☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of ~~July 31, 2022,~~May 8, 2023, there were ~~14,142,621~~13,502,757 shares issued and outstanding of the registrant’s common stock, par value $0.01 per share

NOTE 32 – SECURITIES AVAILABLE FOR SALE

The following table summarizes the amortized cost, fair value, and gross unrealized gains and losses of securities available for sale, by contractual maturity, at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
June 30, 2022
March 31, 2023
U.S treasury bills less than one year	$	9,910,459	$	—	$	(40,027	)		9,870,432	$	4,994,975	$	—	$	(11,211	)		4,983,764
U.S. government and agency obligations
One through five years		6,000,000		—		(432,891	)		5,567,109		6,000,000		—		(499,068	)		5,500,932
Corporate bonds due in:
Less than one year											3,009,923		—		(21,454	)		2,988,469
One through five years		15,252,017		503		(358,051	)		14,894,469		11,199,122		—		(469,648	)		10,729,474
Five through ten years		2,949,325		—		(234,025	)		2,715,300		1,000,000		—		(81,130	)		918,870
MBSs – residential		46,918,907		11,912		(5,546,864	)		41,383,955		44,047,282		4,458		(5,754,573	)		38,297,167
MBSs – commercial		25,553,578		—		(2,477,150	)		23,076,428		20,999,717		—		(2,367,204	)		18,632,513
Total	$	106,584,286	$	12,415	$	(9,089,008	)	$	97,507,693	$	91,251,019	$	4,458	$	(9,204,288	)	$	82,051,189

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2021
December 31, 2022
U.S. treasury bills										$	4,971,310	$	—	$	(43,702	)	$	4,927,608
U.S. government and agency obligations
One through five years	$	3,000,000	$	—	$	(18,270	)	$	2,981,730		6,000,000		—		(534,846	)		5,465,154
Corporate bonds due in:
Less than one year											3,022,044		—		(37,230	)		2,984,814
One through five years		6,375,068		17,594		(636	)		6,392,026		12,182,364		554		(585,085	)		11,597,833
Five through ten years		1,002,542		3,050		—			1,005,592		1,000,000		—		(76,600	)		923,400
MBSs – residential		21,695,539		89,297		(24,591	)		21,760,245		44,879,199		2,146		(5,232,300	)		39,649,045
MBSs – commercial		9,741,782		—		(42,577	)		9,699,205		22,086,788		—		(2,534,064	)		19,552,724
Total	$	41,814,931	$	109,941	$	(86,074	)	$	41,838,798	$	94,141,705	$	2,700	$	(9,043,827	)	$	85,100,578

All of the mortgaged-backed securities (“MBSs”) are issued by the following government sponsored agencies: Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Government National Mortgage Association (“GNMA”).

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 32 – SECURITIES AVAILABLE FOR SALE (Continued)

There were 0no sales of securities during the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 or ~~June 30, 2021.~~March 31, 2022.

The age of unrealized losses and the fair value of related securities as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 were as follows:


	Less Than 12 Months					12 Months or More					Total					Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
June 30, 2022
March 31, 2023
U.S treasury bills	$	9,870,432	$	(40,027	)	$	—	$	—		$	9,870,432	$	(40,027	)	$	—	$	—		$	4,983,764	$	(11,211	)	$	4,983,764	$	(11,211	)
U.S. government and agency obligations		5,567,109		(432,891	)		—		—			5,567,109		(432,891	)		—		—			5,500,932		(499,068	)		5,500,932		(499,068	)
Corporate bonds		16,608,727		(592,076	)		—		—			16,608,727		(592,076	)		—		—			14,636,812		(572,232	)		14,636,812		(572,232	)
MBSs – residential		40,333,985		(5,541,734	)		239,326		(5,130	)		40,573,311		(5,546,864	)		3,390,067		(177,215	)		34,373,999		(5,577,358	)		37,764,066		(5,754,573	)
MBSs – commercial		23,076,428		(2,477,150	)		—		—			23,076,428		(2,477,150	)		4,188,975		(149,428	)		14,443,537		(2,217,776	)		18,632,512		(2,367,204	)
Total	$	95,456,681	$	(9,083,878	)	$	239,326	$	(5,130	)	$	95,696,007	$	(9,089,008	)	$	7,579,042	$	(326,643	)	$	73,939,044	$	(8,877,645	)	$	81,518,086	$	(9,204,288	)

	Less Than 12 Months					12 Months or More					Total					Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2021
December 31, 2022
U.S treasury bills																$	4,927,608	$	(43,702	)	$	—	$	—		$	4,927,608	$	(43,702	)
U.S. government and agency obligations	$	2,981,730	$	(18,270	)	$	—	$	—		$	2,981,730	$	(18,270	)		2,758,248		(241,752	)		2,706,906		(293,094	)		5,465,154		(534,846	)
Corporate bonds		1,006,523		(636	)		—		—			1,006,523		(636	)		11,859,089		(392,367	)		2,647,402		(306,548	)		14,506,491		(698,915	)
MBSs – residential		10,000,558		(22,652	)		250,581		(1,939	)		10,251,139		(24,591	)		16,474,573		(1,557,718	)		22,801,879		(3,674,582	)		39,276,452		(5,232,300	)
MBSs – commercial		9,699,205		(42,577	)		—		—			9,699,205		(42,577	)		9,449,159		(857,122	)		10,103,565		(1,676,942	)		19,552,724		(2,534,064	)
Total	$	23,688,016	$	(84,135	)	$	250,581	$	(1,939	)	$	23,938,597	$	(86,074	)	$	45,468,677	$	(3,092,661	)	$	38,259,752	$	(5,951,166	)	$	83,728,429	$	(9,043,827	)

Unrealized losses on corporate bonds available for sale ~~have~~are not ~~been recognized into income~~considered to be credit losses because the issuer bonds are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value was largely due to changes in interest rates and other market conditions. At ~~June 30, 2022,~~March 31, 2023, 100% of the mortgage-backed securities were issued by U.S. government-sponsored entities and agencies, primarily FNMA and FHLMC, institutions which the government has affirmed its commitment to support. Because the decline in fair value iswas attributable to changes in interest rates and illiquidity, and not credit quality, and because the Bank does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Bank does not consider these losses to be credit-related at March 31, 2023. At December 31, 2022 the Bank does not consider these securities to be other-than-temporary ~~impaired at June 30, 2022.~~impaired. At ~~June 30,~~March 31, 2023 and December 31, 2022, securities available for sale with a carrying value of $~~144,705~~123,808 and $126,662 were pledged to secure public deposits. There were 0 ~~securities available for sale and pledged to secure public deposits at December 31, 2021. There were~~ 5350 securities in a loss position at ~~June 30, 2022, none of which were considered to be other-than-temporally impaired.~~March 31, 2023.

NOTE 43 – SECURITIES HELD TO MATURITY

The following table summarizes the amortized cost, fair value, and gross unrecognized gains and losses of securities held to maturity by contractual maturity at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value			Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
June 30, 2022
March 31, 2023
U.S. Government and agency obligations
One through five years	$	10,000,000	$	—	$	(288,760	)	$	9,711,240		$	10,000,000	$	—	$	(428,570	)	$	9,571,430
Five through ten years		3,000,000		—		(340,374	)		2,659,626			3,000,000		—		(388,377	)		2,611,623
Corporate bonds due in:
One through five years		938,800		—		(40,579	)		898,221			2,447,722		—		(57,009	)		2,390,713
Five through ten years		15,317,671		14,613		(416,722	)		14,915,562			17,277,373		—		(1,511,930	)		15,765,443
Municipal obligations due in:
Less than one year		8,453,894		595		(40,660	)		8,413,829			7,700,335		—		(6,787	)		7,693,548
One through five years		1,223,015		499		(71,658	)		1,151,856			902,310		—		(72,825	)		829,485
Five through ten years		375,000		128		—			375,128			375,000		1,961		—			376,961
Greater than ten years		1,730,290		—		(372,950	)		1,357,340			1,727,132		—		(309,700	)		1,417,432
MBSs:
Residential		15,543,065		1,545		(1,670,272	)		13,874,338			13,991,428		840		(1,530,638	)		12,461,630
Commercial		29,850,605		—		(3,349,349	)		26,501,256			20,785,906		—		(2,702,218	)		18,083,688
Total	$	86,432,340	$	17,380	$	(6,591,324	)	$	79,858,396		$	78,207,206	$	2,801	$	(7,008,054	)	$	71,201,953

Effective January 1, 2023, the company adopted the provision of ASC 326, which requires management to complete an evaluation of the HTM securities portfolio to identify whether any allowance for credit losses is required. Management completed an evaluation as of the adoption date and determined the allowance for credit losses on the HTM portfolio was not significant. This determination was based on financial review of securities and ratings of each security.										Effective January 1, 2023, the company adopted the provision of ASC 326, which requires management to complete an evaluation of the HTM securities portfolio to identify whether any allowance for credit losses is required. Management completed an evaluation as of the adoption date and determined the allowance for credit losses on the HTM portfolio was not significant. This determination was based on financial review of securities and ratings of each security.
	Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
December 31, 2021
											Amortized Cost		Gross Unrecognized Gains		Gross Unrecognized Losses			Fair Value
December 31, 2022
U.S. Government and agency obligations
One through five years											$	10,000,000	$	—	$	(456,850	)	$	9,543,150
Five through ten years	$	3,000,000	$	—	$	—		$	3,000,000			3,000,000		—		(466,866	)		2,533,134
Corporate bonds due in:
One through five years												2,444,729		1,269		(55,836	)		2,390,162
Five through ten years		13,681,053		410,726		(39,870	)		14,051,909			15,825,262		54,738		(1,045,557	)		14,834,443
Municipal obligations due in:
Less than one year		4,006,006		12,668		(2,776	)		4,015,898			7,706,402		—		(36,250	)		7,670,152
One through five years		903,483		—		(15,399	)		888,084			902,545		—		(84,742	)		817,803
Five through ten years		375,000		27,353		—			402,353			375,000		1,286		—			376,286
Greater than ten years		1,732,386		9,527		—			1,741,913			1,728,184		—		(346,586	)		1,381,598
MBSs:
Residential		16,913,787		75,094		(240,797	)		16,748,084			14,425,827		410		(1,431,861	)		12,994,376
Commercial		33,441,384		287,278		(495,844	)		33,232,818			21,019,360		—		(2,860,813	)		18,158,547
Total	$	74,053,099	$	822,646	$	(794,686	)	$	74,081,059		$	77,427,309	$	57,703	$	(6,785,361	)	$	70,699,651

All of the MBSs are issued by the following government sponsored agencies: FHLMC, FNMA and GNMA.

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 43 – SECURITIES HELD TO MATURITY (Continued)

The age of unrecognized losses and the fair value of related securities were as follows:


	Less Than 12 Months					12 Months or More					Total					Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses
June 30, 2022
March 31, 2023
U.S. government and agency obligations	$	12,370,866	$	(629,134	)	$	—	$	—		$	12,370,866	$	(629,134	)	$	—	$	—		$	12,183,053	$	(816,947	)	$	12,183,053	$	(816,947	)
Corporate bonds		11,431,670		(374,801	)		667,500		(82,500	)		12,099,170		(457,301	)		13,871,194		(1,103,901	)		4,284,963		(465,038	)		18,156,157		(1,568,939	)
Municipal bonds		9,866,743		(485,268	)		—		—			9,866,743		(485,268	)		7,693,548		(6,787	)		2,246,917		(382,525	)		7,693,548		(389,312	)
MBSs – residential		8,703,765		(1,106,726	)		4,934,374		(563,546	)		13,638,139		(1,670,272	)		932,470		(27,773	)		11,366,555		(1,502,865	)		12,299,025		(1,530,638	)
MBSs – commercial		20,130,247		(1,744,641	)		6,371,009		(1,604,708	)		26,501,256		(3,349,349	)		—		—			18,083,688		(2,702,218	)		18,083,688		(2,702,218	)
Total	$	62,503,291	$	(4,340,570	)	$	11,972,883	$	(2,250,754	)	$	74,476,174	$	(6,591,324	)	$	22,497,212	$	(1,138,461	)	$	48,165,176	$	(5,869,593	)	$	68,415,471	$	(7,008,054	)

	Less Than 12 Months					12 Months or More					Total					Less Than 12 Months					12 Months or More					Total
	Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses			Fair Value		Unrecognized Losses
December 31, 2021
December 31, 2022
U.S. government and agency obligations																$	9,543,150	$	(456,850	)	$	2,533,134	$	(466,866	)	$	12,076,284	$	(923,716	)
Corporate bonds	$	3,710,120	$	(39,870	)	$	—	$	—		$	3,710,120	$	(39,870	)		11,464,282		(680,447	)		3,329,054		(420,946	)		14,793,336		(1,101,393	)
Municipal bonds		3,835,309		(18,175	)		—		—			3,835,309		(18,175	)		7,670,152		(36,250	)		2,199,401		(431,328	)		9,869,553		(467,578	)
MBSs – residential		10,720,544		(141,726	)		2,701,345		(99,071	)		13,421,889		(240,797	)		2,008,303		(101,341	)		10,809,648		(1,330,520	)		12,817,951		(1,431,861	)
MBSs – commercial		7,898,509		(197,720	)		4,653,364		(298,124	)		12,551,873		(495,844	)		7,383,822		(282,984	)		10,774,725		(2,577,829	)		18,158,547		(2,860,813	)
Total	$	26,164,482	$	(397,491	)	$	7,354,709	$	(397,195	)	$	33,519,191	$	(794,686	)	$	38,069,709	$	(1,557,872	)	$	29,645,962	$	(5,227,489	)	$	67,715,671	$	(6,785,361	)

~~Unrecognized~~No allowance for credit losses on the securities above have ~~not~~ been ~~recognized into income~~recorded because the issuers of the securities are of high credit quality ~~management does not intend to sell and it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery,~~ and the decline in fair value was ~~largely~~ due to changes in interest rates and other market conditions. The fair value is expected to recover as the securities approach maturity. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, securities held to maturity with a carrying amount of $~~6,643,645~~5,147,814 and $~~8,363,997~~5,293,804, respectively, were pledged to secure repurchase agreements at the Federal Home Loan Bank of New York. There were 5758 securities in a loss position at ~~June 30,~~March 31, 2023. At December 31, 2022 ~~none of which were considered~~the Bank does not consider these securities to be ~~other-than-temporally~~other-than-temporary impaired. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, securities held to maturity with a carrying value of $~~4,792,454~~5,311,643 and $~~3,976,629~~5,293,804, respectively, were pledged to secure public deposits.

