BCB Bancorp 10K 2011 Annual report | BCBP Filing

EXHIBIT 13

CONSOLIDATED FINANCIAL STATEMENTS

BCB Bancorp, Inc. and Subsidiaries

Consolidated Financial Report

December 31, 2011

Table of Contents

	Page

Report of Independent Registered Public Accounting Firm

Consolidated Financial Statements

Consolidated Statements of Financial Condition	1
Consolidated Statements of Income	2
Consolidated Statements of Changes in Stockholders’ Equity	3
Consolidated Statements of Cash Flows	4
Notes to Consolidated Financial Statements	5

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

BCB Bancorp, Inc.

Bayonne, New Jersey

We have audited the accompanying consolidated statements of financial condition of BCB Bancorp, Inc. (the "Company") and Subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of income, changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2011. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. Anaudit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of BCB Bancorp, Inc. and Subsidiaries as of December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), BCB Bancorp, Inc.’sinternal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 30, 2012 expressed an adverse opinion.

/s/ ParenteBeard LLC

ParenteBeard LLC

Clark, New Jersey

March 30, 2012

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

BCB Bancorp, Inc.

Bayonne, New Jersey

We have audited BCB Bancorp, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control—Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). BCB Bancorp, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report on Management’s Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim consolidated financial statements will not be prevented or detected on a timely basis. We have identified the following material weakness that is identified in management’s assessment. The Company did not document monitoring controls over the use of outside service organizations and did not test the operating effectiveness of such controls as of December 31, 2011. This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2011 consolidated financial statements, and this report does not affect our report dated March 30, 2012, on those consolidated financial statements.

In our opinion, because of the effect of the material weakness described above, BCB Bancorp, Inc. has not maintained effective internal control over financial reporting as of December 31, 2011 based on criteria established in Internal Control—Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial condition and the related consolidated statements of income, changes in stockholders’ equity, and cash flows of BCB Bancorp, Inc. and subsidiaries, and our report dated March 30, 2012 expressed an unqualified opinion.

/s/ ParenteBeard LLC

ParenteBeard LLC

Clark, New Jersey

March 30, 2012

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BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

	December 31,
	2011			2010
	(In Thousands, except for share data)

Assets
Cash and amounts due from depository institutions	$	8,692		$	22,065
Interest-bearing deposits		108,395			99,062

Cash and Cash Equivalents		117,087			121,127

Securities available for sale		1,045			1,098
Securities held to maturity, fair value $213,903 and $166,785; respectively		206,965			165,572
Loans held for sale		5,856			5,572
Loans receivable, net of allowance for loan losses of $10,509 and $8,417; respectively		840,763			773,101
Premises and equipment		13,576			11,359
Property held for sale		—			1,017
Federal Home Loan Bank of New York stock		7,498			6,723
Interest receivable		4,997			5,203
Real estate owned		6,570			3,602
Deferred income taxes		9,940			5,785
Other assets		2,611			6,729

Total Assets	$	1,216,908		$	1,106,888

Liabilities and Stockholders’ Equity

Liabilities

Non-interest bearing deposits	$	78,589		$	69,471
Interest bearing deposits		899,034			816,817

Total deposits		977,623			886,288

Long-term debt		129,531			114,124
Other liabilities		9,706			7,502

Total Liabilities	$	1,116,860		$	1,007,914

Stockholders’ Equity

Preferred stock: 10,000,000 shares authorized; none issued and outstanding		—			—
Common stock, stated value $0.064; 20,000,000 shares authorized; 10,817,901 and 10,144,830 shares, respectively, issued; 9,520,056 and 9,383,695 shares, respectively, outstanding		692			649
Paid-in capital		91,715			85,327
Treasury stock, at cost, 1,297,845 and 761,135 shares, respectively		(16,327	)		(10,760	)
Retained earnings		25,255			23,753
Accumulated other comprehensive income (loss), net of taxes		(1,287	)		5

Total Stockholders’ Equity		100,048			98,974

Total Liabilities and Stockholders’ Equity	$	1,216,908		$	1,106,888

See notes to consolidated financial statements.

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BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Income

	Years Ended December 31,
	2011			2010			2009
	(In Thousands, Except for Per Share Data)

Interest Income
Loans	$	45,023		$	34,502		$	27,349
Investments, taxable		7,720			5,457			6,982
Investments, nontaxable		49			24			—
Other interest-earning assets		87			117			47

Total Interest Income		52,879			40,100			34,378

Interest Expense
Deposits:
Demand		849			938			877
Savings and club		1,020			1,304			1,157
Certificates of deposit		6,421			6,220			7,984

		8,290			8,462			10,018
Borrowed money		5,007			5,206			4,976

Total Interest Expense		13,297			13,668			14,994

Net Interest Income		39,582			26,432			19,384

Provision for Loan Losses		4,100			2,450			1,550

Net Interest Income after Provision for Loan Losses		35,482			23,982			17,834

Non-Interest Income
Fees and service charges		846			907			657
Gain on sales of loans originated for sale		887			295			225
(Loss) gain on sale of real estate owned		(498	)		(345	)		13
Loss on sale of property held for sale		(124	)		—			—
Loss on write-down of fixed assets		(592	)		—			—
Gain on sale of securities		18			—			—
Gain on bargain purchase		1,162			12,582			—
Other		251			423			36

Total Non-Interest Income		1,950			13,862			931

Non-Interest Expenses
Salaries and employee benefits		12,680			10,785			5,403
Occupancy expense of premises		3,039			1,932			1,122
Equipment		4,301			3,293			2,124
Professional fees		1,287			780			465
Directors fees		689			553			395
Regulatory assessments		1,181			1,204			1,137
Advertising		399			336			273
Merger related expenses		538			644			648
Other		3,894			2,486			829

Total Non-Interest Expenses		28,008			22,013			12,396

Income before Income Taxes		9,424			15,831			6,369

Income Taxes		3,373			1,505			2,621

Net Income	$	6,051		$	14,326		$	3,748

Net Income per Common Share
Basic	$	0.64		$	2.06		$	0.81

Diluted	$	0.64		$	2.05		$	0.80

Weighted Average Number of Common Shares Outstanding
Basic		9,417			6,968			4,655

Diluted		9,433			6,983			4,676

See notes to consolidated financial statements.

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BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

	Common Stock		Paid- In Capital		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
	(In Thousands, except for share and per share amounts)

Balance- December 31, 2008	$	331	$	46,864	$	(8,680	)	$	11,325		$	(125	)	$	49,715

Exercise of stock options (11,933)		1		62		—			—			—			63
Treasury stock purchases (4,072 shares)		—		—		(39	)		—			—			(39	)
Cash dividend ($0.48 per share) declared		—		—		—			(2,234	)		—			(2,234	)
Net income		—		—		—			3,748			—			3,748
Unrealized loss on securities available for sale, net of deferred income tax of $93		—		—		—			—			138			138

Total Comprehensive income															3,886

Balance - December 31, 2009		332		46,926		(8,719	)		12,839			13			51,391

Common Stock issued for the acquisition of Pamrapo Bancorp, Inc. (4,935,495 shares, including 30,000 shares transferred to treasury)		316		38,329		(235	)		—			—			38,410
Exercise of stock options (13,677 shares)		1		72		—			—			—			73
Treasury stock purchases (193,383 shares)		—		—		(1,806	)		—			—			(1,806	)
Cash dividend ($0.48 per share) declared		—		—		—			(3,412	)		—			(3,412	)
Net income		—		—		—			14,326			—			14,326
Unrealized gain (loss) on securities available for sale, net of deferred income tax of $9		—		—		—			—			(12	)		(12	)
Benefit plans, net of deferred income tax of $3		—		—		—			—			4			4

Total Comprehensive income															14,318

Balance - December 31, 2010		649		85,327		(10,760	)		23,753			5			98,974
Common stock issued for the acquisition of Allegiance Community Bank (issued 644,434 shares)		41		6,126		—			—			—			6,167
Exercise of stock options (28,637 shares)		2		235		—			—			—			237
Stock compensation expense		—		12		—			—			—			12
Tax benefit on stock compensation		—		15		—			—			—			15
Treasury stock purchases (536,710 shares)		—		—		(5,567	)		—			—			(5,567	)
Cash dividends ($0.48 per share) declared		—		—		—			(4,549	)		—			(4,549	)
Net income		—		—		—			6,051			—			6,051
Unrealized gain (loss) on securities available for sale, net of deferred income tax of $(21)		—		—		—			—			(31	)		(31	)
Benefit plans, net of deferred income tax of $(868)		—		—		—			—			(1,261	)		(1,261	)

Total Comprehensive income															4,759

Balance - December 31, 2011	$	692	$	91,715	$	(16,327	)	$	25,255		$	(1,287	)	$	100,048

See notes to consolidated financial statements.

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BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Years Ended December 31,
	2011			2010			2009
	(In Thousands)

Cash Flows from Operating Activities
Net income	$	6,051		$	14,326		$	3,748
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of premises and equipment		1,055			642			363
Amortization (accretion), net		1,306			1,877			367
Provision for loan losses		4,100			2,450			1,550
Deferred income tax benefit		(1,845	)		(341	)		(598	)
Loans originated for sale		(31,950	)		(26,142	)		(19,576	)
Proceeds from sales of loans originated for sale		30,884			19,433			16,948
Gain on sales of loans originated for sale		(887	)		(295	)		(225	)
Loss (gain) on sale of real estate owned		498			345			(13	)
Loss on sale of property held for investment		124			—			—
Loss on leasehold improvements on branch closing		592			—			—
Write down of real estate owned		510			—			—
Gain on bargain purchase		(1,162	)		(12,582	)		—
Gain on sales of securities held to maturity		(18	)		—			—
Stock compensation expense		12			—			—
Decrease in interest receivable		649			501			85
Decrease (increase) in other assets		5,227			(1,207	)		(2,607	)
Increase (decrease) in accrued interest payable		26			(239	)		(120	)
(Decrease) increase in other liabilities		(937	)		(1,159	)		88

Net Cash Provided by (Used in) Operating Activities		14,235			(2,391	)		10

Cash Flows from Investing Activities
Proceeds from repayments and calls on securities held to maturity		85,089			156,757			155,553
Purchases of securities held to maturity		(95,537	)		(104,997	)		(147,647	)
Purchases of securities available for sale		—			—			(227	)
Proceeds from sales of securities held to maturity		2,438			—			—
Proceeds from sales of participation interests in loans		4,777			1,708			1,238
Proceeds from sale of real estate owned		2,722			1,260			307
Proceeds from sale of property held for investment		511			—			—
Purchases of loans		(2,292	)		—			(1,744	)
Net decrease in loans receivable		10,325			39,551			4,202
Improvements to real estate owned		(113	)		(32	)		(58	)
Additions to premises and equipment		(2,246	)		(704	)		(95	)
Redemption of Federal Home Loan Bank of New York stock		44			1,869			22
Cash acquired in acquisition		5,901			22,979			—
Net Cash Provided by Investing Activities		11,619			118,391			11,551

Cash Flows from Financing Activities
Net (decrease) increase in deposits		(20,030	)		(13,260	)		53,235
Repayment of long-term debt		—			(43,815	)		—
Net change in short term borrowings		—			—			(2,000	)
Purchase of treasury stock		(5,567	)		(1,806	)		(39	)
Cash dividends paid		(4,549	)		(3,412	)		(2,234	)
Net proceeds from issuance of common stock		237			73			63
Tax benefit from exercise of stock options		15			—			—

Net Cash (Used In) Provided by Financing Activities		(29,894	)		(62,220	)		49,025

Net (Decrease) Increase in Cash and Cash Equivalents		(4,040	)		53,780			60,586

Cash and Cash Equivalents - Beginning		121,127			67,347			6,761
Cash and Cash Equivalents - Ending		117,087		$	121,127		$	67,347

Supplementary Cash Flow Information
Cash paid during the year for:
Income taxes	$	4,549		$	2,252		$	3,220
Interest	$	13,271		$	13,907		$	15,114

Non-Cash items:
Transfer of loans to other real estate owned	$	7,145		$	6,887		$	71
Loans to facilitate sales of other real estate owned	$	942		$	3,771		$	—
Reclassification of loans originated for sale to held to maturity	$	1,669		$	5,707		$	—
Reclassification of property held for sale to real estate owned	$	382		$	—		$	—

Acquisition of noncash assets and liabilities
Assets acquired	$	129,235		$	514,523		$	—
Liabilities assumed	$	127,807		$	486,275		$	—

See notes to consolidated financial statements.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1 - Organization and Stock Offerings

BCB Bancorp, Inc. (the “Company”) is incorporated in the State of New Jersey and is a bank holding company. The common stock of the Company is listed on the Nasdaq Electronic Bulletin Board and trades under the symbol “BCBP.”

