What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 262 added, 258 removed, 1146 unchanged (31% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

June 30, 2024

September 30, 2024

December 31, 2023

41 unchanged sentences

Stockholders’ Equity

Preferred stock $ 0.01 par value 1,000,000 shares authorized, none issued and outstanding at June 30, 2024 and December 31, 2023

Common stock $ 0.01 par value, 30,000,000 shares authorized, 13,148,824 issued and outstanding at June 30, 2024 and 13,279,230 at December 31, 2023

Preferred stock $ 0.01 par value 1,000,000 shares authorized, none issued and outstanding at September 30, 2024 and December 31, 2023

Common stock $ 0.01 par value, 30,000,000 shares authorized, 13,092,357 issued and outstanding at September 30, 2024 and 13,279,230 at December 31, 2023

130,923 132,792

3 unchanged sentences

90,936,649 92,177,068

Unearned ESOP shares ( 396,415 shares at June 30, 2024 and 409,750 shares at December 31, 2023)

Unearned ESOP shares ( 389,674 shares at September 30, 2024 and 409,750 shares at December 31, 2023)

( 4,595,895 ) ( 4,821,798 )

9 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Interest income

Loans, including fees

$ 8,299,404 $ 8,141,719 $ 16,506,796 $ 15,841,157

1,846,717 996,338 3,363,060 2,047,598

13,124 20,232 26,272 65,134

Other interest-earning assets

314,964 248,914 639,268 470,503

Total interest income

10,474,209 9,407,203 20,535,396 18,424,392

Interest expense

6,253,895 4,210,984 12,223,776 7,925,981

FHLB advances

1,476,600 902,839 2,916,669 1,680,193

Total interest expense

7,730,495 5,113,823 15,140,445 9,606,174

Net interest income

2,743,714 4,293,380 5,394,951 8,818,218

Provision (recovery) for credit losses

35,000 ( 125,000 ) 70,000 ( 125,000 )

Net interest income after provision (recovery) for credit losses

2,708,714 4,418,380 5,324,951 8,943,218

Non-interest income

Fees and service charges

49,203 45,700 107,790 97,852

Gain on sale of loans

— 16,150 — 29,375

Bank-owned life insurance

215,056 190,147 427,015 376,200

38,945 31,479 67,477 63,328

Total non-interest income

303,204 283,476 602,282 566,755

Non-interest expense

Salaries and employee benefits

2,143,388 2,301,236 4,301,953 4,463,605

Occupancy and equipment

366,908 358,757 738,025 741,544

FDIC insurance assessment

106,716 127,119 207,313 187,119

Data processing

318,520 235,095 622,125 512,192

115,100 96,083 225,200 243,383

Director fees

151,549 159,338 307,249 318,675

Professional fees

260,112 114,018 456,897 263,268

263,490 240,562 510,112 419,770

Total non-interest expense

3,725,783 3,632,208 7,368,874 7,149,556

(Loss) income before income taxes

( 713,865 ) 1,069,648 ( 1,441,641 ) 2,360,417

Income tax (benefit) expense

( 281,386 ) 213,007 ( 568,182 ) 511,069

Net (loss) income

$ ( 432,479 ) $ 856,641 $ ( 873,459 ) $ 1,849,348

(Loss) earnings per Share - basic

$ ( 0.03 ) $ 0.07 $ ( 0.07 ) $ 0.14

(Loss) earnings per Share - diluted

$ ( 0.03 ) $ 0.07 $ ( 0.07 ) $ 0.14

Weighted average shares outstanding - basic

12,803,925 13,079,302 12,828,428 13,137,522

Weighted average shares outstanding - diluted

12,803,925 13,081,158 12,828,428 13,162,056

See accompanying notes to unaudited consolidated financial statements.

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net (loss) income

$ ( 432,479 ) $ 856,641 $ ( 873,459 ) $ 1,849,348

Other comprehensive (loss) income:

Net unrealized gain (loss) on securities available for sale:

1,030,695 ( 702,617 ) ( 52,070 ) ( 861,321 )

( 289,728 ) 197,506 14,637 242,118

740,967 ( 505,111 ) ( 37,433 ) ( 619,203 )

Defined benefit retirement plans:

Reclassification adjustment for amortization of prior service cost and net (loss) gain included in salaries and employee benefits

— ( 23,016 ) 6,414 ( 46,032 )

— 6,470 ( 3,309 ) 12,940

— ( 16,546 ) 3,105 ( 33,092 )

Unrealized gain on swap contracts accounted for as cash flow hedges

59,173 459,058 719,520 298,344

( 16,633 ) ( 129,042 ) ( 202,257 ) ( 83,865 )

42,540 330,016 517,263 214,479

Unrealized (loss) gain on swap contracts accounted for as cash flow hedges

Total other comprehensive income (loss)

783,507 ( 191,641 ) 482,935 ( 437,816 )

Comprehensive income (loss)

$ 351,028 $ 665,000 $ ( 390,524 ) $ 1,411,532

See accompanying notes to unaudited consolidated financial statements.

29 unchanged sentences

13,482,457 $ 134,824 $ 57,301,002 $ 93,383,881 $ ( 4,972,400 ) $ ( 6,648,829 ) $ 139,198,478

— — — ( 29,053 ) — — ( 29,053 )

Other comprehensive income

— — — — — ( 978,131 ) ( 978,131 )

Stock based compensation

— — 233,193 — — — 233,193

Stock purchased and retired

( 108,691 ) ( 1,087 ) ( 821,172 ) — — — ( 822,259 )

ESOP Shares released ( 25,789 shares)

— — ( 24,274 ) — 75,301 — 51,027

Balance September 30, 2023

13,373,766 $ 133,737 $ 56,688,749 $ 93,354,828 $ ( 4,897,099 ) $ ( 7,626,960 ) $ 137,653,255

Balance January 1, 2024

24 unchanged sentences

13,148,824 $ 131,388 $ 55,561,684 $ 91,303,609 $ ( 4,671,196 ) $ ( 5,981,839 ) $ 136,343,646

— — — ( 366,960 ) — — ( 366,960 )

Other comprehensive income

— — — — — 1,134,044 1,134,044

Stock based compensation

— — 196,498 — — — 196,498

Stock purchased and retired

( 56,467 ) ( 465 ) ( 414,511 ) — — — ( 414,976 )

ESOP shares released ( 6,447 shares)

— — ( 27,796 ) — 75,301 — 47,505

Balance September 30, 2024

13,092,357 $ 130,923 $ 55,315,875 $ 90,936,649 $ ( 4,595,895 ) $ ( 4,847,795 ) $ 136,939,757

See accompanying notes to unaudited consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended

For the nine months ended

September 30,

Cash flows from operating activities

6 unchanged sentences

Amortization of premiums and accretion of discounts on securities, net

Deferred income (benefit)

Deferred tax benefit

Gain on sale of loans

13 unchanged sentences

Maturities, calls, and repayments of securities held to maturity

Purchase of loan pool

Net decrease in loans

9 unchanged sentences

Repurchase of common stock

Issuance of common stock

Net increase in advance payments from borrowers for taxes and insurance

2 unchanged sentences

Cash and cash equivalents at beginning of year

Cash and cash equivalents at June 30,

Cash and cash equivalents at September 30,

Supplemental cash flow information

15 unchanged sentences

was formed to buy, sell and hold investment securities.

Bogota Properties, LLC was inactive at June 30, 2024 and December 31, 2023 .

Bogota Properties, LLC was inactive at September 30, 2024 and December 31, 2023 .

The Bank generally originates residential, commercial and consumer loans to, and accepts deposits from, customers in New Jersey.

4 unchanged sentences

Reclassifications had no effect on prior year net income or stockholders' equity.

Earnings per Share:

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period.

(Loss) Earnings per Share:

Basic (loss) earnings per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.

For purposes of calculating basic EPS, weighted average common shares outstanding excludes unallocated employee stock ownership plan shares that have not been committed for release and non-vested shares of restricted stock.

Diluted EPS is computed using the same method as basic EPS, except it also reflects the potential dilution which could occur if non-vested restricted stock and stock options were exercised and converted into common stock.

Diluted EPS is computed using the same method as basic EPS, except it also reflects the potential dilution which could occur if non-vested restricted stock vested or stock options were exercised and converted into common stock.

The potentially diluted shares would then be included in the weighted average number of shares outstanding for the period using the treasury stock method.

