Bogota Financial Corp. 10-K

ITEM 8. Financial Statements and Supplementary Data 2025 Auditor firm PCAOB number: 74 Auditor name: S. R. Snodgrass P.C. Auditor location: Cranbury Township, PA 47 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Bogota Financial Corp. Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial condition of Bogota Financial Corp. and subsidiaries (the “Company”) as of December 31, 2025 and 2024; the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows for the years then ended; and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent, with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the Audit Committee and that: (1) relate to accounts or disclosures that are material to the financial statements; and (2) involve our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter, in any way, our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Allowance for Credit Losses (ACL) – Qualitative Factors Description of the Matter The Company’s loan portfolio totaled $650.2 million as of December 31, 2025, and the associated ACL was $2.5 million. As discussed in Notes 1 and 4 to the financial statements, the calculation of the ACL requires significant judgment about the expected future losses, which is based on a base loss projection determined through a historical weighted average loss rate analysis, which is then adjusted for current qualitative conditions, which include reasonable and supportable forecasts. Management applies these qualitative adjustments to the base loss projection to reflect changes in the current and forecasted environment, both internal and external, that are different from the conditions that existed during the historical loss calculation period. The qualitative adjustments include analysis of items related to current economic and forecasted conditions, delinquency statistics, geographic concentrations, and the adequacy of the underlying collateral, the financial strength of the borrower, the results of internal loan reviews, and other relevant factors. We identified these qualitative adjustments within the ACL as critical audit matters because they involve a high degree of subjectivity. While the determination of these qualitative adjustments includes analysis of observable data over the historical loss period, the judgments required to assess the directionality and magnitude of adjustments are highly subjective. Auditing these complex judgments and assumptions involved especially challenging auditor judgment due to the nature of audit evidence and the nature and extent of effort required to address these matters. How We Addressed the Matter in Our Audit The primary procedures we performed to address this critical audit matter included: ● Testing the design, implementation, and operating effectiveness of internal controls over the calculation of the allowance for credit losses, including the accuracy of inputs into significant qualitative factor adjustments. ● Tested the completeness and accuracy of the Company’s watchlist and nonaccrual loan reports. ● Testing the completeness and accuracy of the other significant data points that management uses in their evaluation of significant qualitative adjustments. ● Testing the anchoring calculation that management completes to properly align the magnitude of the adjustments with the Company’s defined peer group historical loss data. ● Evaluating the directional consistency and reasonableness of management’s conclusions regarding basis points applied (whether positive or negative) based on the trends identified in the underlying data. ● Testing the mathematical accuracy of the application of the qualitative adjustments to the loan segments within the ACL calculation. We have served as the Company's auditor since 2021. /s/S.R. Snodgrass, P.C. Cranberry Township, Pennsylvania March 27, 2026 48 Table of Contents BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION December 31, 2025 and 2024 2025 2024 ASSETS Cash and due from banks $ 11,584,648 $ 18,020,527 Interest-bearing deposits in other banks 24,013,947 34,211,681 Cash and cash equivalents 35,598,595 52,232,208 Securities available for sale 158,064,631 140,307,447 Loans, net of allowance $ 2,529,949 and $ 2,620,949 , at December 31, 2025 and 2024, respectively 647,645,607 711,716,236 Premises and equipment, net 4,399,202 4,727,302 Regulatory stock 5,403,900 8,923,000 Accrued interest receivable 4,261,410 4,232,563 Core deposit intangibles 107,604 152,893 Bank owned life insurance 31,774,855 31,859,604 Right-of-use asset 10,265,125 10,776,596 Investment in limited partnership 2,413,320 — Other assets 5,013,251 6,562,035 Total assets $ 904,947,500 $ 971,489,884 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest bearing $ 28,177,516 $ 32,681,963 Interest bearing 624,269,541 609,506,079 Total deposits 652,447,057 642,188,042 FHLB advances-short term 20,000,000 29,500,000 FHLB advances-long term 73,322,132 142,673,182 Advance payments by borrowers for taxes and insurance 2,591,007 2,809,205 Lease liability 10,434,759 10,780,363 Other liabilities 5,244,197 6,249,932 Total liabilities 764,039,152 834,200,724 Stockholders' Equity Preferred stock $ 0.01 par value 1,000,000 shares authorized, none issued and outstanding at December 31, 2025 and 2024 — — Common stock $ 0.01 par value, 30,000,000 shares authorized, 12,925,572 issued and outstanding at December 31, 2025 and 13,059,175 at December 31, 2024 129,255 130,592 Additional Paid-In capital 54,949,369 55,269,962 Retained earnings 92,097,426 90,006,648 Unearned ESOP shares ( 356,188 shares at December 31, 2025 and 382,933 shares at December 31, 2024) ( 4,219,390 ) ( 4,520,594 ) Accumulated other comprehensive loss ( 2,048,312 ) ( 3,597,448 ) Total stockholders' equity 140,908,348 137,289,160 Total liabilities and stockholders' equity $ 904,947,500 $ 971,489,884 See accompanying notes to consolidated financial statements 49 Table of Contents BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF OPERATIONS Years ended December 31, 2025 and 2024 2025 2024 Interest income Loans $ 33,521,481 $ 33,411,221 Securities Taxable 7,932,326 6,888,462 Tax-exempt 11,571 50,892 Other interest-earning assets 1,543,744 1,399,170 Total interest income 43,009,122 41,749,745 Interest expense Deposits 22,454,118 24,584,690 FHLB of New York advances 5,084,182 6,613,845 Total interest expense 27,538,300 31,198,535 Net interest income 15,470,822 10,551,210 Recovery of provision for credit losses ( 130,000 ) ( 148,000 ) Net interest income after recovery of provision for credit losses 15,600,822 10,699,210 Non-interest income Fees and service charges 230,945 228,685 Gain on sale of loans 37,830 31,942 Gain on sale of properties 5,973 9,005,245 Loss on sale of securities - ( 8,930,843 ) Bank owned life insurance 1,436,078 871,753 Other 57,330 141,622 Total non-interest income 1,768,156 1,348,404 Non-interest expenses Salaries and employee benefits 8,499,609 8,750,350 Occupancy and equipment 2,680,587 1,467,517 Federal Deposit Insurance Corporation (“FDIC”) insurance premiums 403,905 424,090 Data processing 1,156,153 1,203,181 Advertising 172,985 371,790 Director fees 536,191 622,799 Professional fees 1,054,456 789,646 Other 792,592 960,230 Total non-interest expenses 15,296,478 14,589,603 Income (loss) before income taxes 2,072,500 ( 2,541,989 ) Income tax benefit ( 18,278 ) ( 371,569 ) Net income (loss) $ 2,090,778 $ ( 2,170,420 ) Earnings (loss) per share - basic $ 0.17 $ ( 0.17 ) Earnings (loss) per share - diluted $ 0.17 $ ( 0.17 ) Weighted average shares outstanding 12,632,118 12,767,410 Weighted average shares outstanding - diluted 12,502,323 12,767,410 See accompanying notes to consolidated financial statements 50 Table of Contents BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, 2025 and 2024 2025 2024 Net income (loss) $ 2,090,778 $ ( 2,170,420 ) Net comprehensive income: Unrealized gain on securities available for sale: 2,918,502 1,727,197 Reclassification of loss on sale of securities - 5,174,027 Unrealized loss transferred from held to maturity - ( 3,236,824 ) Tax effect ( 820,391 ) ( 1,030,063 ) Net of tax 2,098,111 2,634,337 Defined benefit retirement plans: Unrealized gain (loss) arising during the period including changes in assumptions 145,483 ( 98,193 ) Reclassification adjustment for amortization of prior service cost and net (loss) gain included in salaries and employee benefits ( 57,441 ) 11,714 Tax effect, income tax benefit ( 24,749 ) 23,404 Net of tax 63,293 ( 63,075 ) Derivatives, net of tax: Unrealized (loss) gain on derivatives ( 851,673 ) 411,830 Tax effect 239,405 ( 115,766 ) Net of tax ( 612,268 ) 296,064 Total other comprehensive income 1,549,136 2,867,326 Comprehensive income $ 3,639,914 $ 696,906 See accompanying notes to consolidated financial statements 51 Table of Contents BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF EQUITY Years ended December 31, 2025 and 2024 Common Stock Shares Common Stock Paid-in Capital Retained Earnings Unearned ESOP shares Accumulated Other Comprehensive Loss Total Equity Balance January 1, 2024 13,279,230 $ 132,792 $ 56,149,915 $ 92,177,068 $ ( 4,821,798 ) $ ( 6,464,774 ) 137,173,203 Net loss — — — ( 2,170,420 ) — — ( 2,170,420 ) Restricted stock issuance 10,000 — — — — — — Stock based compensation — — 921,273 — — — 921,273 Other comprehensive income — — — — — 2,867,326 2,867,326 Stock purchased and retired ( 230,055 ) ( 2,200 ) ( 1,693,231 ) — — — ( 1,695,431 ) ESOP shares released — — ( 107,995 ) — 301,204 — 193,209 Balance December 31, 2024 13,059,175 $ 130,592 $ 55,269,962 $ 90,006,648 $ ( 4,520,594 ) $ ( 3,597,448 ) $ 137,289,160 Net income — — — 2,090,778 — — 2,090,778 Stock based compensation — — 897,485 — — — 897,485 Other comprehensive income — — — — — 1,549,136 1,549,136 Stock purchased and retired ( 133,603 ) ( 1,337 ) ( 1,125,056 ) — — — ( 1,126,393 ) ESOP shares released — — ( 93,022 ) — 301,204 — 208,182 Balance December 31, 2025 12,925,572 $ 129,255 $ 54,949,369 $ 92,097,426 $ ( 4,219,390 ) $ ( 2,048,312 ) $ 140,908,348 See accompanying notes to consolidated financial statements 52 Table of Contents BOGOTA FINANCIAL CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended December 31, 2025 and 2024 2025 2024 Cash flows from operating activities Net (loss) income $ 2,090,778 $ ( 2,170,420 ) Adjustments to reconcile net income to net cash provided by operating activities Amortization of intangible assets 99,409 ( 7,288 ) Recovery of credit losses ( 130,000 ) ( 148,000 ) Depreciation of premises and equipment 398,468 496,984 Amortization (accretion) of deferred loan (fees) costs, net 179,929 302,034 Amortization of premiums and accretion of discounts on securities, net ( 46,759 ) ( 71,420 ) Deferred income tax benefit expense ( 8,693 ) ( 457,536 ) Gain on sale of loans ( 37,830 ) ( 31,942 ) Proceeds from sale of loans ( 1,932,899 ) ( 1,420,192 ) Origination