NOTE 54 – LOANS

In conjunction with the adoption of ASC 326, the Company made certain loan portfolio segment reclassifications to conform to the new allowance for credit losses methodology. Loans and these related reclassifications, are summarized as follows at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:


										Post Adoption						Pre Adoption
	June 30, 2022			December 31, 2021			March 31, 2023			December 31, 2022			The effect of adoption			December 31, 2022
Real estate:	(unaudited)						(unaudited)
Residential	$	379,776,653		$	319,968,234
Commercial and multi-family real estate		173,619,693			175,375,419
Residential First Mortgage							$	489,079,665		$	495,689,840		$	29,589,213		$	466,100,627
Commercial and Multi-Family Real Estate								—			—			(162,338,669	)		162,338,669
Commercial Real Estate								95,343,455			96,030,721			96,030,721			—
Multi-Family Real Estate								71,414,226			66,400,713			66,400,713			—
Construction		51,799,501			41,384,687			57,379,095			61,825,478			—			61,825,478
Commercial and industrial		2,068,871			7,905,524
Commercial and Industrial								1,523,380			1,684,189			—			1,684,189
Consumer:
Home equity and other		25,798,836			27,728,979
Home Equity and Other Consumer								—			—			(29,654,973	)		29,654,973
Consumer								11,475			98,770			98,770			—
Total loans		633,063,554			572,362,843			714,751,296			721,729,711			125,775			721,603,936
Allowance for loan losses		(2,253,174	)		(2,153,174	)
Allowance for credit losses								(2,860,949	)		(2,860,949	)		(282,775	)		(2,578,174	)
Net loans	$	630,810,380		$	570,209,669		$	711,890,347		$	718,868,762		$	(157,000	)	$	719,025,762

As a qualified Small Business Administration lender, the Bank was automatically authorized to originate loans under the Paycheck Protection Program (“PPP”). During 2020, the Bank received and processed ~~113~~ ~~PPP applications totaling approximately $10.5~~ ~~million. The Bank participated in the second round of PPP loans and during the first half of 2021, the Bank received and processed~~ 54 ~~applications totaling $6.9~~ ~~million. All outstanding PPP loans are included in the table above under commercial and industrial loans. Since origination, the Bank has processed forgiveness applications for $13.4~~ ~~million and the outstanding balance of PPP loans at June 30, 2022 and December 31, 2021 was $1.4~~ ~~million and $5.8~~ ~~million, respectively.~~

The Bank has granted loans to officers and directors of the Bank. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, such loans totaled $~~1,754,815~~1,756,594 and $577,143, respectively. At ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022, deferred loan fees were $~~2,127,170~~2,894,450 and $1,249,233, respectively.


	Residential First Mortgage			Commercial Real Estate			Multi- Family Real Estate		Construction			Commercial and Industrial			Consumer			Total
Three months March 31, 2023
Allowance for credit losses:
Beginning balance	$	1,602,534		$	381,180		$	234,300	$	258,500		$	3,960		$	97,700		$	2,578,174
Impact of ASC 326 adoption		113,969			141,797			25,469		1,500			40			—			282,775
Provision for recovery of credit losses (credit)		198,444			(99,975	)		18,231		(19,000	)		—			(97,700	)		—
Loans charged off		—			—					—			—			—			—
Recoveries		—			—					—			—			—			—
Total ending allowance balance	$	1,914,947		$	423,000		$	278,000	$	195,240		$	4,000		$	—		$	2,860,949

	Residential First Mortgage			Commercial and Multi- Family Real Estate			Construction		Commercial and Industrial			Home Equity & Other			Total
March 31, 2022
Allowance for loan losses:
Beginning balance	$	1,092,474		$	768,600		$	195,000	$	9,400		$	87,700		$	2,153,174
Provision for loan losses (credit)		(17,400	)		11,400			13,000		(100	)		(6,900	)		—
Loans charged off		—			—			—		—			—			—
Recoveries		—			—			—		—			—			—
Total ending allowance balance	$	1,075,074		$	780,000		$	208,000	$	9,300		$	80,800		$	2,153,174

Purchased credit impaired ("PCI") loans are loans acquired at a discount primarily due to deteriorated credit quality. These loans are initially recorded at fair value at acquisition, based upon the present value of expected future cash flows, with no related allowance for loan losses. PCI loans acquired in the Gibraltar Bank acquisition totaled $~~4.7~~ ~~million at June 30, 2022.~~

~~The following table presents changes in accretable yield for PCI loans for the six months ended June 30, 2022 and 2021.~~

Three months ended
June 30, 2022

Six months ended
June 30, 2022

Three Months Ended
June 30, 2021

Six Months Ended
June 30, 2021

Balance at the beginning of period

$
160,457

$
170,075

$
217,789

$
—

Acquisition

—

—

0

217,789

Accretion

8,603

18,221

—

—

Reclassification of non-accretable discount

—

—

—

—

Balance at the end of period

$
151,854

$
151,854

$
217,789

$
217,789

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE ~~5 – LOANS~~ ~~(Continued)~~

~~The following table presents the activity in the allowance for loan losses by portfolio segments for the three months ended June 30, 2022 and 2021.~~

Residential
First
Mortgage

Commercial
and Multi-
Family Real
Estate

Construction

Commercial
and
Industrial

Home equity & other

Total

Three months
June 30, 2022

Allowance for loan losses:

Beginning balance

$
1,092,474

$
768,600

$
195,000

$
9,400

$
87,700

$
2,153,174

(Credit) provision for loan losses

159,450

(88,600
)

37,000

(2,400
)

(5,450
)

100,000

Loans charged off

—

—

—

—

—

—

Recoveries

—

—

—

—

—

—

Total ending allowance balance

$
1,251,924

$
680,000

$
232,000

$
7,000

$
82,250

$
2,253,174

June 30, 2021

Allowance for loan losses:

Beginning balance

$
1,185,674

$
849,000

$
48,000

$
13,500

$
86,000

$
2,182,174

(Credit) provision for loan losses

(58,980
)

4,000

6,000

(5,020
)

—

(54,000
)
Loans charged off

—

—

—

—

—

—

Recoveries

—

—

—

—

—

—

Total ending allowance balance

$
1,126,694

$
853,000

$
54,000

$
8,480

$
86,000

$
2,128,174

~~The following table presents the activity in the allowance for loan losses by portfolio segments for the six months ended June 30, 2022 and 2021.~~

Residential
First
Mortgage

Commercial
and Multi-
Family Real
Estate

Construction

Commercial
and
Industrial

Home equity & other

Total

Six months
June 30, 2022

Allowance for loan losses:

Beginning balance

$
1,092,474

$
768,600

$
195,000

$
9,400

$
87,700

$
2,153,174

Provision for loan losses (credit)

159,450

(88,600
)

37,000

(2,400
)

(5,450
)

100,000

Loans charged off

—

—

—

—

—

—

Recoveries

—

—

—

—

—

—

Total ending allowance balance

$
1,251,924

$
680,000

$
232,000

$
7,000

$
82,250

$
2,253,174

June 30, 2021

Allowance for loan losses:

Beginning balance

$
1,254,174

$
841,000

$
45,000

$
14,000

$
87,000

$
2,241,174

Provision for loan losses (credit)

(127,480
)

12,000

9,000

(5,520
)

(1,000
)

(113,000
)
Loans charged off

—

—

—

—

—

—

Recoveries

—

—

—

—

—

—

Total ending allowance balance

$
1,126,694

$
853,000

$
54,000

$
8,480

$
86,000

$
2,128,174

~~BOGOTA FINANCIAL CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~NOTE 5~~4 – LOANS (Continued)

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segments and based on impairment method as of ~~June 30, 2022 and~~ December 31, ~~2021:~~2022:


	Residential First Mortgage		Commercial and Multi- Family Real Estate		Construction		Commercial and Industrial		Home equity & other consumer		Total		Residential First Mortgage		Commercial and Multi- Family Real Estate		Construction		Commercial and Industrial		Home Equity & Other consumer		Total
June 30, 2022
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	35,859	$	—	$	—	$	—	$	—	$	35,859
Collectively evaluated for impairment		1,216,065		680,000		232,000		7,000		82,250		2,217,315
Acquired with deteriorated credit quality		—		—		—		—		—		—
Total ending allowance balance	$	1,251,924	$	680,000	$	232,000	$	7,000	$	82,250	$	2,253,174
Loans:
Loans individually evaluated for impairment	$	832,754	$	—	$	—	$	—	$	18,239	$	850,993
Loans collectively evaluated for impairment		375,642,159		172,240,349		51,799,501		2,068,871		25,745,345		627,496,225
Loans acquired with deteriorated credit quality		3,301,740		1,379,344		—		—		35,252		4,716,336
Total ending loan balance	$	379,776,653	$	173,619,693	$	51,799,501	$	2,068,871	$	25,798,836	$	633,063,554
December 31, 2021
December 31, 2022
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	35,859	$	—	$	—	$	—	$	—	$	35,859	$	33,000	$	—	$	—	$	—	$	—	$	33,000
Collectively evaluated for impairment		1,056,615		768,600		195,000		9,400		87,700		2,117,315		1,569,534		615,480		258,500		3,960		97,700		2,545,174
Total ending allowance balance	$	1,092,474	$	768,600	$	195,000	$	9,400	$	87,700	$	2,153,174	$	1,602,534	$	615,480	$	258,500	$	3,960	$	97,700	$	2,578,174
Loans:
Loans individually evaluated for impairment	$	1,099,793	$	—	$	—	$	—	$	18,507	$	1,118,300	$	819,590	$	—	$	—	$	—	$	37,069	$	856,659
Loans collectively evaluated for impairment		314,754,870		173,962,424		41,384,687		7,866,263		27,710,472		565,678,716		462,439,940		160,990,186		61,825,478		1,684,189		29,586,787		716,526,580
Loans acquired with deteriorated credit quality		4,113,571		1,412,995		—		39,261		—		5,565,827		2,841,097		1,348,483		—		—		31,117		4,220,697
Total ending loan balance	$	319,968,234	$	175,375,419	$	41,384,687	$	7,905,524	$	27,728,979	$	572,362,843	$	466,100,627	$	162,338,669	$	61,825,478	$	1,684,189	$	29,654,973	$	721,603,936

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 4 – LOANS (Continued)

Impaired loans as of the three months ended December 31, 2022 were as follows:


	Loans With no related allowance recorded		Loans with an allowance recorded		Average of individually Impaired loans		Amount of allowance for loan losses allocated
Residential First Mortgage	$	1,199,278	$	171,616	$	1,300,615	$	33,000
Commercial and Multi-Family Real Estate		488,222		—		488,196		—
Construction		—		—		—		—
Commercial and Industrial		—		—		—		—
Home Equity and Other Consumer		37,069		—		26,298		—
	$	1,724,569	$	171,616	$	1,815,109	$	33,000

Collateral - dependent loans individually evaluated with the Allowance for Credit Losses by collateral type were as follows at March 31, 2023:


Portfolio segment	Real estate		Other
Residential First Mortgage	$	—	$	—
Commercial Real Estate		—		—
Multi-Family Real Estate		—		—
Construction		10,922,520		—
Commercial and Industrial		—		—
Other Consumer		—		—
	$	10,922,520	$	—

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 54 – LOANS (Continued)

~~Impaired loans as of and for the three and six months ended June 30, 2022 were as follows:~~

Loans
With no related
allowance recorded

Loans
with an
allowance recorded

Amount of
allowance for
loan losses allocated

Residential first mortgages

$
1,215,530

$
173,353

$
35,859

Commercial and Multi-Family

488,849

—

—

Construction

—

—

—

Commercial & Industrial

—

—

—

Home equity & other consumer

18,239

—

—

$
1,722,618

$
173,353

$
35,859

Average
Of individually
Impaired loans for the

Three months ended
June 30, 2022

Six months ended
June 30, 2022

Residential first mortgages

$
1,393,122

$
1,482,496

Commercial and Multi-Family

488,752

488,504

Construction

—

—

Commercial & Industrial

—

—

Home equity & other consumer

28,907

25,440

$
1,910,781

$
1,996,440

~~Impaired loans as of December 31, 2021 and for the three and six months ended June 30, 2021 were as follows:~~

Loans
With no related
allowance recorded

Loans
with an
allowance recorded

Amount of
allowance for
loan losses allocated

Residential first mortgages

$
1,486,469

$
174,776

$
35,859

Commercial and Multi-Family

488,003

—

—

Construction

—

—

—

Commercial & Industrial

—

—

—

Home equity & other consumer

18,507

—

—

$
1,992,979

$
174,776

$
35,859

Average
Of individually
Impaired loans for the

Three months ended June 30, 2021

Six months ended June 30, 2021

Residential first mortgages

$
1,217,094

$
1,231,099

Commercial and Multi-Family

222,534

227,226

Construction

—

—

Commercial & Industrial

—

—

Home equity & other consumer

18,980

19,353

$
1,458,608

$
1,477,678

~~BOGOTA FINANCIAL CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

~~NOTE 5 – LOANS~~ ~~(Continued)~~

~~The Bank has~~ 3 ~~residential loans totaling $469,102that were troubled debt restructurings (“TDRs”) as of June 30, 2022, with one loan totaling $173,353~~ ~~with a specific reserve of $35,859. At December 31, 2021, the Bank had~~ 4 ~~residential loans totaling $728,288~~ ~~that were TDRs and~~ 1 ~~loan totaling $174,776~~ ~~with a specific reserve of $35,859~~.~~The Bank has not committed to lend additional amounts as of June 30, 2022 or December 31, 2021 to customers with outstanding loans that are classified as TDRs. There were~~ 0 ~~loans modified as TDRs during the six-month periods ended June 30, 2022 or 2021. There were~~ 0 ~~TDRs in payment default within twelve months following the modification during the six months ended June 30, 2022 or 2021.~~

Interest income recognized on impaired loans for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 ~~and June 30, 2021~~ was nominal.

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more and still on accrual, ~~excluding PCI loans,~~ by class of loans as of ~~June 30, 2022 and~~ December 31, ~~2021:~~2022:

Nonaccrual

Loans Past
Due 90 Days
or More Still
Accruing

June 30, 2022

Residential

$
832,754

$
—

Home equity and other consumer

18,239

—

Total

$
850,993

$
—

December 31, 2021

Residential

$
846,037

$
—

Home equity and other consumer

18,507

—

Total

$
864,544

$
—


	Nonaccrual		Loans Past Due 90 Days or More Still Accruing
December 31, 2022
Residential First Mortgage	$	819,590	$	—
Home Equity and Other Consumer		37,069		—
Total	$	856,659	$	—

~~The~~No nonaccrual loans have specific reserves as of March 31, 2023 and the Bank had 0no other real estate owned at either ~~June 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022.


	Nonaccrual loans beginning of period		Nonaccrual loans end of period		Nonaccrual with no Allowance for Credit Loss		Loans Past Due 90 Days or More Still Accruing		Interest recognized on nonaccrual loans
March 31, 2023
Residential First Mortgage	$	819,590	$	1,497,898	$	1,497,898	$	—	$	—
Commercial Real Estate			$	487,755	$	487,755
Construction		—		10,922,520		10,922,520		—	$	—
Consumer		37,069		—		—		—	$	—
Total	$	856,659	$	12,908,173	$	12,908,173	$	—	$	—

1918

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 54 – LOANS (Continued)

The following table presents the aging of the recorded investment in past due loans as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, by class of loans:

30-59 Days
Past Due

60-89 Days
Past Due

Greater than
89 Days
Past Due

Total
Past Due

Loans Not
Past Due

PCI loans

Total

June 30, 2022

Residential

$
—

$
559,838

$
286,744

$
846,582

$
375,628,331

$
3,301,740

$
379,776,653

Commercial and multi-family

—

—

—

—

172,240,349

1,379,344

173,619,693

Construction

—

—

—

—

51,799,501

—

51,799,501

Commercial and industrial

—

—

—

—

2,068,871

—

2,068,871

Home equity and other consumer

137,112

—

—

137,112

25,626,472

35,252

25,798,836

Total

$
137,112

$
559,838

$
286,744

$
983,694

$
627,363,524

$
4,716,336

$
633,063,554

December 31, 2021

Residential

$
—

$
312,616

$
857,676

$
1,170,292

$
314,684,371

$
4,113,571

$
319,968,234

Commercial and multi-family

—

—

—

—

173,962,424

1,412,995

175,375,419

Construction

—

—

—

—

41,384,687

—

41,384,687

Commercial and industrial

—

—

—

—

7,905,524

—

7,905,524

Home Equity & Consumer

27,529

—

—

27,529

27,662,189

39,261

27,728,979

Total

$
27,529

$
312,616

$
857,676

$
1,197,821

$
565,599,195

$
5,565,827

$
572,362,843


	30-59 Days Past Due		60-89 Days Past Due		Greater than 89 Days Past Due		Total Past Due		Loans Not Past Due		Total
March 31, 2023
Residential First Mortgage	$	—	$	1,117,150	$	783,376	$	1,900,526	$	487,179,139	$	489,079,665
Commercial Real Estate		—		—		455,293		455,293		94,888,162		95,343,455
Multi-Family Real Estate		—		—		—		—		71,414,226		71,414,226
Construction		—		—		10,893,713		10,893,713		46,485,382		57,379,095
Commercial and Industrial		—		—		—		—		1,523,380		1,523,380
Consumer		—		—		—		—		11,475		11,475
Total	$	—	$	1,117,150	$	12,132,382	$	13,249,532	$	701,501,764	$	714,751,296

	30-59 Days Past Due		60-89 Days Past Due		Greater than 89 Days Past Due		Total Past Due		Loans Not Past Due		PCI loans		Total
December 31, 2022
Residential First Mortgage	$	—	$	360,849	$	279,515	$	640,364	$	462,619,166	$	2,841,097	$	466,100,627
Commercial and Multi-Family Real Estate		—		—		—		—		160,990,186		1,348,483		162,338,669
Construction		—		—		—		—		61,825,478		—		61,825,478
Commercial and Industrial		—		—		—		—		1,684,189		—		1,684,189
Home Equity and Other Consumer		92,977		—		19,122		112,099		29,511,757		31,117		29,654,973
Total	$	92,977	$	360,849	$	298,637	$	752,463	$	716,630,776	$	4,220,697	$	721,603,936

Loans greater than 89 days past due and loans on non-accrual are considered to be nonperforming.

