Bogota Financial Corp. Commitments Disclosure
NOTE 15 – COMMITMENTS AND CONTINGENCIES
The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments primarily include commitments to extend credit. Such instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated statements of financial condition. The contractual amounts of these instruments reflect the extent of involvement the Bank has in those particular classes of financial instruments.
The Bank’s exposure to credit loss in the event of non-performance by the other party to the financial instruments for commitments to extend credit is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.
The Bank had outstanding firm commitments, all of which expire within two months, to originate, or purchase participation interests in, loans at December 31, 2025 and 2024 was as follows:
| 2025 | 2024 | |||||||
| Fixed Rate | ||||||||
| Residential mortgage loans | $ | — | $ | 561,750 | ||||
| Commercial real estate | — | 7,030,000 | ||||||
| $ | — | $ | 7,591,750 | |||||
| Variable Rate | ||||||||
| Residential mortgage loans | $ | — | $ | — | ||||
| Construction loans | - | - | ||||||
| Home equity loans | 1,331,000 | 299,000 | ||||||
| Commercial real estate | - | - | ||||||
| $ | 1,331,000 | $ | 299,000 | |||||
Commitments to make loans are generally made for periods of 90 days or less. As of December 31, 2025 there was $80,000 in ACL for loan commitments.
At December 31, 2025 and 2024, undisbursed funds from approved lines of credit under a homeowners’ equity lending program amounted to approximately $59,664,628 and $54,581,083, respectively. At December 31, 2025 and 2024, undisbursed funds from approved lines of credit under a business line of credit program amounted to $8,685,211 and 9,437, respectively. Unless they are specifically cancelled by notice from the Bank, these funds represent firm commitments available to the respective borrowers on demand. At December 31, 2025 and 2024, the Bank recorded an allowance for credit losses related to these commitments of ,000 and $118,000, respectively. Unless they are specifically cancelled by notice from the Bank, these funds represent firm commitments available to the respective borrowers on demand.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but primarily includes commercial and residential real estate. The Bank leases certain Bank properties and equipment under operating leases. Rent expense was $1.5 million and $228,937 for 2025 and 2024, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
| 2023 | Mar 28, 2024 | |
| 2022 | Mar 24, 2023 | |
| 2021 | Mar 29, 2022 | |
| 2020 | Mar 26, 2021 | |
| 2019 | Mar 30, 2020 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.