UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2004.
Or
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________________ to _______________________
Commission File Number: 0-50275
BCB Bancorp, Inc.
(Exact name of registrant as specified in its charter)
New Jersey 26-0065262
(State or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
104-110 Avenue C Bayonne, New Jersey 07002
(Address of principal executive offices) (Zip Code)
(201) 823-0700
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. |X| Yes |_| No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). |_| Yes |_| No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the court. |_| Yes |_| No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of May 14, 2004, BCB
Bancorp, Inc., had 2,394,319 shares of common stock with no par value issued and
outstanding.
BCB BANCORP INC., AND SUBSIDIARY
INDEX
Page
PART I. CONSOLIDATED FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Statements of Financial Condition as of
March 31, 2004 and December 31, 2003 (unaudited)..................... 1
Consolidated Statements of Income for the three months
ended March 31, 2004 and March 31, 2003 (unaudited).................. 2
Consolidated Statement of Changes in Stockholders'
Equity for the three months ended
March 31, 2004 (unaudited)........................................... 3
Consolidated Statements of Cash Flows for the three months
ended March 31, 2004 and March 31, 2003 (unaudited).................. 4
Notes to Unaudited Consolidated Financial Statements................. 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations................................................... 7
Item 3. Qualitative and Quantitative Disclosures about Market Risk...11
Item 4. Controls and Procedures......................................13
PART II. OTHER INFORMATION....................................................14
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENT
BCB BANCORP INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition at
March 31, 2004 and December 31, 2003
(Unaudited)
(in thousands except for share data )
At At
31-Mar-04 31-Dec-03
--------- ---------
ASSETS
Cash and amounts due from depository institutions ................. $ 2,635 $ 2,895
Interest-earning deposits ......................................... 21,100 8,891
--------- ---------
Total cash and cash equivalents ................................ 23,735 11,786
--------- ---------
Securities held to maturity ....................................... 99,313 90,313
Loans receivable .................................................. 204,575 188,786
Premises and equipment ............................................ 5,752 5,704
Federal Home Loan Bank of New York stock .......................... 1,250 1,250
Interest receivable, net .......................................... 2,056 1,856
Deferred income taxes ............................................. 753 697
Other assets ...................................................... 446 284
--------- ---------
Total assets .................................................. $ 337,880 $ 300,676
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits .......................................................... $ 288,925 $ 253,650
Borrowed Money .................................................... 25,000 25,000
Other Liabilities ................................................. 1,022 859
--------- ---------
Total Liabilities ............................................. 314,947 279,509
--------- ---------
STOCKHOLDERS' EQUITY
Common Stock, $0.10 stated value: 10,000,000 shares
authorized, 2,394,319 and 2,296,984 shares
outstanding .................................................... 239 230
Additional paid-in capital ........................................ 27,541 26,484
Accumulated deficit ............................................... (4,847) (5,547)
--------- ---------
Total stockholders' equity .................................... 22,933 21,167
--------- ---------
Total liabilities and stockholders' equity ................... $ 337,880 $ 300,676
========= =========
See accompanying notes to consolidated financial statements.
