Bogota Financial (BSBK) risk factors, FY2024 10-K

Risks Related to our Lending Activities

1. 01The geographic concentration of our loan portfolio makes us vulnerable to a downturn in the local economy
2. 02Our strategy emphasis on commercial and multi-family real estate loans may expose us to increased lending risks
3. 03Our non-owner occupied commercial real estate loans may expose us to increased credit risk
4. 04Our allowance for credit losses may not be sufficient to cover actual credit losses
5. 05Our concentrations of loans in certain industries could have adverse effects on credit quality
6. 06We are subject to environmental liability risk associated with lending activities
7. 07Changes in interest rates may reduce our profits
8. 08Furthermore, increases in interest rates may adversely affect the ability of borrowers to make loan repayments on adjustable-rate loans, as the interest owed on such loans would increase as interest rates increase
9. 09Changes in the estimated fair value of debt securities may reduce stockholders’ equity and net income

Risks Related to Economic Conditions

1. 10Inflation can have an adverse impact on our business and on our customers
2. 11Changes to trade policies and tariffs can have an adverse impact on our business and our customers
3. 12Interruption of our customers' supply chains could negatively impact their business and operations and impact their ability to repay their loans
4. 13A 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 an adverse effect on our results of operations

Risks Related to Our Funding

1. 14Our 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 wholesale funding strategies for liquidity needs
2. 15If our banking deposits that we receive from municipalities were lost within a short period of time, it could negatively impact our liquidity and earnings

Risks Related to Our Business Strategy

1. 16Building market share through de novo branching may cause our expenses to increase faster than revenues
2. 17Our business strategy contemplates moderate organic growth, and our financial condition and results of operations may be adversely affected if we fail to grow or fail to manage our growth effectively
3. 18Acquisitions may disrupt our business and dilute shareholder value

Risks Related to Our Securities Portfolio

1. 19Our investments in corporate and municipal debt securities obligations expose us to additional credit risks, which could adversely affect our financial condition and results of operations
2. 20Changes in the valuation of our securities portfolio may reduce our profits and our capital levels

Risks Related to Our Operations

1. 21We 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 affect our performance
2. 22Our success depends on retaining certain key personnel
3. 23Systems failures or breaches of our network security could adversely affect our financial condition and results of operation and subject us to increased operating costs as well as litigation and other liabilities
4. 24While our Board of Directors takes an active role in cybersecurity risk tolerance, we rely to a large degree on management and outside consultants in overseeing cybersecurity risk management
5. 25Natural disasters, acts of terrorism, global market disruptions and other external events could harm our business
6. 26Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses

Risks Related to Competition

1. 27Strong competition within our market area may reduce our profits and slow growth

Risks Related to Laws and Regulations and Their Enforcement

1. 28Changes 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 of operations
2. 29The fiscal, monetary and regulatory policies of the federal government and its agencies could adversely affect our business, financial condition and results of operations
3. 30We are subject to stringent capital requirements, which may adversely impact our return on equity, require us to raise additional capital, or restrict us from paying dividends or repurchasing shares
4. 31Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions
5. 32We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors
6. 33We are a smaller reporting company and, even if we no longer qualify as an emerging growth company, any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to smaller reporting companies could make our common stock less attractive to investors
7. 34Changes in accounting standards could affect reported earnings

Risks Related to Ownership of Our Common Stock

1. 35Federal Reserve Board regulations and policy effectively prohibit Bogota Financial, MHC from waiving the receipt of dividends, which will likely preclude us from paying any dividends on our common stock
2. 36Our common stock is not heavily traded, and the stock price may fluctuate significantly
3. 37Bogota 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 prevent stockholders from forcing a sale or a second-step conversion transaction you may find advantageous
4. 38We are an emerging growth company and have elected to comply only with the reduced reporting and disclosure requirements applicable to emerging growth companies. As such, our common stock may be less attractive to investors
5. 39Even 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, which may make our common stock less attractive to investors
6. 40Various factors may make takeover attempts more difficult to achieve