BCBP
$10.82
Bcb Bancorp
$.41
3.94%
Earnings Details
3rd Quarter September 2020
Wednesday, October 21, 2020 4:15:00 PM
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Summary

Bcb Bancorp (BCBP) Recent Earnings

Bcb Bancorp (BCBP) reported 3rd Quarter September 2020 earnings of $0.47 per share on revenue of $35.4 million. The consensus earnings estimate was $0.14 per share on revenue of $19.4 million. Revenue grew 8.1% on a year-over-year basis.

Results
Reported Earnings
$0.47
Earnings Whisper
-
Consensus Estimate
$0.14
Reported Revenue
$35.4 Mil
Revenue Estimate
$19.4 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

BCB Bancorp, Inc. Reports Third Quarter 2020 Net Income of $8.3 Million; Strong Results for Loan Deferrals and Net Interest Margin

BAYONNE, N.J., Oct. 21, 2020 (GLOBE NEWSWIRE) -- BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported net income of $8.3 million for the third quarter of 2020, compared to $2.7 million for the second quarter of 2020, and $5.2 million for the third quarter of 2019. Earnings per diluted share for the third quarter of 2020 were $0.47, compared to $0.14 in the preceding quarter and $0.30 in the third quarter of 2019. For the first nine months of the year, net income was $13.6 million, or $0.73 per diluted common share, compared with $15.9 million, or $0.91 per diluted common share, for the first nine months of 2019.

“Financial results for the third quarter improved substantially compared to both the prior quarter and prior year’s third quarter, reflecting strong earnings growth and improved operating efficiencies. Those operating efficiencies, and management’s efforts to delever its balance sheet, yielded significant growth in net interest margin of 53 basis points for the third quarter of 2020 as compared to the second quarter of 2020. Our successful deployment of cash, as well as tightly managing the cost of funds, has yielded desired results, and positions us well moving forward,” stated Thomas Coughlin, President and Chief Executive Officer.

“The strong earnings growth recognized this quarter included the execution of three initiatives the Company undertook; the sale-leaseback of one of its properties, the purchase of $60 million in bank-owned life insurance (“BOLI”), and the redemption of its Series C 6% and Series F 6% preferred stock. During the quarter, we recognized a gain of approximately $4.4 million related to the sale-leaseback project and approximately $385,000 in income from the investment in BOLI. The investment in BOLI provides a new form of non-interest income, that is nontaxable, and helps to diversify our revenue streams. We called all outstanding Series C 6% and Series F 6% preferred stock and replaced the majority of it with Series H 3.5% preferred stock, effectively reducing our cost of preferred dividends overall, while remaining well-capitalized.

“Third quarter results were affected by an increase to the loan loss provision as a result of the COVID-19 pandemic on the economy, as well as the low interest rate environment. We evaluated factors related to the COVID-19 pandemic and its impact on our New Jersey and New York markets. We recorded $2.7 million to our provision for loan losses in the third quarter, bringing our total reserves to $31.8 million. We believe this reserve level is adequate to cover potential future loan losses from the pandemic.

“Due to the positive trends within our loan portfolio, and the commitment of our staff, we have reduced the total percentage of loan deferrals from over 30% of our loan portfolio during the second quarter of 2020 to less than 1% at October 16, 2020,” said Coughlin. “At the onset of the COVID-19 pandemic, we worked closely with our customers to ensure they had the financial support they needed to continue operating, given the unprecedented nature of the pandemic. The return to normal payment status highlights both the Bank’s conservative underwriting process as well as our strong customer base. For the remaining 11 loans that are currently in deferment, totaling approximately $5.2 million, we have determined that no specific reserve is necessary at this time.

“To help service the needs of our business customers, we continued to offer Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans until the program was completed on August 8, 2020. As of September 30, 2020, we had helped approximately 1,100 customers receive $129 million in PPP funding. We are now starting to process applications for PPP loan forgiveness for our customers. Unearned PPP loan fees, net of unearned PPP costs, are $2.4 million. We expect the timing of the loan forgiveness to benefit fourth quarter 2020 and first quarter 2021 operating results,” Coughlin concluded.  

Executive Summary

  • Net Interest Margin was 2.98 percent for the third quarter of 2020, compared to 2.45 percent for the second quarter of 2020, and 3.06 percent for the third quarter of 2019.
    o Total yield on interest-earning assets increased 35 basis points to 4.06 percent for the third quarter of 2020, compared to 3.71 percent for the second quarter of 2020 and decreased 57 basis points from 4.63 percent for the third quarter of 2019.
    o Total cost of interest-bearing liabilities decreased 20 basis points to 1.35 percent for the third quarter of 2020, compared to 1.55 percent for the second quarter of 2020 and decreased 52 basis points from 1.87 percent for the third quarter of 2019.
  • Net income was $8.3 million in the third quarter of 2020, compared to $2.7 million in the prior quarter and $5.2 million in the third quarter a year ago.
  • Earnings per diluted share were $0.47 in the third quarter of 2020, compared to $0.14 in the prior quarter and $0.30 in the third quarter of 2019.
  • Loans receivable, net of allowance for loan losses, increased by 6.1 percent, to $2.392 billion at September 30, 2020, from $2.254 billion a year earlier.
  • The provision for loan losses increased by $1.8 million, to $2.7 million for the third quarter of 2020, from $900,000 for the third quarter of 2019, primarily due to factors related to the COVID-19 pandemic.
  • Allowance for loan losses as a percentage of non-accrual loans was 444.1 percent at September 30, 2020, compared to 486.6 percent at September 30, 2019, as total non-accrual loans increased to $7.2 million as compared to $5.1 million at September 30, 2019.
  • Total deposits were $2.273 billion at September 30, 2020 from $2.263 billion a year ago.
  • The Company purchased $60.0 million of BOLI during the third quarter of 2020.
  • The Company redeemed $10.5 million of its preferred stock during the third quarter of 2020, which included the Company’s Series C 6% and Series F 6% preferred stock and issued $9.0 million of Series H 3.5% preferred stock.
  • On October 14, 2020 the Company’s Board of Directors declared a regular quarterly cash dividend of $0.14 per share. The dividend will be payable November 20, 2020, to common shareholders of record on November 6, 2020.

Balance Sheet Review

Total assets decreased by $144.6 million, or 4.8 percent, to $2.842 billion at September 30, 2020, from $2.987 billion at June 30, 2020, and increased by $16.8 million, or 0.6 percent, from $2.825 billion at September 30, 2019. The decrease in total assets in the current quarter was mainly related to decreases in total cash and cash equivalents, partly offset by increases in loans receivable and a purchase of $60.0 million of BOLI.

