• BSBK reported a net loss of $29,000 for Q3 2023, compared to a net income of $1.9 million in Q3 2022.

• The company's net income for the first nine months of 2023 was $1.8 million, down from $5.0 million in the same period in 2022.

• BSBK completed the repurchase of 556,631 shares of its common stock, and 122,301 shares under a separate program, during the nine months ended September 30, 2023.

• The company's total assets decreased by $24.1 million, or 2.5%, to $927.0 million as of September 30, 2023.

• Warning! GuruFocus has detected 2 Warning Signs with BSBK.

On November 1, 2023, Bogota Financial Corp (NASDAQ:BSBK), the holding company for Bogota Savings Bank, released its earnings report for the three and nine months ended September 30, 2023. The company reported a net loss of $29,000 for Q3 2023, compared to a net income of $1.9 million for the same period in 2022. For the first nine months of 2023, BSBK reported a net income of $1.8 million, a significant decrease from the $5.0 million net income reported for the same period in 2022.

Financial Performance and Challenges

BSBK's President and CEO, Joseph Coccaro, attributed the disappointing net income and return on average assets for the first nine months of 2023 to higher interest rates impacting the company's net interest margin. He stated,

The impact of higher interest rates continues to impact our net interest margin. Our net income and return on average assets for the first nine months of 2023 are disappointing when compared to prior periods due to the increase in deposit and borrowing costs exceeding our growth in loan revenue."

Income Statement Analysis

BSBK's net income decreased by $2.0 million, or 101.5%, to a net loss of $29,000 for Q3 2023, primarily due to a decrease of $3.0 million in net interest income. Interest income increased by $1.1 million, or 13.6%, due to increases in the average balances and higher yields on interest-earning assets. However, interest expense increased by $4.1 million, or 208.7%, due to increases in the average balance of and higher costs on interest-bearing liabilities.

Balance Sheet Analysis

As of September 30, 2023, BSBK's total assets were $927.0 million, representing a decrease of $24.1 million, or 2.5%, from December 31, 2022. Net loans decreased by $8.7 million, or 1.2%, due to $55.5 million in repayments, partially offset by new production of $46.8 million. The company's total liabilities decreased by $22.1 million, or 2.7%, to $789.4 million, mainly due to a $56.1 million decrease in deposits, offset by a $33.0 million increase in borrowings.