleasant during the second quarter of 2026, which we hope will be an additional source 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.
Previous wording
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 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%for the year ended December 31, 2024 compared to 1.69% for the year ended December 31, 2023. To support our growth in a cost-effective way, we plan to continue to invest prudently in technology to help improve our operational infrastructure.
Current wording
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 1.66% for the year ended December 31, 2025 compared to 1.66% for the year ended December 31, 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.
Previous wording
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, non-performing assets totaled $14.0 million, which represented 1.44% of total assets. Included in this amount was one 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 November 2024. We did not record any specific reserve, or charge-offs for this loan. At December 31, 2023, there were $12.8 million of non-performing assets, which represented 1.36% of total assets.
Current wording
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, 2025, non-performing assets totaled $13.3 million, which represented 1.47% of total assets. Included in this amount was a $10.9 million construction loan, which is being actively managed by the Company and is considered well-secured with a loan-to-value of 41% based on an appraisal performed in March 2025. We did not record any specific reserve, or charge-offs for this loan. At December 31, 2024, there were $14.0 million of non-performing assets, which represented 1.44% of total assets.
Previous wording
Actual credit losses may be significantly more than the allowance we have established 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 loan losses.
Current wording
Actual credit losses may be significantly more than the allowance we have established, 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 credit losses.
Previous wording
***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.
Current wording
***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.
Previous wording
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.
Current wording
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.
Previous wording
At December 31, 2024, municipal deposits totaled $30.7 million, which represented 4.8% of total deposits, and brokered deposits totaled $101.6 million, which represented 15.8% of total deposits. At December 31, 2023, municipal deposits totaled $48.0 million, which represented 7.7% of total deposits, and brokered deposits totaled $53.5 million, which represented 8.5% of total deposits.
Current wording
At December 31, 2025, municipal deposits totaled $45.1 million, which represented 6.9% of total deposits, and brokered deposits totaled $109.7 million, which represented 16.8% of total deposits. At December 31, 2024, municipal deposits totaled $30.7 million, which represented 4.8% of total deposits, and brokered deposits totaled $101.6 million, which represented 15.8% of total deposits.
Previous wording
***Borrowings.***Federal Home Loan Bank of New York borrowings increased $4.5 million, or 2.7%, to $172.2 million at December 31, 2024 from $167.7 million at December 31, 2023, due to proceeds of $57.8 million from short-term advances, offset by a decrease of $53.4 million in long-term advances. The weighted average rate paid on borrowings was 4.49% and 4.54% as of December 31, 2024 and December 31, 2023, respectively. The Company uses cash flow hedges are used to manage interest rate risk. At December 31, 2024, the Company had five interest rate swaps with a notional amount of $65.0 million hedging on certain short-term FHLB advances.
Current wording
***Borrowings.***Federal Home Loan Bank of New York borrowings decreased $78.9 million, or 45.8%, to $93.3 million at December 31, 2025 from $172.2 million at December 31, 2024, due to repayments of $9.5 million from short-term advances and a decrease of $69.4 million in long-term advances. The weighted average rate paid on borrowings was 4.35% and 4.49% as of December 31, 2025 and December 31, 2024, respectively. The Company uses cash flow hedges to manage interest rate risk. At December 31, 2025, the Company had six interest rate swaps with a notional amount of $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.
Previous wording
***Total Equity.***Stockholders’ equity increased $116,000, or 0.1%, to $137.3 million, due to a reduction in the accumulated other comprehensive loss on the securities portfolio of $2.9 million, offset by a net loss of $2.2 million and the repurchase of 221,130 shares of stock at a cost of $1.7 million. At December 31, 2024, the Company’s ratio of average stockholders’ equity-to-total assets was 14.10%, compared to 15.24% at December 31, 2023.
Current wording
***Total Equity.***Total stockholders’ equity increased $3.6 million to $140.9 million at December 31, 2025, from $137.3 million at December 31, 2024. The increase was due to a reduction in the accumulated other comprehensive loss on the securities portfolio of $1.5 million and net income of $2.1 million, offset by the repurchase of 123,603 shares of stock at a total cost of $1.1 million. At December 31, 2025, the Company’s ratio of average stockholders’ equity-to-average total assets was 15.30%, compared to 14.10% at December 31, 2024.