1
BCB BANCORP INC. AND SUBSIDIARY
Consolidated Statements of Income
For the three months ended
March 31, 2004 and March 31, 2003
(Unaudited)
(in thousands except for per share data)
Three Months Ended
------------------------------
March 31,
------------------------------
2004 2003
------ ------
Interest income:
Loans ............................................................... $3,277 $2,314
Securities .......................................................... 1,291 727
Other interest-earning assets ....................................... 31 29
------ ------
Total interest income ............................................ 4,599 3,070
------ ------
Interest expense:
Deposits:
Demand ........................................................... 73 51
Savings and club ................................................. 912 747
Certificates of deposit .......................................... 406 138
------ ------
1,391 936
Borrowed money ..................................................... 92 --
------ ------
Total interest expense ......................................... 1,483 936
------ ------
Net interest income ................................................... 3,116 2,134
Provision for loan losses ............................................. 200 225
------ ------
Net interest income after provision for loan losses ................... 2,916 1,909
------ ------
Non-interest income:
Fees and service charges ........................................... 130 83
Gain on sales of loans originated for sale ......................... 17 --
Gain on sales of securities available for sale ..................... -- --
Other .............................................................. 6 5
------ ------
Total non-interest income ....................................... 153 88
------ ------
Non-interest expense:
Salaries and employee benefits ..................................... 976 531
Occupancy expense of premises ...................................... 159 85
Equipment .......................................................... 347 191
Advertising ........................................................ 22 30
Other .............................................................. 394 211
------ ------
Total non-interest expense ...................................... 1,898 1,048
------ ------
Income before income tax provision ................................... 1,171 949
Income tax provision .................................................. 471 376
------ ------
Net Income ............................................................ $ 700 $ 573
====== ======
Net Income per common share
Basic .......................................................... $ 0.30 $ 0.25
====== ======
Diluted ........................................................ $ 0.28 $ 0.24
====== ======
Weighted average number of common shares outstanding-
basic ................................................... 2,320 2,297
====== ======
diluted ................................................. 2,488 2,371
====== ======
See accompanying notes to consolidated financial statements.
2
BCB BANCORP INC. AND SUBSIDIARY
Consolidated Statement of Changes in Stockholders'
Equity For the three months ended March 31, 2004
(Unaudited)
(in thousands)
Additional Accumulated
Common Stock Paid-In Capital Deficit Total
------------ --------------- ------- -----
Balance, December 31, 2003 ....................... $230 $26,484 $(5,547) $21,167
Exercise of Stock Options ......................... 9 1,057 1,066
Net income for the three months ended
March 31, 2004 ............................... -- -- 700 700
---- ------- ------- -------
Balance, March 31, 2004 ........................... $239 $27,541 $(4,847) $22,933
---- ------- ------- -------
See accompanying notes to consolidated financial statements.
3
BCB BANCORP INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
For the three months ended
March 31, 2004 and 2003
(Unaudited)
(in thousands)
Three Months Ended
March 31,
---------------------------
2004 2003
-------- --------
Cash flows from operating activities:
Net Income .................................................................. $ 700 $ 573
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation .......................................................... 82 26
Amortization and accretion, net ....................................... (21) (22)
Provision for loan losses ............................................. 200 225
Deferred income tax ................................................... (56) --
Decease (Increase) in interest receivable ............................. (200) 68
Increase in other assets .............................................. (162) (43)
Increase (Decrease) in other liabilities .............................. 163 (140)
-------- --------
Net cash provided by operating activities ...................... 706 687
-------- --------
Cash flows from investing activities:
Purchases of securities held to maturity ................................. (10,374) (15,000)
Proceeds from call of security held to maturity .......................... -- 12,000
Proceeds from repayments on securities held to maturity .................. 1,342 4,334
Purchase of loans ........................................................ -- --
Net (increase) in loans receivable ....................................... (15,936) (15,270)
Additions to premises and equipment ...................................... (130) (324)
-------- --------
Net cash (used in) investing activities ........................... (25,098) (14,260)
-------- --------
Cash flows from financing activities:
Net increase in deposits ................................................. 35,275 24,072
Stock options exercised .................................................. 1,066 --
-------- --------
Net cash provided by financing activities ......................... 36,341 24,072
-------- --------
Net increase in cash and cash equivalents ...................................... 11,949 10,499
Cash and cash equivalents-begininng ............................................ 11,786 5,144
-------- --------
Cash and cash equivalents-ending ............................................... $ 23,735 $ 15,643
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes .......................................................... $ 261 $ 450
======== ========
Interest .............................................................. $ 1,458 $ 934
======== ========
See accompanying notes to consolidated financial statements.