Credit Quality Indicators

The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. Commercial and multi-family real estate, commercial and industrial and construction loans are graded on an annual basis. Residential and consumer loans are primarily evaluated based on performance. Refer to the immediately preceding table for the aging of the recorded investment of these loan segments. The Bank uses the following definitions for risk ratings:

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above are considered to be Pass rated loans.

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 54 – LOANS (Continued)

Based on the most recent analysis performed, the risk category of loans by class is as follows:


	Term Loans by Origination Year
March 31, 2023	2023		2022		2021		2020		2019		Prior		Revolving Loans		Totals
Residential First Mortgage
Pass		1,356,565		116,300,705		40,276,075		29,878,332		28,409,680		129,243,964		141,925,437	$	487,390,758
Special Mention		—		—		—		191,009		171,616		455,299		112,099		930,023
Substandard		—		—		—		—		—		469,749		289,135		758,884
Doubtful		—		—		—		—		—		—		—		—
Total		1,356,565		116,300,705		40,276,075		30,069,341		28,581,296		130,169,012		142,326,671		489,079,665
Gross chargeoffs by vintage		—		—		—		—		—		—		—		—

Commercial Real Estate
Pass		—		3,116,904		—		6,634,424		5,605,765		12,726,031		66,772,576		94,855,700
Special Mention		—		—		—		—		—		—		487,755		487,755
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total		—		3,116,904		—		6,634,424		5,605,765		12,726,031		67,260,331		95,343,455
Gross chargeoffs by vintage		—		—		—		—		—		—		—		—

Multi-Family Real Estate
Pass		—		2,435,157		—		1,202,368		—		2,177,677		65,599,024		71,414,226
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total		—		2,435,157		—		1,202,368		—		2,177,677		65,599,024		71,414,226
Gross chargeoffs by vintage		—		—		—		—		—		—		—		—

Construction
Pass		—		—		—		—		—		—		46,456,575		46,456,575
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		10,922,520		10,922,520
Doubtful		—		—		—		—		—		—		—		—
Total		—		—		—		—		—		—		57,379,095		57,379,095
Gross chargeoffs by vintage		—		—		—		—		—		—		—		—

Commercial and Industrial
Pass		—		—		259,355		767,024		348,985		6,494		141,522		1,523,380
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total		—		—		259,355		767,024		348,985		6,494		141,522		1,523,380
Gross chargeoffs by vintage		—		—		—		—		—		—		—		—

Consumer
Pass		—		—		—		—		—		—		11,475		11,475
Special Mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—
Total		—		—		—		—		—		—		11,475		11,475
Total loans	$	1,356,565	$	121,852,766	$	40,535,430	$	38,673,157	$	34,536,046	$	145,079,214	$	332,718,118	$	714,751,296

Pass

Special
Mention

Substandard

Doubtful

Totals

June 30, 2022

Residential

$
378,943,899

$
372,332

$
460,422

$
—

$
379,776,653

Commercial and multi-family

173,619,693

—

—

—

173,619,693

Construction

51,799,501

—

—

—

51,799,501

Commercial and industrial

2,068,871

—

—

—

2,068,871

Home equity and other consumer

25,780,597

—

18,239

—

25,798,836

Total

$
632,212,561

$
372,332

$
478,661

$
—

$
633,063,554

December 31, 2021

Residential

$
318,868,440

$
383,034

$
716,760

$
—

$
319,968,234

Commercial and multi-family

174,173,925

—

1,201,494

—

175,375,419

Construction

41,384,687

—

—

—

41,384,687

Commercial and industrial

7,905,524

—

—

—

7,905,524

Home equity and other consumer

27,710,472

—

18,507

—

27,728,979

Total

$
570,043,048

$
383,034

$
1,936,761

$
—

$
572,362,843


	Pass		Special Mention		Substandard		Totals
December 31, 2022
Residential First Mortgage	$	465,089,495	$	555,965	$	455,167	$	466,100,627
Commercial and Multi-Family Real Estate		162,338,669		—		—		162,338,669
Construction		61,825,478		—		—		61,825,478
Commercial and Industrial		1,684,189		—		—		1,684,189
Home Equity and Other Consumer		29,617,904		19,122		17,947		29,654,973
Total	$	720,555,735	$	575,087	$	473,114	$	721,603,936

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

There have been no loan modifications for the three month period ended March 31, 2023.

NOTE 65 – STOCK BASED COMPENSATION

At the annual meeting held on May 27, 2021, stockholders of the Company approved the Bogota Financial Corp. 2021 Equity Incentive Plan ("2021 Plan"), which provides for the issuance of up to 902,602 shares (257,887 restricted stock awards and 644,718 stock options) of Bogota Financial Corp. common stock.

On September 2, 2021, 226,519 shares of restricted stock were awarded, with a grant date fair value of $10.45 per share. Grants of restricted common stock were issued from authorized but unissued shares. Restricted shares granted under the 2021 Plan vest in equal installments, over a service period of five years, beginning one year from the date of grant. Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and March 31, 2022, approximately $118,000 and $~~236,000~~118,000 in expense was recognized in regard to these ~~awards. There was~~ 0 ~~restricted stock expense recorded for the three and six months ended June 30, 2021.~~awards, respectively. The expected future compensation expense related to the ~~226,519~~181,215 non-vested restricted shares outstanding at ~~June 30, 2022~~March 31, 2023 was approximately $~~2.0~~1.8 million over a ~~weighted average~~ period of four years.

The following is a summary of the Company's restricted stock activity during the ~~six~~three months ended ~~June 30, 2022:~~March 31, 2023:


	Number of non-vested Restricted Shares		Weighted Average Grant Date Fair Value		Number of Non-vested Restricted Shares		Weighted Average Grant Date Fair Value
Outstanding, January 1, 2022		226,519	$	10.45
Outstanding, January 1, 2023						181,215	$	10.45
Granted		0		0		—		—
Vested		0		0		—		—
Forfeited		0		0		—		—
Outstanding, June 30, 2022		226,519	$	10.45
Outstanding, March 31, 2023						181,215	$	10.45

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 65 – STOCK BASED COMPENSATION (Continued)

On September 2, 2021, options to purchase 526,119 shares of Company common stock were awarded, with a grant date fair value of $4.37 per option. Stock options granted under the 2021 Plan vest in equal installments over a service period of five years beginning one year from the date of grant. Stock options were granted at an exercise price of $10.45, which represents the fair value of the Company's common stock price on the grant date based on the closing market price and have an expiration period of 10 years.

~~The fair value of stock options granted was estimated utilizing the Black-Scholes option pricing model using the following assumptions: expected life of~~ ~~6.5~~ ~~years, risk-free rate of return of~~ ~~0.904%, volatility of~~ ~~41.10%, and a dividend yield of~~ ~~0.00~~%.

The expected life of the options represents the period of time that stock options are expected to be outstanding and is estimated using the simplified approach, which assumes that all outstanding options will be exercised at the midpoint of the vesting date and full contractual term. The risk-free rate of return is based on the rates on the grant date of a U.S. Treasury Note with a term equal to the expected option life. Since the Company recently converted to a public Company and does not have sufficient historical price data, the expected volatility is based on the historical daily stock prices of a peer group of similar entities based on factors such as industry, stage of life cycle, size and financial leverage. The Company has 0~~t paid any cash dividends on its common stock.~~

Management recognizes expense for the fair value of these awards on a straight-line basis over the requisite service period. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and March 31, 2022, approximately $115,000 and $~~230,000~~115,000 in expense was recognized in regard to these awards, respectively. ~~There was~~ 0 ~~stock option expense recorded for the three or six months ended June 30, 2021.~~ The expected future compensation expense related to the ~~526,119~~418,895 non-vested options outstanding at ~~June 30, 2022~~March 31, 2023 was $~~1.9~~1.7 million over the vesting period of four years.

The following is a summary of the Company's option activity during the ~~six~~three months ended ~~June 30, 2022:~~March 31, 2023:


	Number of Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value		Number of Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding, January 1, 2022	$	523,619	$	10.45		6.5	$	397,951
Outstanding, January 1, 2023										523,619	$	10.45		6.5	$	—
Granted		—								—
Exercised		—								—
Forfeited		—								—
Outstanding, June 30, 2022		523,619	$	10.45		5.9	$	397,591
Options exercisable at June 30, 2022	$	—					$	—
Outstanding, March 31, 2023										523,619	$	10.45		5.9	$	—
Options exercisable at March 31, 2022										104,724					$	—

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value, the difference between the Company's closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options.

NOTE 76 – EMPLOYEE STOCK OWNERSHIP PLAN

In connection with our mutual-to-stock reorganization and stock offering, the Bank established an employee stock ownership plan (“ESOP”), which acquired 515,775 shares of the Company’s common stock equaling 3.92% of the Company's outstanding shares. The ESOP is a tax-qualified retirement plan providing employees the opportunity to own Company stock. Bank contributions to the ESOP are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The number of shares to be allocated annually is 25,789 through 2039. During the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ $~~70,000~~72,000 and $~~65,000~~ ~~was incurred as expense for the plan, respectively. During the six months ended June 30, 2022 and 2021, $137,000~~ ~~and $125,000~~66,000 was incurred as expense for the plan, respectively. As of ~~June 30, 2022,~~March 31, 2023, ~~65,789~~72,539 shares have been allocated and ~~449,977~~429,900 shares are unallocated with a fair value of $~~5.1~~4.3 million.

Note 7 – DERIVATIVES AND HEDGING ACTIVITES

The Company uses derivative financial instruments as components of its market risk management, principally to manage interest rate risk. Certain derivatives are entered into in connection with transactions with commercial customers. Derivatives are not used for speculative purposes. All derivatives are recognized as either assets or liabilities in the Consolidated Statements of Financial Condition, reported at fair value and presented on a gross basis. Until a derivative is settled, a favorable change in fair value results in an unrealized gain that is recognized as an asset, while an unfavorable change in fair value results in an unrealized loss that is recognized as a liability.

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 87 – DERIVATIVES AND HEDGING ACTIVITES ~~Commitments and Contingencies~~(continued)

The ~~Bank~~Company generally applies hedge accounting to its derivatives used for market risk management purposes. Hedge accounting is permitted only if specific criteria are met, including a ~~party~~requirement that a highly effective relationship exists between the derivative instrument and the hedged item, both at inception of the hedge and on an ongoing basis. Changes in the fair value of effective fair value hedges are recognized in current earnings (with the change in fair value of the hedged asset or liability also recognized in earnings). Changes in the fair value of effective cash flow hedges are recognized in other comprehensive income (loss) until earnings are affected by the variability in cash flows of the designated hedged item. Ineffective portions of hedge results are recognized in current earnings. Changes in the fair value of derivatives for which hedge accounting is not applied are recognized in current earnings.

The Company formally documents at inception all relationships between the derivative instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. This process includes linking all derivatives that are designated as hedges to specific assets and liabilities, or to specific firm commitments. The Company also formally assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair values or cash flows of the hedged items. If it is determined that a derivative is not highly effective or has ceased to be a highly effective hedge, the Company would discontinue hedge accounting prospectively. Gains or losses resulting from the termination of a derivative accounted for as a cash flow hedge remain in other comprehensive income (loss) and is (accreted) amortized to earnings over the remaining period of the former hedging relationship.

Certain derivative financial instruments ~~with off-balance sheet~~are offered to certain commercial banking customers to manage their risk ~~in the normal course~~ of ~~business to meet the financing needs~~exposure and risk management strategies. These derivative instruments consist primarily of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments primarily include commitments to extend credit. Such instruments involve, to varying degrees, elements of creditcurrency forward contracts and interest rate swap contracts. The risk associated with these transactions is mitigated by simultaneously entering into similar transactions having essentially offsetting terms with a third party. In addition, the Company executes interest rate swaps with third parties in ~~excess~~order to hedge the interest rate risk of short-term FHLB advances.

Interest Rate Swaps. At March 31, 2023, the Company had two interest rate swaps with a notional amounts of $20.0 million hedging on certain FHLB advances and brokered deposits. This interest rate swap meets the cash flow hedge accounting requirements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without the exchange of the underlying notional amount. At March 31, 2023, the Company had one interest rate swap with a notional amount ~~recognized~~of $10.0 million hedging on certain FHLB advances and one interest rate swap with a notional amount of $10.0 million hedging on certain brokered deposits. At both March 31, 2023 and December 31, 2022, the Company had no interest rate swaps in place with commercial banking customers.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the ~~consolidated statements~~Consolidated Statements of ~~financial condition. The contractual amounts~~Financial Condition at March 31, 2023:


		March 31, 2023
		Asset Derivative
	Consolidated Statements of Financial Condition	Fair Value
Interest rate swaps	Other Assets	$	163,349
Total derivative instruments		$	163,349

For the three months ended March 31, 2023, unrealized losses of ~~these instruments reflect the extent~~$163,349 were recorded for changes in fair value of ~~involvement the Bank has in those particular classes of financial instruments.~~interest rate swaps with third parties. At March 31, 2023, accrued interest was $12,000.

The ~~Bank’s exposure to credit loss in~~Company has agreements with counterparties that contain a provision that if the ~~event~~Company defaults on any of ~~nonperformance~~its indebtedness, including default where repayment of the indebtedness has not been accelerated by the ~~other party to~~lender, then the ~~financial instruments for commitments to extend credit is represented by the contractual amount~~Company could also be declared in default of ~~those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.~~its derivative

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~The Bank had outstanding firm commitments, all of which expire within three months, to originate, loans at June 30, 2022 and December 31, 2021 as follows:~~

June 30,
2022

December 31,
2021

Fixed Rate

Residential mortgage loans

$
27,116,500

$
2,986,250

Commercial real estate

350,000

—

Construction

675,000

—

Home equity

—

170,000

Total

$
28,141,500

$
3,156,250

June 30,
2022

December 31,
2021

Variable Rate

Residential mortgage loans

$
25,144,739

$
—

Commercial real estate

3,040,000

1,400,000

Commercial and industrial

500,000

—

Construction

—

7,522,375

Home equity

618,000

1,060,000

Total

$
29,302,739

$
9,982,375

~~Commitments to make loans are generally made for periods of 90 days or less.~~obligations.

