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 SummaryNet 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 ReviewTotal 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 ReviewNet 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 ReviewNet 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 QualityPrimarily 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 StatementsThis 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 MeasuresReported 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.
(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.(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.
Contact:
Thomas Coughlin, President & CEO
Thomas Keating, CFO
(201) 823-0700
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