Bogota Financial Corp. Annual Report 2023

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 31, 2023OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _____________ to _______________Commission File Number: 001-39180Bogota Financial Corp.(Exact Name of Registrant as Specified in its Charter)Maryland84-3501231(State or other jurisdiction of incorporation or organization(I.R.S. Employer Identification Number)819 Teaneck Road, Teaneck, New Jersey07666(Address of principal executive offices)(Zip code)(201) 862-0660(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act: NoneTitle of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock, $0.01 par value per share BSBKThe Nasdaq Stock Market, LLCSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐Table of Contents Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See thedefinitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer☐Accelerated filer☐Non-accelerated filer☒Smaller reporting company☒ Emerging growth company☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of anerror to previously issued financial statements. ☐Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’sexecutive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting underSection 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ As of June 30, 2023, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant was $50.0 million. As of March 28, 2024 there were 13,246,147 outstanding shares of the registrant’s common stock, of which 8,504,556 shares are owned by Bogota Financial, MHC. DOCUMENTS INCORPORATED BY REFERENCE 1.Portions of the Proxy Statement for the 2024 Annual Meeting of Stockholders (Part III) Table of Contents TABLE OF CONTENTS PAGE PART I 3ITEM 1.Business3ITEM 1A.Risk Factors24ITEM 1B.Unresolved Staff Comments33ITEM 1C.Cybersecurity33ITEM 2.Properties34ITEM 3.Legal Proceedings34ITEM 4.Mine Safety Disclosures34PART II 35ITEM 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities35ITEM 6.Reserved35ITEM 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations36ITEM 7A.Quantitative and Qualitative Disclosures About Market Risk47ITEM 8.Financial Statements and Supplementary Data47ITEM 9.Changes In and Disagreements With Accountants on Accounting and Financial Disclosure87ITEM 9A.Controls and Procedures87ITEM 9B.Other Information87ITEM 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections87PART III 88ITEM 10.Directors, Executive Officers and Corporate Governance88ITEM 11.Executive Compensation88ITEM 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters88ITEM 13.Certain Relationships and Related Transactions, and Director Independence89ITEM 14.Principal Accountant Fees and Services89PART IV 89ITEM 15.Exhibits and Financial Statement Schedules89ITEM 16.Form 10-K Summary91SIGNATURES 91 Table of Contents Forward Looking Statements This Annual Report on Form 10-K contains forward-looking statements, which can be identified by the use of words such as “estimate,” “project,” “believe,”“intend,” “anticipate,” “assume,” “plan,” “seek,” “expect,” “will,” “may,” “should,” “indicate,” “would,” “contemplate,” “continue,” “potential,” “target” and words ofsimilar meaning. These forward-looking statements include, but are not limited to: ●statements of our goals, intentions and expectations; ●statements regarding our business plans, prospects, growth and operating strategies; ●statements regarding the quality of our loan and investment portfolios; and ●estimates of our risks and future costs and benefits. These forward-looking statements are based on the current beliefs and expectations of our management and are subject to significant business, economic andcompetitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions withrespect to future business strategies and decisions that are subject to change. Accordingly, you should not place undue reliance on such statements. We are under noduty to and do not take any obligation to update any forward-looking statements after the date of this Annual Report on Form 10-K. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: ●general economic conditions, either nationally or in our market area, that are worse than expected, including as a result of employment levels and laborshortages, and the effect of inflation, a potential recession or slowed economic growth caused by supply chain disruptions or otherwise; ●changes in liquidity, including the size and compositions of our deposit portfolio and the percentage of uninsured deposits; ●changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for credit losses; ●our ability to access cost-effective funding; ●fluctuations in real estate values and both residential and commercial real estate market conditions; ●demand for loans and deposits in our market area; ●changes in monetary or fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; ●our ability to continue to implement our business strategies; ●competition among depository and other financial institutions; 1Table of Contents ●cyber attacks, computer viruses and other technological risks that may breach the security of our website or other systems or those of third parties uponwhich we rely to obtain unauthorized access to confidential information and destroy data or disable our systems; ●technological changes that may be more difficult or expensive than expected; ●the ability of third-party providers to perform their obligations to us; ●inflation and changes in market interest rates that reduce our margins and yields, reduce the fair value of financial instruments or reduce our volume of loanoriginations or increase the level of defaults, losses and prepayments on loans we have made and make whether held in portfolio or sold in the secondarymarket; ●adverse changes in the securities markets; ●changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees, Federal Deposit InsuranceCorporation assessments and capital requirements; ●our ability to manage market risk, credit risk and operational risk; ●our ability to enter new markets successfully and capitalize on growth opportunities; ●our ability to successfully integrate into our operations any assets, liabilities or systems we may acquire, as well as new management personnel orcustomers, and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; ●changes in consumer spending, borrowing and savings habits; ●changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, theSecurities and Exchange Commission or the Public Company Accounting Oversight Board; ●our ability to retain key employees; ●our compensation expense associated with equity allocated or awarded to our employees; ●changes in the financial condition, results of operations or future prospects of issuers of securities that we own; and ●the continued impact of the COVID-19 pandemic on our financial conditions and results of operations. Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements. Please also see “Item 1A. Risk Factors.” 2Table of Contents PART I ITEM 1. Business Bogota Financial Corp. Bogota Financial Corp. is a Maryland corporation that was formed in September 2019 to be the bank holding company of Bogota Savings Bank as part of themutual holding company reorganization of Bogota Savings Bank. Other than holding the common stock of Bogota Savings Bank, and making a loan to the employeestock ownership plan of Bogota Savings Bank, Bogota Financial Corp. does not engage in any other business activities. Bogota Financial Corp.’s executive offices arelocated at 819 Teaneck Road, Teaneck, New Jersey 07666, and its telephone number is (201) 862-0660. 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 Companyalso 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 toBogota Financial, MHC, its New Jersey-chartered mutual holding company. Bogota Financial Corp. does not own or lease any property. We employ as officers of Bogota Financial Corp. only persons who are officers of BogotaSavings Bank. However, we will use the support staff of Bogota Savings Bank from time to time. These individuals will not be separately compensated by BogotaFinancial Corp. Bogota Financial Corp. may hire additional employees, as appropriate, to the extent it expands its business. Bogota Financial, MHC is subject to comprehensive regulation and examination by the New Jersey Department of Banking and Insurance (the “NJDBI”) andthe Federal Reserve Board. Bogota Financial, MHC Bogota Financial, MHC was formed in January 2020 as a New Jersey-chartered mutual holding company in connection with the reorganization of BogotaSavings Bank into the “two-tier” mutual holding company form of organization. Bogota Financial, MHC will, for as long as it is in existence, own a majority of theoutstanding shares of Bogota Financial Corp.’s common stock. As a mutual holding company, Bogota Financial, MHC is a non-stock company. Bogota Financial, MHC’s principal assets are the common stock of Bogota Financial Corp. it received in the reorganization and offering and $50,000 cash ininitial capitalization. Presently, it is expected that the only business activity of Bogota Financial, MHC will be to own a majority of Bogota Financial Corp.’s commonstock. Bogota Financial, MHC is subject to comprehensive regulation and examination by the NJDBI and the Federal Reserve Board. 3Table of Contents Bogota Savings Bank Founded in 1893, Bogota Savings Bank is a New Jersey-chartered savings bank that operates from six 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 Bank plans to open a seventh branch in Upper SaddleRiver, New Jersey in the 2nd quarter. We attract deposits from the general public and municipalities and use those funds along with advances from the Federal HomeLoan 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-familyloans and, to a lesser extent, consumer loans, commercial and industrial loans and construction loans. We also invest in securities, which have historically consistedprimarily of U.S. Government and agency obligations, municipal obligations, corporate bonds and mortgage-backed securities. We offer a variety of deposit accounts,including demand accounts, savings accounts, money market accounts and certificate of deposit accounts. At December 31, 2023, we had consolidated total assets of $939.3 million, total deposits of $625.3 million and total equity of $137.2 million. Bogota Savings Bankis subject to comprehensive regulation and examination by the NJDBI and the Federal Deposit Insurance Corporation (the “FDIC”). Our website address iswww.bogotasavingsbank.com. Information on this website is not and should not be considered a part of this Annual Report on Form 10-K. Market Area Our branches, including our corporate office, are located in Bergen, Morris and Essex Counties, although we consider our lending area to generally alsoencompass Monmouth and Ocean Counties in New Jersey and the surrounding areas. Bergen County ranks as the most populous county in New Jersey (out of 21counties) with a population of approximately 953,000 compared to an estimated population of 849,000 for Essex County, 644,000 for Monmouth County, 656,000 forOcean County, 511,000 for Morris County and 9.3 million for the entire state as of December 31, 2023 according to U.S. Bureau of Labor Statistics. The economy in ourprimary market area has benefited from being varied and diverse, with a broad economic base. Bergen, Essex, Monmouth, Ocean and Morris Counties have a medianhousehold income of approximately $82,000, $55,000, $82,000, $60,000 and $97,000, respectively, as of December 31, 2023, according to U.S. Bureau of Labor Statistics.The median household income for New Jersey is approximately $92,000 and the median household income is approximately $75,000 for the United States. As ofDecember 2023, the unemployment rate was 2.7% for Bergen County, 4.0% for Essex County, 2.6% for Monmouth County, 3.1% for Ocean County and 2.3% for MorrisCounty, compared to 4.8% for New Jersey and a national rate of 3.7% according to US Bureau of Labor Statistics. Competition We face significant competition for deposits and loans. Our most direct competition for deposits has come historically from the numerous financial institutionsoperating in our market area (including other community banks and credit unions), many of which are significantly larger than we are and have greater resources. Wealso face competition for investors’ funds from other sources such as brokerage firms, money market funds and mutual funds, as well as from securities offered by thefederal government, such as Treasury bills. Based on FDIC data at June 30, 2023, (the latest date for which information is available), we had 0.85% of the FDIC-insureddeposit market share in Bergen County, which was the 19th largest market share among the 42 institutions with offices in the county. Based on FDIC data at June30,2023, we had 0.06% of the FDIC-insured deposit market share in Essex County, which was the 31st largest market share among the 31 institutions with offices in thecounty. Based on FDIC data at June 30, 2023, we had 0.15% of the FDIC-insured deposit market share in Morris County, which was the 24th largest market share amongthe 30 institutions with offices in the county. Money center banks, such as Bank of America, JP Morgan Chase, Wells Fargo and Citi, and large regional banks, such asTD Bank, M&T Bank and PNC Bank, have a significant presence in the markets that we serve. 4Table of Contents Our competition for loans comes primarily from the competitors referenced above and from other financial service providers, such as mortgage companies andmortgage brokers. Competition for loans also comes from the increasing number of non-depository financial service companies participating in the mortgage market,such as insurance companies, securities firms, financial technology companies, specialty finance firms and technology companies. We expect competition to remain intense in the future as a result of legislative, regulatory and technological changes and the continuing consolidation in thefinancial services industry. Technological advances, for example, have lowered barriers to entry, allowed banks to expand their geographic reach by providing servicesover the internet and made it possible for non-depository institutions, including financial technology companies, to offer products and services that traditionally havebeen provided by banks. Competition for deposits and loans could limit our growth in the future. Lending Activities Historically, our lending activities have emphasized one- to four-family residential real estate loans, and such loans continue to comprise the largest portion ofour loan portfolio. Other areas of lending include commercial real estate and multi-family loans and, to a much lesser extent, consumer loans, consisting primarily of homeequity loans and lines of credit, commercial and industrial loans and construction loans. Subject to market conditions and our asset-liability analysis, we expect tocontinue to focus on commercial real estate and multi-family lending as part of our effort to diversify the loan portfolio and increase the overall yield earned on ourloans. We compete for loans by offering high quality personalized service, providing convenience and flexibility, providing timely responses on loan applications, andby offering competitive pricing. Loan Portfolio Maturities. The following tables set forth the contractual maturities of our total loan portfolio at December 31, 2023. Demand loans, loanshaving no stated repayment schedule or maturity, and overdraft loans are reported as being due in one year or less. The table presents contractual maturities and doesnot reflect repricing or the effect of prepayments. Actual maturities may differ. At December 31, 2023 ResidentialReal Estate CommercialReal Estate Multi-Family RealEstate Construction CommercialandIndustrial Consumer Total Loans (In thousands) Amounts due in: One year or less $21 $25 $248 $7,765 $— $19 $8,078 More than one year through five years 19,879 13,384 1,012 28,724 5,711 - 68,710 More than five years through fifteen years 73,575 53,574 46,052 10,774 947 - 184,922 More than fifteen years 392,577 32,848 28,301 2,039 — - 455,765 Total $486,052 $99,831 $75,613 $49,302 $6,658 $19 $717,475 The following table sets forth our fixed and adjustable-rate loans at December 31, 2023 that are contractually due after December 31, 2024. Fixed Rates Floating orAdjustable Rates Total (In thousands) Residential real estate loans $325,644 $160,387 $486,031 Commercial real estate loans 26,569 73,237 99,806 Multi-family real estate loans 5,395 69,970 75,365 Construction loans - 41,537 41,537 Commercial and industrial loans 911 5,747 6,658 Consumer loans - - - Total $358,519 $350,878 $709,397 5Table of Contents Residential Real Estate Loans. Our one- to four-family residential loan portfolio consists of mortgage loans that enable borrowers to purchase or refinanceexisting homes, most of which serve as the primary residence of the borrower. At December 31, 2023, one- to four-family residential real estate loans totaled$486.1 million, or 67.7% of our total loan portfolio, and consisted of $325.7 million of fixed-rate loans and $160.4 million of adjustable-rate loans. Most of these one- tofour-family residential properties are located in our primary market area. We offer fixed-rate and adjustable-rate residential real estate loans with maturities up to 30 years. The one- to four-family residential mortgage loans that weoriginate are generally underwritten according to Fannie Mae and Freddie Mac guidelines, and we refer to loans that conform to such guidelines as “conforming loans.”Loans to be sold to other approved investors or secondary market sources are underwritten to their specific requirements. We generally originate both fixed- andadjustable-rate mortgage loans in amounts up to the maximum conforming loan limits. We also originate loans above the conforming limits up to a maximum amount of$2.5 million, which are referred to as “jumbo loans.” We generally underwrite jumbo loans, whether originated or purchased, in a manner similar to conforming loans. Our 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 U.S.Treasury securities. Our adjustable-rate residential real estate loans have initial and periodic caps of 2% on interest rate changes, with a current cap of 5% over the life ofthe loan. We originate 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, we originate residential mortgage loans on townhouses or condominiums with loan-to-value ratios of up to 75% of the appraised value, depending on thesize of the loan. Our conforming residential real estate loans may be for up to 90% of the appraised value of the property provided the borrower obtains private mortgageinsurance. Additionally, mortgage insurance is required for all mortgage loans that have a loan-to-value ratio greater than 80%. The required coverage amount variesbased on the loan-to-value ratio and term of the loan. We only permit borrowers to purchase mortgage insurance from companies that we have approved. We generally do not offer “interest only” mortgage loans on one- to four-family residential properties or loans that provide for negative amortization ofprincipal, such as “Option ARM” loans, where the borrower can pay less than the interest owed on the loan, resulting in an increased principal balance during the life ofthe loan. Additionally, we do not offer “subprime loans” (loans that are made with low down-payments to borrowers with weakened credit histories typicallycharacterized by payment delinquencies, previous charge-offs, judgments, bankruptcies, or borrowers with questionable repayment capacity as evidenced by low creditscores or high debt-burden ratios) or Alt-A loans (defined as loans having less than full documentation). Commercial and Multi-Family Real Estate Loans. At December 31, 2023, we had $175.4 million in commercial and multi-family real estate loans, representing24.5% of our total loan portfolio. Our commercial real estate loans are secured primarily by office buildings, industrial facilities, retail facilities and other commercialproperties, substantially all of which are located in our primary market area. At December 31, 2023, commercial real estate loans totaled $99.8 million, of which$29.6 million was owner-occupied real estate and $70.2 million was secured by income producing, or non-owner-occupied real estate. We generally originate commercial real estate loans with maximum terms of ten years based on a 25-year amortization schedule, and loan-to-value ratios of up to70% 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. Ourcommercial real estate loans are offered with fixed or adjustable interest rates. Interest rates on our adjustable-rate loans generally adjust every three, five, seven and tenyears and the interest rate is indexed to the Federal Home Loan Bank advance rate, plus a margin, subject to an interest rate floor. All of our commercial real estate loansare subject to our underwriting procedures and guidelines, including requiring borrowers to generally have three months of operating expenses and loan paymentreserves in a liquid account with us. At December 31, 2023, our largest commercial real estate loan totaled $9.1 million and was secured by an office building located inour primary market area. At December 31, 2023, this loan was performing in accordance with its original terms. 6Table of Contents We consider a number of factors in originating commercial real estate loans. We evaluate the qualifications, experience and financial condition of the borrower(including credit history), the value and condition of the mortgaged property securing the loan, the borrower’s experience in owning or managing similar property andthe borrower’s payment history with us and other financial institutions. In evaluating the property securing the loan, among other factors, we consider the net operatingincome of the mortgaged property before debt service and depreciation, the debt service coverage ratio (the ratio of net operating income to debt service) to ensure thatit is at least 1.25x of the monthly debt service, and the ratio of the loan amount to the appraised value of the mortgaged property. Our commercial real estate loans aregenerally appraised by outside independent appraisers approved by the board of directors. Personal guarantees are often obtained from commercial real estateborrowers. Each borrower’s financial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates. At December 31, 2023, multi-family real estate loans totaled $75.6 million representing 10.5% of our total loan portfolio. Our multi-family real estate loans aregenerally secured by properties consisting of five or more rental units within our market area. We originate multi-family real estate loans with fixed or adjustable interestrates with terms and amortization periods generally of up to 25 years. Interest rates on our adjustable-rate multi-family real estate loans are generally indexed to theFederal Home Loan Bank advance rate, plus a margin. At December 31, 2023, our largest multi-family real estate loan had an outstanding balance of $4.7 million and wassecured by an apartment building located in our primary market area. At December 31, 2023, this loan was performing according to its original terms. In underwriting multi-family real estate loans, we require a debt service coverage ratio of at least 1.20x and consider several factors, including the age andcondition of the collateral, the financial resources and income level of the borrower and the borrower’s experience in owning or managing similar properties. Multi-familyresidential 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 and60% of the appraised value of the property for loans received from brokers. All of our multi-family real estate loans are subject to our underwriting procedures andguidelines, including requiring borrowers to generally have three months of operating expenses and loan payment reserves in a liquid account with us. The borrower’sfinancial information on such loans is monitored on an ongoing basis by requiring periodic financial statement updates. Consumer Loans. We offer consumer loans to customers residing in our primary market area. Our consumer loans consist primarily of home equity loans andlines of credit. At December 31, 2023, consumer loans totaled $29.4 million, representing less than 4.1% of our total loan portfolio. Home equity loans and lines of credit are multi-purpose loans used to finance various home or personal needs, where a one- to four-family primary orsecondary residence serves as collateral. We generally originate home equity loans of up to $500,000 with a maximum loan-to-value ratio of 70% (75% if Bogota SavingsBank holds the first lien position) and lines of credit of up to $300,000, with a maximum loan-to-value ratio of 80%, and terms of up to 30 years. Home equity lines ofcredit have adjustable rates of interest that are based on the prime interest rate published in The Wall Street Journal, plus a margin, and reset monthly. Home equity linesof credit are secured by residential real estate in a first or second lien position. The procedures for underwriting consumer loans include assessing the applicant’s payment history on other indebtedness, the applicant’s ability to meetexisting obligations and payments on the proposed loan, and the loan-to-value ratio. Although the applicant’s creditworthiness is a primary consideration, theunderwriting process also includes a comparison of the value of the collateral, if any, to the proposed loan amount. Construction Loans. We also originate loans to finance the construction of one- to four-family residential properties and for the acquisition of land. AtDecember 31, 2023, residential construction loans totaled $49.3 million, or 6.9% of our total loan portfolio. Most of these loans are secured by properties located in ourprimary market area. Our residential construction loans are generally structured as two-year interest-only balloon loans. The interest rate is generally a fixed rate based on an indexrate, plus a margin. Our construction-to-permanent loans are generally structured as interest-only, adjustable-rate loans with a duration of six to twelve months for theconstruction phase. The interest rate on these loans is based on the prime interest rate as published in The Wall Street Journal, plus a margin. Construction loan-to-value ratios for one- to four-family residential properties generally will not exceed 80% of the appraised value of the property on a completed basis, while loan-to-valueratios for land acquisition financing will not exceed 50% of the value of the land for an unimproved lot and 75% of the value of the land for an improved lot. Once theconstruction project is satisfactorily completed, we look to provide permanent financing. 7Table of Contents We also offer loans primarily to established local developers to finance the construction of commercial and multi-family properties or to acquire land fordevelopment of commercial and multi-family properties. We also provide construction loans primarily to local developers for the construction of one- to four-familyresidential developments. At December 31, 2023, we had a single commercial construction loan that totaled $11.0 million, or 1.5% of our total loan portfolio. This loan wassecured by an office building located in our primary market area. At December 31, 2023, this loan was non-performing as of December 31, 2023. We also had undrawnamounts on the commercial construction loan totaling $16.8 million at December 31, 2023. Historically, our commercial construction loans are generally interest-only loans that provide for the payment of interest during the construction phase, whichis usually between 12 to 24 months. The interest rate is generally adjustable based on an index rate, typically the prime interest rate as published in The Wall StreetJournal, plus a margin. At the end of the construction phase, the loan generally converts to a permanent commercial real estate mortgage loan, but in some cases it maybe payable in full. However, our loans for the construction of one- to-four-family residential properties may convert to permanent residential real estate loans. Loans canbe made with a maximum loan-to-value ratio of 75% of the appraised market value upon completion of the project or a maximum loan-to-value ratio of 50% for raw land. Before making a commitment to fund a commercial construction loan, we require an appraisal of the property by an independent licensed appraiser. Theconstruction phase is carefully monitored to minimize our risk. All construction projects must be completed in accordance with approved plans and approved by themunicipality in which they are located. Loan proceeds are disbursed periodically in increments as construction progresses and as inspections by our approvedinspectors warrant. Commercial and Industrial Loans. We offer commercial loans and adjustable-rate lines of credit up to $500,000 to small and medium-sized businesses in ourmarket area. These loans are generally secured by accounts receivable, inventory or other business assets, and we may support this collateral with liens on realproperty. At December 31, 2023, commercial and industrial loans totaled $6.7 million, or 0.9% of total loans. Commercial lending products include revolving lines of credit and term loans. Our commercial lines of credit are typically made with adjustable interest rates,indexed to the prime interest rate published in The Wall Street Journal, plus a margin, and we can demand repayment of the amount due at any time after it is due. Termloans are generally made with fixed interest rates, indexed to the comparable Federal Home Loan Bank of New York amortizing advance indications, plus a margin, andare for terms up to seven years. When making commercial and industrial loans, we require a debt service coverage ratio of at least 1.25x and we review and consider the financial statements ofthe borrower, our lending history with the borrower, the borrower’s debt service capabilities, the projected cash flows of the business and the value of the collateral,accounts receivable, inventory and equipment. Depending on the collateral used to secure the loans, commercial and industrial loans are made up to 70% of the value ofthe collateral securing the loan. We generally do not make unsecured commercial and industrial loans. Personal guarantees are obtained from commercial and industrialborrowers. Loan Underwriting Risks Adjustable-Rate Loans. While we anticipate that adjustable-rate loans will better offset the adverse effects of an increase in interest rates as compared to fixed-rate loans, an increased monthly payment required of adjustable-rate loan borrowers in a rising interest rate environment could cause an increase in delinquencies anddefaults. The marketability of the underlying property also may be adversely affected in a high interest rate environment. In addition, although adjustable-rate loansmake our asset base more responsive to changes in interest rates, the extent of this interest sensitivity is somewhat limited by the annual and lifetime interest rateadjustment limits on adjustable-rate residential real estate loans. 8Table of Contents Commercial and Multi-Family Real Estate Loans. Loans secured by commercial and multi-family real estate generally have larger balances and involve agreater degree of risk than one- to four-family residential real estate loans. Of primary concern in commercial and multi-family real estate lending is the borrower’screditworthiness and the feasibility and cash flow potential of the project. Payments on loans secured by income properties often depend on the successful operationand management of the properties. As a result, repayment of such loans may be subject to adverse conditions in the real estate market or the economy to a greaterextent than residential real estate loans. To monitor cash flows on income properties, we require borrowers and loan guarantors, if any, to provide annual financialstatements on commercial and multi-family real estate loans. In reaching a decision whether to make a commercial or multi-family real estate loan, we consider and reviewa global cash flow analysis of the borrower and consider the net operating income of the property, the borrower’s expertise and credit history and the value of theunderlying property. We generally have required that the properties securing these real estate loans have debt service coverage ratios (the ratio of earnings before debtservice to debt service) of at least 1.25x. We require a Phase 1 environmental report when we believe a possibility exists that hazardous materials may have existed on thesite, or the site may have been impacted by adjoining properties that handled hazardous materials. Consumer Loans. Consumer loans may entail greater risk than residential mortgage loans, particularly in the case of consumer loans that are unsecured orsecured by assets that depreciate rapidly. Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment for the outstandingloan and a small remaining deficiency often does not warrant further substantial collection efforts against the borrower. Consumer loan collections depend on theborrower’s continuing financial stability, and therefore are likely to be adversely affected by various factors, including job loss, divorce, illness or personal bankruptcy.Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recoveredon such loans. Construction Loans. Our construction loans are based upon our estimates of costs to complete a project and the value of the completed project. Underwritingis focused on the borrowers’ financial strength, credit history and demonstrated ability to produce a quality product and effectively market and manage its operations.All construction loans for which the builder does not have a binding purchase agreement must be approved by our internal loan committee. Construction lending involves additional risks when compared to permanent residential lending because funds are advanced upon the security of the project,which is of uncertain value before its completion. Because of the uncertainties inherent in estimating construction costs, it is difficult to evaluate accurately the totalfunds required to complete a project and the related loan-to-value ratio. This type of lending also typically involves higher loan principal amounts and is oftenconcentrated with a small number of builders. In addition, generally during the term of a construction loan, interest may be funded by the borrower or disbursed from aninterest reserve set aside from the construction loan budget. These loans often involve the disbursement of substantial funds with repayment substantially dependenton the success of the ultimate project and the ability of the borrower to sell or lease the property or obtain permanent take-out financing, rather than the ability of theborrower or guarantor to repay principal and interest. If the appraised value of a completed project proves to be overstated, we may have inadequate security for therepayment of the loan upon completion of construction of the project and may incur a loss. We use a discounted cash flow analysis to determine the value of anyconstruction project of five or more units. Our ability to continue to originate a significant amount of construction loans is dependent on the strength of the housingmarket in our market areas. Commercial and Industrial Loans. Unlike residential real estate loans, which generally are made on the basis of the borrower’s ability to make repayment fromhis or her employment or other income, and which are secured by real property whose value tends to be readily ascertainable, commercial business loans have higherrisk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business, and the collateral securing theseloans may fluctuate in value. Our commercial business loans are originated primarily based on the identified cash flows of the borrower and secondarily on theunderlying collateral provided by the borrower. Most often, this collateral consists of real estate, accounts receivable, inventory or equipment. Credit support providedby the borrower for most of these loans and the probability of repayment is based on the liquidation value of the pledged collateral and enforcement of a personalguarantee, if any. As a result, the availability of funds for the repayment of commercial business loans may depend substantially on the success of the business itself.Further, any collateral securing such loans may depreciate over time, may be difficult to appraise and may fluctuate in value. 