of loans held for sale 1,970,729 1,452,134 Loss on sale of securities - 8,930,843 Gain on sale of premises and equipment - ( 9,005,245 ) Increase in cash surrender value of bank owned life insurance ( 1,436,078 ) ( 871,753 ) Employee stock ownership plan 208,183 193,210 Stock based compensation 897,485 921,273 Changes in Accrued interest receivable ( 28,847 ) ( 299,778 ) Net changes in other assets 1,322,046 ( 397,027 ) Net changes in other liabilities ( 342,592 ) 24,217 Net cash provided by operating activities 3,203,329 ( 2,559,906 ) Cash flows from investing activities Purchases of securities available for sale ( 60,062,086 ) ( 76,764,024 ) Purchases of securities held to maturity - ( 10,645,873 ) Maturities, calls, and repayments of securities available for sale 45,270,162 21,598,983 Maturities, calls, and repayments of securities held to maturity - 7,486,846 Proceeds from sale of securities - 54,324,194 Proceeds from sale of premises and equipment - 12,063,133 Net decrease (increase) in loans 63,950,167 25,585 Proceeds from sale of loans from portfolio - 2,819,704 Purchase of equity investment ( 2,500,000 ) - Purchases of premises and equipment ( 70,368 ) ( 594,787 ) Purchase of FHLB stock ( 3,656,900 ) ( 7,529,600 ) Redemption of FHLB stock 7,176,000 7,342,700 Net cash provided by investing activities 50,106,975 10,126,861 Cash flows from financing activities Net increase (decrease) in deposits 10,255,031 16,852,360 Net decrease in short-term FHLB advances ( 9,500,000 ) ( 8,000,000 ) Proceeds of long-term FHLB non-repo advances ( 69,354,358 ) 12,503,358 Net increase (decrease) in advance payments from borrowers for taxes and insurance ( 218,197 ) 75,496 Repurchase of common stock ( 1,126,393 ) ( 1,695,432 ) Net cash provided (used in) by financing activities ( 69,943,917 ) 19,735,782 Net increase in cash and cash equivalents ( 16,633,613 ) 27,302,737 Cash and cash equivalents – beginning of year 52,232,208 24,929,471 Cash and cash equivalents – end of year $ 35,598,595 $ 52,232,208 Supplemental cash flow information Income taxes paid $ 100,000 $ 40,000 Interest paid $ 28,095,143 $ 30,745,082 Fair value change in derivatives $ 315,633 $ 411,830 Fair value change in fair value hedges $ ( 1,126,656 ) $ ( 109,594 ) Non-cash investment and financing activities Right of use asset $ 10,265,125 $ 10,522,118 Lease liability $ 10,434,759 $ 10,522,118 Transfer of held to maturity securities to available for sale $ - $ 53,956,431 See accompanying notes to consolidated financial statements 53 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations and Principles of Consolidation : On January 15, 2020, Bogota Financial Corp. (the “Company,” “we” or “our”) became the mid-tier stock holding company for Bogota Savings Bank (the “Bank”) in connection with the reorganization of Bogota Savings Bank into the two -tier mutual holding company structure. The Bank maintains two subsidiaries Bogota Securities Corp, which was formed for the purpose of buying, selling and holding investment securities and Bogota Properties, LLC, which was inactive at December 31, 2025 . The Bank generally originates residential, commercial and consumer loans to, and accepts deposits from, customers in New Jersey. The Bank is also subject to the regulations of, and examination by, certain federal and state regulatory agencies. Bogota Financial Corp. completed its stock offering in connection with the mutual holding company reorganization of Bogota Savings Bank on January 15, 2020. The Company sold 5,657,735 shares of common stock at $ 10.00 per share for gross proceeds of $ 56.6 million. In connection with the reorganization, the Company also issued 263,150 shares of common stock and $ 250,000 in cash to Bogota Savings Bank Charitable Foundation, Inc. and 7,236,640 shares of common stock to Bogota Financial, MHC, its New Jersey-chartered mutual holding company. Reclassifications : Some items in the prior year financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year net income or equity. Earnings per Share: Basic earnings per share (“EPS”) is computed by dividing net income available to common shareholders 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. Diluted EPS is computed using the same method as basic EPS, but also reflects the potential dilution which could occur if stock options shares were exercised and converted into common stock. The potentially dilutive shares would then be included in the weighted average number of shares outstanding for the period using the treasury stock method. For the twelve -month periods ended December 31, 2025 and 2024 , options to purchase 510,119 commo n shares with an exercise price of $ 10.45 were outstanding but were not included in the calculation of diluted EPS because the options were anti-dilutive, meaning the exercise price for such options were higher than the average price for the Company for such period. The following is a reconciliation of the numerators and denominators of the basic earnings per share calculations for the years ended December 31, 2025 and 2024 . For the year ended December 31, 2025 For the year ended December 31, 2024 Net income (loss) $ 2,090,778 $ ( 2,170,420 ) Shares: Weighted average shares outstanding - basic 12,632,118 12,767,410 Weighted average shares outstanding - diluted 12,502,323 12,767,410 Dilutive securities ( 129,795 ) — Earnings (loss) per share - basic $ 0.17 $ ( 0.17 ) Earnings (loss) per share - diluted $ 0.17 $ ( 0.17 ) 54 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Use of Estimates : To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from those estimated. Cash Flows : Cash and cash equivalents include cash and deposits with other banks with original maturities of 90 days or less. Net cash flows are reported for customer loan and deposit transactions and short-term FHLB advances. Interest-Bearing Deposits in Other Banks : Interest-bearing deposits in other banks have original maturities of 90 days or less and are carried at cost. Securities : Debt securities are classified as held to maturity (HTM) and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale (AFS) when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income (loss), net of tax. During 2024, all of the Company's HTM securities were transferred to AFS. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage-backed securities (“MBSs”), where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. AFS debt securities are measured at fair value rather than amortized cost. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either criteria is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit losses. Losses are charged against the allowance when management believes the uncollectibility of an AFS security is confirmed or when either of the criteria regarding intent or requirement to sell is met. As of December 31, 2025 and 2024 , the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and management had the intent and ability to hold to recovery, therefore, an allowance for credit losses was not recorded. Accrued interest receivable on AFS securities is excluded from the estimate of credit losses and is included in Accrued interest receivable on the Consolidated Statements of Financial Condition. At December 31, 2025 and 2024 , accrued interest receivable on AFS securities was $ 886,000 and $ 809,000 , respectively. Loans : Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and an allowance for credit losses. Interest income is accrued on the unpaid principal balance. The Bank originates real estate, commercial and consumer loans. A substantial portion of the loan portfolio is represented by loans in northern New Jersey. The ability of the Bank’s debtors to honor their contracts is dependent upon the real estate values and general economic conditions in this area. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments. 55 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Interest income on real estate, commercial and consumer loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days and still on accrual status include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. A loan is moved to nonaccrual status in accordance with the Bank’s policy, typically after 90 days of non-payment. All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Allowance for Credit Losses - Loans and Leases : The CECL model requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures). The estimate of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considers whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the historical period used. The Company considers future economic conditions and portfolio performance as part of a reasonable and supportable forecast. Portfolio segment is defined as the level at which an entity develops and documents a systematic methodology to determine its allowance for credit losses (“ACL”). The Company has designated six portfolio segments, which are residential, commercial real estate, multi-family, construction, commercial and industrial and consumer. These portfolio segments are further disaggregated into classes, which represent loans and leases of similar type, risk characteristics, and methods for monitoring and assessing credit risk. The Company has minimal history of credit losses and therefore uses the Weighted Average Remaining Maturity (WARM) method for all segments and relies on the use of qualitative factors to determine future credit losses. Accrued interest receivable on loans is excluded from the estimate of credit losses and is included in Accrued interest receivable on the Consolidated Statements of Financial Condition. At December 31, 2025 and 2024 , accrued interest receivable on loans was $ 3.4 million and $ 3.4 million, respectively. The Company considers the impact of current environmental factors at the reporting date that did not exist over the period from which historical experience was used. Relevant factors include, but are not limited to, concentrations of credit risk (geographic, large borrower, and industry), economic trends and conditions, changes in underwriting standards, experience and depth of lending staff, trends in delinquencies, and the amount of criticized loans. The Company also incorporates a one -year reasonable and supportable loss forecast period to account for the effect of forecasted economic conditions and other factors on the performance of the commercial portfolio, which could differ from historical loss experience. The Company performs a quarterly asset quality review, which includes a review of forecasted gross charge-offs and recoveries, non-performing assets, criticized loans and leases, and risk rating migration. The asset quality review is reviewed by management and the results are used to consider a qualitative overlay to the quantitative baseline. After the one -year reasonable and supportable loss forecast period, this overlay adjustment assumes an immediate reversion to historical loss rates for the remaining loan life period. 