Bogota Financial (BSBK 0.91%), a community-focused bank serving northern New Jersey, returned to profit in its Q2 2025 earnings released on July 31, 2025, covering the three months ended June 30. The company posted net income of $224,000, or $0.02 per share (GAAP), compared to a net loss of $432,000, or ($0.03) per share (GAAP), in the same period last year. This swing to profit came mainly from a 34.7% jump in net interest income (GAAP) and meaningful reductions in interest expenses. No analyst estimates were available for the quarter, so headline figures stand alone. The quarter saw tangible margin improvement and active cost management, but this was offset by declines in net loans and deposits, as well as a spike in loan delinquencies.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| EPS | $0.02 | ($0.03) | n/m |
| Net Income | $224,000 | ($432,000) | n/m |
| Net Interest Income | $3.7 million | $2.7 million | 34.7 % |
| Return on Average Assets | 0.02 % | (0.18 %) | +0.20 pp |
| Total Assets | $921.8 million | $971.5 million1 | (5.1%) |
| Total Deposits | $628.2 million | N/A | - |
About Bogota Financial and Recent Focus Areas
Bogota Financial operates as a community bank, with activities centered around traditional personal and business banking, residential and commercial lending, and deposit gathering. Its key business lines involve residential first mortgage loans, commercial and multi-family real estate loans, construction loans, and an array of deposit products targeted to local individuals and businesses.
In recent periods, the company has focused on managing its loan portfolio for both quality and yield, especially amid varying demand for residential and construction loans. Growth in consumer and commercial deposits, where it can manage funding costs, remains a core priority. Success is measured by prudent loan growth, cost control, and maintaining strong capital and regulatory ratios. Risk management and asset quality have also taken center stage as the bank navigates a changing interest rate and regulatory landscape.
Quarter in Review: Financial and Business Developments
Bogota Financial saw a return to profitability, driven mainly by an increase in net interest income (GAAP), which rose 34.7% to $3.7 million from $2.7 million in Q2 2024. This improvement resulted from a higher net interest margin—up to 1.74% from 1.21%—reflecting both lower funding costs and a better loan-deposit mix. Non-interest income, which includes fees, gains from loan sales, and income from bank-owned life insurance, edged up 9.4% (GAAP). Non-interest expense, which covers items like salaries, legal and compliance costs, and branch operating expenses, rose just 3.5% as the company continued cost-control efforts.
A notable item was a $543,000 payout from a bank-owned life insurance policy, which provided a one-time boost to non-interest income and net profit for the six months ended June 30, 2025. The efficiency ratio, which compares non-interest expense to total income and measures how much it costs to generate a dollar of revenue, improved to 95.7%, down from a high of 122.3% in Q2 2024. Lower ratios are better in this context, but the figure still indicates high overhead relative to income.
Asset figures (GAAP) declined during the quarter. Total assets dropped 5.1% to $921.8 million, and net loans declined as repayments exceeded new loan originations. Residential first mortgage loans, which are standard home loans for consumers, fell by $14.5 million to $458.2 million at June 30, 2025, from $472.7 million at December 31, 2024, while construction loans dropped by $17.4 million to $25.8 million at June 30, 2025, from $43.2 million at December 31, 2024. However, commercial real estate loans and multi-family loans, which are loans on business properties and apartment buildings, each rose modestly—a reflection of the company's focus on higher-yielding segments.
Deposits, the key source of funding for the bank’s lending business, shrank 2.2% to $628.2 million as nearly every deposit category except savings declined. Certificates of deposit, which are time deposits with a fixed interest rate and term, fell $11.5 million to $481.8 million, while savings accounts grew $4.6 million. The share of brokered deposits, which are funds sourced from third parties and often carry higher interest rates, ticked up to 17.2% of total deposits. The bank’s efforts to improve deposit mix and curb funding costs showed results, with the average deposit rate falling to 3.75% in the first half of 2025.
Loan and Risk Management, Credit Quality, and Capital Position
The loan book experienced some stress during the period. Delinquent loans—those past due or in non-payment status—jumped to $20.4 million, now 2.94% of total loans, up from $14.3 million at year-end 2024. This increase stemmed mainly from a single $7.1 million commercial real estate loan that remains well-secured, according to management, as of June 30, 2025. Non-performing assets, which include loans not generating interest and foreclosed properties, stood nearly unchanged at 1.50% of assets as of June 30, 2025. No loans were charged off during the quarter, and the allowance for credit losses—the reserve set aside for expected loan defaults—held steady at 0.37% of total loans.
From a capital and regulatory standpoint, the company reported Tier 1 capital to average assets of 15.32% for the six months ended June 30, 2025, well above required levels. Average equity as a percent of total assets reached 14.96% at June 30, 2025, up from 13.99% at December 31, 2024. Tangible book value per minority share increased to $29.10, supported by continued share buybacks. Management reported, “Since the IPO, we have reduced our outstanding shares by 1,653,571 and improved our tangible book value per minority share from $22.04 to $29.10.” There were no preferred stock issues and share count dipped modestly due to buybacks.
As of June 30, 2024, the company held a 0.86% deposit share in Bergen County. Regulatory compliance and cost-of-risk management remain key focuses, especially given the current environment and the uptick in late-stage loans. No provision was made for credit losses during the quarter; in fact, there was a reported recovery of $80,000 year-to-date as a small reversal of expected losses.
The bank continues to have no exposure to commercial real estate loans backed by office properties, a segment that has drawn concern at some other banks. Exposure remains focused on residential, commercial (non-office), and multi-family real estate lending. Brokered deposits, which represented 17.2% of total deposits as of June 30, 2025, rose as a portion of the base, while uninsured deposits accounted for a modest 9.1%. The bank reported no dividend payout for the quarter.
Looking Ahead: Guidance and Watch Areas
Management did not issue a formal outlook for the next quarter or full fiscal year. Company leadership expressed expectations for loan demand to pick up later in the year and into early 2026, and stated that “Growth in consumer and commercial deposits is another key initiative as we look to reduce cost of funds.” Focus for the coming quarters remains on expanding the commercial loan and deposit portfolios while maintaining strict credit standards.
With loan and deposit balances shrinking and a pronounced increase in delinquencies this quarter, investors may wish to monitor trends in asset quality, origination pace, and funding mix. The absence of explicit forward guidance means future results depend heavily on market demand for loans and the bank’s success in stabilizing deposit inflows. BSBK does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