Loans receivable, net, increased by $48.4 million, or 2.1 percent, to $2.392 billion at September 30, 2020 from $2.344 billion at June 30, 2020, and increased by $138.3 million, or 6.1 percent compared to $2.254 billion at September 30, 2019. A substantial portion of the 12-month increase in loans occurred in the first nine months of 2020 and included $48.4 million of purchased loans and $129.0 million from the Company’s participation in the federal PPP loan program. Total loan increases for the first nine months of 2020 included $133.6 million in commercial business loans, which included PPP loans, $70.7 million in commercial real estate and multi-family loans, $29.8 million in construction loans, and $88,000 in consumer loans, partly offset by decreases of $6.6 million in residential one-to-four family loans and $3.7 million in home equity loans.

Total investment securities decreased by $6.1 million, or 4.3 percent, to $134.1 million at September 30, 2020, from $140.2 million at June 30, 2020, and increased $30.1 million, or 28.9 percent, compared to $104.1 million at September 30, 2019.

Total deposits decreased by $168.9 million, or 6.9 percent, to $2.273 billion at September 30, 2020, from $2.442 billion at June 30, 2020, and increased by $9.9 million, or 0.4 percent, from $2.263 billion at September 30, 2019. The decrease in deposits in the current quarter mainly related to the maturity of certain high-rate, promotional certificate of deposit accounts in the third quarter. Some of these matured deposits went into other forms of deposits while others were withdrawn from the Bank.

Debt obligations decreased by $16.0 million, or 5.1 percent, to $296.6 million at September 30, 2020 from $312.6 million at September 30, 2019. The weighted average interest rate of FHLB advances was 1.99 percent at September 30, 2020 and 2.15 percent at September 30, 2019. During the three months ended September 30, 2020, the Company opted to extinguish a $15.0 million FHLB advance which held a rate of 2.68% and was set to mature in June, 2021. The effect of the extinguishment of the debt reduced the weighted average cost of FHLB borrowings by approximately four basis points on an annualized basis. The related non-recurring expense for the extinguishment of this debt is included in noninterest expense.

Stockholders’ equity increased by $1.7 million, or 0.7 percent, to $242.7 million at September 30, 2020, from $241.0 million three months earlier, and increased $19.0 million, or 8.5 percent, from $223.7 million a year ago. The increase in stockholders’ equity over the prior year included the issuance of $12.5 million of common stock in December, 2019 and an increase in retained earnings of $7.8 million, representing earnings net of dividends paid. Additional paid-in-capital for preferred stock decreased by $4.5 million to $23.5 million at September 30, 2020, from $28.0 million at June 30, 2020, and decreased $1.5 million compared to $25.0 million at September 30, 2019, primarily related to the redemption of $10.5 million of the Company’s then-outstanding preferred stock, which included the Company’s Series C 6% and Series F 6% preferred stock, partly offset by the issuance of $9.0 million of Series H 3.5% preferred stock. Accumulated other comprehensive income increased $3.1 million over the prior year, based upon favorable market conditions. Treasury stock was $26.9 million at September 30, 2020, which was unchanged compared to June 30, 2020, and increased $4.9 million from $22.0 million at September 30, 2019, related to the repurchase of Company common shares.

Third Quarter 2020 Income Statement Review

Net interest income increased by $130,000, or 0.6 percent, to $20.9 million for the three months ended September 30, 2020 from $20.8 million for the three months ended September 30, 2019. The increase in net interest income resulted primarily from a decrease in interest expense related to a decrease in the average rate on interest-bearing liabilities of 52 basis points to 1.35 percent for the three months ended September 30, 2020 from 1.87 percent for the three months ended September 30, 2019, as well as a decrease in the average balance of interest-bearing liabilities of $18.0 million, or 0.8 percent, to $2.247 billion for the three months ended September 30, 2020 from $2.265 billion for the three months ended September 30, 2019. Interest income was $2.9 million lower than the prior year, related to a decrease in the average yield on interest-earning assets of 57 basis points to 4.06 percent for the three months ended September 30, 2020 from 4.63 percent for the three months ended September 30, 2019, partly offset by an increase in the average balance of interest-earning assets of $97.0 million, or 3.6 percent, to $2.807 billion for the three months ended September 30, 2020 from $2.710 billion for the three months ended September 30, 2019. The lower rates for interest income and interest expense were driven by the reduction of the federal funds rate by 175 basis points from October, 2019 through September, 2020. Interest income on loans for the three months ended September 30, 2020 included $230,000 of amortization of purchase credit fair value adjustments. The fair value adjustments relate to the 2018 acquisition of IA Bancorp, Inc. (“IAB”), which added approximately three basis points to the average yield on interest earning assets. Interest income on loans also included $360,000 of net deferred fees related to the Bank’s PPP loans.

Net interest margin was 2.98 percent for the third quarter of 2020, compared to 2.45 percent for the second quarter of 2020 and 3.06 percent for the third quarter of 2019. The significant improvement in net interest margin over the prior quarter was the result of the effective deployment of cash and aligning our cost of funds with the market. The Company increased its average yield on total interest-earning assets by 35 basis points to 4.06 percent for the third quarter of 2020 compared to 3.71 percent for the second quarter of 2020, highlighting the successful deployment of cash during the quarter into loan originations and the purchases of investment securities. The Company decreased its average cost of total interest-bearing liabilities by 20 basis points to 1.35 percent for the third quarter of 2020 compared to 1.55 percent for the second quarter of 2020. The decrease in total interest-bearing liabilities included a decrease in the average cost of total deposit liabilities of 23 basis points to 1.18 percent for the third quarter of 2020 compared to 1.41 percent for the second quarter of 2020. The decrease in the net interest margin compared to the third quarter of 2019 was the result of the current volatile financial markets attributable to the COVID-19 pandemic and the low interest rate environment. The Company’s average yield on interest-earning assets decreased by 57 basis points to 4.06 percent for the third quarter of 2020 compared to 4.63 percent for the third quarter of 2019, highlighting the impact market volatility surrounding the pandemic has had on rates. Management has been proactive in managing its cost of funds and decreased the average cost on total interest-costing liabilities by 52 basis points to 1.35 percent for the third quarter of 2020 compared to 1.87 percent for the third quarter of 2019.

“The net interest margin expanded compared to the immediate prior quarter due to an increase in the average yield on our assets and a decrease in the average cost of our liabilities. This shift in our balance sheet underscores management’s efforts to delever by way of decreasing higher-costing liabilities, namely certain borrowings and promotional and maturing certificates of deposit, and deploying our high cash balances into higher-yielding loans, securities and BOLI,” said Coughlin.

Total noninterest income increased by $5.6 million, or 402.9 percent, to $7.0 million for the third quarter of 2020 from $1.4 million for the third quarter of 2019. The increase in total noninterest income was mainly related to a gain on sale of premises of $4.4 million, an increase in the unrealized gain on equity securities of $823,000 and BOLI income of $385,000. The gain on sale of premises relates to the completion of a sale/leaseback of certain offices that the Company sold to a private investor group in September, 2020. The unrealized gains or losses on equity securities are based on market conditions. The increase in BOLI income relates to an initial purchase of $60.0 million BOLI product in the third quarter of 2020.

