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Press Release

BCB Bancorp, Inc. Earns Record Net Income of $21.0 Million in 2019

Company Release - 1/27/2020 4:15 PM ET

BAYONNE, N.J., Jan. 27, 2020 (GLOBE NEWSWIRE) -- BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported that net income increased 25.5 percent, to $21.0 million for the year ended December 31, 2019 from $16.7 million for 2018. Earnings per diluted share for 2019 were $1.20 as compared to $1.01 in 2018. In the fourth quarter of 2019, the Company earned $5.1 million, compared with $5.2 million in both the fourth quarter of 2018, and the third quarter of 2019. Earnings per diluted share were $0.29 in the fourth quarter of 2019, compared to $0.31 per diluted share in the fourth quarter of 2018, and $0.30 per diluted share in the preceding quarter.

“We had another strong year delivering record earnings for 2019, producing top-line revenue growth while improving operating efficiencies,” stated Thomas Coughlin, President and Chief Executive Officer.  “Our strategy is now centered on repositioning the balance sheet by focusing on generating solid lower-cost deposits, reducing our reliance on higher cost funding sources, and effective utilization of our cash position. In the coming year, we will remain focused on disciplined balance sheet growth, while delivering consistent operating results to our shareholders.”

Executive Summary

  • Net income of $5.1 million in the fourth quarter of 2019 compared to $5.2 million in the fourth quarter a year ago.
  • Earnings per diluted share were $0.29 in 4Q19, compared to $0.31 in 4Q18.
  • Net interest margin was 3.07 percent for the full year 2019, compared to 3.31 percent for the full year 2018, and 2.88 percent for the fourth quarter 2019, compared to 3.24 percent for the fourth quarter 2018. These decreases were the result of management’s focus on increasing its cash position to allow for paydowns of borrowings and higher cost CDs.
  • Total assets increased 8.7 percent to $2.907 billion at December 31, 2019 from $2.675 billion a year earlier.
  • Loans receivable, net decreased by 4.4 percent, to $2.178 billion at December 31, 2019 from $2.278 billion a year earlier, as the Company’s focus remains on repositioning the balance sheet.
  • Allowance for loan losses as a percentage of non-accrual loans was 570.5 percent at December 31, 2019, compared to 309.6 percent at December 31, 2018.
  • Total deposits increased 8.3 percent, to $2.362 billion at December 31, 2019 from $2.181 billion 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 February 21, 2020, to common shareholders of record on February 7, 2020. 
  • On December 30, 2019, the Company completed the sale of 1,020,408 shares of common stock, at an issuance price of $12.25 per share.
  • 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 $232.7 million, or 8.7 percent, to $2.907 billion at December 31, 2019 from $2.675 billion at December 31, 2018, and increased by $82.0 million, or 2.9 percent from $2.825 billion at September 30, 2019. The increase in total assets was mainly related to increases in total cash and cash equivalents and was partly offset by a decrease in net loans receivable.

Loans receivable, net decreased by $100.1 million, or 4.4 percent, to $2.178 billion at December 31, 2019 from $2.278 billion at December 31, 2018, and decreased by $75.3 million, or 3.3 percent compared to $2.254 billion at September 30, 2019. The decrease in loans over the prior year was a result of payoffs, as well as curtailed loan growth in 2019.  Decreases in loans receivable, net for 2019 included $90.9 million in commercial real estate and multi-family loans, $9.7 million in residential one-to-four family loans, $8.3 million in home equity loans, $2.8 million in construction loans, $127,000 in consumer loans, partly offset by an increase of $12.4 million in commercial business loans.

