Business Wire | Oct 29, 2020 04:15PM EDT

Bogota Financial Corp. Reports Results for the Three and Nine Months Ended September 30, 2020

Oct. 29, 2020

TEANECK, N.J.--(BUSINESS WIRE)--Oct. 29, 2020--Bogota Financial Corp. (the "Company") (NASDAQ: BSBK), the holding company for Bogota Savings Bank (the "Bank"), reported net income for the three months ended September 30, 2020 of $956,000, compared to net income of $671,000 for the comparable prior year period. The Company reported net income for the nine months ended September 30, 2020 of $1.0 million compared to a net income of $1.6 million for the comparable prior year period. The Company contributed cash and stock with a value of $2.9 million ($2.1 million after-tax) to the Bogota Charitable Foundation during the nine months ended September 30, 2020. Also during the nine months ended September 30, 2020 the Company had merger and acquisition related expenses of $79,000. Without the contribution to the charitable foundation and merger expenses, net income would have been $3.2 million.

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

On September 3, 2020 the Bank and Gibraltar Bank ("Gibraltar") announced the execution of a merger agreement pursuant to which Gibraltar will merge with and into the Bank. The merger is expected to increase the Bank's consolidated assets to approximately $860.0 million by the end of the first quarter of 2021, and double its branch network. Also in first quarter of 2021 the Bank will be opening a new branch in Hasbrouck Heights, New Jersey which will also include additional back offices for staff.

Other Financial Highlights:

* Total assets decreased $13.1 million, or 1.7%, to $753.5 million from $766.6 million at December 31, 2019. Unfilled subscriptions of $41.5 million from the stock offering were returned to subscribers in January 2020 following the completion of the stock offering. Excluding these funds, total assets increased by 3.9% during the nine months ended September 30, 2020. * Net loans increased $46.7 million, or 8.7%, to $583.8 million at September 30, 2020 from $537.2 million at December 31, 2019. * Total deposits were $510.8 million, increasing $13.1 million, or 2.6%, during the nine months ended September 30, 2020. * Return on average assets was 0.19% for the nine-month period ended September 30, 2020 compared to 0.25% for the corresponding period of 2019. Without the charitable foundation contribution, the return on average assets would have been 0.55% for the nine-month period ended September 30, 2020. * Return on average equity was 1.11% for the nine-month period ended September 30, 2020 compared to 2.25% for the same period of 2019. Without the charitable foundation contribution, the return on average equity would have been 3.25% for the nine-month period ended September 30, 2020.

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

COVID

We are also providing assistance to individuals and small business clients directly impacted by the COVID-19 pandemic by allowing borrowers to modify their loans. Through September 30, 2020, the Company 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. Of the 172 loans to which loan modifications were granted only 25 loans have requested additional deferrals as of September 30, 2020. The 25 loans still on deferral represents $7.9 million or 1.4% of net loans and all the loans are within the one-to-four family residential real estate portfolio.

These short-term loan modifications will be treated in accordance with Section 4013 of the CARES Act and will not be treated as troubled debt restructurings during the short-term modification period if the loan was not in arrears at December 31, 2019. Furthermore, these loans will continue to accrue interest. Details with respect to actual loan modifications are as follows:

Original Loan Modifications Loans currently still in deferral

Percent Percent Balance as of Total Balance as of Total Number of Loans as Number of Loans asType of Loan of September of of September of Loans 30, September Loans 30, September 2020 30, 2020 30, 2020 2020

One- tofour-family 146 $ 42,661,815 7.3% 25 $ 7,948,412 1.4% residentialreal estate

Commercial 14 19,446,112 3.3% - - 0.0% real estate

Multi-family 10 5,261,485 0.9% - - 0.0% real estate

Commercialand 2 485,075 0.1% - - 0.0% industrial

Consumer - - - - - -

Other - - - - - -

Total 172 $ 67,854,487 11.6% 25 $ 7,948,412 1.4%

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

Mr. Coccaro further stated, "We continue to focus on the various ways in which we can assist our customers who have been adversely impacted by COVID-19, while we recognize significant economic uncertainty lies ahead, we believe our strong balance sheet is well positioned for such an environment. The economic impact of the COVID-19 pandemic on the Company's operations was not material during the first nine months ended September 30, 2020. However, there could be a more significant impact on the Company's financial results going forward due to increases in loan delinquencies, problem assets or foreclosures, a decline in collateral value or an increase in allowance for loan losses. I am optimistic community banking will continue to prosper by supporting individuals and small businesses looking for a community bank."

