Financial Performance - The company reported a net loss of $2.17 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, compared to earnings per share of $0.05 in 2023[330]. - Total comprehensive income for 2024 was $696,906, 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 $8,930,843 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 $76,025,392 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 $8.9 million was realized on the sale of securities with an amortized cost of approximately $66.0 million, which had a market value of $57.1 million[444]. Assets and Deposits - The company's assets increased by $32.2 million, or 3.4%, from $939.3 million at December 31, 2023, to $971.5 million at December 31, 2024[181]. - Total assets increased to $971.49 million in 2024 from $939.32 million in 2023, representing a growth of approximately 3.7%[328]. - Total deposits rose to $642.19 million in 2024, up from $625.35 million in 2023, indicating an increase of about 2.7%[328]. - Certificates of deposit comprised $493.3 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 $493,279,775 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 $30,554,842 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 $44.6 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 $37.28 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 $15.10 million in 2023, a decline of about 29.5%[330]. - Non-interest income totaled $1.35 million in 2024, up from $1.14 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 $932,772 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 $2,620,949 in 2024, indicating improved credit quality[424]. - The recorded investment in nonaccrual loans as of December 31, 2024, was $12,776,177, compared to $856,659 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, 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 $1,851,969 in 2023[430]. - The total allowance for credit losses for commercial real estate loans increased from $437,180 in 2023 to $508,000 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 $2.6 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, reflecting gross unrealized losses of $6,114,261[406]. - The fair value change in derivatives resulted in a gain of $411,830 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].
Bogota Financial (BSBK) - 2024 Q4 - Annual Report