Total noninterest expense decreased by $310,000, or 2.3 percent, to $13.3 million for the third quarter of 2020, from $13.6 million for the third quarter of 2019. Salaries and employee benefits expense decreased by $909,000, or 12.5 percent, to $6.4 million for the third quarter of 2020, from $7.3 million for the third quarter of 2019, reflecting fewer full-time equivalent employees and $200,000 of costs deferred for PPP loans, partly offset by normal compensation increases. Occupancy and equipment expense increased by $349,000, or 13.2 percent, to $3.0 million for the third quarter of 2020 from $2.6 million for the third quarter of 2019, largely related to costs incurred for a new branch, which opened in July 2020, as well as the opening of two de novo branches and the relocation of one of our existing branches during 2019. Data processing and service fees increased by $161,000, or 20.7 percent, to $937,000 for the third quarter of 2020 from $776,000 for the third quarter of 2019. The increase was largely attributable to additional branches and system applications. Regulatory assessments increased by $402,000 to $311,000, for the third quarter of 2020, from a credit of $91,000 for the third quarter of 2019. The increase was primarily due to the receipt of an FDIC Small Bank Assessment Credit in the third quarter of 2019, and increases in the FDIC assessment rate and assessment base. Other noninterest expense decreased by $790,000, or 34.8 percent, to $1.5 million for the three months ended September 30, 2020 from $2.3 million for the three months ended September 30, 2019. Other noninterest expense consisted of loan expense, business development, office supplies, correspondent bank fees, telephone and communication and miscellaneous fees and expenses. The decrease in the current period was primarily related to a reduction of business development and loan-related expenses, largely attributable to the current pandemic condition.

The income tax provision increased by $1.1 million, or 46.9 percent, to $3.5 million for the third quarter of 2020 from $2.4 million for the third quarter of 2019. The increase in the income tax provision was a result of higher taxable income for the third quarter of 2020 as compared with that same period for 2019. The consolidated effective tax rate for the third quarter of 2020 was 29.4 percent compared to 31.1 percent for the third quarter of 2019. The lower rate in the current period related primarily to non-taxable BOLI income and lower non-deductible costs in the current year period.

Year-to-Date Income Statement Review

Net interest income decreased by $4.9 million, or 7.8 percent, to $57.7 million for the first nine months of 2020, from $62.6 million for the first nine months of 2019. The decrease in net interest income resulted primarily from a decrease in the average yield on interest-earning assets of 70 basis points to 3.94 percent for the first nine months of 2020, compared to 4.64 percent for the first nine months of 2019, partly offset by an increase in the average balance of interest-earning assets of $223.1 million, or 8.4 percent, to $2.882 billion, for the first nine months of 2020, from $2.659 billion for the first nine months of 2019. Interest income on loans receivable decreased by $5.7 million, or 6.6 percent, to $80.1 million, for the first nine months of 2020, from $85.8 million for the first nine months of 2019. The decrease was primarily attributable to a decrease in the average yield on loans of 26 basis points to 4.67 percent for the first nine months of 2020, from 4.93 percent for the first nine months of 2019, as well as a decrease in the average balance of loans receivable of $32.2 million, or 1.4 percent, to $2.286 billion for the first nine months of 2020 from $2.318 billion for the first nine months of 2019. Interest income on loans also included $967,000 of amortization of purchase credit fair value adjustments. The fair value adjustments relate to the 2018 acquisition of IAB for the nine months ended September 30, 2020, which added approximately four basis points to the average yield on interest earning assets. Interest income on loans also included $630,000 of net deferred fees related to the Bank’s PPP loans. Interest expense decreased related to a decrease in the average rate on interest-bearing liabilities of 24 basis points to 1.56 percent for the nine months ended September 30, 2020 from 1.80 percent for the nine months ended September 30, 2019, partly offset by an increase in the average balance of interest-bearing liabilities of $116.6 million, or 5.2 percent, to $2.339 billion for the nine months ended September 30, 2020 from $2.223 billion for the nine months ended September 30, 2019. The lower rates for interest income and interest expense were driven by the reduction of the federal funds rate by 175 basis points from October, 2019 through September, 2020.

Net interest margin was 2.67 percent for the first nine months of 2020 and 3.14 percent for the first nine months of 2019. The Company’s average yield on total interest-earning assets decreased by 70 basis points to 3.94 percent for the first nine months of 2020 compared to 4.64 percent for the first nine months of 2019, highlighting the impact market volatility surrounding the pandemic has had on rates. The Company decreased its average cost of total interest-bearing liabilities by 24 basis points to 1.56 percent for the first nine months of 2020 compared to 1.80 percent for the first nine months of 2019. The decrease in the cost of total interest-bearing liabilities included a decrease in the average cost of total deposit liabilities of 25 basis points to 1.42 percent for the first nine months of 2020 compared to 1.67 percent for the first nine months of 2019.

Total noninterest income increased by $4.4 million, or 100.1 percent, to $8.8 million for the first nine months of 2020, from $4.4 million for the first nine months of 2019. The increase in total noninterest income was mainly related to a gain on sale of premises of $4.4 million, an increase in the unrealized gain of equity securities of $560,000, BOLI income of $385,000 and an increase in other noninterest income of $248,000, partly offset by a decrease of $552,000 in gains on the sale of loans and a decrease in fees and service charges of $402,000. The gain on sale of premises relates to the completion of a sale/leaseback of certain offices that the Company sold to a private investor group in September, 2020. The unrealized gains or losses on equity securities are based on market conditions. The BOLI income relates to an initial purchase of $60.0 million in BOLI in the third quarter of 2020. The increase in other noninterest income related primarily to the reversal of certain liabilities previously recorded for IAB acquired loans that paid off in the first nine months of 2020. The lower level of loan sales was attributable to the curtailment of loan growth, while the decline in fees and service charges related in part to the pandemic condition as well as lower servicing fee income resulting from fewer loan sales.