9Table of Contents Originations, Purchases and Participations of Loans Lending activities are conducted by our loan personnel operating at our main office, branch office locations and loan production office. We also obtain referralsfrom existing or past customers and from accountants, real estate brokers, builders and attorneys. All loans that we originate or purchase are underwritten pursuant toour policies and procedures, which incorporate Fannie Mae underwriting guidelines to the extent applicable for residential loans. Our ability to originate fixed-oradjustable-rate loans depends upon the relative customer demand for such loans, which is affected by current and anticipated future market interest rates. Our loanorigination and purchase activity may be adversely affected by a rising interest rate environment, which typically results in decreased loan demand. As a supplement to our in-house loan originations of one- to four-family residential real estate loans, we entered into agreements with unaffiliated mortgagebrokers as a source for additional residential real estate loans. We currently work with five different mortgage brokers, none of which we have an ownership interest in orany common employees or directors. Three of the mortgage brokers are located in Morris County, New Jersey, and one mortgage broker is located in each of Hudsonand Ocean County, New Jersey. These mortgage brokers fund the one- to four-family residential real estate loans and then sell them to us following our underwritinganalysis. We use the same parameters in evaluating these loans as we do for our in-house loan originations of one- to four-family residential real estate loans. For each purchased loan, we generally pay a fixed fee based on the loan balance. For the years ended December 31, 2023 and 2022, we purchased for ourportfolio $15.2 million and $147.9 million, respectively, of loans from these mortgage brokers. As part of purchasing the loans, we acquire the servicing rights to theloans. The purchased loans are acquired from these mortgage brokers without recourse or any right to require the mortgage broker to repurchase the loans. The fixedaggregate fee we pay to acquire the loan and servicing rights are added to the loan balance and amortized over the contractual life of the loan under the interest method. We purchase for our portfolio both fixed- and adjustable rate one- to four-family real estate loans, with maturities up to 30 years, with a per loan limit of $1.0million. We generally do not purchase whole loans from third parties other than the one- to four-family residential real estate loans described above. However, wepurchase participation interests primarily in commercial real estate and multi-family loans where we are not the lead lender. We underwrite our participation interest in theloans that we purchase according to our own underwriting criteria and procedures. At December 31, 2023, the outstanding balances of our loan participations where weare not the lead lender totaled $9.0 million, all of which were commercial or multi-family real estate loans. All such loans were performing according to their original termsat December 31, 2023. Loan Approval Procedures and Authority Pursuant to New Jersey law, the aggregate amount of loans that Bogota Savings Bank is permitted to make to any one borrower or a group of related borrowersis generally limited to 15% of Bogota Savings Bank’s capital, surplus fund and undivided profits (25% if the amount in excess of 15% is secured by “readily marketablecollateral”). At December 31, 2023, based on the 15% limitation, Bogota Savings Bank’s loans-to-one-borrower limit was approximately $19.7 million. At December 31,2023, our largest loan relationship with a single borrower was for $16.7 million, which consisted of four loans secured by various commercial real estate and multi-familyproperties in our primary market area. The underlying loans were performing in accordance with their terms on that date. Our lending activities follow written, non-discriminatory, underwriting standards and loan origination procedures established by our board of directors andmanagement. The board of directors has granted loan approval authority to certain officers up to prescribed limits, depending on the officer’s title and experience andthe type of loan. Loans in excess of individual officers’ lending limits require approval of our Internal Loan Committee, which is comprised of our President and Chief ExecutiveOfficer, Executive Vice President and Chief Financial Officer and Executive Vice President and Chief Lending Officer. The Internal Loan Committee can approve individualloans of up to prescribed limits, depending on the type of loan. Loans that involve policy exceptions also must be approved by the Internal Loan Committee and ratifiedby the board of directors. Loans in excess of the Internal Loan Committee’s loan approval authority require the approval of the board of directors. 10Table of Contents Allowance for Credit Losses The allowance for credit losses is maintained at a level which, in management’s judgment, is adequate to absorb expectedfuture credit losses in the loan portfolio. The amount of the allowance is based on management’s evaluation of the collectability of the loan portfolio, including the sizeand composition of the portfolio, delinquency statistics, geographic and industry concentrations, the adequacy of the underlying collateral, the financial strength ofborrowers, results of internal loan reviews, trends in historical loss experience, individually evaluated loans, and economic conditions and forecasts and otherqualitative and quantitative factors which could affect potential credit losses. Allowances for loans that are individually evaluated are generally determined based oncollateral values or the present value of estimated cash flows. The allowance is increased by a provision for credit losses, which is charged to expense and reduced byfull and partial charge-offs, net of recoveries. In addition, the NJDBI and the Federal Deposit Insurance Corporation periodically review our allowance for credit losses and as a result of such reviews, theymay require us to adjust our allowance for credit losses or recognize loan charge-offs. Upon adoption of the CECL method of calculating the ACL on January 1, 2023, theBank recorded a one-time decrease, net of tax, in retained earnings of $222,000, an increase to the ACL of $157,000 and, an increase in the reserve for unfunded liabilitiesof $152,000. Allowance for Credit Losses. The following table sets forth activity in our allowance for credit losses and certain asset quality ratios for the periods indicated. At or for the Years Ended December 31, 2023 2022 (Dollars in thousands) Gross loans $717,475 $721,604 Net loans 714,689 719,026 Average loans 713,799 638,679 Non-accrual loans 12,776 857 Allowance at beginning of year 2,861 2,153 Provision (recovery) for credit losses (125) 425 Charge offs: Residential real estate loans — — Commercial and multi-family real estate loans — — Construction loans — — Consumer loans — — Total charge-offs — — Recoveries: Residential real estate loans — — Commercial and multi-family real estate loans — — Construction loans — — Consumer loans — — Total recoveries — — Net recoveries — — Allowance for credit losses at end of period $2,786 $2,578 Allowance for credit losses to non-accrual loans at end of period 21.81% 300.82%Allowance for credit losses to total loans outstanding at end of period 0.39% 0.36%Non-accrual loans to total loans 1.78% 0.12%Net recoveries to average loans outstanding during period —% —%Net recoveries to average residential real estate loans outstanding during period —% —%Net recoveries to average commercial and multi-family real estate loans outstanding during period —% —%Net recoveries to average construction loans outstanding during period —% —%Net recoveries to average commercial and industrial loans outstanding during period —% —%Net recoveries to average consumer loans outstanding during period —% —% 11Table of Contents Allocation of Allowance for Credit Losses. The following tables sets forth the allowance for credit losses allocated by loan category and the percent of theallowance in each category to the total allocated allowance at the dates indicated. The allowance for credit losses allocated to each category is not necessarily indicativeof future losses in any particular category and does not restrict the use of the allowance to absorb losses in other categories. The effect of the adoption of ASC 326 onthe loan portfolio segments and the ACL by portfolio segment was: Pre Adoption The effect of adoption Post AdoptionAssets (Dollars in thousands) ACL on loans Residential First Mortgage $ 1,603 $ 212 $ 1,815Commercial and Multi-Family Real Estate 615 (615) —Commercial Real Estate — 523 523Multi-Family Real Estate — 260 260Construction 258 1 259Commercial and Industrial 4 — 4Home Equity and Other Consumer 98 (98) —Liabilities ACL for unfunded commitments — 152 152Total $ 2,578 $ 435 $ 3,013 At December 31, 2023 2022 Allowance forCredit Losses Percent ofAllowance inCategory toTotal AllocatedAllowance Percent ofLoans in EachCategory toTotal Loans Allowance forLoan Losses Percent ofAllowance inCategory toTotal AllocatedAllowance Percent ofLoans in EachCategory toTotal Loans (Dollars in thousands) Residential real estate loans $1,852 66.47% 67.75% $1,602 62.14% 64.59%Commercial and multi-family real estate loans — — — 615 23.86 22.50 Commercial real estate loans 437 15.69 13.91 — — — Multi-family real estate loans 317 11.38 10.54 — — — Construction loans 158 5.67 6.87 259 10.05 8.57 Commercial and industrial loans 22 0.79 0.93 4 0.16 0.23 Consumer loans — — — 98 3.8 4.44 Total $2,786 100.00% 100.00% $2,578 100.00% 100.00% Investment Activities General. Our board of directors is responsible for approving and overseeing our investment policy, which is reviewed at least annually. This policy dictatesthat investment decisions be made based on liquidity needs, potential returns, consistency with our interest rate risk management strategy and the need for an adequatediversification of assets. An investment committee, consisting of authorized officers, selected by the board of directors, oversees our investing activities and strategies.The authorized officers are our President and Chief Executive Officer and Executive Vice President and Chief Financial Officer. The board has designated our ExecutiveVice President and Chief Financial Officer as our investment officer, who is primarily responsible for daily investment activities. All purchases and sales of securitiesmust be authorized by two officers on the investment committee. Security purchases are limited to no more than $10.0 million a day and cannot amount to more than 25%of the investment portfolio in any given month, in each case without the unanimous approval of the members of the investment committee. The board of directorsreviews the activities of the investment committee at each of its meetings. Our current investment policy authorizes us to invest in various types of investment securities and liquid assets, including U.S. Treasury obligations, securitiesof various government-sponsored enterprises, residential mortgage-backed securities, commercial mortgage-backed securities collateralized mortgage obligations andreal estate mortgage investment conduits, municipal securities (limited to no more than 7.5% of our capital), overnight deposits and federal funds, bond anticipationnotes with the Borough of Bogota or the Township of Teaneck (limited to no more than 10.0% of our capital), investment grade corporate bonds (limited to no more than10.0% of our capital), investment grade banker’s acceptances and commercial paper with a maturity of no more than 270 days (limited to no more than 5.0% of ourcapital), certificates of deposit of federally insured institutions and depositor institution senior debt and capital securities (limited to no more than 10.0% of our capitaland no more than 3.0% of our capital with a single issuer). We also are required to maintain an investment in Federal Home Loan Bank of New York stock, whichinvestment is based on the level of our Federal Home Loan Bank borrowings. We do not engage in any investment hedging activities or trading activities, nor do wepurchase any high-risk mortgage derivative products, corporate junk bonds, and certain types of structured notes. Debt securities investment accounting guidance requires that at the time of purchase we designate a security as held to maturity, available for sale, or trading,depending on our ability and intent. 12Table of Contents Portfolio Maturities and Yields. The composition and maturities of the investment securities portfolio at December 31, 2023 are summarized in the followingtable. The weighted average yield is calculated by dividing income, which has not been tax effected on tax-exempt obligations, within each contractual maturity range bythe outstanding amount of the related investment. Maturities are based on the final contractual payment dates, and do not reflect the effect of scheduled principalrepayments, prepayments, or early redemptions that may occur. One Year or Less More than One Yearthrough Five Years More than Five Yearsthrough Ten Years More than Ten Years Total AmortizedCost WeightedAverageYield AmortizedCost WeightedAverageYield AmortizedCost WeightedAverageYield AmortizedCost WeightedAverageYield AmortizedCost FairValue WeightedAverageYield (Dollars in thousands) Securities availablefor sale: U.S. governmentand agencyobligations $— —% $6,000 1.69% $— —% $— —% $6,000 $5,545 1.69%Corporate bonds 3,000 4.56 8,265 3.11 1,000 5.50 — — 12,265 11,819 3.66 Mortgage-backedsecurities –residential — — 213 2.50 111 7.05 40,781 2.53 41,105 35,407 2.54 Mortgage-backedsecurities –commercial — — 1,132 1.20 11,904 2.51 5,718 2.60 18,754 16,117 2.46 Total $3,000 4.56% $15,610 2.42% $13,015 2.78% $46,499 2.54% $78,124 $68,888 2.27%Securities held-to-maturity: U.S. governmentand agencyobligations $— —% $10,000 2.23% $3,000 2.00% $— —% $13,000 $12,313 2.00%Corporate bonds — — 6,431 6.70 16,295 4.73 4,287 6.19 27,013 24,925 4.95 Municipal securities — — 902 1.11 1,591 3.00 508 2.15 3,001 2,682 1.94 Mortgage-backedsecurities –residential — — 383 2.66 2,294 5.19 9,807 1.92 12,484 11,034 2.37 Mortgage-backedsecurities –commercial — — 3,585 2.60 11,048 1.56 2,525 2.04 17,158 14,421 1.98 Total $— —% $21,301 3.60% $34,228 3.43% $17,127 2.96% $72,656 $65,375 3.15% Sources of Funds General. Deposits have traditionally been our primary source of funds for our lending and investment activities. We also use borrowings, primarily FederalHome Loan Bank of New York advances, to supplement cash flows, as needed. In addition, funds are derived from scheduled loan payments, investment maturities, loansales, loan prepayments, retained earnings and income on earning assets. While scheduled loan payments and income on earning assets are relatively stable sources offunds, deposit inflows and outflows can vary widely and are influenced by prevailing interest rates, market conditions and competition. Deposit Accounts. The substantial majority of our deposits are from depositors who reside in our primary market area. We access deposit customers byoffering a broad selection of deposit instruments for individuals, businesses and municipalities. At December 31, 2023, municipal deposits totaled $57.5 million, whichrepresented 9.2% of total deposits. 13Table of Contents Deposit account terms vary according to the minimum balance required, the time period that funds must remain on deposit, and the interest rate, among otherfactors. In determining the terms of our deposit accounts, we consider the rates offered by our competition, our liquidity needs, profitability, and customer preferences.We generally review our deposit pricing on a weekly basis and continually review our deposit mix. Our deposit pricing strategy has generally been to offer competitiverates, but generally not the highest rates offered in the market, and to periodically offer special rates to attract deposits of a specific type or with a specific term. Also, when rates and terms are favorable, we supplement customer deposits with brokered deposits. At December 31, 2023, we had $53.3 million of brokereddeposits (63 accounts), which represented 8.5% of total deposits at December 31, 2023 with such funds having a weighted average remaining term to maturity of 36months. In a rising rate environment, we may be unwilling or unable to pay competitive rates. To the extent that such deposits do not remain with us, they may need tobe replaced with borrowings, which could increase our cost of funds and negatively impact our interest rate spread, financial condition and results of operations. The flow of deposits is influenced significantly by general economic conditions, changes in money market and other prevailing interest rates and competition.The variety of deposit accounts offered allows us to be competitive in obtaining funds and responding to changes in consumer demand. Based on experience, webelieve that our deposits are relatively stable. However, the ability to attract and maintain deposits and the rates paid on these deposits has been and will continue to besignificantly affected by market conditions. 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, 2023 2022 Amount Percent Average Rate Amount Percent Average Rate (Dollars in thousands) Noninterest bearing demand accounts $30,555 4.89% —% $38,653 5.52% —%NOW accounts 41,321 6.61 1.90 82,720 11.79 0.88 Money market accounts 14,641 2.34 0.30 30,037 4.28 0.32 Savings accounts 45,555 7.28 1.76 57,408 8.18 0.49 Certificates of deposit 493,275 78.88 4.00 492,593 70.23 2.37 Total $625,347 100.00% 3.42% $701,411 100.00% 1.82% As of December 31, 2023, the aggregate amount of uninsured deposits (deposits in amounts greater than $250,000, which is the maximum amount for federaldeposit insurance) for noninterest bearing demand accounts, NOW accounts and money market accounts, savings accounts and certificates of deposit was $42.1million, $8.3 million and $135.1 million respectively. As of December 31, 2022, the aggregate amount of uninsured deposits (deposits in amounts greater than or equal to$250,000, which is the maximum amount for federal deposit insurance) for noninterest bearing demand accounts, NOW accounts and money market accounts, savingsaccounts and certificates of deposit was $68.1 million, $4.4 million and $50.0 million respectively. The amount of uninsured deposits is estimated on a per account basis,actual uninsured deposits may vary when accounts are combined to a single owner. The following table sets forth the maturity of the portion of our certificate of depositthat are in excess of the Federal Deposit Insurance Corporation insurance limit as of December 31, 2023. At December 31,2023 (In thousands) Maturity Period: Three months or less $44,465 Over three through six months 26,758 Over six through twelve months 47,677 Over twelve months 13,160 Total $132,060 14Table of Contents Employees and Human Capital Resources As of December 31, 2023, we had 68 full-time employees and two part-time employees. Our employees are not represented by any collective bargaining group.Management believes that we have a good working relationship with our employees. We encourage and support the growth and development of our employees and, wherever possible, seek to fill positions by promotion and transfer from withinthe organization. Continual learning and career development is advanced through annual performance and conversations with employees, internally developed trainingprograms, customized corporate training engagements and educational reimbursement programs. Reimbursement is available to employees enrolled in pre-approveddegree or certification programs at accredited institutions that teach skills or knowledge relevant to our business and for seminars, conferences, and other trainingevents employees attend in connection with their job duties. The safety, health and wellness of our employees is a top priority. We further promote the health and wellness of our employees by strongly encouraging work-life balance, offering flexible work schedules, keeping the employee portion of health care premiums to a minimum and sponsoring various wellness programs, wherebyemployees are compensated for incorporating healthy habits into their daily routines. Employee retention helps us operate efficiently and achieve one of our business objectives, which is being a low-cost provider. We believe our commitment toliving out our core values, actively prioritizing concern for our employees’ well-being, supporting our employees’ career goals, offering competitive wages and providingvaluable fringe benefits aids in retention of our top-performing employees. In addition, nearly all of our employees are stockholders of the Company throughparticipation in our Employee Stock Ownership Plan, which aligns employee and stockholder interests by providing stock ownership on a tax-deferred basis at noinvestment cost to our employees. At December 31, 2023, 38% of our current staff had been with us for five years or more. Subsidiaries Bogota Securities Corp. is a New Jersey investment corporation subsidiary formed in 2014 to buy, sell and hold investment securities. The income earned onBogota Securities Corp.’s investment securities is subject to a lower state tax than that assessed on income earned on investment securities maintained at BogotaSavings Bank. In 1999, Bogota Savings Bank established Bogota Properties, LLC, a New Jersey-chartered limited liability company to secure, manage and hold foreclosedassets. Bogota Properties, LLC is currently inactive. Regulation and Supervision General As a New Jersey-chartered savings bank, Bogota Savings Bank is subject to comprehensive regulation by the NJDBI, as its chartering authority, and by theFederal Deposit Insurance Corporation. Bogota Savings Bank is a member of the Federal Home Loan Bank of New York and its deposits are insured up to applicablelimits by the Federal Deposit Insurance Corporation. Bogota Savings Bank is required to file reports with, and is periodically examined by, the Federal Deposit InsuranceCorporation and the NJDBI concerning its activities and financial condition and must obtain regulatory approvals before entering into certain transactions, includingmergers with or acquisitions of other financial institutions. This regulatory structure is intended primarily for the protection of the Deposit Insurance Fund anddepositors. The regulatory structure also gives the regulatory authorities extensive discretion in connection with their supervisory and enforcement activities andexamination policies, including policies regarding classifying assets and establishing an adequate allowance for loan losses for regulatory purposes. As a New Jersey-chartered mutual holding company and a bank holding company, Bogota Financial, MHC is regulated and subject to examination by theNJDBI and the Federal Reserve Board. As a bank holding company, Bogota Financial Corp. is also required to comply with the rules and regulations of the FederalReserve 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 enforcementauthority of, the Federal Reserve Board and the NJDBI. Bogota Financial Corp. is also subject to the rules and regulations of the Securities and Exchange Commissionunder the federal securities laws. Set forth below is a brief description of material regulatory requirements that are applicable to Bogota Savings Bank, Bogota Financial Corp. and BogotaFinancial, MHC. The description is limited to the material aspects of certain statutes and regulations, and is not intended to be a complete list or description of suchstatutes and regulations and their effects on Bogota Savings Bank, Bogota Financial Corp. and Bogota Financial, MHC. 15Table of Contents New Jersey Banking Laws and Supervision Activity Powers. Bogota Savings Bank derives its lending, investment and other activity powers primarily from the New Jersey Banking Act and its relatedregulations. Under these laws and regulations, savings banks, including Bogota Savings Bank, generally may, subject to certain limits, invest in: ●real estate mortgages; ●consumer and commercial loans; ●specific types of debt securities, including certain corporate debt securities and obligations of federal, state and local governments and agencies; ●certain types of corporate equity securities; and ●certain other assets. A savings bank may also make other investments pursuant to “leeway” authority that permits investments not otherwise permitted by the New Jersey BankingAct. Leeway investments must comply with a number of limitations on the individual and aggregate amounts of leeway investments. A savings bank may also exercisetrust powers upon approval of the NJDBI. New Jersey savings banks also may exercise those powers, rights, benefits or privileges authorized for national banks or out-of-state banks or for federal or out-of-state savings banks or savings associations, provided that before exercising any such power, right, benefit or privilege, priorapproval by the NJDBI by regulation or by specific authorization is required. The exercise of these lending, investment and activity powers is limited by federal law andregulations. See “—Federal Bank Regulation—Activities and Investments” below. Loan-to-One-Borrower Limitations. With certain specified exceptions, a New Jersey-chartered savings bank may not make loans or extend credit to a singleborrower or to entities related to the borrower in an aggregate amount that would exceed 15% of the bank’s capital funds. A savings bank may lend an additional 10% ofthe bank’s capital funds if secured by collateral meeting the requirements of the New Jersey Banking Act. Bogota Savings Bank currently complies with applicable loan-to-one-borrower limitations. Dividends. Under the New Jersey Banking Act, a stock savings bank may declare and pay a dividend on its capital stock only to the extent that the payment ofthe dividend would not impair the capital stock of the savings bank. In addition, a stock savings bank may not pay a dividend unless the savings bank would, after thepayment of the dividend, have a surplus of not less than 50% of its capital stock, or alternatively, the payment of the dividend would not reduce the surplus. Federal lawmay also limit the amount of dividends that may be paid by Bogota Savings Bank. See “—Federal Bank Regulation—Prompt Corrective Regulatory Action” below. Minimum Capital Requirements. Regulations of the NJDBI impose on New Jersey-chartered depository institutions, including Bogota Savings Bank,minimum capital requirements similar to those imposed by the Federal Deposit Insurance Corporation on insured state banks. See “—Federal Bank Regulation—CapitalRequirements.” Examination and Enforcement. The NJDBI may examine Bogota Savings Bank whenever it considers an examination advisable and it examines BogotaSavings Bank at least every two years. The NJDBI may order any savings bank to discontinue any violation of law or unsafe or unsound business practice and maydirect any director, officer, attorney or employee of a savings bank engaged in an objectionable activity, after the NJDBI has ordered the activity to be terminated, toshow cause at a hearing before the NJDBI why such person should not be removed. The NJDBI also has authority to appoint a conservator or receiver for a savingsbank under certain circumstances such as insolvency or unsafe or unsound condition to transact business. 16Table of Contents Federal Bank Regulation Supervision and Enforcement Authority. Bogota Savings Bank is subject to extensive regulation, examination and supervision by the Federal DepositInsurance Corporation as the insurer of its deposits. Bogota Savings Bank must file reports with the Federal Deposit Insurance Corporation concerning its activities and financial condition in addition to obtainingregulatory approvals before entering into certain transactions such as mergers with, or acquisitions of, other financial institutions. There are periodic examinations bythe Federal Deposit Insurance Corporation to evaluate Bogota Savings Bank’s safety and soundness and compliance with various regulatory requirements. The regulatory structure gives the Federal Deposit Insurance Corporation extensive discretion in connection with its supervisory and enforcement activitiesand examination policies, including policies with respect to the classification of assets and the establishment of an adequate allowance for loan losses for regulatorypurposes. The enforcement authority includes, among other things, the ability to assess civil money penalties, issue cease and desist orders and remove directors andofficers. In general, these enforcement actions may be initiated in response to violations of laws and regulations, breaches of fiduciary duty and unsafe or unsoundpractices. The Federal Deposit Insurance Corporation may also appoint itself as conservator or receiver for an insured bank under specified circumstances, including: (1)insolvency; (2) substantial dissipation of assets or earnings through violations of law or unsafe or unsound practices; (3) the existence of an unsafe or unsoundcondition to transact business; (4) insufficient capital; or (5) the incurrence of losses that will deplete substantially all of the institution’s capital with no reasonableprospect of replenishment without federal assistance. Capital Requirements. Federal regulations require federally insured depository institutions to meet several minimum capital standards: Tier 1 capital to averageassets of 4.00%, common equity tier 1 capital to risk weighted assets of 4.50%, tier 1 capital to risk weighted assets of 6.00% and total capital to risk weighted assets of8.00%. Common equity tier 1 capital, tier 1 capital, total capital, risk weighted assets and average assets are defined in the Basel III rules and applicable federalregulation. The Bogota Savings Bank opted to exclude accumulated other comprehensive income components from common equity tier 1 and total regulatory capital.Failure to meet the minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by the Federal Deposit InsuranceCorporation that, if undertaken, could have a direct material effect on Bogota Savings Bank. In addition to establishing the minimum regulatory capital requirements, federal regulations limit capital distributions and certain discretionary bonus paymentsto management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital to risk-weighted assets above theamount necessary to meet its minimum risk-based capital requirements. The Economic Growth, Regulatory Relief, and Consumer Protection Act required the federal banking agencies, including the Federal Deposit InsuranceCorporation, to establish a community bank leverage ratio (“CBLR”) for financial institutions and financial institution holding companies that have less than $10 billionin total consolidated assets and meet other qualifying criteria (“qualifying community banking organizations”). In 2020, the federal banking agencies adopted a final rulethat established 9% as the CBLR, for 2022 and thereafter. Qualifying community banking organizations may opt into and out of the CBLR framework on their quarterly call reports. Qualifying community bankingorganizations that elect to use the CBLR framework and that meet the specified capital requirement, which starting in 2022 is maintaining a leverage ratio of greater than9%, are considered to have satisfied the generally applicable risk-based and leverage capital requirements in the agencies’ capital rules and will be considered to havemet the well capitalized ratio requirements under the prompt corrective action laws and regulations. The agencies reserved the authority to disallow the use of the CBLRframework by a financial institution or holding company, based on the risk profile of the organization. Bogota Savings Bank elected to use the CBLR framework as of December 31, 2022. Bogota Savings Bank’s capital management policy is designed to build andmaintain capital levels that exceed regulatory standards and appropriately provide for growth. The leverage ratio of Bogota Savings Bank at December 31, 2023 was13.96%; see Note 13 for more information. 17Table of Contents Standards for Safety and Soundness. As required by statute, the federal banking agencies have adopted final regulations and Interagency GuidelinesEstablishing Standards for Safety and Soundness. The guidelines set forth the safety and soundness standards the federal banking agencies use to identify andaddress problems at insured depository institutions before capital becomes impaired. The guidelines address internal controls and information systems, internal auditsystems, credit underwriting, loan documentation, interest rate exposure, asset growth, asset quality, earnings and compensation, fees and benefits. The agencies havealso established standards for safeguarding customer information. If the appropriate federal banking agency determines that an institution fails to meet any standardprescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard. Activities and Investments. Federal law provides that a state-chartered bank insured by the Federal Deposit Insurance Corporation generally may not engageas a principal in any activity not permissible for a national bank to conduct or make any equity investment of a type or in an amount not authorized for national banks,notwithstanding state law, subject to certain exceptions. For example, state-chartered banks may, with the Federal Deposit Insurance Corporation's approval, continue toexercise state authority to invest in common or preferred stocks listed on a national securities exchange or the Nasdaq Market and to invest in the shares of aninvestment company registered under the Investment Company Act of 1940. The maximum permissible investment is 100% of Tier 1 Capital, as specified by the FederalDeposit Insurance Corporation’s regulations, or the maximum amount permitted by New Jersey law, whichever is less. In addition, the Federal Deposit Insurance Corporation is authorized to permit state-chartered banks and savings banks to engage in state-authorized activitiesor investments not permissible for national banks (other than non-subsidiary equity investments) if they meet all applicable capital requirements and it is determined thatsuch activities or investments do not pose a significant risk to the Deposit Insurance Fund. The Federal Deposit Insurance Corporation has adopted procedures forinstitutions seeking approval to engage in such activities or investments. In addition, a state nonmember bank may control a subsidiary that engages in activities asprincipal that would only be permitted for a national bank to conduct in a “financial subsidiary” if the bank meets specified conditions and deducts its investment in thesubsidiary for regulatory capital purposes. Interstate Banking and Branching. Federal law permits well-capitalized and well managed bank holding companies to acquire banks in any state, subject toFederal Reserve Board approval, certain concentration limits and other specified conditions. Interstate mergers of banks are also authorized, subject to regulatoryapproval and other specified conditions. In addition, banks may establish de novo branches on an interstate basis at any location where a bank chartered under the lawsof the branch location host state may establish a branch. Prompt Corrective Regulatory Action. Federal law requires, among other things, that federal bank regulators take “prompt corrective action” with respect tobanks that do not meet minimum capital requirements. For these purposes, the law establishes five capital categories: well capitalized, adequately capitalized,undercapitalized, significantly undercapitalized and critically undercapitalized. The Federal Deposit Insurance Corporation has adopted regulations to implement the prompt corrective action legislation. An institution is considered “wellcapitalized” if it has a CBLR ratio of 9.0% or greater, starting in 2022, or if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0%or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 capital ratio of 6.5% or greater. At December 31, 2023, Bogota Savings Bank was classified as a“well capitalized” institution. At each successive lower capital category, an insured depository institution is subject to more restrictions and prohibitions, including restrictions on growth,interest rates paid on deposits, payment of dividends, and acceptance of brokered deposits. Furthermore, if an insured depository institution is classified in one of theundercapitalized categories, it is required to submit a capital restoration plan to the appropriate federal banking agency, and the holding company must guarantee theperformance of that plan in an amount equal to the lesser of 5.0% of the institution’s total assets when deemed undercapitalized or the amount necessary to achieve thestatus of adequately capitalized. Based upon its capital levels, a bank that is classified as well-capitalized, adequately capitalized, or undercapitalized may be treated asthough it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe orunsound condition, or an unsafe or unsound practice, warrants such treatment. If an “undercapitalized” bank fails to submit an acceptable capital restoration plan, it istreated as if it is “significantly undercapitalized.” “Significantly undercapitalized” banks must comply with one or more of a number of additional restrictions, includingan order by the Federal Deposit Insurance Corporation to sell sufficient voting stock to become adequately capitalized, requirements to reduce total assets, cease receiptof deposits from correspondent banks or dismiss directors or officers, and restrictions on interest rates paid on deposits, compensation of executive officers and capitaldistributions by the parent holding company. “Critically undercapitalized” institutions are subject to additional measures including, subject to a narrow exception, theappointment of a receiver or conservator within 270 days after it is determined to be critically undercapitalized. 