56 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Company establishes a specific reserve for individually evaluated loans which do not share similar risk characteristics with the loans included in the quantitative baseline. These individually evaluated loans are removed from the pooling approach discussed above for the quantitative baseline, and include non-accrual loans, and other loans as deemed appropriate by management. A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Company elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, the Company records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less cost to sell. Substantially all of the collateral consists of various types of real estate including: residential properties; commercial properties, such as retail centers, office buildings, and lodging; agriculture land; and vacant land. The reserve for unfunded commitments (the “Unfunded Reserve”) represents the expected credit losses on off-balance sheet commitments such as unfunded commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. The Unfunded Reserve is recognized as a liability (other liabilities in the consolidated statements of financial condition), with adjustments to the reserve recognized in other noninterest expense in the consolidated statements of operations. The Unfunded Reserve is determined by estimating future draws and applying the expected loss rates on those draws. Future draws are based on historical averages of utilization rates (i.e., the likelihood of draws taken). To estimate future draws on unfunded balances, current utilization rates are compared to historical utilization rates. If current utilization rates are below historical utilization rates, the rate difference is applied to the committed balance to estimate the future draw. Loss rates are estimated by utilizing the same loss rates calculated for the allowance general reserves. Acquired Loans: Loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased with credit deterioration (“PCD”) loans. The Company evaluated acquired loans for deterioration in credit quality based on, but not limited to, the following: ( 1 ) non-accrual status; ( 2 ) previously a troubled debt restructured designation; ( 3 ) risk ratings of special mention, substandard or doubtful; or ( 4 ) delinquency status. At the acquisition date, an estimate of expected credit losses was made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. For acquired loans not deemed PCD at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as credit loss expense. Residential First Mortgage Loans – Residential first mortgage loans are generally made on the basis of the borrower’s ability to make repayment from his or her employment and other income but are secured by real property whose value tends to be more easily ascertainable. Credit risk for these types of loans is generally influenced by general economic conditions, the characteristics of individual borrowers and the nature of the loan collateral. 57 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Commercial and Multi-Family Real Estate Loans – Commercial and multi-family real estate loans generally have larger balances and involve a greater degree of risk than residential real estate loans, inferring higher potential losses on an individual customer basis. Loan repayment is often dependent on the successful operation and management of the properties and/or businesses occupying the properties, as well as on the collateral securing the loan. Economic events or conditions in the real estate market could have an adverse impact on the cash flows generated by the properties securing the Bank’s commercial real estate loans and on the value of such properties. Construction Loans – Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost and timing of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs proves to be inaccurate, additional funds may be required to be advanced in excess of the amount originally committed to permit completion of the building. If the estimate of value proves to be inaccurate, the value of the building may be insufficient to assure full repayment if liquidation is required. If foreclosure is required on a building before or at completion due to a default, there can be no assurance that all of the unpaid balance of, and accrued interest on, the loan as well as related foreclosure and holding costs will be recovered. Commercial and Industrial Loans - A commercial and industrial loan is a loan to a business rather than a loan to an individual consumer. These short-term loans generally have an interest rate based on the prime rate and are secured by collateral owned by the business requesting the loan. Commercial and industrial loans expose us to additional risks since they typically are made on the basis of the borrower's ability to make repayments from the cash flows of the borrower's business and are secured by non-real estate collateral that may depreciate over time, may be illiquid and may fluctuate in value based on the success of the business, guarantor, or market conditions. Consumer Loans – Consumer loans are passbook loans, which are collateralized by a customer's savings account or certificate of deposit. The amount of a passbook loan is limited to a certain percentage of the customer's savings account or certificate of deposit balance and have an interest rate that is a spread above the stated rate on the collateral account. Mortgage Loan Sales : The Bank has a partnership through the Federal Home Bank of New York (“FHLBNY”) to sell loans within the Mortgage Partnership Finance (“MPF”) Program. The MPF Program gives the Bank another alternative to retaining mortgages in portfolio, which may increase profits through fees earned through the sale of loans. It allows the Bank to be competitive in all the fixed-rate products. In addition, the MPF structure capitalizes on the Bank's credit expertise. MPF combines that expertise with the FHLBNY's expertise in handling interest rate risk. FHLBNY manages the interest rate, the liquidity and the prepayment risks, while the Bank manages the credit and servicing risks. The result involves the member receiving a very competitive price for loans plus fees over time for managing the credit and servicing risks. Loans are sold at origination; gains or losses on the sale of mortgage loans are recognized at the settlement date and are determined by the difference between the net proceeds and the amortized cost. All loans are sold with servicing being retained by the Bank. The outstanding principal balances sold and serviced by the Bank under the program wer e $ 3,417,132 a nd $ 3,550,443 at December 31, 2025 and 2024 , respectively. Under the program, the first layer of losses is paid by the FHLBNY up to 100 basis points of the total funded amount of loans sold. (the “First Loss Account”). The Bank then provides a second loss credit enhancement obligation, which is equivalent to “AA” credit risk less the First Loss Account. Loan losses beyond the first and second layers are absorbed by the FHLBNY. There were no losses as of December 31, 2025 on the loans sold under the program. Late fees and ancillary fees related to loan servicing are not material. Premises and Equipment : Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Building and related components are depreciated using the straight-line method with useful lives ranging from fifteen to 39 years. Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives ranging from one to ten years. Leasehold improvements are amortized over the shorter of the terms of the respective leases or the estimated lives of the improvements. Leases : The Company determines if an arrangement is a lease at inception. The Company's leases primarily relate to real estate property for branches and office space. All the Company's leases are classified as operating leases and the related right-of-use asset ("ROU") and lease liability are disclosed on the Consolidated Statements of Financial Condition. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangements. The calculated amounts of the ROU asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of minimum lease payments. As the Company's leases do not provide an implicit rate, the discount rate used in determining the lease liability for each individual lease is the Company's incremental borrowing rate. The present value of the lease liability may include the impact of options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options provided in the lease terms. Lease expense is recognized on a straight-line basis over the expected lease term, while variable lease payments are recognized as incurred. Lease agreements that include lease and non-lease components, such as common area maintenance charges, are accounted for separately. Investment in Limited Partnership : The Company has an investment in a limited partnership that invests in sale lease back transactions. All the Company's investments in limited partnerships are disclosed on the Consolidated Statements of Financial Condition. 58 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Federal Home Loan Bank ( “ FHLB ” ) Stock : FHLB stock is restricted stock, which is carried at cost, and periodically evaluated for impairment based on ultimate recovery of par value. Federal law requires a member institution of the FHLB to hold stock according to a predetermined formula based on the amount of borrowings held. Dividends are recorded as income on the consolidated statement of income. Bank Owned Life Insurance : The Bank has purchased life insurance policies on certain key employees. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Intangible Assets : Intangible assets, other than goodwill, include core deposit intangibles and mortgage servicing rights ("MSRs"). Core deposit intangibles are a measure of the value of consumer demand and savings deposits acquired in business combinations accounted for as purchases. The core deposit intangibles are being amortized over 10 years using the sum-of-the-years digits method of amortization. MSRs arise from the Company originating certain loans for the express purpose of selling such loans in the secondary market. The Company maintains all servicing rights for these loans. The loans held for sale are carried at lower of cost or market value. Originated MSRs are recorded by allocating total costs incurred between the loans and servicing rights based on their relative fair values. MSRs are amortized in proportion to the estimated servicing income over the estimated life of the servicing portfolio and measured annually for impairment. The recoverability of the carrying value of intangible assets is evaluated on an ongoing basis, and permanent declines in value, if any, are charged to expense. Advertising Costs : Advertising costs are expensed as incurred. Any direct response advertising conducted by the Bank is immaterial and has not been capitalized. Advertising costs are included in “non-interest expenses” in the consolidated statements of operations. Off-Balance-Sheet Financial Instruments : In the ordinary course of business, the Bank enters into off-balance-sheet financial instruments consisting of commitments to extend credit. Such financial instruments are recorded in the consolidated statement of financial condition when funded. Income Taxes : Income tax (benefit) expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Bank had no unrecognized tax positions as of December 31, 2025 or 2024 . The Company recognizes interest and/or penalties related to income tax matters in income tax (benefit) expense. 