Income Statement Analysis

Compared to the third quarter of 2019, net interest income increased $843,000, or 30.7%, to $3.6 million for the three months ended September 30, 2020. During the same period, our net interest margin increased from 1.74% to 1.97%, while the ratio of average interest-earning assets to average interest-bearing liabilities increased 8.6% to 121.75%. For the nine months ended September 30, 2020, net interest income increased $1.6 million, or 19.4%, to $10.0 million. For the nine months ended September 30, 2020 there was a 14-basis point increase in net interest margin to 1.90%, while the ratio of average interest-earning assets to average interest-bearing liabilities improved 9.4% to 121.9%. The increase in net interest margin during the three and nine months ended September 30, 2020 was mostly due to the higher ratio of average interest-earning assets to average interest-bearing liabilities

We recorded a provision for loan losses of $25,000 and $275,000 for the three- and nine-month periods ended September 30, 2020, respectively, compared to no provision for loans losses for the same periods last year. Higher commercial real estate loan balances and increased risks factors associated with COVID 19 were the reasons for the provisions.

Non-interest income was $108,000 for the three months September 30, 2020, a decrease of $24,000, or 18.3%, compared to $132,000 in the prior year period. For the nine months ended September 30, 2020, non-interest income totaled $997,000, an increase of $585,000, or 142.1%, from the prior year period. Death benefit proceeds received on our investment in Bank Owned Life Insurance was the primary reason for the increase during the nine-month period.

For the three months ended September 30, 2020, non-interest expenses increased $455,000 to $2.4 million, over the comparable 2019 period. Professional fees increased $154,000, or 180.0%, due to additional expense associated with becoming a public company.

Salaries and employee benefits increased $101,000, or 8.2%, attributable to increased benefits and employee stock ownership plan expenses. Data processing expense increased $98,000 or 117.1% due to invoice credits during 2019 that did not reoccur in 2020. The increase of other general operating expenses was mainly due to increased FDIC insurance expense due to credits utilized last year and increase in other expense. Advertising expense decreased $35,000, or 53.9% due to the lack of advertising during the height of the COVID crisis.

For the nine months ended September 30, 2020, non-interest expenses increased $3.1 million, or 46.7%, to $9.6 million, over the comparable 2019 period. Expenses for the nine months ended September 30, 2020 included a $2.9 million contribution to the Bogota Charitable Foundation that was formed during the reorganization of the Bank into a two-tier mutual holding company form of organization. Data processing costs decreased $327,000, or 39.9%, due to $360,000 in de-conversion expenses in 2019 in connection with the Bank's data processing conversion. Advertising expense decreased $53,000, or 28.7% due to the lack of advertising during the height of the COVID crisis. Excluding the contribution to the charitable foundation in 2020 and the de-conversion expense in 2019, non-interest expenses increased $544,000 to $6.7 million compared to the same period last year. The increase of other general operating expenses was mainly due to increases in professional fees associated with the expense of becoming a public company.

Balance Sheet Analysis

Total assets were $753.5 million at September 30, 2020, representing a decrease of $13.1 million, or 1.7%, from December 31, 2019. Cash and due from banks decreased $56.5 million during the period primarily because of $41.5 million in offering subscriptions that were refunded due to the oversubscription of the stock offering. Net loans increased $46.7 million or 8.7%, due to new production of $171.0 million, consisting of a relatively equal mix of real estate loans and commercial loans, which was partially offset by $124.4 million in repayments. Securities held to maturity decreased $2.3 million mostly due to maturities in municipal bonds and government agency bonds which were not replaced.