4
BCB Bancorp Inc., and Subsidiary
Notes to Unaudited Consolidated Financial Statements
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of BCB Bancorp, Inc. ("the Company") and the Company's wholly owned
subsidiary, Bayonne Community Bank (the "Bank"). The Company's business is
conducted principally through the Bank. All significant intercompany accounts
and transactions have been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and, therefore, do not
necessarily include all information that would be included in audited financial
statements. The information furnished reflects all adjustments that are, in the
opinion of management, necessary for a fair presentation of consolidated
financial condition and results of operations. All such adjustments are of a
normal recurring nature. The results of operations for the three months ended
March 31, 2004 are not necessarily indicative of the results to be expected for
the fiscal year ended December 31, 2004 or any other future interim period.
These statements should be read in conjunction with the Company's audited
consolidated financial statements and related notes for the year ended December
31, 2003, which are included in the Company's Annual Report on Form 10-K as
filed with the Securities and Exchange Commission.
NOTE 2 - EARNINGS PER SHARE
The Company provides dual presentation of basic and diluted earnings per share.
Basic earnings per share utilizes reported net income as the numerator and the
actual average shares outstanding as the denominator. Diluted earnings per share
includes any dilutive effects of options, warrants and convertible securities.
The Company's Board of Directors authorized a 10% stock dividend to stockholders
of record on November 3, 2003. Such dividend was distributed on November 17,
2003. Basic and diluted earnings per share and the weighted average number of
common shares outstanding for the three months ended March 31, 2003 have been
retroactively adjusted to give effect to the stock dividend.
NOTE 3 - SIGNIFICANT EVENTS
In June 2002, the Bank acquired a tract of real estate in the Bergen Point
section of the City of Bayonne, New Jersey for the purposes of constructing a
second facility to further service the banking needs of the community we serve.
This facility commenced operations during November 2003. The Bank agreed to
lease a building in the center of
5
the business district of the City of Bayonne for the purposes of rehabilitating
and converting it to another banking facility. This facility was completed
during May 2003 and the office opened for business on May 31, 2003.
The shareholders of the Bank, on April 24, 2003, approved the Bayonne Community
Bank 2003 Stock Option Plan, which provides for the grant of options to purchase
up to 208,820 shares (229,702 shares after giving effect to the 10% stock
dividend paid in November 2003) of Company common stock. These options vest over
a five-year period following grant and are exercisable for ten-years following
the date of grant. As of March 31, 2004, 206,735 of 229,702 options have been
granted under this plan.
On September 12, 2002, the Board of Directors of the Bank adopted a Plan of
Acquisition whereby the Bank would become a wholly owned subsidiary of BCB
Bancorp, Inc. Following stockholder and regulatory approval the reorganization
pursuant to the Plan of Acquisition was completed on May 1, 2003. Each share of
the Bank's outstanding common stock was automatically converted into one share
of BCB Bancorp, Inc. common stock. The financial information contained in this
Form 10-Q at and for the period ended March 31, 2004 is presented for the
Company and the Bank on a consolidated basis.
6
ITEM 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Financial Condition
BCB Bancorp, Inc., completed its acquisition of Bayonne Community Bank on May 1,
2003 pursuant to a Plan of Acquisition. Information at and for the three months
ended March 31, 2004 reflects the consolidated financial information of BCB
Bancorp Inc. Prior to the completion of the acquisition, BCB Bancorp, Inc. had
no assets, liabilities or operations. Consequently the information provided
below for the three months ended March 31, 2003 is for Bayonne Community Bank on
a stand alone basis.
Total assets increased by $37.2 million or 12.4% to $337.9 million at March 31,
2004 from $300.7 million at December 31, 2003 as the Bank continued to grow
assets primarily through the origination of loans and the purchase of Government
Sponsored Enterprise (GSE) investment securities, funded primarily through
retail deposit growth.