59 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Retirement Plans : Pension expense is the net of service and interest cost and amortization of gains and losses not immediately recognized. Employee 401 (k) plan expense is the amount of matching and safe harbor contributions. Profit sharing expense is based on the amount of contributions made by the Bank as determined by the Board of Directors. Director’s retirement plan expense allocates the benefits over years of service. Supplemental Retirement Plan expense allocates the benefits over years of service. Stock Based Compensation : Compensation cost is recognized for stock options and restricted stock awards issued to employees and directors, based on the fair value of these awards at the grant date. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of the grant is used for restricted shares. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Comprehensive Income : Comprehensive income consists of net income and other comprehensive (loss) income. Other comprehensive (loss) income includes net unrealized holding gains and losses on securities available for sale and net unrealized gains and losses on the pension plan which are also recognized as separate components of equity and the change in fair value of the Company's swap derivatives. Loss Contingencies : Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Recoveries, including proceeds from insurance claims are evaluated separately from loss contingencies and recognized when realized. Fair Value of Financial Instruments : Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in a separate note. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Operating Segments: The Company’s operations are substantially in the financial services industry and include providing traditional banking and other financial services to its customers. Operating segments are components of a business about which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assessing performance. The Company operates primarily in New Jersey through a single reportable operating segment upon which management makes decisions regarding how to allocate resources and assess performance. While the Company’s chief operating decision maker monitors the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Bank-wide basis. Management continues to evaluate business functions such as the cost of funding loan demand, between the commercial and retail operations of the Bank for separate reporting as facts and circumstances change. At December 31, 2025 , the Company had one reportable operating segment. Derivatives and Hedging Activities: The Company uses derivative financial instruments principally to manage interest rate risk. Certain derivatives are entered into in connection with transactions with commercial customers. Derivatives are not used for speculative purposes. All derivatives are recognized as either assets or liabilities in the Consolidated Statements of Financial Condition, reported at fair value and presented on a gross basis. Until a derivative is settled, a favorable change in fair value results in an unrealized gain that is recognized as an asset, while an unfavorable change in fair value results in an unrealized loss that is recognized as a liability. The Company generally applies hedge accounting to its derivatives used for market risk management purposes. Hedge accounting is permitted only if specific criteria are met, including a requirement that a highly effective relationship exists between the derivative instrument and the hedged item, both at inception of the hedge and on an ongoing basis. Changes in the fair value of effective fair value hedges are recognized in current earnings (with the change in fair value of the hedged asset or liability also recognized in earnings). Changes in the fair value of effective cash flow hedges are recognized in other comprehensive income (loss) until earnings are affected by the variability in cash flows of the designated hedged item. Ineffective portions of hedge results are recognized in current earnings. Changes in the fair value of derivatives for which hedge accounting is not applied are recognized in current earnings. 60 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 The Company formally documents at inception all relationships between the derivative instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transactions. This process includes linking all derivatives that are designated as hedges to specific assets and liabilities, or to specific firm commitments. The Company also formally assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair values or cash flows of the hedged items. If it is determined that a derivative is not highly effective or has ceased to be a highly effective hedge, the Company would discontinue hedge accounting prospectively. Gains or losses resulting from the termination of a derivative accounted for as a cash flow hedge remain in other comprehensive income (loss) and is (accreted) amortized to earnings over the remaining period of the former hedging relationship. Certain derivative financial instruments are offered to certain commercial banking customers to manage their risk of exposure and risk management strategies. 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. In addition, the Company executes interest rate swaps with third parties in order to hedge the interest rate risk of short-term FHLB advances. Segment Reporting : The Company operates one reportable segment of business, “retail banking”. Through its community banking segment, the Company provides a broad range of retail and commercial banking services. The accounting policies of the retail banking segment are the same as those described in the summary of significant accounting policies. The Company's chief operating decision maker ("CODM") is the President, Chief Executive Officer and Director, who decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. Adoption of Accounting Standard: In December 2023, the FASB issued ASU 2023 - 09, “Income Taxes (Topic 740 ), Improvements to Income Tax Disclosures.” ASU 2023 - 09 requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid. The ASU indicates that all entities will apply its guidance prospectively with an option for retroactive application to each period in the financial statements. The guidance will be effective for fiscal years beginning after December 15, 2024, and for interim periods for fiscal years beginning after December 15, 2025, with an allowance for early adoption. The Company adopted this standard in the current year and included the updated disclosures in Note 10 . This update did not have a significant impact on the Company's financial statements. 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 for which an allowance for credit loss has not been recorded at December 31, 2025 and 2024 : Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2025 U.S. government and agency obligations One through five years $ 3,000,000 $ — $ ( 56,319 ) $ 2,943,681 Corporate bonds due in: One through five years 10,662,539 74,584 ( 106,769 ) 10,630,354 Five through ten years 36,076,049 494,579 ( 575,789 ) 35,994,839 Greater than ten years 6,358,703 232,308 - 6,591,011 Municipal obligations due in: Five through ten years 505,672 — ( 78,482 ) 427,190 MBS – residential 89,609,605 696,248 ( 1,637,909 ) 88,667,944 MBS – commercial 14,504,808 — ( 1,695,196 ) 12,809,612 Total $ 160,717,376 $ 1,497,719 $ ( 4,150,464 ) $ 158,064,631 December 31, 2024 U.S. government and agency obligations Less than one year $ 10,000,000 $ — $ ( 55,870 ) $ 9,944,130 One through five years 3,000,000 — ( 151,590 ) 2,848,410 Corporate bonds due in: Less than one year 350,000 1,090 - 351,090 One through five years 9,112,269 83,414 ( 64,547 ) 9,131,136 Five through ten years 25,410,219 202,205 ( 1,389,376 ) 24,223,048 Greater than ten years 4,321,924 202,576 - 4,524,500 Municipal obligations due in: Greater than ten years 506,706 — ( 108,431 ) 398,275 MBS – residential 76,661,752 53,730 ( 2,162,673 ) 74,552,809 MBS – commercial 16,515,823 — ( 2,181,774 ) 14,334,049 Total $ 145,878,693 $ 543,015 $ ( 6,114,261 ) $ 140,307,447 61 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 2 – SECURITIES AVAILABLE FOR SALE (Continued) All of the MBS were issued by the following government sponsored agencies Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National Mortgage Association (“FNMA”) and Government National Mortgage Association (“GNMA”). During the year ended December 31, 2025 , there were no sales of securities available for sale. During the year ended December 31, 2024 the Company so ld 16 securities with a book value of $ 38.2 million and realized losses of $ 5.2 million upon sale. The age of unrealized losses and the fair value of related securities as of December 31, 2025 and 2024 were as follows: Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2025 U.S. government and agency obligations $ — $ - $ 2,943,681 $ ( 56,319 ) $ 2,943,681 $ ( 56,319 ) Corporate bonds 4,481,117 ( 32,181 ) 10,599,624 ( 650,376 ) 15,080,741 ( 682,557 ) Municipal obligations - - 427,190 ( 78,482 ) 427,190 ( 78,482 ) MBS – residential 17,214,292 ( 55,056 ) 12,991,116 ( 1,582,852 ) 30,205,408 ( 1,637,908 ) MBS – commercial 1,315,717 ( 6,872 ) 11,493,894 ( 1,688,325 ) 12,809,611 ( 1,695,197 ) Total $ 23,011,126 $ ( 94,109 ) $ 38,455,505 $ ( 4,056,354 ) $ 61,466,631 $ ( 4,150,463 ) Less than 12 Months More than 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2024 U.S. government and agency obligations $ — $ - $ 12,792,540 $ ( 207,460 ) $ 12,792,540 $ ( 207,460 ) Corporate bonds - - 15,965,261 ( 1,453,923 ) 15,965,261 ( 1,453,923 ) - - 398,275 ( 108,431 ) 398,275 ( 108,431 ) MBS – residential 43,739,606 ( 120,511 ) 11,741,816 ( 2,042,162 ) 55,481,422 ( 2,162,673 ) MBS – commercial - - 14,334,049 ( 2,181,774 ) 14,334,049 ( 2,181,774 ) Total $ 43,739,606 $ (120,511 ) $ 55,231,941 $ (5,993,750 ) $ 98,971,547 $ (6,114,261 ) At December 31, 2025 and 2024 , securities available for sale with a carrying value o f $ 5,361,240 an d $ 5,741,240 , respectively, were pledged to secure public deposits. Unrealized losses on corporate bonds available for sale are not considered to be credit losses because the issuer bonds are of high credit quality, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value was due to changes in interest rates and other market conditions. At December 31, 2025 , 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 December 31, 2025 . As of December 31, 2025 and 2024 , no ACL was required on available-for-sale securities. 