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Press Release

BCB Bancorp, Inc. Earnings Increase 14% to $5.2 Million in 3Q19, from 3Q18, Profits Grow 38% in First Nine Months of 2019

Company Release - 10/18/2019 4:15 PM ET

BAYONNE, N.J., Oct. 18, 2019 (GLOBE NEWSWIRE) -- BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported that an increase in total interest income, and decreases in the provision for loan losses and non-interest expenses, contributed to third quarter and year-to-date 2019 profits. Net income increased $638,000, or 13.9 percent, to $5.2 million for the third quarter of 2019, compared with $4.6 million for the third quarter of 2018. In the preceding quarter, the Company earned $5.2 million.

For the first nine months of the year, net income increased $4.4 million, or 37.9 percent, to $15.9 million, compared with $11.5 million for the first nine months of 2018.

“Our third quarter 2019 financial performance demonstrates that the execution of our strategic plan is effective and continues to build shareholder value,” stated Thomas Coughlin, President and Chief Executive Officer.  “Our focus on producing strong core earnings, fostering new client relationships to fund our growth and strengthening our capital position, are all showing results.  Additionally, we are taking steps to strengthen our balance sheet and position ourselves for future growth and higher performance.  We remain focused on competing for business in our local markets and looking for additional growth opportunities.”

Executive Summary

  • Net income increased 13.9 percent to $5.2 million in the third quarter of 2019, compared to $4.6 million in the third quarter of 2018.
  • Earnings per diluted share increased to $0.30 in 3Q19, compared to $0.27 in 3Q18.
  • Net interest margin was 3.06 percent in the third quarter 2019, compared to 3.22 percent in the third quarter a year ago. This decrease was the result of our focus on increasing our cash position to allow for paydowns of borrowings and higher cost CDs.
  • Total assets increased 7.1 percent to $2.825 billion at September 30, 2019, compared to $2.638 billion a year earlier.
  • As a result of management’s focus on repositioning the balance sheet, net loans receivable increased 1.3 percent to $2.254 billion at September 30, 2019, compared to $2.225 billion a year earlier.
  • Allowance for loan losses as a percentage of non-accrual loans was 486.6 percent at September 30, 2019, compared to 193.9 percent at September 30, 2018.
  • Tangible book value improved to $11.72 at September 30, 2019 from $10.78 a year ago.
  • Earlier this month, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.14 per share. The dividend will be payable November 22, 2019, to common shareholders of record on November 8, 2019. 
  • The Company issued $6.3 million of private placement common stock which closed in February 2019 and $5.3 million of preferred series G stock, which was issued in January 2019. The Company had also issued $33.5 million of subordinated debt in July 2018 which, for regulatory purposes, is treated as Tier 1 capital for the Bank and Tier 2 capital for the Company, when applicable.

Balance Sheet Review

Total assets increased by $187.6 million, or 7.1 percent, to $2.825 billion at September 30, 2019 from $2.638 billion at September 30, 2018 and increased by $87.4 million, or 3.2 percent, compared to June 30, 2019. The increase in total assets was primarily the result of an increase in total cash and cash equivalents as a result of new deposit relationships, proceeds from FHLB borrowings, and the inclusion of operating and finance leases due to accounting standards changes.

Net loans receivable increased by $28.7 million, or 1.3 percent, to $2.254 billion at September 30, 2019 from $2.225 billion at September 30, 2018, and decreased slightly compared to $2.300 billion at June 30, 2019. After significant loan growth in 2018, management focused on repositioning the balance sheet, which included curtailing loan growth and strengthening our capital position. The change in loans over the first nine months of 2019 represented decreases of $28.9 million in commercial real estate and multi-family loans, $9.2 million in home equity loans, $5.1 million in residential one-to-four family loans, $3.5 million in commercial business loans, and $81,000 in consumer loans,  partly offset by an increase of  $23.9 million in construction loans.

Total cash and cash equivalents increased by $169.9 million, or 82.2 percent, to $376.6 million at September 30, 2019 from $206.7 million a year ago, and increased by $149.0 million, or 65.4 percent compared to $227.6 million three months earlier. The Company’s level of cash and cash equivalents is a part of the Company’s strategy to maintain strong levels of liquidity. Total investment securities decreased by $23.8 million, or 18.6 percent, to $104.1 million at September 30, 2019 from $127.9 million at September 30, 2018, and decreased by $18.1 million, or 14.8 percent, compared to $122.2 million at June 30, 2019, representing normal repayments, calls, and maturities.

