Financial Performance - Net interest income for the three months ended June 30, 2020, was $3.29 million, an increase of 18.2% compared to $2.78 million for the same period in 2019[17]. - Net income for the three months ended June 30, 2020, was $1.40 million, compared to $608,271 for the same period in 2019, reflecting a growth of 130.2%[17]. - Non-interest income increased to $767,646 for the three months ended June 30, 2020, compared to $139,302 for the same period in 2019, a significant increase of 451.5%[17]. - Earnings per share for the three months ended June 30, 2020, was $0.11, compared to $0.01 for the same period in 2019[17]. - The company reported a comprehensive income of $1.53 million for the three months ended June 30, 2020, compared to $636,236 for the same period in 2019[20]. - As of June 30, 2020, net income for the six months was $65,490, compared to $970,089 for the same period in 2019, indicating a significant decline[29]. - The company reported a net cash provided by operating activities of $3,960,894 for the six months ended June 30, 2020, compared to $1,672,800 for the same period in 2019[29]. - The company reported a net period comprehensive income of $14,253 for the six months ended June 30, 2020, compared to a loss in the previous year[112]. - Net income decreased by $905,000, or 93.3%, to $65,000 for the six months ended June 30, 2020, reflecting a $2.9 million contribution to the Bogota Charitable Foundation[174]. Assets and Liabilities - Total assets decreased to $738.67 million as of June 30, 2020, down from $766.61 million at December 31, 2019, representing a decline of approximately 3.6%[14]. - Total liabilities decreased to $612.34 million as of June 30, 2020, down from $691.63 million at December 31, 2019, a decline of approximately 11.4%[14]. - Total deposits decreased to $492.42 million as of June 30, 2020, from $497.75 million at December 31, 2019, a decrease of 1.7%[14]. - The total stockholders' equity increased to $126.33 million as of June 30, 2020, from $74.98 million at December 31, 2019, an increase of approximately 68.5%[14]. - The company experienced a net decrease in cash and cash equivalents of $76,053,089 for the six months ended June 30, 2020[29]. - Cash and cash equivalents at June 30, 2020, were $51,809,470, down from $127,862,559 at the beginning of the year[29]. - The company had the ability to borrow up to $242.3 million from the Federal Home Loan Bank of New York, with $113.1 million outstanding as of June 30, 2020[199]. - Certificates of deposit due within one year totaled $262.0 million, representing 53.2% of total deposits as of June 30, 2020[203]. Loans and Credit Quality - Total loans amounted to $589,946,920, an increase from $539,173,391 as of December 31, 2019, representing a growth of approximately 9.5%[64]. - The allowance for loan losses increased to $2,266,174 as of June 30, 2020, compared to $2,016,174 at the end of 2019, reflecting a rise of approximately 12.4%[64]. - The Bank granted $68.0 million in loan modifications, which accounted for 12.0% of the total loan portfolio, to assist customers affected by the COVID-19 pandemic[65]. - Nonaccrual loans as of June 30, 2020, totaled $674,724, an increase from $589,940 as of December 31, 2019, representing a rise of 14.4%[79]. - The total recorded investment in impaired loans as of June 30, 2020, was $1,568,736, compared to $1,315,094 as of December 31, 2019, reflecting an increase of 19.3%[74]. - The average of impaired loans for the six months ended June 30, 2020, was $1,525,822, compared to $1,225,275 for the same period in 2019, indicating a year-over-year increase of 24.5%[74]. - The total allowance for loan losses collectively evaluated for impairment was $2,230,315 as of June 30, 2020, compared to $1,980,315 as of December 31, 2019, marking an increase of 12.6%[72]. - The Bank had six residential loans classified as troubled debt restructurings (TDRs) totaling $1,237,523 as of June 30, 2020, with a specific reserve of $35,859[77]. Income and Expenses - Interest income increased by $270,000, or 2.4%, to $11.7 million for the six months ended June 30, 2020, driven by a $55.3 million increase in the average balance of interest-earning assets[175]. - Non-interest expenses increased by $2.6 million to $7.2 million for the six months ended June 30, 2020, largely due to a $2.9 million contribution to the Bogota Charitable Foundation[186]. - Interest expense decreased by $503,000, or 8.6%, to $5.4 million for the six months ended June 30, 2020, primarily due to a 16 basis point decrease in the average cost of interest-bearing liabilities[179]. - The effective tax rate decreased to 15.9% for 2020 from 24.5% for 2019, with income tax expense increasing by $68,000, or 34.4%, to $266,000 for the three months ended June 30, 2020[173]. Market and Economic Conditions - The company faces risks from the COVID-19 pandemic, including potential increases in loan delinquencies and declines in collateral values[121]. - The management's ability to execute business strategies is crucial for future success, especially in the context of ongoing economic uncertainties[124]. - The company’s financial condition is subject to various risks, including changes in market interest rates and competition among financial institutions[118]. - Interest income may decline due to COVID-19, as the company is deferring payments, interest, and fees for affected borrowers[136]. - The allowance for loan losses is critical, as it is based on significant estimates and may vary with changing economic conditions[126]. Regulatory and Compliance - The company expects the adoption of ASU No. 2016-02 on leases to have no material impact on its consolidated financial statements[45]. - ASU 2016-13 requires reporting of expected credit losses based on historical experience and forecasts, effective for fiscal years beginning after December 15, 2022[48][49]. - The company continues to evaluate the impact of new accounting standards on its financial condition and results of operations[49]. - The company is not involved in any pending legal proceedings that would materially affect its financial condition[210]. - The internal controls over financial reporting have not materially changed and remain effective as of June 30, 2020[206].
Bogota Financial (BSBK) - 2020 Q2 - Quarterly Report