Total cash and cash equivalents increased by $11.9 million or 100.8% to $23.7
million at March 31, 2004 from $11.8 million at December 31, 2003 as the Bank
warehoused cash for the purpose of funding loan closings as to which a loan
commitment had already been made by the Bank. The increase in cash and cash
equivalents was primarily attributable to retail deposit growth and repayments
and prepayments in the loan and mortgage backed security portfolios. Investment
securities classified as held-to-maturity increased by $9.0 million or 10.0% to
$99.3 million at March 31, 2004 from $90.3 million at December 31, 2003. The
increase was primarily attributable to the purchase of $9.4 million of mortgage
backed securities and $1.0 million of callable agency securities, partially
offset by mortgage backed securities repayments and prepayments of $1.4 million
during the three months ended March 31, 2004.
Loans receivable increased by $15.8 million or 8.4% to $204.6 million at March
31, 2004 from $188.8 million at December 31, 2003. The increase resulted
primarily from a $12.9 million increase in real estate mortgages comprising
residential, commercial and construction loans, net of amortization, a $2.2
million increase in business loans and lines of credit, net of amortization, and
a $1.0 million increase in consumer loans, net of amortization.
Deposit liabilities increased by $35.2 million or 13.9% to $288.9 million at
March 31, 2004 from $253.7 million at December 31, 2003. The increase resulted
primarily from an increase during the three months ended March 31, 2004 of $17.0
million in time deposits, an increase of $10.8 million in savings and club
accounts and an increase of $7.4 million in demand deposits. The Bank has been
able to achieve these growth rates through competitive pricing on select deposit
products.
7
Stockholders' equity increased by $1.7 million or 8.0% to $22.9 million at March
31, 2004 from $21.2 million at December 31, 2003. The increase was primarily
attributable to the cash received from the exercise of options by directors,
officers and employees of Bayonne Community Bank totaling $1.1 million and net
income for the three months ended March 31, 2004 of $700,000. At March 31, 2004
the Company's Tier 1, Tier 1 Risk-Based and Total Risk based Capital Ratios were
6.79%, 9.87% and 10.87% respectively.
Results of Operations
Net income increased by $127,000 or 22.2% to $700,000 for the three months ended
March 31, 2004 from $573,000 for the three months ended December 31, 2003. The
increase in net income reflects increases in net interest income and
non-interest income and a decrease in the provision for loan losses, partially
offset by increases in non-interest expense and income taxes. Net interest
income increased by $1.0 million or 47.6% to $3.1 million for the three months
ended March 31, 2004 from $2.1 million for the three months ended March 31,
2003. This increase resulted primarily from an increase in average interest
earning assets of $118.7 million or 62.7% to $307.9 million for the three months
ended March 31, 2004 from $189.2 million for the three months ended March 31,
2003, funded primarily through an increase in average interest bearing
liabilities of $117.5 million or 74.2% to $275.9 million for the three months
ended March 31, 2004 from $158.4 million for the three months ended March 31,
2003, partially offset by a decrease in the net interest margin to 4.05% for the
three months ended March 31, 2004 from 4.51% for the three months ended March
31, 2003.
Interest income on loans receivable increased by $1.0 million or 43.5% to $3.3
million for the three months ended March 31, 2004 from $2.3 million for the
three months ended March 31, 2003. The increase was primarily attributable to an
increase in the balance of average loans receivable of $67.1 million or 51.9% to
$196.4 million for the three months ended March 31, 2004 from $129.3 million for
the three months ended March 31, 2003, partially offset by a decrease in the
average yield on loans receivable to 6.68% for the three months ended March 31,
2004 from 7.16% for the three months ended March 31, 2003. The increase in
average loans reflects management's philosophy to deploy funds in higher
yielding instruments, specifically commercial real estate in an effort to
achieve higher returns. The decrease in average yield reflects the effect of
loan originations and refinancings during the current low interest rate
environment.
Interest income on securities held-to-maturity increased by $574,000 or 79.0% to
$1.3 million for the three months ended March 31, 2004 from $727,000 for the
three months ended March 31, 2003. The increase was primarily attributable to an
increase in the average balance of investment securities held-to-maturity of
$45.2 million or 91.7% to $94.5 million for the three months ended March 31,
2004 from $49.3 million for the three months ended March 31, 2003, partially
offset by a decrease in the average yield on investment securities to 5.46% for
the three months ended March 31, 2004 from 5.89% for the three months ended
March 31, 2003. The decrease in average yield reflects the more rapid
amortization of higher yielding mortgage backed securities purchased in 2003
8
and purchases of lower yielding mortgage backed securities during the three
months ended March 31, 2004.