Total deposits increased by $181.3 million, or 8.3 percent, to $2.362 billion at December 31, 2019 from $2.181 billion at December 31, 2018, and increased by $98.6 million, or 4.4 percent, from $2.263 billion at September 30, 2019. The increases in deposits were primarily related to the continued maturation of the branches opened over the last four years. Total increases for 2019 included $83.9 million in money market checking accounts, $62.4 million in NOW deposit accounts, $26.1 million in certificates of deposit, including listing service and brokered deposits, and $8.9 million in non-interest-bearing deposit accounts. Listing service and brokered certificates of deposit, which were used as additional sources of deposit liquidity, totaled $10.6 million and $92.1 million, respectively, at December 31, 2019.

Stockholders’ equity increased by $39.3 million, or 19.6 percent, to $239.5 million at December 31, 2019 from $200.2 million a year ago, and increased by $15.7 million, or 7.0 percent, from $223.7 million three months earlier. The increase in stockholders’ equity was primarily attributable to an increase in additional paid-in capital of $20.1 million related to common stock and preferred stock issued in the first and fourth quarters of 2019. Retained earnings increased by $10.0 million to $48.4 million at December 31, 2019 from $38.4 million at December 31, 2018, due primarily to the increase in net income, net of dividends paid. Treasury stock decreased $6.3 million to $22.0 million at December 31, 2019 from $28.3 million at December 31, 2018, related to the issuance of common stock. Accumulated other comprehensive loss decreased $2.9 million to $2.2 million at December 31, 2019 from $5.1 million a year ago, related to market gains lowering the unrealized loss on available-for-sale securities.

Fourth Quarter Income Statement Review

Net interest income decreased by $1.1 million, or 5.2 percent, to $20.1 million for the fourth quarter of 2019 from $21.2 million for the fourth quarter of 2018. The decrease in net interest income resulted primarily from an increase in the average balance of interest-bearing liabilities of $134.0 million, or 6.1 percent, to $2.334 billion for the fourth quarter of 2019 from $2.200 billion for the fourth quarter a year ago, as well as an increase in the average rate on interest-bearing liabilities of 18 basis points to 1.87 percent for the fourth quarter of 2019 from 1.69 percent for the fourth quarter of 2018. While there was an increase in the average balance of interest-earning assets of $175.2 million, or 6.7 percent, to $2.792 billion for the fourth quarter of 2019 from $2.617 billion for the fourth quarter of 2018, there was a decrease in the average yield on interest-earning assets of 22 basis points to 4.44 percent for the fourth quarter of 2019 from 4.66 percent for the fourth quarter of 2018. Interest income on loans also included $487,000 and $651,000 of amortization of purchase credit adjustments related to the acquisition of IAB for the three-month periods ended December 31, 2019 and 2018, respectively, which added approximately eight and ten basis points to the average yield on interest earning assets, respectively, on an annualized basis.

Net interest margin was 2.88 percent for the fourth quarter of 2019 and 3.24 percent for the fourth quarter of 2018. “The contraction in the net interest margin during the fourth quarter of 2019 was primarily due to the increase in the cost of funds outpacing the return on interest earning assets for the fourth quarter of 2019 as compared to the fourth quarter of 2018,” said Coughlin. “We expect with the three recent Federal Reserve rate cuts for our net interest margin to continue to remain under pressure.”

Total non-interest income decreased by $139,000, or 12.0 percent, to $1.0 million for the fourth quarter of 2019 from $1.1 million for the fourth quarter of 2018. The decrease in total non-interest income was mainly related to lower income on gains on sale of loans, lower income on fees and service charges, lower income on the gain on sale of investment securities, and lower income on the sale of other real estate owned properties, partly offset by decreases in the unrealized losses on equity securities and a slight increase in other non-interest income. Gain on sales of loans decreased by $244,000, or 56.0 percent, to $192,000 for the fourth quarter of 2019 from $436,000 for the fourth quarter of 2018. Fees and service charges decreased $193,000, or 19.1 percent, to $819,000 for the fourth quarter of 2019 from $1.0 million for the fourth quarter of 2018, mainly related to less mortgage servicing fee income from fewer sales of loans. Losses on the sale of investment securities totaled $42,000 for the fourth quarter of 2019 with no comparable figure in the fourth quarter a year ago.

