8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 3, 2020

Bogota Financial Corp.

(Exact Name of Registrant as Specified in Charter)

Maryland	001-39180	84-3501231
(State or Other Jurisdiction) of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)
819 Teaneck Road, Teaneck, New Jersey		07666
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (201) 862-0660

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01	BSBK	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02 Results of Operation and Financial Condition

On August 3, 2020, Bogota Financial Corp., the holding company for Bogota Savings Bank, issued a press release reporting its financial results for the three and six months ended June 30, 2020.

A copy of the press release announcing the results is included as Exhibit 99.1 to this Current Report on Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits

(a) Financial Statements of Businesses Acquired. Not applicable.

(b) Pro Forma Financial Information. Not applicable.

(c) Shell Company Transactions. Not applicable.

(d) Exhibits.

Exhibit No.	Description
99.1	Press release dated August 3, 2020.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	BOGOTA FINANCIAL CORP.
DATE: August 4, 2020	By:	/s/ Brian McCourt
		Brian McCourt
		Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

Bogota Financial Corp. Reports Results for the

Three and Six Months Ended June 30, 2020

NEWS PROVIDED BY

Bogota Financial Corp.

Teaneck, New Jersey, August 3, 2020 – Bogota Financial Corp. (the “Company”) (NASDAQ: BSBK), the holding company for Bogota Savings Bank (the “Bank”), reported net income for the three months ended June 30, 2020 of $1.4 million, compared to net income of $608,000 for the comparable prior year period. The Company reported net income for the six months ended June 30, 2020 of $65,000 compared to a net income of $970,000 for the comparable prior year period. The Company contributed cash and stock with a value of $2.9 million ($2.1 million after-tax) to the Bogota Charitable Foundation during the six months ended June 30, 2020. Without this contribution, net income would have been $2.0 million.

On January 15, 2020, the Company became the holding company for the Bank when it completed the reorganization of the Bank into a two-tier mutual holding company form of organization. In connection with the reorganization, the Company sold 5,657,735 shares of common stock at a price of $10 per share, for gross proceeds of $56.6 million. The Company also issued 263,150 shares of common stock and $250,000 in cash to Bogota Savings Bank Charitable Foundation, Inc., and issued 7,236,640 shares of common stock to Bogota Financial, MHC, and its New Jersey-chartered mutual holding company. Shares of the Company’s common stock began trading on January 16, 2020 on the Nasdaq Capital Market under the trading symbol “BSBK.”

Other Financial Highlights:

• Total assets decreased $27.9 million, or 3.6%, to $738.7 million from $766.6 million at December 31, 2019. Unfilled subscriptions of $41.5 million from the stock offering were returned following the completion of the stock offering. Excluding these funds as of December 31, 2019, total assets increased by 1.8% during the six months ended June 30, 2020.

• Net loans increased $50.5 million, or 9.4%, to $587.7 million from $537.2 million at December 31, 2019.

• Total deposits were $492.4 million, decreasing $5.3 million, or 1.1%, during the six months ended June 30, 2020.

• Return on average assets was 0.04% for the six-month period ended June 30, 2020 compared to 0.59% for the corresponding period of 2019. Without the charitable foundation contribution, the return on average assets would have been 1.12% for the six-month period ended June 30, 2020.

• Return on average equity was 0.22% for the six-month period ended June 30, 2020 compared to 5.35% for the same period of 2019. Without the charitable foundation contribution, the return on average equity would have been 6.12% for the six-month period ended June 30, 2020.

As a qualified Small Business Administration lender, we were automatically authorized to originate loans under the Paycheck Protection Program (“PPP”). As of June 30, 2020, we have received and processed 113 PPP applications totaling approximately $10.5 million.

COVID

We are also providing assistance to individuals and small business clients directly impacted by the COVID-19 pandemic by allowing borrowers to modify their loans. Through June 30, 2020, the Company granted $68.0 million of loan modifications which represented 12.0% of the total loan portfolio allowing customers who were affected by the COVID-19 pandemic to defer principal and/or interest payments. These short-term loan modifications will be treated in accordance with Section 4013 of the CARES Act and will not be treated as troubled debt restructurings during the short-term modification period if the loan was not in arrears at December 31, 2019. Furthermore, these loans will continue to accrue interest and will not be tested for impairment during the short-term modification period. Details with respect to actual loan modification are as follows:

Type of Loan	Number of Loans		Balance as of June 30, 2020		Percent of Total Loans as of June 30, 2020
One- to four-family residential real estate		143	$	42,619,955		7.3	%
Commercial real estate		14		19,561,427		3.3	%
Multi-family real estate		10		5,293,122		0.9	%
Commercial and industrial		2		496,036		0.1	%
Consumer		—		—		—
Other		—		—		—
Total		169	$	67,970,540		11.6	%

Joseph Coccaro, President and Chief Executive Officer, said, “During the first quarter we successfully converted the Bank to a two-tier mutual holding company structure. We are pleased with our continued strategy to expand our loan portfolio and the positive overall impacts of doing so on assets and income. We continue our efforts to expand our market presence, improve and expand our technology platform and offerings and manage our interest rate risk. We have been pleased with our excellent loan quality, and low loan delinquencies during the first six months of 2020.”

Mr. Coccaro continued, “The COVID-19 pandemic has created turmoil around the globe. Virtually all businesses have been impacted by the mandated business closures and restrictions. Thankfully banking is an essential business and we are working very hard helping our customers with emergency funding, loan deferrals and assistance with the PPP. I am hopeful that through the funding of the PPP, most businesses will rebound and there will be a recovery. The economic impact of the COVID-19 pandemic on the Company’s operations was not material during the first six months ended June 30, 2020. However, there could be a more significant impact on the Company’s financial results going forward due to increases in loan delinquencies, problem assets or foreclosures, a decline in collateral value or an increase in allowance for loan losses. I am optimistic community banking will continue to prosper by supporting individuals and small business looking for a community bank.”

Income Statement Analysis

Compared to the second quarter of 2019, net interest income increased $504,000, or 18.1%, to $3.3 million for the three months ended June 30, 2020. During the same period, our net interest margin increased from 1.75% to 1.88%, while the ratio of average interest-earning assets to average interest-bearing liabilities improved 9.8% to 122.67%. For the six months ended June 30, 2020, net interest income increased $773,000, or 13.8%, to $6.4 million. Overall, there was a 9 basis point increase in net interest margin to 1.85%, while the ratio of average interest-earning assets to average interest-bearing liabilities improved 9.5% to 121.9%. The increase in net interest margin during the three and six months ended June 30, 2020 was mostly due to the higher ratio of average interest-earning assets to average interest-bearing liabilities.

We recorded a provision for loan losses of $225,000 and $250,000 for the three and six month periods ended June 30, 2020, respectively, compared to no provision for loans losses for the same periods last year. Higher commercial real estate loan balances and increased risks factors associated with COVID 19 were the reasons for the provision.

Non-interest income was $768,000 for the three months ended June 30, 2020, an increase of $628,000, or 451.1%, compared to $139,000 in the prior year period. For the six months ended June 30, 2020, non-interest income totaled $889,000, an increase of $609,000, or 217.9%, from the prior year period. Death benefit proceeds received on our investment in Bank Owned Life Insurance was the primary reason for the increase during both periods.

For the three months ended June 30, 2020, non-interest expenses increased $45,000 to $2.2 million, over the comparable 2019 period. Professional fees increased $130,000, or 208.1%, due to additional expense associated with becoming a public company.

Salaries and employee benefits decreased $18,000, or 1.5%, attributable to deferred salary expense for increased loan volume. The reduction of other general operating expenses was mainly due to decreases in data processing costs, FDIC insurance assessment and occupancy expense.

For the six months ended June 30, 2020, non-interest expenses increased $2.6 million to $7.2 million, over the comparable 2019 period. Data processing costs decreased $426,000, or 57.8%, due to $360,000 in de-conversion expenses in 2019 in connection with the Bank’s data processing conversion. Expenses for the six months ended June 30, 2020 included a $2.9 million contribution to the Bogota Charitable Foundation that was formed during the reorganization of the Bank into a two-tier mutual holding company form of organization. The increase of other general operating expenses was mainly due to increases in professional fees associated with the expense of becoming a public company. Without the contribution to the charitable foundation in 2020 and the de-conversion expense in 2019, non-interest expenses increased $89,000 to $4.4 million compared to the same period last year.

Balance Sheet Analysis

Total assets were $738.7 million at June 30, 2020, representing a decrease of $27.9 million, or 3.6%, from December 31, 2019. Net loans increased $50.5 million or 9.4%, due to new production of $121.4 million, consisting of a relatively equal mix of real estate loans and commercial loans, which was partially offset by $70.9 million in repayments. Securities held to maturity decreased $1.5 million mostly due to maturities in municipal bonds and government agency bonds which were not replaced. Cash and due from banks decreased $76.1 million during the period primarily because of $41.5 million in offering subscriptions that were refunded due to the oversubscription of the stock offering.

