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Bogota Financial (BSBK) - 2024 Q4 - Annual Report
BSBKBogota Financial (BSBK)2025-03-28 18:48

Financial Performance - The company reported a net loss of 2.17millionin2024,comparedtoanetincomeof2.17 million in 2024, compared to a net income of 0.64 million in 2023, indicating a significant decline in profitability[330]. - Loss per share for 2024 was 0.17,comparedtoearningspershareof0.17, compared to earnings per share of 0.05 in 2023[330]. - Total comprehensive income for 2024 was 696,906,anincreasefrom696,906, an increase from 388,774 in 2023, driven by other comprehensive income adjustments[332]. - The company reported a loss on the sale of securities amounting to 8,930,843in2024,withnosuchlossesreportedin2023[336].−Thecompanyexperiencedanetincreaseindepositsof8,930,843 in 2024, with no such losses reported in 2023[336]. - The company experienced a net increase in deposits of 16,852,360 in 2024, contrasting with a net decrease of 76,025,392in2023[336].−Thecompanyreportedapre−taxgainof76,025,392 in 2023[336]. - The company reported a pre-tax gain of 9.0 million from a sale-leaseback transaction involving three branch offices in December 2024[444]. - A pre-tax loss of 8.9millionwasrealizedonthesaleofsecuritieswithanamortizedcostofapproximately8.9 million was realized on the sale of securities with an amortized cost of approximately 66.0 million, which had a market value of 57.1million[444].AssetsandDeposits−Thecompany′sassetsincreasedby57.1 million[444]. Assets and Deposits - The company's assets increased by 32.2 million, or 3.4%, from 939.3millionatDecember31,2023,to939.3 million at December 31, 2023, to 971.5 million at December 31, 2024[181]. - Total assets increased to 971.49millionin2024from971.49 million in 2024 from 939.32 million in 2023, representing a growth of approximately 3.7%[328]. - Total deposits rose to 642.19millionin2024,upfrom642.19 million in 2024, up from 625.35 million in 2023, indicating an increase of about 2.7%[328]. - Certificates of deposit comprised 493.3millionor76.8493.3 million or 76.8% of total deposits at December 31, 2024, with 450.1 million due within one year[174]. - The scheduled maturities of certificates of deposits amounted to 493,279,775asofDecember31,2024[457].−Noninterestbearingdemandaccountsroseto493,279,775 as of December 31, 2024[457]. - Noninterest bearing demand accounts rose to 32,681,963 in 2024, representing 5.09% of total deposits, compared to 30,554,842and4.8930,554,842 and 4.89% in 2023[455]. Liquidity and Capital - The company had approximately 211.3 million in available liquidity as of December 31, 2024, which is 474.0% of the uninsured and unsecured deposit balance of 44.6million[177].−Thecompanyissubjecttostringentcapitalrequirements,includingacommonequityTier1capitalratioof7.044.6 million[177]. - The company is subject to stringent capital requirements, including a common equity Tier 1 capital ratio of 7.0%, a Tier 1 to risk-based assets capital ratio of 8.5%, and a total capital ratio of 10.5%[201]. - The company has elected to comply with a community bank leverage ratio of 9% instead of the generally applicable capital requirements under Basel III[203]. - The company does not expect to pay any cash dividends on its common stock in the foreseeable future, as it intends to retain all future earnings for business use[209]. Income and Expenses - Interest income for 2024 was 41.75 million, compared to 37.28millionin2023,reflectingagrowthofapproximately12.537.28 million in 2023, reflecting a growth of approximately 12.5%[330]. - Net interest income after recovery of provision for credit losses decreased to 10.70 million in 2024 from 15.10millionin2023,adeclineofabout29.515.10 million in 2023, a decline of about 29.5%[330]. - Non-interest income totaled 1.35 million in 2024, up from 1.14millionin2023,markinganincreaseofapproximately18.41.14 million in 2023, marking an increase of approximately 18.4%[330]. - The company’s pension expense includes service and interest costs, along with amortization of gains and losses not immediately recognized[391]. - Stock-based compensation expenses were 921,273 in 2024, slightly down from 932,772in2023[336].RiskFactors−Thecompanyfacesrisksrelatedtoeconomicconditions,includinginflationandrisinginterestrates,whichcouldnegativelyimpactfinancialresultsandloanrepaymentcapabilities[169].−Thecompanyfacessignificantrisksfromcyberattacksandsecuritybreaches,whichcouldleadtoincreasedoperatingcostsandpotentiallitigation[190].