Bogota Financial Corp. Reports Results for the Three and Twelve Months Ended December 31, 2020

Bogota Financial Corp. (the “Company”) (NASDAQ: BSBK), the holding company for Bogota Savings Bank (the “Bank”), reported net income for the three months ended December 31, 2020 of $1.0 million, compared to net income of $787,000 for the comparable prior year period. The Company reported net income for the twelve months ended December 31, 2020 of $2.1 million compared to a net income of $2.4 million for the prior year. The Company contributed cash and stock with a value of $2.9 million ($2.1 million after-tax) to the Bogota Charitable Foundation during the twelve months ended December 31, 2020. Also, during the twelve months ended December 31, 2020 the Company had expenses of $168,000 related to its proposed merger with Gibraltar Bank (“Gibraltar”). Without the contribution to the charitable foundation and merger expenses, net income would have been $4.3 million.

On January 15, 2020, the Company became the holding company for the Bank when it completed the reorganization of the Bank into a two-tier mutual holding company form of organization. In connection with the reorganization, the Company sold 5,657,735 shares of common stock at a price of $10 per share, for gross proceeds of $56.6 million. The Company also issued 263,150 shares of common stock and $250,000 in cash to Bogota Savings Bank Charitable Foundation, Inc., and issued 7,236,640 shares of common stock to Bogota Financial, MHC, its New Jersey-chartered mutual holding company.

On September 3, 2020 the Bank and Gibraltar executed a merger agreement pursuant to which Gibraltar will merge with and into the Bank. On January 25, 2021, the Bank and Gibraltar Bank announced that all regulatory approvals relating to the merger have been received. Additionally, Gibraltar’s members approved the transaction at a special meeting of members on January 20, 2021. The merger is targeted to close on or about February 28, 2021 with a systems conversion scheduled for August 16, 2021.

The merger is expected to increase the Bank’s consolidated assets to approximately $851.0 million by the end of the first quarter of 2021 and double its branch network. Along with the increased asset size and additional banking branches, the acquisition gives the Company the ability to sell additional residential loans, which will increase non-interest income and lessen our interest rate risk. Also, in second quarter of 2021, the Bank will be opening a new branch in Hasbrouck Heights, New Jersey.

Other Financial Highlights:

Total assets decreased $25.7 million, or 3.3%, to $740.9 million from $766.6 million at December 31, 2019. Unfilled subscriptions of $41.5 million from the stock offering were returned to subscribers in January 2020 following the completion of the stock offering. Excluding these funds from the unfilled subscriptions, total assets increased by 2.1% during the twelve months ended December 31, 2020 from $725.1 million at December 31, 2019.
Net loans increased $20.5 million, or 3.8%, to $557.7 million at December 31, 2020 from $537.2 million at December 31, 2019.
Total deposits were $502.0 million, increasing $4.2 million, or 0.8%, during the twelve months ended December 31, 2020.
Return on average assets was 0.28% for the twelve-month period ended December 31, 2020 compared to 0.36% for the corresponding period of 2019. Without the charitable foundation contribution, the return on average assets would have been 0.59% for the twelve-month period ended December 31, 2020.
Return on average equity was 1.66% for the twelve-month period ended December 31, 2020 compared to 3.30% for the same period of 2019. Without the charitable foundation contribution, the return on average equity would have been 3.46% for the twelve-month period ended December 31, 2020.

COVID

As a qualified Small Business Administration lender, we were automatically authorized to originate loans under the Paycheck Protection Program (“PPP”). As of December 31, 2020, we have received and processed 113 PPP applications totaling approximately $10.5 million and no loans have been forgiven. The Company will be participating in the second round of PPP loans during the first quarter of 2021.

We are also providing assistance to individuals and small business clients directly impacted by the COVID-19 pandemic by allowing borrowers to modify their loans. Through December 31, 2020, the Company granted 168 loan modifications totaling $66.6 million, which represented 11.9% of the total loan portfolio, allowing customers who were affected by the COVID-19 pandemic to defer principal and/or interest payments. Of the 168 loans to which loan modifications were granted only six loans had requested additional deferrals as of December 31, 2020. These six loans represented $993,000, or 0.2%, of net loans and all the loans are within the one to four family residential real estate portfolio.

These short-term loan modifications are treated in accordance with Section 4013 of the CARES Act and will not be treated as troubled debt restructurings during the short-term modification period if the loan was not in arrears at December 31, 2019. Furthermore, these loans will continue to accrue interest. Details with respect to actual loan modifications are as follows:

Original Loan Modifications

Loans currently still in deferral