Interest income on other interest-earning assets increased by $2,000 or 6.9% to
$31,000 for the three months ended March 31, 2004 from $29,000 for the three
months ended March 31, 2003. The increase was primarily due to an increase in
the average balance of other interest-earning assets to $17.0 million for the
three months ended March 31, 2004 from $10.5 million for the three months ended
March 31, 2003 partially offset by a decrease in the average yield on other
interest-earning assets to 0.73% for the three months ended March 31, 2004 from
1.10% for the three months ended March 31, 2003. The decrease in the average
yield reflects the lower interest rate environment for overnight deposits in
2004 as compared to 2003. The increase in the average balance reflects
management's philosophy to forego current income in lower yielding short-term
investments and warehouse liquidity to fund the Bank's loan pipeline.
Total interest expense increased by $547,000 or 58.4% to $1.5 million for the
three months ended March 31, 2004 from $936,000 for the three months ended March
31, 2003. The increase resulted primarily from an increase in average interest
bearing liabilities of $117.5 million or 74.2% to $275.9 million for the three
months ended March 31, 2004 from $158.4 million for the three months ended March
31, 2003, partially offset by a decrease in the average cost of interest bearing
liabilities to 2.15% for the three months ended March 31, 2004 from 2.36% for
the three months ended March 31, 2003.
The provision for loan losses totaled $200,000 and $225,000 for the three-month
periods ended March 31, 2004 and 2003 respectively. The provision for loan
losses is established based upon management's review of the Bank's loans and
consideration of a variety of factors including, but not limited to, (1) the
risk characteristics of the loan portfolio, (2) current economic conditions, (3)
actual losses previously experienced, (4) significant level of loan growth and
(5) the existing level of reserves for loan losses that are possible and
estimable. The Bank had non-performing loans totaling $1.05 million or 0.51% of
gross loans at March 31, 2004, $489,000 or 0.26% of gross loans at December 31,
2003 and $415,000 or 0.30% of gross loans at March 31, 2003. The allowance for
loan losses stood at $2.3 million or 1.12% of gross loans at March 31, 2004,
$2.1 million or 1.11% of gross total loans at December 31, 2003 and $1.5 million
or 1.05% of gross total loans at March 31, 2003. The amount of the allowance is
based on estimates and the ultimate losses may vary from such estimates.
Management assesses the allowance for loan losses on a quarterly basis and makes
provisions for loan losses as necessary in order to maintain the adequacy of the
allowance. While management uses available information to recognize losses on
loans, future loan loss provisions may be necessary based on changes in the
aforementioned criteria. In addition, various regulatory agencies, as an
integral part of their examination process, periodically review the allowance
for loan losses and may require the Bank to recognize additional provisions
based on their judgment of information available to them at the time of their
examination. Management believes that the allowance for loan losses was adequate
at March 31, 2004, December 31, 2003 and March 31, 2003.
9
Total non-interest income increased by $65,000 or 73.9% to $153,000 for the
three months ended March 31, 2004 from $88,000 for the three months ended March
31, 2003. The increase in non-interest income resulted primarily from a $47,000
increase in fees and service charges to $130,000 from $83,000 for the quarters
ended March 31, 2004 and 2003 respectively, an increase of $17,000 in fees
derived from the sale of loans originated for sale to various investors and a
$1,000 increase in other income for the comparative three month time periods.
Total non-interest expenses increased by $850,000 or 81.1% to $1.90 million for
the three months ended March 31, 2004 from $1.05 million for the three months
ended March 31, 2003. The increase in the three month period in 2004 was
primarily due to an increase of $445,000 in salaries and employee benefits
expense to $976,000 for the three months ended March 31, 2004 from $531,000 for
the three months March 31, 2003 as the Bank had a total of 75 full-time
equivalent employees staffing three offices at March 31, 2004 as compared to a
total 38 full-time equivalent employees at March 31, 2003 staffing one office.