Fourth quarter of 2019 total non-interest expense increased by $376,000, or 2.7 percent, to $14.3 million from $13.9 million for the fourth quarter a year ago. Salaries and employee benefits expense increased by $287,000, or 4.1 percent, to $7.3 million for the fourth quarter of 2019 from $7.0 million for the fourth quarter of 2018.  Professional fee expense increased by $197,000, or 42.6 percent, to $659,000 for the fourth quarter of 2019 from $462,000 for the fourth quarter of 2018.  Occupancy expense increased by $183,000, or 7.2 percent, to $2.7 million for the fourth quarter of 2019 from $2.5 million for the fourth quarter a year ago, largely related to the opening of two de novo branches, as well as a relocation of one of our existing branches in 2019.  Regulatory fees associated with FDIC assessments decreased by $356,000, or 73.1 percent, to $131,000 for the fourth quarter of 2019 from $487,000 for the fourth quarter of 2018. The decrease was primarily due to a decrease in the assessment rate and 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.

The income tax provision decreased by $213,000, or 8.9 percent, to $2.2 million for the fourth quarter of 2019 from $2.4 million for the fourth quarter of 2018. The decrease in the income tax provision was a result of lower taxable income for the fourth quarter as compared to the same period for 2018. The consolidated effective tax rate for the fourth quarter of 2019 was 29.9 percent compared to 31.5 percent for the fourth quarter a year ago.

Full Year 2019 Income Statement Review

Net interest income increased by $4.9 million, or 6.3 percent, to $82.6 million for the year ended December 31, 2019 from $77.7 million for the year ended December 31, 2018.

Net interest margin was 3.07 percent for the year 2019 and 3.31 percent for 2018. The decrease in the net interest margin was the result of a competitive interest rate environment, with the increase in the cost of funds outpacing the return on interest earning assets for the short term. Interest income on loans also included $2.0 million and $1.7 million of amortization of purchase credit adjustments related to the acquisition of IAB for the years ended December 31, 2019 and 2018, respectively, which added approximately eight basis points in both years to the average yield on interest earning assets.

Total non-interest income decreased by $2.6 million, or 32.3 percent, to $5.4 million for 2019 from $8.0 million for 2018. The decrease in total non-interest income was mainly related to a decrease in other non-interest income of $2.2 million to $249,000 for 2019 from $2.5 million for 2018, which was mainly attributed to $2.0 million received from a legal settlement in the first quarter of 2018. The decrease in total non-interest income also included decreases of $1.3 million in gains on sales of loans, and a decrease of $426,000 in fees and service charges, both related to lower levels of sales of loans. The decrease in total non-interest income was partly offset by increases of $823,000 in unrealized gains on equity securities, $262,000 in gains on sale of investment securities, $147,000 in gains on sale of other real estate owned properties, as well as an increase of $131,000 in gains on sale of impaired loans.

Total non-interest expense decreased by $683,000, or 1.2 percent, to $55.6 million for 2019 from $56.3 million for 2018.  There were no merger-related expenses in 2019, compared to $2.4 million in merger-related expenses in 2018.  Regulatory fees associated with FDIC assessments decreased by $521,000, or 36.3 percent, to $914,000 for 2019 from $1.4 million in 2018. The decrease was primarily due to a decrease in the assessment rate and 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.

The income tax provision increased by $1.8 million, or 24.4 percent, to $9.3 million for 2019 from $7.5 million for 2018. The increase in the income tax provision was a result of higher taxable income for 2019 compared to 2018. The consolidated effective tax rate for 2019 was 30.7 percent compared to 30.9 percent for 2018.