62 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 3 – INVESTMENT IN LIMITED PARTNERSHIP At December 31, 2025, the Company held a $ 2.4 million investment in a limited partnership, which is part of a $ 10 million commitment which represents 11.5 % ownership in the entity after commitment. The fund invests in sale leaseback transactions. As of December 31, 2025, the Company had a loss of $ 87,000 from this investment. 63 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 64 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 4 – LOANS Loans are summarized as follows at December 31, 2025 and 2024 : December 31, December 31, 2025 2024 Real estate: Residential First Mortgage $ 443,894,498 $ 472,747,542 Commercial Real Estate 121,960,681 118,008,866 Multi-Family Real Estate 58,944,579 74,152,418 Construction 22,046,399 43,183,657 Commercial and Industrial 3,211,338 6,163,747 Consumer 118,061 80,955 Total loans 650,175,556 714,337,185 Allowance for credit losses ( 2,529,949 ) ( 2,620,949 ) Net loans $ 647,645,607 $ 711,716,236 At December 31, 2025 and 2024 , deferred loan fee s were $ 2,287,876 and $2 ,496,364 respectively, which are included in the carrying amount of the loans presented in the above table. The Bank has granted loans to executive officers and directors of the Bank. At December 31, 2025 and 2024 , such loans totaled $ 2,007,102 and $2,256 ,911, respectively. 2025 2024 Outstanding, January 1, $ 2,256,911 $ 1,610,688 New loans - 725,668 Loan repayments ( 249,809 ) ( 79,445 ) Outstanding, December 31, $ 2,007,102 $ 2,256,911 65 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 4 - LOANS (Continued) The following tables present the activity in the allowance for credit losses by portfolio segments for the years ended December 31, 2025 and 2024 : Residential First Mortgage Commercial Real Estate Multi-Family Real Estate Construction Commercial & Industrial Consumer Total December 31, 2025 Allowance for credit losses: Beginning balance $ 1,680,949 $ 508,000 $ 289,000 $ 123,000 $ 20,000 $ — $ 2,620,949 Provision for credit (recoveries) losses ( 63,000 ) 78,000 ( 48,000 ) ( 54,000 ) ( 4,000 ) — ( 91,000 ) Loans charged-off — — — — — — — Recoveries — — — — — — — Total ending allowance balance $ 1,617,949 $ 586,000 $ 241,000 $ 69,000 $ 16,000 $ — $ 2,529,949 Residential First Mortgage Commercial Real Estate Multi-Family Real Estate Construction Commercial & Industrial Consumer Total December 31, 2024 Allowance for credit losses: Beginning balance $ 1,851,969 $ 437,180 $ 317,300 $ 157,500 $ 22,000 $ — $ 2,785,949 Provision for credit losses (recoveries) ( 171,020 ) 70,820 ( 28,300 ) ( 34,500 ) ( 2,000 ) — ( 165,000 ) Loans charged-off — — — — — — — Recoveries — — — — — — — Total ending allowance balance $ 1,680,949 $ 508,000 $ 289,000 $ 123,000 $ 20,000 $ — $ 2,620,949 The provision fluctuations during the years ended December 31, 2025 and 2024 were due to increases or decreases in loan balances in different loan types, economic conditions and changes in asset quality. 66 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 4 – LOANS (Continued) Collateral-dependent loans individually evaluated with the ACL by collateral type were as follows at December 31, 2025 and 2024 : December 31, 2025 December 31, 2024 Portfolio segment Real estate Other Real estate Other Residential First Mortgage $ 2,417,596 $ — $ 1,863,957 $ — Commercial Real Estate — — 1,205,025 — Multi-Family Real Estate — — — — Construction 10,893,713 — 10,893,713 — Commercial and Industrial — — — — Other Consumer — — — — $ 13,311,309 $ — $ 13,962,695 $ — 67 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 4 - LOANS (Continued) No nonaccrual loans had specific reserves as of December 31, 2025 and the Bank had no other real estate owned at either December 31, 2025 or December 31, 2024 . The following table presents the recorded investment in nonaccrual and loans past due 90 days or more and still on accrual by portfolio segment as of December 31, 2025 and 2024 : Nonaccrual loans beginning of period Nonaccrual loans end of period Nonaccrual with no Allowance for Credit Loss Loans Past Due 90 Days or More Still Accruing December 31, 2025 Residential First Mortgage $ 1,863,957 $ 2,417,596 $ 2,417,596 $ — Commercial Real Estate 1,205,025 — — — Construction 10,893,713 10,893,713 10,893,713 — Consumer — — — — Total $ 13,962,695 $ 13,311,309 $ 13,311,309 $ — Nonaccrual loans beginning of period Nonaccrual loans end of period Nonaccrual with no Allowance for Credit Loss Loans Past Due 90 Days or More Still Accruing December 31, 2024 Residential First Mortgage $ 1,432,072 $ 1,863,957 $ 1,863,957 $ — Commercial Real Estate $ 450,392 1,205,025 1,205,025 — Construction 10,893,713 10,893,713 10,893,713 — Consumer — — — — Total $ 12,776,177 $ 13,962,695 $ 13,962,695 $ — 68 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 4 - LOANS (Continued) The following tables present the aging of the recorded investment in past due loans as of December 31, 2025 and 2024 , by class of loans: 30 – 59 Days Past Due 60 – 89 Days Past Due Greater than 89 Days Past Due Total Past Due Loans Not Past Due Total December 31, 2025 Residential first mortgage $ — $ 762,980 $ 1,467,950 $ 2,230,930 $ 441,663,568 $ 443,894,498 Commercial real estate — 13,682,575 — 13,682,575 108,278,106 121,960,681 Multi-family real estate — 106,687 — — 58,944,579 58,944,579 Construction — — 10,893,713 10,893,713 11,152,686 22,046,399 Commercial & Industrial — — — — 3,211,338 3,211,338 Consumer — — — — 118,061 118,061 Total $ — $ 14,552,242 $ 12,361,663 $ 26,807,218 $ 623,368,338 $ 650,175,556 30 – 59 Days Past Due 60 – 89 Days Past Due Greater than 89 Days Past Due Total Past Due Loans Not Past Due Total December 31, 2024 Residential first mortgage $ 119,309 $ 1,607,835 $ 513,297 $ 2,240,441 $ 470,507,101 $ 472,747,542 Commercial real estate — — 1,205,025 1,205,025 116,803,841 118,008,866 Multi-family real estate — — — — 74,152,418 74,152,418 Construction — — 10,893,713 10,893,713 32,289,944 43,183,657 Commercial & Industrial — — — — 6,163,747 6,163,747 Consumer — — — — 80,955 80,955 Total $ 119,309 $ 1,607,835 $ 12,612,035 $ 14,339,179 $ 699,998,006 $ 714,337,185 Loans greater than 89 days past due are considered to be non-performing. Credit Quality Indicators The Bank categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Bank analyzes loans individually by classifying the loans as to credit risk. Commercial and multi-family real estate, commercial and industrial and construction loans are graded on an annual basis. Residential real estate and consumer loans are primarily evaluated based on performance. Refer to the table on the prior page for the aging of the recorded investment of these loan segments. The Bank uses the following definitions for risk ratings: Special Mention – Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date. Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. 69 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 4 – LOANS (Continued) Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans not meeting the criteria above are considered to be Pass rated loans. Based on the most recent analysis performed as of December 31, 2025 and 2024 , the risk category of loans by class is as follows: Term Loans by Origination Year Balance at December 31, 2025 2025 2024 2023 2022 2021 Prior Revolving Loans Totals Residential First Mortgage Pass $ 8,300,835 $ 26,483,619 $ 3,226,455 $ 98,091,242 $ 30,149,035 $ 126,475,739 $ 148,749,978 $ 441,476,903 Special Mention — — — 335,091 — 762,663 845,254 1,943,008 Substandard — — — — — 156,969 317,618 474,587 Doubtful — — — — — — — — Total 8,300,835 26,483,619 3,226,455 98,426,333 30,149,035 127,395,371 149,912,850 443,894,498 Gross charge-offs by vintage — — — — — — — — Commercial Real Estate Pass 540,696 1,125,536 — 2,919,030 — 25,722,648 91,652,771 121,960,681 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total 540,696 1,125,536 — 2,919,030 — 25,722,648 91,652,771 121,960,681 Gross charge-offs by vintage — — — — — — — — Multi-Family Real Estate Pass — — — 2,157,087 — 2,739,832 54,047,660 58,944,579 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total — — — 2,157,087 — 2,739,832 54,047,660 58,944,579 Gross charge-offs by vintage — — — — — — — — Construction Pass — — — — — — 11,152,686 11,152,686 Special Mention — — — — — — — — Substandard — — — — — — 10,893,713 10,893,713 Doubtful — — — — — — — — Total — — — — — — 22,046,399 22,046,399 Gross charge-offs by vintage — — — — — — — — Commercial and Industrial Pass 22,757 1,820,820 152,949 — 0 119,842 1,094,970 3,211,338 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total 22,757 1,820,820 152,949 — 0 119,842 1,094,970 3,211,338 Gross charge-offs by vintage — — — — — — — — Consumer Pass — — — — — — 118,061 118,061 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total — — — — — — 118,061 118,061 Gross charge-offs by vintage — — — — — — — — Total loans $ 8,864,288 $ 29,429,975 $ 3,379,404 $ 103,502,450 $ 30,149,035 $ 155,977,693 $ 318,872,711 $ 650,175,556 Term Loans by Origination Year Balance at December 31, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans Totals Residential First Mortgage Pass $ 26,742,846 $ 20,620,971 $ 102,163,479 $ 31,658,834 $ 25,961,474 $ 118,351,367 $ 145,384,614 $ 470,883,585 Special Mention — — — — 186,177 593,420 598,461 1,378,058 Substandard — — — — — 146,730 339,169 485,899 Doubtful — — — — — — — — Total 26,742,846 20,620,971 102,163,479 31,658,834 26,147,651 119,091,517 146,322,244 472,747,542 Gross charge-offs by vintage — — — — — — — — Commercial Real Estate Pass 14,935,535 11,625,202 5,363,747 2,030,427 42,533,113 38,696,841 1,618,976 116,803,841 Special Mention — — — — — 754,633 — 754,633 Substandard — — — — — 450,392 — 450,392 Doubtful — — — — — — — — Total 14,935,535 11,625,202 5,363,747 2,030,427 42,533,113 39,901,866 1,618,976 118,008,866 Gross charge-offs by vintage — — — — — — — — Multi-Family Real Estate Pass — — 2,262,457 — — 1,909,140 69,980,821 74,152,418 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total — 0 2,262,457 0 — 1,909,140 69,980,821 74,152,418 Gross charge-offs by vintage — — — — — — — — Construction Pass — — — — — — 32,289,944 32,289,944 Special Mention — — — — — — — — Substandard — — — — — — 