On November 20, 2007, the Company announced a stock repurchase plan which provided for the repurchase of 5% or 234,002 shares of the Company’s common stock. This plan was completed during 2010. On July 14, 2010, the Company announced a stock repurchase plan to repurchase 5% or 479,965 shares of the Company’s common stock. This plan was completed during 2010. On December 20, 2010, the Company entered into an agreement with a broker to administer a Rule 10b5-1 trading plan on behalf of the Company. The Rule 10b5-1 trading plan will permit the broker to purchase up to 450,000 shares of Company common stock at designated prices during periods when the Company would otherwise be unable to purchase its common stock. The Board authorized the Rule 10b5-1 trading plan on December 16, 2010. On December 14, 2011, the Company announced a stock repurchase plan to repurchase 5% or 462,225 shares of the Company’s common stock. During 2011, 2010 and 2009, a total of 536,710, 193,383 and 4,072 shares of the Company’s common stock was repurchased at a cost of approximately $5.6 million, $1.8 million, and $39,000 or $10.37, $9.34 and $9.58 per share, respectively.

The Company’s primary business is the ownership and operation of BCB Community Bank (the “Bank”). The Bank is a New Jersey commercial bank which, as of December 31, 2011, operated at eleven locations in Bayonne, Hoboken, Jersey City, Monroe Township, South Orange, and Woodbridge New Jersey, and is subject to regulation, supervision, and examination by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation. The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with borrowed funds, to invest in securities and to make loans collateralized by residential and commercial real estate and, to a lesser extent, consumer loans. BCB Holding Company Investment Corp. (the “Investment Company”) was organized in January 2005 under New Jersey law as a New Jersey investment company primarily to hold investment and mortgage-backed securities. Pamrapo Service Corporation was organized in 1975 under New Jersey law to engage in the purchase and sale of real estate. In the 1990’s, the Service Corporation was engaged in the business of selling non-financial products, (annuities, mutual funds and stocks) to the public. The Pamrapo Service Corporation has been inactive since May 2010.

On October 14, 2011, the Company acquired all of the outstanding common shares of Allegiance Community Bank (“Allegiance”) and thereby acquired all of Allegiance Community Bank’s two branch locations. Under the terms of the merger agreement, Allegiance stockholders received 0.35 of a share of BCB Bancorp, Inc. common stock at a price of $9.57 per share in exchange for each share of Allegiance common stock, resulting in BCB Bancorp, Inc. issuing 644,434 common shares of BCB Bancorp, Inc. common stock with an acquisition date fair value of $6.2 million. See Note 19 for further details.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies

Basis of Consolidated Financial Statement Presentation

The consolidated financial statements which include the accounts of the Company and its wholly-owned subsidiaries, the Bank, the Investment Company and Pamrapo Service Corporation, have been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany accounts and transactions have been eliminated in consolidation.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statement of financial condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relates to the determination of the allowance for loan losses, identification of other-than-temporary impairment of securities and fair value estimates in connection with acquisitions. Management believes that the allowance for loan losses is adequate and that no securities in unrealized loss positions are other-than-temporarily impaired. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the market area. Management’s assessment regarding impairment of securities is based on future projections of cash flow which are subject to change. The fair value estimate of assets acquired and liabilities assumed in acquisitions were estimated utilizing various methodologies and assumptions. Actual results could differ from these assumptions.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

In preparing these consolidated financial statements, the Company evaluated the events that occurred between December 31, 2011 and the date these consolidated financial statements were issued.

Cash and Cash Equivalents

Cash and cash equivalents include cash and amounts due from depository institutions and interest-bearing deposits in other banks having original maturities of three months or less.

Securities Available for Sale and Held to Maturity

Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt and equity securities not classified as trading securities or as held to maturity securities are classified as available for sale securities (“AFS”) and reported at fair value, with unrealized holding gains or losses, net of applicable deferred income taxes, reported in the accumulated other comprehensive income (loss) component of stockholders’ equity.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

If the fair value of a security is less than its amortized cost, the security is deemed to be impaired. Management evaluates all securities with unrealized losses quarterly to determine if such impairments are “temporary” or “other-than-temporary” in accordance with Accounting Standards Codification (“ASC”) Topic 320,Investments – Debt and Equity Securities. Accordingly, temporary impairments are accounted for based upon the classification of the related securities as either available for sale or held to maturity. Temporary impairments on available for sale securities are recognized, on a tax-effected basis, through Other Comprehensive Income (“OCI”) with offsetting entries adjusting the carrying value of the securities and the balance of deferred taxes. Conversely, the carrying values of held to maturity securities are not adjusted for temporary impairments. Information concerning the amount and duration of temporary impairments on both available for sale and held to maturity securities is disclosed in the notes to the consolidated financial statements.

Other-than-temporary impairments are accounted for based upon several considerations. First, other-than-temporary impairments on equity securities and on debt securities that the Company has decided to sell as of the close of a fiscal period, or will, more likely than not, be required to sell prior to the full recovery of fair value to a level equal to or exceeding amortized cost, are recognized in earnings. If neither of these conditions regarding the likelihood of the sale of debt securities are applicable, then the other-than-temporary impairment is bifurcated into credit-related and noncredit-related components. A credit-related impairment generally represents the amount by which the present value of the cash flows that are expected to be collected on a debt security fall below its amortized cost. The noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related. Credit-related, other-than-temporary impairments are recognized in earnings and noncredit-related, other-than-temporary impairments are recognized in OCI. Equity securities on which there is an unrealized loss that is deemed other-than-temporary are written down to fair value with the write-down recognized in earnings.

Premiums and discounts on all securities are amortized/accreted to maturity using the interest method. Interest and dividend income on securities, which includes amortization of premiums and accretion of discounts, are recognized in the consolidated financial statements when earned. Gains or losses on sales are recognized based on the specific identification method.

Loans Held For Sale

Loans held for sale consist primarily of residential mortgage loans intended for sale and are carried at the lower of cost or estimated fair market value using the aggregate method. These loans are generally sold with servicing rights released. Gains and losses recognized on loan sales are based upon the cash proceeds received and the cost of the related loans sold.

Loans Receivable

Loans receivable are stated at unpaid principal balances, less net deferred loan origination fees and the allowance for loan losses. Loan origination fees and certain direct loan origination costs are deferred and amortized/accreted, as an adjustment of yield, over the contractual lives of the related loans.

The accrual of interest on loans that are contractually delinquent more than ninety days is discontinued and the related loans placed on nonaccrual status. Income is subsequently recognized only to the extent that cash payments are received until delinquency status is reduced to less than ninety days, in which case the loan is returned to accrual status.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

Acquired Loans

Loans that were acquired in acquisitions subsequent to January 1, 2009 are recorded at fair value with no carryover of the related allowance for credit losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest.

The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require an evaluation to determine the need for an allowance for credit losses. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount which is then reclassified as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method. The evaluation of the amount of future cash flows that is expected to be collected is performed in a similar manner as that used to determine our allowance for credit losses. Charge-offs of the principal amount on acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. We have determined that we cannot reasonably estimate future cash flows on any such acquired loans that are past due 90 days or more and continue to treat them as non-accrual.

Allowance for Loan Losses

The allowance for loan losses is increased through provisions charged to operations and by recoveries, if any, on previously charged-off loans and reduced by charge-offs on loans which are determined to be a loss in accordance with Bank policy.

The allowance for loan losses is maintained at a level considered adequate to absorb loan losses. Management, in determining the allowance for loan losses, considers the risks inherent in its loan portfolio and changes in the nature and volume of its loan activities, along with the general economic and real estate market conditions. The Bank utilizes a two tier approach: (1) identification of impaired loans and establishment of specific loss allowances on such loans; and (2) establishment of general valuation allowances on the remainder of its loan portfolio. The Bank maintains a loan review system which allows for a periodic review of its loan portfolio and the early identification of potentially impaired loans. Such a system takes into consideration, but is not limited to, delinquency status, size of loans, types and value of collateral, and financial condition of the borrowers. Specific loan loss allowances are established for impaired loans based on a review of such information and/or appraisals of the underlying collateral. General loan loss allowances are based upon a combination of factors including, but not limited to, actual loan loss experience, composition of the loan portfolio, current economic conditions, and management’s judgment.

Although management believes that adequate specific and general allowances for loan losses are established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general loan loss allowances may be necessary.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. A loan evaluated for impairment is deemed to be impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. All loans identified as impaired are evaluated independently. The Bank does not aggregate such loans for evaluation purposes. Payments received on impaired loans are applied first to accrued interest receivable and then to principal.

Concentration of Risk

Financial instruments which potentially subject the Company and its subsidiaries to concentrations of credit risk consist of cash and cash equivalents, investment and mortgage-backed securities and loans.

Cash and cash equivalents include amounts placed with highly rated financial institutions. Securities include securities backed by the U.S. Government and other highly rated instruments. The Bank’s lending activity is primarily concentrated in loans collateralized by real estate in the State of New Jersey. As a result, credit risk related to loans is broadly dependent on the real estate market and general economic conditions in the State.

Premises and Equipment

Land is carried at cost. Buildings, building improvements, leasehold improvements and furniture, fixtures and equipment are carried at cost, less accumulated depreciation and amortization. Significant renovations and additions are charged to the property and equipment account. Maintenance and repairs are charged to expense in the period incurred. Depreciation charges are computed on the straight-line method over the following estimated useful lives of each type of asset.

		Years

Buildings		40
Building improvements		7 - 40
Furniture, fixtures and equipment		3 - 5
Leasehold improvements		Shorter of useful life or term of lease

Federal Home Loan Bank (“FHLB”) of New York Stock

Federal law requires a member institution of the FHLB system to hold stock of its district FHLB according to a predetermined formula. Such stock is carried at cost.

Management evaluates the FHLB of New York stock for impairment in accordance with guidance on accounting by certain entities that lend to or finance the activities of others. Management’s determination of whether this investment is impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB of New York as compared to the capital stock amount for the FHLB of New York and the length of time this situation has persisted, (2) commitments by the FHLB of New York to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB of New York, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB of New York.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

No impairment charges were recorded related to the FHLB of New York stock during 2011, 2010, or 2009.

Real Estate Owned

Assets acquired through, or in lieu of, loan foreclosures are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Costs relating to development and improvement of property are capitalized, whereas costs relating to the holding of property are expensed. At December 31, 2011, the Bank owned fifteen properties totaling $6,570,000. During the year 2011, $382,000 for one property was transferred to real estate owned from property held for sale.

Interest Rate Risk

The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other funds, to make loans secured by real estate and to purchase securities. The potential for interest-rate risk exists as a result of the difference in duration of the Bank’s interest-sensitive liabilities compared to its interest-sensitive assets. For this reason, management regularly monitors the maturity structure of the Bank’s interest-earning assets and interest-bearing liabilities in order to measure its level of interest-rate risk and to plan for future volatility.

Income Taxes

The Company and its subsidiaries file a consolidated federal income tax return. Income taxes are allocated to the Company and its subsidiaries based upon their respective income or loss included in the consolidated income tax return. Separate state income tax returns are filed by the Company and its subsidiaries.

Federal and state income tax expense has been provided on the basis of reported income. The amounts reflected on the tax returns differ from these provisions due principally to temporary differences in the reporting of certain items for financial reporting and income tax reporting purposes. The tax effect of these temporary differences is accounted for as deferred taxes applicable to future periods. Deferred income tax expense or (benefit) is determined by recognizing deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. The realization of deferred tax assets is assessed and a valuation allowance provided, when necessary, for that portion of the asset which is not more likely than not to be realized.