Previous wording
***General.***Net income decreased by $2.8 million, or 437.8%, 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. This decrease was primarily due to a decrease of $4.4 million in net interest income, offset by a decrease of $1.2 million in non-interest expense, an increase of $209,000 increase in non-interest income and a $209,000 increase in income tax benefit.
Current wording
***General.***Net income increased by $4.3 million, or 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. This increase was primarily due to an increase of $4.9 million in net interest income and an increase of $420,000 in non-interest income offset by an increase of $707,000 in non-interest expense and an increase of $353,000 in income tax.
Previous wording
***Interest Income.***Interest income increased $4.4million, or 12.0%, from $37.3 million for the twelve months ended December 31, 2023 to $41.7 million for the twelve months ended December 31, 2024 due to increases in the average balances of and higher yields on interest-earning assets.
Current wording
***Interest Income.***Interest income increased $1.3 million, or 3.0%, from $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 higher yields on interest-earning assets offset by lower average balances.
Previous wording
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.
Current wording
Interest income on cash and cash equivalents increased $302,000, or 49.8%, to $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, 2025 from $10.2 million for the twelve months ended December 31, 2024, offset by a 72 basis point decrease in the average yield from 5.94% for the twelve months ended December 31, 2024 to 5.22% for the twelve months ended December 31, 2025 due to the lower interest rate environment for most of 2025.
Previous wording
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.
Current wording
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.
Previous wording
Interest income on securities increased $2.7 million, or 66.7%, to $6.9 million for the twelve months ended December 31, 2024 from $4.2 million for the twelve months ended December 31, 2023 due to a 101 basis point increase 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 million for the twelve months ended December 31, 2024 from $144.9 million for the twelve months ended December 31, 2023.
Current wording
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.
Previous wording
***Interest Expense.***Interest expense increased $8.9 million, or 39.9%, from $22.3 million for the twelve months ended December 31, 2023 to $31.2 million for the twelve months ended December 31, 2024 due to increases in the average balance of and higher 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, the use of the cash flow hedges reduced the interest expense on the Federal Home Loan Bank advances by $1.5 million.
Current wording
***Interest Expense.***Interest expense decreased $3.7 million, or 11.7%, from $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 a lower average balance of and lower costs on interest-bearing liabilities. During the twelve months ended December 31, 2025, the use of cash flow hedges reduced the interest expense on the Federal Home Loan Bank advances by $644,000, compared to $1.5 million for 2024.
Previous wording
Interest expense on interest-bearing deposits increased $6.6 million, or 36.4%, to $24.6 million for the twelve months ended December 31, 2024 from $18.0 million for the twelve months ended December 31, 2023. The increase was due to a 112 basis point increase in the average cost of interest-bearing deposits to 3.97% for the twelve months ended December 31, 2024 from 2.85% for the twelve months ended December 31, 2023, offset by a $12.3 million decrease in the average balance of interest-bearing deposits. The increase in the average cost of deposits was due to the higher interest rate environment and the composition of the deposit portfolio consisting of a greater proportion of certificates of deposit. The average balance of certificates of deposit increased $10.2 million to $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 decreased $18.1 million and $4.4 million for the twelve months ended December 31, 2024, 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%.
Current wording
Interest expense on interest-bearing deposits decreased $2.1 million, or 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. The decrease was due to a 32 basis point decrease 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 and a $3.9 million decrease in the average balance of interest-bearing deposits. The decrease in the average cost of deposits was due to the lower interest rate environment, which 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 as the average balances of certificates of deposit decreased $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 while NOW and money market accounts and savings accounts increased $6.4 million and $5.3 million for the twelve months ended December 31, 2025, respectively, compared to the twelve months ended December 31, 2024.
Previous wording
Interest expense on Federal Home Loan Bank borrowings increased $2.3 million, or 54.4%, from $4.3 million for the twelve months ended December 31, 2023 to $6.6 million for the twelve months ended December 31, 2024. The increase was primarily due to a $59.2 million increase in the average balance of borrowings to $176.0 million for the twelve months ended December 31, 2024 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 from 3.67% for the twelve months ended December 31, 2023 due to the new borrowings being at higher rates.
Current wording
Interest expense on Federal Home Loan Bank borrowings decreased $1.5 million, or 23.1%, from $6.6 million for the twelve months ended December 31, 2024 to $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 decrease was offset by an increase in the average cost of 22 basis points to 3.97% for the twelve months ended December 31, 2025 from 3.76% for the twelve months ended December 31, 2024 due to maturity of low cost borrowings. At December 31, 2025, cash flow hedges used to manage interest rate risk had a notional value of $85.0 million, while fair value hedges totaled $60.0 million in notional value.