10,893,713 10,893,713 Doubtful — — — — — — — — Total — — — — — — 43,183,657 43,183,657 Gross charge-offs by vintage — — — — — — — — Commercial and Industrial Pass 2,380,140 196,286 — — 311,422 — 3,275,899 6,163,747 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total 2,380,140 196,286 — 0 311,422 — 3,275,899 6,163,747 Gross charge-offs by vintage — — — — — — — — Consumer Pass — — — — — — 80,955 80,955 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total — — — — — — 80,955 80,955 Gross charge-offs by vintage — — — — — — — — Total loans $ 44,058,521 $ 32,442,459 $ 109,789,683 $ 33,689,261 $ 68,992,186 $ 160,902,523 $ 264,462,552 $ 714,337,185 70 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 5 – PREMISES AND EQUIPMENT During December 2024, the Bank entered into a sale-leaseback transaction whereby the Bank sold three of its branch offices resulting in a $ 9.0 million pre-tax gain. Subsequently, the Bank realized a pre-tax loss of $ 8.9 million on the sale of approximately $ 66.0 million in amortized cost ($ 57.1 million in market value) of securities with a weighted average life of approximately 5.5 years and a weighted average yield of 1.89 %. The Bank reinvested $ 32.7 million of these proceeds into securities with a weighted average life of approximately 29.6 years and a weighted average yield of 5.60 %. Premises and equipment consists of the following at December 31, 2025 and 2024 : 2025 2024 Land $ 1,531,700 $ 1,531,700 Buildings and improvements 4,393,066 4,349,785 Furniture, fixtures and equipment 3,747,813 3,763,755 9,672,579 9,645,240 Accumulated depreciation ( 5,273,377 ) ( 4,917,938 ) Premises and equipment, net $ 4,399,202 $ 4,727,302 Depreciation expense wa s $ 398,469 and $ 496,984 for the years ended December 31, 2025 and 2024 , respectively. NOTE 6 – LEASES The Company determines if an arrangement is a lease at inception. Topic 842 requires lessees to recognize a right-of-use asset and a lease liability, measured at the present value of the future minimum lease payments, at the lease commencement date. The calculated amount of the right-of-use asset and lease liabilities are impacted by the length of the lease term and the discount rate used to calculate the present value of minimum lease payments. At December 31, 2025 and 2024 , the right of use asset was $ 10.3 million and $ 10.8 million, respectively. The lease liability at December 31, 2025 and 2024 , was $ 10.4 million and $ 10.8 million, respectively. At December 31, 2025 and 2024 , the weighted average remaining lease term for operating lease s was 13.9 years and 14.9 years, resp ectively, and the weighted average discount rate used in the measurement of operating lease liabilities wa s 7.37 % for both years. The Company elected to account for the lease and non-lease components separately since such amounts are readily determinable under the Company's lease contracts. Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are recognized as incurred. Variable lease payments include common area maintenance charges, real estate taxes, repairs and maintenance costs and utilities. Operating and variable lease expenses are recorded in occupancy expense in the Consolidated Statements of Income. During the years ended December 31, 2025 and 2024 , operating and variable lease expenses totaled approximatel y $ 1.5 million for both years and $ 1.1 million was paid in cash for the lease payments. The new leases added in 2024, were as a result of the sale-leaseback transaction with an unrelated party that was completed in December 2024 which is discussed in Note 5. There were no sale and leaseback transactions, leveraged leases or lease transactions with related parties during the years ended December 31, 2025. At December 31, 2025 , the Company had no leases which had not yet commenced. The following table summarizes lease payment obligations for each of the next five years and thereafter as follows: 2026 $ 1,111,379 2027 1,133,798 2028 1,134,533 2029 1,119,830 2030 1,192,727 Thereafter 11,364,838 $ 17,057,105 Impact of present discount value ( 6,622,346 ) Present value of net future minimum lease payments $ 10,434,759 NOTE 7 – INTANGIBLE ASSETS Core deposit intangible carrying amounts were $ 107,604 for t he year ended December 31, 2025 . Core deposit accumulated amortization and amortization expense total ed $ 292,397 and $ 45,289 , respecti vely, for the year ended December 31, 2025 . Core deposit intangible carrying amounts were $ 152,893 for the year ended December 31, 2024 . Core deposit accumulated amortization and amortization expense totaled $ 247,107 and $ 53,223 respectively, for the year ended December 31, 2024 . Core deposit intangible assets are amortized to their estimated residual values over their expected useful lives, commonly ten years. The estimated aggregate future amortization expense for core deposit intangible assets as of December 31, 2025 , was as follows: 2026 $ 37,355 2027 29,422 2028 21,488 2029 13,554 2030 5,620 Thereafter 165 $ 107,604 71 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 8 – DEPOSITS The following table sets forth the distribution of total deposit accounts, by account type, and the weighted average rate paid at the dates indicated. At December 31, 2025 2024 Amount Percent Average Rate Amount Percent Average Rate Noninterest bearing demand accounts $ 28,177,516 4.32 % — % $ 32,681,963 5.09 % — % NOW accounts 65,532,122 10.04 2.76 55,378,051 8.62 2.53 Money market accounts 10,244,512 1.57 0.44 13,996,460 2.18 0.58 Savings accounts 54,558,439 8.36 2.13 46,851,793 7.30 1.90 Certificates of deposit 493,934,468 75.70 3.75 493,279,775 76.81 4.37 Total $ 652,447,057 100.00 % 3.30 % $ 642,188,042 100.00 % 3.73 % The aggregate amount of certificates of deposit with a minimum denomination of $250,000 was approximatel y $ 198,957,000 an d $ 186,585,000 at December 31, 2025 and 2024 , respectively. Insiders of the Bank ha ve deposits totaling approximately $1 ,561,000 and $ 2,325,000 at December 31, 2025 and 2024 , respectively. The Bank had approximately $ 109,749,000 an d $ 101,561,000 of brokered deposits at December 31, 2025 and 2024 , respectively, which were primarily included in certificate of deposit accounts. The scheduled maturities of certificates of deposits at December 31, 2025 are as follows: 2026 $ 441,276,764 2027 40,258,344 2028 8,842,398 2029 1,255,732 2030 2,301,230 $ 493,934,468 NOTE 9 – ADVANCES FROM THE FEDERAL HOME LOAN BANK ( “ FHLB ” ) OF NEW YORK Advances that mature within one year as of December 31, 2025 totaled $ 85.7 million with a weighted average interest rate of 4.29 %. Advances that matured within one year as of December 31, 2024 totaled $ 95.3 million with a weighted average interest rate of 4.53 %. Advances that mature in greater than one year at December 31, 2025 and 2024 were as follows: Weighted Average Rate at December 31, 2025 2025 2024 Amortizing: Maturing in: 2026 0.80 % $ 678,275 $ - 2027 - 1,688,930 2028 5.00 % 7,643,857 10,136,628 2029 — — — 2030 — — — 4.66 % $ 8,322,132 $ 11,825,558 Non-repo advances Maturing in: 2025 — $ — $ — 2026 4.44 % 65,000,000 65,000,000 2027 — — — 4.44 % $ 65,000,000 $ 65,000,000 72 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 9 – ADVANCES FROM THE FEDERAL HOME LOAN BANK ( “ FHLB ” ) OF NEW YORK (Continued) At December 31, 2025 , secur ities available for sale with a carrying amount of $ 46,534 w ere pledged to secure repurchase agreements. At December 31, 2024 , secur ities held to maturity and available for sale with a carrying amount of $ 12,881,892 w ere pledged to secure repurchase agreements. Change in the fair value of pledged collateral may require the Bank to pledge additional securities. Non-repo and amortizing advances are secured by the FHLB stock owned by the Bank, and a blanket assignment of qualifying loans and securities at December 31, 2025 and 2024 amounted to $ 232,839,835 a nd $ 280,387,637 , respectively. The Bank had available additional borrowing capaci ty of $ 136,555,000 and $ 105,111,000 with the FHLB as of December 31, 2025 and 2024 , respectively. The Bank also had outstanding lines of cred it of $ 54,000,000 and $ 54,000,000 with four cor respondent banks as of December 31, 2025 and 2024 , respectively. There were no outstanding balances against these lines as of December 31, 2025 or 2024 . Payments over the next five years are as follows : 2026 $ 85,678,275 2027 - 2028 7,643,857 2029 - 2030 - Total $ 93,322,132 NOTE 10 – INCOME TAXES Income tax (benefit) expense was as follows: 2025 2024 Current expense Federal $( 36,412 ) $ — State 26,827 85,967 ( 9,585 ) 85,967 Deferred benefit Federal 114,438 ( 372,918 ) State ( 123,131 ) ( 84,618 ) ( 8,693 ) ( 457,536 ) Total income benefit $ ( 18,278 ) $ ( 371,569 ) Total income tax benefit expense differed from the amounts computed by applying the federal income tax rat e of 21 % to i ncome before income taxes as a result of the following for the years ended December 31, 2025 and 2024 : 2025 % of Pretax income 2024 % of Pretax income Expected income tax expense at federal tax rate $ 435,225 21 % $( 533,818 ) 21 % Increase (decrease) in taxes resulting from: State income tax, net of federal income tax effect* ( 45,308 ) - 2 % 1,067 0 % Bank Owned Life Insurance ( 301,576 ) - 15 % ( 183,068 ) 7 % Tax exempt interest, net ( 2,430 ) 0 % ( 6,423 ) 0 % Stock equity plans 42,331 0 % 55,627 - 2 % Change in valuation allowance 14,407 15 % 255,424 - 10 % Other, net ( 160,927 ) - 8 % 39,622 - 7 % $ ( 18,278 ) - 1 % $ ( 371,569 ) - 15 % 73 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 10 – INCOME TAXES (Continued) Year-end deferred tax assets and liabilities were due to the following: 2025 2024 Deferred tax assets: Allowance for credit losses $ 711,169 $ 770,200 Deferred compensation 818,245 896,378 Nonaccrual interest 946,123 680,269 Stock equity plans 425,626 358,431 Federal and NJ NOL carryforward 368,415 748,903 Charitable foundation contribution - 313,209 Cash flow hedges 56,314 - Net unrealized gain on securities available for sale 745,687 1,566,078 Other 596,572 526,457 4,668,151 5,859,925 Deferred tax liabilities: Loan fees/costs 982,848 1,095,311 Purchase accounting 81,840 97,346 Cash flow hedges - 183,092 Other - - 1,064,688 1,375,749 Valuation allowance ( 194,448 ) ( 502,868 ) Net deferred tax asset $ 3,409,015 $ 3,981,308 For the period ending December 31, 2025, there was a valuation allowance of $ 193,000 against deferred assets related to an outstanding insurance claim and capital loss carryforward. Included in retained earnings at December 31, 2025 and 2024 was approxi mately $ 4,609,000 in ba d debt reserves for which no deferred income tax liabilities have been recorded. The amount represents allocations of income to bad debt deductions for tax purposes only. Reduction of these reserves for purposes other than tax bad-debt losses would create income for