Financial report illustrating Bogota Financial's profitability improvement.
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 (NASDAQ: BSBK) has marked a significant turnaround in its financial performance by returning to profitability in the second quarter of 2025. The bank reported earnings of $0.02 per share for the quarter ending June 30, 2025, showcasing a commendable recovery compared to a net loss of $432,000 during the same period last year.
The bank’s net income for the three-month period reached $224,000, and for the first half of 2025, net income stood at $955,000, showcasing a substantial improvement from a net loss of $873,000 during the first six months of the previous year. This resurgence in profitability is primarily attributed to a striking 34.7% increase in net interest income, which rose from $2.7 million in Q2 2024 to $3.7 million this year.
The bank achieved a higher net interest margin of 1.74%, compared to 1.21% in the previous year, indicating improved earnings on its loans relative to the interest paid on deposits. Additionally, Bogota Financial managed to effectively lower its funding expenses, contributing to the overall improvement in financial health.
However, the overall picture is clouded by a slight decline in assets and loan balances. Total assets fell by 5.1%, amounting to $921.8 million by the end of Q2 2025. Similarly, loan balances experienced a 2.6% drop as repayments overshadowed new loan originations, particularly in the residential and construction loan sectors.
Total deposits also saw a decrease of 2.2%, totaling $628.2 million. This decline impacted almost all categories except for savings accounts, which noted an increase of $4.6 million. Additionally, the bank experienced a rise in delinquent loans that reached $20.4 million, representing 2.94% of total loans, primarily driven by a single $7.1 million commercial real estate loan.
Despite the increase in delinquencies, non-performing assets remained stable at 1.50% of total assets. Furthermore, the efficiency ratio saw significant improvement, dropping to 95.7% from 122.3% in Q2 2024, indicating that the bank is maintaining better cost control.
The bank also reported a one-time boost to its non-interest income, which rose by 9.4% year-over-year, including a payout of $543,000 from a bank-owned life insurance policy. In terms of liabilities, total liabilities decreased by 6.1% to $783.4 million, which can be seen as a positive indication of the bank’s commitment to solidifying its financial standing.
Bogota Financial’s Tier 1 capital to average assets ratio was reported at 15.32%, comfortably above required levels, which suggests a robust capital position. The average equity as a percentage of total assets also demonstrated positive growth, coming in at 14.96% as of June 30, 2025.
While the bank has not declared any dividends for the quarter and has provided no formal outlook for future performance, management expressed optimism about an expected increase in loan demand later in 2025 and into early 2026. The focus will be on enhancing both commercial loan and deposit portfolios while managing risks amidst evolving market conditions.
In summary, while Bogota Financial has successfully returned to profitability and showcased improved net income figures, challenges remain with rising delinquencies and a decline in loan balances and deposits. The bank’s strategic efforts to manage expenses and build on its capital position will be critical as it navigates the future economic landscape.
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