Delinquent loans decreased $232,000, or 40.8%, during the nine-month period ended September 30, 2020, finishing at $337,000 or 0.1% of total loans. During the same timeframe, non-performing assets increased $82,000, or 13.9%, to $672,000 due to the addition of one loan and were 0.09% of total assets at September 30, 2020. Our allowance for loan losses was 0.40% of total loans and 344.67% of non-performing loans at September 30, 2020.

Total liabilities decreased $65.5 million, or 9.5%, to $626.1 million mainly due to $90.4 million in gross subscriptions that was either converted to common stock or refunded due to the oversubscription of the stock offering. Deposits increased $13.1 million, or 2.6%, due to increases in non-interest and interest bearing deposits. Federal Home Loan Bank advances increased $11.1 million, or 11.4%, as borrowings were available at lower rates than deposits.

Stockholders' equity increased $52.4 million to $127.4 million, primarily due $54.6 million of net proceeds raised in the stock offering. At September 30, 2020, the Company's ratio of average stockholders' equity-to-total assets was 16.90%, compared to 10.96% at December 31, 2019.

EXPLANATORY NOTE

The Company was formed to serve as the mid-tier stock holding company for the Bank in connection with the reorganization of the Bank and its mutual holding company, Bogota Financial, MHC, into the two-tier mutual holding company structure. As of December 31, 2019 and for the three and nine months ended September 30, 2020, the reorganization had not been completed and the Company had no assets or liabilities and had not conducted any business activities other than organizational activities. Accordingly, the unaudited financial statements and other financial information at and for the 2019 periods contained relate solely to the consolidated financial results of the Bank.

About Bogota Financial Corp.

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

Forward-Looking Statements

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

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

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

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

September 30, December 31, 2020 2019

Assets

Cash and due from banks $ 6,206,405 $ 5,176,241

Interest-bearing deposits in other banks 65,205,827 122,686,318

Cash and cash equivalents 71,412,232 127,862,559

Securities available for sale 12,277,380 13,748,561

Securities held to maturity (fair value of 53,826,111 56,093,317 $55,337,097 and $56,582,299, respectively)

Loans, net of allowance of $2,316,174 and 583,815,965 537,157,217 $2,016,174, respectively

Premises and equipment, net 4,309,116 4,196,753

Federal Home Loan Bank (FHLB) stock 6,065,200 5,672,700

Accrued interest receivable 2,982,313 2,021,360

Bank owned life insurance 16,827,094 17,409,745

Other assets 1,988,626 2,450,042

Total Assets $ 753,504,037 $ 766,612,254

Liabilities and Equity

Liabilities

Non-interest bearing $ 24,026,431 $ 16,122,231

Interest bearing 486,838,498 481,627,221

Total Deposits 510,864,929 497,749,452

FHLB advances 108,147,741 97,092,484

Advance payments by borrowers for taxes and 3,265,348 3,191,706 insurance

Subscription offering proceeds - 90,349,840

Other liabilities 3,826,120 3,250,925

Total liabilities 626,104,138 691,634,407

Commitments and Contingencies-see note 5

Stockholders' Equity

Preferred stock $0.01 par value 1,000,000shares authorized, none issued and - - outstanding at September 30, 2020

Common stock $0.01 par value, 30,000,000shares authorized, 13,157,525 issued and 131,575 - outstanding at September 30, 2020

Additional Paid-In capital 56,996,307 -

Retained earnings 76,313,418 75,291,512

Unearned ESOP shares (496,348 shares) (5,802,428 ) -

Accumulated other comprehensive loss (238,973 ) (313,665 )

Total stockholders' equity 127,399,899 74,977,847

Total liabilities and stockholders' equity $ 753,504,037 $ 766,612,254

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

Three months endedSeptember 30,

Nine months endedSeptember 30,

2020

2019

2020

2019

(unaudited)