For the three and six months ended June 30, 2024 and June 30, 2023 , options to purchase 523,619 common shares with an exercise price of $ 10.45 were outstanding but were not included in the computation of diluted earnings per common share because to do so would be anti-dilutive.

For the three and nine months ended September 30, 2024 and September 30, 2023 , options to purchase 511,119 and 523,619 c ommon shares, respectively, with an exercise price of $ 10.45 were outstanding but were not included in the computation of diluted earnings per common share because to do so would be anti-dilutive.

Anti-dilutive options are those options with exercise prices in excess of the weighted average market value for the periods presented.

All grants of non-vested restricted stock were also excluded from the computation of diluted earnings per share for the three and six months ended June 30, 2024 , because to include such shares would be anti-dilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three and six months ended June 30, 2024 and 2023 .

For the three months ended June 30, 2024

For the three months ended June 30, 2023

For the six months ended June 30, 2024

For the six months ended June 30, 2023

For the three and nine months ended September 30, 2024 and for the three and nine months ended September 30, 2023 , a ll grants of non-vested restricted stock were excluded from the computation of diluted earnings per share , because to include such shares would have been anti-dilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share calculations for the three and nine months ended September 30, 2024 and 2023 .

For the three months ended September 30, 2024

For the three months ended September 30, 2023

For the nine months ended September 30, 2024

For the nine months ended September 30, 2023

Net (loss) income

2 unchanged sentences

12,702,683 13,037,903 12,702,683 13,103,951

Effect of stock options

— 1,856 — 24,534

Effect of unvested restricted stock

Weighted average shares outstanding - diluted

38 unchanged sentences

NOTE 2 – 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, 2024 and December 31, 2023 :

June 30, 2024

The following table summarizes the amortized cost, fair value, and gross unrealized gains and losses of securities available for sale, by contractual maturity, none of which had an allowance for credit losses at September 30, 2024 and December 31, 2023 :

September 30, 2024

government and agency obligations

31 unchanged sentences

Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Government National Mortgage Association (“GNMA”).

There were no sales of securities during the three and six months ended June 30, 2024 or June 30, 2023 .

The age of unrealized losses and the fair value of related securities as of June 30, 2024 and December 31, 2023 were as follows:

There w ere no sales of securities during the three and nine months ended September 30, 2024 or September 30, 2023 .

The age of unrealized losses and the fair value of related securities as of September 30, 2024 and December 31, 2023 were as follows:

Less Than 12 Months

12 Months or More

June 30, 2024

September 30, 2024

government and agency obligations

23 unchanged sentences

Unrealized losses on corporate bonds available for sale are not considered to be credit losses because the 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, 2024 , 100% of the mortgage-backed securities were issued by U.S.

At September 30, 2024 , 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 was 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 June 30, 2024 .

As of June 30, 2024 , no allowance for credit loss ("ACL") was required on available for sale securities.

At June 30, 2024 and December 31, 2023 , securities available for sale with a carrying value of $ 102,050 and $ 113,415 were pledged to secure public de posits.

There were 42 securities in a l oss position at June 30, 2024 .

There were 34 securities in a l oss position at September 30, 2024 .

As of September 30, 2024 , no allowance for credit loss ("ACL") was required on available for sale securities.

At September 30, 2024 and December 31, 2023 , securities available for sale with a carrying valu e of $ 98,231 and $ 113,415 were pledged to secure public deposits.

NOTE 3 – 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, 2024 and December 31, 2023 :

June 30, 2024

The following table summarizes the amortized cost, fair value, and gross unrecognized gains and losses of securities held to maturity by contractual maturity at September 30, 2024 and December 31, 2023 :

September 30, 2024

Government and agency obligations due in:

19 unchanged sentences

16,716,960 — ( 2,074,420 ) 14,642,540

Allowance for credit losses

( 108,000 ) — — ( 108,000 )

$ 80,103,753 $ 142,989 $ ( 5,751,645 ) $ 74,495,097

December 31, 2023

21 unchanged sentences

$ 72,656,179 $ 46,691 $ ( 7,328,117 ) $ 65,374,753

Effective January 1, 2023, the Company adopted ASC 326, which requires management to complete an evaluation of the held to maturity securities portfolio to identify whether any ACL is required.

Management completed an evaluation for the three and six months ended June 30, 2024 and 2023 , the results of which are presented in the below table, which summarizes the allowance and provision for credit losses related to the Company's held-to-maturity securities portfolio by type:

Management completed an evaluation of the held to maturity securities portfolio to identify whether any ACL is required for the three and nine months ended September 30, 2024 and 2023 , the results of which are presented in the below table, which summarizes the allowance and provision for credit losses related to the Company's held-to-maturity securities portfolio by type:

government and agency obligations

4 unchanged sentences

For the three months ended

June 30, 2024

September 30, 2024

Allowance for credit losses:

2 unchanged sentences

Provision for credit losses

— 73,000 — — — 73,000

Securities losses

6 unchanged sentences

MBS – commercial

June 30, 2023

September 30, 2023

Allowance for credit losses:

11 unchanged sentences

MBS – commercial

For the six months ended

June 30, 2024

For the nine months ended

September 30, 2024

Allowance for credit losses:

11 unchanged sentences

MBS – commercial

June 30, 2023

September 30, 2023

Allowance for credit losses:

11 unchanged sentences

NOTE 3 – SECURITIES HELD TO MATURITY (Continued)

The credit rating and the fair value of related securities were as follows:

The credit rating and the amortized cost of related securities were as follows:

government and agency obligations

3 unchanged sentences

MBS – commercial

June 30, 2024

September 30, 2024

Credit Rating

14 unchanged sentences

— 9,750,000 — — — $ 9,750,000

The fair value is expected to recover as the securities approach maturity.

At June 30, 2024 and December 31, 2023 , securities held to maturity with a carrying amount of $ 1,350,225 and $ 1,589,747 , respectively, were pledged to secure repurchase agreements at the Federal Home Loan Bank of New York.

There we re 55 sec urities in a loss position at June 30, 2024 .

At June 30, 2024 and December 31, 2023 , securities held to maturity with a carrying value of $ 4,755,327 and $ 4,976,927 , respectively, were pledged to secure public deposits.

$ 13,000,000 $ 27,013,552 $ 3,000,512 $ 12,484,366 $ 17,157,749 $ 72,656,179

There were 54 securities in a loss position at September 30, 2024 .

The fair value of the securities held to maturity is expected to recover as the securities approach maturity.

At September 30, 2024 and December 31, 2023 , securities held to maturity w ith a carrying amount of $ 1,231,090 and $ 1,589,747 , respectively, were pledged to secure repurchase agreements at the Federal Home Loan Bank of New York.

At September 30, 2024 and December 31, 2023 , securities held to maturity with a carrying value of $ 4,621,590 and $ 4,976,927 , respectively, were pledged to secure public deposits.

NOTE 4 – LOANS

Loans are summarized as follows at June 30, 2024 and December 31, 2023 :

Loans are summarized as follows at September 30, 2024 and December 31, 2023 :

September 30,

Residential First Mortgage

16 unchanged sentences

The Bank has granted loans to officers and directors of the Bank.

At June 30, 2024 and December 31, 2023 , such loans tota led $ 2,268,821 an d $ 1,610,688 , respectively.

At June 30, 2024 and December 31, 2023 , deferred loan fees were $ 2,822,574 and $ 2,873,724 , respectively.

The following table presents the activity in the ACL by portfolio segment for the three and six months ended June 30, 2024 and 2023 :

At September 30, 2024 and December 31, 2023 , such loans totaled $ 2,291,851 and $ 1,610,688 , respectively.

At September 30, 2024 and December 31, 2023 , deferred loan fees were $ 2,633,263 and $ 2,873,724 , respectively.

The following table presents the activity in the ACL by portfolio segment for the three and nine months ended September 30, 2024 and 2023 :

Residential First Mortgage

2 unchanged sentences

Commercial and Industrial

Three months ended June 30, 2024

Three months ended September 30, 2024

Allowance for credit losses:

12 unchanged sentences

Commercial and Industrial

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Allowance for credit losses:

12 unchanged sentences

Commercial and Industrial

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Allowance for credit losses:

12 unchanged sentences

Commercial and Industrial

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Allowance for credit losses:

10 unchanged sentences

$ 1,793,827 $ 533,497 $ 269,925 $ 170,700 $ 18,000 $ — $ 2,785,949

Since the Bank continues to have limited historical loss history, the majority of chances in the ACL noted in the above tables are driven by changes in the balances of the related loan segments.