tax purposes only, which would be subject to the then current corporate income tax rate. There were no unrecognized tax benefits at December 31, 2025 or 2024 . The Bank does not expect the total amount of unrecognized tax benefits to significantly increase or decrease in the next twelve months. There was no material interest or penalties recorded in the income statement or accrued during the years ended December 31, 2025 or 2024 . The Bank is subject to U.S. federal income tax as well as income tax of the State of New Jersey. The Bank is no longer subject to federal and state examination by taxing authorities for years before 2022 and 2021, respectively. NOTE 11 – STOCK BASED COMPENSATION The Company maintains the Bogota Financial Corp. 2021 Equity Incentive Plan (the "2021 Plan"), which provides for the issuance of up to 902,602 shares ( 257,887 restricted stock awards and 644,718 stock options) of Bogota Fin ancial Corp. common stock. On September 2, 20 21, 226,519 sh ares of restricted stock were awarded, with a grant date fair value of $ 10.45 per share. On February 28, 2024, 10,000 shares of restricted stock were awarded, with a grant date fair value of $ 7.80 per share. To fund the grant of restricted common stock, the Company issued shares from authorized but unissued shares. Restricted shares granted under the 2021 Plan vest in equal installments, over the service period of five years, beginning one year from the date of grant. Management recognizes compensation expense for the fair value of restricted shares on a straight-line basis over the requisite service period. During the twelve months ended December 31, 2025 and December 31, 2024 , $453 ,000 and $507 ,000 of expense was recognized in regard to these awards, respectively. The expected future compensati on expense related to the 50,503 non-vested restricted shares outstanding at December 31, 2025 was approximately $ 344,000 over a weighted average period of 1.28 years. 74 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 11 – STOCK BASED COMPENSATION (Continued) The following is a summary of the Company's restricted stock activity during the twelve months ended December 31, 2025 : Number of Restricted Shares Weighted Average Grant Date Fair Value Outstanding, January 1, 2025 94,607 $ 10.45 Granted - - Vested ( 44,304 ) 10.45 Forfeited - 10.45 Outstanding, December 31, 2025 50,303 $ 10.45 On September 2, 2021, options to purchase 523,619 shares of Company common stock were awarded, with a grant date fair value of $ 4.37 per option. Stock options granted under the 2021 Plan vest in equal installments over the service period of five years beginning one year from the date of grant. Stock options were granted at an exercise price of $ 10.45 , which represents the fair value of the Company's common stock price on the grant date based on the closing market price, and have an expiration period of 10 years. Management recognizes expense for the fair value of these awards on a straight-line basis over the requisite service period. During the twelve months ended December 31, 2025 and December 31, 2024 approximately $ 444,000 and $ 445,000 in expense was recognized in regard to these awards, respectively. The expected future compensation expense related to th e 101,743 non-v ested options outstanding at December 31, 2025 was $ 779,000 over the weighted average remaining vesting period of 0.67 years. The following is a summary of the Company's option activity during the twelve months ended December 31, 2025 : Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding, January 1, 2025 510,119 $ 10.45 7.7 $ — Granted - Forfeited - 10.45 Outstanding, December 31, 2025 510,119 10.45 7.7 - Options exercisable at December 31, 2025 496,619 $ — 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. 75 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 12 – DERIVATIVES AND HEDGING ACTIVITES Interest Rate Swaps . At December 31, 2025 , the Company had six cash flow interest rate swaps with notional amounts of $ 85.0 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. The Company entered into the swaps to protect net interest margin in a rising rate environment. 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 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. 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 operations. At both December 31, 2025 and December 31, 2024 , the Company had no back-to-back interest rate swaps in place with commercial banking customers. 76 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 12 – DERIVATIVES AND HEDGING ACTIVITES (Continued) 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 December 31, 2025 : December 31, December 31, 2025 2024 Asset Derivative Asset Derivative Hedge Type Consolidated Statements of Financial Condition Fair Value Fair Value Interest rate swaps Cash Flow Other (Liabilities) Assets $ ( 200,334 ) $ 651,340 Interest rate swaps Fair Value Other (Liabilities) Assets ( 165,389 ) 109,594 Interest rate swaps Fair Value Loans, net 232,460 ( 83,173 ) Total derivative instruments $ ( 133,263 ) $ 677,761 For the twelve months ended December 31, 2025 , changes in fai r value of $ 612,268 were recorded in other comprehensive income, net of tax, for changes in fair value of cash flow hedges. At December 31, 2025 , accrued interest was $ 13,000 . During the 12 months ended December 31, 2025 and 2024, the Company recognized $ 644,000 and $ 1.5 million as reductions to interest expense on interest rate swaps, respectively. For the twelve months ended December 31, 2024 , changes in fair value of $ 411,830 were recorded in other comprehensive income, net of tax, for changes in fair value of interest rate swaps with third parties. At December 31, 2024 , accrued interest was $ 122,000 . 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. NOTE 13 – BENEFIT PLANS 401 (k) Plan : The Bank has a 401 (k) retirement plan covering substantially all employees. The Bank matches 100 % of contributions up to the first 6 % of salary that the employee defers to the retirement plan. The Bank also contributes a safe harbor contribution of 3 % of the employee’s salary. In addition, on an annual basis, the Board of Directors may elect to make discretionary employer contributions. Bank contributions to the plan for the years ended December 31, 2025 and 2024 were $ 399,000 an d $ 416,000 , respectively. Directors ’ Retirement Plan : The Bank has an unfunded, non-qualified pension plan (the “Plan”) to provide post-retirement benefits to each non-employee director of the Bank. The Monthly Retirement Benefit is 100 % of a director's average annual retainer paid over a three -year period ( not necessarily consecutive) during which the highest annual retainer was received and payable for the same number of months the director served on the Board, up to a period of 120 months. The measurement dates used in the Plan valuations were December 31 for plan years 2025 and 2024 , respectively. The following table sets forth the Plan’s funded status at December 31, 2025 and 2024 : 2025 2024 Projected benefit obligation - beginning $ 2,179,442 $ 2,274,809 Service cost 2,477 48,297 Interest cost 111,470 106,145 Actuarial gain 22,799 ( 57,817 ) Annuity payments ( 249,249 ) ( 191,992 ) Projected benefit obligation – ending 2,066,939 2,179,442 Changes in Plan assets Employer contributions 249,249 191,992 Annuity payments ( 249,249 ) ( 191,992 ) Funded status and accrued pension cost included in other liabilities $ 2,066,939 $ 2,179,442 77 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 13 – BENEFIT PLANS (Continued) Amounts recognized in accumulated other comprehensive income at December 31 consist of: 2025 2024 Net actuarial (loss) gain $ 22,799 $ ( 57,817 ) Prior service cost ( 30,021 ) ( 7,206 ) $ ( 7,222 ) $ ( 65,023 ) Components of net periodic benefit cost and other amounts recognized in other comprehensive income: 2025 2024 Service cost $ 2,477 $ 48,297 Interest cost 111,470 106,145 Amortization of prior service cost ( 35,595 ) 11,714 Net periodic benefit cost 78,352 166,156 Net (gain) loss 22,799 ( 57,817 ) Amortization of prior service cost 35,595 ( 11,714 ) Total recognized in other comprehensive (loss) income 58,394 ( 69,531 ) Total recognized in net periodic benefit cost and other comprehensive loss $ 136,746 $ 96,625 Assumptions Weighted-average assumptions used to determine pension benefit obligations at year end: 2025 2024 Discount rate 5.30 % 5.40 % 78 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 13 – BENEFIT PLANS (Continued) Weighted-average assumptions used to determine net periodic pension cost: 2025 2024 Discount rate 5.40 % 5.40 % Amortization period (years) 7.84 8.82 The Monthly Retirement Benefit was changed from 100 % of a director's average annual retainer paid over a three -year period ( not necessarily consecutive) during which the highest annual retainer was received and payable for the same number of months the director served on the Board, up to a period of 120 months to be 15 % of the final three -year average annual compensation paid in twelve equal installments, up to a period of 120 months. The change in the Monthly Retirement Benefit had no material change on the financial statements. For the year ended December 31, 2026 , the Bank expects to contribu te $ 258,506 to the Plan. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as of year ending December 31: 2026 $ 258,506 2027 235,905 2028 235,905 2029 235,905 2030 235,905 2031-2032 322,996 Employee Stock Ownership Plan ( “ ESOP ” ) : Effective upon the consummation of the Bank's reorganization in January 2020, an ESOP was established for all eligible employees. The ESOP used $ 6.0 million in proceeds from a twenty -year term loan obtained from the Company to purchase 515,775 shares of Company common stock. The term loan principal is payable in installments through January 2039. Interest on the term loan is based on a floating rate that was 7.50 % as of December 31, 2025 . Each year, the Bank makes discretionary contributions to the ESOP, which are equal to principal and interest payments required on the term loan. Shares purchased with the loan proceeds were initially pledged as collateral for the term loan and are held in a suspense account for future allocation among participants. Contributions to the ESOP and shares released from the suspense account are allocated among the participants on the basis of compensation, as described by the ESOP, in the year of allocation. The ESOP shares pledged as collateral are reported as unearned ESOP shares in the consolidated statements of financial condition. As shares are committed to be released from collateral, the Bank reports compensation expense equal to the average market price of the shares during the year, and the shares become outstanding for basic net income per common share computations. ESOP compensation expense for the year ended December 31, 2025 and 2024 was $ 202,182 and $ 193,209 , respectively. 