−Thecompanyisexposedtostrongcompetitioninthemarket,whichmayreduceprofitsandslowgrowthduetopricecompetitionandtheneedtoattractqualifiedemployees[196].−Changesinlawsandregulationsmayadverselyaffectthecompany′soperationsandincreaseoperationalcosts,asitissubjecttoextensiveregulatoryscrutiny[197].−Thecompany’sriskmanagementframeworkmaynoteffectivelymitigaterisks,potentiallyleadingtosignificantlosses[194].−Thecompanyisvulnerabletonaturaldisastersandgeopoliticalevents,whichcoulddisruptoperationsandnegativelyimpactfinancialcondition[193].CreditQuality−Theallowanceforcreditlossesdecreasedfrom932,772 in 2023[336]. Risk Factors - The company faces risks related to economic conditions, including inflation and rising interest rates, which could negatively impact financial results and loan repayment capabilities[169]. - The company faces significant risks from cyber attacks and security breaches, which could lead to increased operating costs and potential litigation[190]. - The company is exposed to strong competition in the market, which may reduce profits and slow growth due to price competition and the need to attract qualified employees[196]. - Changes in laws and regulations may adversely affect the company's operations and increase operational costs, as it is subject to extensive regulatory scrutiny[197]. - The company’s risk management framework may not effectively mitigate risks, potentially leading to significant losses[194]. - The company is vulnerable to natural disasters and geopolitical events, which could disrupt operations and negatively impact financial condition[193]. Credit Quality - The allowance for credit losses decreased from 2,785,949 in 2023 to 2,620,949in2024,indicatingimprovedcreditquality[424].−TherecordedinvestmentinnonaccrualloansasofDecember31,2024,was2,620,949 in 2024, indicating improved credit quality[424]. - The recorded investment in nonaccrual loans as of December 31, 2024, was 12,776,177, compared to 856,659in2023,showingasubstantialincrease[432].−TotalpastdueloansasofDecember31,2024,amountedto856,659 in 2023, showing a substantial increase[432]. - Total past due loans as of December 31, 2024, amounted to 14,339,179, while in 2023, it was 12,606,029,representinganincreaseofapproximately13.712,606,029, representing an increase of approximately 13.7%[434]. - The total ending allowance for credit losses for residential first mortgage loans was 1,680,949 in 2024, up from 1,851,969in2023[430].−Thetotalallowanceforcreditlossesforcommercialrealestateloansincreasedfrom1,851,969 in 2023[430]. - The total allowance for credit losses for commercial real estate loans increased from 437,180 in 2023 to 508,000in2024,reflectingariseofapproximately16.2508,000 in 2024, reflecting a rise of approximately 16.2%[430]. Investment Portfolio - As of December 31, 2024, the company maintained a debt securities portfolio of 140.3 million, with other comprehensive gains of 2.6millionrelatedtonetchangesinunrealizedholdinglosses[168].−Thecompany’sinvestmentportfolioincludescorporateandmunicipaldebtsecurities,exposingittoadditionalcreditrisksthatcouldadverselyaffectfinancialcondition[184].−TheCompanyreportedtotalamortizedcostofsecuritiesavailableforsaleat2.6 million related to net changes in unrealized holding losses[168]. - The company’s investment portfolio includes corporate and municipal debt securities, exposing it to additional credit risks that could adversely affect financial condition[184]. - The Company reported total amortized cost of securities available for sale at 145,878,693 as of December 31, 2024, with a fair value of 140,307,447,reflectinggrossunrealizedlossesof140,307,447, reflecting gross unrealized losses of 6,114,261[406]. - The fair value change in derivatives resulted in a gain of 411,830in2024,comparedtoalossof411,830 in 2024, compared to a loss of 239,510 in 2023[336]. - The company did not classify any securities as held-to-maturity as of December 31, 2024, reflecting a shift in investment strategy[416]. Operational Changes - The company is considering building market share by opening de novo branches, which may increase expenses faster than revenues[180]. - The company changed its method of accounting for credit losses effective January 1, 2023, adopting ASC Topic 326[321]. - The Company adopted the new segment reporting standard in November 2023, which did not have a significant impact on its financial statements[405]. - The Company maintains all servicing rights for loans originated for sale in the secondary market, with mortgage servicing rights amortized in proportion to estimated servicing income[383].