Interest income

Loans

$

5,391,077

$

5,136,299

$

15,734,259

$

15,147,160

Securities

Taxable

367,857

441,557

1,204,056

1,383,258

Tax-exempt

13,136

11,836

38,017

77,787

Other interest-earning assets

131,215

215,048

660,492

659,842

Total interest income

5,903,285

5,804,740

17,636,824

17,268,047

Interest expense

Deposits

1,836,627

2,485,223

6,194,460

7,433,088

FHLB advances

472,506

568,740

1,478,432

1,487,479

Total interest expense

2,309,133

3,053,963

7,672,892

8,920,567

Net interest income

3,594,152

2,750,777

9,963,932

8,347,480

Provision for loan losses

25,000

-

275,000

-

Net interest income after provision for loan losses

3,569,152

2,750,777

9,688,932

8,347,480

Non-interest income

Fees and service charges

13,407

25,447

45,451

85,887

Bank owned life insurance

90,359

102,880

939,160

305,142

Other

4,287

3,885

12,470

20,860

Total non-interest income

108,053

132,212

997,081

411,889

Non-interest expense

Salaries and employee benefits

1,330,540

1,229,834

3,790,526

3,704,454

Occupancy and equipment

166,592

162,945

495,509

513,517

FDIC insurance assessment

45,000

14,161

116,000

75,296

Data processing

182,202

83,915

493,439

820,958

Advertising

30,000

65,000

131,814

185,000

Director fees

181,916

160,651

547,091

498,596

Professional fees

239,375

85,500

642,888

208,000

Contribution to Charitable Foundation

-

-

2,881,500

-

Other

218,395

136,762

527,560

554,078

Total non-interest expense

2,394,020

1,938,768

9,626,327

6,559,899

Income (loss) before income taxes (benefit)

1,283,185

944,221

1,059,686

2,199,470

Income tax expense (benefit)

326,769

273,207

37,781

558,367

Net income

$

956,416

$

671,014

$

1,021,905

$

1,641,103

Earnings per Share

$

0.08

-

$

0.09

-

Weighted average shares outstanding

12,657,453

-

12,004,881

-

BOGOTA FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF INCOME

Three months ended Nine months ended September 30, September 30,

2020 2019 2020 2019

(unaudited)

Interest income

Loans $ 5,391,077 $ 5,136,299 $ 15,734,259 $ 15,147,160

Securities

Taxable 367,857 441,557 1,204,056 1,383,258

Tax-exempt 13,136 11,836 38,017 77,787

Otherinterest-earning 131,215 215,048 660,492 659,842 assets

Total interest 5,903,285 5,804,740 17,636,824 17,268,047 income

Interest expense

Deposits 1,836,627 2,485,223 6,194,460 7,433,088

FHLB advances 472,506 568,740 1,478,432 1,487,479

Total interest 2,309,133 3,053,963 7,672,892 8,920,567 expense

Net interest 3,594,152 2,750,777 9,963,932 8,347,480 income

Provision for 25,000 - 275,000 - loan losses

Net interestincome after 3,569,152 2,750,777 9,688,932 8,347,480 provision forloan losses

Non-interest income

Fees and service 13,407 25,447 45,451 85,887 charges

Bank owned life 90,359 102,880 939,160 305,142 insurance

Other 4,287 3,885 12,470 20,860

Totalnon-interest 108,053 132,212 997,081 411,889 income

Non-interest expense

Salaries andemployee 1,330,540 1,229,834 3,790,526 3,704,454 benefits

Occupancy and 166,592 162,945 495,509 513,517 equipment

FDIC insurance 45,000 14,161 116,000 75,296 assessment

Data processing 182,202 83,915 493,439 820,958

Advertising 30,000 65,000 131,814 185,000

Director fees 181,916 160,651 547,091 498,596

Professional 239,375 85,500 642,888 208,000 fees

Contribution toCharitable - - 2,881,500 - Foundation

Other 218,395 136,762 527,560 554,078

Totalnon-interest 2,394,020 1,938,768 9,626,327 6,559,899 expense

Income (loss)before income 1,283,185 944,221 1,059,686 2,199,470 taxes (benefit)

