10-Q: Bogota Financial Corp. Q2 2026 Earnings Show Profit Growth Amid Asset Decline

Bogota Financial Corp. reported a significant increase in net income for the second quarter of 2026, driven by higher net interest income and reduced non-interest expenses, despite a decrease in total assets and deposits.

Summary

• Bogota Financial Corp. reported a net income of $747,522 for the three months ended June 30, 2026, a substantial increase from $224,395 in the same period of 2025. For the six months ended June 30, 2026, net income was $1,453,468, up from $955,342 in the prior year.
• Total assets decreased by 3.3% to $875.0 million as of June 30, 2026, from $904.9 million at December 31, 2025. This was primarily due to decreases in cash and cash equivalents, loans, and securities available for sale.
• Total deposits also saw a significant decrease of 12.0% to $574.2 million at June 30, 2026, from $652.4 million at December 31, 2025, mainly driven by a reduction in certificates of deposit.
• Net interest income increased by 3.9% to $3.8 million for the three months ended June 30, 2026, and by 13.4% to $8.3 million for the six months ended June 30, 2026, compared to the respective periods in 2025.
• Non-performing loans increased to $27.8 million at June 30, 2026, representing 3.2% of total assets, up from $13.3 million at December 31, 2025.
• The company announced a definitive agreement to acquire GSL Savings Bank (GSL), expected to close in the second half of 2026, subject to regulatory approvals and other customary conditions.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive filing, with improved net income and net interest margin, but offset by a decrease in total assets and deposits, and an increase in non-performing loans.

Positives

• Net income for the three months ended June 30, 2026, increased by $523,000 to $747,522, compared to $224,395 in the prior year period.
• Net interest income for the three months ended June 30, 2026, increased by 3.9% to $3.8 million, and for the six months ended June 30, 2026, increased by 13.4% to $8.3 million.
• The net interest margin improved to 1.94% for the three months and 2.06% for the six months ended June 30, 2026, up from 1.74% and 1.70% respectively in the prior year periods.
• Non-interest expenses decreased by 5.2% for the three months and 3.6% for the six months ended June 30, 2026, compared to the prior year periods.
• The company exceeded all applicable regulatory capital requirements and was considered well capitalized, with a Community Bank Leverage Ratio of 16.39% as of June 30, 2026.
• The company has entered into a definitive agreement to acquire GSL Savings Bank, which had approximately $151.2 million in assets as of June 30, 2026.

Negatives

• Total assets decreased by 3.3% to $875.0 million as of June 30, 2026, from $904.9 million at December 31, 2025.
• Total deposits decreased by 12.0% to $574.2 million at June 30, 2026, from $652.4 million at December 31, 2025.
• Non-performing loans increased from $13.3 million at December 31, 2025, to $27.8 million at June 30, 2026.
• Delinquent loans increased to $27.9 million, or 4.4% of total loans, at June 30, 2026, compared to $26.8 million, or 4.1% of total loans, at December 31, 2025.
• Interest income on loans decreased by 9.3% for the three months and 8.2% for the six months ended June 30, 2026, compared to the prior year periods, due to lower average balances and yields.
• Securities available for sale decreased by 11.2% to $140.4 million at June 30, 2026.

Risks

• General economic conditions, either nationally or in our market area, that are worse than expected, including potential recessionary conditions.
• Changes in the amount and trend of loan delinquencies, charge-offs and non-performing and classified loans and changes in estimates and the methodology for calculating the allowance for credit losses.
• Fluctuations in real estate values and both residential and commercial real estate market conditions.
• Monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System.
• Inflation and changes in market interest rates that reduce our margins and yields, reduce the fair value of financial instruments or reduce our volume of loan originations, or increase the level of defaults, losses and prepayments on loans we have made.
• Risks associated with cybersecurity threats, data breaches, ransomware attacks, or other failures in our operational or security systems and infrastructure, including the risks arising from our dependence on third-party service providers and vendors.
• The inability to obtain approvals and/or meet the other closing conditions required to close the Merger with GSL Savings Bank in a timely manner.

Future Outlook

The company is pursuing a merger with GSL Savings Bank, expected to close in the second half of 2026, subject to regulatory approvals and other customary conditions. Management believes it has ample sources of liquidity to satisfy short- and long-term needs and anticipates that a significant portion of maturing certificates of deposit will remain with the company.

Management Comments

• Management believes that movements in interest rates affect the financial condition and results of operations to a greater degree than changes in the rate of inflation.
• Management believes that we had ample sources of liquidity to satisfy our short- and long-term liquidity needs as of June 30, 2026.
• Management believes, based on past experience, that a significant portion of maturing deposits will remain with us.
• Management believes that the Company's net interest income simulation results over one year to changing interest rates were within guidelines.

Industry Context

StockSavvy.ai notes that Bogota Financial Corp. operates in the community banking sector, a segment often characterized by local market focus and sensitivity to interest rate fluctuations. The company's strategic move to acquire GSL Savings Bank aligns with industry trends of consolidation aimed at achieving scale and expanding market reach.

Comparison to Industry Standards

• The Community Bank Leverage Ratio of 16.39% as of June 30, 2026, significantly exceeds the 9% threshold for qualifying community banks to be considered well-capitalized.
• The company's net interest margin of 2.06% for the six months ended June 30, 2026, indicates its ability to manage interest rate spreads effectively within the current economic environment.
• The increase in non-performing loans to 3.2% of total assets is a point of attention, as industry benchmarks for non-performing assets can vary, but a sustained increase warrants monitoring.

Legal Proceedings

• The company was not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business, the outcome of which would not be material to its financial condition or results of operations.

Related Party Transactions

• The Bank has granted loans to officers and directors of the Bank. At June 30, 2026 and December 31, 2025, such loans totaled $1,922,247 and $2,256,911, respectively.

Stakeholder Impact

• Shareholders: The increase in net income and improved net interest margin are positive indicators, while the decrease in assets and deposits and increase in non-performing loans may present concerns.
• Depositors: A decrease in total deposits was observed, primarily in certificates of deposit, though management expects a significant portion to remain. The acquisition of GSL Savings Bank will integrate GSL depositors into Bogota Financial.
• Creditors: The company's strong capital position and regulatory compliance suggest stability for creditors.

Next Steps

• Complete the acquisition of GSL Savings Bank, subject to regulatory approvals and other customary closing conditions.
• Continue to monitor and manage interest rate risk through various strategies including originating adjustable-rate loans and promoting core deposit products.
• Manage liquidity and capital resources to meet financial obligations and regulatory requirements.

Key Dates

Recommendation

The company shows improved profitability and a strong capital position, alongside a strategic acquisition. However, the decrease in assets and deposits, coupled with a rise in non-performing loans, warrants a cautious approach. A 'hold' recommendation reflects the balance between positive operational improvements and ongoing risks.

Keywords

Bogota Financial Corp., Quarterly Report, Form 10-Q, Financial Statements, Results of Operations, Net Income, Interest Income, Deposits