The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements in accordance with ASC Topic 740,Income Taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a likelihood of being realized on examination of more than 50 percent. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Under the “more-likely-than-not” threshold guidelines, the Company

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

believes no significant uncertain tax positions exist, either individually or in the aggregate, that would give rise to the non-recognition of an existing tax benefit. The Company recognizes interest and penalties on unrecognized tax benefits in income taxes expense in the Consolidated Statement of Income. The Company did not recognize any interest in 2011, however the Company did recognize $11,000 for penalties assessed during an audit of prior periods. The Company did not recognize any interest and penalties for the years ended December 31, 2010 and 2009. The tax years subject to examination by the taxing authorities are the years ended December 31, 2010, 2009, and 2008.

Net Income per Common Share

Basic net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding. The diluted net income per common share is computed by adjusting the weighted average number of shares of common stock outstanding to include the effects of outstanding stock options, if dilutive, using the treasury stock method. For the years ended December 31, 2011, 2010, and 2009, the difference in the weighted average number of basic and diluted common shares was due solely to the effects of outstanding stock options. No adjustments to net income were necessary in calculating basic and diluted net income per share. For the years ended December 31, 2011, 2010, and 2009, the weighted average number of outstanding options considered to be anti-dilutive was 209,441, 243,884, and 196,418.

Stock-Based Compensation Plans

The Company, under plans approved by its stockholders in 2011, 2003 and 2002, has granted stock options to employees and outside directors. See note 12 for additional information as to option grants. Compensation expense recognized for all option grants is net of estimated forfeitures and is recognized over the awards’ respective requisite service periods. The fair values relating to all options granted are estimated using a Black-Scholes option pricing model. Expected volatilities are based on historical volatility of our stock and other factors, such as implied market volatility using this options expected term. The Company used the mid-point of the original vesting period and original option life to estimate the options’ expected term, which represents the period of time that the options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company recognizes compensation expense for the fair values of these option awards, which have graded vesting, on a straight-line basis over the requisite service period of these awards.

Benefit Plans

The Company acquired through the merger with Pamrapo Bancorp, Inc. a non-contributory defined benefit pension plan covering all eligible employees of Pamrapo Savings Bank. Effective January 1, 2010, the defined benefit pension plan (the “Pension Plan”), was frozen by Pamrapo Savings Bank. All benefits for eligible participants accrued in the “Pension Plan” to the freeze date have been retained. The benefits are based on years of service and employee’s compensation. The defined benefit plan is funded in conformity with funding requirements of applicable government regulations. Prior service costs for the defined benefit plan generally are amortized over the estimated remaining service periods of employees. Additionally, with the merger with Pamrapo Bancorp, Inc., certain former employees of Pamrapo Bank are covered under a Supplemental Executive Retirement Plan (“SERP”), an unfunded non-qualified deferred retirement plan. Participants who retire at the age of 65 (the “Normal Retirement Age”), are entitled to an annual retirement benefit equal to 75% of compensation reduced by their retirement plan annual benefits. Participants retiring before the Normal Retirement Age receive the same benefits reduced by a percentage based on years of service to the Company and the number of years prior to the Normal Retirement Age that participants retire.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

Comprehensive Income

The Company records unrealized gains and losses, net of deferred income taxes, on securities available for sale in accumulated other comprehensive income (loss). Realized gains and losses, if any, are reclassified to non-interest income upon sale of the related securities or upon the recognition of an impairment loss. Accumulated other comprehensive income (loss) also includes benefit plan amounts recognized in accordance with ASC 715,Compensation-Retirement Benefits, which reflect, net of tax, the unrecognized gains (losses) on the benefit plans. The Company has elected to report the effects of other comprehensive income in the consolidated statements of changes in stockholders’ equity.

Recent Accounting Pronouncements

In April 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-02,Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring The ASU clarifies which loan modifications constitute troubled debt restructurings. It is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial difficulties. The amendments to FASBAccounting Standards Codification Topic 310,Receivables, clarify the guidance on a creditor’s evaluation of whether it has granted a concession and whether a debtor is experiencing financial difficulties. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. This guidance became effective for us with our September 30, 2011 interim financial statements and was applied retrospectively to the beginning of 2011 and is not expected to have a significant impact on the Company’s consolidated financial statements.

In April 2011, the FASB issued Accounting Standards Updates (ASU) No. 2011-03,Transfers and Servicing: Reconsideration of Effective Control for Repurchase Agreements. The ASU is intended to improve financial reporting of repurchase agreements (“repos”) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. In a typical repo transaction, an entity transfers financial assets to a counterparty in exchange for cash with an agreement for the counterparty to return the same or equivalent financial assets for a fixed price in the future. FASBAccounting Standards Codification (Codification) Topic 860,Transfers and Servicing, prescribes when an entity may or may not recognize a sale upon the transfer of financial assets subject to repo agreements. That determination is based, in part, on whether the entity has maintained effective control over the transferred financial assets. The amendments to the Codification in this ASU are intended to improve the accounting for these transactions by removing from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets. The guidance in the ASU is effective for the first interim or annual period on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. Early adoption is not permitted. The Company does not expect that the adoption of this ASU will have a material impact on the Company’s consolidated financial statements.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this update result in common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards (IFRS). Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Some of the amendments in this update clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. This update is effective during interim and annual periods beginning on or after December 15, 2011 and is to be applied prospectively and early adoption is not permitted. The Company does not anticipate the adoption of this update will impact its consolidated financial condition or results of operations.

In June 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-05,Comprehensive Income.The ASU eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and will require it be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The single statement format would include the traditional income statement and the components of total other comprehensive income as well as total comprehensive income. In the two statement approach, the first statement would be the traditional income statement which would be immediately followed by a separate statement which includes the components of other comprehensive income, total other comprehensive income and total comprehensive income. The amendments in this ASU will be applied retrospectively. For public companies, they are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. Adoption of ASU 2011-05 is not expected to have a significant impact on the Company’s consolidated financial statements. In December, 2011, the FASB issued ASU 2011-12,Deferral of the Effective Date to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update 2011-05.In response to stakeholder concerns regarding the operational ramifications of the presentation of these reclassifications for current and previous years, the FASB has deferred the implementation date of this provision to allow time for further consideration. The requirement in ASU 2011-05,Presentation of Comprehensive Income, for the presentation of a combined statement of comprehensive income or separate, but consecutive, statements of net income and other comprehensive income is still effective for fiscal years and interim periods beginning after December 15, 2011 for public companies, and fiscal years ending after December 15, 2011 for nonpublic companies. The adoption of this ASU is not expected to have a significant impact on the Company’s consolidated financial statements.

In September 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-08,Intangibles-Goodwill and Other (Topic 350).The amendments in the ASU is intended to reduce complexity and costs by allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. The amendments also improve previous guidance by expanding upon the examples of events and circumstances that an entity should consider between annual impairment tests in determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Also, the amendments improve the examples of events and circumstances that an

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to measure an impairment loss, if any, under the second step of the goodwill impairment test. The amendments are effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. Adoption of ASU 2011-08 is not expected to have a significant impact on the Company’s consolidated financial statements.

Note 3 - Related Party Transactions

The Bank leases a property from NEW BAY LLC (“NEW BAY”), a limited liability corporation 100% owned by a majority of the Directors and officers of the Bank. In conjunction with the lease, NEW BAY substantially removed the pre-existing structure on the site and constructed a new building suitable to the Bank for its banking operations. Under the terms of the lease, the cost of this project was reimbursed to NEWBAY by the Bank. The amount reimbursed, which occurred during the year 2000, was $943,000, and is included in property and equipment under the caption “Building and improvements” (see Note 7).

On May 1, 2006, the Company renegotiated the lease to a twenty-five year term. The Company paid NEW BAY $165,000 a year ($13,750 per month) for the first 60 months which is included in the consolidated statements of income for 2011, 2010, and 2009 within occupancy expense of premises. The rent shall be reset every five years thereafter at the fair market rental value at the end of each preceding five year period. The Company expects to pay NEW BAY $165,000 for the year 2012.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 4 - Securities Available for Sale

	December 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)

Equity securities- Financial institutions	$	1,097	$	70	$	122	$	1,045

	December 31, 2010
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)

Equity securities- Financial institutions	$	1,097	$	32	$	31	$	1,098

The unrealized losses, categorized by the length of time of continuous loss position, and fair value of related securities available for sale were as follows:

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)
December 31, 2011
Equity securities	$	878	$	122	$	—	$	—	$	878	$	122
December 31, 2010
Equity securities	$	65	$	31	$	—	$	—	$	65	$	31

At December 31, 2011, management concluded that the unrealized loss above (which relate to one financial equity issue) is temporary in nature and does not believe that the unrealized loss represents an other-than-temporary impairment as it was primarily related to market interest rates and not related to the underlying credit quality of the issuer of the security. Additionally, the Company has the ability, and the management has the intent, to hold this security for the time necessary to recover its cost and does not have the intent to sell the security, and it is more likely than not that it would have to sell the security before recovery to its cost.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 5 - Securities Held to Maturity

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)

U.S. Government Agencies:
Due within one year	$	3,315	$	38	$	—	$	3,353
Due after ten years		3,000		12		—		3,012

		6,315		50		—		6,365

Residential mortgage-backed securities:
Due within one year		9		—		—		9
Due after one year through five years		1,325		32		3		1,354
Due after five years through ten years		37,034		417		44		37,407
Due after ten years		160,509		6,464		73		166,900

		198,877		6,913		120		205,670

Municipal Obligations:
Due after five to ten years		391		30		—		421
Due after ten years		979		59		—		1,038
Trust originated preferred security:
Due after ten years		403		6		—		409

	$	206,965	$	7,058	$	120	$	213,903

The amortized cost and carrying values shown above are by contractual final maturity. Actual maturities will differ from contractual final maturities due to scheduled monthly payments related to mortgage–backed securities and due to the borrowers having the right to prepay obligations with or without prepayment penalties. As of December 31, 2011 and December 31, 2010, all residential mortgage backed securities held in the portfolio were Government Sponsored Enterprise securities.

During the second quarter of 2011, management decided to sell its collateralized mortgage obligations that were issued by the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). While these securities were classified as held to maturity, ASC 320 (formerly FAS 115) allows sales of securities so designated, provided that a substantial portion (at least 85%) of the principal balance has been amortized prior to the sale. During the year ended December 31, 2011, proceeds from sales of securities held to maturity totaled approximately $2,438,000 and resulted in gross gains of approximately $25,000 and gross losses of approximately $7,000.

There were no sales of securities held to maturity for the years ended December 31, 2010 and 2009.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 5 - Securities Held to Maturity (Continued)

	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)

U.S. Government Agencies:
Due after one through five years	$	3,315	$	180	$	—	$	3,495
Due after ten years		27,523		14		62		27,475

		30,838		194		62		30,970

Residential mortgage-backed securities:
Due within one year		6		—		—		6
Due after one year through five years		775		24		1		798
Due after five years through ten years		54,629		374		357		54,646
Due after ten years		71,545		1,552		493		72,604

		126,955		1,950		851		128,054

Subordinated notes:
Due within one year		6,000		—		—		6,000
Municipal Obligations:
Due after ten years		1,376		—		21		1,355
Trust originated preferred security:
Due after ten years		403		3		—		406

	$	165,572	$	2,147	$	934	$	166,785

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 5 - Securities Held to Maturity (Continued)

The unrealized losses, categorized by the length of time of continuous loss position, and fair value of related securities held to maturity were as follows:

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)

December 31, 2011:
Residential mortgage-backed securities	$	16,949	$	82	$	5,942	$	38	$	22,891	$	120

	$	16,949	$	82	$	5,942	$	38	$	22,891	$	120

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)

December 31, 2010:
U.S. Government Agencies	$	20,328	$	62	$	—	$	—	$	20,328	$	62
Residential mortgage-backed securities		74,899		851		—		—		74,899		851
Municipal Obligations		1,355		21						1,355		21

	$	96,582	$	934	$	—	$	—	$	96,582	$	934

At December 31, 2011, management concluded that the unrealized losses above (which related to 47 mortgage-backed securities) are temporary in nature since they are related to interest rate fluctuations rather than any underlying credit quality of the issuers. Additionally, the Company has not decided to sell these securities and has concluded that it is unlikely it would be required to sell these securities prior to the anticipated recovery of the unrealized losses.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses

The following table presents the recorded investment in loans receivable at December 31, 2011 and December 31, 2010 by segment and class.

	December 31,
	2011			2010
	(In Thousands)

Real estate mortgage:
Residential	$	218,085		$	234,435
Commercial and multi-family		472,424			410,212
Construction		17,000			17,848

		707,509			662,495

Commercial:
Business loans		30,290			13,932
Lines of credit		44,283			40,228

		74,573			54,160

Consumer:
Passbook or certificate		809			1,004
Home equity lines of credit		18,923			10,228
Home equity		50,152			53,375
Automobile		103			178
Personal		301			554

		70,288			65,339

Deposit overdrafts		95			80

Total Loans		852,465			782,074

Deferred loan fees, net		(1,193	)		(556	)
Allowance for loan losses		(10,509	)		(8,417	)

		(11,702	)		(8,973	)

	$	840,763		$	773,101

At December 31, 2011 and 2010, loans serviced by the Bank for the benefit of others, which consist of participation interests in loans originated by the Bank, totaled approximately $6.3 million and $2.8 million.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table presents the unpaid principal balance and the related recorded investment of acquired loans included in our Consolidated Statements of Financial Condition.

	December 31,
	2011		2010
	(In Thousands)

Unpaid principal balance	$	410,057	$	378,004
Recorded investment		405,951		374,057

The following table presents changes in the accretable discount on loans acquired for the year ended December 31, 2011 and 2010:

	December 31,
	2011			2010
	(In Thousands)

Balance – Beginning	$	205,491		$	—
Acquisitions		17,318			229,805
Accretion		(42,087	)		(24,314	)

Balance - Ending	$	180,722		$	205,491

No interest income is being recognized on loans acquired where the fair value of the loan was based on the cash flows expected to be received from the foreclosure and sale of the underlying collateral. The carrying value of these loans at December 31, 2011 and December 31, 2010 was $13.3 million and $11.7 million.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The Bank grants loans to its officers and directors and to their associates. Related party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than normal risk of collectibility. The activity with respect to loans to directors, officers and associates of such persons, is as follows:

	Years Ended December 31,
	2011			2010
	(In Thousands)

Balance – beginning	$	7,270		$	7,232
Loans originated		613			1,837
Changes in related party status		1,105			190
Collections of principal		(479	)		(1,989	)

Balance - ending	$	8,509		$	7,270

Allowance for Loan Losses

Management reviews the adequacy of the allowance on at least a quarterly basis to ensure that the provision for loan losses has been charged against earnings in an amount necessary to maintain the allowance at a level that is adequate based on management’s assessment of probable estimated losses. The Company’s methodology for assessing the adequacy of the allowance for loan losses consists of several key elements. These elements include a general allocated reserve for impaired loans, a specific reserve for impaired loans and an unallocated portion.

The Company consistently applies the following comprehensive methodology. During the quarterly review of the allowance for loan losses, the Company considers a variety of factors that include:

	·	General economic conditions.

	·	Trends in charge-offs.

	·	Trends and levels of delinquent loans.

	·	Trends and levels of non-performing loans, including loans over 90 days delinquent.

	·	Trends in volume and terms of loans.

	·	Levels of allowance for specific classified loans.

	·	Credit concentrations.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The methodology includes the segregation of the loan portfolio into two divisions. Loans that are performing and loans that are impaired. Loans which are performing are evaluated homogeneously by loan class or loan type. The allowance of performing loans is evaluated based on historical loan experience, including consideration of peer loss analysis, with an adjustment for qualitative factors due to economic conditions in the market. Impaired loans are loans which are more than 90 days delinquent or troubled debt restructured. These loans are individually evaluated for loan loss either by current appraisal, estimated economic factor, or net present value. Management reviews the overall estimate for feasibility and bases the loan loss provision accordingly.

The portfolio of performing loans is segmented into the following loan types, where the risk level for each type is analyzed when determining the allowance for these loans:

Residential single family real estate loans involve certain risks such as interest rate risk and risk of non-repayment. Adjustable-rate residential family real estate loans decreases the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. At the same time, the marketability of the underlying property may be adversely affected by higher interest rates. Repayment risk can be affected by job loss, divorce, illness and personal bankruptcy of the borrower.

Construction lending is generally considered to involve a high risk due to the concentration of principal in a limited number of loans and borrowers and the effects of the general economic conditions on developers and builders. Moreover, a construction loan can involve additional risks because of the inherent difficulty in estimating both a property’s value at completion of the project and the estimated cost (including interest) of the project. The nature of these loans is such that they are generally difficult to evaluate and monitor. In addition, speculative construction loans to a builder are not necessarily pre-sold and thus pose a greater potential risk to the Bank than construction loans to individuals on their personal residence.

Commercial and multi-family real estate lending entails significant additional risks as compared with residential family property lending. Such loans typically involve large loan balances to single borrowers or groups of related borrowers. The payment experience on such loans is typically dependent on the successful operation of the real estate project. The success of such projects is sensitive to changes in supply and demand conditions in the market for commercial real estate as well as economic conditions generally.

Commercial business lending is generally considered higher risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general economic conditions on the business. Commercial business loans are primarily secured by inventories and other business assets. In most cases, any repossessed collateral for a defaulted commercial business loans will not provide an adequate source of repayment of the outstanding loan balance.

Home equity lending entails certain risks such as interest rate risk and risk of non-repayment. The marketability of the underlying property may be adversely affected by higher interest rates, decreasing the collateral securing the loan. Repayment risk can be affected by job loss, divorce, illness and personal bankruptcy of the borrower.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

Home equity line of credit lending entails securing an equity interest in the borrower’s home. The risk associated with this type of lending is the marketability of the underlying property may be adversely affected by higher interest rates. Repayment risk can be affected by job loss, divorce, illness and personal bankruptcy of the borrower. This type of lending is often priced on an adjustable rate basis with the rate set at or above a predefined index. Adjustable-rate loans decreases the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default.

Consumer loans generally have more credit risk because of the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans generally have shorter terms and higher interest rates than other lending. In addition, consumer lending collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely effected by job loss, divorce, illness and personal bankruptcy. In most cases, any repossessed collateral for a defaulted consumer loan will not provide an adequate source of repayment of the outstanding loan.

The Company also maintains an unallocated allowance. The unallocated allowance is used to cover any factors or conditions which may cause a potential loan loss but are not specifically identifiable. It is prudent to maintain an unallocated portion of the allowance because no matter how detailed an analysis of potential loan losses is performed, these estimates lack some element of precision. Management must make estimates using assumptions and information that is often subjective and changing rapidly.

Classified Assets. Our policies provide for a classification system for problem assets. Under this classification system, problem assets are classified as “substandard,” “doubtful,” “loss” or “special mention.” An asset is considered substandard if it is inadequately protected by its current net worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard assets include those characterized by the “distinct possibility” that “some loss” will be sustained if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weakness present makes “collection or liquidation in full” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as loss are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted, and the loan, or a portion thereof, is charged-off. Assets may be designated special mention because of potential weaknesses that do not currently warrant classification in one of the aforementioned categories.

When we classify problem assets, we may establish general allowances for loan losses in an amount deemed prudent by management. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. A portion of general loss allowances established to cover possible losses related to assets classified as substandard or doubtful may be included in determining our regulatory capital. Specific valuation allowances for loan losses generally do not qualify as regulatory capital. As of December 31, 2011, we had $576,000 in assets classified as loss, all of which is considered impaired, $7.1 million in assets classified as doubtful, of which $4.3 million was classified as impaired, $36.5 million in assets classified as substandard, of which $24.3 million was classified as impaired and $28.2 million in assets classified as special mention, of which $15.5 million was classified as impaired. The loans classified as substandard represent primarily commercial loans secured either by residential real estate, commercial real estate or heavy equipment. The loans that have been classified substandard were classified as such primarily because either updated financial information has not been timely provided, or the collateral underlying the loan is in the process of being revalued.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The Company’s internal credit risk grades are based on the definitions currently utilized by the banking regulatory agencies. The grades assigned and definitions are as follows, and loans graded excellent, above average, good and watch list (risk ratings 1-4) are treated as “pass” for grading purposes:

5 – Special Mention-Loans currently performing but with potential weaknesses including adverse trends in borrower’s operations, credit quality, financial strength, or possible collateral deficiency.

6 – Substandard- Loans that are inadequately protected by current sound worth, paying capacity, and collateral support. Loans on “nonaccrual” status. The loan needs special and corrective attention.

7 – Doubtful- Weaknesses in credit quality and collateral support make full collection improbable, but pending reasonable factors remain sufficient to defer the loss status.

8 – Loss- Continuance as a bankable asset is not warranted. However, this does not preclude future attempts at partial recovery.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the activity in the Bank’s allowance for loan losses for the year ended December 31, 2011 and recorded investment in loans receivable at December 31, 2011. The table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of the allowance for loan losses that is allocated to each loan class (In Thousands):

	Residential		Commercial & Multi-family		Construction		Commercial Business⁽¹⁾			Home equity⁽²⁾		Consumer		Unallocated			Total
Allowance for credit losses:
Beginning balance	$	171	$	6,179	$	426	$	1,286		$	204	$	18	$	133		$	8,417
Charge-offs	$	122	$	1,173	$	687	$	24		$	—	$	27	$	—		$	2,033
Recoveries	$	—	$	25	$	—	$	—		$	—	$	—	$	—		$	25
Provisions	$	2,630	$	767	$	565	$	(221	)	$	473	$	19	$	(133	)	$	4,100
Ending balance	$	2,679	$	5,798	$	304	$	1,041		$	677	$	10	$	—		$	10,509
Ending balance: individually evaluated for impairment	$	550	$	2,674	$	—	$	95		$	72	$	—	$	—		$	3,391
Ending balance: collectively evaluated for impairment	$	1,548	$	2,654	$	189	$	792		$	572	$	10	$	—		$	5,765
Ending balance: loans acquired with deteriorated credit quality	$	581	$	470	$	115	$	154		$	33	$	—	$	—		$	1,353

Loans receivables:
Ending balance	$	218,085	$	472,424	$	17,000	$	74,573		$	69,075	$	1,308	$	—		$	852,465
Ending balance: individually evaluated for impairment	$	14,006	$	39,461	$	1,513	$	4,307		$	1,850	$	—	$	—		$	61,137
Ending balance: collectively evaluated for impairment	$	194,862	$	429,355	$	13,236	$	70,012		$	66,613	$	1,308	$	—		$	775,386
Ending balance: loans acquired with deteriorated credit quality	$	9,217	$	3,608	$	2,251	$	254		$	612	$	—	$	—		$	15,942

(1) Includes business lines of credit

(2) Includes home equity lines of credit

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the Bank’s allowance for credit losses and recorded investment in financing receivables for the year ended December 31, 2010. The following table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of allowance for loan losses that is allocated to each loan type.

	Residential		Commercial & Multi-family		Construction		Commercial Business⁽¹⁾		Home equity⁽²⁾		Consumer		Unallocated		Total
Allowance for credit losses:

Ending balance	$	171	$	6,179	$	426	$	1,286	$	204	$	18	$	133	$	8,417
Ending balance: individually evaluated for impairment	$	—	$	1,656	$	—	$	449	$	2	$	—	$	—	$	2,107
Ending balance: collectively evaluated for impairment	$	171	$	4,523	$	426	$	837	$	202	$	18	$	133	$	6,310
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Loans receivables:
Ending balance	$	234,435	$	410,212	$	17,848	$	54,160	$	63,603	$	1,816	$	—	$	782,074
Ending balance: individually evaluated for impairment	$	89	$	27,422	$	2,910	$	2,809	$	372	$	—	$	—	$	33,602
Ending balance: collectively evaluated for impairment	$	219,795	$	379,907	$	14,938	$	51,275	$	63,231	$	1,816	$	—	$	730,962
Ending balance: loans acquired with deteriorated credit quality	$	14,551	$	2,883	$	—	$	76	$	—	$	—	$	—	$	17,510

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth an analysis of the Bank’s allowance for loan losses, for the years ended December 31, 2011, 2010, and 2009.

	Years Ended December 31,
	2011		2010		2009
	(Dollars in Thousands)

Balance at beginning of period	$	8,417	$	6,644	$	5,304

Charge-offs		2,033		689		212

Recoveries		25		12		2
Net charge-offs		2,008		677		210
Provisions charged to operations		4,100		2,450		1,550
Ending balance	$	10,509	$	8,417	$	6,644

The table below sets forth the amounts and types of non-accrual loans in the Bank’s loan portfolio, at December 31, 2011. Loans are placed on non-accrual status when they become more than 90 days delinquent, or when the collection of principal and/or interest become doubtful. As of December 31, 2011, non-accrual loans differed from the amount of total loans past due greater than 90 days due to troubled debt restructuring of loans which are maintained on non-accrual status for a minimum of six months until the borrower has demonstrated its ability to satisfy the terms of the restructured loan.

	Years Ended December 31,
	2011		2010
	(Dollars in Thousands)

Non-accruing loans:
Residential	$	15,511	$	15,115
Construction		4,040		2,773
Commercial business⁽¹⁾		4,265		861
Commercial and multi-family		22,280		21,147
Home equity⁽²⁾		1,729		1,632
Consumer		—		283
Total	$	47,825	$	41,811

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table summarizes information in regards to impaired loans by loan portfolio class for the year ended December 31, 2011 and average recorded investment and actual interest income recognized for the twelve months ended December 31, 2011 (In Thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized

With no related allowance recorded:
Residential Mortgages	$	6,142	$	6,142	$	—	$	3,370	$	157
Commercial and Multi-family		23,417		23,417		—		22,910		793
Construction		1,513		1,513		—		2,415		19
Commercial Business⁽¹⁾		2,366		2,366		—		1,653		94
Home Equity⁽²⁾		1,301		1,301		—		711		52
Consumer		—		—		—		—		—

With an allowance recorded:
Residential Mortgages	$	7,864	$	7,864	$	550	$	3,945	$	303
Commercial and Multi-family		16,044		16,044		2,674		15,447		582
Construction		—		—		—		330		—
Commercial Business⁽¹⁾		1,941		1,941		95		2,019		24
Home Equity⁽²⁾		549		549		72		411		19
Consumer		—		—		—		—		—

Total:
Residential Mortgages	$	14,006	$	14,006	$	550	$	7,315	$	460
Commercial and Multi-family		39,461		39,461		2,674		38,357		1,375
Construction		1,513		1,513		—		2,745		19
Commercial Business⁽¹⁾		4,307		4,307		95		3,672		118
Home Equity⁽²⁾		1,850		1,850		72		1,121		71
Consumer		—		—		—		—		—

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable (Continued)

The following table summarizes information in regards to impaired loans by loan type as of December 31, 2010:

	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Residential	$	89	$	89	$	—
Commercial and multi-family		9,709		9,709		—
Construction		2,910		2,910		—
Commercial business		981		981		—
Home equity		189		189		—
Consumer		—		—		—

With an allowance recorded:
Residential		—		—		—
Commercial and multi-family		17,713		17,713		1,656
Construction		—		—		—
Commercial business		1,828		1,828		449
Home equity		183		183		2
Consumer		—		—		—

Total:
Residential	$	89	$	89	$	—
Commercial and multi-family		27,422		27,422		1,656
Construction		2,910		2,910		—
Commercial business		2,809		2,809		449
Home equity		372		372		2
Consumer		—		—		—

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table summarizes information in regards to troubled debt restructurings for the year ended December 31, 2011, (In thousands):

	Number of Contracts		Pre-Modification Outstanding Recorded Investments		Post-Modification Outstanding Recorded Investments
Troubled Debt Restructurings
Residential		20	$	5,985	$	5,985
Commercial and multi-family		12	$	5,368	$	5,368
Construction		—	$	—	$	—
Commercial business		—	$	—	$	—
Home equity		2	$	470	$	470
Consumer		—	$	—	$	—

The loans included above are considered TDRs as a result of the Bank implementing one or more of the following concessions: granting a material extension of time, issuing a forbearance agreement, adjusting the interest rate, accepting interest only for a period of time or a change in amortization period. As of December 31, 2011, TDRs totaled $11.8 million. All TDRs were considered impaired and therefore were individually evaluated for impairment in the calculation of the allowance for loan losses. The adoption of (ASU) No. 2011-02 did not result in any additional TDR’s being identified when retrospectively applied to the beginning of the year 2011.

The following table summarizes information in regards to troubled debt restructurings for which there was a payment default for the year ended December 31, 2011, which occurred within twelve months of restructuring, (In thousands):

	Number of Contracts		Recorded Investment
Troubled Debt Restructurings
That Subsequently Defaulted

Residential		2	$	506
Commercial and multi-family		2	$	1,429
Construction		—	$	—
Commercial business		—	$	—
Home equity		—	$	—
Consumer		—	$	—

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

At December 31, 2011 and 2010, non-accrual loans for which the accrual of interest had been discontinued totaled approximately $47,825,000 and $41,811,000, respectively. Had non-accrual loans been performing in accordance with their original terms, the interest income recognized for the years ended December 31, 2011, 2010 and 2009 would have been approximately $4,384,000, $1,949,000 and $1,064,000, respectively. Interest income recognized on such loans was approximately $968,000, $280,000 and $282,000 respectively. The Bank is not committed to lend additional funds to the borrowers whose loans have been placed on a nonaccrual status. At December 31, 2011 and 2010, there were no loans which were more than ninety days past due and still accruing interest.

At December 31, 2011 and 2010, impaired loans were $61,137,000 and $33,602,000, respectively, and the related specific allocation of allowance for loan losses totaled $3,391,000 and $2,107,000 respectively. There were impaired loans totaling $34,739,000 which did not have a specific allocation of the allowance for loan losses at December 31, 2011. There were impaired loans totaling $13,878,000 which did not have a specific allocation of the allowance for loan losses at December 31, 2010. During the years ended December 31, 2011, 2010, and 2009, the average balance of impaired loans was $53,210,000, $29,472,000 and $8,662,000, and respectively, and interest income recognized during the period of impairment totaled $2,043,000, $2,114,000 and $464,000 respectively.

The following table sets forth the delinquency status of total loans receivable at December 31, 2011.

	As of December 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable>90 Days and Accruing
	(Dollars in Thousands)

Residential	$	3,272	$	1,381	$	10,473	$	15,126	$	202,959	$	218,085		—
Commercial and multi-family		11,112		1,839		19,866		32,817		439,607		472,424		—
Construction		130		—		3,660		3,790		13,210		17,000		—
Commercial business⁽¹⁾		536		499		1,286		2,321		72,252		74,573		—
Home equity⁽²⁾		1,738		242		1,099		3,079		65,996		69,075		—
Consumer		10		—		—		10		1,298		1,308		—

Total	$	16,798	$	3,961	$	36,384	$	57,143	$	795,322	$	852,465		—

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the delinquency status of total loans receivable at December 31, 2010.

	As of December 31, 2010
	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable>90 Days and Accruing
	(Dollars in Thousands)

Residential	$	5,010	$	3,706	$	15,115	$	23,831	$	210,604	$	234,435		—
Commercial and multi-family		20,071		5,391		21,147		46,609		363,603		410,212		—
Construction		1,889		—		2,773		4,662		13,186		17,848		—
Commercial business⁽¹⁾		1,377		456		861		2,694		51,466		54,160		—
Home equity⁽²⁾		870		694		1,632		3,196		60,407		63,603		—
Consumer		106		5		283		394		1,422		1,816		—
Total	$	29,323	$	10,252	$	41,811	$	81,386	$	700,688	$	782,074		—

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table presents the loan portfolio types summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful, and loss within the Company’s internal risk rating system as of December 31, 2011:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total

Residential	$	203,317	$	5,316	$	7,632	$	1,437	$	383	$	218,085
Commercial and multi-family		426,983		19,620		23,618		2,203		—		472,424
Construction		13,697		—		2,619		684		—		17,000
Commercial business⁽¹⁾		67,593		2,827		1,245		2,784		124		74,573
Home equity⁽²⁾		67,126		468		1,412		—		69		69,075
Consumer		1,308		—		—		—		—		1,308
Total	$	780,024	$	28,231	$	36,526	$	7,108	$	576	$	852,465

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

	Pass		Special Mention		Substandard		Doubtful		Loss		Total

Residential	$	217,459	$	4,930	$	8,874	$	3,172	$	—	$	234,435
Commercial and multi-family		349,219		30,538		17,760		12,578		117		410,212
Construction		12,763		689		4,005		391		—		17,848
Commercial business⁽¹⁾		50,248		3,113		339		25		435		54,160
Home equity⁽²⁾		61,682		807		488		510		116		63,603
Consumer		1,673		7		—		136		—		1,816
Total	$	693,044	$	40,084	$	31,466	$	16,812	$	668	$	782,074

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 7 - Premises and Equipment

	December 31,
	2011			2010
	(In Thousands)

Land	$	1,837		$	1,560
Buildings and improvements		11,080			8,425
Leasehold improvements		1,053			1,186
Furniture, fixtures and equipment		3,462			3,315

		17,432			14,486
Accumulated depreciation and amortization		(3,856	)		(3,127	)

	$	13,576		$	11,359

Buildings and improvements include a building constructed on property leased from a related party (see Note 3).

Rental expenses related to the occupancy of premises and related shared costs for common areas totaled $987,000, $693,000 and $425,000 for the years ended December 31, 2011, 2010, and 2009, respectively. The minimum obligation under non-cancelable lease agreements expiring through April 30, 2031, for each of the years ended December 31 is as follows (in thousands):

2012	$	1,142
2013		864
2014		827
2015		538
2016		361
Thereafter		2,640

	$	6,372

Note 8 - Interest Receivable

	December 31,
	2011		2010
	(In Thousands)

Loans	$	4,181	$	4,340
Securities		816		863

	$	4,997	$	5,203

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 9 - Deposits

	December 31,
	2011		2010
	(In Thousands)

Demand:
Non-interest bearing	$	78,589	$	69,471
NOW		112,605		80,775
Money market		67,592		55,676
		258,786		205,922

Savings and club		265,546		245,951
Certificates of deposit		453,291		434,415

	$	977,623	$	886,288

At December 31, 2011 and 2010, certificates of deposit of $100,000 or more totaled approximately $255.2 million and $236.1 million respectively.

The scheduled maturities of certificates of deposit at December 31, 2011, were as follows (in thousands):

	Amount

2012	$	321,789
2013		56,999
2014		43,169
2015		14,857
2016		16,241
Thereafter		236
	$	453,291

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 10 - Short-Term Borrowings and Long-Term Debt

Long-term debt consists of the following:

			December 31,
			2011					2010
			Weight Average Rate			Amount		Weight Average Rate			Amount
	Maturing by December 31,

Federal Home Loan Bank Advances:

		2016		4.28	%	$	57,000,000		4.28	%	$ 55,000,000

		2017		4.37	%		56,500,000		4.39	%	55,000,000

		2018		2.51	%		10,500,000		-	%	-

				4.17	%		124,000,000		4.33	%	110,000,00
Fair Value Adjustments: (1)							1,406,986
						$	125,406,986				$110,000,000

Beginning September 7, 2010, the Federal Home Loan Bank of New York (“FHLBNY”) replaced the existing Overnight Repricing Advance Program and its associated companion products, the Overnight Line of Credit (“OLOC”), OLOC Plus, OLOC Companion, and OLOC Companion Plus with the new Overnight Advance. The new Overnight advance permits the Bank to borrow overnight up to its maximum borrowing capacity at the FHLBNY. The Bank is no longer restricted to the previous borrowing limits of 10% (OLOC) or up to 20% (OLOC Plus) of total assets. At December 31, 2011, the Bank’s total credit exposure cannot exceed 50% of its total assets, or $608,454,000, based on the borrowing limitations outlined in the Federal Home Loan Bank of New York’s member products guide. The total credit exposure limit of 50% of total assets is recalculated each quarter.

			2011					2010
			Coupon Rate			Amount		Coupon Rate			Amount
	Maturing by December 31,

Trust preferred junior subordinated debenture:		2034		3.21	%	$	4,124,000		2.95	%	$4,124,000

The Trust Preferred floating rate junior subordinated debenture matures on June 17, 2034; interest rate adjusts quarterly to LIBOR plus 2.65%, the rate paid as of December 31, 2011 was 3.21%.

(1) Fair value adjustments represents the difference between the fair market value of the FHLB advances acquired from Allegiance Community Bank acquisition based on pricing from the Federal Home Loan Bank of New York at date of acquisition. This adjustment is being amortized over the life of the acquired advances.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 10 - Short-Term Borrowings and Long-Term Debt (Continued)

The trust preferred debenture became callable, at the Company’s option, on June 17, 2009, and quarterly thereafter.

Additional information regarding short-term borrowings is as follows:

	December 31,
	2011		2010		2009
		(In Thousands)

Average balance outstanding during the year	$	—	$	—	$	38
Highest month-end balance during the year	$	—	$	—	$	—
Average interest rate during the year	$	—	$	—		0.51	%
Weighted average interest rate at year-end	$	—	$	—	$	—

At December 31, 2011 and 2010 cash and securities held to maturity with carrying values of approximately $139.2 million and $145.2 million, respectively, were pledged to secure the above noted Federal Home Loan Bank of New York borrowings. In addition, there was a blanket pledge on the residential mortgage portfolio at December 31, 2011.

Note 11 - Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The Holding Company’s capital adequacy guidelines are not materially different than the capital adequacy guidelines for the Bank.

Quantitative measures, established by regulation to ensure capital adequacy, require the Bank to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined in the regulations), to risk-weighted assets, (as defined), and of Tier 1 capital to average assets (as defined). The following table presents information as to the Bank’s capital levels.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 11 - Regulatory Matters (Continued)

Actual

For Capital Adequacy Purposes

To be Well Capitalized under Prompt Corrective Action Provisions

Amount

Ratio

Amount

Ratio

Amount

Ratio

(Dollars in Thousands)

As of December 31, 2011:

Total capital (to risk-weighted assets)

$112,802

16.42

$³54,960

³8.00

$³68,699

³10.00

Tier 1 capital (to risk-weighted assets)

105,376

15.34

³27,480

³ 4.00

³41,219

³ 6.00

Tier 1 capital (to average assets)

105,376

8.66

³48,646

³4.00

³60,808

³ 5.00

As of December 31, 2010:

Total capital (to risk-weighted assets)

$109,032

15.89

$³54,882

³8.00

$³68,602

³10.00

Tier 1 capital (to risk-weighted assets)

102,541

14.95

³27,441

³ 4.00

³41,161

³ 6.00

Tier 1 capital (to average assets)

102,541

9.16

³44,761

³4.00

³55,952

³ 5.00

As of December 31, 2011, the most recent notification from the Bank’s regulators categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events occurring since that notification that management believes have changed the Bank’s category.

Note 12 - Benefits Plans

Pension Plan

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plans (Continued)

The following tables set forth the Plan’s funded status at December 31, 2011 and 2010 and components of net periodic pension cost for the year ended December 31, 2011 and 2010:

Change in Benefit Obligation:	December 31,
	2011			2010
	(In Thousands)

Benefit obligation, beginning of year	$	8,723		$	—
Benefit obligation, at date of merger		—			8,673
Interest Cost		469			245
Actuarial loss		1,807			369
Benefits paid		(503	)		(253	)
Settlements		(158	)		(311	)

Benefit obligation, ending	$	10,338		$	8,723

Change in Plan Assets:

Fair value of assets, beginning of year	$	4,746		$	—
Fair value of assets, at date of merger		—			4,598
Actual return on plan assets		76			561
Employer contributions		812			151
Benefits paid		(503	)		(253	)
Settlements		(158	)		(311	)

Fair value of assets, ending	$	4,973		$	4,746

Reconciliation of Funded Status:

Accumulated benefit obligation	$	10,338		$	8,723

Projected benefit obligation	$	10,338		$	8,723

Fair value of assets		(4,973	)		(4,746	)

Funded status, included in other liabilities	$	(5,365	)	$	(3,977	)

Valuation assumptions used to determine benefit obligation at period end:

Discount rate		4.40	%		5.54	%

Salary Increase Rate		N/A			N/A

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plans (Continued)

Net Periodic Pension Expense:	December 31,
	2011			2010
	(In Thousands)

Interest cost	$	(469	)	$	(245	)
Expected return on assets		375			181

Net Periodic Pension Cost	$	(94	)	$	(64	)

Valuation assumptions used to determine net periodic benefit cost for the year:

Discount rate		5.54	%		5.50	%
Long term rate of return on plan assets		8.00	%		8.00	%

Salary Increase Rate		N/A			3.50	%

At December 31, 2011 and December 31, 2010, unrecognized net gain (loss) of $(1,239,000) and $6,811, respectively, was included in accumulated other comprehensive (loss) income in accordance with ASC 715-20 and ASC 715-30. None of the unrecognized net loss is expected to be recognized in net periodic pension expense for the year ended December 31, 2011.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

Plan Assets

Investment Policies and Strategies

The primary long-term objective for the Plan is to maintain assets at a level that will sufficiently cover future beneficiary obligations. The Plan will be structured to include a volatility reducing component (the fixed income commitment) and a growth component (the equity commitment).

To achieve the Plan Sponsor’s long-term investment objectives, the Trustee will invest the assets of the Plan in a diversified combination of asset classes, investment strategies, and pooled vehicles. The asset allocation guidelines in the table below reflect the Bank’s risk tolerance and long-term objectives for the Plan. These parameters will be reviewed on a regular basis and subject to change following discussions between the Bank and the Trustee.

Initially, the following asset allocation targets and ranges will guide the Trustee in structuring the overall allocation in the Plan’s investment portfolio. The Bank or the Trustee may amend these allocations to reflect the most appropriate standards consistent with changing circumstances. Any such fundamental amendments in strategy will be discussed between the Bank and the Trustee prior to implementation.

Based on the above considerations, the following asset allocation ranges will be implemented:

	Asset Allocation Parameters by Asset Class
	Minimum			Target			Maximum

Equity
Large-Cap U.S.					26	%
Mid/Small-Cap U.S.					12	%
Non-U.S					12	%
Total-Equity		40	%		50	%		60	%

Fixed Income
Long Duration					47	%
Money Market/Certificates of Deposit					3	%
Total-Fixed Income		40	%		50	%		60	%

The parameters for each asset class provide the Trustee with the latitude for managing the Plan within a minimum and maximum range. The Trustee will have full discretion to buy, sell, invest and reinvest in these asset segments based on these guidelines which includes allowing the underlying investments to fluctuate within the stated policy ranges. The Plan will maintain a cash equivalents component (not to exceed 3% under normal circumstances) within the fixed income allocation for liquidity purposes.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

The Trustee will monitor the actual asset segment exposures of the Plan on a regular basis and, periodically, may adjust the asset allocation within the ranges set forth above as it deems appropriate. Periodic reallocations of assets will be based on the Trustee’s perception of the changing risk/return opportunities of the respective asset classes.

Determination of Long-Term Rate–of Return

The long-term rate-of-return-on assets assumption was set based on historical returns earned by equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn real rates of return in the ranges of 5-9% and 2-6%, respectively. The long-term inflation rate was estimated to be 3%. When these overall return expectations are applied to the Plan’s target allocation, the result is an expected rate of return of 7% to 11%.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

The fair values of the Company’s pension plan assets at December 31, 2011, by asset category (see Note 16 for the definitions of levels), are as follows:

Asset Category	Total		(Level 1)		(Level 2)		(Level 3)

Mutual funds-Equity
Large-Cap Value (a)	$	266,863	$	266,863	$	—	$	—
Large-Cap Core (b)		327,673		327,673		—		—
Mid-Cap Core (c)		—		—		—		—
Small-Cap Core (d)		158,806		158,806		—		—
International Cap (e)		277,059		277,059		—		—

Mutual Funds-Fixed Income
US Core (f)		519,981		519,981		—		—
Core Plus (g)		—		—		—		—

Common/Collective Trusts-Equity
Large-Cap Value (i)		286,944		—		286,944		—
Large-Cap Growth (j)		525,035		—		525,035		—
International Core (k)		272,948		—		272,948		—

Exchange Traded Funds
Fixed Income (h)		537,986		537,986		—		—

Stock
BCB Common Stock		494,410		494,410		—		—

Cash Equivalents
Money Market		14,637		14,637		—		—
BCB Bank CD		1,290,457		—		1,290,457		—

Total	$	4,972,799	$	2,597,415	$	2,375,384	$	—

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

	(a)	This category consists of a mutual fund holding 100-160 stocks, designed to track and outperform the Russell 1000 Value Index.

	(b)	This category contains stocks of the S&P 500 Index. The stocks are maintained in approximately the same weightings as the index.

	(c)	This category contains stocks of the MSCI U.S. Mid Cap 450 Index. The stocks are maintained in approximately the same weightings as the index.

	(d)	This category consists of 400 or more small and micro-cap companies, with as much as 25% invested in non-U.S. equities.

	(e)	This category consists of investments with long-term growth potential located primarily in Europe and the Pacific Basin, with a smaller portion located in developing economies.

	(f)	This category consists of mutual funds that invest in long-term treasury and investment grade corporate bond securities with a dollar-weighted average maturity of 15 to 30 years.

	(g)	This category consists of a diversified portfolio of bonds and other fixed income securities, including mortgage-related and asset backed securities. Up to 15% may be invested in below investment grade domestic and foreign securities.

	(h)	This category consists of an exchange traded fund (ETF) that seeks to approximate the total rate of return of the Barclays Capital U.S. 20+ Year Treasury Bond Index.

	(i)	This category contains large-cap stocks with above-average yield. The portfolio typically holds between 60 and 70 stocks.

	(j)	This category consists of a portfolio of between 45 and 65 stocks that will typically overweight technology and health care.

	(k)	This category consists of a portfolio of over 200 stocks in non-U.S. domiciled companies, with up to 35% invested in emerging markets.

The Company expects to contribute, based upon actuarial estimates, approximately $586,000 to the pension plan in 2012.

Benefit payments are expected to be paid for the years ended December 31 as follows (In thousands):

2012	$	586
2013		606
2014		612
2015		613
2016		618
2017-2021		3,059

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

Supplemental Executive Retirement Plan

The Company acquired through the merger with Pamrapo Bancorp, Inc. a supplemental executive retirement plan (“SERP”) in which certain former employees of Pamrapo Bank are covered. A SERP is an unfunded non-qualified deferred retirement plan. Participants who retire at the age of 65 (the “Normal Retirement Age”), are entitled to an annual retirement benefit equal to 75% of compensation reduced by their retirement plan annual benefits. Participants retiring before the Normal Retirement Age receive the same benefits reduced by a percentage based on years of service to the Company and the number of years prior to the Normal Retirement Age that participants retire.

The following tables set forth the SERP’s funded status and components of net periodic SERP cost:

Change in Benefit Obligation:	December 31,
	2011			2010
	(In Thousands)
Benefit obligation, beginning of year	$	596		$	—
Benefit obligation, at date of merger		—			680
Interest Cost		29			20
Actuarial loss		25			4
Benefits paid		(139	)		(108	)

Benefit obligation, ending	$	511		$	596

Change in Plan Assets

Fair value of assets, beginning of year	$	—		$	—
Employer contributions		139			108
Benefits paid		(139	)		(108	)

Fair value of assets, ending	$	—		$	—

Reconciliation of Funded Status:

Accumulated benefit obligation	$	511		$	596
Projected benefit obligation	$	511		$	596
Fair value of assets		—			—

Funded status, included in other liabilities	$	511		$	596

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

Valuation assumptions used to determine benefit obligation at period end:

Discount rate	4.400	%	5.540	%

Salary Increase Rate	N/A		N/A

Net Periodic SERP Expense:	December 31,
	2011			2010
	(In Thousands)

Interest Cost	$	29		$	20

Net Periodic SERP Cost	$	29		$	20

Valuation assumptions used to determine net periodic benefit cost for the year:

Discount rate		5.54	%		5.50	%

Rate of increase in compensation		N/A			N/A

At December 31, 2011 and December 31, 2010, unrecognized net loss of $17,000 and $3,000, respectively, was included in accumulated other comprehensive income in accordance with ASC 715-20 and ASC 715-30. None of the unrecognized net loss is expected to be recognized in net periodic SERP cost for the year ended December 31, 2011.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

The Company expects to contribute, based upon actuarial estimates, approximately $74,000 to the SERP plan in 2012.

Benefit payments are expected to be paid for the years ended December 31 as follows

(In thousands):

2012	$	74
2013		62
2014		62
2015		62
2016		62
2017-2021		248

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

Stock Options

The Company has three stock-related compensation plans, the 2002 Stock Option Plan, 2003 Stock Option Plan, and the 2011 Stock Option Plan (the “Plans”). All stock options granted have a ten year term. For the 2002 Stock Option Plan and the 2003 Stock Option Plan all shares granted have vested and all but 8,116 options authorized under the Plans have been granted as of December 31, 2011. For the 2011 Stock Option Plan, stock option awards vest at a rate of 10% per year, over ten years commencing on the first anniversary of the grant date. As of December 31, 2011, 60,000 options had been granted, with 840,000 shares authorized under the Plan remaining to be granted. During the year ended December 31, 2011, the Company recorded $12,000 as stock option compensation expense. During the years ended December 31, 2010 and 2009, the Company recorded no share-based compensation expense.

A summary of stock option activity, adjusted to retroactively reflect subsequent stock dividends, follows:

	Number of Option Shares		Range of Exercise Prices		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (000’s)
Outstanding at December 31, 2009	279,500		$5.29-$15.65	$	10.38	3.0 years	$	148

Options forfeited	(4,210	)	7.72		7.72
Options exercised	(13,677	)	5.29		5.29			50
Options added through merger	28,000		18.41-29.25		24.22

Outstanding at December 31, 2010	289,613		$5.29-$29.25	$	12.00

Options forfeited	(3,000	)	29.25		29.25
Options exercised	(28,637	)	8.26		8.26			70
Options granted	60,000		8.93		8.93

Outstanding at December 31, 2011	317,976		$5.29-$29.25	$	11.61	3.46 years		231

Exercisable at December 31, 2011	262,976		$5.29-$29.25	$	12.21	2.0 years		168

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

The key valuation assumptions and fair value of stock options granted during the year ended December 31, 2011 were:

Expected life		7.25 years
Risk-free interest rate		1.44	%
Volatility		29.80	%
Dividend yield		4.71	%
Fair value	$	1.49

It is Company policy to issue new shares upon share option exercise. Expected future compensation expense relating to the 55,000 unexercised options outstanding as of December 31, 2011 is $78,000 over a weighted average period of 9.75 years.

Note 13 - Dividend Restrictions

Payment of cash dividends is conditional on earnings, financial condition, cash needs, the discretion of the Board of Directors, and compliance with regulatory requirements. State and federal law and regulations impose substantial limitations on the Bank’s ability to pay dividends to the Company. Under New Jersey law, the Bank is permitted to declare dividends on its common stock only if, after payment of the dividend, the capital stock of the Bank will be unimpaired and either the Bank will have a surplus of not less than 50% of its capital stock or the payment of the dividend will not reduce the Bank’s surplus. During 2011, 2010 and 2009, the Bank paid the Company total dividends of $9,611,000, $5,334,000, and $2,547,000 respectively. The Company’s ability to declare dividends is dependent upon the amount of dividends declared by the Bank.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 14 - Income Taxes

The components of income tax expense (benefit) are summarized as follows:

	Years Ended December 31,
	2011			2010			2009
	(In Thousands)
Current income tax expense:
Federal	$	4,382		$	1,982		$	2,730
State		836			(136	)		489

		5,218			1,846			3,219

Deferred income tax benefit:
Federal		(1,592	)		5			(467	)
State		(253	)		(346	)		(131	)

		(1,845	)		(341	)		(598	)

Total Income Taxes	$	3,373		$	1,505		$	2,621

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 14 - Income Taxes (Continued)

The tax effects of existing temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are as follows:

	December 31,
	2011		2010
	(In Thousands)
Deferred income tax assets:
Allowance for loan losses	$	4,822	$	3,362
Depreciation		199		137
Other than temporary impairment on security		1,191		1,164
Non-accrual interest		397		41
Benefit Plans		1,530		1,829
Benefit Plan-accumulated other comprehensive loss		868		—
Valuation adjustment on loans receivable acquired		1,677		1,993
Valuation adjustment on time deposits acquired		347		200
Valuation adjustment on borrowings acquired		575		—
Net operating loss		345		—
Unrealized loss on securities available for sale		21		—
Other		318		99

		12,290		8,825
Deferred income tax liabilities:

Benefit Plan-accumulated other comprehensive income		—		3
Valuation adjustment on securities		748		1,288
Valuation adjustment on premises and equipment acquired		1,602		1,749
		2,350		3,040


Net Deferred Tax Asset	$	9,940	$	5,785

At December 31, 2011, the Company had a net operating loss carry forward of approximately $987,000, expiring in the year 2031 for federal tax purposes. The net operating loss carry forward was acquired in our acquisition of Allegiance Community Bank and is subject to limitations pertaining to Section 382 of the Internal Revenue Code.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 14 - Income Taxes (Continued)

The following table presents a reconciliation between the reported income tax expense and the income tax expense which would be computed by applying the normal federal income tax rate of 35% in 2011 and 34% in 2010 and 2009 to income before income tax expense:

	Years Ended December 31,
	2011			2010			2009
	(In Thousands)

Federal income tax expense at statutory rate	$	3,298		$	5,382		$	2,165
Increases (reductions) in income taxes resulting from:
State income tax (benefit), net of federal income tax effect		380			(318	)		236
Merger related items		(219	)		(4,066	)		208
Other items, net		(86	)		507			12

Effective Income Tax	$	3,373		$	1,505		$	2,621

Effective Income Tax Rate		35.8	%		9.5	%		41.2	%

Note 15- Commitments and Contingencies

The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments primarily include commitments to extend credit. The Bank’s exposure to credit loss, in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Outstanding loan related commitments were as follows:

	December 31,
	2011		2010
	(In Thousands)

Loan origination	$	39,133	$	3,038
Standby letters of credit		1,538		2,018
Construction loans in process		3,588		5,180
Unused lines of credit		29,261		33,747

	$	73,520	$	43,983

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 15- Commitments and Contingencies (Continued)

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but primarily includes residential real estate properties.

The Company and its subsidiaries also have, in the normal course of business, commitments for services and supplies. Management does not anticipate losses on any of these transactions.

The Company and its subsidiaries, from time to time, may be party to litigation which arises primarily in the ordinary course of business. In the opinion of management, the ultimate disposition of such litigation should not have a material effect on the consolidated financial statements. As of December 31, 2011, the Company and its subsidiaries were not parties to any material litigation.

Note 16 - Fair Value Measurements and Fair Values of Financial Instruments

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.

ASC Topic 820,Fair Value Measurements and Disclosures, establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For assets and liabilities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 16 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)

Description	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In Thousands)
As of December 31, 2011

Securities available for sale-Equity Securities	$	1,045	$	1,045	$	—	$	—

As of December 31, 2010

Securities available for sale-Equity Securities	$	1,098	$	1,098	$	—	$	—

For assets and liabilities measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

December 31, 2011	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In Thousands)

Impaired loans	$	23,007	$	—	$	—	$	23,007
Real estate owned	$	300	$	—	$	—	$	300

December 31, 2010	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
	(In Thousands)

Impaired loans	$	17,617	$	—	$	—	$	17,617
Real estate owned	$	513	$	—	$	—	$	513

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 16 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at December 31, 2011 and 2010:

Cash and Cash Equivalents (Carried at Cost)

The carrying amounts reported in the consolidated statements of financial condition for cash and short-term instruments approximate those assets’ fair values.

Securities

The fair value of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

Loans Held for Sale (Carried at Lower of Cost or Fair Value)

The fair value of loans held for sale is determined, when possible, using quoted secondary-market prices. If no such quoted prices exist, the fair value of a loan is determined using quoted prices for a similar loan or loans, adjusted for specific attributes of that loan. Loans held for sale are carried at their cost.

Loans Receivable (Carried at Cost)

The fair values of loans, except for certain impaired loans, are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.

Impaired Loans (Generally Carried at Fair Value)

Impaired loans are those for which the Company has measured and recorded an impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair value at December 31, 2011 and 2010 consists of the loan balances of $26,398,000 and $19,724,000, net of a valuation allowance of $3,391,000 and $2,107,000, respectively.

FHLB of New York Stock (Carried at Cost)

The carrying amount of restricted investment in bank stock approximates fair value, and considers the limited marketability of such securities.

Interest Receivable and Payable (Carried at Cost)

The carrying amount of interest receivable and interest payable approximates its fair value.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 16 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)

Deposits (Carried at Cost)

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Long-Term Debt (Carried at Cost)

Fair values of long-term debt are estimated using discounted cash flow analysis, based on quoted prices for new long-term debt with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party.

Off-Balance Sheet Financial Instruments (Disclosed at Cost)

Fair values for the Bank’s off-balance sheet financial instruments (lending commitments and unused lines of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. The fair value of these commitments was deemed immaterial and is not presented in the accompanying table.

The carrying values and estimated fair values of financial instruments were as follows at December 31, 2011 and 2010:

	December 31,
	2011				2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	117,087	$	117,087	$	121,127	$	121,127
Securities available for sale		1,045		1,045		1,098		1,098
Securities held to maturity		206,965		213,903		165,572		166,785
Loans held for sale		5,856		6,020		5,572		5,633
Loans receivable		840,763		890,215		773,101		779,858
FHLB of New York stock		7,498		7,498		6,723		6,723
Interest receivable		4,997		4,997		5,203		5,203

Financial liabilities:
Deposits		977,623		982,500		886,288		890,402
Long-term debt		129,531		141,108		114,124		126,895
Interest payable		813		813		787		787

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 17- Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) included in stockholders’ equity are as follows:

		At December 31,
		2011			2010
		(In thousands)
Net unrealized gain (loss) on securities available for sale	$	(52	)	$	1
Tax effect		21			—
Net of tax amount		(31	)		1

Benefit plan adjustments		(2,124	)		7
Tax effect		868			(3	)
Net of tax amount		(1,256	)		4

Accumulated other comprehensive income (loss)	$	(1,287	)	$	5

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 17- Comprehensive Income (Loss) (Continued)

The components of other comprehensive income (loss) and related tax effects are presented in the following table:

	Years Ended December 31,
	2011			2010			2009
	(In thousands)

Unrealized holding (losses) gains on securities available for sale:	$	(53	)	$	(21	)	$	231

Unrealized holding (losses) gains arising during the year

Defined benefit pension plan and SERP Plan:

Pension Gains (Losses)		(2,106	)		11			—

SERP Losses		(25	)		(4	)		—

Net change in benefit plans accrued expense		(2,131	)		7			—

Other comprehensive income (loss) before tax effect		(2,184	)		(14	)		231
Tax effect		892			6			(93	)
Other comprehensive income (loss)	$	(1,292	)	$	(8	)	$	138

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 18- Parent Only Condensed Financial Information

STATEMENTS OF FINANCIAL CONDITION

	December 31,
	2011		2010
Assets	(In Thousands)

Cash and due from banks	$	—	$	355
Investment in subsidiaries		104,088		102,546
Restricted common stock		124		124
Other assets		36		131

Total Assets	$	104,248	$	103,156

Liabilities and Stockholders’ Equity

Liabilities

Long-term debt	$	4,124	$	4,124
Other liabilities		76		58

Total Liabilities		4,200		4,182

Stockholders’ Equity		100,048		98,974

Total Liabilities and Stockholders’ Equity	$	104,248	$	103,156

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 18- Parent Only Condensed Financial Information (Continued)

STATEMENTS OF INCOME
	Years Ended in December 31,
	2011			2010		2009
	(In Thousands)

Dividends from subsidiary	$	9,611		$	5,334	$	2,547

Total Income		9,611			5,334		2,547

Interest expense, borrowed money		120			122		146
Other		(17	)		60		—
Total Expense		103			182		146

Income before Income Tax Benefit and Equity in Undistributed Earnings (Loss) of Subsidiaries		9,508			5,152		2,401

Income tax expense (benefit)		97			120		(17	)

Income before Equity in Undistributed Earnings of Subsidiaries		9,411			5,032		2,418

Equity in undistributed earnings (losses) of subsidiaries		(3,360	)		9,294		1,330

Net Income	$	6,051		$	14,326	$	3,748

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 18 - Parent Only Condensed Financial Information (Continued)

STATEMENTS OF CASH FLOW
	Years Ended December 31,
	2011			2010			2009
	(In Thousands)

Cash Flows from Operating Activities
Net income	$	6,051		$	14,326		$	3,748
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed (earnings) losses of subsidiaries		3,360			(9,294	)		(1,330	)
Decrease (increase) in other assets		95			171			(5	)
Increase (decrease) in other liabilities		18			(129	)		96

Net Cash Provided By Operating Activities		9,524			5,074			2,509

Cash Flows from Investing Activities
Cash acquired in acquisition		—			31			—
Purchases of securities available for sale		—			—			(227	)

Net Cash Provided By (Used in) Investing Activities		—			31			(227	)

Cash Flows from Financing Activities

Proceeds from issuance of common stock		237			73			63
Cash dividends paid		(4,549	)		(3,412	)		(2,234	)
Purchase of treasury stock		(5,567	)		(1,806	)		(39	)

Net Cash (Used in) Financing Activities		(9,879	)		(5,145	)		(2,210	)

Net (Decrease) increase in Cash and Cash Equivalents		(355	)		(40	)		72

Cash and Cash Equivalents - Beginning		355			395			323

Cash and Cash Equivalents - Ending	$	—		$	355		$	395
Non-Cash Items:

Transfer of securities available for sale to treasury stock	$	—		$	235		$	—

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 19 – Acquisitions

In connection with the merger, the consideration paid and the net assets acquired were recorded at the estimated fair value on the date of acquisition, as summarized in the following table, (In thousands).

Consideration paid
BCB Community Bancorp, Inc. common stock issued	$	6,167
Cash paid on fractional shares		1
	$	6,168
Estimated amounts of identifiable assets acquired and liabilities assumed, at fair value
Cash and cash equivalents	$	5,902
Investment securities		34,969
Loans receivable		88,911
Federal Home Loan Bank of New York stock		819
Premises and equipment		1,618
Interest Receivable		443
Deferred income taxes		1,418
Other assets		1,057
Deposits		(111,365	)
Borrowings		(15,458	)
Other liabilities		(984	)

Total identifiable net assets		7,330

Gain on bargain purchase recognized in non-interest income	$	1,162

The above amounts for loans receivable and deferred income taxes are estimates only. The Company is currently in the process of obtaining fair market values for the above categories which may have a direct impact on the gain on bargain purchase.

ASC 805 “Business Combinations,” permits the use of provisional amounts for the assets acquired and liabilities assumed when the information at acquisition date is incomplete. During the measurement period, which is one year from the acquisition date, amounts provisionally assigned to the acquisition may be adjusted based on new information obtained during the measurement period. Under no circumstances may the measurement period exceed one year from the acquisition date.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 19 – Acquisitions (Continued)

The securities portfolio acquired consisted primarily of FHLMC and FNMA mortgage backed securities which were valued as of October 14, 2011 based on matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

We estimated the fair value for most loans acquired from Allegiance by utilizing a methodology wherein loans with comparable characteristics were aggregated by type of collateral, remaining maturity and repricing terms. Cash flows for each pool were estimated using an estimate of future credit losses and an estimated rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. To estimate the fair value of the remaining loans, we analyzed the value of the underlying collateral of the loans, assuming the fair values of the loans are derived from the eventual sale of the collateral. The value of the collateral was based on recently completed appraisals adjusted to the valuation date based on recognized industry indicies. We discounted these values using market derived rates of return with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. There was no carryover of Allegiance’s allowance for credit losses associated with the loans we acquired in accordance with applicable accounting guidance. Information about the acquired Allegiance loan portfolio as of October 14, 2011 is as follows (in thousands):

Contractually required principal and interest at acquisition	$	107,760
Contractual cash flows not expected to be collected (nonaccretabale discount)		(1,531	)
Expected cash flows at acquisition		106,229
Interest component of expected cash flows (accretable discount)		17,318

Fair value of acquired loans	$	88,911

The fair value of the office buildings and land is based upon independent third-party appraisals of the properties.

The fair value of savings and transaction deposit accounts acquired from Allegiance was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificates of deposit accounts were valued by calculating the discounted cash flow. The discounted cash flows, at an individual account level, were then aggregated together by category type to determine the market value of each time deposit category. The market values of all time deposit categories were added together to determine the total market value of the time deposit portfolio. The discount rate utilized for the discounted cash flow of each time deposit category was calculated based upon the median interest rate for market time deposits nearest the weighted average remaining maturity for that time deposit category.

The fair value of borrowings assumed was determined by estimating projected future cash outflows and discounting them at the current market rate of interest for similar type of borrowings.

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 19 – Acquisitions (Continued)

Direct costs related to the acquisition were expensed as incurred. During the year ended December 31, 2011, we incurred $538,000 in merger related expenses related to the transaction, including $533,000 in professional services and $5,000 in other non-interest expenses.

On July 6, 2010, the Company acquired all of the outstanding common shares of Pamrapo Bancorp, Inc. (“Pamrapo”), the parent company of Pamrapo Savings Bank, and thereby acquired all of Pamrapo Savings Bank’s 10 branch locations. Under the terms of the merger agreement, Pamrapo stockholders received 1.0 share of BCB Bancorp, Inc. common stock in exchange for each share of Pamrapo common stock, resulting in us issuing 4.9 million common shares of BCB Bancorp, Inc. common stock with an acquisition date fair value of $38.6 million. Also under the terms of the merger agreement, Pamrapo stock options were converted to BCB Bancorp, Inc. stock options. There were 28,000 Pamrapo options outstanding that had a fair value of $0.00 on the date of acquisition. The strike price of the options acquired ranged from $18.41-$29.25.

The merger with Pamrapo presents a unique opportunity to merge with a leading community financial institution that will strengthen the earning power of BCB Bancorp, as well as the added scale to undertake and solidify leadership positions in key business lines.

The results of Pamrapo’s operations are included in our Consolidated Statement of Income from the date of acquisition. In connection with the merger, the consideration paid and the net assets acquired were recorded at estimated fair value on the date of acquisition, as summarized in the following table, (in thousands).

Consideration paid
BCB Community Bancorp, Inc. common stock issued	$	38,645

Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value
Cash and cash equivalents	$	22,979
Investment securities		86,770
Loans receivable		412,142
Federal Home Loan Bank of New York stock		2,878
Property held for sale		1,017
Premises and equipment		5,938
Other real estate owned		789
Interest receivable		1,905
Deferred income taxes		1,820
Other assets		1,264
Deposits		(435,810	)
Borrowings		(43,815	)
Other liabilities		(6,650	)

Total identifiable net assets		51,227

Gain on bargain purchase recognized in non-interest income	$	12,582

Table of Contents

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 19 – Acquisitions (Continued)

The securities portfolio acquired consisted primarily of FHLMC and FNMA mortgage backed securities which were valued as of July 6, 2010 based on matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

We estimated the fair value for most loans acquired from Pamrapo by utilizing a methodology wherein loans with comparable characteristics were aggregated by type of collateral, remaining maturity and repricing terms. Cash flows for each pool were estimated using an estimate of future credit losses and an estimated rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. To estimate the fair value of the remaining loans, we analyzed the value of the underlying collateral of the loans, assuming the fair values of the loans are derived from the eventual sale of the collateral. The value of the collateral was based on recently completed appraisals adjusted to the valuation date based on recognized industry indicies. We discounted these values using market derived rates of return with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. There was no carryover of Pamrapo’s allowance for credit losses associated with the loans we acquired in accordance with applicable accounting guidance. Information about the acquired Pamrapo loan portfolio as of July 6, 2010 is as follows (in thousands):

Contractually required principal and interest at acquisition	$	649,871
Contractual cash flows not expected to be collected (nonaccretabale discount)		(7,924	)
Expected cash flows at acquisition		641,947
Interest component of expected cash flows (accretable discount)		229,805
Fair value of acquired loans	$	412,142

The fair value of the office buildings and land is based upon independent third-party appraisals of the properties.

The fair value of other real estate owned is based upon independent third-party appraisals of the properties.

The fair value of savings and transaction deposit accounts acquired from Pamrapo was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificates of deposit accounts were valued by calculating the discounted cash flow. The discounted cash flows, at an individual account level, were then aggregated together by category type to determine the market value of each time deposit category. The market values of all time deposit categories were added together to determine the total market value of the time deposit portfolio. The discount rate utilized for the discounted cash flow of each time deposit category was calculated based upon the median interest rate for market time deposits nearest the weighted average remaining maturity for that time deposit category.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

The fair value of borrowings assumed was determined by estimating projected future cash outflows and discounting them at the current market rate of interest for similar type of borrowings.

Note 19 – Acquisitions (Continued)

Direct costs related to the acquisition were expensed as incurred. During the twelve months ended December 31, 2010, we incurred $644,000 in merger related expenses related to the transaction, including $622,000 in professional services and $22,000 in other non-interest expenses.

The following table presents unaudited pro forma information, (in thousands), as if the acquisition of Allegiance had occurred on January 1, 2010. This pro forma information gives effect to certain adjustments, including purchase accounting fair value adjustments, amortization of fair value adjustments and related income tax effects. The pro forma information does not necessarily reflect the results of operations that would have occurred had the Company merged with Allegiance at the beginning of 2011 or 2010. In particular, potential cost savings are not reflected in the unaudited pro forma amounts.

	Pro forma
	Twelve months ended
	December 31, 2011		December 31, 2010

Net interest income	$	41,734	$	28,363
Noninterest income		2,452		15,480
Noninterest expense		30,864		25,203
Net income		6,237		14,475

The amounts of revenue and earnings attributable to Allegiance since the acquisition date included in the consolidated statement of income for the year ended December 31, 2011 are not disclosed due to the fact that the information is impracticable to provide.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 20 - Quarterly Financial Data (Unaudited)

	Year Ended December 2011
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
	(In Thousands)

Interest income	$	13,054	$	13,250	$	12,728	$	13,847
Interest expense		3,382		3,368		3,334		3,213
Net Interest Income		9,672		9,882		9,394		10,634
Provision for loan losses		350		450		800		2,500
Net Interest Income after Provision for loan losses		9,322		9,432		8,594		8,134
Non-interest income		453		429		182		886
Non-interest expense		6,629		6,557		6,748		8,074
Income before Income Taxes		3,146		3,304		2,028		946
Income taxes		1,225		1,352		840		(44	)
Net Income	$	1,921	$	1,952	$	1,188	$	990
Net income per common share:
Basic	$	0.20	$	0.21	$	0.13	$	0.10
Diluted	$	0.20	$	0.21	$	0.13	$	0.10
Dividends per common share	$	0.12	$	0.12	$	0.12	$	0.12

	Year Ended December 2010
	First Quarter		Second Quarter		Third Quarter			Fourth Quarter
	(In Thousands)

Interest income	$	7,960	$	7,718	$	11,993		$	12,429
Interest expense		3,218		3,027		3,888			3,535
Net Interest Income		4,742		4,691		8,105			8,894
Provision for loan losses		450		300		800			900
Net Interest Income after Provision for loan losses		4,292		4,391		7,305			7,994
Non-interest income		241		304		12,976			341
Non-interest expense		3,269		3,179		8,638			6,927
Income before Income Taxes		1,264		1,516		11,643			1,408
Income taxes		546		594		(299	)		664
Net Income	$	718	$	922	$	11,942		$	744
Net income per common share:
Basic	$	0.15	$	0.20	$	1.28		$	0.43
Diluted	$	0.15	$	0.20	$	1.28		$	0.42
Dividends per common share	$	0.12	$	0.12	$	0.12		$	0.12

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Avg

BCB Bancorp (BCBP) 10-K2011 FY Annual report

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