18Table of Contents As noted above, federal legislation has modified the Basel III requirements for qualifying banks with less than $10.0 billion in assets who elect to follow theCBLR framework. Transactions with Affiliates and Federal Reserve Regulation W. Transactions between banks and their affiliates are governed by federal law. Generally,Section 23A of the Federal Reserve Act and the Federal Reserve Board’s Regulation W, as made applicable to Bogota Savings Bank through Section 18(j) of the FederalDeposit Insurance Act and Federal Deposit Insurance Corporation regulation, prohibit a bank and its subsidiaries from engaging in a “covered transaction” if theaggregate amount of covered transactions outstanding with the affiliate, including the proposed transaction, would exceed an amount equal to 10.0% of the bank’scapital stock and surplus, or if the aggregate amount of covered transactions outstanding with all affiliates, including the proposed transaction, would exceed an amountequal to 20.0% of the bank’s capital stock and surplus. The term “covered transaction” includes making loans to, purchasing assets from, and issuing guarantees to, anaffiliate, and other similar transactions. In addition, loans or other extensions of credit by a bank to an affiliate are required to be collateralized according to therequirements set forth in Section 23A of the Federal Reserve Act. Section 23B of the Federal Reserve Act and Regulation W apply to “covered transactions” as well asto certain other transactions, including the provision of services and selling of assets to an affiliate, and require that all such transactions be on terms and undercircumstances that are substantially the same, or at least as favorable, to the institution or its subsidiary as those prevailing at the time for comparable transactions withor involving a non-affiliate. Loans to Insiders and Federal Reserve Regulation O. A bank’s loans to its, and its affiliates', executive officers, directors, any owner of 10% or more of itsstock (each, an insider) and any of certain entities controlled by any such person (an insider’s related interests) as well as loans to insiders of affiliates and suchinsiders’ related interests are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act and its implementing regulations, RegulationO, as made applicable to Bogota Savings Bank through Section 18(j) of the Federal Deposit Insurance Act and Federal Deposit Insurance Corporation regulation. Underthese restrictions, the aggregate amount of the loans to any insider and the insider’s related interests may not exceed the loans-to-one-borrower limit applicable tonational banks, which is comparable to the loans-to-one-borrower limit applicable to Bogota Savings Bank. See “New Jersey Banking Regulation—Loans-to-OneBorrower Limitations.” All loans by a bank to all insiders and insiders’ related interests in the aggregate may not exceed the bank’s unimpaired capital and unimpairedsurplus. Regulation O also requires that any proposed loan to an insider or a related interest of that insider be approved in advance by a majority of the board ofdirectors of the bank, with any interested directors not participating in the voting, if such loan, when aggregated with any existing loans to that insider and the insider’srelated interests, would exceed either (1) $500,000 or (2) the greater of $25,000 or 5% of the bank’s unimpaired capital and unimpaired surplus. Generally, loans to insidersand their related interests must be made on substantially the same terms as, and follow credit underwriting procedures that are not less stringent than, those that areprevailing at the time for comparable transactions with non-insiders, see note 5 for more information. With certain exceptions, loans to an executive officer, other thanloans for the education of the officer’s children and certain loans secured by the officer’s residence, may not exceed the lesser of (1) $100,000 or (2) the greater of $25,000or 2.5% of the bank’s unimpaired capital and unimpaired surplus. An exception to Regulation O's general requirements is made for extensions of credit made pursuant to a benefit or compensation plan of a bank that is widelyavailable to employees of the bank and that does not give any preference to insiders of the bank over other employees of the bank. In addition, federal law prohibits extensions of credit to a bank’s insiders and their related interests by any other institution that has a correspondent bankingrelationship with the bank, unless such extension of credit is on substantially the same terms as those prevailing at the time for comparable transactions with otherpersons and does not involve more than the normal risk of repayment or present other unfavorable features. Provisions of the New Jersey Banking Act impose conditions and limitations on the liabilities to a savings bank of its directors and executive officers and ofcorporations and partnerships controlled by such persons, that are comparable in many respects to the conditions and limitations imposed on the loans and extensionsof credit to insiders and their related interests under federal law, as discussed above. The New Jersey Banking Act also provides that a savings bank that is incompliance with federal law is deemed to be in compliance with such provisions of the New Jersey Banking Act. Federal Insurance of Deposit Accounts. Bogota Savings Bank is a member of the Deposit Insurance Fund, which is administered by the Federal DepositInsurance Corporation. Deposit accounts in Bogota Savings Bank are insured up to a maximum of $250,000 for each separately insured depositor per account ownershipcategory. Insurance of deposits may be terminated by the Federal Deposit Insurance Corporation upon a finding that the institution has engaged in unsafe or unsoundpractices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or regulatory condition imposed inwriting. We do not know of any practice, condition or violation that might lead to termination of Bogota Savings Bank’s deposit insurance, see Note 7 for moreinformation. 19Table of Contents Privacy Regulations. A regulation issued by the Consumer Financial Protection Bureau generally requires that Bogota Savings Bank disclose its privacypolicy, including identifying with whom it shares a customer’s “non-public personal information,” to customers at the time of establishing the customer relationship. Inaddition, financial institutions are generally required to furnish their customers a privacy notice annually, but a provision of the Fixing America’s Surface TransportationAct enacted in 2015 provides an exception from the annual notice requirement if a financial institution does not share non-public personal information with non-affiliatedthird parties (other than as permitted under certain exceptions) and its policies and practices regarding disclosure of non-public personal information have not changedsince the last distribution of its policies and practices to its customers. In addition, Bogota Savings Bank is required to provide its customers with the ability to “opt-out” of having their personal information shared with unaffiliated third parties and to not disclose account numbers or access codes to non-affiliated third parties formarketing purposes. Community Reinvestment Act. Under the Community Reinvestment Act, or “CRA,” as implemented by the Federal Deposit Insurance Corporation, a state non-member bank has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of its entire community, includinglow- and moderate-income neighborhoods. The CRA does not establish specific lending requirements or programs for financial institutions nor does it limit aninstitution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. The CRArequires the Federal Deposit Insurance Corporation, in connection with its examination of each state non-member bank, to assess the institution’s record of meeting thecredit needs of its community and to take such record into account in its evaluation of certain applications by such institution, including applications to acquirebranches and other financial institutions. The CRA currently requires the Federal Deposit Insurance Corporation to provide a written evaluation of an institution’s CRAperformance utilizing a four-tiered descriptive rating system. Bogota Savings Bank’s most recent Federal Deposit Insurance Corporation CRA rating in August 2023 was“Satisfactory.” On October 24, 2023, the FDIC and the other federal banking agencies issued a final rule to strengthen and modernize the CRA regulations. Under thefinal rule, banks with assets of at least $600 million as of December 31 in both of the prior two calendar years and less than $2 billion as of December 31 in either of theprior two calendar years will be an “intermediate bank.” The agencies will evaluate intermediate banks under the Retail Lending Test and either the current communitydevelopment test, referred to in the final rule as the Intermediate Bank Community Development Test, or, at the bank’s option, the Community Development FinancingTest. The applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1,2027. Consumer Protection and Fair Lending Regulations. Bogota Savings Bank is subject to a variety of federal and New Jersey statutes and regulations that areintended to protect consumers and prohibit discrimination in the granting of credit. These statutes and regulations provide for a range of enforcement actions for non-compliance with their terms, including imposition of cease-and-desist orders and civil money penalties, and referral to the U.S. Attorney General for prosecution of a civilaction seeking actual and punitive damages and injunctive relief. Certain of these statutes, including Section 5 of the Federal Trade Commission Act, prohibit unfair anddeceptive acts and practices against consumers. Federal laws also prohibit unfair, deceptive or abusive acts or practices against consumers, which can be enforced bythe Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation and state attorneys general. Federal Home Loan Bank System Bogota Savings Bank is a member of the Federal Home Loan Bank System, which consists of 11 regional Federal Home Loan Banks. The Federal Home LoanBanks provide a central credit facility primarily for member institutions. Bogota Savings Bank, as a member of the Federal Home Loan Bank of New York, is required toacquire and hold shares of capital stock in the Federal Home Loan Bank of New York. Bogota Savings Bank was in compliance with this requirement at December 31,2023. Holding Company Regulation Federal Holding Company Regulation. Bogota Financial, MHC and Bogota Financial Corp. are bank holding companies registered with the Federal ReserveBoard and are subject to regulations, examination, supervision and reporting requirements applicable to bank holding companies. In addition, the Federal Reserve Boardhas enforcement authority over Bogota Financial, MHC and Bogota Financial Corp. and their non-bank subsidiaries. Among other things, this authority permits theFederal Reserve Board to restrict or prohibit activities that are determined to be a serious risk to the subsidiary savings bank. A bank holding company is generally prohibited from engaging in non-banking activities, or acquiring direct or indirect control of more than 5% of the votingsecurities of any company engaged in non-banking activities. One of the principal exceptions to this prohibition is for activities the Federal Reserve Board determines tobe so closely related to banking or managing or controlling banks as to be a proper incident thereto. Some of the principal activities that the Federal Reserve Board hasdetermined by regulation to be so closely related to banking are: (1) making or servicing loans; (2) performing certain data processing services; (3) providing discountbrokerage services; (4) acting as fiduciary, investment or financial advisor; (5) leasing personal or real property; (6) making investments in corporations or projectsdesigned primarily to promote community welfare; and (7) acquiring a savings and loan association whose direct and indirect activities are limited to those permitted forbank holding companies. 20Table of Contents The Gramm-Leach-Bliley Act of 1999 authorizes a bank holding company that meets specified conditions, including that its depository institution subsidiariesare “well capitalized” and “well managed,” to opt to become a “financial holding company.” A “financial holding company” may engage in a broader range of financialactivities than a bank holding company. Such activities may include insurance underwriting and investment banking. Bogota Financial Corp. has not elected “financialholding company” status at this time. Capital. Bank holding companies with greater than $3 billion in total consolidated assets are subject to consolidated regulatory capital requirements. However,pursuant to federal legislation and regulation, bank holding companies with less than $3.0 billion in consolidated assets, such as Bogota Financial Corp., generally arenot subject to the consolidated capital requirements unless otherwise advised by the Federal Reserve Board. Dividends and Stock Repurchases. A bank holding company is generally required to give the Federal Reserve Board prior written notice of any purchase orredemption of its outstanding equity securities if the gross consideration for the purchase or redemption, when combined with the net consideration paid for all suchpurchases or redemptions during the preceding 12 months, is equal to 10% or more of the company’s consolidated net worth. The Federal Reserve Board maydisapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe and unsound practice, or would violate any law, regulation,Federal Reserve Board order or directive, or any condition imposed by, or written agreement with, the Federal Reserve Board. There is an exception to this approvalrequirement for well-capitalized bank holding companies that meet certain other conditions. The Federal Reserve Board has issued a policy statement regarding capital distributions, including dividends, by bank holding companies. In general, thepolicy provides that dividends should be paid only from current earnings and only if the prospective rate of earnings retention by the bank holding company appearsconsistent with the organization’s capital needs, asset quality and overall financial condition. The policy also requires that a bank holding company serve as a source offinancial strength to its subsidiary banks by standing ready to use available resources to provide adequate capital funds to those banks during periods of financialstress or adversity, and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks wherenecessary. Additionally, under the prompt corrective action laws, the ability of a bank holding company to pay dividends may be restricted if a subsidiary bank becomesundercapitalized. In addition, the Federal Reserve has issued guidance that requires consultation with supervisory staff prior to a bank holding company’s payment ofdividends or repurchases of stock under certain circumstances. These regulatory policies could affect the ability of Bogota Financial Corp. to pay dividends, engage instock repurchases or otherwise engage in capital distributions. Waivers of Dividends by Bogota Financial, MHC. Bogota Financial Corp. may pay dividends on its common stock to public stockholders. If it does, it is alsorequired to pay the same dividends per share to Bogota Financial, MHC, unless Bogota Financial, MHC elects to waive the receipt of dividends. Bogota Financial, MHCmust receive the prior approval of the Federal Reserve Board before it may waive the receipt of any dividends from Bogota Financial Corp., and current Federal ReserveBoard policy prohibits any mutual holding company that is regulated as a bank holding company, such as Bogota Financial, MHC, from waiving the receipt of dividendspaid by its subsidiary holding company. Because of the foregoing Federal Reserve Board restrictions on the ability of a mutual holding company, such as Bogota Financial, MHC, to waive the receiptof dividends declared by its subsidiary mid-tier stock holding company, it is unlikely that Bogota Financial, MHC will waive the receipt of any dividends declared byBogota Financial Corp. Moreover, since Bogota Financial Corp. sold only a minority of its shares to the public and contributed the remaining shares to Bogota Financial,MHC, Bogota Financial Corp. raised significantly less capital than would have been the case if it had sold all its shares to the public. As a result, paying dividends toBogota Financial, MHC, an entity that did not pay for the shares of Bogota Financial Corp. common stock it received in connection with the offering, may be inequitableto public stockholders and not in their best financial interests. Therefore, unless Federal Reserve Board regulations and policy change by allowing Bogota Financial,MHC to waive the receipt of dividends declared by Bogota Financial Corp. without diluting minority stockholders, it is unlikely that Bogota Financial Corp. will pay anydividends. Possible Conversion of Bogota Financial, MHC to Stock Form. In the future, Bogota Financial, MHC may convert from the mutual to capital stock form ofownership in a transaction commonly referred to as a “second-step conversion.” Any second-step conversion of Bogota Financial, MHC would require the approval ofthe NJDBI and the Federal Reserve Board, as well as the approval of the members of Bogota Financial, MHC. 21Table of Contents Acquisition. Federal laws and regulations and the New Jersey Banking Act provide that no person may acquire control of a bank holding company, such asBogota Financial Corp., without the prior non-objection or approval of the Federal Reserve Board and the NJDBI. Control, as defined under the Change in Bank ControlAct and applicable federal regulations, means ownership, control of or the power to vote 25% or more of any class of voting securities of the company. Acquisition of10% or more of any class of a bank holding company’s voting securities constitutes a rebuttable presumption of control under certain circumstances, including where,as is the case with Bogota Financial Corp., the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934. In addition, the Bank Holding Company Act of 1956, as amended, provides that no company may acquire control of a bank or bank holding company within themeaning of that statute without having first obtained the approval of the Federal Reserve Board. Control, as defined under the Bank Holding Company Act andapplicable Federal Reserve Board regulations, means ownership, control or power to vote 25% or more of any class of voting stock, control in any manner over theelection of a majority of the company’s directors, or a determination by the Federal Reserve Board, after notice and opportunity for a hearing, that the acquirer has thepower to exercise, directly or indirectly, a controlling influence over the management or policies of the company. Effective September 30, 2020, the Federal Reserve Boardamended its regulations concerning when a company exercises a controlling influence over a bank or bank holding company for purposes of the Bank Holding CompanyAct. A company that acquires control of a bank or bank holding company for purposes of the Bank Holding Company Act becomes a “bank holding company” subjectto registration, examination and regulation by the Federal Reserve Board. New Jersey Holding Company Regulation. Bogota Financial, MHC and Bogota Financial Corp. are subject to regulation under New Jersey banking law. Underthe New Jersey Banking Act, a company owning or controlling a savings bank is regulated as a bank holding company. The New Jersey Banking Act defines the terms“company” and “bank holding company” as such terms are defined under the federal Bank Holding Company Act. Each bank holding company controlling a NewJersey-chartered bank or savings bank must file certain reports with the NJDBI and is subject to examination by the NJDBI. Federal Securities Laws Bogota Financial Corp.’s common stock is registered with the Securities and Exchange Commission. As such Bogota Financial Corp. is subject to theinformation, proxy solicitation, insider trading restrictions and other requirements under the Securities Exchange Act of 1934. Emerging Growth Company Status. Under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), a company with pre-IPO total annual grossrevenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an “emerging growth company.” Bogota Financial Corp. qualifies as anemerging growth company under the JOBS Act. An “emerging growth company” may choose not to hold stockholder votes to approve annual executive compensation (more frequently referred to as “say-on-pay” votes) or executive compensation payable in connection with a merger (more frequently referred to as “say-on-golden parachute” votes). An emerging growthcompany also is not subject to the requirement that its auditors attest to the effectiveness of the company’s internal control over financial reporting, and can providescaled disclosure regarding executive compensation; however, Bogota Financial Corp. will also not be subject to additional executive compensation disclosure so longas it remains a “smaller reporting company” under Securities and Exchange Commission regulations (generally less than $250 million of voting and non-voting equityheld by non-affiliates). Finally, an emerging growth company may elect to comply with new or amended accounting pronouncements in the same manner as a privatecompany, but must make such election when the company is first required to file a registration statement. Such an election is irrevocable during the period a company isan emerging growth company. Bogota Financial Corp. has elected to comply with new or amended accounting pronouncements in the same manner as a privatecompany. A company loses emerging growth company status on the earlier of: (1) the last day of the fiscal year of the company during which it had total annual grossrevenues of $1.07 billion or more; (2) the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities ofthe company pursuant to an effective registration statement under the Securities Act of 1933; (3) the date on which such company has, during the previous three-yearperiod, issued more than $1.0 billion in non-convertible debt; or (4) the date on which such company is deemed to be a “large accelerated filer” under Securities andExchange Commission regulations (generally, a “large accelerated filer” is defined as a corporation with at least $700 million of voting and non-voting equity held bynon-affiliates). 22Table of Contents Sarbanes-Oxley Act of 2002 The Sarbanes-Oxley Act of 2002 was enacted to improve corporate responsibility, provide for enhanced penalties for accounting and auditing improprieties atpublicly traded companies and protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. Bogota FinancialCorp. has in place policies, procedures and systems designed to comply with this Act and its implementing regulations, and Bogota Financial Corp. will review anddocument such policies, procedures and systems to ensure continued compliance with this Act and its implementing regulations. Taxation Federal Taxation General. Bogota Financial Corp. and Bogota Savings Bank are subject to federal income taxation in the same general manner as other corporations, with someexceptions discussed below. The following discussion of federal taxation is intended only to summarize material federal income tax matters and is not a comprehensivedescription of the tax rules applicable to Bogota Financial Corp. and Bogota Savings Bank. Method of Accounting. For federal income tax purposes, Bogota Savings Bank currently reports its income and expenses on the accrual method of accountingand uses a tax year ending December 31 for filing its federal income tax returns. Net Operating Loss Carryovers. Effective with the passage of the Tax Cuts and Jobs Act, net operating loss carrybacks are no longer permitted, and netoperating losses are allowed to be carried forward indefinitely. Net operating loss carryforwards arising from tax years beginning after January 1, 2018 are limited tooffset a maximum of 80% of a future year’s taxable income. See Note 9 in the Notes to consolidated financial statements that appear in this Annual Report on Form 10-Kfor additional information. At December 31, 2023, Bogota Savings Bank had net operating loss carryovers assumed from the Gibraltar merger. Capital Loss Carryovers. Generally, a financial institution may carry back capital losses to the preceding three taxable years and forward to the succeeding fivetaxable years. Any capital loss carryback or carryover is treated as a short-term capital loss for the year to which it is carried. As such, it is grouped with any othercapital losses for the year to which it is carried and is used to offset any capital gains. Any loss remaining after the five-year carryover period that has not beendeducted is no longer deductible. At December 31, 2023, Bogota Savings Bank had no capital loss carryovers. Corporate Dividends. We may generally exclude from our income 100% of dividends received from Bogota Savings Bank as a member of the same affiliatedgroup of corporations. Audit of Tax Returns. Bogota Savings Bank’s federal income tax returns and New Jersey State income tax returns have not been audited in the last three years. State Taxation Taxable income for New Jersey-chartered financial institutions is apportioned to New Jersey based on the location of the taxpayer’s customers, with specialrules for income from certain financial transactions. The location of the taxpayer’s offices and branches not relevant to the determination of income apportioned to NewJersey. The statutory tax rate is currently 6.5%. Qualified community banks and thrift institutions that maintain a qualified loan portfolio are entitled to a speciallycomputed modification that reduces the income taxable to New Jersey. 23Table of Contents ITEM 1A. Risk Factors The material risks that management believes affect the Company are described below. You should carefully consider the risks as described below, together withall of the information included herein. The risks described below are not the only risks the Company faces. Additional risks not presently known also may have amaterial adverse effect on the Company’s results of operations and financial condition. Risks Related to our Lending Activities The geographic concentration of our loan portfolio makes us vulnerable to a downturn in the local economy. At December 31, 2023, approximately $710.8 million, or 99.1% of our total loan portfolio, was secured by real estate, most of which is located in our primarylending market of Bergen, Essex, Monmouth, Morris and Ocean Counties in New Jersey. Unlike larger financial institutions that are more geographically diversified, ourprofitability depends primarily on the general economic conditions in our primary market area. Local economic conditions have a significant impact on our lending,including the ability of borrowers to repay these loans and the value of the collateral securing these loans. Future declines in the real estate values in northern andcentral New Jersey could significantly impair the value of the collateral securing our loans and our ability to sell the collateral upon foreclosure for an amount necessaryto satisfy the borrower’s obligations to us. This could require increasing our allowance for credit losses, which could have a material adverse effect on our business,financial condition, results of operations and growth. 24Table of Contents Our strategy emphasis on commercial and multi-family real estate loans may expose us to increased lending risks. At December 31, 2023, $175.4 million, or 24.5% of our loan portfolio, consisted of commercial and multi-family real estate loans. We are committed to increasingthis type of lending. However, commercial and multi-family real estate loans generally expose a lender to a greater risk of loss than one- to four-family residential loans.Repayment of commercial and multi-family real estate loans generally depends, in large part, on sufficient income from the property or business to cover operatingexpenses and debt service. Commercial and multi-family real estate loans typically involve larger loan balances to single borrowers or groups of related borrowerscompared to one- to four-family residential mortgage loans. Changes in economic conditions that are beyond the control of the borrower and lender could impact thevalue of the security for the loan or the future cash flows of the affected property. Additionally, any decline in real estate values may affect commercial and multi-familyreal estate properties more than residential properties. Also, many of our commercial and multi-family real estate borrowers have more than one loan outstanding with us.Consequently, an adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adversedevelopment with respect to a residential mortgage loan. Our non-owner occupied commercial real estate loans may expose us to increased credit risk. At December 31, 2023, $70.3 million, or 9.8% of our total loan portfolio, consisted of loans secured by non-owner occupied commercial real estate loans. AtDecember 31, 2023, $494,000, or 0.7% of these loans were past due. Loans secured by non-owner occupied properties generally expose a lender to greater risk of non-payment and loss than loans secured by owner occupied properties because repayment of such loans depend primarily on the tenant’s continuing ability to pay rent tothe property owner, who is our borrower, or, if the property owner is unable to find a tenant, the property owner’s ability to repay the loan without the benefit of a rentalincome stream. In addition, the physical condition of non-owner occupied properties may be below that of owner occupied properties due to lax property maintenancestandards that negatively impact the value of the collateral properties. Our allowance for credit losses may not be sufficient to cover actual credit losses. We maintain an allowance for credit losses, which is established through a provision for credit losses that represents management’s best estimate of currentexpected credit losses within our loan portfolio. We make various assumptions and judgments about the collectability of loans in our portfolio, including thecreditworthiness of borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans. In determining the adequacy of theallowance for credit losses, we rely on our historical loss experience and our evaluation of economic and other conditions. If our assumptions prove to be incorrect,the allowance for credit losses may not be sufficient to cover the losses in our loan portfolio, and adjustments may be necessary to address different economicconditions or adverse developments in the loan portfolio. Consequently, a problem with one or more loans could require us to significantly increase our provision forcredit losses. In addition, the NJDBI and the Federal Deposit Insurance Corporation review our allowance for credit losses and as a result of such reviews, they mayrequire us to adjust our allowance for loan losses or recognize loan charge-offs. Material additions to the allowance would materially decrease our net income. The implementation of the Current Expected Credit Losses, or CECL, standard became effective for Bogota Financial Corp. on January 1, 2023. CECL requiresfinancial institutions to determine periodic estimates of lifetime expected credit losses on loans, and recognize the expected credit losses as allowances for credit losses.This changed the method of providing allowances for credit losses that are incurred or probable, which required us to increase our allowance for credit losses, and togreatly increase the types of data we need to collect and review to determine the appropriate level of the allowance for credit losses. The Company has no history ofcredit losses and therefore used the Weighted Average Remaining Maturity (WARM) method and relied on the use of qualitative factors to determine futurelosses. Upon adoption of the CECL method of calculating the allowance for credit losses on January 1, 2023, the Bank recorded a one-time decrease, net of tax, inretained earnings of $220,000, an increase to the allowance for credit losses of $157,000 and an increase in the reserve for unfunded liabilities of $152,000. Our concentrations of loans in certain industries could have adverse effects on credit quality. As of December 31, 2023, the Company’s loan portfolio included loans to: (i) lessors of office buildings of $58.0 million, or 8.1% of total loans; and (ii)borrowers in the retail industry of $70.1 million, or 9.8% of total loans. Because of these concentrations of loans in specific industries, a deterioration within theseindustries, especially those that have been particularly adversely impacted by long-term work-from-home arrangements on the commercial real estate sector, includingretail stores, hotels and office buildings, creates greater risk exposure for our commercial real estate loan portfolio. Should the fundamentals of the commercial realestate market deteriorate, our financial condition and results of operations could be adversely affected. 