~~The fixed rate loan commitments have interest rates ranging from~~ ~~3.50% to~~ ~~6.00~~%~~and maturities ranging from~~ 10 ~~years to~~ 30 ~~years.~~

~~At June 30, 2022 and December 31, 2021, undisbursed funds from approved lines of credit under a homeowners’ equity lending program amounted to $47,745,830~~ ~~and $48,028,579, respectively. At June 30, 2022 and December 31, 2021, undisbursed funds from approved lines of credit under a business line of credit program amounted to $8,176,073~~ ~~and $7,938,827, respectively. Unless they are specifically cancelled by notice from the Bank, these funds represent firm commitments available to the respective borrowers on demand.~~

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but primarily includes commercial and residential real estate.

~~The Bank leases certain Bank properties and equipment under operating leases. Rent expense was $43,364~~ ~~and $48,012~~ ~~for the three months ended June 30, 2022 and 2021, respectively. Rent expense was $87,179~~ ~~and $73,763~~ ~~for the six months ended June 30, 2022 and 2021, respectively.~~

~~BOGOTA FINANCIAL CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

NOTE 98 – FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a bank’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Bank used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

The Bank’s available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity. The securities available-for-sale portfolio consists of corporate bonds and mortgage-backed securities. The fair values of these securities are obtained from an independent nationally recognized pricing service. An independent pricing service provides prices which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available for the securities.

Assets measured at fair value on a recurring basis are summarized below:

Carrying
Value

Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

As of June 30, 2022

Securities available for sale:

U.S. treasury bills

$
9,870,432

$
9,870,432

$
—

$
—

U.S. government and agency obligations

5,567,109

—

5,567,109

—

Corporate bonds

17,609,769

—

17,609,769

—

MBSs - residential

41,383,955

—

41,383,955

—

MBSs - commercial

23,076,428

—

23,076,428

—

$
97,507,693

$
9,870,432

$
87,637,261

$
—

As of December 31, 2021

Securities available for sale:

U.S. government and agency obligations

$
2,981,730

$
—

$
2,981,730

Corporate bonds

7,397,618

—

7,397,618

—

MBSs - residential

21,760,245

—

21,760,245

—

MBSs - commercial

9,699,205

—

9,699,205

—

$
41,838,798

$
—

$
41,838,798

$
—

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	Carrying Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
As of March 31, 2023
Securities available for sale:
U.S. treasury bills	$	4,983,764	$	4,983,764	$	—	$	—
U.S. government and agency obligations		5,500,932		—		5,500,932		—
Corporate bonds		14,636,813		—		14,636,813		—
Cash flow hedge		163,349				163,349		—
MBSs - residential		38,297,167		—		38,297,167		—
MBSs - commercial		18,632,513		—		18,632,513		—
	$	82,214,538	$	4,983,764	$	77,230,774	$	—
As of December 31, 2022
Securities available for sale:
U.S. treasury bills	$	4,927,608	$	4,927,608	$	—	$	—
U.S. government and agency obligations		5,465,154		—		5,465,154		—
Corporate bonds		15,506,047		—		15,506,047		—
Cash flow hedge		324,062				324,062		—
MBSs - residential		39,649,045		—		39,649,045		—
MBSs - commercial		19,552,724		—		19,552,724		—
	$	85,424,640	$	4,927,608	$	80,497,032	$	—

There were 0no transfers between level 1 and level 2 during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 98 – FAIR VALUE (Continued)

The carrying amounts and estimated fair values of financial instruments not measured at fair value, at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, were as follows:


	Carrying		Fair		Fair Value Measurement Placement						Carrying		Fair		Fair Value Measurement Placement
	Amount		Value		(Level 1)		(Level 2)		(Level 3)		Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(In thousands)										(In thousands)
June 30, 2022
March 31, 2023
Financial instruments - assets
Cash and due from banks	$	7,604	$	7,604	$	7,604	$	—	$	—
Investment securities held-to-maturity		86,432		79,858		—		79,858		—	$	78,207	$	71,202	$	—	$	71,202	$	—
Loans and loans held for sale		631,170		595,775		—		—		595,775		711,890		646,937		—		—		646,937
Financial instruments - liabilities
Certificates of deposit		367,866		369,394		—		369,394		—		498,165		498,240		—		498,240		—
Borrowings		115,279		114,670		—		114,670		—		112,032		100,024		—		100,024		—


	Carrying		Fair		Fair Value Measurement Placement						Carrying		Fair		Fair Value Measurement Placement
	Amount		Value		(Level 1)		(Level 2)		(Level 3)		Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(In thousands)										(In thousands)
December 31, 2021
December 31, 2022
Financial instruments - assets
Cash and due from banks	$	105,069	$	105,069	$	105,069	$	—	$	—
Investment securities held-to-maturity		74,053		74,081		—		74,081		—	$	77,427	$	70,700	$	—	$	70,700	$	—
Loans and loans held for sale		571,363		569,845		—		—		569,845		719,026		658,250		—		—		658,250
Financial instruments - liabilities
Certificates of deposit		366,396		365,452		—		365,452		—		492,593		491,638		—		491,638		—
Borrowings		85,052		86,657		—		86,657		—		102,319		98,885		—		98,885		—

Carrying amount is the estimated fair value for cash and cash equivalents. The fair value of loans is determined using an exit price methodology. Certificates of deposits fair value is estimated by using a discounted cash flow approach. Fair value of FHLB advances is based on current rates for similar financing. Other balance sheet instruments such as cash and cash equivalents, accrued interest receivable, accrued interest payable and Bank owned life insurance holding costs approximate fair value. The fair value of off-balance sheet items is not considered material.

BOGOTA FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 109 – ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss included in equity (net of tax) for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ was as follows:

Unrealized gain
and losses on
available for
sale securities

Benefit plans

Total

Three months ended

June 30, 2022

Beginning balance at April 1, 2022

$
(2,689,802
)

$
58,747

$
(2,631,055
)
Other comprehensive (loss) income before reclassification

—

—

—

Amounts reclassified

(4,142,333
)

41,589

(4,100,744
)
Net period comprehensive (loss) income

(4,142,333
)

41,589

(4,100,744
)
Ending balance at June 30, 2022

$
(6,832,135
)

$
100,336

$
(6,731,799
)

June 30, 2021

Beginning balance at April 1, 2021

$
112,120

$
(342,201
)

$
(230,081
)
Other comprehensive income before reclassification

—

—

—

Amounts reclassified

9,212

31,381

40,593

Net period comprehensive income

9,212

31,381

40,593

Ending balance at June 30, 2021

$
121,332

$
(310,820
)

$
(189,488
)


	Unrealized gain and losses on available for sale securities			Benefit plans			Derivatives			Total
Three months ended
March 31, 2023
Beginning balance at January 1, 2023	$	(6,499,666	)	$	55,684		$	232,969		$	(6,211,013	)
Other comprehensive (loss) income before reclassification		(114,092	)		(16,546	)		(115,537	)		(246,175	)
Amounts reclassified		—			—			—			—
Net period comprehensive (loss) income		(114,092	)		(16,546	)		(115,537	)		(246,175	)
Ending balance at March 31, 2023	$	(6,613,758	)	$	39,138		$	117,432		$	(6,457,188	)

March 31, 2022
Beginning balance at January 1, 2022	$	(289,814	)	$	17,158		$	—		$	(272,656	)
Other comprehensive (loss) income before reclassification		(2,399,988	)		41,589			—			(2,358,399	)
Amounts reclassified		—			—			—			—
Net period comprehensive income		(2,399,988	)		41,589			—			(2,358,399	)
Ending balance at March 31, 2022	$	(2,689,802	)	$	58,747		$	—		$	(2,631,055	)

~~BOGOTA FINANCIAL CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Unrealized gain
and losses on
available for
sale securities

Benefit plans

Total

Six months ended
June 30, 2022

Beginning balance at January 1, 2022

$
(289,814
)

$
17,158

$
(272,656
)
Other comprehensive income before reclassification

—

—

—

Amounts reclassified

(6,542,321
)

83,178

(6,459,143
)
Net period comprehensive income

(6,542,321
)

83,178

(6,459,143
)
Ending balance at June 30, 2022

$
(6,832,135
)

$
100,336

$
(6,731,799
)

June 30, 2021

Beginning balance at January 1, 2021

$
100,569

$
(373,582
)

$
(273,013
)
Other comprehensive income before reclassification

—

—

—

Amounts reclassified

20,763

62,762

83,525

Net period comprehensive income

20,763

62,762

83,525

Ending balance at June 30, 2021

$
121,332

$
(310,820
)

$
(189,488
)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 and for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and March 31, 2022 ~~and June 30, 2021~~ is intended to assist in understanding the financial condition and results of operations of Bogota Financial Corp. The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1, of this Quarterly Report on Form 10-Q.

This report contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,” “intend,” “anticipate,” “plan,” “seek,” “expect” and words of similar meaning. These forward-looking statements include, but are not limited to:

These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

The COVID-19 pandemic has adversely impacted the global and nation economy and certain industries and geographies in which our clients operate. Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 pandemic on the business of the Company, its clients, employees and third-party service providers. The extent of such impact will depend on future developments, which are highly uncertain. Additionally, the responses of various governmental and nongovernmental authorities and consumers to the pandemic may have material long-term effects on the Company and its clients which are difficult to quantify in the near-term or long-term.

Moreover, our future success and profitability substantially depends on the management skills of our executive officers and directors, many of whom have held officer and director positions with us for many years. The unanticipated loss or unavailability of key employees due to the pandemic could harm our ability to operate our business or execute our business strategy. We may not be successful in finding and integrating suitable successors in the event of key employee loss or unavailability.

On February 28, 2021, the Company completed its acquisition of Gibraltar Bank. As a part of the transaction, the Company issued 1,267,916 shares of its common stock to Bogota Financial, MHC. The conversion and consolidation of data processing platforms, systems and customer files occurred on August 16, 2021.

As of February 28, 2021, Gibraltar had assets of $106.2 million, loans of $77.7 million and deposits of $81.6 million and operated from three offices located in Newark, Oak Ridge and Parsippany, New Jersey in Morris and Essex Counties, New Jersey.

A summary of our accounting policies is described in Note 1 to the consolidated financial statements included with our Annual Report on Form 10-K at and for the year ended December 31, ~~2021.~~2022. Critical accounting estimates are necessary in the application of certain accounting policies and procedures and are particularly susceptible to significant change. Critical accounting policies are defined as those involving significant judgments and assumptions by management that could have a material impact on the carrying value of certain assets or on income under different assumptions or conditions. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations. ~~There~~See Note 1, "Basis of Presentation" for additional information on the adoption of ASC 326, which changes the methodology under which management calculates its reserve for loans and investment securities, now referred to as the allowance for credit losses. Management considers the measurement of the allowance for credit losses to be a critical accounting policy. Other than the adoption of ASC 326, there have been no significant changes to the Company's critical accounting policies since December 31, ~~2021.~~

As of June 30, 2022, the Bank had granted 172 loan modifications totaling $67.9 million, which represented 11.6% 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 were treated in accordance with Section 4013 of the Coronavirus Aid Relief and Economic Security (“CARES”) Act and, as such, were not 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 continued to accrue interest.

As a qualified Small Business Administration (“SBA”) lender, the Bank was automatically authorized to originate loans under the Paycheck Protection Program (“PPP”). During 2020, the Bank received and processed 113 PPP applications totaling $10.5 million. The Bank participated in the second round of PPP loans and during the first half of 2021, the Bank received and processed 54 PPP applications totaling $6.9 million. The Bank had $1.4 million in outstanding PPP loans at June 30, 2022.

Comparison of Financial Condition at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022

Total Assets. Total assets ~~increased $37.6 million,~~decreased $809,000, or ~~4.5%~~0.1%, from December 31, ~~2021~~2022 to ~~$874.9~~$950.3 million at ~~June 30, 2022~~March 31, 2023 primarily due to ~~loan originations~~decreases in loans and ~~purchase of investment~~ securities ~~with excess liquidity.~~available for sale offset by an increase in cash and cash equivalents. The ~~increase~~decrease in assets reflected a ~~$60.6~~$7.1 million, or ~~10.6%~~1.0%, ~~increase~~decrease in loans and a ~~$55.7~~$3.0 million, or ~~133.1%~~3.6%, ~~increase~~decrease in securities available for sale, offset by a $7.7 million, or 45.5%, increase in cash and cash equivalents and a ~~$12.4 million~~$780,000 or ~~16.7%~~1.0%, increase in securities held to ~~maturity, offset by a $97.5 million, or 92.8%, decrease in cash and cash equivalents.~~maturity.

Cash and Cash Equivalents. Total cash and cash equivalents ~~decreased $97.5~~increased $7.7 million, or ~~92.8%~~45.5%, to ~~$7.6~~$24.5 million at ~~June 30, 2022~~March 31, 2023 from ~~$105.1~~$16.8 million at December 31, ~~2021.~~2022. The ~~decrease~~increase was primarily due to ~~funding of~~ loan ~~originations~~and

investment repayments and ~~investment security purchases~~excess cash from the increase in long-term FHLB advances during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

Securities Available for Sale. Total securities available for sale ~~increased $55.7~~decreased $3.0 million, or ~~133.1%~~3.6%, to ~~$97.5~~$82.1 million at ~~June 30, 2022~~March 31, 2023 from ~~$41.8~~$85.1 million at December 31, ~~2021.~~2022. The ~~increase~~decrease was due to ~~$67.5 million of purchases of mortgage-backed securities, corporate bonds, U.S. treasury bills~~investment repayments and ~~government agency obligations, with excess cash. The increase in securities available for sale reflected a $10.2 million increase~~an $869,000 decrease in corporate bonds ~~a $9.9 million increase in U.S. treasury bills, a $2.6 million increase in U.S. government agency obligations,~~ and a ~~$33.0~~$2.3 million ~~increase~~decrease in mortgage-backed securities.

Securities Held to Maturity. Total securities held to maturity increased ~~$12.4 million,~~$780,000, or ~~16.7%~~1.0%, to ~~$86.4~~$78.2 million at ~~June 30, 2022~~March 31, 2023 from ~~$74.1~~$77.4 million at December 31, ~~2021,~~2022, primarily due to ~~$23.1~~a $1.5 million in ~~purchases~~purchase of ~~securities~~a corporate bond which was offset by ~~repayments of mortgage-backed securities. The increase in securities held to maturity reflected~~ a ~~$2.5 million increase in corporate bonds, a $10.0 million increase in U.S. government agency obligations, a $4.8 million increase~~$7,000 decrease in municipal bonds and a ~~$5.0 million~~$668,000 decrease in mortgage-backed securities.

Net Loans. Net loans ~~increased $60.6~~decreased $7.1 million, or ~~10.6%~~1.0%, to ~~$630.8~~$711.9 million at ~~June 30, 2022~~March 31, 2023 from ~~$570.2~~$719.0 million at December 31, ~~2021.~~2022. The ~~increase~~decrease was due to ~~an increase~~a decrease of ~~$59.8~~$23.0 million, or ~~18.7%~~4.9%, in one-to four-residential real estate loans to ~~$379.8~~$489.1 million from ~~$320.0~~$466.1 million at December 31, ~~2021, and an increase~~2022, a decrease of ~~$10.4~~$4.4 million, or ~~25.2%~~7.2%, in construction loans to ~~$51.8~~$57.4 million at ~~June 30, 2022~~March 31, 2023 from ~~$41.4~~$61.8 million at December 31, ~~2021 offset by~~2022, a ~~$5.8~~decrease of $11.5 million, or ~~73.8%~~100.0%, in consumer loans to $11.5 million at March 31, 2023 from $29.7 million at December 31, 2022, a $161,000, or 9.5%, and a decrease in commercial and industrial loans to ~~$2.1~~$1.5 million at ~~June 30, 2022~~March 31, 2023 from ~~$7.9~~$1.7 million as of December 31, ~~2021, a decrease~~2022 offset by an increase of ~~$1.9~~$4.3 million, or ~~7.0%, in consumer loans to $25.8 million at June 30, 2022 from $27.7 million at December 31, 2021 and a decrease of $1.8 million, or 1.0%~~2.7%, in commercial and multi-family real estate loans to ~~$173.6~~$166.8 million at ~~June 30, 2022~~March 31, 2023 from ~~$175.4~~$162.3 million at December 31, ~~2021. The decrease in commercial and industrial loans was due to the forgiveness and repayment of $5.5 million in PPP loans that were originated in 2021 and 2020.~~2022. As of ~~June 30,~~March 31, 2023 and 2022, the Bank had ~~$360,000 in~~no loans held for ~~sale compared $1.2 million loans held~~sale. Upon adoption of the CECL method of calculating the allowance for ~~sale as~~credit losses on January 1, 2023, the Bank recorded a one-time decrease, net of ~~December 31, 2021.~~

~~Bank-Owned Life Insurance.~~ ~~Bank-owned life insurance increased $5.3 million or 21.7% due~~tax, in retained earnings of $220,000, an increase to ~~a $5.0 million purchase~~the allowance for credit losses of ~~bank-owned life insurance during~~$157,000 and an increase in the ~~six months ended June 30, 2022.~~reserve for unfunded liabilities of $152,000.