Asset Quality

Primarily as a result of the decrease in average balances of net loans, the Company recognized a credit in the provision for loan losses of $475,000 for the fourth quarter of 2019.  This compares to a provision for loan losses of $900,000 in the preceding quarter and $821,000 for the fourth quarter a year ago.  For the full year 2019, the provision for loan losses decreased to $2.1 million from $5.1 million in 2018, primarily due to the reduction in net loans receivable for 2019.

Non-accruing loans improved to $4.2 million, or 0.19 percent, of gross loans at December 31, 2019, compared to $5.1 million, or 0.22 percent, of gross loans at September 30, 2019, and $7.2 million, or 0.31 percent, of gross loans a year ago.  

Performing troubled debt restructured (“TDR”) loans that were not included in nonaccrual loans at December 31, 2019, were $16.5 million, compared to $16.4 million at September 30, 2019 and $21.4 million at December 31, 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 decreased $1.0 million to $23.7 million, or 570.5 percent of non-accruing loans and 1.08 percent of gross loans, at December 31, 2019, compared to $24.7 million, or 486.6 percent of non-accruing loans and 1.08 percent of gross loans, at September 30, 2019, and increased $1.3 million compared to $22.4 million, or 309.6 percent of non-accruing loans and 0.97 percent of gross loans, a year ago.

The Company recognized net charge-offs of $482,000 during the fourth quarter of 2019. This compares to net recoveries of $2,000 in the third quarter of 2019 and net recoveries of $34,000 in the fourth quarter a year ago.  For 2019, the Company recognized $694,000 in net charge-offs compared to $146,000 in net charge-offs in 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, and a loan production office in Hoboken. 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.

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: 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,  
 December 31, 2019September 30, 2019December 31, 2018December 31, 2019 vs.
September 30, 2019
December 31, 2019 vs.
December 31, 2018
Interest and dividend income: (Dollars in thousands)  
Loans, including fees$ 28,254 $28,860 $28,243 -2.1%0.0%
Mortgage-backed securities 583  652  791 -10.6%-26.3%
Other investment securities 135  107  191 26.2%-29.3%
FHLB stock and other interest earning assets 1,994  1,750  1,263 13.9%57.9%
Total interest and dividend income 30,966  31,369  30,488 -1.3%1.6%
      
Interest expense:     
Deposits:     
Demand 2,023  1,898  1,412 6.6%43.3%
Savings and club 103  102  126 1.0%-18.3%
Certificates of deposit 6,704  6,603  5,674 1.5%18.2%
  8,830  8,603  7,212 2.6%22.4%
Borrowings 2,059  2,006  2,105 2.6%-2.2%
Total interest expense 10,889  10,609  9,317 2.6%16.9%
      
Net interest income 20,077  20,760  21,171 -3.3%-5.2%
(Credit) Provision for loan losses (475) 900  821 -152.8%-157.9%
      
Net interest income after provision for loan losses 20,552  19,860  20,350 3.5%1.0%
      
Non-interest income:     
Fees and service charges 819  855  1,012 -4.2%-19.1%
Gain on sales of loans 192  89  436 115.7%-56.0%
Gain on sales of other real estate owned -  124  26 -100.0%-100.0%
(Loss) gain on sale of investment securities (42) 283  - -114.8%0.0%
Unrealized (loss) on equity investments (19) (45) (380)-57.8%-95.0%
Other 70  77  65 -9.1%7.7%
Total non-interest income 1,020  1,383  1,159 -26.2%-12.0%
      
Non-interest expense:      
Salaries and employee benefits 7,329  7,294  7,042 0.5%4.1%
Occupancy and equipment 2,734  2,647  2,551 3.3%7.2%
Data processing and service fees 959  776  876 23.6%9.5%
Professional fees 659  368  462 79.1%42.6%
Director fees 391  356  158 9.8%147.5%
Regulatory assessment fees (credits) 131  (91) 487 244.0%-73.1%
Advertising and promotional 74  64  108 15.6%-31.5%
Other real estate owned, net (6) (31) 59 80.6%-110.2%
Merger related costs -  -  105 - -100.0%
Other 1,989  2,269  2,036 -12.3%-2.3%
Total non-interest expense 14,260  13,652  13,884 4.5%2.7%
      