On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") No. 2016-02 - Leases, requiring on-balance sheet reporting for all operating leases, which resulted in the recording of $14.0 million in operating lease right-of-use assets and a corresponding $14.1 million in operating lease liabilities at September 30, 2019.

Total deposits increased by $146.8 million, or 6.9 percent, to $2.263 billion at September 30, 2019 from $2.117 billion at September 30, 2018, and increased by $55.2 million, or 2.5 percent, from $2.208 billion at June 30, 2019.  Increases over the first nine months of 2019 included $50.2 million in money market checking accounts, $12.2 million in non-interest bearing deposits, $13.9 million in transaction accounts, and $10.4 million in certificates of deposit, partly offset by decreases of $4.0 million in savings and club accounts. The Company uses listing service and brokered certificates of deposit as additional sources of deposit liquidity, which totaled $10.9 million and $0, respectively, at September 30, 2019.

Debt obligations remained flat at $312.6 million at September 30, 2019 compared to a year ago and increased $30.1 million compared to $282.5 million at June 30, 2019.  Debt obligations consisted of both Federal Home Loan Bank (“FHLB”) borrowings and subordinated debt balances. FHLB borrowings reflect the use of long-term advances to augment deposits as the Company’s funding source for originating loans and investing in investment securities. The increase in FHLB borrowings in the current quarter related to replacing $40 million in advance of the borrowing maturity dates in the next quarter that were secured at favorable interest rates. The weighted average interest rate of FHLB advances was 2.15 percent at September 30, 2019. The issuance of subordinated debt was to maintain adequate capital ratios for further growth. The fixed interest rate of subordinated debt balances was 5.625% at September 30, 2019.

Stockholders’ equity increased by $28.0 million, or 14.3 percent, to $223.7 million at September 30, 2019 from $195.8 million at September 30, 2018, and increased by $2.6 million, or 1.2 percent, compared to $221.2 million three months earlier. The year-over-year increase in stockholders’ equity was primarily attributable to the Company’s issuance of $6.3 million of common stock in a private placement which closed in February 2019 and the issuance of $5.3 million of preferred series G stock in a private placement, which was issued in January 2019. Retained earnings increased by $10.2 million to $45.9 million at September 30, 2019 from $35.7 million a year ago, due primarily to the increase in net income, net of dividends paid, and the decrease in the accumulated other comprehensive loss of $4.0 million.

Third Quarter Income Statement Review

Net interest income increased by $680,000, or 3.4 percent, to $20.8 million for the third quarter of 2019 from $20.1 million for the third quarter of 2018.  The increase in net interest income resulted primarily from an increase in the average balance of interest-earning assets of $213.0 million, or 8.5 percent, to $2.710 billion for the third quarter of 2019 from $2.497 billion for the third quarter a year ago. There was also an increase in the average yield on interest-earning assets of 15 basis points to 4.63 percent for the third quarter of 2019 from 4.48 percent for the third quarter of 2018. The average balance of interest-bearing liabilities increased $173.6 million, or 8.3 percent, to $2.265 billion for the third quarter of 2019 from $2.092 billion for the third quarter of 2018, and there was an increase in the average rate on interest-bearing liabilities of 36 basis points to 1.87 percent for the third quarter of 2019 from 1.51 percent for the third quarter a year ago. Interest income on loans also included $505,000 of amortization of purchase credit adjustments related to the acquisition of IAB for the three months ended September 30, 2019, which added approximately seven basis points to the average yield on interest earning assets on an annualized basis.

Net interest margin was 3.06 percent for the third quarter of 2019 and 3.22 percent for the third quarter of 2018.  “The decrease in our net interest margin for the current quarter was the result of a competitively higher interest rate environment, with the increase in the cost of funds outpacing the return on interest earning assets,” Coughlin said. “We expect with the two recent Federal Reserve rate cuts for our net interest margin to continue to remain under pressure in the short term.”