Deposits. Total deposits ~~increased $13.8~~decreased $10.7 million, or ~~2.3%~~1.5%, to ~~$611.3~~$690.7 million at ~~June 30, 2022~~March 31, 2023 from ~~$597.5~~$701.4 million at December 31, ~~2021 reflecting a new $11.0 million interest-bearing~~2022 due to decreases in checking, ~~municipal relationship~~savings and money market accounts offset by an increase certificates of deposit. The ~~increase~~decrease in deposits reflected ~~an increase~~a decrease in interest-bearing deposits of ~~$13.7~~$10.2 million, or ~~2.5%~~1.5%, to ~~$571.8~~$652.6 million as of ~~June 30, 2022~~March 31, 2023 from ~~$558.2~~$662.8 million at December 31, ~~2021 and an increase~~2022 offset by a decrease in ~~non-interest bearing~~non-interest-bearing deposits of ~~$124,000,~~$546,000, or ~~0.3%~~1.4%, to ~~$39.4~~$38.1 million as of ~~June 30, 2022~~March 31, 2023 from ~~$39.3~~$38.7 million as of December 31, ~~2021.~~2022.

At ~~June 30, 2022,~~March 31, 2023, municipal deposits totaled ~~$38.9~~$62.1 million, which represented ~~6.4%~~9.0% of total deposits, and brokered deposits totaled ~~$48.7~~$50.4 million, which represented ~~8.0%~~7.3% of total deposits. At December 31, ~~2021,~~2022, municipal deposits totaled ~~$31.5~~$57.5 million, which represented ~~5.3%~~8.2% of total deposits, and brokered deposits totaled ~~$52.9~~$58.6 million, which represented ~~8.9%~~8.4% of total deposits. At March 31, 2023, uninsured deposits represented 8.4% of the Bank’s total deposits.

Borrowings. Federal Home Loan Bank of New York borrowings increased ~~$30.2~~$9.7 million, or ~~35.5%~~9.5%, to ~~$115.3~~$112.0 million at ~~June 30, 2022~~March 31, 2023 from ~~$85.1~~$102.3 million at December 31, ~~2021,~~2022, as long-term advances increased $32.2 million, offset by a decrease in short-term advances ~~increased $43.2 million and repayments~~ of ~~long-term advances were $13.0~~$22.5 million. The weighted average rate of borrowings was ~~1.72%~~3.71% and ~~1.69%~~3.36% as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The increase in advances was used to offset withdrawals on deposits. Total borrowing capacity at the Federal Home Loan Bank is $336.8 million of which $112.0 million is advanced.

Total Equity. Stockholders’ equity decreased ~~$7.1 million~~$573,000 to ~~$140.5~~$139.1 million, primarily due to the repurchase of 126,660 shares of stock during the three months at a cost of $1.4 million and increased accumulated other comprehensive loss for securities available for sale of ~~$6.5 million and the repurchase of 379,949 shares of stock during the six months at a cost of $4.3 million,~~$247,000 offset by ~~$3.0 million~~$993,000 of net income for the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. At ~~June 30, 2022,~~March 31, 2023, the Company’s ratio of average stockholders’ equity-to-total assets was ~~17.08%~~14.69%, compared to ~~17.67%~~15.61% at December 31, ~~2021.~~2022.

The following tables present information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting annualized average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented. Average balances have been calculated using daily balances. Nonaccrual loans are included in average balances only. Loan fees are included in interest income on loans and are not material.

The following table sets forth the effects of changing rates and volumes on net interest income. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. Changes attributable to changes in both rate and volume that cannot be segregated have been allocated proportionally based on the changes due to rate and the changes due to volume.

Comparison of Operating Results for the Three Months Ended ~~June 30,~~March 31, 2023 and March 31, 2022 ~~and June 30, 2021~~

General. Net income ~~increased~~decreased by ~~$203,000,~~$408,000, or ~~14.1%~~29.1%, to ~~$1.6 million~~$993,000 for the three months ended ~~June 30, 2022~~March 31, 2023 from $1.4 million for the three months ended ~~June 30, 2021. The increase~~March 31, 2022. This decrease was due to ~~an increase~~a decrease of $598,000 in net interest income and a decrease of ~~$930,000,~~$61,000 in non-interest income, offset by a decrease of $24,000 in non-interest expense and a decrease of $227,000 in income ~~of $280,000 and an increase of $154,000 in the provision for loan losses.~~tax expense.

Interest Income. Interest income increased ~~$709,000,~~$2.7 million, or ~~11.4%~~43.6%, to ~~$6.9~~$9.0 million for the three months ended ~~June 30, 2022.~~March 31, 2023. The increase reflected ~~an $18.2~~a $107.1 million increase in the average balance of interest-earnings assets, and ~~a 29~~an 85 basis points increase in the average yield on interest-earning assets to ~~3.46%~~4.06% for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~3.17%~~3.21% for the three months ended ~~June 30, 2021.~~March 31, 2022.

Interest income on cash and cash equivalents ~~decreased $13,000,~~increased $76,000, or ~~31.7%~~262.1%, to ~~$28,000~~$105,000 for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~$41,000~~$29,000 for the three months ended ~~June 30, 2021~~March 31, 2022 due a 467 basis point increase in the average yield on cash and cash equivalents from 0.17% for the three months ended March 31, 2022 to 4.84% for the three months ended March 31, 2023 due to the higher interest rate environment. This was offset by a ~~$79.2~~$62.7 million decrease in the average balance of cash and cash equivalents to ~~$20.7~~$8.8 million for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~$100.0~~$71.5 million for the three months ended ~~June 30, 2021,~~March 31, 2022, reflecting the use of excess liquidity to fund loan originations and purchase investment securities. This was offset by a 39 basis point increase in the average yield on cash and cash equivalents from 0.16% for the three months ended June 30, 2021 to 0.55% for the three months ended June 30, 2022 due to the higher interest rate environment.

Interest income on loans increased ~~$164,000,~~$2.2 million, or ~~2.9%~~39.0%, to ~~$5.8~~$7.7 million for the three months ended ~~June 30, 2022~~March 31, 2023 compared to ~~$5.7~~$5.5 million for the three months ended ~~June 30, 2021~~March 31, 2022 due primarily to $146.1 million increase in the average balance of loans to $718.0 million for the three months ended March 31, 2023 from $571.8 million for the three months ended March 31, 2022 and a ~~nine~~42 basis point increase in the average yield on loans from ~~3.86%~~3.90% for the three months ended ~~June 30, 2021~~March 31, 2022 to ~~3.95%~~4.32% for the three months ended ~~June 30, 2022 and~~March 31, 2023. The increase was offset by a ~~$2.6 million increase in the average balance of loans to $593.7 million~~$347,000 reserve for ~~the three months ended June 30, 2022 from $591.1 million for the three months ended June 30,~~nonaccrual interest on a delinquent construction

~~2021.~~loan.

Interest income on securities increased ~~$578,000,~~$438,000, or ~~143.9%~~66.6%, to ~~$979,000~~$1.1 million for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~$401,000~~$658,000 for the three months ended ~~June 30, 2021~~March 31, 2022 due primarily to a ~~29 basis point increase in the average yield from 1.86% for the three months ended June 30, 2021 to 2.15% for the three months ended June 30, 2022. The increase was also due to a $95.7~~$23.2 million increase in the average balance of securities to ~~$182.3~~$162.0 million for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~$86.6~~$138.8 million for the three months ended ~~June 30, 2021,~~March 31, 2022, reflecting the purchase of investments with excess ~~liquidity.~~liquidity, and a 81 basis point increase in the average yield from 1.90% for the three months ended March 31, 2022 to 2.71% for the three months ended March 31, 2023.

Interest Expense. Interest expense ~~decreased $221,000,~~increased $3.3 million, or ~~15.5%~~288.6%, to $4.5 million for the three months ended March 31, 2023 from $1.2 million for the three months ended ~~June 30, 2022 from $1.4 million for the three months ended June 30, 2021.~~March 31, 2022. The ~~decrease~~increase primarily reflected a 17165 basis point ~~decrease~~increase in the average cost of interest-bearing liabilities to 2.38% for the three months ended March 31, 2023 from 0.73% for the three months ended ~~June 30, 2022 from 0.90% for the three months ended June 30, 2021.~~March 31, 2022.

Interest expense on interest-bearing deposits ~~decreased $201,000,~~increased $2.9 million, or ~~19.1%~~349.8%, to ~~$850,000 for the three months ended June 30, 2022 from $1.1~~$3.7 million for the three months ended ~~June 30, 2021.~~March 31, 2023 from $826,000 for the three months ended March 31, 2022. The ~~decrease~~increase was due ~~primarily~~ to a 19165 basis point ~~decrease~~increase in the average cost of interest-bearing deposits to ~~0.59%~~2.25% for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~0.78%~~0.60% for the three months ended ~~June 30, 2021.~~March 31, 2022. The ~~decrease~~increase in the average cost of deposits was due to ~~lower average balances~~the higher interest rate environment and ~~lower average costs of certificates of deposit. This decrease was offset by a $40.3 million~~an increase in the average ~~balance~~balances of ~~total deposits~~certificates of deposit of $152.3 million to ~~$579.2~~$503.4 million for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~$539.0~~$351.0 million for the three months ended ~~June 30, 2021.~~March 31, 2022.

Interest expense on Federal Home Loan Bank borrowings ~~decreased $20,000,~~increased $447,000, or ~~5.4%~~135.5%, from ~~$376,000~~$330,000 for the three months ended ~~June 30, 2021~~March 31, 2022 to ~~$356,000~~$777,000 for the three months ended ~~June 30, 2022.~~March 31, 2023. The ~~decrease~~increase was due to a decrease in the average balance of borrowings of $13.8 million to $86.4 million for the three months ended June 30, 2022 from $100.3 million for the three months ended June 30, 2021. The decrease was offset by an increase in the average cost of borrowings of ~~nine~~164 basis points to ~~1.59%~~3.27% for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~1.50%~~1.63% for the three months ended ~~June 30, 2021~~March 31, 2022 due to new borrowings at higher rates. The increase was also due to an increase in the ~~higher borrowing rates.~~average balance of borrowings of $14.3 million to $96.5 million for the three months ended March 31, 2023 from $82.3 million for the three months ended March 31, 2022.

Net Interest Income. Net interest income ~~increased $930,000,~~decreased $598,000, or ~~19.5%~~11.7%, to ~~$5.7~~$4.5 million for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~$4.8~~$5.1 million for the three months ended ~~June 30, 2021.~~March 31, 2022. The ~~increase~~decrease reflected ~~a 45~~an 80 basis point ~~increase~~decrease in our net interest rate spread to ~~2.73%~~1.68% for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~2.28%~~2.48% for the three months ended ~~June 30, 2021.~~March 31, 2022. Our net interest margin ~~increased 41~~decreased 59 basis points to ~~2.85%~~2.05% for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~2.44%~~2.64% for the three months ended ~~June 30, 2021.~~March 31, 2022.

Provision for ~~Loan~~Credit Losses. We recorded ~~a $100,000~~no provision for ~~loan~~credit losses ~~the three months ended June 30, 2022 and recorded a $54,000 credit for the three-month period ended June 30, 2021. Higher balances in residential loans were the reason for the provision~~ for the three months ended ~~June 30,~~March 31, 2023 or the three-month period ended March 31, 2022. As of January 1, 2023, the Bank adopted CECL and recorded a one-time adjustment of $157,000 to the allowance for credit losses. The absence of a provision reflects that the Bank ~~continues to have~~had a ~~low level of delinquent and non-accrual loans~~decrease in the size of the loan portfolio, as well as no charge-offs. Non-performing assets were ~~$1.9~~$12.9 million, or ~~0.21%~~1.35% of total assets, at ~~June 30, 2022.~~March 31, 2023. The allowance for loan losses was ~~$2.3~~$2.7 million, or ~~0.36%~~0.38% of loans outstanding and ~~120.8%~~21.4% of nonperforming loans, at ~~June 30, 2022.~~March 31, 2023. The Bank has one commercial construction loan located in Totowa, New Jersey that is collateral dependent with a balance of $10.9 million with a loan to value ratio of 46% based on a recent appraisal.

Non-Interest Income. Non-interest income decreased by ~~$280,000,~~$61,000, or ~~52.4%~~17.8%, to ~~$254,000~~$283,000 for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~$533,000~~$344,000 for the three months ended ~~June 30, 2021.~~March 31, 2022. Gain on sale of loans decreased ~~$284,000~~$74,000 as ~~the Bank decided to portfolio loans rather than sell loans. This decrease was~~loan originations were lower in 2023 and fees and other income decreased $30,000. These decreases were partially offset by ~~a $24,000, or 16.7%,~~an increase in income from bank-owned life insurance of $30,000, or 19.2%, due to ~~$169,000 for the three months ended June 30, 2022 from $145,000 for the three months ended June 30, 2022.~~higher balances during 2023, and an increase in fee and service charges of $13,000.

Non-Interest Expense. For the three months ended ~~June 30, 2022,~~March 31, 2023, non-interest expense ~~increased $17,000,~~decreased $24,000, or ~~0.5%~~0.7%, over the comparable ~~2021~~2022 period. Salaries and employee benefits increased ~~$63,000,~~$99,000, or ~~3.1%~~4.8%, due to ~~the new stock compensation plan established in September 2021. Data processing expense increased $18,000,~~a higher employee count and annual merit increases. Director fees decreased $55,000, or ~~5.9%~~25.8%, due to ~~higher data processing expense associated with being a larger organization. Professional fees decreased $57,000, or 27.5%, due in part to~~ lower ~~legal expense in 2022. Merger fees expenses were $74,000 in 2021.~~pension expense. The increase in ~~occupancy and equipment expenses~~advertising expense of ~~$48,000,~~$26,000, or ~~16.2%~~21.6%, was due to ~~increased costs~~additional promotions for ~~the acquired Gibraltar Bank branches~~branch locations and ~~the~~ new ~~Hasbrouck Heights branch office.~~promotions on deposit and loan products. Other expense decreased $142,000, or 44.2%, due to lower deferred compensation expense and other various expenses.

Income Tax Expense. Income tax expense ~~increased $277,000,~~decreased $227,000, or ~~80.1%~~43.3%, to ~~$623,000~~$298,000 for the three months ended ~~June 30, 2022~~March 31, 2023 from ~~$346,000~~$525,000 for the three months ended ~~June 30, 2021.~~March 31, 2022. The increase was due to ~~$422,000~~$689,000 of ~~higher~~lower taxable income. The effective tax rate for the three months ended ~~June 30,~~March 31, 2023 and 2022 were 23.09% and ~~2021 were 27.51% and 19.38%~~27.27%, respectively.