Income taxexpense 326,769 273,207 37,781 558,367 (benefit)

Net income $ 956,416 $ 671,014 $ 1,021,905 $ 1,641,103

Earnings per $ 0.08 - $ 0.09 - Share

Weighted averageshares 12,657,453 - 12,004,881 - outstanding

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

At or For the Three MonthsEnded September 30,

At or For the Nine MonthsEnded September 30,

2020

2019

2020

2019

Performance Ratios (1):

Return on average assets (2)

0.51

%

0.10

%

0.19

%

0.25

%

Return on average equity (3)

3.01

%

0.91

%

1.11

%

2.25

%

Interest rate spread (4)

1.71

%

1.51

%

1.58

%

1.54

%

Net interest margin (5)

1.97

%

1.74

%

1.90

%

1.76

%

Efficiency ratio (6)

64.66

%

67.25

%

87.82

%

74.89

%

Average interest-earning assets to average interest-bearing liabilities

121.75

%

112.06

%

121.94

%

112.00

%

Net loans to deposits

114.28

%

113.11

%

114.28

%

11.00

%

Equity to assets (7)

16.85

%

11.14

%

16.85

%

11.38

%

Capital Ratios:

Tier 1 capital (to adjusted total assets)

26.27

%

11.26

%

Tier 1 capital (to risk-weighted assets)

25.80

%

17.98

%

Total capital (to risk-weighted assets)

25.80

%

18.47

%

Common equity Tier 1 capital (to risk-weighted assets)

17.38

%

17.98

%

Asset Quality Ratios:

Allowance for loan losses as a percent of total loans

0.40

%

0.37

%

Allowance for loan losses as a percent of non-performing loans

344.67

%

361.84

%

Net recoveries to average outstanding loans during the period

0.00

%

0.00

%

Non-performing loans as a percent of total loans

0.11

%

0.10

%

Non-performing assets as a percent of total assets

0.09

%

0.08

%

BOGOTA FINANCIAL CORP.

SELECTED RATIOS

At or For the Three At or For the Nine Months Months Ended September 30, Ended September 30,

2020 2019 2020 2019

Performance Ratios (1):

Return on average assets (2) 0.51 % 0.10 % 0.19 % 0.25 %

Return on average equity (3) 3.01 % 0.91 % 1.11 % 2.25 %

Interest rate spread (4) 1.71 % 1.51 % 1.58 % 1.54 %

Net interest margin (5) 1.97 % 1.74 % 1.90 % 1.76 %

Efficiency ratio (6) 64.66 % 67.25 % 87.82 % 74.89 %

Average interest-earningassets to average 121.75 % 112.06 % 121.94 % 112.00 %interest-bearing liabilities

Net loans to deposits 114.28 % 113.11 % 114.28 % 11.00 %

Equity to assets (7) 16.85 % 11.14 % 16.85 % 11.38 %

Capital Ratios:

Tier 1 capital (to adjusted 26.27 % 11.26 %total assets)

Tier 1 capital (to 25.80 % 17.98 %risk-weighted assets)

Total capital (to 25.80 % 18.47 %risk-weighted assets)

Common equity Tier 1 capital 17.38 % 17.98 %(to risk-weighted assets)

Asset Quality Ratios:

Allowance for loan losses as 0.40 % 0.37 %a percent of total loans

Allowance for loan losses asa percent of non-performing 344.67 % 361.84 %loans

Net recoveries to averageoutstanding loans during the 0.00 % 0.00 %period

Non-performing loans as a 0.11 % 0.10 %percent of total loans

Non-performing assets as a 0.09 % 0.08 %percent of total assets

___________________________(1)

Performance ratios are annualized.

(2)

Represents net income divided by average total assets.

