BAYONNE, N.J., July 19, 2021 (GLOBE NEWSWIRE) -- BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported net income of $8.1 million for the second quarter of 2021, compared to $7.1 million in the first quarter of 2021, and $2.7 million for the second quarter of 2020. Earnings per diluted share for the second quarter of 2021 were $0.45, compared to $0.40 in the preceding quarter and $0.14 in the second quarter of 2020. For the first six months of the year, net income was $15.2 million, or $0.85 per diluted common share, compared with $5.2 million, or $0.26 per diluted common share, for the first six months of 2020.
On July 14, 2021, the Company’s Board of Directors declared an increase to its regular quarterly cash dividend to $0.16 per share, up from $0.14 per share. This is the first increase to the dividend rate since May 2014. The dividend will be payable August 18, 2021, to common shareholders of record on August 4, 2021.
“Given the strong earnings results for the quarter, the optimistic outlook for our industry in the coming periods, and the potential of a growing post-pandemic economy, the Company’s Board of Directors, through unanimous consent, increased the quarterly dividend. The Board believes that providing a solid return on our shareholders’ investments is critical. Continuing our strong earnings momentum into the second quarter, we generated solid profits, an annualized return on average assets of 1.12%, and an annualized return on average equity of 12.6%,” stated Thomas Coughlin, President and Chief Executive Officer.
“We achieved top line net interest income growth, while continuing to manage operating expenses, resulting in an efficiency ratio of 48.9% for the quarter. Our continued efforts to deleverage the balance sheet, deploy excess cash and manage the cost of funds helped expand our net interest margin by 102 basis points during the second quarter of 2021, compared to the second quarter a year ago. We believe our reserve levels are sufficient to cover potential loan losses stemming from the pandemic. As the vaccine rollout continues and COVID-19 restrictions continue to lift in New Jersey and New York, we remain optimistic for growth during the second half of the year.
“We continue to monitor our loan portfolio and asset quality metrics very closely,” said Coughlin. “Although our total non-accrual loans increased to $22.2 million at June 30, 2021 from $16.4 million at December 31, 2020, our level of total impaired and classified loans improved to $62.3 million and $51.9 million, respectively, compared to $83.2 million and $68.6 million, respectively at December 31, 2020. Despite the concerns surrounding the pandemic, the Bank charged-off only $300,000 in loans for the most recent quarter, on a total reserve balance of $37.5 million and a total net portfolio balance of $2.313 billion. Additionally, the Bank had no loans on deferment as of June 30, 2021.”
Executive Summary
- On July 14, 2021, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share. The dividend will be payable August 18, 2021, to common shareholders of record on August 4, 2021.
- Net interest margin was 3.47 percent for the second quarter of 2021, compared to 3.48 percent for the first quarter of 2021, and a 102-basis point improvement from 2.45 percent for the second quarter of 2020.
- Total yield on interest-earning assets decreased 11 basis points to 4.04 percent for the second quarter of 2021, compared to 4.15 percent for the first quarter of 2021, and increased 33 basis points from 3.71 percent for the second quarter of 2020.
- Total cost of interest-bearing liabilities decreased 11 basis points to 0.74 percent for the second quarter of 2021, compared to 0.85 percent for the first quarter of 2021, and decreased 81 basis points from 1.55 percent for the second quarter of 2020.
- Net income was $8.1 million in the second quarter of 2021, compared to $7.1 million in the prior quarter and $2.7 million in the second quarter a year ago.
- Earnings per diluted share were $0.45 in the second quarter of 2021, compared to $0.40 in the prior quarter, and $0.14 in the second quarter of 2020.
- The efficiency ratio for the second quarter improved to 48.9% compared to 53.2% in the prior quarter, and 62.6% in the second quarter of 2020.
- The return on average assets ratio for the second quarter improved to 1.12% compared to 1.01% in the prior quarter, and 0.36% in the second quarter of 2020.
- The return on average equity ratio for the second quarter improved to 12.6% compared to 11.4% in the prior quarter, and 4.6% in the second quarter of 2020.
- The provision for loan losses decreased by $1.0 million, to $2.3 million for the second quarter of 2021, compared to a provision for loan losses of $3.3 million for the second quarter of 2020; this decrease was primarily due to factors related to the COVID-19 pandemic; the 2021 second quarter provision for loan losses increased by $430,000 compared to a provision for loan losses of $1.9 million for the first quarter of 2021.
- Allowance for loan losses as a percentage of non-accrual loans was 169.0 percent at June 30, 2021, compared to 246.3 percent for the prior quarter and 641.6 percent at June 30, 2020, as total non-accrual loans increased to $22.2 million at June 30, 2021 from $14.4 million for the prior quarter and increased compared to $4.5 million at June 30, 2020.
- Total deposits were $2.446 billion at June 30, 2021, up from $2.318 billion at the beginning of the year.
Balance Sheet Review
Total assets increased by $74.2 million, or 2.6 percent, to $2.895 billion at June 30, 2021, from $2.821 billion at December 31, 2020. The increase in total assets was mainly related to increases in total cash and cash equivalents and loans receivable, partly offset by a decrease in investment securities.
Total cash and cash equivalents increased by $67.0 million, or 25.7 percent, to $328.3 million at June 30, 2021 from $261.3 million at December 31, 2020. This increase was primarily due to an increase in deposits, partly offset by net repayments of borrowings.
Loans receivable, net, increased by $17.5 million, or 0.8 percent, to $2.313 billion at June 30, 2021 from $2.295 billion at December 31, 2020. Total loan increases for the first six months of 2021 included increases of $25.3 million in construction loans, $24.0 million in commercial real estate and multi-family loans, partly offset by decreases of $15.0 million in residential one-to-four family loans, $12.2 million in commercial business loans, $334,000 in home equity loans, and $363,000 in consumer loans. The allowance for loan losses increased $3.9 million to $37.5 million, or 169.0 percent of non-accruing loans and 1.59 percent of gross loans, at June 30, 2021 as compared to an allowance for loan losses of $33.6 million, or 205.2 percent of non-accruing loans and 1.44 percent of gross loans, at December 31, 2020.
Total investment securities decreased by $13.1 million, or 11.1 percent, to $104.4 million at June 30, 2021 from $117.5 million at December 31, 2020, representing repayments, calls and maturities, partly offset by purchases of $11.1 million.
Deposit liabilities increased by $127.8 million, or 5.5 percent, to $2.446 billion at June 30, 2021 from $2.318 billion at December 31, 2020. The increase in deposit liabilities mainly related to the recent payments to individuals under the American Rescue Plan Act of 2021, adopted in March of this year to provide additional relief for individuals and businesses affected by the coronavirus pandemic, and proceeds from the second round of PPP loans. Total increases for the six months ended June 30, 2021, included $89.9 million in non-interest-bearing deposit accounts, $29.3 million in money market checking accounts, $18.5 million in savings and club accounts and $5.3 million in NOW deposit accounts. The increase in deposits was partly offset by a decrease of $15.2 million in certificates of deposit, including listing service and brokered deposit accounts. The Company utilizes listing service and brokered certificates of deposit as additional sources of deposit liquidity to fund loan growth. At June 30, 2021, the Company had $17.0 million in listing service deposits and no brokered certificates of deposit.
Debt obligations decreased by $62.6 million, or 27.4 percent, to $165.6 million at June 30, 2021 from $228.2 million at December 31, 2020. The weighted average interest rate of FHLB advances was 1.40 percent at June 30, 2021 and 1.66 percent at December 31, 2020. The fixed interest rate of our subordinated debt balances was 5.625 percent at June 30, 2021 and December 31, 2020. During the six months ended June 30, 2021, the Company opted to extinguish $73.0 million in FHLB advances which held a weighted average rate of 1.99%. The advances were originally set to mature in 2021 through 2024. The effect of the extinguishment of the debt reduced the weighted average cost of FHLB borrowings by approximately 21 basis points on an annualized basis. The related expense for the extinguishment of this debt is included in noninterest expense.
Stockholders’ equity increased by $9.3 million, or 3.7 percent, to $258.5 million at June 30, 2021 from $249.2 million at December 31, 2020. The increase was primarily attributable to the increase in retained earnings of $9.8 million, or 16.8 percent, to $68.1 million at June 30, 2021 from $58.3 million at December 31, 2020, related to the net effect of net income less dividends paid for the six months ended June 30, 2021.
Second Quarter 2021 Income Statement Review
Net interest income increased by $6.1 million, or 33.8 percent, to $24.1 million for the second quarter of 2021 from $18.0 million for the second quarter of 2020. The increase in net interest income resulted primarily from a $5.3 million decrease in interest expense and an increase of $798,000 in interest income.
Interest income increased by $798,000, or 2.9 percent, to $28.0 million for the second quarter of 2021 from $27.2 million for the second quarter of 2020. The increase in interest income mainly related to an increase in the average balance of loans receivable of $67.0 million, or 2.9 percent, to $2.344 billion for the second quarter of 2021 from $2.277 billion for the second quarter of 2020. The increase in interest income was partly offset by a decrease in the average balance of total interest-earning deposits of $228.0 million, or 41.4 percent, to $323.0 million for the second quarter of 2021 from $550.9 million for the second quarter of 2020. The decrease in the average balance of interest-earning deposits mainly relates to a decrease in the Company’s level of average cash balances for the second quarter of 2021 as compared to the second quarter of 2020, relating to decreases in the average balances of deposits and FHLB advances. Interest income on loans also included $201,000 of amortization of purchase credit fair value adjustments related to the acquisition of IA Bancorp, Inc. (“IAB”) for the three months ended June 30, 2021, which added approximately three basis points to the average yield on interest earning assets.
Interest expense decreased by $5.3 million, or 57.2 percent, to $3.9 million for the second quarter of 2021 from $9.2 million for the second quarter of 2020. This decrease resulted primarily from a decrease in the average rate on interest-bearing liabilities of 81 basis points to 0.74 percent for the second quarter of 2021 from 1.55 percent for the second quarter of 2020, as well as a decrease in the average balance of interest-bearing liabilities of $250.0 million, or 10.5 percent, to $2.129 billion for the second quarter of 2021 from $2.379 billion for the second quarter of 2020. The decrease in the average cost of funds primarily resulted from the declining interest rate environment and an increased focus on managing funding costs. The decrease in the average balance of interest-bearing liabilities primarily resulted the Company’s strategy of continued deleveraging.
Net interest margin was 3.47 percent for the second quarter of 2021, compared to 2.45 percent for the second quarter of 2020. The increase in the net interest margin compared to the prior-year period was the result of the volatile financial markets in 2020 attributable to the COVID-19 pandemic and the low interest rate environment. Management has been proactive in managing the Company’s cost of funds and has significantly decreased the average cost of total interest-bearing liabilities, while improving the average yield on interest-earning assets for the second quarter of 2021 compared to the second quarter of 2020. Despite the ongoing pandemic, the Company has been able to increase its average balance of loans receivable for the second quarter of 2021 as compared to the second quarter of 2020. The decrease in cost of funds and the increase in the yield on interest-earning assets highlight management’s efforts to maintain a strong net interest margin.
Non-interest income increased by $1.7 million, or 154.5 percent, to $2.8 million for the second quarter of 2021 from $1.1 million for the second quarter of 2020. The increase in total noninterest income was mainly related to BOLI income of $729,000 in the current quarter, an increase in fees and service charges of $492,000, a gain on the sale of premises of $371,000 in the current quarter and an increase in the gain on the sales of loans of $161,000. The BOLI income relates to an initial purchase of $60.0 million of BOLI product in the third quarter of 2020, and an additional purchase of $8.5 million in the first quarter of 2021. The higher fees and service charges related primarily to $144,000 of referral fees for PPP loans. The gains on loan sales are based on market conditions. The gain on the sale of premises results from the sale of a branch office.
Non-interest expense increased by $1.2 million, or 10.1 percent, to $13.2 million for the second quarter of 2021 from $12.0 million for the second quarter of 2020. Salaries and employee benefits expense increased by $830,000, or 14.6 percent, to $6.5 million for the second quarter of 2021 from $5.7 million for the second quarter of 2020, primarily related to $1.1 million of costs deferred for PPP loans in the prior-year period and normal compensation increases, partly offset by fewer full-time equivalent employees. The PPP costs deferred in the prior-year period represent salaries and benefit costs associated with direct PPP loan origination costs. The number of full-time equivalent employees for the second quarter of 2021 was 288, as compared with 340 for the same period in 2020. Occupancy and equipment expense decreased by $242,000, or 8.3 percent, to $2.7 million for the second quarter of 2021 from $2.9 million for the second quarter of 2020, largely related to the termination of building sanitization costs associated with the COVID-19 pandemic in the current quarter and the closure of two of the Company’s branch offices in the fourth quarter of 2020. The Company recognized an expense of $194,000 for a loss on extinguishment of debt, related to the prepayment of higher-cost FHLB borrowings in the second quarter of 2021. Other noninterest expense increased by $223,000, or 16.5 percent, to $1.6 million for the second quarter of 2021 from $1.4 million for the second quarter of 2020. Other noninterest expense consisted of loan expense, business development, office supplies, correspondent bank fees, telephone and communication and miscellaneous fees and expenses. The increase in other noninterest expense in the current period was primarily related to curtailed business development and loan-related expenses in the prior-year period, largely attributable to the pandemic condition.
The income tax provision increased by $2.3 million, or 201.7 percent, to $3.4 million for the second quarter of 2021 from $1.1 million for the second quarter of 2020. The increase in the income tax provision was a result of higher taxable income for the second quarter of 2021 as compared with that same period for 2020. The consolidated effective tax rate for the second quarter of 2021 was 29.6 percent compared to 29.1 percent for the second quarter of 2020. The higher rate in the current period related primarily to a one percent increase in the New Jersey surtax rate.
Year-to-Date Income Statement Review
Net interest income increased by $10.9 million, or 29.5 percent, to $47.6 million for the first six months of 2021 from $36.7 million for the first six months of 2020. The increase in net interest income resulted primarily from a $11.4 million decrease in interest expense, partly offset by a decrease of $546,000 in interest income.
Interest income decreased by $546,000, or 1.0 percent, to $56.1 million for the first six months of 2021 from $56.6 million for the first six months of 2020. The decrease in interest income mainly related to a $2.0 million reduction in interest income from FHLB stock and other interest earning assets, relating to lower average cash balances and lower yields, and a decrease in the average balance of total interest-earning deposits of $271.9 million, or 48.1 percent, to $293.8 million for the first six months of 2021 from $565.8 million for the first six months of 2020. The decrease in the average balance of interest-earning deposits mainly relates to a decrease in the Company’s level of average cash balances for the first six months of 2021 as compared to the first six months of 2020, relating to decreases in the average balances of deposits and FHLB advances. This decrease in interest income was partly offset by an increase in the average balance of loans receivable of $104.4 million, or 4.7 percent, to $2.335 billion for the first six months of 2021 from $2.231 billion for the first six months of 2020. Interest income on loans also included $412,000 of amortization of purchase credit fair value adjustments related to the acquisition of IAB for the six months ended June 30, 2021, which added approximately two basis points to the average yield on interest earning assets.
Interest expense decreased by $11.4 million, or 57.4 percent, to $8.5 million for the first six months of 2021 from $19.9 million for the first six months of 2020. This decrease resulted primarily from a decrease in the average rate on interest-bearing liabilities of 86 basis points to 0.80 percent for the first six months of 2021 from 1.66 percent for the first six months of 2020, as well as a decrease in the average balance of interest-bearing liabilities of $262.1 million, or 11.0 percent, to $2.125 billion for the first six months of 2021 from $2.387 billion for the first six months of 2020. The decrease in the average cost of funds primarily resulted from the declining interest rate environment and an increased focus on managing funding costs. The decrease in the average balance of interest-bearing liabilities primarily resulted the Company’s strategy of continued deleveraging.
Net interest margin was 3.48 percent for the first six months of 2021, compared to 2.54 percent for the first six months of 2020. The increase in the net interest margin compared to the prior-year period was the result of the volatile financial markets in 2020 attributable to the COVID-19 pandemic and the low interest rate environment. Management has been proactive in managing the Company’s cost of funds and has significantly decreased the average cost of total interest-bearing liabilities, while improving the average yield on interest-earning assets for the first six months of 2021 compared to the first six months of 2020. Despite the ongoing pandemic, the Company has been able to increase its average balance of loans receivable for the first six months of 2021 as compared to the first six months of 2020. The decrease in cost of funds and the increase in the yield on interest-earning assets highlight management’s efforts to maintain a strong net interest margin.
Total non-interest income increased by $3.0 million, or 166.3 percent, to $4.8 million for the first six months of 2021 from $1.8 million for the first six months of 2020. The increase in total non-interest income was mainly related to $1.4 million in BOLI income, an increase of $877,000 in fees and service charges, an increase in the gain on sale of loans of $374,000, a gain on the sale of premises of $371,000 and an increase of $301,000 in unrealized gains on equity securities, partly offset by a decrease in other non-interest income of $270,000. The BOLI income relates to an initial purchase of $60.0 million of BOLI product in the third quarter of 2020, and an additional purchase of $8.5 million in the first quarter of 2021. The higher fees and service charges related primarily to $472,000 of referral fees for PPP loans. The gains on loan sales are based on market conditions. The decrease in other non-interest income related primarily to the reversal of certain liabilities previously recorded for IAB acquired loans that paid during the first six months of 2020. The gain on the sale of premises results from the sale of a branch office.
Total non-interest expense increased by $424,000, or 1.6 percent, to $26.7 million for the first six months of 2021 from $26.3 million for the first six months of 2020. Salaries and employee benefits expense was unchanged at $13.1 million for the first six months of 2021 and 2020, despite having $1.1 million of costs deferred for PPP loans in the prior year period. The PPP costs deferred in the prior-year period represent salaries and benefit costs associated with direct PPP loan origination cost. The number of full-time equivalent employees for the six months of 2021 was 300, as compared with 356 for the same period in 2020. The Company recognized an expense of $734,000 for a loss on extinguishment of debt, related to the prepayment of higher-cost FHLB borrowings in the six months ended June 30, 2021.
The income tax provision increased by $4.1 million, or 188.1 percent, to $6.3 million for the first six months of 2021 from $2.2 million for the first six months of 2020. The increase in the income tax provision was a result of higher taxable income for the first six months of 2021 as compared to that same period for 2020. The consolidated effective tax rate for the first six months of 2021 was 29.4 percent compared to 29.5 percent for the same period of 2020.
Asset Quality
During the second quarter of 2021, the Company recognized $300,000 in net charge-offs, compared to $8,000 in net recoveries for the second quarter of 2020.
The provision for loan losses decreased by $1.0 million, to $2.3 million, for the second quarter of 2021, compared to $3.3 million for the second quarter of 2020. The decrease was primarily due to improved COVID-19 related economic metrics. The Bank had non-accrual loans totaling $22.2 million, or 0.94 percent, of gross loans at June 30, 2021, as compared to $16.4 million, or 0.70 percent, of gross loans at December 31, 2020.
Performing troubled debt restructured (“TDR”) loans that were not included in nonaccrual loans at June 30, 2021, were $12.6 million, compared to $13.8 million at December 31, 2020. 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 $37.5 million, or 1.59 percent of gross loans at June 30, 2021, and $33.6 million, or 1.44 percent of gross loans at December 31, 2020. The allowance for loan losses was 169.0 percent of non-accrual loans at June, 30, 2021, and 205.2 percent of non-accrual loans at December 31, 2020.
The COVID-19 pandemic has caused disruption to the global economy, but the extent and duration of the disruption remains uncertain. Management will continue to monitor any activity for loan deferment requests and delinquencies on a regular basis.
COVID-19 Response
With the global outbreak of COVID-19, the Company remains focused on protecting the health and well-being 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.
- Operational Initiatives
- Management meets on an as-needed basis and actively monitors guidance released by regulators, banking associations as well as state and local government.
- Most employees have returned to work, however social distancing is still encouraged for those that are unvaccinated.
- Barriers are in place in branches and back offices to provide protection.
- Branch and operational offices are cleaned and sanitized as needed and employees have access to masks, gloves and disinfectant.
- Management provides updates to employees as needed.
- The Call Center is open six days a week to assist with customer inquiries.
- Branch offices are open; however customers have the ability to make an appointment if they choose. The Bank is encouraging customers to utilize the ATM, drive-through and electronic banking services whenever possible.
- The Bank worked with a local provider in April/May to have the vaccine administered at one of the bank’s locations.
- Allowance for Loan Losses (“ALLL”)
- The Bank increased its loan loss reserves through the addition of $2.3 million in loan loss provisions for the second quarter of 2021, as compared to $3.3 million for the same period last year. 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. Loan categories for specific business types were stressed due to rising delinquencies within those market sectors (hospitality, restaurants, office space, industrial, residential 1-4 (that had previously been granted deferrals) and commercial condos) to determine the potential for collateral shortfalls. 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.
- The Bank increased its loan loss reserves through the addition of $2.3 million in loan loss provisions for the second quarter of 2021, as compared to $3.3 million for the same period last year. 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. Loan categories for specific business types were stressed due to rising delinquencies within those market sectors (hospitality, restaurants, office space, industrial, residential 1-4 (that had previously been granted deferrals) and commercial condos) to determine the potential for collateral shortfalls. 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
- The banking regulatory agencies, through an Interagency Statement dated April 7, 2020, encouraged financial institutions to work prudently with borrowers who request loan modifications or deferrals as a result of COVID-19. The Bank did so in 2020, but now has no deferred loans within its portfolio.
- 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. Most of these loans are accruing interest and the Bank is considering the loans within the overall allowance for loan loss analysis.
- The Bank has worked with customers that previously requested loan deferments and entered into COVID-19 modifications. The loan balances for these customers at June 30, 2021 was approximately $56.3 million. The modifications generally provide a short-term, interest-only period. The Bank does not believe that these modified loans will result in losses, so long as the borrowers' representation of cash flows is realized. Borrowers that have requested modifications with less definitive cash flow projections have been denied and are being analyzed as part of the loan stress testing and Allowance for Loan Loss calculation.
- Paycheck Protection Program (PPP)
- The Bank has partnered with The Loan Source, Inc. and recognized $472,000 in referral fees for the second round of PPP loans in the six months ended June 30, 2021.
- IT Changes
- 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. We have taken additional steps to minimize the increased risk of security breaches (including privacy breaches and cyber-attacks), given the increased number of employees working remotely.
- Liquidity and Capital Resources
- The Company was well positioned with adequate levels of cash and liquid assets as of June 30, 2021, as well as wholesale borrowing capacity of over $800 million. At June 30, 2021, the Company’s equity to assets ratio was 8.93 percent and the Bank is considered “well capitalized” under its regulatory requirements. 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 29 branch offices in Bayonne, Carteret, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lyndhurst, Maplewood, Monroe Township, Newark, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, and 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;
- our allowance for loan losses may have to be increased if borrowers experience financial difficulties beyond any 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;
- 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; 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
(201) 823-0700
| Statements of Income - Three Months Ended, | |||||||||||||
| June 30, 2021 | March 31, 2021 | June 30, 2020 | June 30, 2021 vs. March 31, 2021 | June 30, 2021 vs. June 30, 2020 | |||||||||
| Interest and dividend income: | (In thousands, except per share amounts, Unaudited) | ||||||||||||
| Loans, including fees | $ | 26,888 | $ | 26,863 | $ | 26,123 | 0.1 | % | 2.9 | % | |||
| Mortgage-backed securities | 167 | 206 | 494 | -18.9 | % | -66.2 | % | ||||||
| Other investment securities | 747 | 784 | 246 | -4.7 | % | 203.7 | % | ||||||
| FHLB stock and other interest earning assets | 202 | 222 | 343 | -9.0 | % | -41.1 | % | ||||||
| Total interest and dividend income | 28,004 | 28,075 | 27,206 | -0.3 | % | 2.9 | % | ||||||
| Interest expense: | |||||||||||||
| Deposits: | |||||||||||||
| Demand | 1,150 | 1,198 | 1,562 | -4.0 | % | -26.4 | % | ||||||
| Savings and club | 127 | 118 | 106 | 7.6 | % | 19.8 | % | ||||||
| Certificates of deposit | 1,639 | 1,992 | 5,695 | -17.7 | % | -71.2 | % | ||||||
| 2,916 | 3,308 | 7,363 | -11.9 | % | -60.4 | % | |||||||
| Borrowings | 1,024 | 1,205 | 1,852 | -15.0 | % | -44.7 | % | ||||||
| Total interest expense | 3,940 | 4,513 | 9,215 | -12.7 | % | -57.2 | % | ||||||
| Net interest income | 24,064 | 23,562 | 17,991 | 2.1 | % | 33.8 | % | ||||||
| Provision for loan losses | 2,295 | 1,865 | 3,300 | 23.1 | % | -30.5 | % | ||||||
| Net interest income after provision for loan losses | 21,769 | 21,697 | 14,691 | 0.3 | % | 48.2 | % | ||||||
| Non-interest income: | |||||||||||||
| Fees and service charges | 1,029 | 1,111 | 537 | -7.4 | % | 91.6 | % | ||||||
| Gain on sales of loans | 218 | 274 | 57 | -20.4 | % | 282.5 | % | ||||||
| Loss on sale of impaired loans | (64 | ) | - | - | 0.0 | % | 0.0 | % | |||||
| Gain on sale of investment securities | - | - | 40 | 0.0 | % | -100.0 | % | ||||||
| Gain on sale of premises | 371 | - | - | 0.0 | % | 0.0 | % | ||||||
| BOLI income | 729 | 701 | - | 4.0 | % | 0.0 | % | ||||||
| Realized and unrealized (loss) gain on equity investments | 499 | (196 | ) | 442 | -354.6 | % | 12.9 | % | |||||
| Other | 38 | 60 | 32 | -36.7 | % | 18.8 | % | ||||||
| Total non-interest income | 2,820 | 1,950 | 1,108 | 44.6 | % | 154.5 | % | ||||||
| Non-interest expense: | |||||||||||||
| Salaries and employee benefits | 6,512 | 6,545 | 5,682 | -0.5 | % | 14.6 | % | ||||||
| Occupancy and equipment | 2,668 | 2,953 | 2,910 | -9.7 | % | -8.3 | % | ||||||
| Data processing and service fees | 1,064 | 1,008 | 951 | 5.6 | % | 11.9 | % | ||||||
| Professional fees | 491 | 412 | 398 | 19.2 | % | 23.4 | % | ||||||
| Director fees | 310 | 247 | 365 | 25.5 | % | -15.1 | % | ||||||
| Regulatory assessment fees | 314 | 376 | 251 | -16.5 | % | 25.1 | % | ||||||
| Advertising and promotional | 14 | 12 | 26 | 16.7 | % | -46.2 | % | ||||||
| Other real estate owned, net | 19 | 4 | 21 | 375.0 | % | -9.5 | % | ||||||
| Loss from extinguishment of debt | 194 | 540 | - | -64.1 | % | 0.0 | % | ||||||
| Other | 1,571 | 1,486 | 1,348 | 5.7 | % | 16.5 | % | ||||||
| Total non-interest expense | 13,157 | 13,583 | 11,952 | -3.1 | % | 10.1 | % | ||||||
| Income before income tax provision | 11,432 | 10,064 | 3,847 | 13.6 | % | 197.2 | % | ||||||
| Income tax provision | 3,382 | 2,947 | 1,121 | 14.8 | % | 201.7 | % | ||||||
| Net Income | 8,050 | 7,117 | 2,726 | 13.1 | % | 195.3 | % | ||||||
| Preferred stock dividends | 284 | 283 | 341 | 0.4 | % | -16.7 | % | ||||||
| Net Income available to common stockholders | $ | 7,766 | $ | 6,834 | $ | 2,385 | 13.6 | % | 225.6 | % | |||
| Net Income per common share-basic and diluted | |||||||||||||
| Basic | $ | 0.45 | $ | 0.40 | $ | 0.14 | 12.5 | % | 221.4 | % | |||
| Diluted | $ | 0.45 | $ | 0.40 | $ | 0.14 | 12.5 | % | 221.4 | % | |||
| Weighted average number of common shares outstanding | |||||||||||||
| Basic | 17,126 | 17,115 | 17,179 | 0.1 | % | -0.3 | % | ||||||
| Diluted | 17,282 | 17,232 | 17,183 | 0.3 | % | 0.6 | % | ||||||
| Statements of Income - Six Months Ended, | |||||||
| June 30, 2021 | June 30, 2020 | June 30, 2021 vs. June 30, 2020 | |||||
| Interest and dividend income: | (In thousands, except per share amounts, Unaudited) | ||||||
| Loans, including fees | $ | 53,751 | $ | 52,937 | 1.5 | % | |
| Mortgage-backed securities | 373 | 1,057 | -64.7 | % | |||
| Other investment securities | 1,531 | 254 | 502.8 | % | |||
| FHLB stock and other interest earning assets | 424 | 2,377 | -82.2 | % | |||
| Total interest and dividend income | 56,079 | 56,625 | -1.0 | % | |||
| Interest expense: | |||||||
| Deposits: | |||||||
| Demand | 2,348 | 3,770 | -37.7 | % | |||
| Savings and club | 245 | 211 | 16.1 | % | |||
| Certificates of deposit | 3,631 | 12,127 | -70.1 | % | |||
| 6,224 | 16,108 | -61.4 | % | ||||
| Borrowings | 2,229 | 3,748 | -40.5 | % | |||
| Total interest expense | 8,453 | 19,856 | -57.4 | % | |||
| Net interest income | 47,626 | 36,769 | 29.5 | % | |||
| Provision for loan losses | 4,160 | 4,800 | -13.3 | % | |||
| Net interest income after provision for loan losses | 43,466 | 31,969 | 36.0 | % | |||
| Non-interest income: | |||||||
| Fees and service charges | 2,140 | 1,263 | 69.4 | % | |||
| Gain on sales of loans | 492 | 118 | 316.9 | % | |||
| Loss on sale of impaired loans | (64 | ) | - | 0.0 | % | ||
| Gain on sale of investment securities | - | 40 | -100.0 | % | |||
| Gain on sale of premises | 371 | - | 0.0 | % | |||
| BOLI income | 1,430 | - | 0.0 | % | |||
| Realized and unrealized gain on equity investments | 303 | 2 | 15050.0 | % | |||
| Other | 98 | 368 | -73.4 | % | |||
| Total non-interest income | 4,770 | 1,791 | 166.3 | % | |||
| Non-interest expense: | |||||||
| Salaries and employee benefits | 13,057 | 13,071 | -0.1 | % | |||
| Occupancy and equipment | 5,621 | 5,734 | -2.0 | % | |||
| Data processing and service fees | 2,072 | 1,889 | 9.7 | % | |||
| Professional fees | 903 | 868 | 4.0 | % | |||
| Director fees | 557 | 723 | -23.0 | % | |||
| Regulatory assessments | 690 | 572 | 20.6 | % | |||
| Advertising and promotional | 26 | 87 | -70.1 | % | |||
| Other real estate owned, net | 23 | 47 | -51.1 | % | |||
| Loss from extinguishment of debt | 734 | - | 0.0 | % | |||
| Other | 3,057 | 3,325 | -8.1 | % | |||
| Total non-interest expense | 26,740 | 26,316 | 1.6 | % | |||
| Income before income tax provision | 21,496 | 7,444 | 188.8 | % | |||
| Income tax provision | 6,329 | 2,197 | 188.1 | % | |||
| Net Income | 15,167 | 5,247 | 189.1 | % | |||
| Preferred stock dividends | 567 | 682 | -16.9 | % | |||
| Net Income available to common stockholders | $ | 14,600 | $ | 4,565 | 219.8 | % | |
| Net Income per common share-basic and diluted | |||||||
| Basic | $ | 0.85 | $ | 0.26 | 226.9 | % | |
| Diluted | $ | 0.85 | $ | 0.26 | 226.9 | % | |
| Weighted average number of common shares outstanding | |||||||
| Basic | 17,120 | 17,340 | -1.3 | % | |||
| Diluted | 17,257 | 17,366 | -0.6 | % | |||
| Statements of Financial Condition | June 30, 2021 | March 31, 2021 | June 30, 2020 | June 30, 2021 vs. March 31, 2021 | June 30, 2021 vs. June 30, 2020 | ||||||||
| ASSETS | (In Thousands, except per share amounts, Unaudited) | ||||||||||||
| Cash and amounts due from depository institutions | $ | 9,039 | $ | 24,796 | $ | 18,799 | -63.5 | % | -51.9 | % | |||
| Interest-earning deposits | 319,218 | 272,142 | 393,450 | 17.3 | % | -18.9 | % | ||||||
| Total cash and cash equivalents | 328,257 | 296,938 | 412,249 | 10.5 | % | -20.4 | % | ||||||
| Interest-earning time deposits | 735 | 735 | 735 | - | - | ||||||||
| Debt securities available for sale | 83,543 | 93,582 | 127,518 | -10.7 | % | -34.5 | % | ||||||
| Equity investments | 20,841 | 18,278 | 12,683 | 14.0 | % | 64.3 | % | ||||||
| Loans held for sale | 3,154 | 1,147 | 760 | 175.0 | % | 315.0 | % | ||||||
| Loans receivable, net of allowance for loan losses | |||||||||||||
| of $37,472, $35,477, and $28,842 respectively | 2,312,559 | 2,296,434 | 2,343,593 | 0.7 | % | -1.3 | % | ||||||
| Federal Home Loan Bank of New York stock, at cost | 8,881 | 8,920 | 13,529 | -0.4 | % | -34.4 | % | ||||||
| Premises and equipment, net | 13,819 | 14,796 | 18,653 | -6.6 | % | -25.9 | % | ||||||
| Accrued interest receivable | 10,621 | 12,056 | 16,569 | -11.9 | % | -35.9 | % | ||||||
| Other real estate owned | 414 | 414 | 1,623 | 0.0 | % | -74.5 | % | ||||||
| Deferred income taxes | 13,778 | 13,239 | 11,339 | 4.1 | % | 21.5 | % | ||||||
| Goodwill and other intangibles | 5,458 | 5,472 | 5,519 | -0.3 | % | -1.1 | % | ||||||
| Operating lease right-of-use asset | 13,980 | 14,328 | 13,335 | -2.4 | % | 4.8 | % | ||||||
| Bank-owned life insurance ("BOLI") | 70,963 | 70,234 | - | 1.0 | % | 0.0 | % | ||||||
| Other assets | 8,187 | 5,887 | 8,771 | 39.1 | % | -6.7 | % | ||||||
| Total Assets | $ | 2,895,190 | $ | 2,852,460 | $ | 2,986,876 | 1.5 | % | -3.1 | % | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| LIABILITIES | |||||||||||||
| Non-interest bearing deposits | $ | 492,014 | $ | 454,061 | $ | 390,912 | 8.4 | % | 25.9 | % | |||
| Interest bearing deposits | 1,953,800 | 1,950,074 | 2,051,321 | 0.2 | % | -4.8 | % | ||||||
| Total deposits | 2,445,814 | 2,404,135 | 2,442,233 | 1.7 | % | 0.1 | % | ||||||
| FHLB advances | 128,436 | 133,298 | 242,800 | -3.6 | % | -47.1 | % | ||||||
| Subordinated debentures | 37,159 | 37,101 | 36,926 | 0.2 | % | 0.6 | % | ||||||
| Operating lease liability | 14,256 | 14,589 | 13,521 | -2.3 | % | 5.4 | % | ||||||
| Other liabilities | 11,001 | 9,883 | 10,377 | 11.3 | % | 6.0 | % | ||||||
| Total Liabilities | 2,636,666 | 2,599,006 | 2,745,857 | 1.4 | % | -4.0 | % | ||||||
| STOCKHOLDERS' EQUITY | |||||||||||||
| Preferred stock: $0.01 par value, 10,000 shares authorized | - | - | - | - | - | ||||||||
| Additional paid-in capital preferred stock | 25,723 | 25,723 | 27,956 | 0.0 | % | -8.0 | % | ||||||
| Common stock: no par value, 40,000 shares authorized | - | - | - | - | - | ||||||||
| Additional paid-in capital common stock | 192,968 | 192,633 | 191,160 | 0.2 | % | 0.9 | % | ||||||
| Retained earnings | 68,123 | 62,777 | 48,097 | 8.5 | % | 41.6 | % | ||||||
| Accumulated other comprehensive (loss) income | (93 | ) | (349 | ) | 724 | -73.4 | % | -112.8 | % | ||||
| Treasury stock, at cost | (28,197 | ) | (27,330 | ) | (26,918 | ) | 3.2 | % | 4.8 | % | |||
| Total Stockholders' Equity | 258,524 | 253,454 | 241,019 | 2.0 | % | 7.3 | % | ||||||
| Total Liabilities and Stockholders' Equity | $ | 2,895,190 | $ | 2,852,460 | $ | 2,986,876 | 1.5 | % | -3.1 | % | |||
| Outstanding common shares | 17,077 | 17,121 | 17,057 | -0.3 | % | 0.1 | % | ||||||
| Three Months Ended June 30, | |||||||||||||||
| 2021 | 2020 | ||||||||||||||
| 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 | $ | 2,343,775 | $ | 26,888 | 4.59 | % | $ | 2,276,740 | $ | 26,123 | 4.59 | % | |||
| Investment Securities | 105,520 | 914 | 3.46 | % | 106,777 | 740 | 2.77 | % | |||||||
| Interest-earning deposits | 322,966 | 202 | 0.25 | % | 550,929 | 343 | 0.25 | % | |||||||
| Total Interest-earning assets | 2,772,262 | 28,004 | 4.04 | % | 2,934,446 | 27,206 | 3.71 | % | |||||||
| Non-interest-earning assets | 107,412 | 83,651 | |||||||||||||
| Total assets | $ | 2,879,673 | $ | 3,018,097 | |||||||||||
| Interest-bearing liabilities: | |||||||||||||||
| Interest-bearing demand accounts | $ | 631,568 | $ | 703 | 0.45 | % | $ | 466,565 | $ | 797 | 0.68 | % | |||
| Money market accounts | 335,877 | 447 | 0.53 | % | 327,533 | 765 | 0.93 | % | |||||||
| Savings accounts | 315,210 | 127 | 0.16 | % | 269,299 | 106 | 0.16 | % | |||||||
| Certificates of Deposit | 676,163 | 1,639 | 0.97 | % | 1,029,281 | 5,695 | 2.21 | % | |||||||
| Total interest-bearing deposits | 1,958,818 | 2,916 | 0.60 | % | 2,092,677 | 7,363 | 1.41 | % | |||||||
| Borrowed funds | 170,433 | 1,024 | 2.40 | % | 286,616 | 1,852 | 2.58 | % | |||||||
| Total interest-bearing liabilities | 2,129,250 | 3,940 | 0.74 | % | 2,379,293 | 9,215 | 1.55 | % | |||||||
| Non-interest-bearing liabilities | 494,929 | 400,368 | |||||||||||||
| Total liabilities | 2,624,179 | 2,779,661 | |||||||||||||
| Stockholders' equity | 255,494 | 238,435 | |||||||||||||
| Total liabilities and stockholders' equity | $ | 2,879,673 | $ | 3,018,097 | |||||||||||
| Net interest income | $ | 24,064 | $ | 17,991 | |||||||||||
| Net interest rate spread(1) | 3.30 | % | 2.16 | % | |||||||||||
| Net interest margin(2) | 3.47 | % | 2.45 | % | |||||||||||
| (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 | |||||||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |||||||||||
| (In thousands, except book values) | |||||||||||||||
| Total assets | $ | 2,895,190 | $ | 2,852,460 | $ | 2,821,016 | $ | 2,842,319 | $ | 2,986,876 | |||||
| Cash and cash equivalents | 328,257 | 296,938 | 261,229 | 160,551 | 412,249 | ||||||||||
| Securities | 104,384 | 111,860 | 117,473 | 134,144 | 140,201 | ||||||||||
| Loans receivable, net | 2,312,559 | 2,296,434 | 2,295,021 | 2,391,990 | 2,343,593 | ||||||||||
| Deposits | 2,445,814 | 2,404,135 | 2,318,050 | 2,273,338 | 2,442,233 | ||||||||||
| Borrowings | 165,595 | 170,399 | 228,203 | 296,584 | 279,726 | ||||||||||
| Stockholders’ equity | 258,524 | 253,454 | 249,211 | 242,687 | 241,019 | ||||||||||
| Book value per common share1 | $ | 13.63 | $ | 13.30 | $ | 13.06 | $ | 12.83 | $ | 12.49 | |||||
| Tangible book value per common share2 | $ | 13.32 | $ | 12.99 | $ | 12.76 | $ | 12.53 | $ | 12.18 | |||||
| Operating data by quarter | |||||||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |||||||||||
| (In thousands, except for per share amounts) | |||||||||||||||
| Net interest income | $ | 24,064 | $ | 23,562 | $ | 22,751 | $ | 20,890 | $ | 17,991 | |||||
| Provision for loan losses | 2,295 | 1,865 | 1,915 | 2,726 | 3,300 | ||||||||||
| Non-interest income | 2,820 | 1,950 | 3,744 | 6,955 | 1,108 | ||||||||||
| Non-interest expense | 13,157 | 13,583 | 14,378 | 13,342 | 11,952 | ||||||||||
| Income tax expense | 3,382 | 2,947 | 2,904 | 3,465 | 1,121 | ||||||||||
| Net income | $ | 8,050 | $ | 7,117 | $ | 7,298 | $ | 8,312 | $ | 2,726 | |||||
| Net income per diluted share | $ | 0.45 | $ | 0.40 | $ | 0.41 | $ | 0.47 | $ | 0.14 | |||||
| Common Dividends declared per share | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.14 | |||||
| Financial Ratios3 | |||||||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |||||||||||
| Return on average assets | 1.12 | % | 1.01 | % | 1.03 | % | 1.15 | % | 0.36 | % | |||||
| Return on average stockholder’s equity | 12.60 | % | 11.37 | % | 11.93 | % | 14.06 | % | 4.57 | % | |||||
| Net interest margin | 3.47 | % | 3.48 | % | 3.35 | % | 2.98 | % | 2.45 | % | |||||
| Stockholder’s equity to total assets | 8.93 | % | 8.89 | % | 8.83 | % | 8.54 | % | 8.07 | % | |||||
| Efficiency Ratio4 | 48.94 | % | 53.24 | % | 54.27 | % | 47.92 | % | 62.58 | % | |||||
| Asset Quality Ratios | |||||||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |||||||||||
| (In thousands, except for ratio %) | |||||||||||||||
| Non-Accrual Loans | $ | 22,174 | $ | 14,405 | $ | 16,396 | $ | 7,151 | $ | 4,495 | |||||
| Non-Accrual Loans as a % of Total Loans | 0.94 | % | 0.62 | % | 0.70 | % | 0.29 | % | 0.19 | % | |||||
| ALLL as % of Non-Accrual Loans | 169.0 | % | 246.3 | % | 205.2 | % | 444.1 | % | 641.6 | % | |||||
| Impaired Loans | 62,281 | 67,344 | 83,201 | 31,318 | 26,839 | ||||||||||
| Classified Loans | 51,926 | 56,178 | 68,580 | 18,138 | 13,584 | ||||||||||
| (1) Calculated by dividing stockholders' equity, less preferred 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.” | |||||||||||||||
| Six Months Ended June 30, | ||||||||||||||||
| 2021 | 2020 | |||||||||||||||
| 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 | $ | 2,335,051 | $ | 53,751 | 4.60 | % | $ | 2,230,683 | $ | 52,937 | 4.75 | % | ||||
| Investment Securities | 109,967 | 1,904 | 3.46 | % | 99,542 | 1,311 | 2.63 | % | ||||||||
| Interest-earning deposits | 293,827 | 424 | 0.29 | % | 565,776 | 2,377 | 0.84 | % | ||||||||
| Total Interest-earning assets | 2,738,845 | 56,079 | 4.10 | % | 2,896,001 | 56,625 | 3.91 | % | ||||||||
| Non-interest-earning assets | 108,486 | 79,193 | ||||||||||||||
| Total assets | $ | 2,847,331 | $ | 2,975,194 | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||
| Interest-bearing demand accounts | $ | 621,287 | $ | 1,460 | 0.47 | % | $ | 436,952 | $ | 1,655 | 0.76 | % | ||||
| Money market accounts | 326,565 | 888 | 0.54 | % | 324,383 | 2,115 | 1.30 | % | ||||||||
| Savings accounts | 309,010 | 245 | 0.16 | % | 264,510 | 211 | 0.16 | % | ||||||||
| Certificates of Deposit | 679,550 | 3,631 | 1.07 | % | 1,074,671 | 12,127 | 2.26 | % | ||||||||
| Total interest-bearing deposits | 1,936,413 | 6,224 | 0.64 | % | 2,100,515 | 16,108 | 1.53 | % | ||||||||
| Borrowed funds | 188,096 | 2,229 | 2.37 | % | 286,089 | 3,748 | 2.62 | % | ||||||||
| Total interest-bearing liabilities | 2,124,509 | 8,453 | 0.80 | % | 2,386,604 | 19,856 | 1.66 | % | ||||||||
| Non-interest-bearing liabilities | 469,808 | 349,708 | ||||||||||||||
| Total liabilities | 2,594,317 | 2,736,312 | ||||||||||||||
| Stockholders' equity | 253,014 | 238,882 | ||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,847,331 | $ | 2,975,194 | ||||||||||||
| Net interest income | $ | 47,626 | $ | 36,769 | ||||||||||||
| Net interest rate spread(1) | 3.30 | % | 2.25 | % | ||||||||||||
| Net interest margin(2) | 3.48 | % | 2.54 | % | ||||||||||||
| (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. | ||||||||||||||||
| Recorded Investment in Loans Receivable by quarter | |||||||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |||||||||||
| (In thousands) | |||||||||||||||
| Residential one-to-four family | $ | 229,365 | $ | 234,375 | $ | 244,369 | $ | 241,796 | $ | 247,471 | |||||
| Commercial and multi-family | 1,714,848 | 1,700,113 | 1,690,836 | 1,677,668 | 1,643,954 | ||||||||||
| Construction | 181,312 | 167,224 | 155,967 | 134,769 | 111,463 | ||||||||||
| Commercial business | 172,129 | 177,340 | 184,357 | 311,204 | 309,284 | ||||||||||
| Home equity | 53,333 | 53,360 | 53,667 | 60,973 | 63,481 | ||||||||||
| Consumer | 459 | 851 | 822 | 770 | 603 | ||||||||||
| $ | 2,351,446 | $ | 2,333,263 | $ | 2,330,018 | $ | 2,427,180 | $ | 2,376,256 | ||||||
| Less: | |||||||||||||||
| Deferred loan fees, net | (1,415 | ) | (1,352 | ) | (1,358 | ) | (3,430 | ) | (3,821 | ) | |||||
| Allowance for loan loss | (37,472 | ) | (35,477 | ) | (33,639 | ) | (31,760 | ) | (28,842 | ) | |||||
| Total loans, net | $ | 2,312,559 | $ | 2,296,434 | $ | 2,295,021 | $ | 2,391,990 | $ | 2,343,593 | |||||
| Non-Accruing Loans in Portfolio by quarter | |||||||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |||||||||||
| (In thousands) | |||||||||||||||
| Originated loans: | |||||||||||||||
| Residential one-to-four family | $ | 464 | $ | 701 | $ | 1,736 | $ | 1,412 | $ | 1,332 | |||||
| Commercial and multi-family | 14,673 | 7,962 | 8,721 | 1,436 | 849 | ||||||||||
| Construction | 2,787 | - | - | - | - | ||||||||||
| Commercial business | 4,216 | 5,307 | 5,383 | 3,630 | 1,642 | ||||||||||
| Home equity | 34 | 435 | 556 | 673 | 672 | ||||||||||
| Total: | $ | 22,174 | $ | 14,405 | $ | 16,396 | $ | 7,151 | $ | 4,495 | |||||
| Reconciliation of GAAP to Non-GAAP Financial Measures by quarter | |||||||||||||||
| Tangible Book Value per Share | |||||||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |||||||||||
| (In thousands, except per share amounts) | |||||||||||||||
| Total Stockholders' Equity | $ | 258,524 | $ | 253,454 | $ | 249,211 | $ | 242,687 | $ | 241,019 | |||||
| Less: goodwill | 5,252 | 5,253 | 5,253 | 5,253 | 5,253 | ||||||||||
| Less: preferred stock | 25,723 | 25,723 | 25,723 | 23,481 | 27,956 | ||||||||||
| Total tangible common stockholders' equity | 227,549 | 222,478 | 218,235 | 213,953 | 207,810 | ||||||||||
| Shares common shares outstanding | 17,077 | 17,121 | 17,108 | 17,081 | 17,057 | ||||||||||
| Book value per common share | $ | 13.63 | $ | 13.30 | $ | 13.06 | $ | 12.83 | $ | 12.49 | |||||
| Tangible book value per common share | $ | 13.32 | $ | 12.99 | $ | 12.76 | $ | 12.53 | $ | 12.18 | |||||
| Efficiency Ratios | |||||||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | |||||||||||
| (In thousands, except for ratio %) | |||||||||||||||
| Net interest income | $ | 24,064 | $ | 23,562 | $ | 22,751 | $ | 20,890 | $ | 17,991 | |||||
| Non-interest income | 2,820 | 1,950 | 3,744 | 6,955 | 1,108 | ||||||||||
| Total income | 26,884 | 25,512 | 26,495 | 27,845 | 19,099 | ||||||||||
| Non-interest expense | 13,157 | 13,583 | 14,378 | 13,342 | 11,952 | ||||||||||
| Efficiency Ratio | 48.94 | % | 53.24 | % | 54.27 | % | 47.92 | % | 62.58 | % | |||||
| Distribution of Deposits by quarter | ||||||||||
| Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 | ||||||
| (In thousands) | ||||||||||
| Demand: | ||||||||||
| Non-Interest Bearing | $ | 492,014 | $ | 454,061 | $ | 402,100 | $ | 395,630 | $ | 390,912 |
| Interest Bearing | 619,163 | 620,171 | 613,882 | 504,863 | 472,064 | |||||
| Money Market | 344,512 | 335,440 | 315,208 | 311,074 | 319,113 | |||||
| Sub-total: | $ | 1,455,689 | $ | 1,409,672 | $ | 1,331,190 | $ | 1,211,567 | $ | 1,182,089 |
| Savings and Club | 316,244 | 311,259 | 297,765 | 287,513 | 275,567 | |||||
| Certificates of Deposit | 673,881 | 683,204 | 689,095 | 774,258 | 984,577 | |||||
| Total Deposits: | $ | 2,445,814 | $ | 2,404,135 | $ | 2,318,050 | $ | 2,273,338 | $ | 2,442,233 |