Total noninterest expense decreased by $1.7 million, or 4.0 percent, to $39.7 million, for the first nine months of 2020, from $41.4 million for the first nine months of 2019. Salaries and employee benefits expense decreased by $1.7 million, or 7.9 percent, to $19.5 million for the first nine months of 2020, from $21.2 million for the first nine months of 2019, primarily related to $1.3 million of costs deferred for PPP loans and fewer full-time equivalent employees, partly offset by normal compensation increases. The costs deferred represent current period salaries and benefit costs associated with direct PPP loan origination costs, which are amortized over the life of the loan. The number of full-time equivalent employees for the first nine months of 2020 was 338, as compared with 359 for the like period in 2019. Occupancy and equipment expense increased by $804,000, or 10.1 percent, to $8.7 million for the nine months ended September 30, 2020 from $7.9 million for the nine months ended September 30, 2019, largely related to costs incurred for a new branch which opened in July 2020, as well as the opening of two branches and the relocation of one of our existing branches during 2019. Data processing and service fees increased by $598,000, or 26.8 percent, to $2.8 million for the nine months ended September 30, 2020 from $2.2 million for the nine months ended September 30, 2019, largely attributable to additional branches and system applications. Other noninterest expense decreased by $1.8 million, or 26.7 percent, to $4.8 million for the nine months ended September 30, 2020 from $6.6 million for the nine months ended September 30, 2019. Other noninterest expense consisted of loan expense, business development, office supplies, correspondent bank fees, telephone and communication and miscellaneous fees and expenses. The decrease in the current period was primarily related to a reduction of business development and loan-related expenses, largely attributable to the current pandemic condition.

The income tax provision decreased by $1.5 million, or 20.5 percent, to $5.7 million, for the first nine months of 2020, from $7.2 million for the first nine months of 2019. The decrease in the income tax provision was a result of lower taxable income for the first nine months of 2020 as compared to that same period for 2019. The consolidated effective tax rate for the first nine months of 2020 was 29.5 percent compared to 30.9 percent for the first nine months of 2019. The lower rate in the current period related primarily to non-taxable BOLI income and lower non-deductible costs in the current year period.

Asset Quality

During the third quarter of 2020, the Company recognized $192,000 in net recoveries, compared to $2,000 in net recoveries for the third quarter of 2019, and $8,000 in net recoveries during the second quarter of 2020.

The COVID-19 pandemic has caused disruption to the global economy, but the extent and duration of the disruption is uncertain at this time. Management will continue to monitor any activity for loan deferment requests and delinquencies on a regular basis.

The provision for loan losses increased by $1.8 million, to $2.7 million, for the third quarter of 2020, from $900,000 for the third quarter of 2019, primarily due to COVID-19 related factors. In the second quarter of 2020, the provision for loan losses was $3.3 million. The provision for loan losses increased by $5.0 million to $7.5 million for the first nine months of 2020, from $2.5 million for the first nine months of 2019. The Bank had non-accrual loans totaling $7.2 million, or 0.29 percent, of gross loans at September 30, 2020, as compared to $5.1 million, or 0.22 percent, of gross loans at September 30, 2019.

Performing troubled debt restructured (“TDR”) loans that were not included in nonaccrual loans at September 30, 2020, were $16.4 million, compared to $16.5 million at September 30, 2019. Borrowers who are in financial difficulty and who have been granted concessions (excluding COVID-19 modifications) that may include interest rate reductions, term extensions, or payment alterations are categorized as TDR loans.

The allowance for loan losses was $31.8 million, or 1.31 percent of gross loans at September 30, 2020, and $24.7 million, or 1.08 percent of gross loans at September 30, 2019. The allowance for loan losses was 444.1 percent of non-accrual loans at September 30, 2020 and 486.6 percent of non-accrual loans at September 30, 2019.

COVID-19 Response

With the global outbreak of COVID-19, the Company remains focused on protecting the health and wellbeing of its employees and the communities in which it operates while assuring the continuity of its business operations. 

The Company activated its dedicated pandemic team that proactively implemented its business continuity plans and has taken a variety of measures to ensure the ongoing availability of services, while taking health and safety measures, including enhanced cleaning and hygiene protocols in all of its facilities and remote work policies, where possible. To date, as a result of these business continuity measures, the Company has not experienced significant disruptions in its operations. 

“We believe we have sufficient liquidity on hand to continue business operations during this volatile period,” said Coughlin. As of September 30, 2020, the Company had over $160 million of cash on hand and available wholesale borrowing capacity of over $700 million.

  • Operational Initiatives
    o The pandemic response team meets on a biweekly basis and actively monitors guidance released by regulators, and banking associations.
    o In-person meetings are closely managed and are held on an as needed basis only.
    o Some employees are working remotely, temporarily relocated or are working alternate days to increase social distancing.
    o Barriers have been installed in branches and back offices to provide protection.
    o Branch and operational offices are cleaned and sanitized weekly. This practice will continue until further notice. Employees have access to masks, gloves and disinfectant.
    o Masks are required for entry and social distancing is strictly enforced.  
    o Management provides updates to employees on a regular basis.
    o The Call Center is open seven days a week to assist with customer inquiries.

  • Allowance for Loan Losses (“ALLL”)

    o Although several of the Company’s asset quality metrics have not been adversely affected in a significant manner during the first nine months of 2020, management determined it is prudent to increase its loan loss reserves through the addition of $2.7 million and $7.5 million in loan loss provisions for the three and nine-month periods ended September 30, 2020, respectively, due primarily to the economic downturn as a result of the COVID-19 pandemic. This compares to $900,000 and $2.5 million in loan loss provisions for the three and nine-month periods ended September 30, 2019, respectively. The loan loss reserve to total loans ratio was 1.31 percent at September 30, 2020, compared to 1.08 percent at September 30, 2019. The increased reserve includes provisions taken in response to changes in risks associated with loan classification assignments and a declining economy in New Jersey and New York.
    o The Bank considered qualitative factors, such as changes in underwriting policies, current economic conditions, delinquency statistics, the adequacy of the underlying collateral and the financial strength of borrowers in arriving at its loan loss provision. All of these factors are likely to be affected by the COVID-19 pandemic. Individual deferred loans were stress tested to assess potential credit risks. The impact of COVID-19 is likely to be felt over the next several quarters. Adjustments to the ALLL may be required as the full impact of COVID-19 on the borrowers’ capacity to make payments and the value of the underlying collateral becomes known.

  • Loan Deferments

    o The Bank, like other financial institutions, has received a significant number of requests to defer principal and/or interest payments, and has agreed to such deferrals or is in the process of doing so on a case by case basis. The banking regulatory agencies, through an Interagency Statement dated April 7, 2020, are encouraging financial institutions to work prudently with borrowers who request loan modifications or deferrals as a result of COVID-19.
    o The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, was signed into law on March 27, 2020, and provided over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic. Under Section 4013 of the CARES Act, loans less than 30 days past due as of December 31, 2019 will be considered current for COVID-19 modifications. A financial institution can then suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a TDR, and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes. These loans are accruing interest and the Bank is considering the loans within the overall allowance for loan loss analysis.
    o The Bank began receiving requests for loan deferments on March 13, 2020. The forbearance period provided by the Bank is generally three months with the Bank retaining the sole option to extend the forbearance period for an additional three months. Payments received upon the expiration of the forbearance period will first be applied to interest accrued, then towards escrow advances, and any remaining amount towards principal.