BOGOTA FINANCIAL CORP.

1 unchanged sentence

NOTE 4 – LOANS (Continued)

The following table presents the balance in the ACL and the recorded investment in loans by portfolio segments and based on impairment method as of June 30, 2024 and December 31, 2023 :

The following table presents the balance in the ACL and the recorded investment in loans by portfolio segments and based on impairment method as of September 30, 2024 and December 31, 2023 :

Nonaccrual loans beginning of period

3 unchanged sentences

Interest recognized on nonaccrual loans

June 30, 2024

September 30, 2024

Residential First Mortgage

17 unchanged sentences

$ 856,659 $ 12,776,177 $ 12,776,177 $ — $ —

Collateral - dependent loans individually evaluated with the ACL by collateral type were as follows at June 30, 2024 and December 31, 2023 :

June 30, 2024

Collateral - dependent loans individually evaluated with the ACL by collateral type were as follows at September 30, 2024 and December 31, 2023 :

September 30, 2024

Portfolio segment

16 unchanged sentences

$ 12,776,177 $ —

Interest income recognized during impairment and cash-basis interest income for the three and six months ended June 30, 2024 and 2023 was nominal.

Interest income recognized during impairment and cash-basis interest income for the three and nine months ended September 30, 2024 and 2023 was nominal.

BOGOTA FINANCIAL CORP.

1 unchanged sentence

NOTE 4 – LOANS (Continued)

No nonaccrual loans had specific reserves as of June 30, 2024 , as they were all well-secured and in the process of collection.

The Bank had no other real estate owned at either June 30, 2024 or December 31, 2023 .

The following table presents the aging of the recorded investment in past due loans as of June 30, 2024 and December 31, 2023 , by class of loans:

June 30, 2024

No no naccrual loans had specific reserves as of September 30, 2024 , as they were all well-secured and in the process of collection.

The Bank had no other real estate owned at either September 30, 2024 or December 31, 2023 .

The following table presents the aging of the recorded investment in past due loans as of September 30, 2024 and December 31, 2023 , by class of loans:

September 30, 2024

Residential First Mortgage

21 unchanged sentences

$ — $ 297,118 $ 12,308,911 $ 12,606,029 $ 704,868,555 $ 717,474,584

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

Credit Quality Indicators

16 unchanged sentences

NOTE 4 – LOANS (Continued)

The following table presents loans, by risk category, loan class and year of origination as of June 30, 2024 and December 31, 2023 :

The following table presents loans, by risk category, loan class and year of origination as of September 30, 2024 and December 31, 2023 :

Term Loans by Origination Year

June 30, 2024

September 30, 2024

Revolving Loans

111 unchanged sentences

There were no loan modifications during the three -month period ended

June 30, 2024

September 30, 2024

BOGOTA FINANCIAL CORP.

9 unchanged sentences

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, 2024 approximately $ 122,000 and $ 242,000 in expense was recognized in regard to these awards, respectively, compared to expense during the same periods ended June 30, 2023 , of approximately $ 118,000 and $ 236,000 , respectively.

The expected future compensation expense related to the 145,911 non-vested restricted shares outstanding at June 30, 2024 was approximately $ 1.1 million which is expected to be recognized over a weighted-average period of 2.33 years.

The following is a summary of the Company's restricted stock activity during the six months ended June 30, 2024 :

During the three and nine months ended September 30, 2024 , approximately $ 121,000 and $ 363,000 in expense was recognized in regard to these awards, respectively, compared to expense during the same periods ended September 30, 2023 , of approximately $ 118,000 and $ 354,000 , respectively.

The expected future compensation expense related to the 97,607 non-vested restricted shares outstanding at September 30, 2024 was approximately $ 946,000 , which is expected to be recognized over a weighted-average period of 2.10 years.

The following is a summary of the Company's restricted stock activity during the nine months ended September 30, 2024 :

Number of Non-vested Restricted Shares

2 unchanged sentences

135,911 $ 10.45

Outstanding, June 30, 2024

$ ( 45,304 ) 10.45

$ ( 3,000 ) 10.45

Outstanding, September 30, 2024

97,607 $ 10.18

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.

2 unchanged sentences

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, 2024 and June 30, 2023 , approximately $ 115,000 and $ 230,000 in expense was recognized in regard to these awards, respectively.

The expected future compensation expense related to the 314,171 non-vested options outstanding at June 30, 2024 was $ 1.1 million, which is expected to be recognized over a weighted-average period of 2.50 years.

The following is a summary of the Company's option activity during the six months ended June 30, 2024 :

During the three and nine months ended September 30, 2024 , approximately $ 76,000 and $ 305,000 in expense was recognized in regard to these awards, respectively compared to expense of approximately $ 112,000 and $ 335,000 for the three and nine months ended September 30, 2023 , respectively.

The expected future compensation expense related to the 204,447 non-vested options outstanding at September 30, 2024 was $ 892,000 , which is expected to be recognized over a weighted-average period of 2.00 years.

Forfeitures are accounted for as they occur through reversal of the expense on non-vested shares in the period of forfeiture.

The following is a summary of the Company's option activity during the nine months ended September 30, 2024 :

Number of Stock Options

4 unchanged sentences

523,619 $ 10.45 5.5 $ —

Outstanding, June 30, 2024

( 12,500 ) 10.45 -

Options exercisable at June 30, 2024

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.

As of June 30, 2024 , there were no in-the-money options.

Outstanding, September 30, 2024

511,119 $ 10.45 4.9 $ —

Options exercisable at September 30, 2024

The aggregate intrinsic value in the table above represents 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.

As of September 30, 2024 , there were no in-the-money options.

NOTE 6 – EMPLOYEE STOCK OWNERSHIP PLAN

3 unchanged sentences

The number of shares to be allocated annually is 25,789 through 2039.

During the three and six months ended June 30, 2024 , $ 44,000 and $ 93,809 was incurred as expense for the plan, respectively, compared to expense during the same periods ending June 30, 2023 of approximately $ 55,000 and $ 126,873 , respectively.

As of June 30, 2024 , 119,360 shares have been allocated and 396,415 shares are unallocated with a fair value of $ 2.7 million.

During the three and nine months ended September 30, 2024 , $ 48,000 and $ 141,314 was incurred as expense for the plan, respectively, compared to expense during the same periods ended September 30, 2023 of approximately $ 51,000 and $ 177,900 , respectively.

As of September 30, 2024 , 126,101 shares have been allocated and 389,674 shares are unallocated with a fair value of $ 3.2 million.

NOTE 7 – DERIVATIVES AND HEDGING ACTIVITES

20 unchanged sentences

These derivative instruments consist primarily of currency 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.

The risk associated with these transactions is mitigated by simultaneously entering into similar transactions having essentially offsetting terms with a third party, i.e.

back-to-back swaps.

In addition, the Company executes interest rate swaps with third parties in order to hedge the interest rate risk of short-term FHLB advances.

Interest Rate Swaps.

At June 30, 2024 , the Company had four cash flow interest rate swaps with notional amounts of $ 55.0 million hedging certain FHLB advances and brokered deposits.

At September 30, 2024 , the Company had five cash flow interest rate swaps with notional amounts of $ 65.0 million hedging certain FHLB advances and brokered deposits.

The Company also had two fair value interest rate swaps with notional amounts of $ 60.0 million hedging certain fixed-rate residential loans.

These interest rate swaps meet the hedge accounting requirements.

Changes in the fair value of cash flow hedges are recorded in comprehensive income.

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.

Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreement without the exchange of the underlying notional amount.

The fair value hedges are recorded as components of other assets and other liabilities in the Company’s consolidated balance sheets.

The gain or loss on these derivatives, as well as the offsetting loss or gain on the hedged items attributable to the hedged risk, are recognized in interest income in the Company’s consolidated statements of income.

The fair value hedges are recorded as components of other assets and other liabilities on the Company’s consolidated statement of financial condition.

Changes in fair value of the fair value hedges are recorded against the basis of the asset or liability being hedged.

At December 31, 2023 , the Company had two interest rate swaps with a notional amount of $ 20.0 million to hedge certain FHLB advances and brokered deposits.

At both June 30, 2024 and December 31, 2023 , the Company had no interest rate swaps in place with commercial banking customers.