~~Comparison of Operating Results for the Six Months Ended June 30, 2022 and 2021~~

~~General.~~ Net income decreased by $1.4 million, or 31.5%, to $3.0 million for the six months ended June 30, 2022 from $4.4 million for the six months ended June 30, 2021. The decrease was due to a decrease in non-interest income of $2.3 million, an increase in non-interest expenses of $126,000, an increase in provision for loan losses of $213,000, an increase of $284,000 in income taxes offset by an increase in net interest income of $1.5 million.

~~Interest Income.~~ Interest income increased $714,000, or 5.7%, to $13.2 million for the six months ended June 30, 2022 from $12.5 million for the six months ended June 30, 2021. The increase reflected a $29.1 million increase in the average balance of interest-earnings assets, and a six basis point increase in the average yield on interest-earning assets to 3.33% for the six months ended June 30, 2022 from 3.27% for the six months ended June 30, 2021.

Interest income on cash and cash equivalents decreased $34,000, or 37.4%, to $57,000 for the six months ended June 30, 2022 from $91,000 for the six months ended June 30, 2021 due to a $49.6 million decrease in the average balance of cash and cash equivalents to $46.0 million for the six months ended June 30, 2022 from $95.6 million for the six months ended June 30, 2021, reflecting the use of excess liquidity to fund loan originations and purchase investment securities. This was offset by a six basis point increase in the average yield on cash and cash equivalents from 0.19% for the six months ended June 30, 2021 to 0.25% for the six months ended June 30, 2022 due to the higher interest rate environment.

Interest income on loans increased $236,000, or 2.1%, to $11.4 million for the six months ended June 30, 2022 compared to $11.2 million for the six months ended June 30, 2021 due to a nine basis point increase in the average yield on loans from 3.83% for the six months ended June 30, 2021 to 3.92% for the six months ended June 30, 2022 offset by a $2.5 million decrease in the average balance of loans to $582.8 million for the six months ended June 30, 2022 from $585.3 million for the six months ended June 30, 2021.

Interest income on securities increased $550,000, or 51.7%, to $1.6 million for the six months ended June 30, 2022 from $1.1 million for the six months ended June 30, 2021 due to an $82.2 million increase in the average balance of securities to $160.7 million for the six months ended June 30, 2022 from $78.5 million for the six months ended June 30, 2021, reflecting the purchase of investments with excess liquidity. The increase was offset by a 73 basis point decrease in the average yield from 2.77% for the six months ended June 30, 2021 to 2.04% for the six months ended June 30, 2022.

~~Interest Expense.~~ Interest expense decreased $760,000, or 24.3%, to $2.4 million for the six months ended June 30, 2022 from $3.1 million for the six months ended June 30, 2021. The decrease primarily reflected a 28 basis point decrease in the average cost of interest-bearing liabilities to 0.73% for the six months ended June 30, 2022 from 1.01% for the six months ended June 30, 2021, offset by a $29.4 million, or 4.7%, increase in the average balance of interest-bearing liabilities from $625.2 million for the six months ended June 30, 2021 to $684.6 million for the six months ended June 30, 2022.

Interest expense on interest-bearing deposits decreased $638,000, or 27.6%, to $1.7 million for the six months ended June 30, 2022 from $2.3 million for the six months ended June 30, 2021. The decrease was due primarily to a 31 basis point decrease in the average cost of interest-bearing deposits to 0.59% for the six months ended June 30, 2022 from 0.90% for the six months ended June 30, 2021. The decrease in the average cost of deposits was due to lower average balances and lower average costs of certificates of deposit. This decrease was offset by a $48.9 million increase in the average balance of deposits to $570.2 million for the six months ended June 30, 2022 from $521.3 million for the six months ended June 30, 2021.

Interest expense on Federal Home Loan Bank borrowings decreased $122,000, or 15.1%, from $808,000 for the six months ended June 30, 2021 to $686,000 for the six months ended June 30, 2022. The decrease was due to a

decrease in the average balance of borrowings of $19.5 million to $84.4 million for the six months ended June 30, 2022 from $103.9 million for the six months ended June 30, 2021. The decrease was offset by an increase in the average cost of borrowings of seven basis points to 1.64% for the six months ended June 30, 2022 from 1.57% for the six months ended June 30, 2021 due to the higher borrowing rates.

~~Net Interest Income.~~ Net interest income increased $1.5 million, or 15.8%, to $10.8 million for the six months ended June 30, 2022 from $9.4 million for the six months ended June 30, 2021. The increase reflected a 34 basis point increase in our net interest rate spread to 2.61% for the six months ended June 30, 2022 from 2.27% for the six months ended June 30, 2021. Our net interest margin increased 29 basis points to 2.75% for the six months ended June 30, 2022 from 2.46% for the six months ended June 30, 2021.

~~Provision for Loan Losses.~~ We recorded a $100,000 provision for loan losses for the six months ended June 30, 2022 compared to a $113,000 credit for the six month period ended June 30, 2021. Higher balances in residential and construction loans were the reason for the provision for the six months ended June 30, 2022. The Bank continues to have a low level of delinquent and non-accrual loans in the portfolio, as well as no charge-offs.

~~Non-Interest Income.~~ Non-interest income decreased by $2.3 million, or 79.0%, to $598,000 for the six months ended June 30, 2022 from $2.9 million for the six months ended June 30, 2021. For the six months ended June 30, 2021, there was a $1.9 million bargain purchase gain recognized in the Gibraltar Bank acquisition in 2021. Gain on sale of loans decreased $433,000 or 83.3%, to $87,000 for the six months ended June 30, 2022 from $520,000 for the six months ended June 30, 2021. Bank-owned life insurance income increased $91,000, or 38.6% to $325,000 for the six months ended June 30, 2022 from $235,000 for the six months ended June 30, 2021.

~~Non-Interest Expense.~~ For the six months ended June 30, 2022, non-interest expense increased $126,000, or 1.8%, to $7.1 million, over the comparable 2021 period. Salaries and employee benefits increased $588,000, or 16.4%, due to the new stock compensation plan started in September 2021. Data processing expense increased $88,000, or 17.0%, due to higher data processing expense associated with a larger company. Advertising expense increased $92,000 due to additional promotions for branch locations and new promotions. Professional fees decreased $172,000, or 36.8%, due to lower consulting expense. Merger fees and core conversion costs were $752,000 in 2021. The increase in equipment and occupancy expenses of $126,000, or 22.4%, was mainly due to the additional branch locations.

~~Income Tax Expense.~~ Income tax expense increased $284,000, to $1.1 million for the six months ended June 30, 2022 from $864,000 for the six months ended June 30, 2021. The increase was due to $683,000 of higher taxable income. The effective tax rate for the six months ended June 30, 2022 and 2021 were 27.40% and 16.28% respectively.

General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of loans, have longer maturities than our liabilities, consisting primarily of ~~deposits.~~deposits and borrowings. As a result, a principal part of our business strategy is to manage our exposure to changes in market interest rates. Accordingly, our board of directors has established an Asset/Liability Management Committee (the “ALCO”), which is comprised of three members of executive management and two independent directors, which oversees the asset/liability management processes and related procedures. The ALCO meets on at least a quarterly basis and reviews asset/liability strategies, liquidity positions, alternative funding sources, interest rate risk measurement reports, capital levels and economic trends at both national and local levels. Our interest rate risk position is also monitored quarterly by the board of directors.

We manage our interest rate risk to minimize the exposure of our earnings and capital to changes in market interest rates. We have implemented the following strategies to manage our interest rate risk: originating and purchasing loans with adjustable interest rates; promoting core deposit products; monitoring the length of our borrowings with the Federal Home Loan Bank and brokered deposits depending on the interest rate environment; maintaining a significant portion of our investments as available-for-sale; diversifying our loan portfolio; and strengthening our capital position. By following these strategies, we believe that we are better positioned to react to changes in market interest rates.

Net Portfolio Value Simulation. We analyze our sensitivity to changes in interest rates through a net portfolio value of equity (“NPV”) model. NPV represents the present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities, adjusted for the value of off-balance sheet contracts. The NPV ratio represents the dollar amount of our NPV divided by the present value of our total assets for a given interest rate scenario. NPV attempts to quantify our economic value using a discounted cash flow methodology while the NPV ratio reflects that value as a form of capital ratio. We estimate what our NPV would be at a specific date. We then calculate what the NPV would be at the same date throughout a series of interest rate scenarios representing immediate and permanent, parallel shifts in the yield curve. We currently calculate NPV under the assumptions that interest rates increase 100, 200, 300 and 400 basis points from current market rates and that interest rates decrease 100 and 200 basis points from current market rates.

The following table presents the estimated changes in our net portfolio value that would result from changes in market interest rates as ~~June 30, 2022.~~March 31, 2023. All estimated changes presented in the table are within the policy limits approved by the board of directors.

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The above table assumes that the composition of our interest-sensitive assets and liabilities existing at the date indicated remains constant uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the table provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our NPV and will differ from actual results.

Net Interest Income Analysis. We also use income simulation to measure interest rate risk inherent in our balance sheet at a given point in time by showing the effect on net interest income, over specified time frames and using different interest rate shocks and ramps. The assumptions include management’s best assessment of the effect of changing interest rates on the prepayment speeds of certain assets and liabilities, projections for account balances in each of the product lines offered and the historical behavior of deposit rates and balances in relation to changes in interest rates. These assumptions are subject to change, and as a result, the model is not expected to precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income. Actual results will differ from the simulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in the balance sheet composition and market conditions. Assumptions are supported with quarterly back testing of the model to actual market rate shifts.

As of ~~June 30, 2022,~~March 31, 2023, net interest income simulation results indicated that its exposure over one year to changing interest rates was within our guidelines. The following table presents the estimated impact of interest rate changes on our estimated net interest income over one year:

The preceding simulation analyses does not represent a forecast of actual results and should not be relied upon as being indicative of expected operating results. These hypothetical estimates are based upon numerous assumptions, which are subject to change, including: the nature and timing of interest rate levels including the yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment/replacement of asset and liability cash flows, and others. Also, as market conditions vary, prepayment/refinancing levels, the varying impact of interest rate changes on caps and floors embedded in adjustable-rate loans, early withdrawal of deposits, changes in product preferences, and other internal/external variables will likely deviate from those assumed.

Liquidity. Liquidity describes our ability to meet financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from calls, maturities and sales of securities and sales of loans. We also ~~have the ability to~~ borrow from the Federal Home Loan Bank of New York. At ~~June 30, 2022,~~March 31, 2023, we had the ability to borrow up to ~~$260.0~~$336.8 million, of which ~~$115.0~~$112.6 million was outstanding and $1.5 million was utilized as collateral for letters of credit issued to secure municipal deposits. At ~~June 30, 2022,~~March 31, 2023, we had $51.0 million in unsecured lines of credit with four correspondent banks with no outstanding balance.

The board of directors is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies. We believe that we had ~~enough~~ample sources of liquidity to satisfy our short- and long-term liquidity needs as of ~~June 30, 2022.~~March 31, 2023.

While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents. The levels of these assets are dependent on our operating, financing, lending and investing activities during any period. At ~~June 30, 2022,~~March 31, 2023, cash and cash equivalents totaled ~~$7.6~~$24.5 million. Securities classified as available-for-sale, which provide additional sources of liquidity, totaled ~~$97.5~~$82.1 million at ~~June 30, 2022.~~March 31, 2023.

We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate we will have sufficient funds to meet our current funding commitments. Certificates of deposit due within one year of ~~June 30, 2022~~March 31, 2023 totaled ~~$206.1~~$320.3 million, or ~~33.7%~~46.4% of total deposits. If these deposits do not remain with us, we will be required to seek other sources of funds, including other deposits and Federal Home Loan Bank of New York advances. Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on past experience that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered.

Capital Resources. We are subject to various regulatory capital requirements administered by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation. At ~~June 30, 2022,~~March 31, 2023, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines. As a result of the Economic Growth, Regulatory Relief, and Consumer Protection Act, as modified in April 2020, the federal banking agencies were required to develop a “Community Bank Leverage Ratio” (the ratio of a bank's Tier 1 “equity capital to average total consolidated assets) for financial institutions with less than $10 billion. A “qualifying community bank” with capital exceeding 9% will be considered compliant with all applicable regulatory capital and leverage requirements, including the capital requirements to be considered "well capitalized” under Prompt Corrective Action statutes. As ~~a result~~ of ~~the CARES Act, the ratio was temporarily reduced to 8% for calendar year 2020 and 8.5% for calendar year 2021 in response to COVID-19. As of June 30, 2022,~~March 31, 2023, the Bank is reporting as a qualifying community bank with a ratio of ~~17.50%~~15.60%.

Information with respect to quantitative and qualitative disclosures about market risk can be found in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Management of Market Risk.”

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of ~~June 30, 2022.~~March 31, 2023. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Company’s disclosure controls and procedures were effective.

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

At ~~June 30, 2022~~March 31, 2023 we were not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, the outcome of which would be material to our financial condition or results of operations.

~~There~~Except noted below, there have been no material changes in risk factors applicable to the Company from those disclosed in “Risk Factors” in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

Recent bank industry events involving financial institution failures may adversely affect our business and the market price of our common stock.

Recent developments and events in the financial services industry, including the failures of Silicon Valley Bank, Signature Bank and First Republic Bank and the voluntary liquidation of Silvergate Bank, have resulted in decreased confidence in banks among depositors, other counterparties and investors, as well as significant disruption, volatility and reduced valuations of equity and other securities of banks in the capital markets. These events have occurred against the backdrop of a rapidly rising interest rate environment which, among other things, has resulted in unrealized losses in longer duration securities and loans held by banks, more competition for bank deposits and may increase the risk of a potential recession. These events and developments could materially and adversely impact our business or financial condition, including through potential liquidity pressures, reduced net interest margins, and potential increased credit losses. These recent events and developments have, and could continue to, adversely impact the market price and volatility of our common stock. These recent events may also result in changes to laws or regulations governing banks and bank holding companies or result in the impositions of restrictions through supervisory or enforcement activities, including higher capital requirements, which could have a material impact on our businesses. The cost of resolving the recent failures may prompt the FDIC to increase its premiums above the recently increased levels or to issue additional special assessments.

Lawmakers’ failure to address the federal debt ceiling in a timely manner, downgrades of the U.S. credit rating and uncertain credit and financial market conditions may affect the stability of securities issued or guaranteed by the federal government, which may affect the valuation or liquidity of our investment securities portfolio and increase future borrowing costs.

As a result of uncertain political, credit and financial market conditions, including the potential consequences of the federal government defaulting on its obligations for a period of time due to federal debt ceiling limitations or other unresolved political issues, investments in financial instruments issued or guaranteed by the federal government pose credit default and liquidity risks. Given that future deterioration in the U.S. credit and financial markets is a possibility, no assurance can be made that losses or significant deterioration in the fair value of our U.S. government issued or guaranteed investments will not occur. At March 31, 2023, we had approximately $15.1 million and $50.8 million invested in U.S. government agency securities and residential mortgage-backed securities issued or guaranteed by government-sponsored enterprises, respectively, and $5.0 million in U.S. treasury securities. Downgrades to the U.S. credit rating could affect the stability of securities issued or guaranteed by the federal government and the valuation or liquidity of our portfolio of such investment securities, and could result in our counterparties requiring additional collateral for our borrowings. Further, unless and until U.S. political, credit and financial market conditions have been sufficiently resolved or stabilized, it may increase our future borrowing costs.

On June 16, 2021, the Company’s Board of Directors approved the repurchase of 296,044 shares of its common stock, which was approximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC). On April 11,October 3, 2022, the Company announced ~~it completed its initial 5% buyback plan, purchasing 296,044 shares.~~

~~On May 25, 2022, the Company’s Board of Directors approved~~that is has received regulatory approval for the repurchase of ~~292,568~~up to 556,631 shares of its common stock which is approximately 5%10% of its then outstanding common stock ~~(excluding~~

(excluding shares held by Bogota Financial, MHC). The program does not have a scheduled expiration date and the Board of Directors has the right to suspend or discontinue the program at any time. On May 5, 2023, the Company announced the completion of the repurchase program.