The following is a summary of deferment requests by loan type as of September 30, 2020 and October 16, 2020 (dollars in thousands):

 Portfolio Balance as of 9/30/20Portfolio Balance as of 10/16/20
Number of LoansBalanceWeighted Average Interest RateNumber of LoansBalanceWeighted Average Interest Rate
Residential 1-4 Family2$7895.0- --
Commercial and Multi-Family45$54,7084.510$4,0234.7
Construction- --- --
Commercial Business9$3,8565.61$1,1496.0
Home Equity2 2995.1- --
Total58$59,6524.611$5,1725.0

Loan deferments peaked at $730.1 million in mid-June 2020. The Bank has worked diligently with its customers by reaching out to them as the end of the three-month deferral term was approaching, and to understand the need for any prudent requests of an extension of the deferral period. The Bank has been encouraged with the results, as we have experienced a 99% decline in loan deferment balances through October 16, 2020 since the peak in mid June.

Loan Deferment maturities for the remainder of the year are as follows (in thousands):

 October November December      January 2021 Total 
1st Deferment$- $- $1,432 $495 $1,927
2nd Deferment -  -  2,155  1,090  3,245
Total Deferments$  $  $3,587  1,585 $5,172

Management continues to perform detail stress testing of loan deferments related to various loan to value and cash flow scenarios. The specific ALLL reserves allocated to these stress tests are deemed to be adequate and will continue to be analyzed as the economic conditions progress.

  • Paycheck Protection Program (PPP)  
    o As a qualified SBA lender, the Bank was automatically authorized to originate PPP loans.
    o Through September 30, 2020, the Bank had closed and funded approximately $129 million for almost 1,100 PPP loans.
    o The Company had received approximately $4.7 million of processing fees from the SBA through September 30, 2020. These fees, net of direct costs relating to the origination of these loans, have been deferred and are being amortized over the life of the loans. The amount of net deferred fees recorded to interest income through September 30, 2020 was approximately $640,000. The Company anticipates recognizing $375,000 of net deferred fee income in the fourth quarter of 2020, excluding any amounts resulting from loan forgiveness.
  • Main Street lending Program
    o The Main Street Lending Program is a program announced on April 9, 2020, under which the Federal Reserve will purchase loans that banks give to small and mid-sized businesses. The Federal Reserve will purchase 95% of each loan.
    o The program is designed to keep credit flowing to small and mid-sized businesses that were in good financial standing before the onset of the COVID-19 crisis, but which are now under extreme stress due to stay-at-home and business closure orders from state and local governments. The Bank has been approved as an eligible lender, and has received inquiries since the program became operational on July 8, 2020.
  • Industry Exposure
    o The Company has identified various industries that may be particularly adversely impacted by the COVID-19 pandemic. Though the hotspots may change through the progression of the pandemic, the following sectors are currently being disproportionately impacted: Strip Retail, Hospitality/Hotels, Golf Courses and Banquet Halls, Restaurants and Retail.

The following table summarizes the Bank’s portfolio and deferment balances for these industries, as a percent of the total loan portfolio, at September 30, 2020. At October16, 2020, the Bank only had $400,000 in deferment balances for these industries.

            
DescriptionPortfolio Balance ($000s) Percentage of Loan Portfolio Deferment Balance ($000s) Percentage of Loan Portfolio
Strip Retail$119,505  5% $10,649  <1%
Hospitality/Hotel 66,390  3   1,937  <1   
Golf Courses and Banquet Halls 45,646  2   11,121  <1   
Restaurant (standalone) 36,226  1   234  <1   
Retail (one-to-three units) 66,778  3   401  <1   
 $334,545  15% $24,342  1%
  • IT Changes
    o To protect the well-being of our staff and customers, the Company has set up resources for some employees to work from home. To facilitate the move, we allocated laptop computers to staff and enhanced our ability to access the network offsite.
  • Liquidity and Capital Resources
    o The Company was well positioned with adequate levels of cash and liquid assets as of September 30, 2020, as well as wholesale borrowing capacity of over $700 million, to cover the lack of payments for COVID-19 loan deferments. At September 30, 2020, the Company’s equity to asset ratio was 8.5% and the Bank’s capital was in excess of regulatory requirements. The Company called $10.5 million of its then-outstanding preferred stock in the third quarter, which included all of its Series C 6.0% and Series F 6.0% preferred stock. The Company issued $5.9 million of Series H 3.5% preferred stock in the third quarter of 2020. Total Series H 3.5% preferred stock issued was $9.0 million at September 30, 2020. In September, 2020 the Board of Directors of the Company, extended the issuance of Series H 3.5% preferred stock program through December 31, 2020. The Company had $4.9 million of common stock repurchases for the first six months of 2020, and the program concluded in May 2020. The Company will continue to monitor the effects of COVID-19 in determining future cash dividends and any requirement for additional capital each quarter.

About BCB Bancorp, Inc.

Established in 2000 and headquartered in Bayonne, N.J., BCB Community Bank is the wholly-owned subsidiary of BCB Bancorp, Inc. (NASDAQ: BCBP). The Bank has 31 branch offices in Bayonne, Carteret, Colonia, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lodi, Lyndhurst, Maplewood, Monroe Township, Newark, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, three branches in Hicksville and Staten Island, New York. The Bank provides businesses and individuals a wide range of loans, deposit products, and retail and commercial banking services. For more information, please go to www.bcb.bank.

Forward-Looking Statements

This release, like many written and oral communications presented by BCB Bancorp, Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “could,” “may,” “should,” “will,” “would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

In addition to factors previously disclosed in the Company’s reports filed with the U.S. Securities and Exchange Commission (the "SEC") and those identified elsewhere in this release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; customer acceptance of the Bank’s products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and actions of governmental agencies and legislative and regulatory actions and reforms.

As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, the Company could be subject to any of the following additional risks, any of which could have a material, adverse effect on our business, financial condition, liquidity, and results of operations:

  • demand for our products and services may decline, making it difficult to grow assets and income;
  • if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase, resulting in increased charges and reduced income;
  • collateral for loans, especially real estate, may decline in value, which could cause loan losses to increase;
  • our allowance for loan losses may have to be increased if borrowers experience financial difficulties beyond forbearance periods, which will adversely affect our net income;
  • the net worth and liquidity of loan guarantors may decline, impairing their ability to honor commitments to us;
  • as the result of the decline in the Federal Reserve Board’s target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities, reducing our net interest margin and spread and reducing net income;
  • a material decrease in net income over several quarters could result in a decrease in the rate of our quarterly cash dividend;
  • our cyber security risks are increased as the result of an increase in the number of employees working remotely;
  • we rely on third party vendors for certain services and the unavailability of a critical service due to the COVID-19 outbreak could have an adverse effect on us;
  • FDIC premiums may increase if the agency experiences additional resolution costs; and
  • civil unrest could occur in the communities that the Company serves.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.