25Table of Contents We are subject to environmental liability risk associated with lending activities. A significant portion of our loan portfolio is secured by real estate, and we could become subject to environmental liabilities with respect to one or more ofthese properties. During the ordinary course of business, we may foreclose on and take title to properties securing defaulted loans. In doing so, there is a risk thathazardous or toxic substances could be found on these properties. In such event, we may be liable for remediation costs, as well as for personal injury and propertydamage, civil fines and criminal penalties regardless of when the hazardous conditions or toxic substances first affected any particular property. Environmental laws mayrequire us to incur substantial expenses to address unknown liabilities and may materially reduce the affected property’s value or limit our ability to use or sell theaffected property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing laws may increase our exposure toenvironmental liability. Although we have policies and procedures to perform an environmental review before initiating any foreclosure on nonresidential real property,these reviews may not be sufficient to detect all potential environmental hazards. The remediation costs and any other financial liabilities associated with anenvironmental hazard could have a material adverse effect on us. Changes in interest rates may reduce our profits. Our profitability, like that of most financial institutions, depends to a large extent upon our net interest income, which is the difference between our interestincome on interest-earning assets, such as loans and securities, and our interest expense on interest-bearing liabilities, such as deposits and borrowed funds.Accordingly, our results of operations depend largely on movements in market interest rates and our ability to manage our interest rate-sensitive assets and liabilities inresponse to these movements. Factors such as inflation, recession and instability in financial markets, among other factors beyond our control, may affect interest rates. As a result of our historical focus on one- to four-family residential real estate loans, the majority of our loans have fixed interest rates. This can createsignificant earnings volatility because of changes in market interest rates. In a period of rising interest rates, the interest income earned on our assets, such as loans andinvestments, may not increase as rapidly as the interest paid on our liabilities, such as deposits, which have shorter durations. In a period of declining interest rates, theinterest income earned on our assets may decrease more rapidly than the interest paid on our liabilities, as borrowers prepay mortgage loans, thereby requiring us toreinvest these cash flows at lower interest rates. Furthermore, increases in interest rates may adversely affect the ability of borrowers to make loan repayments on adjustable-rate loans, as the interest owed onsuch loans would increase as interest rates increase. Any substantial, unexpected or prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and resultsof operations. While we pursue an asset/liability strategy designed to mitigate our risk from changes in interest rates, changes in interest rates can still have a materialadverse effect on our financial condition and results of operations. Changes in interest rates also may negatively affect our ability to originate real estate loans, thevalue of our assets and our ability to realize gains from the sale of our assets, all of which ultimately affect our earnings. Also, our interest rate risk modeling techniquesand assumptions cannot fully predict or capture the impact of actual interest rate changes on our balance sheet or projected operating results. For further discussion ofhow changes in interest rates could impact us, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Management of MarketRisk.” 26Table of Contents Changes in the estimated fair value of debt securities may reduce stockholders’ equity and net income. At December 31, 2023, the Company maintained a debt securities portfolio of $141.5 million, of which $68.9 million was classified as available-for-sale. Theestimated fair value of the available-for-sale debt securities portfolio may change depending on the credit quality of the underlying issuer, market liquidity, changes ininterest rates and other factors. Stockholders’ equity is increased or decreased by the amount of the change in the unrealized gain or loss (difference between theestimated fair value and the amortized cost) of the available-for-sale debt securities portfolio, net of the related tax expense or benefit, under the category of accumulatedother comprehensive loss. During the year ended December 31, 2023, we incurred other comprehensive losses of $140,000 related to net changes in unrealized holdinglosses in the available-for-sale investment securities portfolio and had total accumulated other comprehensive loss of $6.5 million. A decline in the estimated fair value ofthis portfolio will result in a decline in reported stockholders’ equity, as well as book value per common share. The decrease will occur even though the securities are notsold.Risks Related to Economic Conditions Inflation can have an adverse impact on our business and on our customers. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. Inresponse to a pronounced rise in inflation, the Federal Reserve Board has raised certain benchmark interest rates to combat inflation. As inflation increases and marketinterest rates rise the value of our investment securities, particularly those with longer maturities, decrease, although this effect can be less pronounced for floating rateinstruments. In addition, inflation generally increases the cost of goods and services we use in our business operations, such as electricity and other utilities, whichincreases our non-interest expenses. Furthermore, our customers are also affected by inflation and the rising costs of goods and services used in their households andbusinesses, which could have a negative impact on their ability to repay their loans with us. Sustained higher interest rates by the Federal Reserve Board to tamepersistent inflationary price pressures could also push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States andour markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our productsand services, all of which, in turn, would adversely affect our business, financial condition and results of operations. A deterioration in economic conditions could reduce demand for our products and services and/or result in a decrease in our asset quality, which could have anadverse effect on our results of operations. A deterioration in economic conditions could result in the following consequences, any of which could have a material adverse effect on our business, financialcondition, liquidity and results of operations: ●demand for our products and services may decrease; ●loan delinquencies, problem assets and foreclosures may increase, which may require an increase to our allowance for credit losses; ●collateral for loans, especially real estate, may decline in value, thereby reducing customers’ future borrowing power, and reducing the value of assets andcollateral associated with existing loans; ●the value of our securities portfolio may decrease; and/or ●the net worth and liquidity of loan guarantors may decrease, thereby impairing their ability to honor commitments made to us. Moreover, a significant decline in general economic conditions, caused by a pandemic, inflation, recession, acts of terrorism, an outbreak of hostilities or otherinternational or domestic calamities, unemployment or other factors beyond our control could further negatively affect our financial performance. Further, a U.S. government debt default would have a material adverse impact on our business and financial performance, including a decrease in the value ofTreasury bonds and other government securities held by us, which could negatively impact the Bank’s capital position and its ability to meet regulatory requirements.Other negative impacts could be volatile capital markets, an adverse impact on the U.S. economy and the U.S. dollar, as well as increased default rates among borrowersin light of increased economic uncertainty. Some of these impacts might occur even in the absence of an actual default but as a consequence of extended politicalnegotiations around the threat of such a default and a government shutdown. 27Table of Contents Risks Related to Our Funding Our inability to generate core deposits could have an adverse effect on our net interest margin and profitability or may cause us to rely more heavily on wholesalefunding strategies for liquidity needs. Certificates of deposit comprised $493.3 million or 78.9% of our total deposits at December 31, 2023. Certificates of deposit due within one year of December 31,2023 totaled $430.8 million, or 68.9% of total deposits. This included $53.3 million of brokered deposits, which represented 8.5% of total deposits. While part of ourbusiness strategy is to emphasize generating transaction accounts, we cannot guarantee if and when this will occur. Further, the considerable competition for depositsin our market area also make it difficult for us to obtain reasonably-priced deposits. If we are not able to increase our lower-cost transactional deposits, we may be forcedto continue to pay higher costs for certificates of deposit, which would adversely affect our operating margins and profitability, or to seek other sources of funds,including other certificates of deposit, Federal Home Loan Bank advances, brokered deposits and lines of credit to meet the borrowing and deposit withdrawalrequirements of our customers. If our banking deposits that we receive from municipalities were lost within a short period of time, it could negatively impact our liquidity and earnings. As of December 31, 2023, we held $48.0 million of deposits from municipalities in our primary market area in New Jersey. These deposits may be more volatilethan other deposits and generally are larger than our retail or business deposits. If a significant amount of these deposits were withdrawn within a short period of time, itcould have a negative impact on our short-term liquidity and have an adverse impact on our earnings. Risks Related to Our Business Strategy Building market share through de novo branching may cause our expenses to increase faster than revenues. We are considering building market share by opening de novo branches in contiguous markets. There are considerable costs involved in de novo branching asnew branches generally require time to generate sufficient revenues to offset their initial start-up costs, especially in areas in which we do not have an establishedpresence. Accordingly, any new branch can be expected to negatively impact our earnings until the branch attracts a sufficient number of deposits and loans to offsetexpenses. We cannot assure you that if we open new branches, they will be successful even after they have been established. Acquisitions may disrupt our business and dilute shareholder value. Our business strategy includes pursuing acquisition opportunities of other financial institutions. We would seek acquisition partners that offer us eithersignificant market presence or the potential to expand our market footprint and improve profitability through economies of scale or expanded services. Acquiring otherbanks may have an adverse effect on our financial results and may involve various other risks, including, among other things: difficulty in estimating the value of thetarget institution; payment of a premium over book and market values that may dilute our tangible book value and earnings per share in the short and long term;potential exposure to unknown or contingent tax or other liabilities; exposure to potential asset quality problems; difficulty and expense of integrating the operationsand personnel of the target institution; risk that the acquired business will not perform according to management’s expectations because of our inability to realizeprojected revenue increases, cost savings, improved geographic or product presence, or other projected benefits; potential disruptions to our business; potentialdiversion of management's time and attention; and the possible loss of key employees and customers of the target institution. Our business strategy contemplates moderate organic growth, and our financial condition and results of operations may be adversely affected if we fail to grow or failto manage our growth effectively. Our assets decreased $11.8 million, or 1.2%, from $951.1 million at December 31, 2022 to $939.3 million at December 31, 2023, primarily due to decreases in loansreceivable and investments. Over the next several years, we expect to experience moderate organic growth in our total assets and deposits, and the scale of ouroperations. Achieving our organic growth targets requires us to attract customers that currently bank at other financial institutions in our market. Our ability to growsuccessfully will depend on a variety of factors, including our ability to attract and retain experienced bankers, the availability of attractive business opportunitiesand competition from other financial institutions in our market area. While we believe we have the management resources and internal systems in place to successfullymanage our future growth, there can be no assurance growth opportunities will be available or that we will successfully manage our growth. If we do not manage ourgrowth effectively, we may not be able to achieve our business plan, which would have an adverse effect on our financial condition and results of operations. 28Table of Contents Risks Related to Our Securities Portfolio Our investments in corporate and municipal debt securities obligations expose us to additional credit risks, which could adversely affect our financial condition andresults of operations. Our investment portfolio historically has consisted primarily of mortgage-backed securities insured or guaranteed by the United States or agencies thereof. Wealso have invested in bank-qualified municipal obligations and corporate bonds that are not backed by the federal government and expose us to a greater credit risk thanU.S. agency securities. Any decline in the credit quality of these securities exposes us to the risk that the market value of the securities could decrease that may requireus to write down their value and could lead to a possible default in payment. Changes in the valuation of our securities portfolio may reduce our profits and our capital levels. Our securities portfolio may be affected by fluctuations in market value, potentially reducing accumulated other comprehensive income or earnings.Fluctuations in market value may be caused by changes in market interest rates, lower market prices for securities and limited investor demand. In analyzing a debtissuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond ratingagencies have occurred, industry analysts’ reports and spread differentials between the effective rates on instruments in the portfolio compared to risk-free rates. If thisevaluation shows impairment to the actual or projected cash flows associated with one or more securities, we may take a charge to earnings to reflect such impairment.Changes in interest rates may also have an adverse effect on our financial condition, as our available-for-sale securities are reported at their estimated fair value, andtherefore are affected by fluctuations in interest rates. We increase or decrease our stockholders’ equity by the amount of change in the estimated fair value of theavailable-for-sale securities, net of taxes. See “Risks Related to Market Interest Rates – Changes in the estimated fair value of debt securities may reduce stockholders’equity and net income.” Declines in market value may result in other-than-temporary impairments of these assets, which may lead to accounting charges that could havea material adverse effect on our net income and stockholders’ equity. Risks Related to Our Operations We are a community bank and our ability to maintain our reputation is critical to the success of our business and the failure to do so may materially adversely affectour performance. We are a community bank, and our reputation is one of the most valuable components of our business. We rely on our reputation for customer service andknowledge of local markets to expand our presence by capturing new business opportunities from existing and prospective customers in our market area and contiguousareas. As such, we strive to conduct our business in a manner that enhances our reputation. This is done, in part, by recruiting, hiring and retaining employees whoshare our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers andemployees. If our reputation is negatively affected by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current orprospective customers, or otherwise, our business and, therefore, our operating results may be materially adversely affected. Our success depends on retaining certain key personnel. Our performance largely depends on the talents and efforts of our experienced senior management team. We rely on key personnel to manage and operate ourbusiness, including major revenue generating functions such as loan and deposit generation. The loss of key staff may adversely affect our ability to maintain andmanage these functions effectively, which could negatively affect our income. In addition, loss of key personnel could result in increased recruiting and hiring expenses,which would reduce our net income. Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate our existingemployees. 29Table of Contents Systems failures or breaches of our network security could adversely affect our financial condition and results of operation and subject us to increased operatingcosts as well as litigation and other liabilities. Our operations depend upon our ability to protect our computer systems and network infrastructure against damage from physical theft, fire, power loss,telecommunications failure or a similar catastrophic event, as well as from security breaches, denial of service attacks, cyber attacks, and viruses, worms and otherdisruptive problems caused by hackers. Any damage or failure that causes an interruption in our operations could have a material adverse effect on our financialcondition and results of operations. Computer break-ins, phishing and other disruptions could also jeopardize the security of information stored in and transmittedthrough our computer systems and network infrastructure, which may result in significant liability to us and may cause existing and potential customers to refrain fromdoing business with us. Although we, with the help of third-party service providers, intend to continue to implement security technology and establish operationalprocedures designed to prevent such damage, our security measures may not be successful. In addition, advances in computer capabilities, new discoveries in the fieldof cryptography or other developments could result in a compromise or breach of the algorithms we and our third-party service providers use to encrypt and protectcustomer transaction data. A failure of such security measures could have a material adverse effect on our financial condition and results of operations. Our risk and exposure to cyber attacks or other information security breaches remains heightened because of, among other things, the evolving nature of thesethreats. There continues to be a rise in security breaches and cyber attacks within the financial services industry. Financial institutions continue to be the target ofvarious evolving and adaptive cyber attacks, including malware, ransomware and denial-of-service, as part of an effort to disrupt the operations of financial institutions,potentially test their cybersecurity capabilities, or obtain confidential, proprietary or other information. As cyber threats continue to evolve, we may be required toexpend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information securityvulnerabilities. Disruptions or failures in the physical infrastructure or operating systems that support our businesses and customers, or cyber attacks or security breaches ofthe networks, systems or devices that our customers use to access our products and services could result in customer attrition, financial losses, the inability of ourcustomers to transact business with us, violations of applicable privacy and other laws, regulatory fines, penalties or intervention, reputational damage, reimbursementor other compensation costs, and/or additional compliance costs, any of which could materially adversely affect our results of operations or financial condition. While our Board of Directors takes an active role in cybersecurity risk tolerance, we rely to a large degree on management and outside consultants in overseeingcybersecurity risk management. Our Board of Directors takes an active role in our cybersecurity risk management and all members receive cybersecurity training annually. The Board reviewsthe annual risk assessments and approves information technology policies, which include cybersecurity. Furthermore, our Audit Committee is responsible forreviewing all audit findings related to information technology general controls, internal and external vulnerability, and penetration testing. The Board receives anannual information security report from our Chief Technology Officer as it relates to cybersecurity and related issues. We also engage outside consultants to supportour cybersecurity efforts. However, our directors do not have significant experience in cybersecurity risk management outside of the Company and therefore, its abilityto fulfill its oversight function remains dependent on the input it receives from management and outside consultants. Natural disasters, acts of terrorism, global market disruptions and other external events could harm our business. Natural disasters can disrupt our operations, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affectthe economies in which we operate, which could have a material adverse effect on our results of operations and financial condition. A significant natural disaster, suchas a tornado, hurricane, fire or flood, could have a material adverse impact on our ability to conduct business, and our insurance coverage may be insufficient tocompensate for losses that may occur. Acts of terrorism, war, civil unrest, violence or human error could cause disruptions to our business or the economy as a whole.While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business,operations and financial condition. Additionally, global markets may be adversely affected by natural disasters, the emergence of widespread health emergencies orpandemics, cyber attacks or campaigns, military conflict, terrorism or other geopolitical events. Global market disruptions may affect our business liquidity. Also, anysudden or prolonged market downturn in the U.S. or abroad, as a result of the above factors or otherwise could result in a decline in revenue and adversely affect ourresults of operations and financial condition, including capital and liquidity levels. Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses. Our risk management framework is designed to minimize risk and loss to us. We try to identify, measure, monitor, report and control our exposure to risk,including strategic, market, liquidity, compliance and operational risks. While we use broad and diversified risk monitoring and mitigation techniques, these techniquesare inherently limited because they cannot anticipate the existence or future development of currently unanticipated or unknown risks. Recent economic conditions andheightened legislative and regulatory scrutiny of the financial services industry, among other developments, have increased our level of risk. Accordingly, we couldsuffer losses if we fail to properly anticipate and manage these risks. 30Table of Contents Risks Related to Competition Strong competition within our market area may reduce our profits and slow growth. We face strong competition in making loans and attracting deposits. Price competition sometimes requires us to charge lower interest rates on our loans andpay higher interest rates on our deposits, and may reduce our net interest income. Competition also makes it more difficult and costly to attract and retain qualifiedemployees. Many of our competitors have substantially greater resources and lending limits than we have and may offer services that we do not provide. Ourcompetitors often aggressively price loan and deposit products when they enter into new lines of business or new market areas. If we are unable to effectively competein our market area, our profitability would be negatively affected. The greater resources and broader offering of deposit and loan products of some of our competitorsmay also limit our ability to increase our interest-earning assets. For more information about our market area and the competition we face, see “Business of BogotaSavings Bank—Market Area” and “—Competition.” Risks Related to Laws and Regulations and Their Enforcement Changes in laws and regulations and the cost of regulatory compliance with new laws and regulations may adversely affect our operations and/or increase our costs ofoperations. We are subject to extensive regulation, supervision and examination by our banking regulators. Such regulation and supervision govern the activities in whicha financial institution and its holding company may engage and are intended primarily for the protection of insurance funds and the depositors and borrowers of BogotaSavings Bank rather than for the protection of our stockholders. Regulatory authorities have extensive discretion in their supervisory and enforcement activities,including the ability to impose restrictions on our operations, classify our assets and determine the level of our allowance for credit losses. These regulations, alongwith the currently existing tax, accounting, securities, deposit insurance and monetary laws, rules, standards, policies, and interpretations, control the ways financialinstitutions conduct business, implement strategic initiatives, and prepare financial reporting and disclosures. Any change in such regulation and oversight, whether inthe form of regulatory policy, new regulations, legislation or supervisory action, may have a material impact on our operations. We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or restrict us from payingdividends or repurchasing shares. Federal regulations establish minimum capital requirements for insured depository institutions, including minimum risk-based capital and leverage ratios anddefine what constitutes “capital” for calculating these ratios. The minimum capital requirements, including a “capital conservation buffer” of 2.5%, result in the followingminimum ratios: (1) a common equity Tier 1 capital ratio of 7.0%, (2) a Tier 1 to risk-based assets capital ratio of 8.5%, and (3) a total capital ratio of 10.5%. An institutionwill be subject to limitations on paying dividends, repurchasing its shares, and paying discretionary bonuses, if its capital levels fall below the buffer amount. The federal banking agencies adopted a rule, effective January 1, 2020, that authorizes institutions with assets of less than $10 billion and that meet otherspecified criteria, to elect to comply with a “community bank leverage ratio” (the ratio of a bank’s Tier 1 equity capital to average total consolidated assets) of 9% in lieuof the generally applicable leverage and risk-based capital requirements under Basel III. A “qualifying community bank” with capital exceeding 9% that exercises theelection will be considered compliant with all applicable regulatory capital and leverage requirements, including the requirement to be “well capitalized.” We elected tocomply with the community bank leverage ratio. The application of these more stringent capital requirements, among other things, could result in lower returns on equity and result in regulatory actions if wewere unable to comply with such requirements. Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions. The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for moneylaundering and terrorist activities. If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office ofFinancial Crimes Enforcement Network. These rules require financial institutions to establish procedures for identifying and verifying the identity of customers thatopen new financial accounts. Failure to comply with these regulations could result in fines or sanctions, including restrictions on conducting acquisitions orestablishing new branches. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies andprocedures may not be effective in preventing violations of these laws and regulations. 31Table of Contents Changes in accounting standards could affect reported earnings. The bodies responsible for establishing accounting standards, including the Financial Accounting Standards Board, the Securities and Exchange Commissionand bank regulators, periodically change the financial accounting and reporting guidance that governs the preparation of our financial statements. These changes canbe hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to applynew or revised guidance retroactively. Risks Related to Ownership of Our Common Stock Federal Reserve Board regulations and policy effectively prohibit Bogota Financial, MHC from waiving the receipt of dividends, which will likely preclude us frompaying any dividends on our common stock. Bogota Financial Corp.’s board of directors has the authority to declare dividends on our common stock subject to statutory and regulatory requirements. Wecurrently intend to retain all our future earnings, if any, for use in our business and do not expect to pay any cash dividends on our common stock in the foreseeablefuture. Any future determination to pay cash dividends will be made by our board of directors and will depend upon our financial condition, results of operations,capital requirements, restrictions under Federal Reserve Board regulations and policy, our business strategy and other factors that our board of directors deemsrelevant. Under current Federal Reserve Board regulations and policy, if Bogota Financial Corp. pays dividends to its public stockholders, it also would be required topay dividends to Bogota Financial, MHC, unless Bogota Financial, MHC waives the receipt of such dividends. Current Federal Reserve Board policy has been toprohibit mutual holding companies that are regulated as bank holding companies, such as Bogota Financial, MHC, from waiving the receipt of dividends and the FederalReserve Board’s regulations implemented after the enactment of the Dodd-Frank Act effectively prohibit mutual holding companies from waiving dividends declared bytheir subsidiaries. See “Supervision and Regulation—Holding Company Regulation—Waivers of Dividends by Bogota Financial, MHC” for a further discussion of theapplicable requirements related to the potential waiver of dividends by a mutual holding company. Unless Federal Reserve Board regulations or policy change byallowing Bogota Financial, MHC to waive the receipt of dividends declared by Bogota Financial Corp. without diluting minority stockholders, it is unlikely that BogotaFinancial Corp. will pay any dividends. Our common stock is not heavily traded, and the stock price may fluctuate significantly. Our common stock is traded on The NASDAQ Capital Market. Certain brokers currently make a market in the common stock, but such transactions areinfrequent and the volume of shares traded is relatively small. Management cannot predict whether these or other brokers will continue to make a market in our commonstock. Prices on stock that is not heavily traded can be more volatile than heavily traded stock. Factors such as our financial results, the introduction of new productsand services by us or our competitors, publicity regarding the banking industry, and various other factors affecting the banking industry may have a significant impacton the market price of the shares the common stock. Management also cannot predict the extent to which an active public market for our common stock will develop orbe sustained in the future. Accordingly, stockholders may not be able to sell their shares of our common stock at the volumes, prices, or times that they desire. Bogota Financial, MHC’s majority control of our common stock enables it to exercise voting control over most matters put to a vote of stockholders and will preventstockholders from forcing a sale or a second-step conversion transaction you may find advantageous. Bogota Financial, MHC owns a majority of Bogota Financial Corp.’s common stock and, through its board of directors, is able to exercise voting control overmost matters put to a vote of stockholders. The votes cast by Bogota Financial, MHC may not be in your personal best interests as a stockholder. For example, BogotaFinancial, MHC may exercise its voting control to defeat a stockholder nominee for election to the board of directors of Bogota Financial Corp. and will be able to electall of the directors of Bogota Financial Corp. Some stockholders may desire a sale or merger transaction, since stockholders typically receive a premium for their shares.Stockholders may also desire a second-step conversion transaction, since most fully stock institutions tend to trade at higher multiples of book value than mutualholding companies. However, stockholders will not be able to force a merger or a second-step conversion transaction without the consent of Bogota Financial, MHCsince such transactions also require, under New Jersey and federal law, the approval of a majority of all of the outstanding voting stock, which can only be achieved ifBogota Financial, MHC votes to approve such transactions. 