Previous wording
***Provision for (recovery of) Credit Losses.***We recorded a $148,000 recovery of credit losses for the year ended December 31, 2023 compared to a $125,000 recovery of credit losses for the twelve-month period ended December 31, 2023. The Bank had decreases in the loan and securities portfolios and no charge-offs during the years. This recovery in 2024 was inclusive of the effect of 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 twelve months ended December 31, 2024.
Current wording
***Provision for (recovery of) Credit Losses.***We recorded a $130,000 recovery of credit losses for the twelve months ended December 31, 2025 compared to a $148,000 recovery for credit losses for the twelve-month period ended December 31, 2024 which reflected a decrease in the loan portfolio, as well as no charge-offs during the years. This 2024 recovery was inclusive of the effect due 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 for the 2024 period.
Previous wording
***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.
Current wording
***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.
Previous wording
**Liquidity.Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing needs 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. We also have the ability to borrow from the Federal Home Loan Bank of New York. At December 31, 2024, we had the ability to borrow up to $280.4 million, of which $175.3 million was outstanding and $1.5 million was utilized as collateral for letters of credit issued to secure municipal deposits resulting in remaining availability of $105.1 million. At December 31, 2024, we also had $54.0 million in unsecured lines of credit with four correspondent banks with no outstanding balances.
Current wording
**Liquidity.Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing needs 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. We also have the ability to borrow from the Federal Home Loan Bank of New York. At December 31, 2025, we had the ability to borrow up to $232.8 million, of which $93.3 million was outstanding and $3.0 million was utilized as collateral for letters of credit issued to secure municipal deposits resulting in remaining availability of $136.6 million. At December 31, 2025, we also had $54.0 million in unsecured lines of credit with four correspondent banks with no outstanding balances.
Previous wording
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows andloan sales and 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 December 31, 2024, cash and cash equivalents totaled $52.2 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $140.3 million with a unrealized loss of $5.6 million at December 31, 2024.
Current wording
While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows andloan sales and 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 December 31, 2025, cash and cash equivalents totaled $35.6 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $158.1 million with a unrealized loss of $2.7 million at December 31, 2025.
Previous wording
We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of December 31, 2024 totaled $450.1 million, or 70.0% 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 that we will have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of December 31, 2025 totaled $441.3 million, or 67.6% 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
At December 31, 2024, wehad $7.9 million of commitments to originate loans, comprised of $562,000 of residential loans, $7.0 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.
Current wording
At December 31, 2025, wehad $1.3 million of commitments to originate loans, comprised of $1.3 million of commitments of home equity loans and lines of credit. See Note 15 in the Notes to the consolidated financial statements for further information.
Previous wording
The reserve for unfunded commitments (the “Unfunded Reserve”) represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The Unfunded Reserve is recognized as a liability (other liabilities in the consolidated statements of condition), with adjustments to the reserve recognized in other noninterest expense in the consolidated statements of operations. The Unfunded Reserve is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates (i.e., the likelihood of draws taken). To estimate future draws on unfunded balances, current utilization rates are compared to historical utilization rates. If current utilization rates are below historical utilization rates, the rate difference is applied to the committed balance to estimate the future draw. Loss rates are estimated by utilizing the same loss rates calculated for the allowance general reserve. At December 31, 2024, the Bank held $135,000 in reserves for unfunded liabilities, compared to $152,000 as of December 31, 2023.
Current wording
The reserve for unfunded commitments (the “Unfunded Reserve”) represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The Unfunded Reserve is recognized as a liability (other liabilities in the consolidated statements of condition), with adjustments to the reserve recognized in other noninterest expense in the consolidated statements of operations. The Unfunded Reserve is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates (i.e., the likelihood of draws taken). To estimate future draws on unfunded balances, current utilization rates are compared to historical utilization rates. If current utilization rates are below historical utilization rates, the rate difference is applied to the committed balance to estimate the future draw. Loss rates are estimated by utilizing the same loss rates calculated for the allowance general reserve. At December 31, 2025, the Bank held $80,000 in reserves for unfunded liabilities, compared to $135,000 as of December 31, 2024.