Income before income tax provision 7,312  7,591  7,625 -3.7%-4.1%
Income tax provision 2,188  2,359  2,401 -7.2%-8.9%
      
Net Income$ 5,124 $5,232 $5,224 -2.1%-1.9%
Preferred stock dividends 342  342  262 0.1%30.7%
Net Income available to common stockholders$ 4,782 $4,890 $4,962 -2.2%-3.6%
      
Net Income per common share-basic and diluted     
Basic$ 0.29 $0.30 $0.31 -3.4%-7.7%
Diluted$ 0.29 $0.30 $0.31 -4.0%-8.0%
      
Weighted average number of common shares outstanding     
Basic 16,508  16,468  15,820 0.2%4.3%
Diluted 16,601  16,523  15,851 0.5%4.7%
              


   
 Year Ended, 
 December 31, 2019December 31, 2018December 31, 2019 vs.
December 31, 2018
Interest and dividend income: (Dollars in thousands) 
Loans, including fees$ 113,981$97,831 16.5%
Mortgage-backed securities 2,743 3,154 -13.0%
Other investment securities 567 607 -6.6%
FHLB stock and other interest earning assets 6,264 3,505 78.7%
Total interest and dividend income 123,555 105,097 17.6%
    
Interest expense:   
Deposits:   
Demand 7,247 4,314 68.0%
Savings and club 428 444 -3.6%
Certificates of deposit 25,394 16,400 54.8%
  33,069 21,158 56.3%
Borrowings 7,882 6,258 26.0%
Total interest expense 40,951 27,416 49.4%
    
Net interest income 82,604 77,681 6.3%
Provision for loan losses 2,069 5,130 -59.7%
    
Net interest income after provision for loan losses 80,535 72,551 11.0%
    
Non-interest income:   
Fees and service charges 3,359 3,785 -11.3%
Gain on sales of loans 1,036 2,333 -55.6%
Gain (loss) on bulk sale of impaired loans held in portfolio 107 (24)545.8%
Gain on sales of other real estate owned 177 30 490.0%
Gain on sale of investment securities 262 - - 
Unrealized gain (loss) on equity investments 201 (622)132.3%
Other 249 2,458 -89.9%
Total non-interest income 5,391 7,960 -32.3%
    
Non-interest expense:    
Salaries and employee benefits 28,456 27,590 3.1%
Occupancy and equipment 10,660 9,579 11.3%
Data processing and service fees 3,187 3,375 -5.6%
Professional fees 2,033 1,937 5.0%
Director fees 1,381 752 83.6%
Regulatory assessments 914 1,435 -36.3%
Advertising and promotional 334 422 -20.9%
Other real estate owned, net 71 272 -73.9%
Merger related costs - 2,408 -100.0%
Other 8,547 8,496 0.6%
Total non-interest expense 55,583 56,266 -1.2%
    
Income before income tax provision 30,343 24,245 25.2%
Income tax provision 9,309 7,482 24.4%
    
Net Income$ 21,034$16,763 25.5%
Preferred stock dividends 1,344 953 41.0%
Net Income available to common stockholders$ 19,690$15,810 24.5%
    
Net Income per common share-basic and diluted   
Basic$ 1.20$1.02 18.5%
Diluted$ 1.20$1.01 18.8%
    
Weighted average number of common shares outstanding   
Basic 16,367 15,567 5.1%
Diluted 16,423 15,661 4.9%
    


      
Statements of Financial ConditionDecember 31, 2019September 30, 2019December 31, 2018December 31, 2019 vs.
September 30, 2019
December 31, 2019 vs.
December 31, 2018
ASSETS(Dollars in thousands)  
Cash and amounts due from depository institutions$ 24,985 $27,625 $18,970 -9.6%31.7%
Interest-earning deposits 525,368  348,986  176,294 50.5%198.0%
Total cash and cash equivalents 550,353  376,611  195,264 46.1%181.9%
      