Explanation of Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release also contains certain supplemental non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s core financial results for the periods in question.

The Company provides measurements and ratios based on tangible stockholders' equity and efficiency ratios. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors.

For a reconciliation of GAAP to Non-GAAP financial measures included in this press release, see "Reconciliation of GAAP to Non-GAAP Financial Measures" below.

Contact:        
Thomas Coughlin,
President & CEO
Thomas Keating, CFO
Michael Lesler, COO
(201) 823-0700

 Statements of Income (unaudited) - Three Months Ended,
 September 30, 2020June 30, 2020September 30, 2019September 30, 2020 vs.
June 30, 2020
September 30, 2020 vs. September 30, 2019
Interest and dividend income: (In thousands, except per share amounts)  
   Loans, including fees$ 27,126 $26,123 $28,860 3.8%-6.0%
   Mortgage-backed securities 393  494  652 -20.4%-39.7%
   Other investment securities 693  246  107 181.7%547.7%
   FHLB stock and other interest earning assets 254  343  1,750 -25.9%-85.5%
     Total interest and dividend income 28,466  27,206  31,369 4.6%-9.3%
      
Interest expense:     
Deposits:     
   Demand 1,157  1,562  1,898 -25.9%-39.0%
   Savings and club 113  106  102 6.6%10.8%
   Certificates of deposit 4,531  5,695  6,603 -20.4%-31.4%
  5,801  7,363  8,603 -21.2%-32.6%
   Borrowings 1,775  1,852  2,006 -4.2%-11.5%
       Total interest expense 7,576  9,215  10,609 -17.8%-28.6%
      
Net interest income 20,890  17,991  20,760 16.1%0.6%
Provision for loan losses 2,726  3,300  900 -17.4%202.9%
      
Net interest income after provision for loan losses 18,164  14,691  19,860 23.6%-8.5%
      
Non-interest income:     
   Fees and service charges 875  537  855 62.9%2.3%
   Gain on sales of loans 174  57  89 205.3%95.5%
   Gain on sales of other real estate owned -  -  124 0.0%-100.0%
   Gain on sale of investment securities 306  40  283 665.0%8.1%
   Gain on sale of premises 4,378  -  - 0.0%0.0%
   BOLI income 385  -  - 0.0%0.0%
   Unrealized gain (loss) on equity investments 778  442  (45)76.0%1828.9%
   Other 59  32  77 84.4%-23.4%
      Total non-interest income 6,955  1,108  1,383 527.7%402.9%
      
Non-interest expense:     
   Salaries and employee benefits 6,385  5,682  7,294 12.4%-12.5%
   Occupancy and equipment 2,996  2,910  2,647 3.0%13.2%
   Data processing and service fees 937  951  776 -1.5%20.7%
   Professional fees 421  398  368 5.8%14.4%
   Director fees 471  365  356 29.0%32.3%
   Regulatory assessment fees (credits) 311  251  (91)23.9%-441.8%
   Advertising and promotional 18  26  64 -30.8%-71.9%
  Other real estate owned, net 11  21  (31)-47.6%135.5%
  Loss from extinguishment of debt 313  -  - 0.0%0.0%
   Other 1,479  1,348  2,269 9.7%-34.8%
      Total non-interest expense 13,342  11,952  13,652 11.6%-2.3%
      
Income before income tax provision 11,777  3,847  7,591 206.1%55.1%
Income tax provision 3,465  1,121  2,359 209.1%46.9%
      
Net Income 8,312  2,726  5,232 204.9%58.9%
   Preferred stock dividends 332  341  342 -2.6%-2.9%
Net Income available to common stockholders$ 7,980 $2,385 $4,890 234.6%63.2%
      
Net Income per common share-basic and diluted     
   Basic$ 0.47 $0.14 $0.30 235.7%56.7%
   Diluted$ 0.47 $0.14 $0.30 235.7%56.7%
      
Weighted average number of common shares outstanding     
   Basic 17,069  17,179  16,468 -0.6%3.6%
   Diluted 17,069  17,183  16,523 -0.7%3.3%


 Statements of Income (unaudited) - Nine Months Ended, 
 September 30, 2020September 30, 2019September 30, 2020 vs. September 30, 2019
Interest and dividend income: (In thousands, except per share amounts) 
  Loans, including fees$ 80,063$85,727-6.6%
  Mortgage-backed securities 1,450 2,160-32.9%
 Other investment securities 947 432119.2%
  FHLB stock and other interest earning assets 2,631 4,270-38.4%
     Total interest and dividend income 85,091 92,589-8.1%
    
Interest expense:   
  Deposits:   
     Demand 4,927 5,224-5.7%
     Savings and club 324 325-0.3%
     Certificates of deposit 16,658 18,690-10.9%
  21,909 24,239-9.6%
     Borrowings 5,523 5,823-5.2%
       Total interest expense 27,432 30,062-8.7%
    
Net interest income 57,659 62,527-7.8%
Provision for loan losses 7,526 2,544195.8%
    
Net interest income after provision for loan losses 50,133 59,983-16.4%
    
Non-interest income:   
   Fees and service charges 2,138 2,540-15.8%
  Gain on sales of loans 292 844-65.4%
   Gain on bulk sale of impaired loans held in portfolio - 107-100.0%
  Gain on sales of other real estate owned - 177-100.0%
   Gain on sale of investment securities 346 30413.8%
   Gain on sale of premises 4,378 -0.0%
   BOLI income 385 -0.0%
  Unrealized gain on equity investments 780 220254.5%
   Other 427 179138.5%
      Total non-interest income 8,746 4,371100.1%
    
Non-interest expense:    
   Salaries and employee benefits 19,456 21,127-7.9%
  Occupancy and equipment 8,730 7,92610.1%
   Data processing and service fees 2,826 2,22826.8%
  Professional fees 1,289 1,374-6.2%
   Director fees 1,194 99020.6%
  Regulatory assessments 883 78312.8%
   Advertising and promotional 105 260-59.6%
  Other real estate owned, net 58 77-24.7%
   Loss from extinguishment of debt 313 -0.0%
  Other 4,804 6,558-26.7%
      Total non-interest expense 39,658 41,323-4.0%
    
Income before income tax provision 19,221 23,031-16.5%
Income tax provision 5,662 7,121-20.5%
    
Net Income 13,559 15,910-14.8%
Preferred stock dividends 1,014 1,0021.2%
Net Income available to common stockholders$ 12,545$14,908-15.9%
    
Net Income per common share-basic and diluted   
Basic$ 0.73$0.91-19.8%
Diluted$ 0.73$0.91-19.8%
    
Weighted average number of common shares outstanding   
Basic 17,250 16,3205.7%
Diluted 17,268 16,3695.5%


