About Bogota Financial

Bogota Financial Corp. operates as the bank holding company for Bogota Savings Bank that provides banking products and services in the United States. The company operates from offices located in Bogota, Hasbrouck Heights, Newark, Oak Ridge, Parsippany and Teaneck, New Jersey; and a loan production office in Spring Lake, New Jersey. The company attracts deposits from the general public and municipalities and use those funds along with advances from the Federal Home Loan Bank of New York and funds generated from operations to originate one- to four-family residential real estate loans and commercial real estate and multi-family loans and, to a lesser extent, consumer loans, commercial and industrial loans and construction loans. The company offers a variety of deposit accounts, including demand accounts, savings accounts, money market accounts, and certificate of deposit accounts. The substantial majority of the company’s deposits are from depositors who reside in its primary market area. The company accesses deposit customers by offering a broad selection of deposit instruments for individuals, businesses, and municipalities. Market Area The company’s branches, including its corporate office, are located in Bergen, Morris and Essex counties, although it considers its lending area to generally also encompass Monmouth and Ocean counties in New Jersey and the surrounding areas. Lending Activities Residential Real Estate Loans The company’s one- to four-family residential loan portfolio consists of mortgage loans that enable borrowers to purchase or refinance existing homes, most of which serve as the primary residence of the borrower. Most of these one- to four-family residential properties are located in the company’s primary market area. The company offers fixed-rate and adjustable-rate residential real estate loans with maturities up to 30 years. The company generally originates both fixed- and adjustable-rate mortgage loans in amounts up to the maximum conforming loan limits. The company also originates loans above the conforming limits up to a maximum amount of $2.5 million, which are referred to as jumbo loans. The company’s adjustable-rate residential real estate loans have interest rates that are fixed for an initial period ranging from one to ten years. After the initial fixed period, the interest rate on adjustable-rate residential real estate loans is generally reset every year based on a contractual spread or margin above the average yield on the U.S. Treasury securities. The company’s adjustable-rate residential real estate loans have initial and periodic caps of 2% on interest rate changes, with a cap of 5% over the life of the loan. The company originates one-to four-family residential mortgage loans with loan-to-value ratios of up to 80% of the appraised value, depending on the size of the loan. Additionally, the company originates residential mortgage loans on townhouses or condominiums with loan-to-value ratios of up to 75% of the appraised value, depending on the size of the loan. Its conforming residential real estate loans may be for up to 90% of the appraised value of the property provided the borrower obtains private mortgage insurance. Additionally, mortgage insurance is required for all mortgage loans that have a loan-to-value ratio greater than 80%. The required coverage amount varies based on the loan-to-value ratio and term of the loan. Commercial and Multi-Family Real Estate Loans The company’s commercial real estate loans are secured primarily by office buildings, industrial facilities, retail facilities and other commercial properties, substantially all of which are located in its primary market area. The company originates commercial real estate loans with maximum terms of ten years based on a 25-year amortization schedule, and loan-to-value ratios of up to 70% of the appraised value of the property for loans that are originated in-house and 60% of the appraised value of the property for loans received from brokers. The company’s commercial real estate loans are offered with fixed or adjustable interest rates. Interest rates on the company’s adjustable-rate loans generally adjust every three, five, seven and ten years; and the interest rate is indexed to the Federal Home Loan Bank advance rate, plus a margin, subject to an interest rate floor. The company’s commercial real estate loans are generally appraised by outside independent appraisers approved by the board of directors. Personal guarantees are often obtained from commercial real estate borrowers. Each borrower’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates. The company’s multi-family real estate loans are generally secured by properties consisting of five or more rental units within its market area. The company originates multi-family real estate loans with fixed interest rates or with a variety of adjustable interest rates with terms and amortization periods generally of up to 25 years. Interest rates on the company’s adjustable-rate multi-family real estate loans are generally indexed to the Federal Home Loan Bank advance rate, plus a margin. Multi-family residential real estate loans have loan-to-value ratios of up to 75% of the appraised value of the property securing the loans for loans that are originated in-house and 60% of the appraised value of the property for loans received from brokers. Consumer Loans The company offers consumer loans to customers residing in its primary market area. The company’s consumer loans consist primarily of home equity loans and lines of credit. Construction Loans The company originates