During the three and six months ended June 30, 2024 , the net effect on interest expense related to cash flow hedges was a reduced expense of $ 185,000 and $ 421,000 respectively, while the net effect on interest expense related to fair value hedge during the three and six months ended June 30, 2024 ,was a reduced expense of $ 103,000 and $ 327,000 respectively.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the Consolidated Statements of Financial Condition at June 30, 2024 :

At both September 30, 2024 and December 31, 2023 , the Company had no back-to-back interest rate swaps in place with commercial banking customers.

During the three and nine months ended September 30, 2024 , the net effect on interest expense related to cash flow hedges was a reduced expense of $ 258,000 and $ 679,000 , respectively, while the net effect on interest expense related to fair value hedge during the three and nine months ended September 30, 2024 , was a reduced expense of $ 240,000 and $ 567,000 , respectively.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification in the Consolidated Statements of Financial Condition at September 30, 2024 :

September 30,

Asset Derivative

2 unchanged sentences

Interest rate swaps

Other (Liabilities) Assets

$ ( 344,096 ) $ 239,510

Interest rate swaps

Other (Liabilities) Assets

$ ( 544,702 ) $ —

3 unchanged sentences

$ ( 325,120 ) $ 239,510

For the six months ended June 30, 2024 , unrealized gains of $ 360,000 were recorded for changes in fair value of interest rate swaps with third parties and at June 30, 2024 , accrued interest was $ 215,000 .

For the nine months ended September 30, 2024 , unrealized losses of $ 420,000 were recorded for changes in fair value of interest rate swaps with third parties and at September 30, 2024 , accrued interest was $ 233,000 .

The Company has agreements with counterparties that contain a provision that if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of its derivative obligations.

17 unchanged sentences

Quoted Prices

As of June 30, 2024

As of September 30, 2024

Securities available for sale:

23 unchanged sentences

$ 69,127,689 $ — $ 69,127,689 $ —

There were no transfers between level 1 and level 2 during the six months ended June 30, 2024 .

The carrying amounts and estimated fair values of financial instruments not measured at fair value, at June 30, 2024 and December 31, 2023 , were as follows:

There were no transfers between level 1 and level 2 during the nine months ended September 30, 2024 .

The carrying amounts and estimated fair values of financial instruments not measured at fair value, at September 30, 2024 and December 31, 2023 , were as follows:

Fair Value Measurement Placement

(In thousands)

June 30, 2024

September 30, 2024

Financial instruments - assets

1 unchanged sentence

$ 80,104 $ 74,495 $ — $ 74,495 $ —

Loans and loans held for sale

708,897 680,139 — — 680,139

9 unchanged sentences

$ 72,656 $ 65,375 $ — $ 65,375 $ —

Loans and loans held for sale

714,687 672,347 — — 672,347

9 unchanged sentences

NOTE 9 – 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, 2024 and 2023 was as follows:

The components of accumulated other comprehensive loss included in equity (net of tax) for the three and nine months ended September 30, 2024 and 2023 was as follows:

Unrealized gain

4 unchanged sentences

Three months ended

June 30, 2024

September 30, 2024

Beginning balance

7 unchanged sentences

$ ( 4,606,077 ) $ 5,654 $ ( 247,372 ) $ ( 4,847,795 )

June 30, 2023

September 30, 2023

Beginning balance

3 unchanged sentences

Amounts reclassified

— ( 16,546 ) — ( 16,546 )

Net period comprehensive (loss) income

4 unchanged sentences

Benefit plans

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Beginning balance

3 unchanged sentences

Amounts reclassified

— 3,105 — 3,105

Net period comprehensive (loss) income

2 unchanged sentences

$ ( 4,606,077 ) $ 5,654 $ ( 247,372 ) $ ( 4,847,795 )

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Beginning balance

3 unchanged sentences

Amounts reclassified

— ( 49,638 ) — ( 49,638 )

Net period comprehensive (loss) income

5 unchanged sentences

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, 2024 and December 31, 2023 and for the three and six months ended June 30, 2024 and June 30, 2023 is intended to assist in understanding the financial condition and results of operations of Bogota Financial Corp.

Management’s discussion and analysis of financial condition and results of operations at September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and September 30, 2023 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.

17 unchanged sentences

competition among depository and other financial institutions;

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 and make whether held in portfolio or sold in the secondary market;

adverse changes in the securities markets;

changes in the securities markets;

changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements;

14 unchanged sentences

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.

Comparison of Financial Condition at June 30, 2024 and December 31, 2023

Comparison of Financial Condition at September 30, 2024 and December 31, 2023

Total Assets.

Assets increased $35.4 million, or 3.8%, from $939.3 million at December 31, 2023 to $974.7 million at June 30, 2024 primarily due to a $38.0 million, or 55.1%, increase in securities available for sale and an $8.4 million, or 11.6%, increase in securities held-to-maturity, offset by a $7.1 million, or 1.0%, decrease in loans and a $7.3 million, or 29.4%, decrease in cash and cash equivalents.

Assets increased $39.6 million, or 4.2%, from $939.3 million at December 31, 2023 to $978.9 million at September 30, 2024 primarily due to a $39.7 million, or 57.6%, increase in securities available for sale and an $7.4 million, or 10.3%, increase in securities held-to-maturity, offset by a $5.8 million, or 0.8%, decrease in loans and a $3.9 million, or 15.8%, decrease in cash and cash equivalents.

Cash and Cash Equivalents.

Cash and cash equivalents decreased $7.3 million, or 29.4%, to $17.6 million at June 30, 2024 from $24.9 million at December 31, 2023 , as excess funds were used to purchase securities.

Cash and cash equivalents decreased $3.9 million, or 15.8%, to $21.0 million at September 30, 2024 from $24.9 million at December 31, 2023 , as excess funds from increases in borrowings and deposits were used to purchase securities.

Securities Available for Sale.

Securities available for sale increased $38.0 million, or 55.1%, to $106.9 million at June 30, 2024 from $68.9 million at December 31, 2023 .

The increase was primarily due to the purchase of mortgage-backed securities that were purchased with excess funds.

Securities available for sale increased $39.7 million, or 57.6%, to $108.6 million at September 30, 2024 from $68.9 million at December 31, 2023 .

The increase was primarily due to the purchase of mortgage-backed securities that were purchased with excess funds as part of our leveraging strategy.

Securities Held to Maturity.

Securities held to maturity increased $8.4 million, or 11.6%, to $81.1 million at June 30, 2024 from $72.7 million at December 31, 2023 , primarily due to the purchase of mortgage-backed securities.

At June 30, 2024, the Company's allowance for credit losses related to held-to-maturity securities totaled $108,000 or 0.13% of the total held-to-maturity securities portfolio.

Net loans decreased $7.1 million, or 1.0%, to $707.6 million at June 30, 2024 from $714.7 million at December 31, 2023 .

The decrease was due to a decrease of $10.4 million, or 2.1%, in one- to four-residential real estate loans to $475.7 million from $486.1 million at December 31, 2023 and a decrease of $10.8 million, or 21.9%, in construction loans to $38.5 million at June 30, 2024 from $49.3 million at December 31, 2023 , offset by a $11.0 million, or 11.0%, increase in commercial real estate loans to $110.8 million at June 30, 2024 from $99.8 million at December 31, 2023 .

The decrease in one- to four-residential and construction loans reflect less opportunities and decreased demand due to the higher interest rate environment.

As of June 30, 2024 and December 31, 2023 , the Bank had no loans held for sale.

Delinquent loans increased $888,000 to $13.5 million, or 1.90% of total loans, at June 30, 2024 .

The increase was mostly due to one commercial real estate loan with a balance of $761,000 with a loan to value ratio of 59%.

During the same timeframe, non-performing assets increased from $12.8 million at December 31, 2023 to $13.0 million, which represented 1.33% of total assets at June 30, 2024 .

The Company’s allowance for credit losses was 0.39% of total loans and 21.20% of non-performing loans at June 30, 2024 compared to 0.39% of total loans and 21.81% of non-performing loans at December 31, 2023 .

Securities held to maturity increased $7.4 million, or 10.3%, to $80.1 million at September 30, 2024 from $72.7 million at December 31, 2023 , primarily due to the purchase of mortgage-backed securities with excess funds.

At September 30, 2024 , the Company's allowance for credit losses related to held-to-maturity securities totaled $108,000 or 0.13% of the total held-to-maturity securities portfolio.

Net loans decreased $5.8 million, or 0.8%, to $708.9 million at September 30, 2024 from $714.7 million at December 31, 2023 .