Interest-earning time deposits 735  735  735 - - 
Debt securities available for sale 91,613  98,218  119,335 -6.7%-23.2%
Equity investments 2,500  5,857  7,672 -57.3%-67.4%
Loans held for sale 917  3,195  1,153 -71.3%-20.5%
Loans receivable, net of allowance for loan losses of $23,734, $24,691, and $22,359 respectively 2,178,407  2,253,699  2,278,492 -3.3%-4.4%
Federal Home Loan Bank of New York stock, at cost 13,821  15,171  13,405 -8.9%3.1%
Premises and equipment, net 19,920  20,315  20,293 -1.9%-1.8%
Operating lease right-of-use asset 13,246  13,951  - -5.1%- 
Accrued interest receivable 8,318  8,959  8,378 -7.2%-0.7%
Other real estate owned 1,623  -  1,333 - 21.8%
Deferred income taxes 11,180  13,445  13,601 -16.8%-17.8%
Goodwill and other intangibles 5,552  5,570  5,604 -0.3%-0.9%
Other assets 9,283  9,773  9,466 -5.0%-1.9%
Total Assets$ 2,907,468 $2,825,499 $2,674,731 2.9%8.7%
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
      
LIABILITIES     
Non-interest bearing deposits$ 271,901 $276,235 $263,960 -1.6%3.0%
Interest bearing deposits 2,090,162  1,987,222  1,916,764 5.2%9.0%
Total deposits 2,362,063  2,263,457  2,180,724 4.4%8.3%
FHLB advances 245,800  275,800  245,800 -10.9%- 
Subordinated debentures 36,810  36,752  36,577 0.2%0.6%
Operating lease liability 13,380  14,054  - -4.8%- 
Other liabilities 9,942  11,717  11,415 -15.1%-12.9%
Total Liabilities  2,667,995  2,601,780  2,474,516 2.5%7.8%
      
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, 40,000,000 shares authorized -  -  - - - 
Additional paid-in capital common stock 190,294  177,253  175,500 7.4%8.4%
Retained earnings 48,429  45,947  38,405 5.4%26.1%
Accumulated other comprehensive (loss) (2,218) (2,449) (5,076)-9.4%-56.3%
Treasury stock, at cost (22,048) (22,048) (28,320)- -22.1%
Total Stockholders' Equity 239,473  223,719  200,215 7.0%19.6%
      
Total Liabilities and Stockholders' Equity$ 2,907,468 $2,825,499 $2,674,731 2.9%8.7%
      
Outstanding common shares 17,517  16,477  15,889 6.3%10.2%
      

 

   
  Three Months Ended December 31,
 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$2,269,581 $28,254 4.98% $2,288,372 $28,243 4.94%
Investment Securities 100,676  718 2.85%  141,248  982 2.78%
Interest-earning deposits 421,659  1,994 1.89%  187,051  1,263 2.70%
Total Interest-earning assets 2,791,916  30,966 4.44%  2,616,671  30,488 4.66%
Non-interest-earning assets 70,330       61,033     
Total assets$2,862,246      $2,677,704     
Interest-bearing liabilities:               
Interest-bearing demand accounts$360,201 $716 0.80% $349,730 $634 0.73%
Money market accounts 284,546  1,307 1.84%  214,278  778 1.45%
Savings accounts 256,663  103 0.16%  261,526  126 0.19%
Certificates of Deposit 1,120,029  6,704 2.39%  1,063,045  5,674 2.13%
Total interest-bearing deposits 2,021,439  8,830 1.75%  1,888,579  7,212 1.53%
Borrowed funds 312,848  2,059 2.63%  311,663  2,105 2.70%
Total interest-bearing liabilities 2,334,287  10,889 1.87%  2,200,242  9,317 1.69%
Non-interest-bearing liabilities 303,262       281,400     
Total liabilities 2,637,549       2,481,642     
Stockholders' equity 224,697       196,062     
Total liabilities and stockholders' equity$2,862,246      $2,677,704     
Net interest income   $20,077      $21,171  
Net interest rate spread(1)      2.57%       2.97%
Net interest margin(2)      2.88%       3.24%
                
                

(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.