loans to finance the construction of one- to four-family residential properties. The company’s residential land and acquisition loans are generally structured as two-year interest-only balloon loans. The company’s construction-to-permanent loans are generally structured as interest-only, adjustable-rate loans with a duration of six to twelve months for the construction phase. The company also offers loans primarily to established local developers to finance the construction of commercial and multi-family properties or to acquire land for the development of commercial and multi-family properties. The company also provides construction loans primarily to local developers for the construction of one- to four-family residential developments. This loan was secured by an office building located in the company’s primary market area. Before making a commitment to fund a commercial construction loan, the company requires an appraisal of the property by an independent licensed appraiser. Loan proceeds are disbursed periodically in increments as construction progresses and as inspections by the company’s approved inspectors warrant. Commercial and Industrial Loans The company offers commercial loans and adjustable-rate lines of credit up to $500,000 to small and medium-sized businesses in its market area. These loans are generally secured by accounts receivable, inventory or other business assets, and the company may support this collateral with liens on real property. Commercial lending products include revolving lines of credit and term loans. Investment Activities As of December 31, 2022, the company’s investment securities included U.S. treasury bills; U.S. government and agency obligations; corporate bonds; and mortgage-backed securities (such as residential and commercial). Regulation and Supervision As a New Jersey-chartered savings bank, the bank is subject to comprehensive regulation by the New Jersey Department of Banking and Insurance (NJDBI), as its chartering authority, and by the Federal Deposit Insurance Corporation. The bank is a member of the Federal Home Loan Bank of New York and its deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation. The bank is required to file reports with, and is periodically examined by, the Federal Deposit Insurance Corporation and the NJDBI concerning its activities and financial condition and must obtain regulatory approvals before entering into certain transactions, including mergers with or acquisitions of other financial institutions. As a mutual holding company, the company is also required to comply with the rules and regulations of the Federal Reserve Board and the NJDBI. It is required to file certain reports with the Federal Reserve Board and the NJDBI; and is subject to examination by, and the enforcement authority of, the Federal Reserve Board and the NJDBI. The company is also subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws. The bank derives its lending, investment and other activity powers primarily from the New Jersey Banking Act and its related regulations. The bank is subject to extensive regulation, examination, and supervision by the Federal Deposit Insurance Corporation as the insurer of its deposits. The bank must file reports with the Federal Deposit Insurance Corporation concerning its activities and financial condition in addition to obtaining regulatory approvals before entering into certain transactions, such as mergers with, or acquisitions of, other financial institutions. There are periodic examinations by the Federal Deposit Insurance Corporation to evaluate the bank’s safety and soundness and compliance with various regulatory requirements. The bank is a member of the Deposit Insurance Fund, which is administered by the Federal Deposit Insurance Corporation. Deposit accounts in the bank are insured up to a maximum of $250,000 for each separately insured depositor. The bank is subject to a variety of federal and New Jersey statutes and regulations that are intended to protect consumers and prohibit discrimination in the granting of credit. These statutes and regulations provide for a range of sanctions for non-compliance with their terms, including imposition of administrative fines and remedial orders, and referral to the Attorney General for prosecution of a civil action for actual and punitive damages and injunctive relief. Certain of these statutes, including Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts and practices against consumers, authorize private individual and class action lawsuits and the award of actual, statutory and punitive damages and attorneys’ fees for certain types of violations. The bank’s most recent Federal Deposit Insurance Corporation CRA (Community Reinvestment Act) rating in November 2020 was ‘Satisfactory’. The bank is a member of the Federal Home Loan Bank System, which consists of 11 regional Federal Home Loan Banks. The Federal Home Loan Banks provide a central credit facility primarily for member institutions. The bank, as a member of the Federal Home Loan Bank of New York, is required to acquire and hold shares of capital stock in the Federal Home Loan Bank of New York. The bank was in compliance with this requirement as of December 31, 2022. The company’s common stock is registered with the Securities and Exchange Commission. As such, the company is subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934. The company qualifies as an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (JOBS Act). History Bogota Financial Corp. was founded in 1893. The company, a Maryland corporation, was incorporated in 2019.