The decrease was due to a decrease of $12.6 million, or 2.6%, in one- to four-residential real estate loans to $473.5 million from $486.1 million at December 31, 2023 and a decrease of $9.1 million, or 18.4%, in construction loans to $40.2 million at September 30, 2024 from $49.3 million at December 31, 2023 , offset by a $13.1 million, or 13.1%, increase in commercial real estate loans to $112.9 million at September 30, 2024 from $99.8 million at December 31, 2023 , and by a $3.6 million, or 53.6%, increase in commercial and industrial loans to $10.2 million at September 30, 2024 from $6.7 million at December 31, 2023 .

The decreases in one- to four-residential and construction loans reflect less opportunities and decreased demand due to the higher interest rate environment.

As of September 30, 2024 and December 31, 2023 , the Bank had no loans held for sale.

Delinquent loans increased $8.9 million to $21.5 million, or 3.0% of total loans, at September 30, 2024 .

The increase was mostly due to four commercial real estate loans to three customers with a balance of $8.1 million.

Three of the past due commercial real estate loans are being actively managed with the customers and are expected to be brought current, while one totaling $758,000 has been placed on nonaccrual status, but is considered well-secured with a loan-to-value of 59%.

We did not record any specific reserves, or charge-offs for these loans.

During the same timeframe, non-performing assets increased from $12.8 million at December 31, 2023 to $13.8 million, which represented 1.41% of total assets at September 30, 2024 .

The Company’s allowance for credit losses was 0.39% of total loans and 19.94% of non-performing loans at September 30, 2024 compared to 0.39% of total loans and 21.81% of non-performing loans at December 31, 2023 .

The Bank does not have any exposure to commercial real estate loans secured by office space.

The majority of the non-performing loans at June 30, 2024 was comprised of one construction loan with a balance of $10.9 million with a loan to value ratio of 45%.

Based on the well-secured nature of the loan, there was no associated specific reserve at June 30, 2024 .

The majority of the non-performing loans at September 30, 2024 was comprised of one construction loan for construction of a catering hall that is 99% complete, with a balance of $10.9 million and a loan to value ratio of 45%.

Based on the well-secured nature of the loan, there was no associated specific reserve at September 30, 2024 .

The Company has commenced legal action against the client.

Total Liabilities.

Total liabilities increased $36.2 million, or 4.5%, to $838.4 million as of June 30, 2024 from $802.2 million as of December 31, 2023 , primarily due to a $23.8 million increase in deposits and a $11.8 million increase in borrowings.

Deposits increased $23.8 million, or 3.8%, to $649.1 million at June 30, 2024 from $625.3 million at December 31, 2023 .

The increase in deposits reflected an increase in interest-bearing demand deposits of $1.7 million, or 1.6%, to $103.2 million as of June 30, 2024 from $101.5 million at December 31, 2023 due to the increases of $3.7 million, or 4.2%, in checking and savings accounts, offset by a $2.0 million, or 13.8%, decrease in money market accounts.

Certificates of deposit increased $19.3 million, or 3.9% to $512.6 million at June 30, 2024 from $493.3 million at December 31, 2023 .

Non-interest bearing deposits increased $2.8 million, or 9.1%, to $33.3 million as of June 30, 2024 from $30.6 million as of December 31, 2023.

Total liabilities increased $39.7 million, or 5.0%, to $841.9 million as of September 30, 2024 from $802.2 million as of December 31, 2023 , primarily due to a $3.9 million increase in deposits and a $34.9 million increase in borrowings.

Deposits increased $3.9 million, or 0.6%, to $629.2 million at September 30, 2024 from $625.3 million at December 31, 2023 .

The increase in deposits reflected an increase in interest-bearing demand deposits of $1.8 million, or 1.8%, to $103.3 million as of September 30, 2024 from $101.5 million at December 31, 2023 due to the increases of $4.5 million, or 5.2%, in checking and savings accounts, offset by a $2.6 million, or 18.1%, decrease in money market accounts.

Certificates of deposit increased $505,000, or 0.1%, to $493.8 million at September 30, 2024 from $493.3 million at December 31, 2023 .

Non-interest bearing deposits increased $1.5 million, or 5.2%, to $32.1 million as of September 30, 2024 from $30.6 million as of December 31, 2023.

The changes reflected customers’ desire for higher-yielding accounts in the higher interest rate environment.

At June 30, 2024 , municipal deposits totaled $35.4 million, which represented 5.5% of total deposits, and brokered deposits totaled $91.2 million, which represented 14.1% of deposits.

At September 30, 2024 , municipal deposits totaled $36.0 million, which represented 5.7% of total deposits, and brokered deposits totaled $101.1 million, which represented 16.1% of deposits.

At December 31, 2023 , municipal deposits totaled $57.5 million, which represented 9.2% of deposits, and brokered deposits totaled $53.3 million, which represented 8.5% of total deposits.

At June 30, 2024 , uninsured deposits totaled $69.3 million, comprised of 326 account holders, which represented 10.7% of total deposits.

Federal Home Loan Bank of New York borrowings increased $11.7 million, or 7.0%, to $179.4 million at June 30, 2024 from $167.7 million at December 31, 2023 , specifically short-term advances increased by $22.5 million while long-term advances decreased $10.7 million to better position the Company to take advantage of potential rate cuts.

The weighted average rate of borrowings was 4.71% and 4.54% as of June 30, 2024 and December 31, 2023 , respectively.

Total borrowing capacity at the Federal Home Loan Bank was $304.2 million at June 30, 2024 , of which $179.4 million was advanced.

At September 30, 2024 , uninsured deposits totaled $64.1 million, comprised of 296 account holders, which represented 10.2% of total deposits.

Federal Home Loan Bank of New York borrowings increased $34.9 million, or 20.8%, to $202.6 million at September 30, 2024 from $167.7 million at December 31, 2023 .

Specifically short-term advances increased by $16.0 million while long-term advances increased $18.9 million which is part of our leveraging strategy that will allow the Company to better position itself to take advantage of potential rate cuts.

The weighted average rate of borrowings was 4.62% and 4.54% as of September 30, 2024 and December 31, 2023 , respectively.

Total borrowing capacity at the Federal Home Loan Bank was $297.9 million at September 30, 2024 , of which $202.6 million was advanced.

Total Equity.

Stockholders’ equity decreased $830,000 to $136.3 million, primarily due to a net loss of $873,000 and the repurchase of 140,406 shares of stock during the six months ended June 30, 2024 at a cost of $1.0 million, offset by an decrease in accumulated other comprehensive loss for securities available for sale of $483,000 and stock compensation of $472,000 for the six months ended June 30, 2024 .

At June 30, 2024 , the Company’s ratio of average stockholders’ equity-to-total assets was 13.65%, compared to 1 5.24% at December 31, 2023 .

Stockholders’ equity decreased $233,000 to $136.9 million, primarily due to a net loss of $1.2 million and the repurchase of 196,873 shares of stock during the nine months ended September 30, 2024 at a cost of $1.4 million, offset by a decrease in accumulated other comprehensive loss for securities available for sale of $1.6 million and stock compensation of $668,000 for the nine months ended September 30, 2024 .

At September 30, 2024 , the Company’s ratio of average stockholders’ equity-to-average total assets was 14.01%, compared to 15.24% at December 31, 2023 .

Average Balance Sheets and Related Yields and Rates

4 unchanged sentences

Loan fees are included in interest income on loans and are not material.

Three Months Ended June 30,

Three Months Ended September 30,

Average Balance

Interest and Dividends

Yield/ Cost (1)

Average Balance

Interest and Dividends

Yield/ Cost (1)

(Dollars in thousands)

18 unchanged sentences

Average interest-earning assets to average interest-bearing liabilities

(1) The average balance of loans includes non-accrual loans.

(2) Cash flow hedges are used to manage interest rate risk.

During the three months ended June 30, 2024 , the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $461,000 and $92,000 respectively.

(1) Cash flow and fair value hedges are used to manage interest rate risk.

During the three months ended September 30, 2024 and 2023 , the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $498,000 and $115,000 respectively.

(2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

Six Months Ended June 30,

Nine Months Ended September 30,

Average Balance

Interest and Dividends

Yield/ Cost (1)

Average Balance

Interest and Dividends

Yield/ Cost (1)

(Dollars in thousands)

18 unchanged sentences

Average interest-earning assets to average interest-bearing liabilities

(1) The average balance of loans includes non-accrual loans.