Delinquent loans decreased $232,000, or 40.8%, during the six-month period ended June 30, 2020, finishing at 0.1% of total loans, or $337,000. During the same timeframe, non-performing assets increased $85,000, or 14.4%, to $675,000 and were 0.09% of total assets at June 30, 2020. Our allowance for loan losses was 0.38% of total loans and 335.87% of non-performing loans at June 30, 2020.

Total liabilities decreased $79.3 million, or 11.5%, to $612.3 million mainly due to $90.4 million in gross subscriptions that was either converted to common stock or due to the oversubscription of the stock offering. Deposits decreased $5.3 million, or 1.1%, mostly due to a decrease in certificate of deposits as the Bank had a high volume of maturities not all of which were renewed. Federal Home Loan Bank advances increased $16.0 million, or 16.5%, as borrowings were available at lower rates than deposits.

Stockholders’ equity increased $51.4 million to $126.3 million, primarily due $54.6 million of net proceeds raised in the stock offering. At June 30, 2020, the Company’s ratio of average stockholders’ equity-to-total assets was 17.25%, compared to 10.96% at December 31, 2019.

EXPLANATORY NOTE

The Company was formed to serve as the mid-tier stock holding company for the Bank in connection with the reorganization of the Bank and its mutual holding company, Bogota Financial, MHC, into the two-tier mutual holding company structure. As of December 31, 2019 and for the three and six months ended June 30, 2019, the reorganization had not been completed and the Company had no assets or liabilities and had not conducted any business activities other than organizational activities. Accordingly, the unaudited financial statements and other financial information at and for the 2019 periods contained relate solely to the consolidated financial results of the Bank.

About Bogota Financial Corp.

Bogota Financial Corp. is a Maryland corporation organized as the mid-tier holding company of Bogota Savings Bank and is the majority-owned subsidiary of Bogota Financial, MHC. Bogota Savings Bank is a New Jersey chartered stock savings bank that has served the banking needs of its customers in northern and central New Jersey since 1893. It operates from two offices located in Bogota and Teaneck, New Jersey.

Forward-Looking Statements

This press release contains certain forward-looking statements about the Company and the Bank. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and the Bank are engaged.

Further, given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus can be controlled and abated and when and how the economy may be reopened or remain open. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, we could be subject to any of the following risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations: demand for our products and services may decline, making it difficult to grow assets and income; if the economy is unable to substantially reopen or remain open, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income; collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase; our allowance for loan losses may have to be increased if borrowers experience financial difficulties, which will adversely affect our net income; the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us. As the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income. Our cyber security risks are increased as the result of an increase in the number of employees working remotely; and FDIC premiums may increase if the agency experience additional resolution costs.

The Company undertakes no obligation to revise these forward-looking statements or to reflect events or circumstances after the date of this press release.

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	June 30, 2020			December 31, 2019
	unaudited			audited
Assets
Cash and due from banks	$	5,655,248		$	5,176,241
Interest-bearing deposits in other banks		46,154,222			122,686,318
Cash and cash equivalents		51,809,470			127,862,559
Securities available for sale		12,563,822			13,748,561
Securities held to maturity (fair value of $56,100,917 and $56,582,299, respectively)		54,611,029			56,093,317
Loans, net of allowance of $2,266,174 and $2,016,174, respectively		587,680,746			537,157,217
Premises and equipment, net		4,102,503			4,196,753
Federal Home Loan Bank (FHLB) stock		6,324,100			5,672,700
Accrued interest receivable		2,671,225			2,021,360
Bank owned life insurance		16,736,735			17,409,745
Other assets		2,173,950			2,450,042
Total Assets	$	738,673,580		$	766,612,254
Liabilities and Equity
Liabilities
Non-interest bearing	$	25,528,305		$	16,122,231
Interest bearing		466,886,915			481,627,221
Total Deposits		492,415,220			497,749,452
FHLB advances		113,105,606			97,092,484
Advance payments by borrowers for taxes and insurance		2,692,262			3,191,706
Subscription offering proceeds		—			90,349,840
Other liabilities		4,128,541			3,250,925
Total liabilities		612,341,629			691,634,407
Commitments and Contingencies-see note 6
Stockholders’ Equity
Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at June 30, 2020		—			—
Common stock $0.01 par value, 30,000,000 shares authorized, 13,157,525 issued and outstanding at June 30, 2020		131,575			—
Additional Paid-In capital		57,022,232			—
Retained earnings		75,357,002			75,291,512
Unearned ESOP shares (503,465 shares)		(5,879,446	)		—
Accumulated other comprehensive loss		(299,412	)		(313,665	)
Total stockholders’ equity		126,331,951			74,977,847
Total liabilities and stockholders’ equity	$	738,673,580		$	766,612,254