(3)

Represents net income divided by average equity.

(4)

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

(5)

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

(6)

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

(7)

Represents average equity divided by average total assets.

___________________________ Performance ratios are annualized.(1)

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

Represents net income divided by average equity.(3)

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

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

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

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

BOGOTA FINANCIAL CORP.RECONCILIATION OF GAAP TO NON-GAAP

Three months ended September 30, 2020

Income Before Income Taxes

Provision for Income Taxes

Net Income

GAAP basis

$

1,283,185

$

326,769

$

956,416

Add: merger and acquisition related expenses

78,606

-

78,606

Non-GAAP basis

$

1,361,791

$

326,769

$

1,035,022

Three months ended September 30, 2019

Income Before Income Taxes

Provision for Income Taxes

Net Income

GAAP basis

$

944,221

$

273,207

$

671,014

Add: merger and acquisition related expenses

-

-

-

Non-GAAP basis

$

944,221

$

273,207

$

671,014

Nine months ended September 30, 2020

Income Before Income Taxes

Provision for Income Taxes

Net Income

GAAP basis

$

1,059,686

$

37,781

$

1,021,905

ADD: Charitable Foundation Contribution

2,881,500

809,990

2,071,510

Add: merger and acquisition related expenses

78,606

-

78,606

Non-GAAP basis

$

4,019,792

$

847,771

$

3,172,021

Nine months ended September 30, 2019

Income Before Income Taxes

Provision for Income Taxes

Net Income

GAAP basis

$

2,199,470

$

558,367

$

1,641,103

Add: merger and acquisition related expenses

-

-

-

Non-GAAP basis

$

2,199,470

$

558,367

$

1,641,103

The Company's management believes that the presentation of net income on a non-GAAP basis, excluding nonrecurring items, provides useful information for evaluating the Company's operating results and any related trends that may be affecting the Company's business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.

BOGOTA FINANCIAL CORP.RECONCILIATION OF GAAP TO NON-GAAP

Three months ended September 30, 2020

Income Provision Before for Net Income Income Income Taxes Taxes

GAAP basis $ 1,283,185 $ 326,769 $ 956,416

Add: merger and acquisition related 78,606 - 78,606 expenses

Non-GAAP basis $ 1,361,791 $ 326,769 $ 1,035,022



Three months ended September 30, 2019

Income Provision Before for Net Income Income Income Taxes Taxes

GAAP basis $ 944,221 $ 273,207 $ 671,014

Add: merger and acquisition related - - - expenses

Non-GAAP basis $ 944,221 $ 273,207 $ 671,014



Nine months ended September 30, 2020

Income Provision Before for Net Income Income Income Taxes Taxes

GAAP basis $ 1,059,686 $ 37,781 $ 1,021,905

ADD: Charitable Foundation 2,881,500 809,990 2,071,510 Contribution

Add: merger and acquisition related 78,606 - 78,606 expenses

Non-GAAP basis $ 4,019,792 $ 847,771 $ 3,172,021



Nine months ended September 30, 2019

Income Provision Before for Net Income Income Income Taxes Taxes

GAAP basis $ 2,199,470 $ 558,367 $ 1,641,103

Add: merger and acquisition related - - - expenses

Non-GAAP basis $ 2,199,470 $ 558,367 $ 1,641,103



The Company's management believes that the presentation of net income on a non-GAAP basis, excluding nonrecurring items, provides useful information for evaluating the Company's operating results and any related trends that may be affecting the Company's business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP.

Nine months ended September 30,

Return on average assets (annualized): 2020 2019

GAAP 0.19 % 0.25 %

Non-GAAP 0.55 % 0.25 %

Return on average equity (annualized):

GAAP 1.11 % 2.25 %

Non-GAAP 3.25 % 2.25 %

View source version on businesswire.com: https://www.businesswire.com/news/home/20201029006144/en/

CONTACT: Joseph Coccaro - President & CEO, 201-862-0660 ext. 1110