(2) Cash flow hedges are used to manage interest rate risk.

During the six months ended June 30, 2024 , the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $749,000 and $139,000 respectively.

(1) Cash flow and fair value hedges are used to manage interest rate risk.

During the nine months ended September 30, 2024 and 2023 , the net effect on interest expense on the Federal Home Loan Bank advances and certificates of deposit was a reduced expense of $1.2 million and $254,000 respectively.

(2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

6 unchanged sentences

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.

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

Three Months Ended September 30, 2024

Nine Months Ended September 30, 2024

Three Months Ended September 30, 2023

Nine Months Ended September 30, 2023

Increase (Decrease) Due to

13 unchanged sentences

Net decrease in net interest income

Comparison of Operating Results for the Three Months Ended June 30, 2024 and June 30, 2023

Net income decreased by $1.3 million, or 150.5%, to a net loss of $432,000 for the three months ended June 30, 2024 from net income of $857,000 for the three months ended June 30, 2023 .

This decrease was primarily due to a decrease of $1.5 million in net interest income, partially offset by a decrease of $494,000 in income tax expense.

Comparison of Operating Results for the Three Months Ended September 30, 2024 and September 30, 2023

Net income decreased by $338,000 to a net loss of $367,000 for the three months ended September 30, 2024 from a net loss of $29,000 for the three months ended September 30, 2023 .

This decrease was primarily due to a decrease of $560,000 in net interest income, partially offset by a decrease of $56,000 in non-interest expense, an increase of $128,000 in income tax benefit and a $38,000 increase in non-interest income.

Interest Income.

Interest income increased $1.1 million, or 11.3%, from $9.4 million for the three months ended June 30, 2023 to $10.5 million for the three months ended June 30, 2024 due to higher yields on interest-earning assets and an increase in the average balance of securities, partially offset by a decrease in the average balance of loans and cash and cash equivalents.

Interest income on cash and cash equivalents decreased $22,000, or 14.9%, to $127,000 for the three months ended June 30, 2024 from $149,000 for the three months ended June 30, 2023 due to a $3.8 million decrease in the average balance to $8.6 million for the three months ended June 30, 2024 from $12.4 million for the three months ended June 30, 2023 , reflecting the use of excess cash to purchase securities.

The decrease was offset by a 110 basis point increase in the average yield from 4.80% for the three months ended June 30, 2023 to 5.90% for the three months ended June 30, 2024 , due to the higher interest rate environment.

Interest income on loans increa sed $157,000, or 1.9%, to $8.3 million for the t hree months ended June 30, 2024 compared to $8.1 million for the three months ended June 30, 2023 due prim arily to an 11 basis point increase in the average yield from 4.59% for the three months ended June 30, 2023 to 4.70% for the three months ended June 30, 2024 , offset by a $2.1 million decrease in the average balance to $710.1 million for the three months ended June 30, 2024 from $712.2 million for the three months ended June 30, 2023 .

Interest income on securities increased $843,000, or 82.9%, to $1.9 million for the three months ended June 30, 2024 from $1.0 million for the three months ended June 30, 2023 primarily due to a 123 basis point increase in the average yield from 2.78% for the three months ended June 30, 2023 to 4.01% for the three months ended June 30, 2024 , and a $39.3 million increase in the average balance to $185.5 million for the three months ended June 30, 2024 from $146.2 million for the three months ended June 30, 2023 .

Interest income increased $1.3 million, or 14.3%, from $9.3 million for the three months ended September 30, 2023 to $10.6 million for the three months ended September 30, 2024 primarily due to higher yields on interest-earning assets and an increase in the average balance of securities.

Interest income on cash and cash equivalents decreased $30,000, or 17.9%, to $138,000 for the three months ended September 30, 2024 from $168,000 for the three months ended September 30, 2023 due to a $2.6 million decrease in the average balance to $10.2 million for the three months ended September 30, 2024 from $12.8 million for the three months ended September 30, 2023 , reflecting the use of excess cash to purchase securities.

The decrease was offset by an 18 basis point increase in the average yield from 5.21% for the three months ended September 30, 2023 to 5.39% for the three months ended September 30, 2024 , due to the higher interest rate environment.

Interest income on loans increased $400,000, or 5.0%, to $8.4 million for the three months ended September 30, 2024 compared to $8.0 million for the three months ended September 30, 2023 due primarily to a 24 basis point increase in the average yield from 4.45% for the three months ended September 30, 2023 to 4.69% for the three months ended September 30, 2024 , and to a lesser extent, a $876,000 increase in the average balance to $711.6 million for the three months ended September 30, 2024 from $710.7 million for the three months ended September 30, 2023 .

Interest income on securities increased $889,000, or 88.2%, to $1.9 million for the three months ended September 30, 2024 from $1.0 million for the three months ended September 30, 2023 primarily due to a $48.7 million increase in the average balance to $187.2 million for the three months ended September 30, 2024 from $138.5 million for the three months ended September 30, 2023 , and a 114 basis point increase in the average yield from 2.91% for the three months ended September 30, 2023 to 4.05% for the three months ended September 30, 2024 due to the higher interest rate environment.

Interest Expense.

Interest expense increased $2.6 million, or 51.2%, from $5.1 million for the three months ended June 30, 2023 to $7.7 million for the three months ended June 30, 2024 due to higher costs and average balances on interest -bearing liabilities.

Interest expense on interest-bearing deposits increased $2.0 million, or 48.5%, to $6.2 million for the three months ended June 30, 2024 from $4.2 million for the three months ended June 30, 2023 .

The increase was due to a 131 basis point increase in the average cost of deposits to 3.99% for the three months ended June 30, 2024 from 2.68% for the three months ended June 30, 2023 .

Interest expense increased $1.9 million, or 31.1%, from $6.1 million for the three months ended September 30, 2023 to $8.0 million for the three months ended September 30, 2024 due to higher costs and average balances on interest-bearing liabilities.

Interest expense on interest-bearing deposits increased $1.3 million, or 27.0%, to $6.2 million for the three months ended September 30, 2024 from $4.9 million for the three months ended September 30, 2023 .

The increase was due to a 93 basis point increase in the average cost of deposits to 4.04% for the three months ended September 30, 2024 from 3.11% for the three months ended September 30, 2023 .

The increase in the average cost of deposits was due to the higher interest rate environment and a change in the composition of the deposit portfolio to a greater concentration of higher-costing certificates of deposit.

The average balances of certificates of deposit increased $23.9 million to $517.9 million for the three months ended June 30, 2024 from $494.0 million for the three months ended June 30, 2023 .

The average balance of savings accounts decreased by $4.8 million during the quarter, while the average balance of NOW and money market accounts decreased $20.6 million for the three months ended June 30, 2024 , compared to the three months ended June 30, 2023 .

Interest expense on Federal Home Loan Bank advances increased $573,000, or 63.6%, from $903,000 for the three months ended June 30, 2023 to $1.5 million for the three months ended June 30, 2024 .

The increase was due to an increase in the average balance of $49.8 million to $170.3 million for the three months ended June 30, 2024 .

The increase was also due to an increase in the average cost of borrowings of 48 basis points to 3.49% for the three months ended June 30, 2024 from 3.01% for the three months ended June 30, 2023 due to the new borrowings being at higher rates.

The average balances of certificates of deposit decreased $831,000 to $497.3 million for the three months ended September 30, 2024 from $498.1 million for the three months ended September 30, 2023 .

The average balance of savings accounts decreased by $2.1 million during the quarter, while the average balance of NOW and money market accounts decreased $9.0 million for the three months ended September 30, 2024 , compared to the three months ended September 30, 2023 .

Interest expense on Federal Home Loan Bank advances increased $582,000, or 47.7%, from $1.2 million for the three months ended September 30, 2023 to $1.8 million for the three months ended September 30, 2024 .

The increase was due to an increase in the average balance of $71.6 million to $196.9 million for the three months ended September 30, 2024 .

The increase was offset by a 22 basis point decrease in the average cost of borrowings to 3.64% for the three months ended September 30, 2024 from 3.86% for the three months ended September 30, 2023 due to the new borrowings being at lower rates.

Net Interest Income.

Net interest income decreased $1.6 million, or 36.1%, to $2.7 million for the three months ended June 30, 2024 from $4.3 million for the three months ended June 30, 2023 .

The decrease reflected an 85 basis point decrease in our net interest rate spread to 0.72% for the three months ended June 30, 2024 from 1.57% for the three months ended June 30, 2023 .