Total non-interest income decreased by $469,000, or 25.3 percent, to $1.4 million for the third quarter of 2019 from $1.9 million for the third quarter of 2018. The decrease in total non-interest income was mainly related to lower income from fees and service charges as well as lower gains on sale of loans, partly offset by higher gains on sale of other real estate owned properties and gains on sale of investment securities. Fees and service charges decreased $237,000, or 21.7 percent to $855,000 for the third quarter of 2019 from $1.1 million for the third quarter of 2018, mainly related to less mortgage servicing fee income with less sales of loans. Gain on sales of loans decreased by $649,000, or 87.9 percent, to $89,000 for the third quarter of 2019 from $738,000 for the third quarter of 2018. Factors considered when deciding to sell loans include market conditions, demand, and the loan portfolio. Gains on sale of other real estate owned properties increased by $110,000, to $124,000 for the third quarter of 2019 from a gain of $14,000 for the third quarter of 2018. Gain on sale of investment securities was $283,000 for the third quarter of 2019, with no comparable sales for the third quarter a year ago.

Third quarter total non-interest expense decreased by $739,000, or 5.1 percent, to $13.7 million from $14.4 million for the third quarter a year ago. Regulatory fees associated with FDIC assessments decreased by $510,000 for the third quarter of 2019 from $419,000 for the third quarter of 2018. The decrease was primarily due to a decrease in the assessment rate, a credit that related to the receipt of an FDIC Small Bank Assessment Credit, which came as a result of the FDIC exceeding its stated Deposit Fund Reserve Ratio, partly offset by an increase in the assessment base.  Data processing expense decreased by $166,000, or 17.6 percent, to $776,000 for the third quarter of 2019 from $942,000 for the third quarter a year ago primarily attributable to non-recurring charges in the third quarter of 2018 related to the merger with IAB.  There were no merger-related expenses during the third quarter of 2019, compared to $119,000 in merger-related costs in the third quarter a year ago. Salaries and employee benefits expense increased by a modest 1.9 percent, or $138,000. The increase in salaries and employee benefits related in part to normal salary increases, partly offset by a reduction in full-time equivalent employees, from 371 at September 30, 2018 to 352 at September 30, 2019, as part of management’s continued initiative to manage headcount throughout the organization. Occupancy expense increased by $157,000, or 6.3 percent, to $2.6 million for the third quarter of 2019 from $2.5 million for the third quarter a year earlier, largely related to the opening of three new branches in 2019.

The income tax provision increased by $319,000, or 15.6 percent, to $2.4 million for the third quarter of 2019 from $2.0 million for the third quarter of 2018. The increase in the income tax provision comes as a result of higher taxable income for the third quarter of 2019 as compared to that same period for 2018. The consolidated effective tax rate for the third quarter of 2019 was 31.1 percent compared to 30.8 percent for the third quarter a year ago.

Year to Date Income Statement Review

Net interest income increased by $6.0 million, or 10.6 percent, to $62.5 million for first nine months of 2019 from $56.5 million for the first nine months of 2018. Net interest margin was 3.14 percent for the first nine months of 2019 compared to 3.34 percent for the first nine months of 2018. The decrease in the net interest margin was the result of a comparatively higher interest rate environment, with the increase in the average cost of funds outpacing the return on interest earning assets for the nine-month period ended September 30, 2019 as compared to the same period one year ago. Interest income on loans also included $1.5 million of amortization of purchase credit adjustments related to the acquisition of IAB for the nine months ended September 30, 2019, which added approximately eight basis points to the average yield on interest earning assets on an annualized basis.

Total non-interest income decreased by $2.4 million, or 35.7 percent, to $4.4 million for the first nine months of 2019 from $6.8 million for the first nine months a year ago. The decrease in total non-interest income mainly related to a decrease in the amount of other non-interest income of $2.2 million, or 92.5 percent, to $179,000 for the first nine months of 2019 from $2.4 million for the first nine months a year ago. The decrease in other non-interest income was the result of $2.2 million in proceeds from a legal settlement recognized in the first quarter of 2018.

Total non-interest expense decreased by $1.1 million or 2.5 percent, to $41.3 million for the first nine months of 2019 from $42.4 million for the first nine months of 2018. There were no merger-related expenses in the first nine months of 2019, compared to $2.3 million in the first nine months of 2018.  “Excluding the prior-year merger costs, total non-interest expense rose 3.1% over last year. Management is pleased with the results of our cost containment efforts. The increase would be less considering that the prior year did not include IAB non-interest costs until the merger date of April 17, 2018,” Coughlin stated.

