Bogota Financial (BSBK) Q2 2024 earnings summary

Executive summary

• Reported a net loss of $432,000 for Q2 2024 and $873,000 for the six months ended June 30, 2024, compared to net income of $857,000 and $1.8 million for the same periods in 2023, driven by a significant decline in net interest income.

• Losses were driven by a $1.5 million decrease in net interest income for the quarter and $3.4 million decrease for the half-year, partially offset by lower income tax expense.

• Total assets increased 3.8% to $974.7 million at June 30, 2024, primarily due to higher securities balances.

• Completed third stock repurchase program and began a fourth, repurchasing 107,323 shares for $735,000 as of June 30, 2024.

• Deposits rose 3.8% to $649.1 million, and borrowings increased 7.0% to $179.4 million, reflecting a shift in funding mix.

Financial highlights

• Net interest income fell 36.1% year-over-year for Q2 and 38.8% for the six-month period, mainly due to higher funding costs outpacing asset yield improvements.

• Interest income increased 11.3% for Q2 and 11.5% for the six months, driven by higher yields and larger securities balances.

• Interest expense surged 51.2% for Q2 and 57.6% for the six months, reflecting higher deposit and borrowing costs.

• Non-interest income rose modestly, with a 7.0% increase for Q2 and 6.3% for the half-year, mainly from higher bank-owned life insurance income.

• Non-interest expense increased 2.6% for Q2 and 3.1% for the six months, with higher professional and data processing fees partially offset by lower compensation costs.

Outlook and guidance

• Management expects continued pressure on net interest margin due to the high interest rate environment and competitive deposit market.

• Liquidity and capital positions remain strong, with ample borrowing capacity and regulatory capital ratios well above requirements.

• Management remains focused on growth, prudent lending, and expanding services and technology to attract new customers.

• Strategic plan execution and continued stock buybacks are priorities.