   
 Years Ended December 31,
 2019  2018
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate
  Average
Balance
  Interest
Earned/Paid
 Average
Yield/Rate
   
 (Dollars in thousands)
Interest-earning assets:               
Loans Receivable$2,305,496 $113,981 4.94% $2,060,187 $97,831 4.75%
Investment Securities 115,548  3,310 2.86%  142,343  3,761 2.64%
Interest-earning deposits 271,067  6,264 2.31%  142,867  3,505 2.45%
Total Interest-earning assets 2,692,111  123,555 4.59%  2,345,397  105,097 4.48%
Non-interest-earning assets 72,634       55,404     
Total assets$2,764,745      $2,400,801     
Interest-bearing liabilities:               
Interest-bearing demand accounts$346,973 $2,628 0.76% $334,156 $2,036 0.61%
Money market accounts 261,395  4,611 1.76%  188,109  2,278 1.21%
Savings accounts 258,481  427 0.17%  262,745  444 0.17%
Certificates of Deposit 1,089,408  25,403 2.33%  911,141  16,400 1.80%
Total interest-bearing deposits 1,956,257  33,069 1.69%  1,696,151  21,158 1.25%
Borrowed funds 294,562  7,882 2.68%  262,227  6,258 2.39%
Total interest-bearing liabilities 2,250,819  40,951 1.82%  1,958,378  27,416 1.40%
Non-interest-bearing liabilities 296,185       253,301     
Total liabilities 2,547,004       2,211,679     
Stockholders' equity 217,741       189,122     
Total liabilities and stockholders' equity$2,764,745      $2,400,801     
Net interest income   $82,604      $77,681  
Net interest rate spread(1)      2.77%       3.08%
Net interest margin(2)      3.07%       3.31%
                
                

(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. 

  
 Financial condition data by quarter
 Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
      
 (In thousands, except tangible book value)
Total assets$2,907,468 $2,825,499 $2,738,130 $2,718,400 $2,674,731 
Cash and cash equivalents 550,353  376,611  227,642  193,548  195,264 
Securities 94,113  104,075  122,159  125,905  127,007 
Loans receivable, net 2,178,407  2,253,699  2,299,765  2,307,140  2,278,492 
Deposits 2,362,063  2,263,457  2,208,222  2,188,633  2,180,724 
Borrowings 282,610  312,552  282,493  282,435  282,377 
Stockholders’ equity 239,473  223,719  221,153  216,718  200,215 
Tangible Book Value 11.94  11.72  11.58  11.35  11.00 
      
 Operating data by quarter
 Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
      
 (In thousands, except for per share amounts)
Net interest income$20,077 $20,760 $20,865 $20,902 $21,171 
Provision for loan losses (475) 900  755  889  821 
Non-interest income 1,020  1,383  1,328  1,660  1,159 
Non-interest expense 14,260  13,652  13,894  13,777  13,884 
Income tax expense 2,188  2,359  2,317  2,445  2,401 
Net income$5,124 $5,232 $5,227 $5,451 $5,224 
Net income per diluted share$0.29 $0.30 $0.30 $0.32 $0.31 
Common Dividends declared per share$0.14 $0.14 $0.14 $0.14 $0.14 
      
 Financial Ratios
 Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
Return on average assets 0.72% 0.75% 0.77% 0.81% 0.78%
Return on average stockholder’s equity 9.12% 9.44% 9.61% 10.55% 10.66%
Net interest margin 2.88% 3.06% 3.16% 3.18% 3.24%
Stockholder’s equity to total assets 8.24% 7.92% 8.08% 7.97% 7.49%
Efficiency Ratio 67.59% 61.65% 62.61% 61.06% 62.18%
      