79 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 13 – BENEFIT PLANS (Continued) The ESOP shares were as follows: 2025 2024 Allocated shares 159,587 132,842 Unearned shares 356,188 382,933 Total ESOP shares 515,775 515,775 Fair value of unearned ESOP shares $ 3,009,789 $ 2,871,998 Supplemental Executive Retirement Plan ( “ SERP ” ) : In 2014, the Bank adopted an unfunded, non-qualified Supplemental Executive Retirement Plan (“SERP”) for the benefit of its senior officers. On May 20, 2016, the SERP was amended and restated as of January 1, 2016. The SERP provides the Bank with the opportunity to supplement the retirement income of the President and CEO to achieve equitable wage replacement at retirement. As of December 31, 2025 , the accrued SERP obligation was $ 840,059 . The expense w as $ 25,000 during 2025 . At December 31, 2025 , the amount recognized in accumulated other comprehensive gain was $ 24,757 . As of December 31, 2024 , the accrued SERP obligation was $ 922,384 . T he expense was a benefit of $39 ,000 during 2024 . At December 31, 2024 , the amount recognized in accumulated other comprehensive loss was $ 14,392 . NOTE 14 – REGULATORY CAPITAL MATTERS Banks are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. A capital conservation buffer of 2.5 %, which was fully phased on January 1, 2019 resulted in the Bank effectively having the following minimum capital to risk-weighted assets ratios: a) 7.0 % based on CET1; b) 8.5 % based on tier 1 capital; and c) 10.5 % based on total regulatory capital. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Failure to meet capital requirements can initiate regulatory action. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2021 and 2020, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. In accordance with the Economic Growth, Regulatory Relief, and Consumer Protection Act, the federal banking agencies adopted, effective January 1, 2020, a final rule whereby financial institutions and financial institution holding companies that have less than $10 billion in total consolidated assets and meet other qualifying criteria, including a leverage ratio of greater than 9% (“qualifying community banking organizations”), are eligible to opt into a community bank leverage ratio (“CBLR”) framework. Qualifying community banking organizations that elect to use the CBLR framework and that maintain a leverage ratio of greater than 9% are considered to have satisfied the generally applicable risk-based and leverage capital requirements in the agencies’ capital rules and will be considered to have met the well capitalized ratio requirements under the PCA statutes. 80 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 14 – REGULATORY CAPITAL MATTERS (Continued) The agencies reserved the authority to disallow the use of the CBLR framework by a financial institution or holding company, based on the risk profile of the organization. The Bank elected to adopt the CBLR framework. As a qualifying community banking organization, the Company and the Bank may opt out of the CBLR framework in any subsequent quarter by completing its regulatory agency reporting using the traditional capital rules. The Bank excludes accumulated OCI components from Tier 1 and Total regulatory capital. The Bank’s actual and required capital amounts and ratios under the CBLR rules at December 31, 2025 and 2024 are presented in the tables below. Actual Capital Required For Capital Adequacy Purposes Amount Ratio Amount Ratio 2025 Tier 1 capital to average assets: Bank 132,238 14.35 % 73,521 9.0 2024 Tier 1 capital to average assets: Bank 129,461 13.34 % 77,651 9.0 NOTE 15 – COMMITMENTS AND CONTINGENCIES The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments primarily include commitments to extend credit. Such instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition. The contractual amounts of these instruments reflect the extent of involvement the Bank has in those particular classes of financial instruments. The Bank’s exposure to credit loss in the event of non-performance by the other party to the financial instruments for commitments to extend credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. 81 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 15 – COMMITMENTS AND CONTINGENCIES (Continued) The Bank had outstanding firm commitments, all of which expire within two months, to originate, or purchase participation interests in, loans at December 31, 2025 and 2024 was as follows: 2025 2024 Fixed Rate Residential mortgage loans $ — $ 561,750 Commercial real estate — 7,030,000 $ — $ 7,591,750 Variable Rate Residential mortgage loans $ — $ — Construction loans - - Home equity loans 1,331,000 299,000 Commercial real estate - - $ 1,331,000 $ 299,000 Commitments to make loans are generally made for periods of 90 days or less. As of December 31, 2025 there was $ 80,000 in ACL for loan commitments. At December 31, 2025 and 2024 , undisbursed funds from approved lines of credit under a homeowners’ equity lending program amounted to approximately $ 59,664,628 and $ 54,581,083 , respectively. At December 31, 2025 and 2024 , undisbursed funds from approved lines of credit under a business line of credit program amounted to $ 8,685,211 and $6,64 9,437, respectively. Unless they are specifically cancelled by notice from the Bank, these funds represent firm commitments available to the respective borrowers on demand. At December 31, 2025 and 2024 , the Bank recorded an allowance for credit losses related to these commitments of $80 ,000 and $ 118,000 , respectively. Unless they are specifically cancelled by notice from the Bank, these funds represent firm commitments available to the respective borrowers on demand. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but primarily includes commercial and residential real estate. The Bank leases certain Bank properties and equipment under operating leases. Rent expense w as $ 1.5 million a nd $ 228,937 for 2025 and 2024 , respectively. 82 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 16 – FAIR VALUE Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 – Significant unobservable inputs that reflect a bank’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Bank used the following methods and significant assumptions to estimate the fair value of each type of financial instrument: The fair value for investment securities are determined by quoted market prices, if available (Level 1 ). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2 ). Assets measured at fair value on a recurring basis are summarized below: Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) December 31, 2025 Assets Securities available for sale: U.S. government and agency obligations $ 2,943,681 $ — $ 2,943,681 $ — Corporate bonds 53,216,205 — 53,216,205 — Municipal obligations 427,190 — 427,190 — MBS – residential 89,983,662 — 89,983,662 — MBS – commercial 12,809,611 — 12,809,611 — Liabilities Cash flow and fair value hedges 365,273 365,273 $ 159,745,622 $ — $ 159,745,622 $ — December 31, 2024 Assets Securities available for sale: U.S. government and agency obligations $ 12,792,540 $ — $ 12,792,540 $ — Corporate bonds 38,229,775 — 38,229,775 — Municipal obligations 398,275 — 398,275 — MBS – residential 74,552,809 — 74,552,809 — MBS – commercial 14,334,049 — 14,334,049 — Fair value hedge 109,594 — 109,594 — Cash flow hedge 651,340 651,340 — $ 141,068,382 $ — $ 141,068,382 $ — No assets were measured at fair value on a non-recurring basis at December 31, 2025 and 2024 . 83 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 16 – FAIR VALUE (Continued) The carrying amounts and estimated fair values of financial instruments, at December 31, 2025 and 2024 are as follows: Carrying Fair Fair Value Measurement Placement Amount Value (Level 1) (Level 2) (Level 3) (In thousands) December 31, 2025 Financial instruments -assets Loans, gross $ 650,176 $ 626,438 $ — $ — $ 626,438 Financial instruments - liabilities Certificates of deposit 493,934 494,596 — 494,596 — Borrowings 93,322 93,742 — 93,742 — December 31, 2024 Financial instruments - assets Loans 714,337 686,977 — — 686,977 Financial instruments - liabilities Certificates of deposit 482,878 493,769 — 493,769 — Borrowings 172,173 172,575 — 172,575 — Carrying amount is the estimated fair value for cash and cash equivalents. The fair value of loans is determined using an exit price methodology. Certificates of deposits fair value is estimated by using a discounted cash flow approach. Fair value of FHLB advances is based on current rates for similar financing. Other balance sheet instruments such as cash and cash equivalents, accrued interest receivable, accrued interest payable and Bank owned life insurance holding costs approximate fair value. The fair value of off-balance sheet items is not considered material. 84 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 NOTE 17 – ACCUMULATED OTHER COMPREHENSIVE LOSS The components of accumulated other comprehensive loss included in equity as of December 31 is as follows net of taxes: Year ended December 31, 2025 Unrealized gain (loss) in investments Derivatives Defined benefit plan Total Beginning balance $ ( 4,005,169 ) $ 468,247 $ ( 60,526 ) $ ( 3,597,448 ) Other comprehensive income (loss) before reclassification 2,098,111 ( 612,268 ) 120,733 1,606,576 Amounts reclassified from other comprehensive loss - - ( 57,440 ) ( 57,440 ) Net current period other comprehensive income (loss) 2,098,111 ( 612,268 ) 63,293 1,549,136 Ending balance $ ( 1,907,058 ) $ ($144,021) $ 2,767 $ ( 2,048,312 ) Year ended December 31, 2024 Unrealized gain (loss) in investments Derivatives Defined benefit plan Total Beginning balance $ ( 6,639,506 ) $ 172,183 $ 2,549 $ ( 6,464,774 ) Other comprehensive (loss) income before reclassification 697,134 296,064 ( 74,789 ) 918,409 Held to maturity losses tranferred to available for sale ( 3,236,824 ) - - ( 3,236,824 ) Amounts reclassified from other comprehensive (loss) income 5,174,027 - 11,714 5,185,741 Net current period other comprehensive (loss) 2,634,337 296,064 ( 63,075 ) 2,867,326 Ending balance $ ( 4,005,169 ) $ 468,247 $ ($60,526) $ ( 3,597,448 ) Details about accumulated other comprehensive loss components Year ended December 31, 2025 Year ended December 31, 2024 Realized loss on sales of securities $ - $ (8,930,843 ) Non-interest income — — $ - $ (8,930,843 ) Amortization of estimated defined benefit pension plan losses $ ( 57,441 ) $ 11,714 other expense 16,147 ( 3,293 ) provision for income taxes $ ( 41,294 ) $ 8,421 Total reclassifications for the period $ (41,294 ) $ (8,922,422 ) 85 Table of Contents BOGOTA FINANCIAL CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2025 and 2024 ITEM 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None.