Bogota Financial Reports Profitability in Q2

News Summary

Bogota Financial has reported a net income of $224,000 in the second quarter, marking a significant recovery from a prior loss. The bank also recorded a 34.7% increase in net interest income, although total assets declined. Delinquent loans rose, but the efficiency ratio improved, showcasing cost-control efforts. The bank plans to focus on expanding its commercial loan and deposit portfolios despite not declaring dividends for the upcoming quarters.

Bogota Financial Reports Return to Profitability Amid Rising Delinquencies

Bogota Financial has announced a significant turnaround in its financial performance for the second quarter of 2025, achieving a modest earnings per share (EPS) of $0.02, a movement from a net loss recorded in the same period last year. The bank’s net income reached $224,000 for the three months ending June 30, 2025, compared to a net loss of $432,000 in Q2 2024.

Financial Highlights

For the first half of 2025, Bogota Financial reported a total net income of $955,000, showcasing a remarkable recovery from a net loss of $873,000 in the prior year. This profitability is primarily attributed to a 34.7% increase in net interest income, which climbed to $3.7 million from $2.7 million in Q2 2024. The bank’s net interest margin also improved, rising to 1.74% from 1.21%, indicating enhanced efficiency in its earnings from core lending activities.

Loan and Deposit Trends

Despite the positive financial results, the bank experienced a decline in total assets, which fell by 5.1% to $921.8 million by the end of Q2 2025. Loan balances saw a 2.6% drop, primarily due to repayments outpacing new loan originations, a trend observed especially in residential and construction loans. Total deposits also decreased by 2.2%, settling at $628.2 million. This decline can be attributed to reductions in almost every deposit category, apart from savings accounts, which saw an increase of $4.6 million.

Delinquency and Asset Quality

In a concerning development, delinquent loans rose to $20.4 million, representing 2.94% of total loans. This increase was significantly influenced by a single $7.1 million commercial real estate loan. However, non-performing assets have remained stable at 1.50% of total assets, highlighting some level of management over asset quality.

Operational Efficiency and Capital Strength

The bank improved its efficiency ratio to 95.7%, down notably from 122.3% in Q2 2024, signaling better control over operational costs. Total liabilities decreased by 6.1% to $783.4 million, showcasing a stronger liability management approach. Furthermore, the bank reported a Tier 1 capital to average assets ratio of 15.32%, exceeding required levels and indicating a robust capital position. Additionally, the average equity percentage of total assets rose to 14.96% as of June 30, 2025.

Non-Interest Income and Future Outlook

In terms of non-interest income, the bank realized a 9.4% increase year-over-year, aided by a one-time boost of $543,000 from a bank-owned life insurance payout. Despite these gains, Bogota Financial chose not to declare any dividends for the quarter and has not provided a formal outlook for upcoming performance.

Management anticipates an upsurge in loan demand as the year progresses, particularly in the consumer and commercial segments. The bank is focused on expanding its commercial loan and deposit portfolios while navigating the evolving market landscape and managing associated risks. This strategic emphasis on growth aims to bolster the bank’s performance moving forward, ensuring it remains resilient in a potentially challenging economic environment.

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