 Asset Quality Ratios
 (In thousands, except for ratio %)
 Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
Non-Accrual Loans$4,160 $5,074 $5,488 $5,670 $7,221 
Non-Accrual Loans as a % of Total Loans 0.19% 0.22% 0.24% 0.24% 0.31%
ALLL as % of Non-Accrual Loans 570.53% 486.62% 433.47% 405.71% 309.64%
Impaired Loans 26,912  30,856  37,275  40,533  42,408 
Classified Loans 13,483  15,998  22,679  23,977  26,161 
                


  
 Recorded Investment in Loans Receivable by quarter
 Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
 (In Thousands)
Residential one-to-four family$248,381 $252,971 $258,688 $258,184 $258,085 
Commercial and multi-family 1,606,976  1,668,982  1,702,132  1,724,326  1,697,837 
Construction 104,996  131,697  134,963  114,462  107,783 
Commercial business 177,642  161,649  164,569  167,067  165,193 
Home equity 64,638  63,645  63,927  66,946  72,895 
Consumer 682  728  727  731  809 
 $2,203,315 $2,279,672 $2,325,006 $2,331,716 $2,302,602 
Less:     
Deferred loan fees, net (1,174) (1,282) (1,452) (1,572) (1,751)
Allowance for loan loss (23,734) (24,691) (23,789) (23,004) (22,359)
      
Total loans, net$2,178,407 $2,253,699 $2,299,765 $2,307,140 $2,278,492 
      
 Non-Accruing Loans in Portfolio by quarter
 Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
 (In Thousands)
Originated loans:     
Residential one-to-four family$590 $814 $1,022 $1,415 $1,160 
Commercial and multi-family 761  1,584  1,881  1,364  2,568 
Commercial business 1,428  887  745  256  356 
Home equity 347  350  129  272  277 
Sub-total:$3,126 $3,635 $3,777 $3,307 $4,361 
      
Acquired loans initially recorded at fair value:       
Residential one-to-four family$291 $1,046 $1,116 $1,704 $2,165 
Commercial and multi-family 217  -  -  597  605 
Commercial business 513  378  378  -  48 
Home equity 13  15  217  62  42 
Sub-total:$1,034 $1,439 $1,711 $2,363 $2,860 
      
Total:$4,160 $5,074 $5,488 $5,670 $7,221 
      


 Reconciliation of GAAP to Non-GAAP Financial Measures by quarter
      
 Tangible Book Value per Share
 Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
   (In Thousands, except per share amounts)
Total Stockholders' Equity$239,473 $223,719 $221,153 $216,718 $200,215 
Less: goodwill 5,253  5,570  5,587  5,584  5,699 
Less: preferred stock 25,016  25,016  25,016  25,016  19,706 
Total tangible stockholders' equity 209,204  193,133  190,550  186,118  174,810 
Shares outstanding 17,517  16,477  16,461  16,398  15,889 
Book value per share$13.67 $13.58 $13.43 $13.22 $12.60 
Tangible book value per share$11.94 $11.72 $11.58 $11.35 $11.00 
      
 Efficiency Ratios
 Q4 2019Q3 2019Q2 2019Q1 2019Q4 2018
   (In Thousands)
Net interest income$20,077 $20,760 $20,865 $20,902 $21,171 
Non-interest income 1,020  1,383  1,328  1,660  1,159 
Total income 21,097  22,143  22,193  22,562  22,330 
Non-interest expense 14,260  13,652  13,894  13,777  13,884 
Efficiency Ratio* 67.59% 61.65% 62.61% 61.06% 62.18%
      
*Efficiency Ratio is calculated as total non-interest expense to total income 
      

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

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Source: BCB Bancorp, Inc.