Our net interest margin decreased 75 basis points to 1.21% for the three months ended June 30, 2024 from 1.96% for the three months ended June 30, 2023 .

Net interest income decreased $560,000, or 17.4%, to $2.7 million for the three months ended September 30, 2024 from $3.2 million for the three months ended September 30, 2023 .

The decrease reflected a 35 basis point decrease in our net interest rate spread to 0.66% for the three months ended September 30, 2024 from 1.01% for the three months ended September 30, 2023 .

Our net interest margin decreased 32 basis points to 1.15% for the three months ended September 30, 2024 from 1.47% for the three months ended September 30, 2023 .

Provision for Credit Losses.

We recorded a $35,000 provisio n for credit losses for the three months ended June 30, 2024 compared to a $125,000 recovery for credit losses for the three-month period ended June 30, 2023 .

During the three months ended June 30, 2024 the Company recorded a $73,000 provision for the held-to-maturity securities portfolio, which was partially offset by a credit to the provision for loans of $38,000, which was related to the increase in corporate securities and a decrease in the loan portfolio.

We did not record a provision for credit losses for the three months ended September 30, 2024 or September 30, 2023 due to the decrease in loans.

Non-Interest Income.

Non-interest income increased by $20,000, or 7.0%, to $303,000 for the three months ended June 30, 2024 from $283,000 for the three months ended June 30, 2023 .

Bank-owned life insurance income increased $25,000, or 13.1%, due to higher balances during 2024 , which was partially offset by no loan sales in 2024 compared to a $16,000 gain on sale of loans in 2023.

Non-interest income increased by $37,000, or 13.0%, to $327,000 for the three months ended September 30, 2024 from $290,000 for the three months ended September 30, 2023 .

Bank-owned life insurance income increased $23,000, or 11.7%, due to higher balances during 2024 , and gain on sale of loans increased $12,000 compared to no gain on sale of loans for the three months ended September 30, 2023 .

Non-Interest Expense.

For the three months ended June 30, 2024 , non-interest expense increas ed $94,000, or 2.6%, o ver the comparable 2023 period.

Professional fees increased $146,000, or 128.1% due to higher consulting expense related to strategic business planning.

Data processing expense increased $83,000, or 35.5%, due to higher processing costs.

Advertising expense also increased by $19,000, or 19.8%, which was related to promotions for our new branch location.

This was off set by a $158,000, or 6.9% decrease in salaries and employee benefits cost, which decreased due to lower headcount and increased expenses in 2023 related to the retirement of the Company's previous Chief Executive Officer.

For the three months ended September 30, 2024 , non-interest expense decreased $56,000, or 1.5%, over the comparable 2023 period.

This was due to a $171,000, or 7.5% reduction in salaries and employee benefits, which decreased due to lower headcount, and a $40,000, or 31.9%, decrease in advertising expenses.

Our FDIC insurance assessment also decreased by $26,000, or 19.8%.

These decreases were offset by an increase in professional fees of $99,000, or 70.6%, due to higher consulting expense related to strategic business planning.

Data processing expense also increased $100,000, or 48.8%, due to higher processing costs.

Income Tax Expense.

Income tax expense decreased $494,000, or 232.1%, to a benefit of $281,000 for the three months ended June 30, 2024 from a $213,000 expense for the three months ended June 30, 2023 .

The decrease was due to $1.8 million of lower taxable income.

Comparison of Operating Results for the Six Months Ended June 30, 2024 and June 30, 2023

Net income decreased by $2.7 million, or 147.2%, to a net loss of $873,000 for the six months ended June 30, 2024 from net income of $1.8 million for the six months ended June 30, 2023 .

Income tax benefit increased $128,000, or 102.1%, to a benefit of $253,000 for the three months ended September 30, 2024 from a $125,000 benefit for the three months ended September 30, 2023 .

The decrease was due to $466,000 of lower taxable income.

Comparison of Operating Results for the Nine Months Ended September 30, 2024 and September 30, 2023

Net income decreased by $3.1 million, or 168.1%, to a net loss of $1.2 million for the nine months ended September 30, 2024 from net income of $1.8 million for the nine months ended September 30, 2023 .

This decrease was primarily due to a decrease of $4.0million in net interest income, partially offset by a decrease of $1.2 million in income tax expense.

Interest Income.

Interest income increased $2.1 million, or 11.5%, from $18.4 million for the six months ended June 30, 2023 to $20.5 million for the six months ended June 30, 2024 due to higher yields on interest-earning assets, and to a lesser extent by an increase in the average balance of securities, partially offset by a decrease in the average balance of loans and cash and cash equivalents.

Interest income on cash and cash equivalents increased $22,000, or 8.7%, to $276,000 for the six months ended June 30, 2024 from $254,000 for the six months ended June 30, 2023 due to a 168 basis point increase in the average yield from 4.82% for the six months ended June 30, 2023 to 6.50% for the six months ended June 30, 2024 due to the higher interest rate environment.

The increase was offset by a $2.1 million decrease in the average balance to $8.5 million for the six months ended June 30, 2024 from $10.6 million for the six months ended June 30, 2023 .

Interest income on loans increased $666,000, or 4.2%, to $16.5 million for the six months ended June 30, 2024 compared to $15.8 million for the six months ended June 30, 2023 due primarily to a 19 basis point increase in the average yield from 4.45% for the six months ended June 30, 2023 to 4.64% for the six months ended June 30, 2024 , offset by a $3.3 million decrease in the average balance to $711.7 million for the six months ended June 30, 2024 from $715.1 million for the six months ended June 30, 2023 .

Interest income on securities increased $1.3 million, or 60.4%, to $3.4 million for the six months ended June 30, 2024 from $2.1 million for the six months ended June 30, 2023 primarily due to a 111 basis point increase in the average yield from 2.74% for the six months ended June 30, 2023 to 3.85% for the six months ended June 30, 2024 , and a $22.1 million increase in the average balance to $176.1 million for the six months ended June 30, 2024 from $154.0 million for the six months ended June 30, 2023 .

Interest income increased $3.4 million, or 12.4%, from $27.7 million for the nine months ended September 30, 2023 to $31.1 million for the nine months ended September 30, 2024 due to higher yields on interest-earning assets and an increase in the average balance of securities, partially offset by a decrease in the average balance of loans and cash and cash equivalents.

Interest income on cash and cash equivalents decreased $8,000, or 1.9%, to $415,000 for the nine months ended September 30, 2024 from $423,000 for the nine months ended September 30, 2023 due to a $2.3 million decrease in the average balance to $9.1 million for the nine months ended September 30, 2024 from $11.4 million for the nine months ended September 30, 2023 , reflecting the decrease of liquidity due to increased securities purchases.

This decrease was offset by a 111 basis point increase in the average yield from 4.98% for the nine months ended September 30, 2023 to 6.09% for the nine months ended September 30, 2024 due to the higher interest rate environment.

Interest income on loans increased $1.1 million, or 4.5%, to $24.9 million for the nine months ended September 30, 2024 compared to $23.8 million for the nine months ended September 30, 2023 due primarily to a 20 basis point increase in the average yield from 4.46% for the nine months ended September 30, 2023 to 4.66% for the nine months ended September 30, 2024 , offset by a $1.9 million decrease in the average balance to $711.7 million for the nine months ended September 30, 2024 from $713.6 million for the nine months ended September 30, 2023 .

Interest income on securities increased $2.2 million, or 69.4%, to $5.3 million for the nine months ended September 30, 2024 from $3.1 million for the nine months ended September 30, 2023 primarily due to a 112 basis point increase in the average yield from 2.80% for the nine months ended September 30, 2023 to 3.92% for the nine months ended September 30, 2024 , and a $31.0 million increase in the average balance to $179.8 million for the nine months ended September 30, 2024 from $148.8 million for the nine months ended September 30, 2023 .

Interest Expense.

Interest expense increased $5.5 million, or 57.6%, from $9.6 million for the six months ended June 30, 2023 to $15.1 million for the six months ended June 30, 2024 primarily due to higher costs and average balances on certificates of deposit and borrowings.

Interest expense on interest-bearing deposits increased $4.3 million, or 54.2%, to $12.2 million for the six months ended June 30, 2024 from $7.9 million for the six months ended June 30, 2023 .

The increase was due to a 145 basis point increase in the average cost of deposits to 3.91% for the six months ended June 30, 2024 from 2.46% for the six months ended June 30, 2023 .