The income tax provision increased by $2.0 million, or 40.1 percent, to $7.1 million for the first nine months of 2019 from $5.1 million for the first nine months of 2018. The increase in the income tax provision comes as a result of higher taxable income for the first nine months ended September 30, 2019 as compared to that same period for 2018. The consolidated effective tax rate for the first nine months of 2019 was 30.9 percent compared to 30.6 percent for the first nine months of 2018.

Asset Quality

The provision for loan losses remained relatively flat at $900,000 for the third quarter of 2019 as compared to $907,000 for the third quarter of 2018.  Year-to-date, the provision for loan losses decreased by $1.8 million, to $2.5 million for the first nine months of 2019 from $4.3 million for the first nine months of 2018, mainly related to the loan growth curtailment. Non-accruing loans improved to $5.1 million, or 0.22 percent, of gross loans at September 30, 2019 as compared to $11.1 million, or 0.49 percent, of gross loans at September 30, 2018.

Performing troubled debt restructured (“TDR”) loans that were not included in nonaccrual loans at September 30, 2019, were $16.5 million, compared to $21.8 million at June 30, 2019 and $20.6 million at September 30, 2018.  Borrowers who are in financial difficulty and who have been granted concessions that may include interest rate reductions, term extensions, or payment alterations are categorized as TDR loans. 

The allowance for loan losses was $24.7 million, or 486.6 percent of non-accruing loans and 1.08 percent of gross loans, at September 30, 2019 as compared to an allowance for loan losses of $23.8 million, or 433.5 percent of non-accruing loans and 1.02 percent of gross loans, at June 30, 2019 and an allowance for loan losses of $21.5 million or 193.9 percent of non-accruing loans and 0.96 percent of gross loans, a year ago.

The Company recognized net recoveries of $2,000 during the third quarter of 2019. This compares to net recoveries of $30,000 in the second quarter of 2019 and net charge offs of $43,000 in the third quarter a year ago. Year-to-date, the Company recognized $212,000 in net charge-offs compared to $180,000 in net charge-offs in the first nine months of 2018.

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 30 branch offices in Bayonne, Carteret, Colonia, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lodi, Lyndhurst, Maplewood, Monroe Township, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, three branches in Hicksville and Staten Island, New York. The Bank provides business and individuals a wide range of loans, deposit products, and retail and commercial banking services. For more information, please go to www.bcb.bank.

In September 2019, the Company announced its inclusion into the prestigious Sandler O'Neill Sm-All Stars Class of 2019, an elite group of 30 publicly traded small-cap banks and thrifts, based on growth, profitability, credit quality and capital strength.

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: difficulties and delays in integrating the Indus-American Bank business or fully realizing cost savings and other benefits of the Merger; business disruption following the Merger; 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 BCB 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.

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.

 Statements of Income  - Three Months Ended,  
 September 30, 2019June 30, 2019September 30, 2018September 30, 2019 vs.
June 30, 2019
September 30, 2019 vs.
September 30, 2018
Interest and dividend income: (Dollars in thousands)  
Loans, including fees$28,860 $28,634 $26,019 0.8%10.9%
Mortgage-backed securities 652  738  827 -11.7%-21.2%
Other investment securities 107  197  116 -45.7%-7.8%
FHLB stock and other interest earning assets 1,750  1,173  1,009 49.2%73.4%
Total interest and dividend income  31,369  30,742  27,971 2.0%12.1%
      
 Interest expense:      
Deposits:     
Demand 1,898  1,750  1,130 8.5%68.0%
Savings and club 102  110  116 -7.3%-12.1%
Certificates of deposit 6,603  6,097  4,591 8.3%43.8%
  8,603  7,957  5,837 8.1%47.4%
Borrowings 2,006  1,920  2,054 4.5%-2.3%
Total interest expense 10,609  9,877  7,891 7.4%34.4%
      
Net interest income 20,760  20,865  20,080 -0.5%3.4%
Provision for loan losses  900  755  907 19.2%-0.8%
      
Net interest income after provision for loan losses  19,860  20,110  19,173 -1.2%3.6%
      
Non-interest income:      
Fees and service charges  855   802  1,092 6.6%-21.7%
Gain on sales of loans 89   437  738 -79.6%-87.9%
Gain on sales of other real estate owned 124  45  14 175.6%7.86 
Gain on sale of investment securities 283  21  - 1247.6%0.0%
Unrealized (loss) on equity investments (45) (26) (82)73.1%45.1%
Other 77  49  90 57.1%-14.4%
Total non-interest income  1,383  1,328  1,852 4.1%-25.3%
      
Non-interest expense:       
Salaries and employee benefits 7,294   6,918  7,156 5.4%1.9%
Occupancy and equipment 2,647  2,649  2,490 -0.1%6.3%
Data processing and service fees 776  731  942 6.2%-17.6%
Professional fees 368  473  437 -22.2%-15.8%
Director fees 356  316  192 12.7%85.4%
Regulatory assessments (91) 417  419 -121.8%-121.7%
Advertising and promotional 64  123  129 -48.0%-50.4%
Other real estate owned, net (31) 124  22 -125.0%-240.9%
Merger related costs -  -  119 - -100.0%
Other 2,269  2,143  2,485 5.9%-8.7%
Total non-interest expense 13,652   13,894  14,391 -1.7%-5.1%
      
Income before income tax provision 7,591   7,544  6,634 0.6%14.4%
Income tax provision   2,359   2,317  2,040 1.8%15.6%
      
Net Income $5,232  $5,227 $4,594 0.1%13.9%
Preferred stock dividends 342   342  263 - 30.0%
Net Income available to common stockholders $4,890  $4,885 $4,331 0.1%12.9%
      
Net Income per common share-basic and diluted      
Basic$0.30  $0.30 $0.27 - 11.1%
Diluted$0.30  $0.30 $0.27 - 11.1%
      
Weighted average number of common shares outstanding      
Basic 16,468   16,413  15,789 0.3%4.3%
Diluted 16,523   16,471  15,896 0.3%3.9%
      


 Nine Months Ended, 
 September 30, 2019September 30, 2018September 30, 2019 vs.
September 30, 2018
Interest and dividend income: (Dollars in thousands) 
Loans, including fees$85,727$69,588 23.2%
Mortgage-backed securities 2,160 2,363 -8.6%
Other investment securities 432 416 3.8%
FHLB stock and other interest earning assets 4,270 2,242 90.5%
Total interest and dividend income  92,589 74,609 24.1%
    
Interest expense:    
Deposits:   
Demand 5,224 2,902 80.0%
Savings and club 325 318 2.2%
Certificates of deposit 18,690 10,726 74.2%
  24,239 13,946 73.8%
Borrowings 5,823 4,153 40.2%
Total interest expense 30,062 18,099 66.1%
    
Net interest income 62,527  56,510 10.6%
Provision for loan losses  2,544  4,309 -41.0%
    
Net interest income after provision for loan losses  59,983  52,201 14.9%
    
Non-interest income:    
Fees and service charges 2,540 2,773 -8.4%
Gain on sales of loans 844 1,897 -55.5%
Gain (loss) on bulk sale of impaired loans held in portfolio 107 (24)545.8%
Gain on sales of other real estate owned 177 4 4325.0%
Gain on sale of investment securities 304 - - 
Unrealized gain (loss) on equity investments 220 (242)190.9%
Other 179 2,393 -92.5%
Total non-interest income  4,371 6,801 -35.7%
    
Non-interest expense:     
Salaries and employee benefits 21,127 20,548 2.8%
Occupancy and equipment 7,926 7,028 12.8%
Data processing and service fees 2,228 2,499 -10.8%
Professional fees 1,374 1,475 -6.8%
Director fees 990 594 66.7%
Regulatory assessments 783 948 -17.4%
Advertising and promotional 260 314 -17.2%
Other real estate owned, net 77 213 -63.8%
Merger related costs - 2,303 -100.0%
Other 6,558 6,460 1.5%
Total non-interest expense 41,323 42,382 -2.5%
    
Income before income tax provision 23,031 16,620 38.6%
Income tax provision 7,121 5,081 40.1%
    
Net Income $15,910$11,539 37.9%
Preferred stock dividends 1,002 691 45.0%
Net Income available to common stockholders $14,908$10,848 37.4%
    
Net Income per common share-basic and diluted    
Basic$0.91$0.70 30.0%
Diluted$0.91$0.69 31.9%
    
Weighted average number of common shares outstanding    
Basic 16,320 15,482 5.4%
Diluted 16,369 15,609 4.9%
    


Statements of Financial ConditionSeptember 30, 2019June 30, 2019September 30, 2018September 30, 2019 vs
June 30, 2019
September 30, 2019 vs
September 30, 2018
 ASSETS (Dollars in thousands)  
Cash and amounts due from depository institutions$27,625 $20,660 $32,459 33.7%-14.9%
Interest-earning deposits 348,986  206,982  174,251 68.6%100.3%
Total cash and cash equivalents 376,611  227,642  206,710 65.4%82.2%
      
Interest-earning time deposits 735  735  980 - -25.0%
Debt securities available for sale 98,218  116,258  119,811 -15.5%-18.0%
Equity investments 5,857  5,901  8,052 -0.7%-27.3%
Loans held for sale 3,195  -  1,772 - 80.3%
Loans receivable, net of allowance for loan losses     
of $24,691, $23,789, and $21,504, respectively 2,253,699  2,299,765  2,225,001 -2.0%1.3%
Federal Home Loan Bank of New York stock, at cost 15,171  13,821  14,755 9.8%2.8%
Premises and equipment, net 20,315  19,482  20,392 4.3%-0.4%
Operating lease right-of-use asset 13,951  14,650  - -4.8%- 
Accrued interest receivable 8,959  9,315  8,635 -3.8%3.8%
Other real estate owned -  1,235  1,232 -100.0%-100.0%
Deferred income taxes 13,445  12,962  11,607 3.7%15.8%
Goodwill and other intangibles 5,570  5,587  5,223 -0.3%6.6%
Other assets 9,773  10,777  13,698 -9.3%-28.7%
Total Assets $2,825,499 $2,738,130 $2,637,868 3.2%7.1%
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
      
LIABILITIES     
Non-interest bearing deposits$276,235 $278,602 $276,998 -0.8%-0.3%
Interest bearing deposits 1,987,222  1,929,620  1,839,626 3.0%8.0%
Total deposits 2,263,457  2,208,222  2,116,624 2.5%6.9%
FHLB advances 275,800  245,800  275,800 12.2%- 
Subordinated debentures 36,752  36,693  36,519 0.2%0.6%
Operating lease liability 14,054  14,724  - -4.6%- 
Other liabilities 11,717  11,538  13,162 1.6%-11.0%
Total Liabilities   2,601,780   2,516,977  2,442,105 3.4%6.5%
      
STOCKHOLDERS' EQUITY     
Preferred stock: $0.01 par value, 10,000,000 shares authorized   -  - - - 
Additional paid-in capital preferred stock 25,016   25,016  19,706 - 26.9%
Common stock: no par value, 20,000,000 shares authorized   -  - - - 
Additional paid-in capital common stock 177,253   176,767  175,970 0.3%0.7%
Retained earnings 45,947   43,347  35,693 6.0%28.7%
Accumulated other comprehensive (loss) (2,449) (1,929) (6,490)27.0%-62.3%
Treasury stock, at cost (22,048) (22,048) (29,116)- -24.3%
Total Stockholders' Equity  223,719   221,153  195,763 1.2%14.3%
      
Total Liabilities and Stockholders' Equity $2,825,499  $2,738,130 $2,637,868 3.2%7.1%
      
Outstanding common shares 16,477   16,461  15,799 0.1%4.3%
      


  Three Months Ended September 30,
  2019   2018 
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate (3)
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate (3)
   
  (Dollars in thousands)
Interest-earning assets:               
Loans Receivable$2,309,703 $28,860 5.00% $2,183,872 $26,019 4.77%
Investment Securities 111,551  759 2.72%  148,540  943 2.54%
Interest-earning deposits 289,080  1,750 2.42%  164,944  1,009 2.45%
Total Interest-earning assets 2,710,334  31,369 4.63%  2,497,356  27,971 4.48%
Non-interest-earning assets 75,904       63,729     
Total assets$2,786,238      $2,561,085     
Interest-bearing liabilities:               
Interest-bearing demand accounts$344,439 $661 0.77% $336,373 $504 0.60%
Money market accounts 269,775  1,237 1.84%  195,436  626 1.28%
Savings accounts 257,392  102 0.16%  265,610  116 0.17%
Certificates of Deposit 1,095,481  6,603 2.41%  969,475  4,591 1.89%
Total interest-bearing deposits 1,967,087  8,603 1.75%  1,766,894  5,837 1.32%
Borrowed funds 298,152  2,006 2.69%  324,767  2,054 2.53%
Total interest-bearing liabilities 2,265,239  10,609 1.87%  2,091,661  7,891 1.51%
Non-interest-bearing liabilities 299,230       274,850     
Total liabilities 2,564,469       2,366,511     
Stockholders' equity 221,769       194,574     
Total liabilities and stockholders' equity$2,786,238      $2,561,085     
Net interest income   $20,760      $20,080  
Net interest rate spread(1)      2.76%       2.97%
Net interest margin(2)      3.06%       3.22%
                
                

(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,
  2019   2018 
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate (3)
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate (3)
   
  (Dollars in thousands)
Interest-earning assets:               
Loans Receivable$ 2,318,047 $ 85,727 4.93% $ 1,983,562 $ 69,588 4.68%
Investment Securities  120,560   2,592 2.87%   142,712   2,779 2.60%
Interest-earning deposits  220,318   4,270 2.58%   127,977   2,242 2.34%
Total Interest-earning assets  2,658,925   92,589 4.64%   2,254,251   74,609 4.41%
Non-interest-earning assets  72,718        53,375     
Total assets$ 2,731,643      $ 2,307,626     
Interest-bearing liabilities:               
Interest-bearing demand accounts$ 342,515 $ 1,913 0.74% $ 328,908 $ 1,402 0.57%
Money market accounts  253,593   3,311 1.74%   179,290   1,500 1.12%
Savings accounts  259,093   325 0.17%   263,156   318 0.16%
Certificates of Deposit  1,079,090   18,690 2.31%   859,949   10,726 1.66%
Total interest-bearing deposits  1,934,291   24,239 1.67%   1,631,303   13,946 1.14%
Borrowed funds  288,399   5,823 2.69%   245,567   4,153 2.26%
Total interest-bearing liabilities  2,222,690   30,062 1.80%   1,876,870   18,099 1.29%
Non-interest-bearing liabilities  293,557        243,973     
Total liabilities  2,516,247        2,120,843     
Stockholders' equity  215,396        186,783     
Total liabilities and stockholders' equity$ 2,731,643      $ 2,307,626     
Net interest income   $ 62,527      $ 56,510  
Net interest rate spread(1)      2.84%       3.13%
Net interest margin(2)      3.14%       3.34%
                
                

(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 2019Q2 2019Q1 2019Q4 2018Q3 2018
      
 (In thousands, except tangible book value)
Total assets$2,825,499 $2,738,130 $2,718,400 $2,674,731 $2,637,868 
Cash and cash equivalents 376,611  227,642  193,548  195,264  206,710 
Securities 104,075  122,159  125,905  127,007  127,863 
Loans receivable, net 2,253,699  2,299,765  2,307,140  2,278,492  2,225,001 
Deposits 2,263,457  2,208,222  2,188,633  2,180,724  2,116,624 
Borrowings 312,552  282,493  282,435  282,377  312,319 
Stockholders’ equity 223,719  221,153  216,718  200,215  195,763 
Tangible Book Value 11.72  11.58  11.35  11.00  10.78 
      
 Operating data by quarter
 Q3 2019Q2 2019Q1 2019Q4 2018Q3 2018
      
 (In thousands, except for per share amounts)
Net interest income$20,760 $20,865 $20,902 $21,171 $20,080 
Provision for loan losses 900  755  889  821  907 
Non-interest income 1,383  1,328  1,660  1,159  1,852 
Non-interest expense 13,652  13,894  13,777  13,884  14,391 
Income tax expense 2,359  2,317  2,445  2,401  2,040 
Net income$5,232 $5,227 $5,451 $5,224 $4,594 
Net income per diluted share$0.30 $0.30 $0.32 $0.31 $0.27 
Common Dividends declared per share$0.14 $0.14 $0.14 $0.14 $0.14 
      
 Financial Ratios
 Q3 2019Q2 2019Q1 2019Q4 2018Q3 2018
Return on average assets 0.75% 0.77% 0.81% 0.78% 0.72%
Return on average stockholder’s equity 9.44% 9.61% 10.55% 10.66% 9.44%
Net interest margin 3.06% 3.16% 3.18% 3.24% 3.22%
Stockholder’s equity to total assets 7.92% 8.08% 7.97% 7.49% 7.42%
Efficiency Ratio 61.65% 62.61% 61.06% 62.18% 65.62%
      
 Asset Quality Ratios
 (In thousands, except for ratio %)
 Q3 2019Q2 2019Q1 2019Q4 2018Q3 2018
Non-Accrual Loans$5,074 $5,488 $5,670 $7,221 $11,093 
Non-Accrual Loans as a % of Total Loans 0.22% 0.24% 0.24% 0.31% 0.49%
ALLL as % of Non-Accrual Loans 486.62% 433.47% 405.71% 309.64% 193.85%
Impaired Loans 30,856  37,275  40,533  42,408  47,251 
Classified Loans 15,998  22,679  23,977  26,161  30,179 
      


 Recorded Investment in Loans Receivable by quarter
 Q3 2019Q2 2019Q1 2019Q4 2018Q3 2018
  (In Thousands)
Residential one-to-four family$252,971 $258,688 $258,184 $258,085 $254,149 
Commercial and multi-family 1,668,982  1,702,132  1,724,326  1,697,837  1,701,105 
Construction 131,697  134,963  114,462  107,783  75,601 
Commercial business 161,649  164,569  167,067  165,193  142,312 
Home equity 63,645  63,927  66,946  72,895  73,714 
Consumer 728  727  731  809  1,368 
 $2,279,672 $2,325,006 $2,331,716 $2,302,602 $2,248,249 
Less:     
Deferred loan fees, net (1,282) (1,452) (1,572) (1,751) (1,744)
Allowance for loan loss (24,691) (23,789) (23,004) (22,359) (21,504)
      
Total loans, net$2,253,699 $2,299,765 $2,307,140 $2,278,492 $2,225,001 
      
 Non-Accruing Loans in Portfolio by quarter
 Q3 2019Q2 2019Q1 2019Q4 2018Q3 2018
  (In Thousands)
Originated loans:     
Residential one-to-four family$814 $1,022 $1,415 $1,160 $1,457 
Commercial and multi-family 1,584  1,881  1,364  2,568  5,572 
Commercial business 887  745  256  356  251 
Home equity 350  129  272  277  338 
Sub-total:$3,635 $3,777 $3,307 $4,361 $7,618 
      
Acquired loans initially recorded at fair value:    
Residential one-to-four family$1,046 $1,116 $1,704 $2,165 $2,590 
Commercial and multi-family -  -  597  605  590 
Commercial business 378  378  -  48  295 
Home equity 15  217  62  42  - 
Sub-total:$1,439 $1,711 $2,363 $2,860 $3,475 
      
Total:$5,074 $5,488 $5,670 $7,221 $11,093 
      


 Reconciliation of GAAP to Non-GAAP Financial Measures by quarter
      
 Tangible Book Value per Share
 Q3 2019Q2 2019Q1 2019Q4 2018Q3 2018
  (In Thousands, except per share amounts)
Total Stockholders' Equity$223,719 $221,153 $216,718 $200,215 $195,763 
Less: goodwill and other intangibles 5,570  5,587  5,584  5,699  5,714 
Less: preferred stock 25,016  25,016  25,016  19,706  19,706 
Total tangible stockholders' equity 193,133  190,550  186,118  174,810  170,343 
Shares outstanding 16,477  16,461  16,398  15,889  15,799 
Book value per share$13.58 $13.43 $13.22 $12.60 $12.39 
Tangible book value per share$11.72 $11.58 $11.35 $11.00 $10.78 
      
 Efficiency Ratios
 Q3 2019Q2 2019Q1 2019Q4 2018Q3 2018
  (In Thousands)
Net interest income$20,760 $20,865 $20,902 $21,171 $20,080 
Non-interest income 1,383  1,328  1,660  1,159  1,852 
Total income 22,143  22,193  22,562  22,330  21,932 
Non-interest expense 13,652  13,894  13,777  13,884  14,391 
Efficiency Ratio 61.65% 62.61% 61.06% 62.18% 65.62%
      

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

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Source: BCB Bancorp, Inc.