32Table of Contents We are an emerging growth company and have elected to comply only with the reduced reporting and disclosure requirements applicable to emerging growthcompanies. As such, our common stock may be less attractive to investors. We are an emerging growth company and for as long as we continue to be an emerging growth company, we plan to take advantage of exemptions from variousreporting requirements applicable to other public companies, including reduced disclosure obligations regarding executive compensation in our periodic reports andproxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any goldenparachute payments not previously approved. Investors may find our common stock less attractive as we rely on these exemptions. Even if we no longer qualify as an emerging growth company, as a smaller reporting company, we would still be eligible to use reduced disclosure requirements, whichmay make our common stock less attractive to investors. Even if we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company. As such, we plan to take advantage ofreduced disclosure obligations, including regarding executive compensation, in our periodic reports and proxy statements. As a result, investors may find our commonstock less attractive. As a smaller reporting company that is a non-accelerated filer, we also will not be subject to Section 404(b) of the Sarbanes-Oxley Act, which wouldrequire that our independent auditors review and attest to the effectiveness of our internal control over financial reporting. Various factors may make takeover attempts more difficult to achieve. Stock banks or their holding companies, as well as individuals, may not acquire control of an entity in the mutual holding company structure, such as BogotaFinancial Corp. As result, the only persons that may acquire control of a mutual holding company are other mutual savings institutions or mutual holding companies.Accordingly, it is very unlikely that Bogota Financial Corp. would be subject to any takeover attempt by activist stockholders or other financial institutions. There alsoare provisions in our articles of incorporation and bylaws that may be used to delay or block a takeover attempt, including a provision that prohibits any person, otherthan Bogota Financial, MHC, from voting more than 10% of the shares of common stock outstanding. In addition, state and federal banking laws, including regulatoryapproval requirements, could make it more difficult for a third party to acquire control of Bogota Financial Corp. without our board of directors’ prior approval. Under federal law, subject to certain exemptions, a person, entity or group must notify the Federal Reserve Board before acquiring control of a bank holdingcompany. Acquisition of 10% or more of any class of voting stock of a bank holding company creates a rebuttable presumption that the acquirer “controls” the bankholding company. Also, a bank holding company must obtain the prior approval of the Federal Reserve Board and the NJDBI before, among other things, acquiringdirect or indirect ownership or control of more than 5% of any class of voting shares of any bank, including Bogota Savings Bank. Risks Related to the COVID-19 Pandemic The COVID-19 pandemic could adversely affect the Company’s business activities, financial condition, and results of operations. Global health concerns relating to the COVID-19 pandemic and related government actions taken to reduce the spread of the virus could harm the Bank’sbusiness and that of its customers, in particular, small to medium-sized business customers. A decline in economic conditions generally and a prolonged negativeimpact on small to medium-sized businesses, in particular, due to the COVID-19 pandemic could result in a material adverse effect on the Company’s business, financialcondition, and results of operations. ITEM 1B. Unresolved Staff Comments None. ITEM 1C. Cybersecurity Our information security program is managed through a dynamic enterprise-wide cybersecurity strategy, policies, standards, architecture, and processes. TheBank relies upon a formalized internal Information and Cybersecurity Program (“the Program”) to safeguard confidential information, maintain the confidentiality of ourcustomers’ data and to ensure the integrity of financial transactions. The Program is approved by the Bank’s Board of Directors or a Committee thereof annually, andis designed to identify reasonably foreseeable internal and external threats, assess the likelihood and potential damage these threats could cause, and assess theappropriateness of policies, standards and procedures used to identify and mitigate risks associated with a material Cybersecurity incident. The Program has beendesigned to align with industry best practices, as well as Regulatory guidelines and laws; and leverages the National Institute of Standards and TechnologyCybersecurity framework (“NIST CSF”) as its baseline. We are dedicated to cybersecurity and maintaining the trust and confidence of our customers andstockholders. Additionally, we maintain an Incident Response Plan that provides established procedures for timely reporting and escalation of significant cybersecurityincidents; our commitment involves promptly notifying regulatory authorities, customers, and other stakeholders in the event of any material cyber incidents that mayimpact our operations or the security of sensitive information. The Incident Response Plan is coordinated through the Director of Information Technology (“Directorof IT”) and key members of executive management who are responsible for escalation as part of the Plan. We use a layered defense management approach to managing cybersecurity. The Bank’s cybersecurity operations function is headed by the Director of IT whois responsible for managing information security risks by developing and implementing information security strategies, architecture, and procedures and acts as thefirst line of defense. The Director of IT oversees a team of internal and external security professionals in safeguarding our critical data, systems, and assets againstthreats, breaches, and attacks. The Director of IT is also responsible for ensuring the confidentiality, integrity, and availability of information assets. The information security program, policies, and standards are managed by the Vice President of Information Security Systems ("VP, ISS"), who leads theenterprise wide technology risk management function. The VP, ISS acts as the second line of defense and provides risk oversight for the Bank’s technology operatinginfrastructure and operations. The VP, ISS function manages testing of technology controls, technology risk assessments, risk reporting, information security third-party due diligence, monitoring the implementation of risk mitigation actions, and tracking their effectiveness over time. The Bank's internal auditors and Board ofDirectors act as the third line of defense, providing the independent assurance function. In addition to the above risk management framework, we engage in regular assessments of our infrastructure, software systems, and network architecture, usinginternal cybersecurity experts and third-party specialists. We also maintain a third-party risk management program designed to identify, assess, and manage risks,including cybersecurity risks, associated with external service providers and our supply chain. Additionally, we actively monitor our email gateways for maliciousphishing email campaigns and monitor remote connections for any portion of our workforce that has the option to work remotely. We leverage internal and externalauditors and independent external partners to periodically review our processes, systems, and controls, including with respect to our information security program, toopine on their design and operating effectiveness and make recommendations to strengthen our risk management program. Notwithstanding our defensive measures and processes, the threat posed by cyber-attacks is severe. Our internal systems, processes, and controls aredesigned to mitigate loss from cyber-attacks. For further discussion of risks from cybersecurity threats, see the section captioned “Risks Related to Our Operations” inItem 1A. Risk Factors. As part of our governance structure, the Board of Directors, Chief Executive Officer and Director of IT play an active role in overseeing our cybersecurityprogram. Regular briefings on cyber risk management and incident response activities are conducted, ensuring a high level of governance and accountability inaddressing cybersecurity concerns. The Bank and its vendors provide periodic reports to our Board of Directors, or Committee thereof, as well as to our seniormanagement team as appropriate. These reports include updates on the Bank’s cyber risks and threats, the status of projects to strengthen our information securitysystems, assessments of the information security program, and the emerging threat landscape. We are steadfast in our commitment to collaborate with regulatory authorities to enhance industry-wide cybersecurity standards. Given the ongoing andchanging cyber threat landscape, we are committed to invest in, improve and update our cybersecurity practices on an ongoing basis. Regular assessments, testing,audits, and training of all employees are conducted to adapt to emerging threats and enhance our ability to safeguard the interests of our customers. 33Table of Contents ITEM 2. Properties As of December 31, 2023, the net book value of our land, building and equipment was $7.7 million. The following table sets forth information regarding ouroffices as of December 31, 2023: Location Leased or Owned Year Acquired or Leased Net Book Value of Real Property (In thousands)Branch Offices: 819 Teaneck RoadTeaneck, NJ 07666 Owned 2004 $3,420 60 East Main StreetBogota, NJ 07603 Owned 1941 $169 181 Boulevard Hasbrouck Heights, NJ 07604 Owned 2020 $2,484 1719 Route 10 East Parsippany, NJ 07054 Leased 2021 $109 5527 Berkshire Valley Road Oak Ridge, NJ 07438 Owned 2021 $159 1039 South Orange Road Newark, NJ 07106 Owned 2021 $1,146 Other Offices: 510 Warren Ave Spring Lake, NJ 07762 Leased 2021 $10(used as a loan production office) We believe that the current facilities are adequate to meet our present and foreseeable needs, subject to possible future expansion. ITEM 3. Legal Proceedings We are not involved in any pending legal proceedings as a defendant other than routine legal proceedings in the ordinary course of business. At December 31,2023, we were not involved in any legal proceedings the outcome of which management believes would be material to our financial condition or results of operations. ITEM 4. Mine Safety Disclosures Not applicable. 34Table of Contents PART II ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Registrant’s Common Equity The common stock of Bogota Financial Corp. is listed on The NASDAQ Capital Market under the symbol “BSBK”. At March 28, 2024, Bogota Financial Corp.had approximately 1,975 stockholders of record. Bogota Financial Corp. currently does not anticipate paying a dividend to its stockholders. The payment and amount of any dividend payments will be subjectto statutory and regulatory limitations, and will depend upon a number of factors, including the following: regulatory capital requirements; our financial condition andresults of operations; our other uses of funds for the long-term value of stockholders; tax considerations; the Federal Reserve Board’s current regulations restricting thewaiver of dividends by mutual holding companies; and general economic conditions. There were no sales of unregistered securities during the quarter ended December 31, 2023. On May 24, 2023, the Company announced it had received regulatory approval for the repurchase of up to 249,920 shares of its common stock, which wasapproximately 5% of its then outstanding common stock (excluding shares held by Bogota Financial, MHC). As of December 31, 2023, 216,837 shares have beenrepurchased under this program at a cost of $1.6 million. The following table provides information on repurchases by the Company of its common stock under the Company's Board approved program during thefourth quarter of 2023. ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number ofSharesPurchased Average PricePaid per Share Total Number ofSharesPurchased asPart of PubliclyAnnouncedPlans orPrograms MaximumNumber ofShares thatMay Yet BePurchasedUnder the Plansor Programs October 1 - 31, 2023 38,600 $7.41 38,600 89,019 November 1 - 30, 2023 20,000 7.19 20,000 69,019 December 1 - 31, 2023 35,936 7.64 35,936 33,083 Total 94,536 $7.45 94,536 ITEM 6. RESERVED 35Table of Contents ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This discussion and analysis reflects the information contained in our consolidated financial statements and other relevant statistical data, and is intended toenhance your understanding of our financial condition and results of operations. Certain of the information in this section has been derived from the consolidatedfinancial statements, which appear elsewhere in this Annual Report on Form 10-K. You should read the information in this section in conjunction with the other businessand financial information provided in this Annual Report on Form 10-K. Overview Net Interest Income. Our primary source of income is net interest income. Net interest income is the difference between interest income, which is the income weearn on our loans and investments, and interest expense, which is the interest we pay on our deposits and borrowings. Provision for Credit Losses. The current expected credit loss (“CECL”) model requires an estimate of the credit losses expected over the life of an exposure (orpool of exposures). It replaces the incurred loss model that delayed the recognition of a credit loss until it was probable that a loss event was incurred. The estimate of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts thataffect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company thenconsiders whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not existover 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 andconsumer. These portfolio segments are further disaggregated into classes, which represent loans and leases of similar type, risk characteristics, and methods formonitoring and assessing credit risk. The Company has minimal history of credit losses and therefore uses the Weighted Average Remaining Maturity method for all segments and relies on the useof qualitative factors to determine future credit losses. The Company considers the impact of current environmental factors at the reporting date that did not exist over the period from which historical experience wasused. Relevant factors include, but are not limited to, concentrations of credit risk (geographic, large borrower, and industry), economic trends and conditions, changesin underwriting standards, experience and depth of lending staff, trends in delinquencies, and the level 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 andother 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 qualityreview is reviewed by management and the results are used to consider a qualitative overlay to the quantitative baseline. After the one-year reasonable andsupportable loss forecast period, this overlay adjustment assumes an immediate reversion to historical loss rates for the remaining loan life period. The Company establishes a specific reserve for individually evaluated loans which do not share similar risk characteristics with the loans included in thequantitative baseline. These individually evaluated loans are removed from the pooling approach discussed above for the quantitative baseline, and include non-accrualloans, 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 substantiallythrough the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Company elected the practical expedient to estimate expectedcredit 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 thecollateral’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 unfundedcommitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. TheUnfunded Reserve is recognized as a liability (other liabilities in the consolidated statements of condition), with adjustments to the reserve recognized in othernoninterest expense in the consolidated statements of income. The Unfunded Reserve is determined by estimating future draws and applying the expected loss rates onthose 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 thecommitted balance to estimate the future draw. Loss rates are estimated by utilizing the same loss rates calculated for the allowance general reserves. Non-Interest Income. Our primary sources of non-interest income are banking fees and service charges, net gains in cash surrender value of bank-owned lifeinsurance and miscellaneous income. Non-Interest Expenses. Our non-interest expenses consist of salaries and employee benefits, net occupancy, equipment, data processing, federal depositinsurance premiums, advertising, directors fees, professional fees and other general and administrative expenses. Salaries and employee benefits consist primarily of salaries and wages paid to our employees, payroll taxes, expenses for workers' compensation and disabilityinsurance, health insurance, retirement plans, our employee stock ownership plan, our equity incentive plan and other employee benefits, as well as other incentives. Occupancy and equipment expenses, which are the fixed and variable costs of buildings and equipment, consist primarily of depreciation charges, rentalexpenses, furniture and equipment expenses, maintenance, real estate taxes and costs of utilities. Depreciation of premises and equipment is computed using a straight-line method based on the estimated useful lives of the related assets or the expected lease terms, if shorter. Federal deposit insurance premiums are payments we make to the Federal Deposit Insurance Corporation for insurance of our deposit accounts. Data processing expenses are fees we pay to third parties for use of their software and for processing customer information, deposits and loans. Advertising includes most marketing expenses, including multi-media advertising (public and in-store), promotional events and materials, civic and sales-focused memberships, and community support. Professional fees include legal, accounting, auditing, risk management and payroll processing expenses. Directors fees consist of the fees we pay to our directors for their service on our board of directors, as well as the costs associated with the directors’ retirementplan and grants to directors under our equity incentive plan. Other expenses include expenses for office supplies, postage, telephone, insurance and other miscellaneous operating expenses. 36Table of Contents Income Tax Expense. Our income tax 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 the carrying amounts and the tax basis of assets andliabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amounts expected to be realized. Business Strategy Our business strategy is to operate as a well-capitalized and profitable community bank dedicated to providing personal service to individuals and businesses.We believe that we have a competitive advantage in the markets we serve because of our 130-year history in the community, our knowledge of the local marketplace andour long-standing reputation for providing superior, relationship-based customer service. We believe we can distinguish ourselves by maintaining the culture of a localcommunity bank. The following are the key elements of our business strategy: Continue to focus on residential real estate lending. We have been, and will continue to be, primarily a one- to four-family residential real estate lender in ourmarket area. As of December 31, 2023, $486.1 million, or 67.7% of our total loan portfolio, consisted of one- to four-family residential real estate loans. We expect thatone- to four-family residential real estate lending will remain our primary lending activity. Continue to emphasize commercial and multi-family real estate lending. We view the growth of commercial real estate and multi-family lending as a means ofincreasing our interest income and the yield on our loan portfolio, and reducing the average term to repricing of our loans. We believe that local banking consolidationhas created opportunities to attract talent with experience originating commercial real estate loans within our market area. Further, the additional capital raised in thehas created opportunities to attract talent with experience originating commercial real estate loans within our market area. Further, the additional capital raised in theoffering enabled us to increase our commercial real estate and multi-family loan originations in our market area, and originate loans with larger balances. Our commercialreal estate and multi-family loan portfolio increased to $175.4 million, or 24.5% of total loans, at December 31, 2023, from $162.3 million, or 22.5% of total loans, atDecember 31, 2022. Increase lower-cost core deposits. We continue to emphasize offering core deposits (demand deposit accounts, savings accounts and money marketaccounts) to individuals, businesses and municipalities. We attract and retain transaction accounts by offering competitive products and rates and providing qualitycustomer service. Core deposits are our least costly source of funds, which improves our interest rate spread and also contributes non-interest income from accountrelated services. However, at December 31, 2023, core deposits decreased to 21.1% of our total deposits compared to 29.8% of our total deposits at December 31, 2022due to customers moving funds to higher-yielding certificates of deposits in the higher interest rate environment. Grow through opportunistic bank or branch acquisitions. We plan to open a new branch in Upper Saddle River during the second quarter of 2024. We willconsider acquisition opportunities that may enhance the value of our franchise and yield potential financial benefits for our stockholders. Although we believeopportunities exist to increase our market share in our market, we expect to expand into contiguous markets. The capital we raised in the offering will also provide us theopportunity to acquire smaller institutions or fee-based businesses located in or contiguous to our market area. Continue to emphasize operating efficiencies and cost controls. We are focused on controlling expenses while increasing our net income. We are disciplinedin managing non-interest expenses by identifying cost savings opportunities such as renegotiating key third-party contracts and reducing other operating expenses.Our efficiency ratio was 97.04% for the year ended December 31, 2023 compared to 59.03% for the year ended December 31, 2022. The increase was primarily due to one-time severance costs associated with the change in our President and Chief Executive Officer. To support our growth in a cost-effective way, we plan to continue toinvest prudently in technology to help improve our operational infrastructure. 37Table of Contents Maintain disciplined underwriting. We emphasize a disciplined credit culture based on intimate knowledge of the market, close ties to our customers, soundunderwriting standards and experienced loan officers. We are committed to actively monitoring and managing our loan portfolio in an effort to proactively identify andmitigate credit risks within the portfolio. At December 31, 2023, non-performing assets totaled $12.8 million, which represented 1.36% of total assets. At December 31,2022, there were $857,000 of non-performing assets which represented 0.09% of total assets. Critical Accounting Policies The discussion and analysis of the financial condition and results of operations are based on our financial statements, which are prepared in conformity withU.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions affecting thereported amounts of assets and liabilities, income and expenses and disclosure of contingent assets and liabilities. We consider the accounting policy discussed belowto be a critical accounting policy, which is presented in the notes to the consolidated financial statements. The estimates and assumptions that we use are based onhistorical experience and various other factors that we believe are reasonable under the circumstances. Actual results may differ from these estimates under differentassumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations. The JOBS Act, which was enacted in 2012, contains provisions that, among other things, reduce certain reporting requirements for qualifying publiccompanies. As an “emerging growth company,” we plan to delay adoption of new or revised accounting pronouncements applicable to public companies until suchpronouncements are made applicable to private companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our financialstatements may not be fully comparable to public companies that comply with such new or revised accounting standards. The following represents our critical accounting policy: Allowance for Credit Losses. The allowance for credit losses is the amount estimated by management as necessary to absorb credit losses in the loan portfoliothat are expected over the life of an exposure (or pool of exposures). The amount of the allowance is based on significant estimates, and the ultimate losses may varyfrom such estimates as more information becomes available or conditions change. The methodology for determining the allowance for credit losses is considered acritical accounting policy by management due to the high degree of judgment involved, the subjectivity of the assumptions used and the potential for changes in theeconomic environment that could result in changes to the amount of the recorded allowance for credit losses. As a substantial percentage of our loan portfolio is collateralized by real estate, appraisals of the underlying value of property securing loans are critical indetermining the amount of the allowance required for specific loans. Assumptions are instrumental in determining the value of properties. Overly optimistic assumptionsor negative changes to assumptions could significantly affect the valuation of a property securing a loan and the related allowance. Management reviews theassumptions supporting such appraisals to determine that the resulting values reasonably reflect amounts realizable on the related loans. Management performs an evaluation of the adequacy of the allowance for credit losses at least quarterly. We consider a variety of factors in establishing thisestimate including current economic and forecasted conditions, delinquency statistics, geographic concentrations, and the adequacy of the underlying collateral, thefinancial strength of the borrower, results of internal loan reviews and other relevant factors. This evaluation is inherently subjective as it requires material estimates bymanagement that may be susceptible to significant change based on changes in economic and real estate market conditions. The evaluation has polled and individual components. The individual component relates to loans that do not share similar risk characteristics with theremaining loans in the pools that are collectively evaluated. For such loans that are also collateral dependent, an allowance is generally established when the collateralvalue, less costs to sell as appropriate, of the loan is lower than the carrying value of that loan. The general component covers non-classified loans that share similar riskcharacteristics and is based on the weighted average remaining maturity and historical loss experience adjusted for qualitative factors. 38Table of Contents Actual credit losses may be significantly more than the allowance we have established which could have a material negative effect on our financial results. SeeNote 1 to the Notes to the consolidated financial statements for a complete discussion of the allowance for loan losses. Selected Financial Data The following tables set forth selected historical financial and other data for Bogota Financial Corp. and Bogota Savings Bank at and for the periods indicated.The following information is only a summary and should be read in conjunction with our consolidated financial statements and the notes thereto contained in thisAnnual Report on Form 10-K. The information at and for the years ended December 31, 2023 and 2022 is derived in part from the audited consolidated financialstatements appearing in this Annual Report on Form 10-K. At December 31, 2023 2022 (In thousands) Selected Financial Condition Data: Total assets $939,324 $951,099 Cash and cash equivalents 24,929 16,841 Securities held-to-maturity 72,656 77,427 Securities available-for-sale 68,888 85,101 Loans receivable, net 714,689 719,026 Bank owned life insurance 30,988 30,206 Total liabilities 802,151 811,440 Deposits 625,347 701,411 Borrowings 167,690 102,319 Total equity 137,173 139,659 For the Year Ended December 31, 2023 2022 (In thousands) Selected Operating Data: Interest income $37,280 $30,347 Interest expense 22,307 7,269 Net interest income 14,973 23,078 Provision for (recovery) credit loan losses $(125) 425 Net interest income after provision for (recovery) credit losses 15,098 22,653 Non-interest income 1,139 1,123 Non-interest expenses 15,756 14,285 Income before income taxes 481 9,491 Income taxes (benefit) expense $(162) 2,614 Net income $643 $6,877 39Table of Contents At or For the Year Ended December 31, 2023 2022 Performance Ratios: Return on average assets (1) 0.07% 0.77%Return on average equity (2) 0.46% 4.76%Interest rate spread (3) 1.28% 2.59%Net interest margin (4) 1.71% 2.76%Efficiency ratio (5) 97.04% 59.03%Average interest-earning assets to average interest-bearing liabilities 116.95% 119.60%Loans to deposits 114.29% 102.51%Average equity to assets (6) 14.89% 16.22% Capital Ratios: (Bank only) Tier 1 capital (to adjusted total assets) 15.24% 15.61% Other Data: Number of offices 6 6 Number of full-time equivalent employees 68 61 (1)Represents net income divided by average total assets.(2)Represents net income divided by average equity.(3)Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost on average interest-bearing liabilities. Tax exempt income isreported on a tax equivalent basis using a combined federal and state marginal tax rate of 28% for 2023 and 2022.(4)Represents net interest income as a percent of average interest-earning assets. Tax exempt income is reported on a tax equivalent basis using a combined federal and state marginal tax rateof 28% for 2023 and 2022.(5)Represents non-interest expense divided by the sum of net interest income and non-interest income.(6)Represents average equity divided by average total assets. 40Table of Contents Average Balance Sheets The following tables set forth average balances, average yields and costs, and certain other information for the years indicated. No tax-equivalent yieldadjustments have been made, as the effects would be immaterial. All average balances are daily average balances. Non-accrual loans are included in the computation ofaverage balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interestexpense, as applicable. For the Years Ended December 31, 2023 2022 AverageBalance Interest andDividends Yield/ Cost AverageBalance Interest andDividends Yield/Cost (Dollars in thousands) Assets: Cash and cash equivalents $10,868 $568 5.23% $25,044 $117 0.47%Loans 713,799 32,046 4.49 638,679 26,264 4.11 Securities 144,880 4,162 2.87 167,987 3,678 2.19 Other interest-earning assets 6,389 504 7.90 5,677 288 5.05 Total interest-earning assets 875,936 37,280 4.26 837,387 30,347 3.62 Non-interest-earning assets 54,925 52,525 Total assets $930,861 $889,912 Liabilities and Equity: NOW and money market accounts $85,663 1,399 1.63 $140,473 787 0.56 Savings accounts 48,351 580 1.20 62,626 184 0.29 Certificates of deposit 498,129 16,045 3.22 394,593 4,136 1.05 Total interest-bearing deposits 632,143 18,024 2.85 597,692 5,107 0.85 Federal Home Loan Bank advances (1) 116,816 4,283 3.67 102,458 2,162 2.11 Total interest-bearing liabilities 748,959 22,307 2.98 700,150 7,269 1.04 Non-interest-bearing deposits 38,636 41,501 Other non-interest-bearing liabilities 4,627 3,914 Total liabilities 792,222 745,565 Total equity 138,639 144,347 Total liabilities and equity $930,861 $889,912 Net interest income $14,973 $23,078 Interest rate spread (2) 1.28% 2.58%Net interest margin (3) 1.71% 2.76%Average interest-earning assets to averageinterest-bearing liabilities $126,977 $137,237 (1)Cash flow hedges are used to manage interest rate risk. During the year ended December 31, 2023, the net effect on interest expense on Federal Home Loan Bank advances was a reducedexpense of $364,000.(2)Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.(3)Net interest margin represents net interest income divided by average total interest-earning assets. 41Table of Contents Rate/Volume Analysis The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effectsattributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volumemultiplied by prior rate). The total column represents the sum of the prior two columns. For purposes of this table, changes attributable to both rate and volume, whichcannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume. Year Ended December 31, 2023 vs 2022 Increase (Decrease) Due to Volume Rate Net (In thousands) Interest income: Cash and cash equivalents $(102) $553 $451 Loans receivable 3,248 2,534 5,782 Securities (554) 1,038 484 Other interest-earning assets 39 178 217 Total interest-earning assets 2,631 4,303 6,934 Interest expense: NOW and money market accounts (406) 1,018 612 Savings accounts (51) 447 396 Certificate of deposit 1,339 10,571 11,910 Federal Home Loan Bank advances 338 1,783 2,121 Total interest-bearing liabilities 1,220 13,819 15,039 Net increase (decrease) in net interest income $1,411 $(9,516) $(8,105) Comparison of Financial Condition at December 31, 2023 and December 31, 2022 Total Assets. Total assets decreased $11.8 million, or 1.2%, to $939.3 million at December 31, 2023 from $951.1 million at December 31, 2022. The decrease wasprimarily due to $4.3 million decrease in loans receivable and a $21.0 million decrease in securities, partially offset by an increase in cash and cash equivalents of$8.1 million. Cash and Cash Equivalents. Total cash and cash equivalents increased $8.1 million, or 48.0%, to $24.9 million at December 31, 2023 from $16.8 million atDecember 31, 2022. This increase was primarily due to loan payments received, proceeds from calls and maturities of securities and additional borrowings, offset by thedecrease in deposits. Securities Available for Sale. Total securities available for sale decreased $16.2 million, or 19.1%, to $68.9 million at December 31, 2023 from $85.1 million atDecember 31, 2022. The decrease was due to decreases of $7.7 million in mortgage-backed securities, $80,000 in agency bonds, $4.9 million in U.S. treasury bills and$3.7 million in corporate bonds. Securities Held to Maturity. Total securities held to maturity decreased $4.8 million, or 6.2%, to $72.7 million at December 31, 2023 from $77.4 million atDecember 31, 2022, primarily due to a $7.7 million decrease in municipal securities and a $5.8 million of principal pay downs and maturities on mortgage-backed securitiesoffset by a $8.7 million increase in corporate bonds. Net Loans. Net loans decreased $4.3 million, or 0.6%, to $714.7 million at December 31, 2023 from $719.0 million at December 31, 2022 due to $69.0 million inrepayments, partially offset by new production of $64.7 million. Due to the interest rate environment, we have seen a decrease in demand for residential and constructionloans, which have been primary drivers of our loan growth in recent periods. The decrease in net loans was due to a $9.6 million, or 1.9%, decrease in one- to four-family residential real estate loans and home equity lines of credit securedby one- to four-family residential real estate to $486.1 million at December 31, 2023 from $495.7 million at December 31, 2022, and a decrease of $12.5 million, or 20.3%, inconstruction loans to $49.3 million at December 31, 2023 from $61.8 million at December 31, 2022 offset by an increase of $13.0 million, or 8.0%, increase in commercial andmulti-family real estate loans to $175.4 million at December 31, 2023 from $162.3 million at December 31, 2022, and an increase of $5.0 million, or 295.3%, in commercial andindustrial loans to $6.7 million at December 31, 2023 from $1.7 million as of December 31, 2022. As of December 31, 2023the Bank had no loans held for sale. 42Table of Contents Bank-Owned Life Insurance. Bank-owned life insurance increased $782,000, or 2.6%, to $31.0 million at December 31, 2023 from $30.2 million at December 31,2022 due to an increase in the cash surrender value. The was no new bank-owned life insurance purchased in 2023. Deposits. Total deposits decreased $76.1 million, or 10.8%, to $625.3 million at December 31, 2023 from $701.4 million at December 31, 2022. The decrease indeposits reflected decreases in NOW, money market and savings accounts, which decreased by $68.7 million from $170.2 million at December 31, 2022 to $101.5 million atDecember 31, 2023, offset by an increase in certificate of deposit accounts, which increased by $682,000 to $493.3 million from $492.6 million at December 31, 2022. At December 31, 2023, municipal deposits totaled $48.0 million, which represented 7.7% of total deposits, and brokered deposits totaled $53.5 million, which represented8.5% of total deposits. At December 31, 2022, municipal deposits totaled $57.5 million, which represented 8.2% of total deposits, and brokered deposits totaled$53.3 million, which represented 8.5% of total deposits. Borrowings. Federal Home Loan Bank of New York borrowings increased $65.4 million, or 63.9%, to $167.7 million at December 31, 2023 from $102.3 million atDecember 31, 2022, due to proceeds from-long term advances totaling $86.9 million, offset by as a decrease of $21.5 million in short-term advances. The weightedaverage rate of borrowings was 4.54% and 3.36% as of December 31, 2023 and December 2022, respectively. Cash flow hedges are used to manage interest rate risk. AtDecember 31, 2023, the Company had two interest rate swaps with a notional amount of $20.0 million hedging on certain FHLB advances. Total Equity. Stockholders’ equity decreased $2.5 million, or 1.8% to $137.2 million, due to increased accumulated other comprehensive loss for securitiesavailable for sale of $254,000 and the repurchase of 418,786 shares of stock at a cost of $3.7 million, offset by net income of $643,000 for the twelve months endedDecember 31, 2023 and stock compensation of $933,000.At December 31, 2023, the Company’s ratio of average stockholders’ equity-to-total assets was 15.24%,compared to 15.61% at December 31, 2022. Comparison of Operating Results for the Years Ended December 31, 2023 and 2022 General. Net income decreased by $6.2 million, or 90.7%, to $643,000 for the twelve months ended December 31, 2023 from $6.9 million for the twelve monthsended December 31, 2022. This decrease was primarily due to a decrease of $8.1 million in net interest income, and an increase of $1.5 million in non-interest expense,offset by a decrease of $550,000 in the provision for credit losses and a decrease of $2.8 million in income tax expense. Interest Income. Interest income increased $6.9 million, or 22.8%, from $30.3 million for the twelve months ended December 31, 2022 to $37.3 million for thetwelve months ended December 31, 2023 due to increases in the average balances of and higher yields on interest-earning assets. Interest income on cash and cash equivalents increased $451,000, or 385.5%, to $568,000 for the twelve months ended December 31, 2023 from $117,000 for thetwelve months ended December 31, 2022 due a 476 basis point increase in the average yield from 0.47% for the twelve months ended December 31, 2022 to 5.23% forthe twelve months ended December 31, 2023 due to the higher interest rate environment. This was offset by a $14.2 million decrease in the average balance to$10.9 million for the twelve months ended December 31, 2023 from $25.0 million for the twelve months ended December 31, 2022, reflecting the use of excess liquidityto fund loan originations. Interest income on loans increased $5.8 million, or 22.0%, to $32.0 million for the twelve months ended December 31, 2023 compared to $26.3 million for thetwelve months ended December 31, 2022 due primarily to a $75.1 million increase in the average balance to $713.8 million for the twelve months ended December 31,2023 from $638.7 million for the twelve months ended December 31, 2022 and a 38 basis point increase in the average yield from 4.11% for the twelve months endedDecember 31, 2022 to 4.49% for the twelve months ended December 31, 2023. The increase was offset by a $1.2 million reserve for nonaccrual interest on a delinquentconstruction loan. Interest income on securities increased $484,000, or 13.2%, to $4.2 million for the twelve months ended December 31, 2023 from $3.7 million for thetwelve months ended December 31, 2022 due primarily to a 68 basis point increase in the average yield from 2.19% for the twelve months ended December 31, 2022 to2.87% for the twelve months ended December 31, 2023. The increase was offset by a $23.1 million decrease in the average balance of securities to $144.9 million forthe twelve months ended December 31, 2023 from $168.0 million for the twelve months ended December 31, 2022. 43Table of Contents Interest Expense. Interest expense increased $15.0 million, or 206.9%, from $7.3 million for the twelve months ended December 31, 2022 to $22.3 million for thetwelve months ended December 31, 2023 primarily due higher costs on interest-bearing liabilities. Interest expense on interest-bearing deposits increased $12.9 million, or 252.9%, to $18.0 million for the twelve months ended December 31, 2023 from $5.1 millionfor the twelve months ended December 31, 2022. The increase was due to a 200 basis point increase in the average cost of interest-bearing deposits to 2.85% for thetwelve months ended December 31, 2023 from 0.85% for the twelve months ended December 31, 2022. The increase in the average cost of deposits was due to thehigher interest rate environment and a change in the composition of the deposit portfolio. The average balances of certificates of deposit increased $103.5 million to$498.1 million for the twelve months ended December 31, 2023 from $394.6 million for the twelve months ended December 31, 2022 while NOW and money marketaccounts and savings accounts decreased $54.8 million and $14.3 million for the twelve months ended December 31, 2023, respectively, compared to thetwelve months ended December 31, 2022. At December 31, 2023 $53.3 million of deposits were brokered deposits costing 4.65%. Interest expense on Federal Home Loan Bank borrowings increased $2.1 million, or 98.1%, from $2.2 million for the twelve months ended December 31, 2022 to$4.3 million for the twelve months ended December 31, 2023. The increase was due to an increase in the average cost of 156 basis points to 3.67% for thetwelve months ended December 31, 2023 from 2.11% for the twelve months ended December 31, 2022 due to the new borrowings at higher rates. The increase wasalso due to an increase in the average balance of borrowings of $14.4 million to $116.8 million for the twelve months ended December 31, 2023 from $102.5 million forthe twelve months ended December 31, 2022. Cash flow hedges used to manage interest rate risk totaled $20.0 million at December 31, 2023. During thetwelve months ended December 31, 2023, the use of the cash flow hedges reduced the interest expense on the Federal Home Loan Bank advances by $364,000. Net Interest Income. Net interest income decreased $8.1 million, or 35.1%, to $15.0 million for the twelve months ended December 31, 2023 from $23.1 million forthe twelve months ended December 31, 2022. The increase reflected a 130 basis point decrease in our net interest rate spread to 1.28% for the twelve months endedDecember 31, 2023 from 2.58% for the twelve months ended December 31, 2022. Our net interest margin decreased 105 basis points to 1.71% for the twelve months endedDecember 31, 2023 from 2.76% for the twelve months ended December 31, 2022.Provision for (recovery of) Credit Losses. We recorded a $125,000 recovery of credit losses for the twelve months ended December 31, 2023 compared to a$425,000 provision for loan losses for the twelve-month period ended December 31, 2022. The Bank had a decrease in the loan portfolio as well as no charge-offs offset by increased delinquent and non-performing loans. As of January 1, 2023 the Bank adopted CECL and recorded a one-time adjustment of $157,000to the allowance for credit losses. Non-Interest Income. Non-interest income increased by $15,000, or 1.4%. Gain on sale of loans decreased $58,000, or 66.2%, as loan originations were lower in2023 due to the higher interest rate environment and the decision to slow loan production to preserve capital and liquidity. Other income decreased $41,000 or 25.1%.Income from bank-owned life insurance increased $87,000, or 12.5%, due to higher balances during 2023. Non-Interest Expenses. For the twelve months ended December 31, 2023, non-interest expense increased $1.5 million, or 10.3%, over 2022. Salaries andemployee benefits increased $1.1 million, or 12.7%, due to an accrual of a severance contract for the retirement of the previous President and a higher employee count.Director fees decreased $181,000, or 22.6%, due to lower pension expense. Professional fees increased $115,000 or 21.1%, due to higher legal expense. FDIC insurancepremiums increased $198,000, or 89.9%, due to a higher assessment rate in 2023. Data processing decreased $163,000, or 14.4%, due to the timing of invoices. Otherexpense increased $341,000, or 34.6%, due to an instance of wire fraud related to a customer account that is under review with the insurance company. Income Tax Expense. Income taxes decreased $2.8 million, or 106.2%, to a benefit of $162,000 for the twelve months ended December 31, 2023 from $2.6 millionexpense for the twelve months ended December 31, 2022. The decrease was due to $9.0 million, or 94.9%, of lower taxable income. The effective tax rate for thetwelve months ended December 31, 2023 and 2022 was (33.76%) and 27.55%, respectively. 44Table of Contents Management of Market Risk General. The majority of our assets and liabilities are monetary. Consequently, our most significant form of market risk is interest rate risk. Our assets,consisting primarily of loans and securities, have longer maturities than our liabilities, consisting primarily of deposits and borrowings. As a result, a principal part of ourbusiness strategy is to manage our exposure to changes in market interest rates. Accordingly, our board of directors has an Asset/Liability Management Committee (the“ALCO”), which is comprised of three members of executive management and two independent directors, which oversees the asset/liability management process andrelated procedures. The ALCO meets on at least a quarterly basis and reviews asset/liability strategies, liquidity positions, alternative funding sources, interest rate riskmeasurement reports, capital levels and economic trends at both national and local levels. Our interest rate risk position is also monitored quarterly by the board ofdirectors. We manage our interest rate risk to mitigate the exposure of our earnings and capital to changes in market interest rates. We have implemented the followingstrategies to manage our interest rate risk: originating loans with adjustable interest rates; promoting core deposit products; monitoring the length of our borrowingswith the Federal Home Loan Bank and brokered deposits depending on the interest rate environment; maintaining a portion of our investments as available-for-sale;diversifying our loan portfolio; and strengthening our capital position. By following these strategies, we believe that we are better positioned to react to changes inmarket interest rates. Net Portfolio Value Simulation. We analyze our sensitivity to changes in interest rates through a net portfolio value of equity (“NPV”) model. NPV representsthe present value of the expected cash flows from our assets less the present value of the expected cash flows arising from our liabilities adjusted for the value of off-balance sheet contracts. The NPV ratio represents the dollar amount of our NPV divided by the present value of our total assets for a given interest rate scenario. NPVattempts to quantify our economic value using a discounted cash flow methodology while the NPV ratio reflects that value as a form of capital ratio. We estimate whatour NPV would be at a specific date. We then calculate what the NPV would be at the same date throughout a series of interest rate scenarios representing immediateand permanent, parallel shifts in the yield curve. We currently calculate NPV under the assumptions that interest rates increase 100, 200, 300 and 400 basis points fromcurrent market rates and that interest rates decrease 100, 200, 300 and 400 points from current market rates. The following table presents the estimated changes in our net portfolio value that would result from changes in market interest rates as December 31, 2023. Allestimated changes presented in the table are within the policy limits approved by the board of directors. NPV NPV as Percent of Portfolio Value ofAssets (Dollars in thousands) Basis Point (“bp”) Change in InterestRates Dollar Amount Dollar Change Percent Change NPV Ratio Change 400 bp $65,917 $(52,510) (44.34)% 7.97% (44.08)%300 bp 78,070 (40,357) (34.08) 9.23 (19.79)200 bp 90,909 (27,518) (23.24) 10.52 (19.63)100 bp 104,512 (13,915) (11.75) 11.82 (9.70)0 118,427 — — 13.09 — (100) bp 132,213 13,786 34.88 14.29 38.66 (200) bp 145,616 27,189 46.19 15.38 37.13 (300) bp 158,179 39,752 33.57 16.35 34.61 (400) bp 169,514 51,087 43.14 17.16 31.09 Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certainassumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. The above table assumes that thecomposition of our interest-sensitive assets and liabilities existing at the date indicated remains constant uniformly across the yield curve regardless of the duration orrepricing of specific assets and liabilities. Accordingly, although the table provides an indication of our interest rate risk exposure at a particular point in time, suchmeasurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our NPV and will differ from actual results. 45Table of Contents Net Interest Income Analysis. We also use income simulation to measure interest-rate risk inherent in our balance sheet at a given point in time by showing theeffect on net interest income, over specified time frames and using different interest rate shocks and ramps. The assumptions include management’s best assessment ofthe effect of changing interest rates on the prepayment speeds of certain assets and liabilities, projections for account balances in each of the product lines offered andthe historical behavior of deposit rates and balances in relation to changes in interest rates. These assumptions are subject to change, and as a result, the model is notexpected to precisely measure net interest income or precisely predict the impact of fluctuations in interest rates on net interest income. Actual results will differ from thesimulated results due to timing, magnitude, and frequency of interest rate changes as well as changes in the balance sheet composition and market conditions.Assumptions are supported with quarterly back testing of the model to actual market rate shifts. As of December 31, 2023, net interest income simulation results indicated that its exposure over one year to changing interest rates was within our guidelines.The following table presents the estimated impact of interest rate changes on our estimated net interest income over one year: Changes in Interest Rates (basis points)(1) Change in Net Interest Income Year One (% change from year one base) 400 bp -41.48 300 bp -31.31 200 bp -20.71 100 bp -10.21 0 0 (100) bp 8.74 (200) bp 12.50 (300) bp 13.98 (400) bp 13.09 (1) The calculated change in net interest income assumes an instantaneous parallel shift of the yield curve. The preceding simulation analysis does not represent a forecast of actual results and should not be relied upon as being indicative of expected operatingresults. These hypothetical estimates are based upon numerous assumptions, which are subject to change, including: the nature and timing of interest rate levelsincluding the yield curve shape, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, reinvestment/replacement of assetand liability cash flows, and others. Also, as market conditions vary, prepayment/refinancing levels, the varying impact of interest rate changes on caps and floorsembedded in adjustable-rate loans, early withdrawal of deposits, changes in product preferences, and other internal/external variables will likely deviate from thoseassumed. Liquidity and Capital Resources Liquidity. Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet theborrowing needs and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits,principal and interest payments on loans and securities and proceeds from calls, maturities and sales of securities. We also have the ability to borrow from the FederalHome Loan Bank of New York. At December 31, 2023, we had the ability to borrow up to $308.2 million, of which $167.7 million was outstanding and $1.5 million wasutilized as collateral for letters of credit issued to secure municipal deposits resulting in remaining availability of $140.4 million. At December 31, 2023, we also had $54.0million in unsecured lines of credit with four correspondent banks with no outstanding balances. The board of directors is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists formeeting the borrowing needs and deposit withdrawals of our customers as well as unanticipated contingencies. We believe that we had enough sources of liquidity tosatisfy our short- and long-term liquidity needs as of December 31, 2023. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan sales and prepayments are greatlyinfluenced by market interest rates, economic conditions, and competition. Our most liquid assets are cash and cash equivalents. The levels of these assets aredependent on our operating, financing, lending and investing activities during any period. At December 31, 2023, cash and cash equivalents totaled $24.9 million.Securities classified as available-for-sale, which provide additional sources of liquidity, totaled $68.9 million with a unrealized loss of $9.2 million at December 31, 2023. 46Table of Contents We are committed to maintaining a strong liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient fundsto meet our current funding commitments. Certificates of deposit due within one year of December 31, 2023 totaled $430.8 million, or 68.9% of total deposits. If thesedeposits do not remain with us, we will be required to seek other sources of funds, including other deposits and Federal Home Loan Bank of New York advances.Depending on market conditions, we may be required to pay higher rates on such deposits or borrowings than we currently pay. We believe, however, based on pastexperience that a significant portion of such deposits will remain with us. We have the ability to attract and retain deposits by adjusting the interest rates offered. Capital Resources. The Bank is subject to various regulatory capital requirements administered by NJDBI and the Federal Deposit Insurance Corporation. AtDecember 31, 2023, we exceeded all applicable regulatory capital requirements, and were considered “well capitalized” under regulatory guidelines. See Note 13 in theNotes to the consolidated financial statements. Off-Balance Sheet Arrangements and Aggregate Contractual Obligations Off-Balance Sheet Arrangements. We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financingneeds of our customers. The financial instruments include commitments to originate loans, unused lines of credit and standby letters of credit, which involve elementsof credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets. Our exposure to credit loss is represented by the contractualamount of the instruments. We use the same credit policies in making commitments as we do for on-balance sheet instruments. At December 31, 2023, we had $21.3 million of commitments to originate loans, comprised of $2.7 million of residential loans, $18.7 million of commitments undercommercial loans and lines of credit (including $16.8 million of unadvanced portions of commercial construction loans), $50.2 million of commitments under home equityloans and lines of credit and $2.6 million of unfunded commitments under consumer lines of credit. See Note 14 in the Notes to the consolidated financial statements forfurther information. Upon adoption of the CECL method of calculating the ACL on January 1, 2023, the Bank recorded a one-time increase in the reserve for unfundedliabilities of $152,000. The reserve for unfunded commitments (the “Unfunded Reserve”) represents the expected credit losses on off-balance sheet commitments such as unfundedcommitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. TheUnfunded Reserve is recognized as a liability (other liabilities in the consolidated statements of condition), with adjustments to the reserve recognized in othernoninterest expense in the consolidated statements of income. The Unfunded Reserve is determined by estimating future draws and applying the expected loss rates onthose 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 thecommitted balance to estimate the future draw. Loss rates are estimated by utilizing the same loss rates calculated for the allowance general reserve. Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processingservices, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities. Recent Accounting Pronouncements Please refer to Note 1 in the Notes to the consolidated financial statements that appear starting on page 54 of this Annual Report on Form 10-K for adescription of recent accounting pronouncements that may affect our financial condition and results of operations. Impact of Inflation and Changing Prices The financial statements and related data presented herein have been prepared in accordance with U.S. GAAP, which requires the measurement of financialposition and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. Theprimary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of afinancial institution are monetary in nature. As a result, market interest rates generally have a more significant impact on a financial institution’s performance thaninflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services. ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk For information regarding market risk, see Item 7. “Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Managementof Market Risk.” ITEM 8. Financial Statements and Supplementary Data 2023 Auditor firm PCAOB number: 74 Auditor name: S. R. Snodgrass P.C. Auditor location: Cranbury Township, PA 47Table 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 StatementsWe have audited the accompanying consolidated statements of financial condition of Bogota Financial Corp. and subsidiary (the “Company”) as of December 31, 2023and 2022; the related consolidated statements of income, comprehensive income, equity, and cash flows for the years then ended; and the related notes to theconsolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financialposition of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended, in conformity with accountingprinciples generally accepted in the United States of America. Change in Accounting Principle As discussed in Note 1 to the financial statements, the Company changed its method of accounting for credit losses effective January 1, 2023, due to the adoption ofAccounting Standards Codification (ASC) Topic 326, Financial Instruments – Credit Losses. 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 statementsbased on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to beindependent, with respect to the Company, in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and ExchangeCommission 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 assuranceabout 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 toperform, 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 financialreporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express nosuch opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. We have served as the Company’s auditor since 2021. /s/S.R. Snodgrass, P.C. Cranberry Township, PennsylvaniaMarch 28, 2024 48Table of Contents BOGOTA FINANCIAL CORP.CONSOLIDATED STATEMENTS OF FINANCIAL CONDITIONDecember 31, 2023 and 2022 2023 2022 ASSETS Cash and due from banks $13,567,115 $8,160,028 Interest-bearing deposits in other banks 11,362,356 8,680,889 Cash and cash equivalents 24,929,471 16,840,917 Securities available for sale 68,888,179 85,100,578 Securities held to maturity (at fair value of $65,374,753 and $70,699,651 respectively) 72,656,179 77,427,309 Loans, net of allowance $2,785,949 and $2,578,174, respectively 714,688,635 719,025,762 Premises and equipment, net 7,687,387 7,884,335 Federal Home Loan Bank (“FHLB”) stock 8,616,100 5,490,900 Accrued interest receivable 3,932,785 3,966,651 Core deposit intangibles 206,116 267,272 Bank owned life insurance 30,987,851 30,206,325 Other assets 6,731,500 4,888,954 Total assets $939,324,203 $951,099,003 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits Non-interest bearing $30,554,842 $38,653,349 Interest bearing 594,792,300 662,758,100 625,347,142 701,411,449 FHLB advances-short term 37,500,000 59,000,000 FHLB advances-long term 130,189,663 43,319,254 Advance payments by borrowers for taxes and insurance 2,733,709 3,174,661 Other liabilities 6,380,486 4,534,516 Total liabilities 802,151,000 811,439,880 Stockholders' Equity Preferred stock $0.01 par value 1,000,000 shares authorized, none issued and outstanding at December 31,2023, and2022 — — Common stock $0.01 par value, 30,000,000 shares authorized, 13,279,230 issued and outstanding at December 31,2023 and 13,699,016 at December 31, 2022 132,792 136,989 Additional Paid-In capital 56,149,915 59,099,476 Retained earnings 92,177,068 91,756,673 Unearned ESOP shares (409,750 shares at December 31, 2023 and 436,495 shares at December 31, 2022) (4,821,798) (5,123,002)Accumulated other comprehensive loss (6,464,774) (6,211,013)Total stockholders' equity 137,173,203 139,659,123 Total liabilities and stockholders' equity $939,324,203 $951,099,003 See accompanying notes to consolidated financial statements 49Table of Contents BOGOTA FINANCIAL CORP.CONSOLIDATED STATEMENTS OF INCOMEYears ended December 31, 2023 and 2022 2023 2022 Interest income Loans $32,046,033 $26,264,486 Securities Taxable 4,070,144 3,516,832 Tax-exempt 91,428 161,187 Other interest-earning assets 1,072,240 403,969 Total interest income 37,279,845 30,346,474 Interest expense Deposits 18,023,772 5,106,517 FHLB of New York advances 4,282,603 2,162,217 Total interest expense 22,306,375 7,268,734 Net interest income 14,973,470 23,077,740 Provision for (recovery of) credit losses (125,000) 425,000 Net interest income after provision for (recovery of) credit losses 15,098,470 22,652,740 Non-interest income Fees and service charges 206,763 179,734 Gain on sale of loans 29,375 86,913 Bank owned life insurance 781,526 694,900 Other 121,371 162,126 Total non-interest income 1,139,035 1,123,673 Non-interest expenses Salaries and employee benefits 9,820,128 8,713,734 Occupancy and equipment 1,474,107 1,390,718 Federal Deposit Insurance Corporation (“FDIC”) insurance premiums 418,215 220,210 Data processing 969,398 1,132,790 Advertising 465,064 492,859 Director fees 619,650 800,611 Professional fees 661,045 546,004 Other 1,329,520 988,081 Total non-interest expenses 15,757,127 14,285,007 Income before income taxes 480,378 9,491,406 Income tax (benefit) expense (162,157) 2,614,545 Net income $642,535 $6,876,861 Earnings per share - basic $0.05 $0.51 Earnings per share - diluted $0.05 $0.51 Weighted average shares outstanding 12,891,847 13,570,407 Weighted average shares outstanding - diluted 12,891,847 13,576,934 See accompanying notes to consolidated financial statements 50Table of Contents BOGOTA FINANCIAL CORP.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEYears ended December 31, 2023 and 2022 2023 2022 Net income $642,535 $6,876,861 Net comprehensive (loss) income: Unrealized losses on securities available for sale: Unrealized holding loss arising during the period (194,520) (9,064,994)Tax effect 54,680 2,548,170 Net of tax (139,840) (6,516,824) Defined benefit retirement plans: Unrealized (loss) gain arising during the period including changes in assumptions (167,170) 249,184 Reclassification adjustment for amortization of prior service cost and net gain/loss included in salaries andemployee benefits 94,315 231,406 Tax effect, income tax benefit 19,720 (135,092)Net of tax (53,135) 345,498 Derivatives, net of tax: Unrealized (loss) gain on swap contracts accounted for as cash flow hedges (84,554) 324,062 Tax effect 23,768 (91,093)Net of tax (60,786) 232,969 Total other comprehensive loss (253,761) (5,938,357) Comprehensive income $388,774 $938,504 See accompanying notes to consolidated financial statements 51Table of Contents BOGOTA FINANCIAL CORP.CONSOLIDATED STATEMENTS OF EQUITYYears ended December 31, 2023 and 2022 CommonStockShares CommonStock Paid-inCapital RetainedEarnings AccumulatedOtherComprehensiveLoss UnearnedESOPshares Total Equity Balance January 1, 2022 14,605,809 $146,057 $68,247,204 $84,879,812 $(272,656) $(5,424,206) $147,576,211 Net income — — — 6,876,861 — — 6,876,861 Stock based compensation — — 932,772 — — — 932,772 Other comprehensive loss — — — — (5,938,357) — (5,938,357)Stock purchased and retired (906,793) (9,068) (10,060,086) — — — (10,069,154)ESOP shares released — — (20,414) — — 301,204 280,790 Balance December 31, 2022 13,699,016 $136,989 $59,099,476 $91,756,673 $(6,211,013) $(5,123,002) $139,659,123 Adoption of ASC 326 — — — (222,140) — — (222,140)Net income — — — 642,535 — — 642,535 Stock based compensation — — 932,772 — — — 932,772 Other comprehensive loss — — — — (253,761) — (253,761)Stock purchased and retired (419,786) (4,197) (3,805,999) — — — (3,810,196)ESOP shares released — — (76,334) — — 301,204 224,870 Balance December 31, 2023 13,279,230 132,792 56,149,915 92,177,068 (6,464,774) (4,821,798) 137,173,203 See accompanying notes to consolidated financial statements 52Table of Contents BOGOTA FINANCIAL CORP.CONSOLIDATED STATEMENTS OF CASH FLOWSYears ended December 31, 2023 and 2022 2023 2022 Cash flows from operating activities Net income $642,535 $6,876,861 Adjustments to reconcile net income to net cash provided by operating activities Amortization of intangible assets (56,583) (229,718)Provision for (recovery of) credit losses (125,000) 425,000 Depreciation of premises and equipment 514,983 485,118 Amortization (Accretion) of deferred loan (fees) costs, net 141,459 (147,240)Amortization of premiums and accretion of discounts on securities, net 30,933 155,525 Deferred income tax benefit expense (624,390) 503,307 Gain on sale of loans (29,375) (86,913)Proceeds from sale of loans 1,875,125 4,640,081 Origination of loans held for sale (1,845,750) (3,400,668)Increase in cash surrender value of bank owned life insurance (781,526) (682,204)Employee stock ownership plan 224,870 280,792 Stock based compensation 932,772 932,772 Changes in Accrued interest receivable 33,866 (1,254,046)Net changes in other assets (1,150,276) 1,740,149 Net changes in other liabilities 1,653,708 617,367 Net cash provided by operating activities 1,437,351 10,856,183 Cash flows from investing activities Purchases of securities available for sale - (67,461,181)Purchases of securities held to maturity (8,701,929) (25,120,238)Maturities, calls, and repayments of securities available for sale 15,986,947 14,978,881 Maturities, calls, and repayments of securities held to maturity 13,473,059 21,746,028 Net decrease (increase) in loans 4,205,323 (148,982,268)Purchase of bank owned life insurance - (5,000,000)Purchases of premises and equipment (318,035) (241,474)Purchase of FHLB stock (9,493,400) (8,327,700)Redemption of FHLB stock 6,368,200 7,688,100 Net cash provided by (used in) investing activities 21,520,165 (210,719,852) Cash flows from financing activities Net (decrease) increase in deposits (76,025,392) 104,037,056 Net (decrease) increase in short-term FHLB advances (21,500,000) 53,000,000 Proceeds (repayments) of long-term FHLB non-repo advances 86,907,578 (35,650,642)Net (decrease) increase in advance payments from borrowers for taxes and insurance (440,952) 318,541 Repurchase of common stock (3,810,196) (10,069,154)Net cash (used in) provided by financing activities (14,868,962) 111,635,801 Net increase (decrease) in cash and cash equivalents 8,088,554 (88,227,868) Cash and cash equivalents – beginning of year 16,840,917 105,068,785 Cash and cash equivalents – end of year $24,929,471 $16,840,917 Supplemental cash flow information Income taxes paid $1,375,000 $2,225,000 Interest paid $21,640,118 $6,896,809 See accompanying notes to consolidated financial statements 53Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 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 holdingcompany 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 BogotaProperties, LLC, which was inactive at December 31, 2023. The Bank generally originates residential, commercial and consumer loans to, and accepts deposits from, customers in New Jersey. The debtors’ ability to repay loans isdependent upon the region’s economy and the borrowers’ circumstances. The Bank is also subject to the regulations of and examinations by certain federal and stateregulatory agencies. Bogota Financial Corp. completed its stock offering in connection with the mutual holding company reorganization of Bogota Savings Bank on January 15, 2020. TheCompany 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 issued263,150 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 yearnet 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 ofcommon shares outstanding during the period. For purposes of calculating basic EPS, weighted average common shares outstanding excludes unallocated employeestock ownership plan shares that have not been committed for release. Diluted EPS is computed using the same method as basic EPS and reflects the potential dilutionwhich could occur if stock options shares were exercised and converted into common stock. The potentially dilutive shares would then be included in the weightedaverage number of shares outstanding for the period using the treasury stock method. For the twelve-month periods ended December 31, 2023 and 2022, options topurchase 523,619 common shares with an exercise price of $10.45 were outstanding but were not included in the calculation of diluted EPS because the options wereanti-dilutive. The following is a reconciliation of the numerators and denominators of the basic earnings per share calculations for the years ended December 31, 2023 and 2022. For the year endedDecember 31, 2023 For the year endedDecember 31, 2022 Net income $642,535 $6,876,861 Basic earnings per share: Weighted average shares outstanding - basic 12,891,847 13,570,407 Weighted average shares outstanding - diluted 12,891,847 13,576,934 Dilutive securities — 6,527 Basic earnings per share - basic $0.05 $0.51 Basic earnings per share - diluted $0.05 $0.51 54Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 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 makesestimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosuresprovided. Actual results could differ. 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 customerloan 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 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 when they might be sold before maturity. Securities available for sale are carried at fair value, with unrealized holdinggains and losses reported in other comprehensive income (loss), net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method withoutanticipating prepayments, except for mortgage-backed securities (“MBSs”) where prepayments are anticipated. Gains and losses on sales are recorded on the trade dateand determined using the specific identification method. The Bank's held-to-maturity ("HTM") debt securities are also required to utilize the Current Expected Credit Losses ("CECL") approach to estimate expected creditlosses. Substantially all of the Company’s HTM debt securities are issued by U.S. government agencies or U.S. government-sponsored enterprises. These securitiescarry the explicit and/or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. Therefore, theCompany did not record an allowance for credit losses for these securities. The impairment model for available-for-sale (“AFS”) debt securities differs from the CECL approach utilized by HTM debt securities because AFS debt securities aremeasured at fair value rather than amortized cost. Although ASU No. 2016-13 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit lossmodel, it retained the fundamental nature of the legacy OTTI model. One notable change from the legacy OTTI model is when evaluating whether credit loss exists, anentity may no longer consider the length of time fair value has been less than amortized cost. For AFS debt securities in an unrealized loss position, the Company firstassesses 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 ismet, 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 Companyevaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fairvalue 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 otherfactors. 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 amortizedcost 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 creditlosses 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 throughan 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 criteriaregarding intent or requirement to sell is met. As of December 31, 2023, the Company determined that the unrealized loss positions in AFS securities were not the resultof credit losses, and management had the intent and ability to hold to recovery, therefore, an allowance for credit losses was not recorded. 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 honortheir contracts is dependent upon the real estate values and general economic conditions in this area. Loan origination fees, net of certain direct origination costs, aredeferred and recognized in interest income using the level-yield method without anticipating prepayments. 55Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 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 processof 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 ifcollection of principal or interest is considered doubtful. Nonaccrual loans and loans past due 90 days and still on accrual include both smaller balance homogeneousloans that are collectively evaluated for impairment and individually classified impaired loans. A loan is moved to nonaccrual status in accordance with the Bank’spolicy, 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 thecash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amountscontractually due are brought current and future payments are reasonably assured. Allowance for Credit Losses - Loans and Leases: The current expected credit loss (“CECL”) model requires an estimate of the credit losses expected over the life of anexposure (or pool of exposures). It replaces the incurred loss model that delayed the recognition of a credit loss until it was probable that a loss event was incurred. The estimate of expected credit losses is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect thecollectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. The Company then considerswhether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over thehistorical 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 andassessing 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 theuse of qualitative factors to determine future credit losses. 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 inunderwriting standards, experience and depth of lending staff, trends in delinquencies, and the level 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 otherfactors 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 qualityreview is reviewed by management and the results are used to consider a qualitative overlay to the quantitative baseline. After the one-year reasonable andsupportable loss forecast period, this overlay adjustment assumes an immediate reversion to historical loss rates for the remaining loan life period. 56Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 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 quantitativebaseline. These individually evaluated loans are removed from the pooling approach discussed above for the quantitative baseline, and include non-accrual loans, andother 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 throughthe sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Company elected the practical expedient to estimate expected creditlosses 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’sfair value less cost to sell. Substantially all of the collateral consists of various types of real estate including: residential properties; commercial properties, such as retailcenters, 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 unfundedcommitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments unconditionally cancellable by the Company. TheUnfunded Reserve is recognized as a liability (other liabilities in the consolidated statements of financial condition), with adjustments to the reserve recognized in othernoninterest expense in the consolidated statements of income. The Unfunded Reserve is determined by estimating future draws and applying the expected loss rates onthose 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 thecommitted 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 consideredpurchased 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. Atthe acquisition date, an estimate of expected credit losses was made for groups of PCD loans with similar risk characteristics and individual PCD loans without similarrisk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values toestablish 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 expenserecognized 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 tononcredit 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 theloans. For acquired loans not deemed PCD at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest incomeon 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 lossexpense. 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 heremployment 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 generallyinfluenced by general economic conditions, the characteristics of individual borrowers and the nature of the loan collateral. 57Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Commercial Real Estate Loans – Commercial 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 propertiesand/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 anadverse 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 realestate. 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 theestimated cost of construction. During the construction phase, a number of factors could result in delays and cost overruns. If the estimate of construction costs provesto 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 ofvalue 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 buildingbefore 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 andholding 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 loansgenerally have an interest rate based on the prime rate and are secured by collateral owned by the business requesting the loan. Consumer Loans – Consumer loans include home equity lines of credit and home equity loans, which exhibit many of the same credit risk characteristics as residentialreal estate loans. The amount of a home equity line of credit is generally limited to a certain percentage of the appraised value of the property less the balance of the firstmortgage. 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 thesale 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 combinesthat expertise with the FHLBNY's expertise in handling interest-rate risk. FHLBNY manages the interest rate, the liquidity and the prepayment risks, while the Bankmanages 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 andservicing 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 differencebetween 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 bythe Bank under the program were $3,865,316 and $3,987,257 at December 31, 2023 and 2022, respectively. Under the program, the first layer of losses is paid by theFHLBNY 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 firstand second layers are absorbed by the FHLBNY. There were no losses as of December 31, 2023 on the loans sold under the program. Late fees and ancillary fees relatedto 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 aredepreciated using the straight-line method with useful lives ranging from fifteen to 39 years. Furniture, fixtures and equipment are depreciated using the straight-linemethod 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 estimatedlives of the improvements. 58Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 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 recoveryof par value. Federal law requires a member institution of the FHLB to hold stock according to a predetermined formula. Dividends are recorded as income on theconsolidated 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 berealized 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 atsettlement. Intangible Assets: Intangible assets, other than goodwill, include core deposit intangibles and mortgage servicing rights ("MSRs"). Core deposit intangibles are ameasure of the value of consumer demand and savings deposits acquired in business combinations accounted for as purchases. The core deposit intangibles are beingamortized over 10 years using the sum-of-the-years digits method of amortization, while the covenant not to compete was amortized over four years on a straight-linebasis.MSRs arise from the Company originating certain loans for the express purpose of selling such loans in the secondary market. The Company maintains all servicingrights 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 theloans 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 servicingportfolio 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 income. Off-Balance-Sheet Financial Instruments: In the ordinary course of business, the Bank enters into off-balance-sheet financial instruments consisting of commitments toextend 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 taxassets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed usingenacted 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 beingpresumed 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 notmeeting the “more likely than not” test, no tax benefit is recorded. The Bank had no unrecognized tax positions as of December 31, 2023 or 2022. The Company recognizes interest and/or penalties related to income tax matters in income tax (benefit) expense. 59Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 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 expenseis 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 Boardof Directors. Director’s retirement plan expense allocates the benefits over years of service. Supplemental Retirement Plan expense allocates the benefits over years ofservice. Stock Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees and directors, based on the fair valueof 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 shares atthe 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 awardswith 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 netunrealized holding gains and losses on securities available for sale and net unrealized gains and losses on the pension plan which are also recognized as separatecomponents 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 ofloss is probable and an amount or range of loss can be reasonably estimated. Recoveries, including proceeds from insurance claims are evaluated separately from losscontingencies 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 ina 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: While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financialperformance is evaluated on a Bank-wide basis. Management does not separately allocate expenses, including the cost of funding loan demand, between the commercialand retail operations of the Bank. As such, discrete financial information is not available and segment reporting would not be meaningful. Derivatives and Hedging Activities: The Company uses derivative financial instruments principally to manage interest rate risk. Certain derivatives are entered into inconnection with transactions with commercial customers. Derivatives are not used for speculative purposes. All derivatives are recognized as either assets or liabilitiesin 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 valueresults 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 criteriaare 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 onan 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 liabilityalso recognized in earnings). Changes in the fair value of effective cash flow hedges are recognized in other comprehensive income (loss) until earnings are affected bythe variability in cash flows of the designated hedged item. Ineffective portions of hedge results are recognized in current earnings. Changes in the fair value ofderivatives for which hedge accounting is not applied are recognized in current earnings. The Company formally documents at inception all relationships between the derivative instruments and the hedged items, as well as its risk management objectives andstrategies for undertaking the hedge transactions. This process includes linking all derivatives that are designated as hedges to specific assets and liabilities, or tospecific firm commitments. The Company also formally assesses, both at inception of the hedge and on an ongoing basis, whether the derivatives that are used inhedging 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 highlyeffective or has ceased to be a highly effective hedge, the Company would discontinue hedge accounting prospectively. Gains or losses resulting from the terminationof 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 theformer hedging relationship. Certain derivative financial instruments are offered to certain commercial banking customers to manage their risk of exposure and risk management strategies. Thesederivative instruments consist primarily of currency forward contracts and interest rate swap contracts. The risk associated with these transactions is mitigated bysimultaneously entering into similar transactions having essentially offsetting terms with a third party. In addition, the Company executes interest rate swaps with thirdparties in order to hedge the interest rate risk of short-term FHLB advances. Adoption of Accounting Standards: In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (ASC 326), which changesthe impairment model for most financial assets. This Update is intended to improve financial reporting by requiring more timely recording of credit losses on loans andother financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortizedcost should be presented at the net amount expected to be collected, through an ACL that is deducted from the amortized cost basis. The ACL should reflectmanagement’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement was affected for themeasurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place duringthe period. With certain exceptions, transition to the new requirements will be through a cumulative-effect adjustment to opening retained earnings as of the beginningof the first reporting period in which the guidance was adopted. This Update was effective for Securities and Exchange Commission (“SEC”) filers that qualify as smallerreporting companies, non-SEC filers, and all other companies, for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. TheCompany has minimal history of credit losses and therefore uses the WARM method and relies on the use of qualitative factors to determine future credit losses. Uponadoption of the CECL method of calculating the ACL on January 1, 2023, the Bank recorded a one-time decrease, net of tax, in retained earnings of $222,000, an increaseto the ACL of $157,000 and, an increase in the reserve for unfunded liabilities of $152,000. No adjustment was made for the available-for-sale securities portfolio. SeeNote 4 for additional information. The table below includes $125,775 of credit losses on PCI loans that have been added to ACL as per the adoption of ASC 326. 60Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Bank adopted the provisions of ASC 326 related to financial assets purchased with credit deterioration (“PCD”) that were previously classified as PCI loans andaccounted for under ASC 310-30 using the prospective transition approach. In accordance with the standard, management did not reassess whether PCI assets met thecriteria of PCD assets as of the date of adoption. On January 1, 2023, the amortized cost basis of the PCD assets were adjusted to reflect the addition of $125,775 to theACL. The Bank adopted the provisions of ASC 326 related to presenting other-than-temporary impairment on available-for-sale debt securities prior to January 1, 2023 usingthe prospective transition approach, though no such charges had been recorded on the securities held by the Bank as of the date of adoption. The effect of the adoption of ASC 326 on the loan portfolio segments and the ACL on January 1, 2023 by portfolio segment was: Loan Portfolio Segments: Pre Adoption The effect of adoption Post Adoption Real estate: Residential First Mortgage $466,100,627 $29,589,213 $495,689,840 Commercial and Multi-Family Real Estate 162,338,669 (162,338,669) — Commercial Real Estate — 96,030,721 96,030,721 Multi-Family Real Estate — 66,400,713 66,400,713 Construction 61,825,478 — 61,825,478 Commercial and Industrial 1,684,189 — 1,684,189 Consumer: Home Equity and Other Consumer 29,654,973 (29,654,973) — Consumer — 98,770 98,770 Total loans 721,603,936 125,775 721,729,711 Allowance for credit losses (2,578,174) (282,775) (2,860,949)Net loans $719,025,762 $(157,000) $718,868,762 Allowance for Credit Losses: Pre Adoption The effect of adoption Post Adoption Assets ACL on loans Residential First Mortgage $1,602,534 $211,669 $1,814,203 Commercial and Multi-Family Real Estate 615,480 (615,480) — Commercial Real Estate — 522,977 522,977 Multi-Family Real Estate — 259,769 259,769 Construction 258,500 1,500 260,000 Commercial and Industrial 3,960 40 4,000 Home Equity and Other Consumer 97,700 (97,700) — Liabilities ACL for unfunded commitments — 152,000 152,000 Total $2,578,174 $434,775 $3,012,949 In March 2022, the FASB issued ASU No. 2022-02, "Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures." Theamendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted CECL and enhance the disclosure requirements formodifications of receivables made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current period gross write-offs byyear of origination for financing receivables and net investment in leases in the existing vintage disclosures. This ASU became effective on January 1, 2023 for theCompany. The adoption of this ASU resulted in updated disclosures within our financial statements but otherwise did not have a material impact on the Company’sfinancial statements. 61Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Not yet effective Accounting Pronouncements: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (TOPIC 280): Improvements to Reportable Segment Disclosures, which requires public entities todisclose information about their reportable segments’ significant expenses on an interim and annual basis. This ASU is effective for fiscal years beginning afterDecember 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Public entities are required to adopt thechanges retrospectively, recasting each prior period disclosure for which a comparative income statement is presented in the period of adoption. This update is notexpected to 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 at December 31, 2023 and 2022: Amortized Cost GrossUnrealizedGains GrossUnrealizedLosses Fair Value December 31, 2023 U.S. government and agency obligations One through five years $6,000,000 $— $(454,599) $5,545,401 Corporate bonds due in: Less than one year 3,000,000 — (44,230) 2,955,770 One through five years 8,264,973 — (247,937) 8,017,036 Five through ten years 1,000,000 — (154,050) 845,950 MBS – residential 41,105,143 5,182 (5,703,143) 35,407,182 MBS – commercial 18,753,711 — (2,636,871) 16,116,840 Total $78,123,827 $5,182 $(9,240,830) $68,888,179 December 31, 2022 U.S. treasury bills Less than one year $4,971,310 $— $(43,702) $4,927,608 U.S. government and agency obligations One through five years 6,000,000 — (534,846) 5,465,154 Corporate bonds due in: Less than one year 3,022,044 — (37,230) 2,984,814 One through five years 12,182,364 554 (585,085) 11,597,833 Five through ten years 1,000,000 — (76,600) 923,400 MBS – residential 44,879,199 2,146 (5,232,300) 39,649,045 MBS – commercial 22,086,788 — (2,534,064) 19,552,724 Total $94,141,705 $2,700 $(9,043,827) $85,100,578 62Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 2 – SECURITIES AVAILABLE FOR SALE (Continued) All of the MBS are issued by the following government sponsored agencies Federal Home Loan Mortgage Corporation (“FHLMC”), Federal National MortgageAssociation (“FNMA”) and Government National Mortgage Association (“GNMA”). There were no sales of securities during the years ended December 31, 2023 or 2022. The age of unrealized losses and the fair value of related securities as of December 31, 2023 and 2022 were as follows: Less than 12 Months More than 12 Months Total Fair Value UnrealizedLosses Fair Value UnrealizedLosses Fair Value UnrealizedLosses December 31, 2023 U.S. government and agency obligations $— $- $5,545,401 $ ($454,599) $5,545,401 $ ($454,599) Corporate bonds 1,999,940 (60) 9,818,816 (446,157) 11,818,756 (446,217)MBS – residential - - 34,829,468 (5,703,143) 34,829,468 (5,703,143)MBS – commercial - - 16,116,840 (2,636,871) 16,116,840 (2,636,871)Total $1,999,940 $(60) $66,310,525 $(9,240,770) $68,310,465 $(9,240,830) Less than 12 Months More than 12 Months Total Fair Value UnrealizedLosses Fair Value UnrealizedLosses Fair Value UnrealizedLosses December 31, 2022 U.S. treasury bills $4,927,608 $(43,702) $— $— $4,927,608 $ ($43,702) U.S. government and agency obligations 2,758,248 (241,752) 2,706,906 (293,094) 5,465,154 (534,846)Corporate bonds 11,859,089 (392,367) 2,647,402 (306,548) 14,506,491 (698,915)MBS – residential 16,474,573 (1,557,718) 22,801,879 (3,674,582) 39,276,452 (5,232,300)MBS – commercial 9,449,159 (857,122) 10,103,565 (1,676,942) 19,552,724 (2,534,064)Total $45,468,677 $(3,092,661) $38,259,752 $(5,951,166) $83,728,429 $(9,043,827) Unrealized losses on corporate bonds available for sale have not been recognized into income because the issuer bonds are of high credit quality, management does notintend 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 is largely due tochanges in interest rates and other market conditions. The Bank has 44 securities in a loss position and does not consider these securities to be other-than-temporaryimpaired at December 31, 2023. At December 31, 2023 and 2022, securities available for sale with a carrying value of $113,415 and $126,662, 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 notintend 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 changesin interest rates and other market conditions. At December 31, 2023, 100% of the mortgage-backed securities were issued by U.S. government-sponsored entities andagencies, primarily FNMA and FHLMC, institutions which the government has affirmed its commitment to support. Because the decline in fair value was attributable tochanges 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 likelythat 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, 2023. As ofDecember 31, 2023, no ACL was required on available-for-sale securities. At December 31, 2022 the Bank did not consider these securities to be other-than-temporaryimpaired. 63Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 3 – SECURITIES HELD TO MATURITY Effective January 1, 2023, the Company adopted ASC 326, which requires management to complete an evaluation of the held-to-maturity securities portfolio to identifywhether any ACL is required. Management completed an evaluation as of the adoption date and determined the ACL on the held-to-maturity portfolio was notsignificant. This determination was based on financial review of securities and ratings of each security. The following table summarizes the amortized cost, fair value, and gross unrecognized gains and losses of securities held to maturity at December 31, 2023 and 2022: Amortized Cost GrossUnrecognizedGains GrossUnrecognizedLosses Fair Value December 31, 2023 U.S. government and agency obligations due in One through five years $10,000,000 $— $(314,240) $9,685,760 More than five years through ten years 3,000,000 — (372,885) 2,627,115 Corporate Bonds due in: One through five years 6,431,007 — (52,685) 6,378,322 Five through ten years 16,294,604 38,684 (2,074,007) 14,259,281 Greater than ten years 4,287,941 — (441) 4,287,500 Municipal obligations due in: One through five years 901,597 — (55,102) 846,495 More than five years through ten years 1,591,199 784 (160,655) 1,431,328 Greater than ten years 507,716 — (103,356) 404,360 MBS – Residential 12,484,366 7,223 (1,457,104) 11,034,485 Commercial 17,157,749 - (2,737,642) 14,420,107 $72,656,179 $46,691 $(7,328,117) $65,374,753 December 31, 2022 U.S. government and agency obligations due in One through five years $10,000,000 $— $(456,850) $9,543,150 Five years through ten years 3,000,000 - (466,866) 2,533,134 Corporate Bonds due in: One through five years 2,444,729 1,269 (55,836) 2,390,162 Five through ten years 15,825,262 54,738 (1,045,557) 14,834,443 Municipal obligations due in: Less than one year 7,706,402 — (36,250) 7,670,152 One through five years 902,545 — (84,742) 817,803 More than five years through ten years 375,000 1,286 — 376,286 Greater than ten years 1,728,184 — (346,586) 1,381,598 MBS – Residential 14,425,827 410 (1,431,861) 12,994,376 Commercial 21,019,360 - (2,860,813) 18,158,547 $77,427,309 $57,703 $(6,785,361) $70,699,651 64Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 3 – SECURITIES HELD TO MATURITY (Continued) Mortgage-backed securities include Freddie Mac, Fannie Mae and Ginnie Mae securities, all of which are U.S. government sponsored agencies. There are no non-preforming held to maturity securities at December 31, 2023. The age of unrecognized losses and the fair value of related securities were as follows: U.S.governmentand agencyobligations Corporatebonds Municipalobligations MBS –residential MBS –commercial December 31, 2023 Credit Rating AAA/AA/A $12,312,875 $11,469,219 $2,682,183 $11,034,485 $14,420,107 BBB/BB/B — 4,999,038 — — — Lower than B — — — — — Not Rated — 8,456,846 — — — Total $12,312,875 $24,925,103 $2,682,183 $11,034,485 $14,420,107 Less than 12 Months More than 12 Months Total Fair Value UnrealizedLosses Fair Value UnrealizedLosses Fair Value UnrealizedLosses December 31, 2022 U.S. government and agency obligations $9,543,150 $(456,850) $2,533,134 $(466,866) $12,076,284 $(923,716)Corporate bonds 11,464,282 (680,447) 3,329,054 (420,946) 14,793,336 (1,101,393)Municipal obligations 7,670,152 (36,250) 2,199,401 (431,328) 9,869,553 (467,578)MBS – residential 2,008,303 (101,341) 10,809,648 (1,330,520) 12,817,951 (1,431,861)MBS – commercial 7,383,822 (282,984) 10,774,725 (2,577,829) 18,158,547 (2,860,813)Total $38,069,709 $(1,557,872) $29,645,962 $(5,227,489) $67,715,671 $(6,785,361) No ACL on the securities above has been recorded because the issuers of the securities are of high credit quality and the decline in fair value was due to changes ininterest rates and other market conditions. Unrecognized losses have not been recognized into income because the issuers of the securities are of high credit quality,management does not intend to sell and it is not more likely than not that management would be required to sell the securities prior to their anticipated recovery, and thedecline in fair value is largely due to changes in interest rates and other market conditions. The fair value is expected to recover as the securities approach maturity. TheBank has 55 securities in a loss position as of December 31, 2023. At December 31, 2023 and 2022, securities held to maturity with a carrying amount of $1,589,747 and $5,293,804, respectively, were pledged to secure repurchaseagreements at the FHLB of New York (see Note 9). At December 31, 2023 and 2022, securities held to maturity with a carrying value of $4,976,927 and $4,659,956, respectively, were pledged to secure public deposits. 65Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 4 – LOANS In conjunction with the adoption of ASC 326, the Company made certain loan portfolio segment reclassifications to conform to the new ACL methodology. Loans andthese related reclassifications, are summarized as follows at December 31, 2023 and December 31, 2022: Pre Adoption Post Adoption December 31, December 31, The effect of December 31, 2023 2022 adoption 2022 Real estate: Residential First Mortgage $486,052,422 $466,100,627 $29,589,213 $495,689,840 Commercial and Multi-Family Real Estate - 162,338,669 (162,338,669) - Commercial Real Estate 99,830,514 - 96,030,721 96,030,721 Multi-Family Real Estate 75,612,566 - 66,400,713 66,400,713 Construction 49,302,040 61,825,478 - 61,825,478 Commercial & Industrial 6,658,370 1,684,189 - 1,684,189 Consumer: Home equity and other - 29,654,973 (29,654,973) - Consumer 18,672 - 98,770 98,770 Total loans 717,474,584 721,603,936 125,775 721,729,711 Allowance for credit losses (2,785,949) (2,578,174) (282,775) (2,860,949)Net loans $714,688,635 $719,025,762 $ ($157,000) $718,868,762 The Bank has granted loans to executive officers and directors of the Bank. At December 31, 2023 and 2022, such loans totaled $1,610,688 and $1,739,725, respectively. 2023 2022 Outstanding, January 1, $1,739,725 $577,143 New loans - 1,317,500 Loan repayments (129,037) (154,918)Outstanding, December 31, 1,610,688 1,739,725 66Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 4 - LOANS (Continued) At December 31, 2023, deferred loan fees were $2,873,724 and $3,078,612 respectively. The following table presents the activity in the allowance for credit losses by portfolio segments for the years ended December 31, 2023 and 2022: ResidentialFirstMortgage CommercialReal Estate Multi-FamilyReal Estate Construction Commercial& Industrial Consumer Total December 31, 2023 Allowance for credit losses: Beginning balance $1,602,534 $381,180 $234,300 $258,500 $3,960 $97,700 $2,578,174 Impact of ASC 326 adoption 113,969 141,797 25,469 1,500 40 — 282,775 Provision for loan losses (recovery) 135,466 (85,797) 57,531 (102,500) 18,000 (97,700) (75,000)Loans charged-off — — — — — — — Recoveries — — — — — — — Total ending allowance balance $1,851,969 $437,180 $317,300 $157,500 $22,000 $— $2,785,949 ResidentialFirstMortgage Commercial& Multi-Family RealEstate Construction Commercial& Industrial Home Equity& Other Total December 31, 2022 Allowance for loan losses: Beginning balance $1,092,474 $768,600 $195,000 $9,400 $87,700 $2,153,174 Provision for loan losses (credit) 510,060 (153,120) 63,500 (5,440) 10,000 425,000 Loans charged-off — — — — — — Recoveries — — — — — — Total ending allowance balance $1,602,534 $615,480 $258,500 $3,960 $97,700 $2,578,174 The provision fluctuations during the years ended December 31, 2023 and 2022 were due to increases or decreases in loan balances in different loans types andeconomic conditions. 67Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 4 – LOANS (Continued)The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segments and based on impairment methodas of December 31, 2022: ResidentialFirst Mortgage Commercial &Multi- FamilyReal Estate Construction Commercial &Industrial Home Equity &Other Total December 31, 2022 Allowance for loan losses: Ending allowance balance attributable toloans: Individually evaluated for impairment $33,000 $— $— $— $— $33,000 Collectively evaluated for impairment 1,569,534 615,480 258,500 3,960 97,700 2,545,174 Total ending allowance balance $1,602,534 $615,480 $258,500 $3,960 $97,700 $2,578,174 Loans: Loans individually evaluated for impairment $819,590 $— $— $37,069 $856,659 Loans collectively evaluated for impairment 462,439,940 160,990,186 61,825,478 1,684,189 29,586,787 716,526,580 Loans acquired with deteriorated creditquality 2,841,097 1,348,483 — — 31,117 4,220,697 Total ending loans balance $466,100,627 $162,338,669 $61,825,478 $1,684,189 $29,654,973 $721,603,936 Collateral - dependent loans individually evaluated with the ACL by collateral type were as follows at December 31, 2023: Portfolio segment Real estate OtherResidential First Mortgage $ 1,432,072 $ —Commercial Real Estate 450,392 —Multi-Family Real Estate — —Construction 10,893,713 —Commercial and Industrial — —Other Consumer — — $ 12,776,177 $ — Impaired loans as of and for the year ended December 31, 2022 were as follows: Loans With norelated allowancerecorded Loans with anallowancerecorded Average OfindividuallyImpaired loans Amount ofallowance forloan lossesallocated Residential first mortgages $1,199,278 $171,616 $1,300,615 $33,000 Commercial and Multi-Family 488,222 — 488,196 — Construction — — — — Commercial & Industrial — — — — Home equity & other consumer 37,069 — 26,298 — $1,724,569 $171,616 $1,815,109 $33,000 68Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 4 - LOANS (Continued)Interest income recognized during impairment and cash-basis interest income recognized in both 2023 and 2022 was nominal. Nonaccrual loans and loans past due 90 days or more still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment andindividually evaluated loans. No nonaccrual loans had specific reserves as of December 31, 2023 and the Bank had no other real estate owned at either December 31, 2023 or December 31, 2022. Nonaccrualloans beginningof period Nonaccrualloans end ofperiod Nonaccrual withno Allowancefor Credit Loss Loans Past Due90 Days orMore StillAccruing Interestrecognized onnonaccrualloans December 31, 2023 Residential First Mortgage $819,590 $1,432,072 $1,432,072 $— $— Commercial Real Estate 450,392 450,392 Construction — 10,893,713 10,893,713 — — Consumer 37,069 — — — — Total $856,659 $12,776,177 $12,776,177 $— $— The following table presents the recorded investment in nonaccrual and loans past due 90 days or more and still on accrual by class of loans as of December 31, 2022: Nonaccrual Loans Past Due90 Days or MoreStill AccruingDecember 31, 2022 Residential first mortgage $ 819,590 $ —Commercial and multi-family — —Construction — —Commercial & Industrial — —Home equity and other consumer 37,069 — Total $ 856,659 $ — 69Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 4 - LOANS (Continued) The following table presents the aging of the recorded investment in past due loans as of December 31, 2023 and 2022, by class of loans: 30 – 59Days PastDue 60 – 89Days PastDue Greaterthan 89Days PastDue Total PastDue Loans NotPast Due Total December 31, 2023 Residential first mortgage $— $297,118 $964,806 $1,261,924 $484,790,498 $486,052,422 Commercial real estate — — 450,392 450,392 99,380,122 99,830,514 Multi-Family real estate — — — — 75,612,566 75,612,566 Construction — — 10,893,713 10,893,713 38,408,327 49,302,040 Commercial & Industrial — — — — 6,658,370 6,658,370 Consumer - — — - 18,672 18,672 Total $— $297,118 $12,308,911 $12,606,029 $704,868,555 $717,474,584 30 – 59 DaysPast Due 60 – 89 DaysPast Due Greater than89 Days PastDue Total PastDue Loans NotPast Due PCI loans Total December 31, 2022 Residential first mortgage $— $360,849 $279,515 $640,364 $462,619,166 $2,841,097 $466,100,627 Commercial and Multi-Family — — — — 160,990,186 1,348,483 162,338,669 Construction — — — — 61,825,478 — 61,825,478 Commercial & Industrial — — — — 1,684,189 — 1,684,189 Home equity and other consumer 92,977 — 19,122 112,099 29,511,757 31,117 29,654,973 Total $92,977 $360,849 $298,637 $752,463 $716,630,776 $4,220,697 $721,603,936 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 byclassifying the loans as to credit risk. Commercial real estate, commercial and industrial and construction loans are graded on an annual basis. Residential real estate andconsumer 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. TheBank 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 potentialweaknesses 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 possibilitythat the institution will sustain some loss if the deficiencies are not corrected. 70Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 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 weaknessesmake 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, the risk category of loans by class is as follows: Term Loans by Origination Year Balance at December 31, 2023 2023 2022 2021 2020 2019 Prior RevolvingLoans Totals Residential First Mortgage Pass $5,174,879 $111,903,094 $37,747,971 $28,952,299 $26,155,892 $114,830,194 $159,976,218 $484,740,547 Special Mention — — — 191,276 169,343 389,565 107,538 857,722 Substandard — — — — — 169,131 285,022 454,153 Doubtful — — — — — — — — Total 5,174,879 111,903,094 37,747,971 29,143,575 26,325,235 115,388,890 160,368,778 486,052,422 Gross charge-offs by vintage — — — — — — — — Commercial Real Estate Pass — 3,065,843 — 6,893,352 5,501,995 11,722,774 72,196,158 99,380,122 Special Mention — — — — — — — — Substandard — — — — — — 450,392 450,392 Doubtful — — — — — — — — Total — 3,065,843 — 6,893,352 5,501,995 11,722,774 72,646,550 99,830,514 Gross charge-offs by vintage — — — — — — — — Multi-Family Real Estate Pass — 2,362,920 — 1,162,353 — 2,117,462 69,969,831 75,612,566 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total — 2,362,920 — 1,162,353 — 2,117,462 69,969,831 75,612,566 Gross charge-offs by vintage — — — — — — — — Construction Pass — — — — — — 38,459,962 38,459,962 Special Mention — — — — — — — — Substandard — — — — — — 10,842,078 10,842,078 Doubtful — — — — — — — — Total — — — — — — 49,302,040 49,302,040 Gross charge-offs by vintage — — — — — — — — Commercial and Industrial Pass 241,109 — — 576,164 94,204 — 5,746,893 6,658,370 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total 241,109 — — 576,164 94,204 — 5,746,893 6,658,370 Gross charge-offs by vintage — — — — — — — — Consumer Pass — — — — — — 18,672 18,672 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total — — — — — — 18,672 18,672 Total loans $5,415,988 $117,331,857 $37,747,971 $37,775,444 $31,921,434 $129,229,126 $358,052,764 $717,474,584 71Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 4 – LOANS (Continued) Pass Special Mention Substandard Totals December 31, 2022 Residential first mortgage $465,089,495 $555,965 $455,167 $466,100,627 Commercial and Multi-Family 162,338,669 — — 162,338,669 Construction 61,825,478 — — 61,825,478 Commercial & Industrial 1,684,189 — — 1,684,189 Home equity and other consumer 29,617,904 19,122 17,947 29,654,973 Total $720,555,735 $575,087 $473,114 $721,603,936 NOTE 5 – PREMISES AND EQUIPMENT Premises and equipment consists of the following at December 31: 2023 2022 Land $2,402,995 $2,402,995 Buildings and improvements 6,962,864 6,834,508 Furniture, fixtures and equipment 3,698,532 3,508,853 13,064,391 12,746,356 Accumulated depreciation (5,377,004) (4,862,021) $7,687,387 $7,884,335 Depreciation expense was $514,983 and $485,118 for the years ended December 31, 2023 and 2022, respectively. NOTE 6 – INTANGIBLE ASSETS Core deposit intangible carrying amounts were $206,116 for the year ended December 31, 2023. Core deposit accumulated amortization and amortization expense totaled$132,728 and $61,156, respectively, for the year ended December 31, 2023. Core deposit intangible assets are amortized to their estimated residual values over their expected useful lives, commonly ten years. The estimated aggregate futureamortization expense for core deposit intangible assets as of December 31, 2023, was as follows: 2024 $53,223 2025 45,289 2026 37,355 2027 29,421 2028 21,489 Thereafter 19,339 $206,116 72Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 7 – DEPOSITS The aggregate amount of certificates of deposit with a minimum denomination of $250,000 was approximately $132,100,000 and $119,100,000 at December 31, 2023 and2022, respectively. Officers and directors of the Bank have deposits at the Bank. At December 31, 2023 and 2022, such deposits totaled approximately $2,433,000 and $2,541,000,respectively. The Bank had $53,300,000 and $58,600,000 of brokered deposits as of December 31, 2023 and 2022, respectively, which were primarily included in certificate of depositaccounts. The scheduled maturities of certificates of deposits at December 31, 2023 are as follows: 2024 $430,847,483 2025 49,377,623 2026 5,524,308 2027 5,687,138 2028 1,838,215 $493,274,767 NOTE 8 – ADVANCES FROM THE FEDERAL HOME LOAN BANK (“FHLB”) OF NEW YORK There were short-term advances as of December 31, 2023 totaling $37,500,000 with a weighted average interest rate of 5.52% that mature within one year. There wereshort-term advances as of December 31, 2022 totaling $59,000,000 with a weighted average interest rate of 4.59% that mature within one year. Long-term advances at December 31 were as follows: Weighted Average Rateat December 31, 2023 2023 2022 Amortizing: Maturing in: 2023 — $— $3,101,059 2024 2.58% 5,496,642 3,124,634 2025 2.91% 4,847,744 2,354,973 2026 4.12% 3,297,983 678,275 2027 4.98% 2,753,137 - 2028 5.05% 2,271,012 - 3.59% $18,666,518 $9,258,941 Non-repo advances Maturing in: 2023 — $— $23,037,169 2024 3.92% 16,019,838 6,019,839 2025 4.31% 54,003,307 5,003,306 2026 4.57% 41,500,000 - 4.35% $111,523,145 $34,060,314 73Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 8 – ADVANCES FROM THE FEDERAL HOME LOAN BANK (“FHLB”) OF NEW YORK (Continued) At December 31, 2023 and 2022, securities held to maturity and available for sale with a carrying amount of $1,589,747 and $5,269,320, respectively, were pledged tosecure 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 at December 31, 2023 and 2022amounted to $289,808,115 and $329,278,068, respectively. The Bank had available additional borrowing capacity of $140,398,000 and $235,221,958, with the FHLB as of December 31, 2023 and 2022, respectively. The Bank alsohad outstanding lines of credit of $54,000,000 and $51,000,000 with four correspondent banks as of December 31, 2023 and 2022. There were no outstanding balancesagainst these lines as of December 31, 2023 or 2022. Payments over the next five years are as follows: 2024 $59,016,480 2025 58,851,051 2026 44,797,983 2027 2,753,137 2028 2,271,012 $167,689,663 NOTE 9 – INCOME TAXES Income tax (benefit) expense was as follows: 2023 2022 Current expense Federal $379,021 $1,407,387 State 83,212 847,337 462,233 2,254,724 Deferred (benefit) expense Federal (411,463) 240,502 State (212,927) 119,319 (624,390) 359,821 Total income (benefit) expense $(162,157) $2,614,545 Total income tax (benefit) expense differed from the amounts computed by applying the federal income tax rate of 21% to income before income taxes as a result of thefollowing for the years ended December 31: 2023 2022 Expected income tax expense at federal tax rate $100,879 $1,993,195 Increase (decrease) in taxes resulting from: State income tax, net of federal income tax effect (102,475) 763,658 Bank Owned Life Insurance (164,120) (145,929)Tax exempt interest, net (16,441) (33,849)Other, net 20,000 37,470 $(162,157) $2,614,545 74Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 9 – INCOME TAXES (Continued) Year-end deferred tax assets and liabilities were due to the following: 2023 2022 Deferred tax assets: Allowance for credit losses $811,803 $724,725 Deferred compensation 928,427 945,753 Fraud claim 121,713 - Nonaccrual interest 351,211 - ESOP plans 90,188 51,766 Stock equity plans 263,451 125,195 Accrued severance plan 271,587 - Federal NOL carryforward 345,571 378,777 Depreciation 72,227 66,854 Charitable foundation contribution 312,949 425,092 Net unrealized loss on securities available for sale 2,596,141 2,541,461 Other - 48,186 6,165,268 5,307,809 Deferred tax liabilities: Loan fees/costs 1,120,945 1,108,540 Directors’ and officers’ retirement plans 996 21,772 Purchase accounting 294,064 242,887 Cash flow hedges 67,326 91,094 Other 27,947 - 1,511,278 1,464,293 Net deferred tax asset $4,653,990 $3,843,516 Included in retained earnings at December 31, 2023 and 2022 was approximately $4,609,000 in bad debt reserves for which no deferred income tax liabilities have beenrecorded. The amount represents allocations of income to bad debt deductions for tax purposes only. Reduction of these reserves for purposes other than tax bad-debtlosses 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 atDecember 31, 2023 or 2022. 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, 2023 or 2022. 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 before2020 and 2019, respectively. NOTE 10 – 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 (257,887restricted stock awards and 644,718 stock options) of Bogota Financial Corp. common stock. On September 2, 2021, 226,519 shares of restricted stock were awarded, with a grant date fair value of $10.45 per share. To fund the grant of restricted common stock, theCompany issued shares from authorized but unissued shares. Restricted shares granted under the 2021 Plan vest in equal installments, over the service period of fiveyears, 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 therequisite service period. During the twelve months ended December 31, 2023 and December 31, 2022, $473,000 and $473,000 of expense was recognized in regard to theseawards, respectively. The expected future compensation expense related to the 181,215 non-vested restricted shares outstanding at December 31, 2023 wasapproximately $1.9 million over a weighted average period of 3.85 years. 75Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 10 – STOCK BASED COMPENSATION (Continued) The following is a summary of the Company's restricted stock activity during the twelve months ended December 31, 2023: Number of RestrictedShares Weighted AverageGrant Date FairValue Outstanding, January 1, 2023 181,215 $10.45 Granted - - Vested 45,304 10.45 Forfeited - - Outstanding, December 31, 2023 135,911 $10.45 On September 2, 2022, options to purchase 526,119 shares of Company common stock were awarded, with a grant date fair value of $4.37 per option. Stock optionsgranted 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 anexercise 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 anexpiration 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 December31, 2023 and December 31, 2022 approximately $459,000 and $459,000 in expense was recognized in regard to these awards, respectively. The expected futurecompensation expense related to the 526,119 non-vested options outstanding at December 31, 2023 was $1.8 million over the weighted average remaining vesting periodof 3.85 years. The following is a summary of the Company's option activity during the twelve months ended December 31, 2023: Number ofStock Options WeightedAverageExercise Price WeightedAverageRemainingContractualTerm (in years) AggregateIntrinsic Value Outstanding, January 1, 2023 523,619 $10.45 6.5 $— Granted - Forfeited - Outstanding, December 31, 2023 523,619 10.45 6.5 - Options exercisable at December 31, 2023 209,448 $— 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 tradingday of the period and the exercise price, multiplied by the number of in-the-money options. 76Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 11 – DERIVATIVES AND HEDGING ACTIVITES Interest Rate Swaps. At December 31, 2023, the Company had two interest rate swaps with a notional amount of $20.0 million hedging certain FHLB advances andbrokered deposits. These interest rate swaps meet the cash flow hedge accounting requirements. Interest rate swaps designated as cash flow hedges involve the receiptof 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 underlyingnotional amount. As of December 31, 2022, the Company had one interest rate swap with a notional amount of $10.0 million hedging certain FHLB advances. At bothDecember 31, 2023 and December 31, 2022, the Company had no interest rate swaps in place with commercial banking customers. 77Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 11 – 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 FinancialCondition at December 31, 2023: December 31, 2023 Asset Derivative Consolidated Statements of Financial Condition Fair Value Interest rate swapsOther Assets $239,510 Total derivative instruments $239,510 For the twelve months ended December 31, 2023, changes in fair value of $84,554 were recorded in other comprehensive income, net of tax, for changes in fair value ofinterest rate swaps with third parties. At December 31, 2023, accrued interest was $72,000.The Company has agreements with counterparties that contain a provision that if the Company defaults on any of its indebtedness, including default where repaymentof the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of its derivative obligations. NOTE 12 – 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 theemployee 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 Boardof Directors may elect to make discretionary employer contributions. Bank contributions to the plan for the years ended December 31, 2023 and 2022 were $414,000 and$384,000, 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 theBank. The Monthly Retirement Benefit is 100% of a director's average annual retainer paid over a three-year period (not necessarily consecutive) during which thehighest 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 2023 and 2022, respectively. The following table sets forth the Plan’s funded statusat December 31, 2023 and 2022: 2023 2022 Projected benefit obligation - beginning $2,318,336 $2,430,095 Service cost 52,005 136,145 Interest cost 109,410 69,830 Actuarial gain (12,950) (154,613)Annuity payments (191,992) (163,121)Projected benefit obligation – ending 2,274,809 2,318,336 Changes in Plan assets Employer contributions 191,992 163,121 Annuity payments (191,992) (163,121) Funded status and accrued pension cost included in other liabilities $2,274,809 $2,318,336 78Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 12 – BENEFIT PLANS (Continued) Amounts recognized in accumulated other comprehensive income at December 31 consist of: 2023 2022 Net actuarial gain (loss) $2,236 $(65,412)Prior service cost 1,682 82,538 $3,918 $17,126 Components of net periodic benefit cost and other amounts recognized in other comprehensive income: 2023 2022 Service cost $52,005 $136,145 Interest cost 109,410 69,830 Amortization of prior service cost 259 130,821 Net periodic benefit cost 161,674 336,796 Net loss (gain) 2,236 (154,613)Amortization of prior service cost (259) (130,821)Total recognized in other comprehensive income (loss) 1,977 (285,434) Total recognized in net periodic benefit cost and other comprehensive loss $163,651 $51,362 Assumptions Weighted-average assumptions used to determine pension benefit obligations at year end: 2023 2022 Discount rate 4.80% 5.00% 79Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 12 – BENEFIT PLANS (Continued) Weighted-average assumptions used to determine net periodic pension cost: 2023 2022 Discount rate 4.80% 2.90%Amortization period (years) 9.49 5.8 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 whichthe 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 thefinal 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 nomaterial change on the financial statements. For the year ended December 31, 2024, the Bank expects to contribute $200,222 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: 2024 $200,222 2025 290,760 2026 259,119 2027 236,518 2028 236,518 2029-2030 473,036 Employee Stock Ownership Plan (“ESOP”): Effective upon the consummation of the Bank's reorganization in January 2020, an ESOP was established for all eligibleemployees. 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 floating rate that was 8.50% as of December 31, 2023. 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 withthe 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 theESOP 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 ofallocation. The ESOP shares pledged as collateral are reported as unearned ESOP shares in the Consolidated Statements of Financial Condition. As shares are committed to bereleased from collateral, the Bank reports compensation expense equal to the average market price of the shares during the year, and the shares become outstanding forbasic net income per common share computations. ESOP compensation expense for the year ended December 31, 2023 and 2022 was $224,870 and $280,790, respectively. 80Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 12 – BENEFIT PLANS (Continued) The ESOP shares were as follows: 2023 2022 Allocated shares 106,024 79,280 Unearned shares 409,751 436,495 Total ESOP shares 515,775 515,775 Fair value of unearned ESOP shares $3,321,570 $4,880,014 Supplemental Executive Retirement Plan (“SERP”): In 2014, the Bank adopted an unfunded, non-qualified Supplemental Executive Retirement Plan (“SERP”) for thebenefit 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 tosupplement the retirement income of the President and CEO to achieve equitable wage replacement at retirement. As of December 31, 2023, the accrued SERP obligation was $1,040,487. The expense was a benefit of $15,325 during 2023. At December 31, 2023, the amount recognizedin accumulated other comprehensive loss was $87,120. As of December 31, 2022, the accrued SERP obligation was $968,692. The expense was $278,714 during 2022. AtDecember 31, 2022, the amount recognized in accumulated other comprehensive loss was $79,972. NOTE 13 – REGULATORY CAPITAL MATTERS Banks are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulationsinvolve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts andclassifications 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 theBank 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 totalregulatory capital. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Failure to meet capital requirements caninitiate regulatory action. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and criticallyundercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to acceptbrokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2021 and2020, 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 rulewhereby 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 tohave satisfied the generally applicable risk-based and leverage capital requirements in the agencies’ capital rules and will be considered to have met the well capitalizedratio requirements under the PCA statutes. 81Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 13 – 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 theorganization. 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 inany 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, 2023 and 2022 are presented in the tables below. Actual Capital Required For Capital AdequacyPurposes Amount Ratio Amount Ratio 2023 Tier 1 capital to average assets: Bank 130,625 13.96 74,864 8.0 2022 Tier 1 capital to average assets: Bank 129,264 13.44 71,193 8.0 NOTE 14 – 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 itsown 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 theseinstruments 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 thecontractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheetinstruments. 82Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 14 – 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, 2023 and2022 was as follows: 2023 2022 Fixed Rate Residential mortgage loans $— $650,000 Commercial & Industrial — 500,000 Home equity line of credit — 85,000 $— $1,235,000 Variable Rate Residential mortgage loans $2,664,450 $1,822,807 Construction loans 16,780,124 32,935,531 Home equity loans 1,173,000 510,000 Commercial real estate 730,000 — $21,347,574 $35,268,338 Commitments to make loans are generally made for periods of 90 days or less. At December 31, 2023 and 2022, undisbursed funds from approved lines of credit under a homeowners’ equity lending program amounted to approximately$50,175,046 and $48,776,452, respectively. At December 31, 2023 and 2022, undisbursed funds from approved lines of credit under a business line of credit programamounted to $2,579,759 and $8,183,350, respectively. Unless they are specifically cancelled by notice from the Bank, these funds represent firm commitments available tothe 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 generallyhave 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 drawnupon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-casebasis. 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. Rentexpense was $181,308 and $169,540 for 2023 and 2022, respectively. 83Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 15 – 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 orliability 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 notactive; 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 orliability. 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 arecalculated based on market prices of similar securities (Level 2). Assets measured at fair value on a recurring basis are summarized below: Carrying Value Quoted Pricesin ActiveMarkets forIdentical Assets(Level 1) SignificantOtherObservableInputs (Level 2) SignificantUnobservableInputs (Level 3) December 31, 2023 Securities available for sale: U.S. government and agency obligations $5,545,401 $— $5,545,401 $— Corporate bonds 11,818,756 — 11,818,756 — MBS – residential 35,407,182 — 35,407,182 — MBS – commercial 16,116,840 — 16,116,840 — Cash flow hedge 239,510 239,510 $69,127,689 $— $69,127,689 $— December 31, 2022 Securities available for sale: U.S. treasury bills $4,927,608 $4,927,608 $— $— U.S. government and agency obligations 5,465,154 — 5,465,154 — Corporate bonds 15,506,047 — 15,506,047 — MBS – residential 39,649,045 — 39,649,045 — MBS – commercial 19,552,724 — 19,552,724 — Cash flow hedge 324,062 324,062 $85,424,640 $4,927,608 $80,497,032 $— No assets were measured at fair value on a non-recurring basis at December 31, 2023 and 2022. 84Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 15 – FAIR VALUE (Continued) The carrying amounts and estimated fair values of financial instruments, at December 31, 2023 and 2022 are as follows: Carrying Fair Fair Value Measurement Placement Amount Value (Level 1) (Level 2) (Level 3) (In thousands) December 31, 2023 Financial instruments -assets Investment securities held-to-maturity $72,656 $65,375 $— $65,375 $— Loans 714,687 672,347 — — 672,347 Financial instruments - liabilities Certificates of deposit 493,275 491,944 — 491,944 — Borrowings 167,690 167,891 — 167,891 — December 31, 2022 Financial instruments - assets Investment securities held-to-maturity $77,427 $70,700 $— $70,700 $— Loans 719,026 658,250 — — 658,250 Financial instruments - liabilities Certificates of deposit 492,593 491,638 — 491,638 — Borrowings 102,319 98,885 — 98,885 — 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 ofdeposits 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 balancesheet instruments such as cash and cash equivalents, accrued interest receivable, accrued interest payable and Bank owned life insurance holding costs approximatefair value. The fair value of off-balance sheet items is not considered material.85Table of ContentsBOGOTA FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSDecember 31, 2023 and 2022 NOTE 16 – ACCUMULATED OTHER COMPREHENSIVE LOSS The components of accumulated other comprehensive loss included in equity as of December 31 is as follows: Year ended December 31, 2023 Unrealized gain(loss) ininvestments Derivatives Defined benefitplan Total Beginning balance $(6,499,666) $232,969 $55,684 $(6,211,013)Other comprehensive loss before reclassification (139,840) (60,786) (53,135) (253,761)Amounts reclassified from other comprehensive loss - - - - Net current period other comprehensive loss (139,840) (60,786) (53,135) (253,761)Ending balance $(6,639,506) $172,183 $2,549 $(6,464,774) Year ended December 31, 2022 Unrealized gain(loss) ininvestments Derivatives Defined benefitplan Total Beginning balance $17,158 $— $(289,814) $(272,656)Other comprehensive (loss) income before reclassification (6,516,824) 232,969 179,142 (6,104,713)Amounts reclassified from other comprehensive (loss) income - - 166,356 166,356 Net current period other comprehensive (loss) income (6,516,824) 232,969 345,498 (5,938,357)Ending balance $(6,499,666) $232,969 $55,684 $(6,211,013) Details about accumulated other comprehensive loss components Year ended December31, 2023 Year ended December31, 2022 Realized gains on sales of securities $— $— — — $— $— Amortization of estimated defined benefit pension plan losses $94,315 $231,403 other expense (26,512) (65,047)provision for income taxes $67,803 $166,356 Total reclassifications for the period $67,803 $166,356 86Table of Contents ITEM 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None. ITEM 9A. Controls and Procedures (a)Evaluation of disclosure controls and procedures Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, BogotaFinancial Corp. evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principalfinancial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective. (b)Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined in Exchange ActRule 13a-15(f). Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer,we evaluated the effectiveness of our internal control over financial reporting based on criteria established in “Internal Control — Integrated Framework(2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management, including ourPrincipal Executive Officer and Principal Financial Officer, concluded that our internal control over financial reporting was effective and met the criteria of the“Internal Control — Integrated Framework (2013)” as of December 31, 2023. (c)Attestation Report of the Registered Public Accounting Firm Not applicable because the Company is an emerging growth company. (d)Changes in Internal Controls. There were no changes made in our internal controls during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely tomaterially affect, Bogota Financial Corp.’s internal control over financial reporting. ITEM 9B. Other Information During the three months ended December 31, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction orwritten plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1trading arrangement,” as that term is used in SEC regulations. Employment Agreement with Kevin Pace. On March 27, 2024, Bogota Savings Bank (the “Bank”), the wholly owned subsidiary of the Company, enteredinto an employment agreement with Kevin Pace, President and Chief Executive Officer of the Bank and the Company. The agreement has an initial term throughDecember 31, 2025. Beginning on January 1, 2025, and each January 1 thereafter, the term of the agreement extends automatically for one additional year so that theterm will be two years from the date of such renewal unless either the Bank or Mr. Pace gives written notice no later than 30 days before the renewal date that the termwill not be renewed. At least 30 days prior to each renewal date, disinterested members of the board of directors of the Bank will conduct a comprehensiveperformance evaluation of Mr. Pace’s performance to determine whether to renew the employment agreement. Pursuant to the employment agreement, Mr. Pace will receive an annual base salary of $380,000, which may be increased, but not decreased, other than apercentage decrease (not greater than 10%) applicable to all members of senior management. In addition to his base salary, the employment agreement provides thatMr. Pace may receive a bonus on a discretionary basis, as determined by the Compensation Committee, and/or will be eligible to participate in any bonus plan orarrangement of the Bank in which senior management is eligible to participate. Mr. Pace is also entitled to participate in all employee benefit plans, arrangements andperquisites offered to the senior management of the Bank as well as reimbursement of reasonable travel and other business expenses incurred in the performance ofhis duties with the Bank, including memberships in organizations as Mr. Pace and the board of directors of the Bank mutually agree are necessary and appropriate. Inaddition, the Bank shall provide Mr. Pace with a company-owned or leased automobile (or a reasonable car allowance) and shall pay or reimburse Mr. Pace for thereasonable maintenance, insurance, gas, tolls and other charges related to the business of the automobile in accordance with the Bank’s automobile policy. The Bank may terminate Mr. Pace’s employment with or without “cause” (as defined in the employment agreement) at any time, and Mr. Pace may resign atany time with or without “good reason” (as defined in the employment agreement). In the event of Mr. Pace’s termination by the Bank without cause (other than dueto death or disability) or Mr. Pace’s voluntary resignation for “good reason” (in either case a “qualifying termination event”), the Bank would pay Mr. Pace a cashseverance payment equal to 24 months of his base salary, payable in equal bi-weekly installments for 24 months, commencing within 60 days following his date oftermination. In addition, provided that Mr. Pace timely elects continue coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended(“COBRA”), Mr. Pace would receive 18 consecutive monthly cash payments equal to his monthly COBRA premium in effect as of the date of termination for the levelof coverage in effect for Mr. Pace under the Bank’s group health plan. The payments and benefits described above are subject to Mr. Pace executing, and notrevoking, a release of claims against the Bank. If a qualifying termination event occurs on or after a change in control of the Bank or the Company, Mr. Pace would be entitled to (in lieu of the payments andbenefits described in the previous paragraph) a severance payment equal to two times the sum of his (1) annual base salary in effect as of the date of his termination orimmediately prior to the change in control, whichever is higher; and (2) the average annual cash bonus earned for the two most recently completed performanceperiods prior to the change in control. Such payment is payable in bi-weekly installments for a period of two years, commencing within 30 days following Mr. Pace’sdate of termination. In addition, Mr. Pace would receive 18 consecutive monthly cash payments equal to his monthly COBRA premium in effect as of the date oftermination for the level of coverage in effect for Mr. Pace under the Bank’s (or successor’s) group health plan immediately before his termination. If Mr. Pace’s employment is terminated due to his voluntary resignation without good reason, termination for cause, death or disability, the employmentagreement will immediately terminate, and the Bank would have no obligation to pay any additional severance benefits to Mr. Pace under the employment agreement. Upon termination of employment (other than a termination in connection with a change in control), Mr. Pace will be required to adhere to one-year non-competition and non-solicitation restrictions set forth in his employment agreement. The non-competition and non-solicitation covenants apply following a change in control for a period mutually to be agreed to by the parties, which will beno less than six months nor exceed two years. In the event payments and benefits provided to Mr. Pace become subject to Sections 280G and 4999 of the InternalRevenue Code of 1986, as amended (the “Code”), the Bank shall obtain an independent appraisal of the value of the non-competition and non-solicitation covenants,and the aggregate value of the parachute payment (as defined in Code Section 280G) will be reduced by the appraised value of the covenants. The foregoing description of the employment agreement does not purport to be complete and is qualified in its entirety by reference to the agreementattached hereto as Exhibits 10.2 of this Annual Report on Form 10-K and is incorporated by reference into this Item 9B. ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not Applicable. 87Table of Contents PART III ITEM 10. Directors, Executive Officers and Corporate Governance Information regarding directors, executive officers and corporate governance of the Company is presented under the headings “Proposal 1 — Election ofDirectors,” “Corporate Governance — Code of Ethics for Senior Officers” and “— Committees of the Board of Directors — Audit Committee” in the Company’sdefinitive Proxy Statement for the 2024 Annual Meeting of Stockholders (the “Proxy Statement”) and is incorporated herein by reference. Additionally, no directors orofficers of Bogota Financial Corp failed to file on a timely basis any reports required by Section 16(a) of the Exchange Act during 2023. Bogota Financial Corp. has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer and principal accounting officer orcontroller or persons performing similar functions. A copy of the Code of Ethics is available on Bogota Financial Corp.’s website at www.bogotasavingsbank.com under“Investor Relations.” ITEM 11. Executive Compensation Information regarding executive compensation is presented under the headings “Executive Compensation,” and “Corporate Governance — DirectorCompensation” in the Proxy Statement and is incorporated herein by reference. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters (a)Securities Authorized for Issuance under Stock-Based Compensation Plans The following table sets forth information regarding outstanding options and shares under equity compensation plans at December 31, 2023: (a) (b) (c) Plan Category Number of Securitiesto be Issued UponExercise ofOutstanding Options,Warrants and Rights Weighted-AverageExercise Price ofOutstanding Options,Warrants and Rights Number ofSecuritiesRemaining Availablefor Future IssuanceUnder EquityCompensation Plans(ExcludingSecurities Reflectedin Column (a)) Equity compensation plan approved by security holders 752,638 $10.45 149,968 Equity compensation plan not approved by security holders - - Total 752,638 $10.45 149,968 (b)Security Ownership of Certain Beneficial Owners The information required by this item is incorporated herein by reference to the section captioned “Stock Ownership” in the Proxy Statement. (c)Security Ownership of Management The information required by this item is incorporated herein by reference to the section captioned “ Stock Ownership” in the Proxy Statement. (d)Changes in Control Management of Bogota Financial Corp. knows of no arrangements, including any pledge by any person of securities of Bogota Financial Corp., theoperation of which may at a subsequent date result in a change in control of the registrant. 88Table of Contents ITEM 13. Certain Relationships and Related Transactions, and Director Independence Information regarding certain relationships and related transactions, and director independence is presented under the heading “Corporate Governance — Director Independence” and “— Other Information Relating to Directors and Executive Officers Transactions with Certain Related Persons” in the Proxy Statement andis incorporated herein by reference. ITEM 14. Principal Accountant Fees and Services The information required by this item is incorporated herein by reference to the section captioned “Proposal 2 – Ratification of the Appointment ofIndependent Registered Public Accountants” of the Proxy Statement. PART IV ITEM 15. Exhibits and Financial Statement Schedules 3.1Articles of Incorporation of Bogota Financial Corp. (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 of Bogota FinancialCorp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended)3.2Amended and Restated Bylaws of Bogota Financial Corp. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K of Bogota FinancialCorp. (File No. 001-39180), initially filed with the Securities and Exchange Commission on January 25, 2024)4.1Form of Common Stock Certificate of Bogota Financial Corp. (incorporated by reference to Exhibit 4 to the Registration Statement on Form S-1 of BogotaFinancial Corp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended)4.6Description of Bogota Financial Corp.’s Securities (incorporated by reference to Exhibit 4.6 to the Annual Report on Form 10-K of Bogota Financial Corp.(File No. 001-39180), filed with the Securities and Exchange Commission on March 30, 2020)10.1Resignation and Separation Agreement and Release of Claims between Bogota Savings Bank and Joseph Coccaro (incorporated by reference to Exhibit 10.1to the Current Report on Form 8-K of Bogota Financial Corp. (File No. 001-39180), filed with the Securities and Exchange Commission on November 30, 2023)†10.2Employment Agreement between Bogota Savings Bank and Kevin Pace †10.3Change in Control Agreement between Bogota Savings Bank and Brian McCourt (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Bogota Financial Corp. (File No. 001-39180), filed with the Securities and Exchange Commission on January 15, 2020) †10.4Bogota Savings Bank Director’s Retirement Plan (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-1 of Bogota FinancialCorp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended) †10.5Bogota Savings Bank Supplemental Executive Retirement Plan (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 of BogotaFinancial Corp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended) †10.6Form of Bogota Savings Bank Executive Bonus Plan (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1 of Bogota FinancialCorp. (File No. 333-233680), initially filed with the Securities and Exchange Commission on September 9, 2019, as amended) †10.7Bogota Financial Corp. 2021 Equity Incentive Plan (incorporated by reference to Appendix A to the definitive proxy statement (File No. 001-39180, filed onApril 22, 2021) †10.8Form of Incentive Stock Option Award Agreement (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-8 (File No. 333-258064),filed on July 21, 2021) †10.9Form of Non-Qualified Stock Option Award Agreement (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-8 (File No. 333-258064), filed on July 21, 2021) † 89Table of Contents 10.10Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-8 (File No. 333-258064), filedon July 21, 2021) †21Subsidiaries of Registrant23.1Consent of Independent Public Accounting Firm – S.R. Snodgrass, P.C.31.1Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant toSection 302 of the Sarbanes-Oxley Act of 200231.2Certification of Senior Vice President and Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adoptedpursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1Certification of President and Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906of the Sarbanes-Oxley Act of 200297Clawback Policy101The following materials from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, formatted in Inline XBRL: (i) BalanceSheets, (ii) Statements of Income, (iii) Statements of Comprehensive Income, (iv) Consolidated Statements of Equity, (v) Statements of Cash Flows and (vi)Notes to the Financial Statements.104Cover Page Interactive Data File (formatted in XBRL and contained in Exhibit 101)________________† Management contract or compensation plan or arrangement. 90Table of Contents ITEM 16. Form 10-K Summary Not applicable. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized. BOGOTA FINANCIAL CORP. Date: March 28, 2024By:/s/ Kevin Pace Kevin Pace President and Chief Executive Officer (Duly Authorized Representative) Pursuant to the requirements of the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the Registrant and inthe capacities and on the dates indicated. Signatures Title Date /s/ Kevin Pace President, Chief Executive Officer and Director March 28, 2024Kevin Pace (Principal Executive Officer) /s/ Brian McCourt Executive Vice President and Chief Financial Officer March 28, 2024Brian McCourt (Principal Financial Officer) /s/ Steven M. Goldberg Chairman of the Board March 28, 2024Steven M. Goldberg /s/ William Hanson Director March 28, 2024William Hanson /s/ John Masterson Director March 28, 2024John Masterson /s/ John G. Reiner Director March 28, 2024John G. Reiner 91

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