Interest expense increased $7.4 million, or 47.4%, from $15.7 million for the nine months ended September 30, 2023 to $23.1 million for the nine months ended September 30, 2024 , primarily due to higher costs and higher average balances on certificates of deposit and borrowings.

Interest expense on interest-bearing deposits increased $5.6 million, or 43.9%, to $18.4 million for the nine months ended September 30, 2024 from $12.8 million for the nine months ended September 30, 2023 .

The increase was due to a 128 basis point increase in the average cost of deposits to 3.95% for the nine months ended September 30, 2024 from 2.67% for the nine months ended September 30, 2023 .

The average balances of certificates of deposit increased $18.5 million to $517.2 million for the six months ended June 30, 2024 from $498.7 million for the six months ended June 30, 2023 while average NOW and money market accounts and savings accounts decreased $31.9 million and $7.5 million for the six months ended June 30, 2024 , respectively, compared to the six months ended June 30, 2023 .

Interest expense on Federal Home Loan Bank advances increased $1.2 million, or 73.6%, from $1.7 million for the six months ended June 30, 2023 to $2.9 million for the six months ended June 30, 2024 .

The increase was due to an increase in the average balance of $54.2 million to $160.3 million for the six months ended June 30, 2024 .

The increase was also due to an increase in the average cost of borrowings of 47 basis points to 3.66% for the six months ended June 30, 2024 from 3.19% for the six months ended June 30, 2023 due to the new borrowings being at higher rates.

The average balances of certificates of deposit increased $12.0 million to $510.5 million for the nine months ended September 30, 2024 from $498.5 million for the nine months ended September 30, 2023 while average NOW and money market accounts and savings accounts decreased $24.2 million and $5.7 million for the nine months ended September 30, 2024 , respectively, compared to the nine months ended September 30, 2023 .

Interest expense on Federal Home Loan Bank advances increased $1.8 million, or 62.7%, from $2.9 million for the nine months ended September 30, 2023 to $4.7 million for the nine months ended September 30, 2024 .

The increase was due to an increase in the average balance of $60.7 million to $171.6 million for the nine months ended September 30, 2024 .

The increase was also due to an increase in the average cost of borrowings of 17 basis points to 3.67% for the nine months ended September 30, 2024 from 3.50% for the nine months ended September 30, 2023 due to the new borrowings being at higher rates.

Net Interest Income.

Net interest income decreased $3.4 million, or 38.8%, to $5.4 million for the six months ended June 30, 2024 from $8.8 million for the six months ended June 30, 2023 .

The decrease reflected a 93 basis point decrease in our net interest rate spread to 0.68% for the six months ended June 30, 2024 from 1.61% for the six months ended June 30, 2023 .

Our net interest margin decreased 81 basis points to 1.20% for the six months ended June 30, 2024 from 2.01% for the six months ended June 30, 2023 .

Net interest income decreased $3.9 million, or 33.1%, to $8.1 million for the nine months ended September 30, 2024 from $12.0 million for the nine months ended September 30, 2023 .

The decrease reflected a 73 basis point decrease in our net interest rate spread to 0.68% for the nine months ended September 30, 2024 from 1.41% for the nine months ended September 30, 2023 .

Our net interest margin decreased 64 basis points to 1.18% for the nine months ended September 30, 2024 from 1.82% for the nine months ended September 30, 2023 .

Provision for Credit Losses.

We recorded a $70,000 provision for credit losses for the six months ended June 30, 2024 compared to a $125,000 recovery for credit losses for the six -month period ended June 30, 2023 .

The entire provision during the period was due to a $108,000 provision for held-to-maturity securities, which was offset by a $38,000 credit to the provision for loans, which was related to the increase in corporate securities a nd a decrease in the loan portfolio.

We recorded a $70,000 provision for credit losses for the nine months ended September 30, 2024 compared to a $125,000 recovery for credit losses for the nine -month period ended September 30, 2023 .

The entire provision during the period was due to a $108,000 provision for held-to-maturity securities due to an increase in corporate securities, which was offset by a $38,000 credit to the provision for loans due to a decrease in the loan portfolio.

Non-Interest Income.

Non-interest income increased by $35,000, or 6.3%, to $602,000 for the six months ended June 30, 2024 from $567,000 for the six months ended June 30, 2023 .

Bank-owned life insurance income increased $51,000, or 13.5%, due to higher balances during 2024 , which was partially offset by no loan sales in 2024 compared to a $29,000 gain on sale of loans in 2023.

Non-Interest E xpense.

For the six months ended June 30, 2024 , non-interest expense increased $219,000, or 3.1%, over the comparable 2023 period.

Non-interest income increased by $73,000, or 8.5%, to $929,000 for the nine months ended September 30, 2024 from $856,000 for the nine months ended September 30, 2023 .

Bank-owned life insurance income increased $74,000, or 12.9%, due to higher balances during 2024 .

Non-Interest Expense.

For the nine months ended September 30, 2024 , non-interest expense increased $163,000, or 1.5%, over the comparable 2023 period.

Professional fees increased $270,000, or 65.5% due to higher consulting expense related to strategic business planning.

Data processing expense increased $210,000, or 29.3%, due to higher processing costs.

These were offset by a $162,000, or 3.6%, reduction in salaries and employee benefit costs, which decreased due to lower headcount and increase expenses in 2023 related to the retirement of the Company's previous Chief Executive Officer.

These were offset by a $333,000, or 4.9%, reduction in salaries and employee benefit costs, which decreased due to lower headcount.

Income Tax Expense.

Income tax expense decreased $1.1 million, or 211.2%, to a benefit of $568,000 for the six months ended June 30, 2024 from a $511,000 expense for the six months ended June 30, 2023 .

Income tax expense decreased $1.2 million, or 312.9%, to a benefit of $821,000 for the nine months ended September 30, 2024 from a $386,000 expense for the nine months ended September 30, 2023 .

The decrease was due to $4.3 million of lower taxable income.

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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, 200, 300 and 400 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 of June 30, 2024 .

The following table presents the estimated changes in our net portfolio value that would result from changes in market interest rates as of September 30, 2024 .

All estimated changes presented in the table are within the policy limits approved by the board of directors.

14 unchanged sentences

Assumptions are supported with quarterly back testing of the model to actual market rate shifts.

As of June 30, 2024 , net interest income simulation results indicated that its exposure over one year to changing interest rates was within our guidelines.

As of September 30, 2024 , 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:

9 unchanged sentences

Liquidity and Capital Resources

Liquidity describes our ability to meet financial obligation s that arise in the ordinary course of business.

Liquidity describes our ability to meet financi al 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.

1 unchanged sentence

We also borrow from the Federal Home Loan Bank of New York.

At June 30, 2024 , we had the ability to borrow up to $304.2 million, of which $179.4 million was outstanding and $1.4 million was utilized as collateral for letters of credit issued to secure municipal deposits.

At June 30, 2024 , we had $54.0 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 ample sources of liquidity to satisfy our short- and long-term liquidity needs as of June 30, 2024 .

While maturities and scheduled amortization of loans and securities are pre dictable sources of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and competition.

At September 30, 2024 , we had the ability to borrow up to $297.9 million, of which $202.7 million was outstanding and $1.2 million was utilized as collateral for letters of credit issued to secure municipal deposits.

At September 30, 2024 , we had $54.0 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 st rategies 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 ample sources of liquidity to satisfy our short- and long-term liquidity needs as of September 30, 2024 .

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, 2024 , cash and cash equivalents totaled $17.6 million.

Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $106.9 million at June 30, 2024 .

At September 30, 2024 , cash and cash equivalents totaled $21.0 million.

Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $108.6 million at September 30, 2024 .

We are committed to maintaining a strong liquidity position.

1 unchanged sentence

We anticipate we will have sufficient funds to meet our current funding commitments.

Certificates of deposit due within one year of June 30, 2024 to taled $464.3 million, or 71.5% of total deposits.

Certificates of deposit due within one year of September 30, 2024 t otaled $439.7 million, or 69.9% 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.

4 unchanged sentences

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, 2024 , 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 B ank 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.

At September 30, 2024 , we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines.

As a result of the Economic Growth, Regulatory Relie f, 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 of June 30, 2024 , the Bank is reporting as a qualifying community bank with a ratio of 13.07%.

As of September 30, 2024 , the Bank is reporting as a qualifying community bank with a ratio of 13.12%.

Substantially all of the Company's assets and liabilities relate to banking activities and are monetary.

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements