Core Viewpoint - Bogota Financial returned to profitability in Q2 2025, reporting a net income of $224,000, a significant turnaround from a net loss of $432,000 in the same period last year, primarily driven by a 34.7% increase in net interest income and reduced interest expenses [1][5][6] Financial Performance - Earnings per share (EPS) improved to $0.02 from a loss of $0.03 year-over-year [2] - Net interest income rose to $3.7 million from $2.7 million, reflecting a 34.7% increase [2][5] - Total assets decreased by 5.1% to $921.8 million, while total deposits shrank to $628.2 million [2][8] - The efficiency ratio improved to 95.7%, down from 122.3% in Q2 2024, indicating better cost management [6] Loan and Deposit Trends - The bank experienced a decline in net loans, with residential first mortgage loans falling by $14.5 million and construction loans dropping by $17.4 million [7] - Delinquent loans increased to $20.4 million, representing 2.94% of total loans, up from $14.3 million at year-end 2024 [10] - Deposits decreased by 2.2%, with certificates of deposit falling by $11.5 million, while savings accounts saw a modest increase of $4.6 million [8][9] Risk Management and Capital Position - The allowance for credit losses remained steady at 0.37% of total loans, with no loans charged off during the quarter [10][12] - Tier 1 capital to average assets was reported at 15.32%, well above required levels, and average equity as a percentage of total assets increased to 14.96% [11] - The bank has no exposure to commercial real estate loans backed by office properties, focusing instead on residential and multi-family lending [13] Strategic Focus and Outlook - The company aims to manage its loan portfolio for quality and yield, with a focus on growing consumer and commercial deposits [4][14] - Management anticipates an increase in loan demand later in the year and into early 2026, emphasizing the importance of maintaining strict credit standards [14][15]

Financial Data and Key Metrics Changes - GAAP net loss allocable to common shares in Q1 2025 was $5,900,000 or $0.80 per share diluted, compared to earnings of $0.48 per share in the previous quarter [11] - Earnings available for distribution (EAD) for Q1 2025 was a loss of $0.86 per share, a decrease of $0.41 from the previous quarter [12] - GAAP book value per share decreased to $28.5 on March 31 from $28.87 on December 31 [12] - Available liquidity at March 31 was $87,000,000, comprising $66,000,000 of unrestricted cash and $21,000,000 of projected financing available on unlevered assets [13] Business Line Data and Key Metrics Changes - Loan payoffs during the period were $115,900,000, with a net reduction of the loan portfolio of $109,600,000 [5] - The company closed one new commitment of $15,000,000 and funded existing loan commitments of $12,000,000 during the quarter [5] - The weighted average spread of the floating rate loans in the $1,400,000,000 commercial real estate loan portfolio is now 3.67% over one month term SOFR rates [6] - The total allowance for credit losses at March 31 was $31,100,000, representing 2.26% of the loan portfolio [11] Market Data and Key Metrics Changes - The company sold two loans during the period, including a loan for $31,700,000 in proceeds [5] - A $20,600,000 loan was sold at par on an underperforming sub-storage facility in Miami [6] - One loan was sold at 94¢ on the dollar, resulting in a $700,000 loss [24] Company Strategy and Development Direction - The company aims to optimize portfolio leverage to drive equity returns and plans to redeploy capital into attractive commercial real estate loans [8] - The investment landscape is described as attractive, with expectations of net growth in the portfolio between $300,000,000 and $500,000,000 by the end of the year [20] - The company is actively closing new loans and focusing on maintaining strong credit quality in the current portfolio [14] Management's Comments on Operating Environment and Future Outlook - Management indicated that Q1 2025 represents a trough in portfolio size, with expectations to ramp up securitization in the second half of the year [14] - The company expects to see more payoffs throughout the year through refinancings or sales of assets, indicating a healthy portfolio [20] - The pipeline for new loans is reported to be stronger than ever, with increased quoting of deals due to market volatility pushing opportunities their way [27] Other Important Information - The company incurred a non-recurring charge of $1,500,000 related to unamortized debt issuance costs during the quarter [9] - The GAAP debt to equity leverage ratio slightly decreased to 2.9 times at March 31 from 3 times at December 31 [13] Q&A Session Summary Question: Could you talk a little bit about the portfolio and the payoffs that occurred during the quarter? - Management confirmed that the payoffs were expected, with five loan payoffs occurring, primarily through refinancing [18] Question: Should we expect more early payments and what are the opportunities for portfolio growth? - Management expects more payoffs throughout the year and anticipates net growth in the portfolio despite these payoffs, focusing on multifamily and other asset classes [20] Question: Can you provide details on the loan sales and the impact on earnings? - One loan was sold at par, while another was sold at a loss of 94¢ on the dollar due to underperformance [24] Question: Is the increase in real estate expenses due to seasonality? - Management indicated that the increase is primarily due to seasonality, particularly in hotel operations, and expects a turnaround in Q2 [26] Question: How is the pipeline looking given recent market volatility? - The pipeline is reported to be stronger than ever, with many opportunities arising from market volatility [27]

Financial Data and Key Metrics Changes - GAAP net income allocable to common shares for Q4 2024 was $4.1 million or $0.52 per share diluted [19] - Earnings available for distribution (EAD) for Q4 2024 was $0.48 per share, compared to $0.24 per share for Q3 2024 [22] - Operating GAAP book value per share increased to $28.87 on December 31, 2024, from $27.92 on September 30, 2024 [22] Business Line Data and Key Metrics Changes - Loan payoffs during the period were $107.5 million, with a net reduction of the loan portfolio of $81.8 million [11] - The weighted average spread of floating rate loans in the $1.5 billion commercial real estate loan portfolio is 3.73% over one-month term SOFR rates [12] - The total balance for credit losses at December 31 was $32.8 million, representing 2.2% of the $1.5 billion loan portfolio [22] Market Data and Key Metrics Changes - The company ended the quarter with $1.5 billion of commercial real estate loans across fifty-three individual investments [12] - The weighted average risk rating increased to 2.9% at December 31, 2024, from 2.7% at September 30, 2024 [13] Company Strategy and Development Direction - The company is focused on developing a pipeline of high-quality investments and actively managing the portfolio to grow earnings and book value [11] - The strategy includes monetizing equity investments and redeploying capital into the loan book through active origination [28] - The company aims to drive mid-teens return on equity (ROE) and maintain a leverage profile of three and a half to four turns [29] Management's Comments on Operating Environment and Future Outlook - Management expects to see an increase in loan payoffs as properties stabilize and refinancing options become available [40] - The company anticipates that the portfolio will grow to between $1.8 billion and $2 billion by the end of the year [41] - Future gains from real estate operations are expected to be recycled back into the loan book [53] Other Important Information - The company purchased $2.3 million from its previous repurchase plan and approved an additional $5 million for buybacks [23] - Available liquidity at December 31 was $76.9 million, comprising $56.7 million of unrestricted cash [25] Q&A Session Summary Question: Expectations for additional payoffs from two-rated loans - Management expects more payoffs on higher-rated loans, with several already occurring in Q1 [40] Question: Opportunities in the market - The company is seeing increased activity in multifamily refinancings and other asset classes like hospitality and self-storage [44] Question: Gains from remaining real estate operations - Management is cautious about predicting specific gains but believes future sales will lead to capital being recycled back into the loan book [53] Question: Increase in real estate expenses - The increase is attributed to one-time cleanup items and is not expected to recur in 2025 [59]