Statements of Financial Condition (unaudited)September 30, 2020June 30, 2020September 30, 2019September 30, 2020 vs. June 30, 2020September 30, 2020 vs. September 30, 2019
ASSETS(In thousands, except share amounts)  
Cash and amounts due from depository institutions$ 18,938 $18,799 $27,625 0.7%-31.4%
Interest-earning deposits 141,613  393,450  348,986 -64.0%-59.4%
   Total cash and cash equivalents 160,551  412,249  376,611 -61.1%-57.4%
      
Interest-earning time deposits 735  735  735 - - 
Debt securities available for sale 119,643  127,518  98,218 -6.2%21.8%
Equity investments 14,501  12,683  5,857 14.3%147.6%
Loans held for sale 1,510  760  3,195 98.7%-52.7%
Loans receivable, net of allowance for loan losses     
   of $31,760, $28,842, and $24,691 respectively 2,391,990  2,343,593  2,253,699 2.1%6.1%
Federal Home Loan Bank of New York stock, at cost 13,160  13,529  15,171 -2.7%-13.3%
Premises and equipment, net 15,968  18,653  20,315 -14.4%-21.4%
Accrued interest receivable 17,746  16,569  8,959 7.1%98.1%
Other real estate owned 1,623  1,623  - 0.0%0.0%
Deferred income taxes 12,184  11,339  13,445 7.5%-9.4%
Goodwill and other intangibles 5,503  5,519  5,570 -0.3%-1.2%
Operating lease right-of-use asset 15,798  13,335  13,951 18.5%13.2%
Bank-owned life insurance ("BOLI") 60,385  -  - 0.0%0.0%
Other assets 11,022  8,771  9,773 25.7%12.8%
    Total Assets$ 2,842,319 $2,986,876 $2,825,499 -4.8%0.6%
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
      
LIABILITIES     
Non-interest bearing deposits$ 395,630 $390,912 $276,235 1.2%43.2%
Interest bearing deposits 1,877,708  2,051,321  1,987,222 -8.5%-5.5%
  Total deposits 2,273,338  2,442,233  2,263,457 -6.9%0.4%
FHLB advances 259,600  242,800  275,800 6.9%-5.9%
Subordinated debentures 36,984  36,926  36,752 0.2%0.6%
Operating lease liability 16,004  13,521  14,054 18.4%13.9%
Other liabilities 13,706  10,377  11,717 32.1%17.0%
    Total Liabilities  2,599,632  2,745,857  2,601,780 -5.3%-0.1%
      
STOCKHOLDERS' EQUITY     
Preferred stock: $0.01 par value, 10,000,000 shares authorized -  -  - - - 
Additional paid-in capital preferred stock 23,481  27,956  25,016 -16.0%-6.1%
Common stock: no par value, 40,000,000 shares authorized -  -  - - - 
Additional paid-in capital common stock 191,755  191,160  177,253 0.3%8.2%
Retained earnings 53,742  48,097  45,947 11.7%17.0%
Accumulated other comprehensive income (loss) 627  724  (2,449)-13.4%-125.6%
Treasury stock, at cost (26,918) (26,918) (22,048)0.0%22.1%
    Total Stockholders' Equity 242,687  241,019  223,719 0.7%8.5%
      
     Total Liabilities and Stockholders' Equity$ 2,842,319 $2,986,876 $2,825,499 -4.8%0.6%
      
Outstanding common shares 17,081  17,057  16,477 0.1%3.7%


 Three Months Ended September 30,
  2020  2019
 Average BalanceInterest Earned/PaidAverage Yield/Rate (3) Average BalanceInterest Earned/PaidAverage Yield/Rate (3)
 (Dollars in thousands)
Interest-earning assets:       
Loans Receivable$ 2,394,997$ 27,1264.53% $2,309,703$28,8605.00%
Investment Securities 138,736 1,0863.13%  111,551 7592.72%
Interest-earning deposits 273,620 2540.37%  289,080 1,7502.42%
   Total Interest-earning assets 2,807,353 28,4664.06%  2,710,334 31,3694.63%
Non-interest-earning assets 94,623    75,904  
   Total assets$ 2,901,976   $2,786,238  
Interest-bearing liabilities:       
Interest-bearing demand accounts$ 498,287$ 6500.52% $344,439$6610.77%
Money market accounts 315,658 5080.64%  269,775 1,2371.84%
Savings accounts 283,684 1130.16%  257,392 1020.16%
Certificates of Deposit 875,497 4,5302.07%  1,095,481 6,6032.41%
   Total interest-bearing deposits 1,973,126 5,8011.18%  1,967,087 8,6031.75%
Borrowed funds 274,144 1,7752.59%  298,152 2,0062.69%
   Total interest-bearing liabilities 2,247,270 7,5761.35%  2,265,239 10,6091.87%
Non-interest-bearing liabilities 418,184    299,230  
   Total liabilities 2,665,454    2,564,469  
Stockholders' equity 236,522    221,769  
   Total liabilities and stockholders' equity$ 2,901,976   $2,786,238  
Net interest income $ 20,890   $20,760 
Net interest rate spread(1)  2.71%   2.76%
Net interest margin(2)  2.98%   3.06%
        
        
        
(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.
(3) Annualized.       


 Nine Months Ended September 30,
  2020  2019
 Average BalanceInterest Earned/PaidAverage Yield/Rate (3) Average BalanceInterest Earned/PaidAverage Yield/Rate (3)
 (Dollars in thousands)
Interest-earning assets:       
Loans Receivable$ 2,285,854$ 80,0634.67% $2,318,047$85,7274.93%
Investment Securities 115,910 2,3972.76%  120,560 2,5922.87%
Interest-earning deposits 480,221 2,6310.73%  220,318 4,2702.58%
   Total Interest-earning assets 2,881,985 85,0913.94%  2,658,925 92,5894.64%
Non-interest-earning assets 68,397    72,718  
   Total assets$ 2,950,382   $2,731,643  
Interest-bearing liabilities:       
Interest-bearing demand accounts$ 457,546$ 2,3050.67% $342,515$1,9130.74%
Money market accounts 321,453 2,6231.09%  253,593 3,3111.74%
Savings accounts 270,948 3240.16%  259,093 3250.17%
Certificates of Deposit 1,007,796 16,6572.20%  1,079,090 18,6902.31%
   Total interest-bearing deposits 2,057,743 21,9091.42%  1,934,291 24,2391.67%
Borrowed funds 281,574 5,5232.62%  288,399 5,8232.69%
   Total interest-bearing liabilities 2,339,317 27,4321.56%  2,222,690 30,0621.80%
Non-interest-bearing liabilities 372,976    293,557  
   Total liabilities 2,712,293    2,516,247  
Stockholders' equity 238,089    215,396  
   Total liabilities and stockholders' equity$ 2,950,382   $2,731,643  
Net interest income $ 57,659   $62,527 
Net interest rate spread(1)  2.38%   2.84%
Net interest margin(2)  2.67%   3.14%
        
        
        
(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.
(3) Annualized.       

 


 Financial Condition data by quarter
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
      
 (In thousands, except tangible book value)
Total assets$2,842,319 $2,986,876 $2,942,003 $2,907,468 $2,825,499 
Cash and cash equivalents 160,551  412,249  595,186  550,353  376,611 
Securities 134,144  140,201  97,009  94,113  104,075 
Loans receivable, net 2,391,990  2,343,593  2,164,057  2,178,407  2,253,699 
Deposits 2,273,338  2,442,233  2,375,721  2,362,063  2,263,457 
Borrowings 296,584  279,726  299,668  282,610  312,552 
Stockholders’ equity 242,687  241,019  240,638  239,473  223,719 
Book value per common share1$14.21 $14.13 $13.82 $13.67 $13.58 
Tangible book value per common share2$12.53 $12.18 $12.09 $11.94 $11.72 
      
 Operating data by quarter
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
      
 (In thousands, except for per share amounts)
Net interest income$20,890 $17,991 $18,778 $20,077 $20,760 
Provision (credit) for loan losses 2,726  3,300  1,500  (475) 900 
Non-interest income 6,955  1,108  683  1,020  1,383 
Non-interest expense 13,342  11,952  14,364  14,260  13,652 
Income tax expense 3,465  1,121  1,076  2,188  2,359 
Net income$8,312 $2,726 $2,521 $5,124 $5,232 
Net income per diluted share$0.47 $0.14 $0.12 $0.29 $0.30 
Common Dividends declared per share$0.14 $0.14 $0.14 $0.14 $0.14 
      
 Financial Ratios3
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
Return on average assets 1.15% 0.36% 0.34% 0.72% 0.75%
Return on average stockholder’s equity 14.06% 4.57% 4.21% 9.12% 9.44%
Net interest margin 2.98% 2.45% 2.63% 2.88% 3.06%
Stockholder’s equity to total assets 8.54% 8.07% 8.18% 8.24% 7.92%
Efficiency Ratio4 47.92% 62.58% 73.81% 67.59% 61.65%
      
 Asset Quality Ratios
 (In thousands, except for ratio %)
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
Non-Accrual Loans$7,151 $4,495 $4,362 $4,160 $5,074 
Non-Accrual Loans as a % of Total Loans 0.29% 0.19% 0.20% 0.19% 0.22%
ALLL as % of Non-Accrual Loans 444.13% 641.65% 585.37% 570.53% 486.62%
Impaired Loans 31,318  26,839  23,022  26,912  30,856 
Classified Loans 18,138  13,584  9,882  13,483  15,998 
      
(1) Calculated by dividing stockholders' equity to shares outstanding.
(2) Calculated by dividing tangible stockholders’ common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders’ common equity is stockholders’ equity less goodwill and preferred stock. See “Reconciliation of GAAP to Non-GAAP Financial Measures by quarter.”
(3) Ratios are presented on an annualized basis, where appropriate.
(4) The Efficiency Ratio, a non-GAAP measure, was calculated by dividing non-interest expense by the total of net interest income and non-interest income. See “Reconciliation of GAAP to Non-GAAP Financial Measures by quarter.”


 Recorded Investment in Loans Receivable by quarter
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
 (In thousands)
Residential one-to-four family$241,796 $247,471 $268,137 $248,381 $252,971 
Commercial and multi-family 1,677,668  1,643,954  1,577,816  1,606,976  1,668,982 
Construction 134,769  111,463  101,692  104,996  131,697 
Commercial business 311,204  309,284  177,146  177,642  161,649 
Home equity 60,973  63,481  64,857  64,638  63,645 
Consumer 770  603  1,029  682  728 
 $2,427,180 $2,376,256 $2,190,677 $2,203,315 $2,279,672 
Less:     
   Deferred loan fees, net (3,430) (3,821) (1,086) (1,174) (1,282)
   Allowance for loan loss (31,760) (28,842) (25,534) (23,734) (24,691)
      
Total loans, net$2,391,990 $2,343,593 $2,164,057 $2,178,407 $2,253,699 
      
 Non-Accruing Loans in Portfolio by quarter
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
 (In thousands)
Originated loans:     
Residential one-to-four family$847 $788 $788 $590 $814 
Commercial and multi-family 457  218  218  761  1,584 
Commercial business 3,252  1,129  1,189  1,428  887 
Home equity 604  608  294  347  350 
Sub-total:$5,160 $2,743 $2,489 $3,126 $3,635 
      
Acquired loans initially recorded at fair value:    
Residential one-to-four family$565 $544 $602 $291 $1,046 
Commercial and multi-family 979  631  758  217  - 
Commercial business 378  513  513  513  378 
Home equity 69  64  -  13  15 
Sub-total:$1,991 $1,752 $1,873 $1,034 $1,439 
      
Total:$7,151 $4,495 $4,362 $4,160 $5,074 


 Distribution of Deposits by quarter
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
 (In thousands)
Demand:     
   Non-Interest Bearing$395,630$390,912$293,174$271,702$276,203
   Interest Bearing 504,863 472,064 428,683 394,074 344,385
   Money Market 311,074 319,113 321,973 305,790 272,139
Sub-total:$1,211,567$1,182,089$1,043,830$971,566$892,727
   Savings and Club 287,513 275,567 260,291 260,545 256,531
   Certificates of Deposit 774,258 984,577 1,071,600 1,129,952 1,114,199
Total Deposits:$2,273,338$2,442,233$2,375,721$2,362,063$2,263,457


 Reconciliation of GAAP to Non-GAAP Financial Measures by quarter
      
 Tangible Book Value per Share
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
 (In thousands, except per share amounts)
Total Stockholders' Equity$242,687 $241,019 $240,638 $239,473 $223,719 
Less: goodwill 5,253  5,253  5,253  5,253  5,570 
Less: preferred stock 23,481  27,956  24,876  25,016  25,016 
Total tangible common stockholders' equity 213,953  207,810  210,509  209,204  193,133 
Shares common shares outstanding 17,081  17,057  17,407  17,517  16,477 
Book value per common share$14.21 $14.13 $13.82 $13.67 $13.58 
Tangible book value per common share$12.53 $12.18 $12.09 $11.94 $11.72 
      
 Efficiency Ratios
 Q3 2020Q2 2020Q1 2020Q4 2019Q3 2019
 (In thousands, except for ratio %)
Net interest income$20,890 $17,991 $18,778 $20,077 $20,760 
Non-interest income 6,955  1,108  683  1,020  1,383 
Total income 27,845  19,099  19,461  21,097  22,143 
Non-interest expense 13,342  11,952  14,364  14,260  13,652 
Efficiency Ratio 47.92% 62.58% 73.81% 67.59% 61.65%

 


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Source: BCB Bancorp, Inc.