The following table provides information on repurchases by the Company of its common stock under the Company's Board approved programs for the second quarter:

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 thereunto duly authorized.


Maryland		84-3501231
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

819 Teaneck Road Teaneck, New Jersey		07666
(Address of Principal Executive Offices)		(Zip Code)


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


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Consolidated Statements of Financial Condition at ~~June 30, 2022~~March 31, 2023 (unaudited) and December 31, ~~2021.~~2022.	1

	Consolidated Statements of Income for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)	2

	Consolidated Statements of Comprehensive Income (Loss) ~~Income~~ for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)	3

	Consolidated Statements of Equity for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)	4

	Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ (unaudited)	5

	Notes to Consolidated Financial Statements (unaudited)	76

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4036

Item 4.	Controls and Procedures	4036

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	4137

Item 1A.	Risk Factors	4137

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4137

Item 3.	Defaults Upon Senior Securities	4138

Item 4.	Mine Safety Disclosures	4138

Item 5.	Other Information	4138

Item 6.	Exhibits	4239

	SIGNATURES	4340


	As of			As of
	March 31, 2023			December 31, 2022
Assets
Cash and due from banks	$	11,423,093		$	8,160,028
Interest-bearing deposits in other banks		13,079,185			8,680,889
Cash and cash equivalents		24,502,278			16,840,917
Securities available for sale		82,051,189			85,100,578
Securities held to maturity (fair value of $71,201,953 and $70,699,651,respectively)		78,207,206			77,427,309
Loans, net of allowance of $2,860,949 and $2,578,174, respectively		711,890,347			719,025,762
Premises and equipment, net		7,852,299			7,884,335
Federal Home Loan Bank (FHLB) stock and other restricted securities		5,918,600			5,490,900
Accrued interest receivable		3,777,228			3,966,651
Core deposit intangibles		251,240			267,272
Bank-owned life insurance		30,392,377			30,206,325
Other assets		5,447,449			4,888,954
Total Assets	$	950,290,213		$	951,099,003
Liabilities and Equity
Non-interest bearing deposits	$	38,107,101		$	38,653,349
Interest bearing deposits		652,604,123			662,758,100
Total deposits		690,711,224			701,411,449
FHLB advances-short term		36,500,000			59,000,000
FHLB advances-long term		75,531,931			43,319,254
Advance payments by borrowers for taxes and insurance		3,499,731			3,174,661
Other liabilities		4,961,068			4,534,516
Total liabilities		811,203,954			811,439,880

Stockholders’ Equity
Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at March 31, 2023 and December 31, 2022		—			—
Common stock $0.01 par value, 30,000,000 shares authorized, 13,572,356 issued and outstanding at March 31, 2023 and 13,699,016 at December 31, 2022		135,723			136,989
Additional paid-in capital		57,928,185			59,099,476
Retained earnings		92,527,240			91,756,673
Unearned ESOP shares (429,900 shares at March 31, 2023 and 436,945 shares at December 31, 2022)		(5,047,701	)		(5,123,002	)
Accumulated other comprehensive loss		(6,457,188	)		(6,211,013	)
Total stockholders’ equity		139,086,259			139,659,123
Total liabilities and stockholders’ equity	$	950,290,213		$	951,099,003


	As of			As of
	June 30, 2022			December 31, 2021
Assets	(unaudited)
Cash and due from banks	$	6,781,706		$	14,446,792
Interest-bearing deposits in other banks		822,524			90,621,993
Cash and cash equivalents		7,604,230			105,068,785
Securities available for sale		97,507,693			41,838,798
Securities held to maturity (fair value of $79,858,396 and $74,081,059, respectively)		86,432,340			74,053,099
Loans held for sale		360,000			1,152,500
Loans, net of allowance of $2,253,174 and $2,153,174, respectively		630,810,380			570,209,669
Premises and equipment, net		8,006,717			8,127,979
Federal Home Loan Bank (FHLB) stock and other restricted securities		6,076,700			4,851,300
Accrued interest receivable		3,007,407			2,712,605
Core deposit intangibles		300,827			336,364
Bank-owned life insurance		29,836,866			24,524,122
Other assets		5,001,976			4,486,366
Total Assets	$	874,945,136		$	837,361,587
Liabilities and Equity
Non-interest bearing deposits	$	39,442,245		$	39,317,500
Interest bearing deposits		571,847,021			558,162,278
Total Deposits		611,289,266			597,479,778
FHLB advances		115,278,743			85,051,736
Advance payments by borrowers for taxes and insurance		3,431,613			2,856,120
Other liabilities		4,484,720			4,397,742
Total liabilities		734,484,342			689,785,376

Stockholders’ Equity
Preferred stock $0.01 par value 1,000,000 shares authorized, NaN issued and outstanding at June 30, 2022 and December 31, 2021		—			—
Common stock $0.01 par value, 30,000,000 shares authorized, 14,207,860 issued and outstanding at June 30, 2022 and 14,605,809 at December 31, 2021		142,078			146,057
Additional paid-in capital		64,401,403			68,247,204
Retained earnings		87,922,716			84,879,812
Unearned ESOP shares (449,977 shares at June 30, 2022 and 463,239 shares at December 31, 2021)		(5,273,604	)		(5,424,206	)
Accumulated other comprehensive loss		(6,731,799	)		(272,656	)
Total stockholders’ equity		140,460,794			147,576,211
Total liabilities and stockholders’ equity	$	874,945,136		$	837,361,587


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


	Three months ended June 30,						Six months ended June 30,					Three Months Ended March 31,
	2022			2021			2022		2021			2023		2022
Interest income
Loans	$	5,848,522		$	5,684,881		$	11,385,602	$	11,149,842
Loans, including fees												$	7,699,438	$	5,537,080
Securities
Taxable		932,714			388,604			1,569,835		1,062,151			1,051,260		637,121
Tax-exempt		46,282			12,798			67,278		25,383			44,902		20,996
Other interest-earning assets		83,682			115,256			167,495		238,260			221,589		83,813
Total interest income		6,911,200			6,201,539			13,190,210		12,475,636			9,017,189		6,279,010
Interest expense
Deposits		849,808			1,050,546			1,675,992		2,314,228			3,714,997		826,184
FHLB advances		356,203			376,508			686,036		807,633			777,354		329,833
Total interest expense		1,206,011			1,427,054			2,362,028		3,121,861			4,492,351		1,156,017
Net interest income		5,705,189			4,774,485			10,828,182		9,353,775			4,524,838		5,122,993
Provision (credit) for loan losses		100,000			(54,000	)		100,000		(113,000	)
Net interest income after provision for loan losses		5,605,189			4,828,485			10,728,182		9,466,775
Provision for credit losses													—		—
Net interest income after provision for credit losses													4,524,838		5,122,993
Non-interest income
Fees and service charges		50,478			68,576			89,796		121,103			52,152		39,318
(Loss) gain on sale of loans		(217	)		284,065			86,913		520,102
Bargain purchase gain		—			—			—		1,933,397
Gain on sale of loans													13,225		87,130
Bank-owned life insurance		169,449			145,167			325,442		234,833			186,053		155,993
Other		34,007			35,480			95,989		42,459			31,849		61,982
Total non-interest income		253,717			533,288			598,140		2,851,894			283,279		344,423
Non-interest expense
Salaries and employee benefits		2,098,897			2,035,467			4,162,244		3,574,387			2,162,369		2,063,347
Occupancy and equipment		342,381			294,694			686,810		561,173			382,787		344,429
FDIC insurance assessment		54,000			69,300			108,000		114,300			60,000		54,000
Data processing		330,840			312,527			609,187		520,836			277,097		278,347
Advertising		91,145			60,000			212,290		120,000			147,300		121,145
Director fees		203,534			216,880			418,325		415,119			159,337		214,791
Professional fees		151,490			208,849			295,753		467,766			149,250		144,263
Merger fees		—			73,932			—		392,197
Core conversion costs		—			—			—		360,000
Other		321,585			305,484			642,538		483,801			179,208		320,953
Total non-interest expense		3,593,872			3,577,133			7,135,147		7,009,579			3,517,348		3,541,275
Income before income taxes		2,265,034			1,784,640			4,191,175		5,309,090			1,290,769		1,926,141
Income tax expense		623,027			345,916			1,148,271		864,059			298,062		525,244
Net income	$	1,642,007		$	1,438,724		$	3,042,904	$	4,445,031		$	992,707	$	1,400,897
Earnings per Share - basic	$	0.12		$	0.10		$	0.22	$	0.33		$	0.08	$	0.10
Earnings per Share - diluted	$	0.12		$	0.10		$	0.22	$	0.33		$	0.08	$	0.10
Weighted average shares outstanding - basic		13,662,222			13,945,423			13,760,002		13,528,822			13,013,492		13,858,884
Weighted average shares outstanding - diluted		13,701,674			13,945,423			13,800,168		13,528,822			13,055,533		13,878,304


	Common Stock Shares			Common Stock			Additional Paid-in Capital			Retained Earnings		Unearned ESOP shares			Accumulated Other Comprehensive Income (Loss)			Total stockholders' Equity
Balance January 1, 2021		13,157,525		$	131,575		$	56,975,187		$	77,359,737	$	(5,725,410	)	$	(273,013	)	$	128,468,076
Net income		—			—			—			3,006,307		—			—			3,006,307
Other comprehensive income		—			—			—			—		—			42,932			42,932
Issuance of common stock to Bogota MHC		1,267,916			12,679			11,487,321			—		—			—			11,500,000
ESOP Shares released (25,789 shares)		—			—			(14,466	)		—		75,301			—			60,835
Balance March 31, 2021		14,425,441		$	144,254		$	68,448,042		$	80,366,044	$	(5,650,109	)	$	(230,081	)	$	143,078,150
Net income		—			—			—			1,438,724		—			—			1,438,724
Other comprehensive income		—			—			—			—		—			40,593			40,593
ESOP shares released		—			—			(10,666	)		—		75,301			—			64,635
Balance June 30, 2021		14,425,441		$	144,254		$	68,437,376		$	81,804,768	$	(5,574,808	)	$	(189,488	)	$	144,622,102
																					Common Stock Shares			Common Stock			Additional Paid-in Capital			Retained Earnings			Unearned ESOP shares			Accumulated Other Comprehensive Income (Loss)			Total stockholders' Equity
Balance January 1, 2022		14,605,809		$	146,057		$	68,247,204		$	84,879,812	$	(5,424,206	)	$	(272,656	)	$	147,576,211			14,605,809		$	146,057		$	68,247,204		$	84,879,812		$	(5,424,206	)	$	(272,656	)	$	147,576,211
Net income		—			—			—			1,400,897		—			—			1,400,897			—			—			—			1,400,897			—			—			1,400,897
Other comprehensive income																						—			—			—			—			—			(2,358,399	)		(2,358,399	)
Stock based compensation		—			—			233,193			—		—			—			233,193			—			—			233,193			—			—			—			233,193
Stock purchased and retired																						(180,501	)		(1,805	)		(1,890,310	)		—			—			—			(1,892,115	)
ESOP Shares released (25,789 shares)																						—			—			(9,156	)		—			75,301			—			66,145
Balance March 31, 2022																						14,425,308		$	144,252		$	66,580,931		$	86,280,709		$	(5,348,905	)	$	(2,631,055	)	$	145,025,932

Balance January 1, 2023																						13,699,016		$	136,989		$	59,099,476		$	91,756,673		$	(5,123,002	)	$	(6,211,013	)	$	139,659,123
Adoption of ASU 326 credit losses																						—			—			—			(222,140	)		—			—			(222,140	)
Net income																						—			—			—			992,707			—			—			992,707
Other comprehensive loss		—			—			—			—		—			(2,358,399	)		(2,358,399	)		—			—			—			—			—			(246,175	)		(246,175	)
Stock based compensation																						—			—			233,193			—			—			—			233,193
Stock purchased and retired		(180,501	)		(1,805	)		(1,890,310	)		—		—			—			(1,892,115	)		(126,660	)		(1,266	)		(1,401,568	)		—			—			—			(1,402,834	)
ESOP shares released (25,789 shares)		—			—			(9,156	)		—		75,301			—			66,145			—			—			(2,916	)		—			75,301			—			72,385
Balance March 31, 2022		14,425,308		$	144,252		$	66,580,931		$	86,280,709	$	(5,348,905	)	$	(2,631,055	)	$	145,025,932
Net income		—			—			—			1,642,007		—			—			1,642,007
Stock based compensation		—			—			233,193			—		—			—			233,193
Other comprehensive loss		—			—			—			—		—			(4,100,744	)		(4,100,744	)
Stock purchased and retired		(217,448	)		(2,174	)		(2,407,889	)		—		—			—			(2,410,063	)
ESOP shares released		—			—			(4,832	)		—		75,301						70,469
Balance June 30, 2022		14,207,860		$	142,078		$	64,401,403		$	87,922,716	$	(5,273,604	)	$	(6,731,799	)	$	140,460,794
Balance March 31, 2023																						13,572,356		$	135,723		$	57,928,185		$	92,527,240		$	(5,047,701	)	$	(6,457,188	)	$	139,086,259


	For the six months ended June 30,						For the three months ended March 31,
	2022			2021			2023			2022
Cash flows from operating activities
Net income	$	3,042,904		$	4,445,031		$	992,707		$	1,400,897
Adjustments to reconcile net income to net cash from operating activities:
Bargain purchase gain		—			(1,933,397	)
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets		(119,059	)		(275,595	)		(29,410	)		(36,955	)
Provision (credit) for loan losses		100,000			(113,000	)
Provision for credit losses								—			—
Depreciation of premises and equipment		234,798			149,401			125,591			115,751
Amortization of deferred loan(fees) costs, net		(41,279	)		331,462
Amortization (accretion) of deferred loan (fees) costs, net								96,560			(50,202	)
Amortization of premiums and accretion of discounts on securities, net		38,625			103,369			6,893			21,590
Deferred income tax expense		76,209			350,680			—			—
Gain on sale of loans		(86,913	)		(520,102	)		(13,225	)		(87,130	)
Proceeds from sale of loans		4,640,081			15,659,195			649,225			4,402,073
Origination of loans held for sale		(3,760,668	)					(636,000	)		—
Increase in cash surrender value of bank owned life insurance		(312,745	)		(234,833	)		(186,052	)		(143,296	)
Employee stock ownership plan expense		136,615			125,471			72,385			66,146
Stock based compensation		466,386			—			233,193			233,193
Changes in:
Accrued interest receivable		(294,802	)		467,536			189,423			(57,827	)
Net changes in other assets		1,933,798			(519,057	)		(536,090	)		1,887,663
Net changes in other liabilities		202,678			503,921			251,534			455,797
Net cash provided by operating activities		6,256,628			18,540,082			1,216,734			8,207,700
Cash flows from investing activities
Purchases of securities held to maturity		(23,120,238	)		(27,261,578	)		(1,000,000	)		(11,395,678	)
Purchases of securities available for sale		(67,461,181	)		(2,021,000	)		—			(54,117,158	)
Maturities, calls, and repayments of securities available for sale		2,653,200			2,593,807			2,883,794			1,004,209
Maturities, calls, and repayments of securities held to maturity		10,740,997			14,151,334			220,103			4,134,147
Net (increase) decrease in loans		(60,612,691	)		34,542,074
Purchase of Bank Owned Life Insurance		(5,000,000	)		(8,000,000	)
Net cash acquired in merger		—			19,393,090
Net decrease in loans								6,898,525			2,216,500
Purchases of premises and equipment		(113,536	)		(945,972	)		(93,555	)		(48,681	)
Purchase of FHLB stock		(2,204,600	)		(169,700	)		(2,024,300	)		—
Redemption of FHLB stock		979,200			1,194,200			1,596,600			336,600
Net cash (used in) provided by investing activities		(144,138,849	)		33,476,255
Net cash provided by (used in) investing activities								8,481,167			(57,870,061	)