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020			2019
	(unaudited)
Interest income
Loans	$	5,245,931	$	5,067,063	$	10,343,182		$	10,010,861
Securities
Taxable		405,146		464,481		836,199			941,701
Tax-exempt		13,220		25,722		24,881			65,950
Other interest-earning assets		151,913		215,427		529,276			444,794
Total interest income		5,816,210		5,772,693		11,733,538			11,463,306
Interest expense
Deposits		2,041,512		2,513,871		4,357,833			4,947,865
FHLB advances		488,854		477,160		1,005,926			918,739
Total interest expense		2,530,366		2,991,031		5,363,759			5,866,604
Net interest income		3,285,844		2,781,662		6,369,779			5,596,702
Provision for loan losses		225,000		—		250,000			—
Net interest income after provision for loan losses		3,060,844		2,781,662		6,119,779			5,596,702
Non-interest income
Fees and service charges		12,327		31,957		32,045			60,440
Bank owned life insurance		749,091		102,164		848,802			202,261
Other		6,228		5,181		8,182			16,976
Total non-interest income		767,646		139,302		889,029			279,677
Non-interest expense
Salaries and employee benefits		1,202,387		1,220,789		2,459,986			2,474,620
Occupancy and equipment		159,376		175,208		328,916			350,572
FDIC insurance assessment		26,000		44,369		71,000			89,456
Data processing		165,211		172,940		311,237			737,043
Advertising		42,180		60,000		101,814			120,000
Director fees		178,894		168,380		365,176			337,945
Professional fees		192,572		62,500		324,906			122,500
Contribution to Charitable Foundation		—		—		2,881,500			—
Other		193,070		210,807		387,771			388,994
Total non-interest expense		2,159,690		2,114,993		7,232,306			4,621,130
Income (loss) before income taxes (benefit)		1,668,800		805,971		(223,498	)		1,255,249
Income tax expense (benefit)		265,727		197,700		(288,988	)		285,160
Net income	$	1,403,073	$	608,271	$	65,490		$	970,089
Earnings per Share	$	0.11		—	$	0.01			—
Weighted average shares outstanding		12,650,748		—		11,675,010			—

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

	At or For the Three Months Ended June 30,						At or For the Six Months Ended June 30,
	2020			2019			2020			2019
Performance Ratios (1):
Return on average assets (2)		0.77	%		0.09	%		0.04	%		0.29	%
Return on average equity (3)		4.46	%		0.83	%		0.22	%		2.66	%
Interest rate spread (4)		1.55	%		1.52	%		1.50	%		1.54	%
Net interest margin (5)		1.88	%		1.75	%		1.85	%		1.76	%
Efficiency ratio (6)		53.28	%		72.41	%		99.64	%		78.64	%
Average interest-earning assets to average interest-bearing liabilities		122.67	%		111.74	%		121.99	%		111.43	%
Net loans to deposits		119.35	%		106.73	%		119.35	%		106.73	%
Equity to assets (7)		17.25	%		11.38	%		17.25	%		11.38	%
Capital Ratios:
Tier 1 capital (to adjusted total assets)								26.73	%		11.14	%
Tier 1 capital (to risk-weighted assets)								26.28	%		17.50	%
Total capital (to risk-weighted assets)								26.26	%		17.98	%
Common equity Tier 1 capital (to risk-weighted assets)								17.59	%		17.50	%
Asset Quality Ratios:
Allowance for loan losses as a percent of total loans								0.38	%		0.37	%
Allowance for loan losses as a percent of non-performing loans								335.87	%		372.64	%
Net recoveries to average outstanding loans during the period								0.00	%		0.00	%
Non-performing loans as a percent of total loans								0.11	%		0.10	%
Non-performing assets as a percent of total assets								0.09	%		0.08	%

(1) Performance ratios are annualized.

(2) Represents net income divided by average total assets.

(3) Represents net income divided by average equity.

(4) Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of average interest-bearing liabilities. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rate of 30%.

(5) Represents net interest income as a percent of average interest-earning assets. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rate of 30% for 2020 and 2019.

(6) Represents non-interest expenses divided by the sum of net interest income and non-interest income.

(7) Represents average equity divided by average total assets.

Contacts

Joseph Coccaro – President & CEO

201-862-0660 ext. 1110