Cash flows from financing activities
Net (decrease) increase in deposits		(10,685,712	)		22,491,367
Net decrease in short-term FHLB advances		(22,500,000	)		(6,000,000	)
Proceeds from long-term FHLB non-repo advances		36,000,000			—
Repayments of long-term FHLB non-repo advances		(3,773,064	)		(1,027,300	)
Repurchase of common stock		(1,402,834	)		(1,892,115	)
Net increase in advance payments from borrowers for taxes and insurance		325,070			75,878
Net cash (used in) provided by financing activities		(2,036,540	)		13,647,830
Net (decrease) increase in cash and cash equivalents		7,661,361			(36,014,531	)
Cash and cash equivalents at beginning of year		16,840,917			105,068,785
Cash and cash equivalents at March 31	$	24,502,278		$	69,054,254
Supplemental cash flow information
Income taxes paid	$	—		$	—
Interest paid	$	4,359,274		$	1,164,604


	For the three months ended June 30, 2022		For the three months ended June 30, 2021		For the six months ended June 30, 2022		For the six months ended June 30, 2021		For the three months ended March 31, 2023		For the three months ended March 31, 2022
Numerator
Net income	$	1,642,007	$	1,438,724	$	3,042,904	$	4,445,031	$	992,707	$	1,400,897
Denominator:
Weighted average shares outstanding - basic		13,662,222		13,945,423		13,760,002		13,528,822		13,013,492		13,858,884
Effect of stock options		39,452		—		40,166		—		42,041		19,420
Weighted average shares outstanding - diluted		13,701,674		13,945,423		13,800,168		13,528,822		13,055,533		13,878,304
Earnings per common share:
Basic	$	0.12	$	0.10	$	0.22	$	0.33	$	0.08	$	0.10
Diluted		0.12		0.10		0.22		0.33		0.08		0.10


	As recorded by Gibraltar Bank			Fair value adjustments				As recorded at acquisition
Fair value of Equity acquired								$	11,500,000
Assets Acquired
Cash and cash equivalents	$	19,393,090		$	—			$	19,393,090
Securities held to maturity		7,250,000			(208,051	)	(a)		7,041,949
Federal Home Loan Bank stock and other restricted stock		603,500			—				603,500
Loans receivable		77,683,903			(920,497	)	(b)		76,763,406
Allowance for loan loss		(640,232	)		640,232		(c)		—
Accrued interest receivable		302,927			—				302,927
Premises and equipment, net		348,714			1,079,647		(d)		1,428,361
Core deposit intangible		—			400,000		(e)		400,000
Deferred taxes		913,303			(184,973	)	(f)		728,330
Other assets		362,636			(278,355	)	(g)		84,281
Total assets acquired	$	106,217,841		$	528,003			$	106,745,844
Liabilities assumed
Deposits	$	81,558,612		$	386,865		(h)	$	81,945,477
Borrowings		10,000,000			273,721		(i)		10,273,721
Advance payments by borrowers for taxes and insurance		646,661			—				646,661
Accrued expenses and other liabilities		446,588			—				446,588
Total liabilities assumed	$	92,651,861		$	660,586			$	93,312,447
Net assets acquired								$	13,433,397
Bargain purchase gain recorded at merger									1,933,397


~~(a)~~	~~Represents the fair value adjustments on investment securities at the acquisition date.~~
~~(b)~~	Represents the fair value adjustments on the net book value of loans, which includes an interest rate mark and credit mark adjustment and the reversal of deferred fees/costs and premiums over estimated useful life.


~~(c)~~	~~Represents the elimination of Gibraltar Bank allowance for loan losses.~~
~~(d)~~	Represents the fair value adjustments to reflect the fair value of land and buildings and premises and equipment, which will be amortized on a straight-line basis over the estimated useful lives of the individual assets.


~~(e)~~	Represents the intangible assets recorded to reflect the fair value of core deposits. The core deposit asset was recorded as an identifiable intangible asset and will be amortized on an accelerated basis over the estimated average life of the deposit base.
~~(f)~~	~~Represents an adjustment to net deferred tax assets resulting from the fair value adjustments related to the acquired assets, liabilities assumed and identifiable intangible assets recorded.~~


~~(g)~~	~~Represents an adjustment to other assets acquired.~~
~~(h)~~	~~Represents fair value adjustments on time deposits, which will be treated as a reduction of interest expense over the remaining term of the time deposits.~~


~~(i)~~	~~Represents FHLB borrowing calculation to prepay borrowings, which will be treated as a reduction of interest expense.~~


	Three months ended June 30, 2022		Six months ended June 30, 2022		Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
Balance at the beginning of period	$	160,457	$	170,075	$	217,789	$	—
Acquisition		—		—		0		217,789
Accretion		8,603		18,221		—		—
Reclassification of non-accretable discount		—		—		—		—
Balance at the end of period	$	151,854	$	151,854	$	217,789	$	217,789


	Loans With no related allowance recorded		Loans with an allowance recorded		Amount of allowance for loan losses allocated
Residential first mortgages	$	1,215,530	$	173,353	$	35,859
Commercial and Multi-Family		488,849		—		—
Construction		—		—		—
Commercial & Industrial		—		—		—
Home equity & other consumer		18,239		—		—
	$	1,722,618	$	173,353	$	35,859


	Average Of individually Impaired loans for the
	Three months ended June 30, 2021		Six months ended June 30, 2021
Residential first mortgages	$	1,217,094	$	1,231,099
Commercial and Multi-Family		222,534		227,226
Construction		—		—
Commercial & Industrial		—		—
Home equity & other consumer		18,980		19,353
	$	1,458,608	$	1,477,678


	June 30, 2022		December 31, 2021
Fixed Rate
Residential mortgage loans	$	27,116,500	$	2,986,250
Commercial real estate		350,000		—
Construction		675,000		—
Home equity		—		170,000
Total	$	28,141,500	$	3,156,250


	June 30, 2022		December 31, 2021
Variable Rate
Residential mortgage loans	$	25,144,739	$	—
Commercial real estate		3,040,000		1,400,000
Commercial and industrial		500,000		—
Construction		—		7,522,375
Home equity		618,000		1,060,000
Total	$	29,302,739	$	9,982,375


	Three Months Ended June 30,																Three Months Ended March 31,
	2022								2021								2023								2022
	Average Balance			Interest and Dividends		Yield/ Cost (3)			Average Balance			Interest and Dividends		Yield/ Cost (3)			Average Balance			Interest and Dividends		Yield/ Cost (4)			Average Balance			Interest and Dividends		Yield/ Cost (3)
	(Dollars in thousands)																(Dollars in thousands)
Assets:	(unaudited)																(unaudited)
Cash and cash equivalents	$	20,723		$	28		0.55	%	$	99,956		$	41		0.16	%	$	8,799		$	105		4.84	%	$	71,541		$	29		0.17	%
Loans		593,705			5,849		3.95	%		591,134			5,685		3.86	%		717,964			7,699		4.32	%		571,827			5,537		3.90	%
Securities		182,338			979		2.15	%		86,594			402		1.86	%		161,960			1,096		2.71	%		138,798			658		1.90	%
Other interest-earning assets		4,891			55		4.53	%		5,740			74		5.16	%		5,338			117		8.74	%		4,834			55		4.50	%
Total interest-earning assets		801,657			6,911		3.46	%		783,424			6,202		3.17	%		894,061			9,017		4.06	%		787,000			6,279		3.21	%

Non-interest-earning assets		54,038								41,827								54,810								50,802
Total assets	$	855,695							$	825,251							$	948,871							$	837,802
Liabilities and equity:
NOW and money market accounts	$	158,552		$	217		0.55	%	$	99,267		$	142		0.59	%	$	112,717		$	380		1.37	%	$	143,453		$	220		0.62	%
Savings accounts		66,095			43		0.26	%		64,341			26		0.16	%		53,618			70		0.53	%		66,583			43		0.26	%
Certificates of deposit		354,600			590		0.67	%		375,373			883		0.94	%		503,369			3,265		2.63	%		351,027			563		0.65	%
Total interest-bearing deposits		579,247			850		0.59	%		538,981			1,051		0.78	%		669,704			3,715		2.25	%		561,063			826		0.60	%

Federal Home Loan Bank advances		86,445			356		1.59	%		100,289			376		1.50	%
Federal Home Loan Bank advances (1)																		96,532			777		3.27	%		82,280			330		1.63	%
Total interest-bearing liabilities		665,692			1,206		0.73	%		639,270			1,427		0.90	%		766,236			4,492		2.38	%		643,343			1,156		0.73	%
Non-interest-bearing deposits		38,132								26,736								37,224								42,936
Other non-interest-bearing liabilities		5,556								15,421								5,977								5,265
Total liabilities		709,380								681,427								809,437								691,544

Total equity		146,315								143,824								139,434								146,258
Total liabilities and equity	$	855,695							$	825,251							$	948,871							$	837,802
Net interest income				$	5,705							$	4,775							$	4,525							$	5,123
Interest rate spread ~~(1)~~(2)							2.73	%							2.28	%							1.68	%							2.48	%
Net interest margin ~~(2)~~(3)							2.85	%							2.44	%							2.05	%							2.64	%
Average interest-earning assets to average interest-bearing liabilities		120.42	%							122.55	%							116.68	%							122.33	%


	Six Months Ended June 30,
	2022								2021
	Average Balance			Interest and Dividends		Yield/ Cost (3)			Average Balance			Interest and Dividends		Yield/ Cost (3)
	(Dollars in thousands)
Assets:
Cash and cash equivalents	$	45,991		$	57		0.25	%	$	95,564		$	91		0.19	%
Loans		582,826			11,386		3.92	%		585,279			11,150		3.83	%
Securities		160,688			1,637		2.04	%		78,485			1,088		2.77	%
Other interest-earning assets		4,864			110		4.54	%		5,919			147		4.98	%
Total interest-earning assets		794,369			13,190		3.33	%		765,247			12,476		3.27	%
Non-interest-earning assets		52,429								35,878
Total assets	$	846,798							$	801,125
Liabilities and equity:
NOW and money market accounts	$	151,044		$	437		0.58	%	$	94,606		$	251		0.54	%
Savings accounts		66,338			86		0.26	%		53,344			48		0.18	%
Certificates of deposit		352,824			1,153		0.66	%		373,355			2,015		1.09	%
Total interest-bearing deposits		570,206			1,676		0.59	%		521,305			2,314		0.90	%
Federal Home Loan Bank advances		84,374			686		1.64	%		103,897			808		1.57	%
Total interest-bearing liabilities		654,580			2,362		0.73	%		625,202			3,122		1.01	%
Non-interest-bearing deposits		40,545								27,820
Other non-interest-bearing liabilities		6,755								9,268
Total liabilities		701,880								662,290
Total equity		144,918								138,835
Total liabilities and equity	$	846,798							$	801,125
Net interest income				$	10,828							$	9,354
Interest rate spread (1)							2.61	%							2.27	%
Net interest margin (2)							2.75	%							2.46	%
Average interest-earning assets to average interest-bearing liabilities		121.36	%							122.40	%


	Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021									Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021									Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022
	Increase (Decrease) Due to									Increase (Decrease) Due to									Increase (Decrease) Due to
	Volume			Rate			Net			Volume			Rate			Net			Volume			Rate			Net
	(In thousands)																		(In thousands)
Interest income:	(unaudited)																		(unaudited)
Cash and cash equivalents	$	(195	)	$	182		$	(13	)	$	(92	)	$	58		$	(34	)	$	(204	)	$	280		$	76
Loans receivable		26			138			164			(124	)		360			236			1,521			641			2,162
Securities		506			71			577			1,354			(805	)		549			123			315			438
Other interest earning assets		(10	)		(9	)		(19	)		(25	)		(12	)		(37	)		6			56			62
Total interest-earning assets		327			382			709			1,113			(399	)		714			1,446			1,292			2,738

Interest expense:
NOW and money market accounts		139			(64	)		75			165			21			186			(300	)		460			160
Savings accounts		1			16			17			13			25			38			(53	)		80			27
Certificates of deposit		(47	)		(246	)		(293	)		(105	)		(757	)		(862	)		337			2,365			2,702
Federal Home Loan Bank advances		(140	)		120			(20	)		(216	)		94			(122	)		66			381			447
Total interest-bearing liabilities		(47	)		(174	)		(221	)		(143	)		(617	)		(760	)		50			3,286			3,336
Net increase (decrease) in net interest income	$	374		$	556		$	930		$	1,256		$	218		$	1,474		$	1,396		$	(1,994	)	$	(598	)


	NPV								NPV as Percent of Portfolio Value of Assets						NPV								NPV as Percent of Portfolio Value of Assets
	(Dollars in thousands)														(Dollars in thousands)
Basis Point (“bp”) Change in Interest Rates	Dollar Amount		Dollar Change			Percent Change			NPV Ratio			Change			Dollar Amount		Dollar Change			Percent Change			NPV Ratio			Change
400 bp	$	95,325	$	(24,326	)		(20.33	)%		12.66	%		(9.64	)%	$	70,593	$	(51,023	)		(41.95	)%		8.59	%		(34.86	)%
300 bp		105,258		(14,393	)		(12.03	)		13.56			(3.21	)		83,324		(38,292	)		(31.49	)		9.87			(24.89	)
200 bp		113,983		(5,668	)		(4.74	)		14.22			1.50			95,749		(25,867	)		(21.27	)		11.02			(16.13	)
100 bp		119,476		(175	)		(0.15	)		14.43			3.00			109,674		(11,942	)		(9.82	)		12.23			(6.93	)
—		119,651		—			—			14.01						121,616		—			—			13.14
(100) bp		119,403		(248	)		(1.16	)		14.68			4.78			129,016		7,400			6.09			13.52			2.89
(200) bp		119,001		(650	)		(3.16	)		14.71			6.78			137,342		15,726			12.93			13.96			6.24


Changes in Interest Rates (basis points)(1)	Change in Net Interest Income Year One (% change from year one base)			Change in Net Interest Income Year One (% change from year one base)
400	(15.09)%				(15.23	)%
300		(10.97	)		(11.47	)
200		(6.80	)		(7.79	)
100		(2.67	)		(3.84	)
—	—			—
(100)		(0.86	)		2.74
(200)		2.86			3.94


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 1 - 30, 2022		69,392	$	10.81		69,392		-
May 1 - 31, 2022		2,000		11.15		2,000		290,568
June 1 - 30, 2022		146,056		11.17		146,056		144,512
Total		217,448	$	11.05	$	217,448


Exhibit Number		Description

3.1		Articles of Incorporation of Bogota Financial Corp. (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1, as amended (Commission File No. 333-233680))

3.2		Bylaws of Bogota Financial Corp. (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1, as amended (Commission File No. 333-233680))

4.1		Form of Common Stock Certificate of Bogota Financial Corp. (incorporated by reference to Exhibit 4 of the Company’s Registration Statement on Form S-1, as amended (Commission File No. 333-233680))

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.0		The following materials for the quarter ended ~~June 30, 2022,~~March 31, 2023, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Financial Condition, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive (Loss) Income, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial Statements*

104		Cover Page Interactive Data File (formatted in XBRL and contained in Exhibit 101)


		BOGOTA FINANCIAL CORP.


Date: ~~August 11, 2022~~June 13, 2023		/s/ Joseph Coccaro
		Joseph Coccaro
		President and Chief Executive Officer



Date: ~~August 11, 2022~~June 13, 2023		/s/ Brian McCourt
		Brian McCourt
		Executive Vice President and Chief Financial Officer