Equipment expense increased by $156,000 to $347,000 for the three months ended
March 31, 2004 from $191,000 for the three months ended March 31, 2003. The
primary component of this expense item is data service provider expense which
increases with the growth of the Bank's balance sheet. Occupancy expense
increased by $74,000 to $159,000 for the three months ended March 31, 2004 from
$85,000 for the three months ended March 31, 2003 due to the occupancy of three
facilities in the 2004 period compared to one facility in the 2003 period.
Advertising expense decreased by $8,000 to $22,000 for the three months ended
March 31, 2004 from $30,000 for the three months ended March 31, 2003. Other
non-interest expense increased by $183,000 to $394,000 for the three months
ended March 31, 2004 from $211,000 for the three months ended March 31, 2003.
Other non-interest expense is comprised of director's fees, stationary, forms
and printing, professional fees, legal fees, check printing, correspondent bank
fees, telephone and communication, shareholder relations and other fees and
expenses.
Income tax expense increased $95,000 to $471,000 for the three months ended
March 31, 2004 from $376,000 for the three months ended March 31, 2003
reflecting increased income earned during the three month time period ended
March 31, 2004.
10
Item 3. Qualitative and Quantitative Analysis of Market Risk
Management of Market Risk
General. The majority of our assets and liabilities are monetary in nature.
Consequently, one of our most significant forms of market risk is interest rate
risk. Our assets, consisting primarily of mortgage loans, have longer maturities
than our liabilities, consisting primarily of deposits. As a result, a principal
part of our business strategy is to manage interest rate risk and reduce the
exposure of our net interest income to changes in market interest rates.
Accordingly, our Board of Directors has established an Asset/Liability Committee
which is responsible for evaluating the interest rate risk inherent in our
assets and liabilities, for determining the level of risk that is appropriate
given our business strategy, operating environment, capital, liquidity and
performance objectives, and for managing this risk consistent with the
guidelines approved by the Board of Directors. Senior management monitors the
level of interest rate risk on a regular basis and the Asset/Liability
Committee, which consists of senior management and outside directors operating
under a policy adopted by the Board of Directors, meets as needed to review our
asset/liability policies and interest rate risk position.
The following table presents the Bank's net portfolio value ("NPV"). These
calculations were based upon assumptions believed to be fundamentally sound,
although they may vary from assumptions utilized by other financial
institutions. The information set forth below is based on data that included all
financial instruments as of December 31, 2003. Assumptions have been made by the
Bank relating to interest rates, loan prepayment rates, core deposit duration,
and the market values of certain assets and liabilities under the various
interest rate scenarios. Actual maturity dates were used for fixed rate loans
and certificate accounts. Investment securities were scheduled at either the
maturity date or the next scheduled call date based upon management's judgment
of whether the particular security would be called in the current interest rate
environment and under assumed interest rate scenarios. Variable rate loans were
scheduled as of their next scheduled interest rate repricing date. Additional
assumptions made in the preparation of the NPV table include prepayment rates on
loans and mortgage-backed securities, core deposits without stated maturity
dates were scheduled with an assumed term of 48 months, and money market and
noninterest bearing accounts were scheduled with an assumed term of 24 months.
The NPV at "PAR" represents the difference between the Bank's estimated value of
assets and estimated value of liabilities assuming no change in interest rates.
The NPV for a decrease of 200 and 300 basis points has been excluded since it
would not be meaningful, in the interest rate environment as of December 31,
2003. The following sets forth the Bank's NPV as of December 31, 2003.
NPV as a % of Assets
Change in Net Portfolio $ Change from % Change from --------------------
Calculation Value PAR PAR NPV Ratio Change
- ----------- ------------- ------------- ------------- --------------------
+300bp $ 11,271 $ (21,128) -65.21% 4.35% -635 bps
+200bp 20,353 (12,046) -37.81 7.38 -332 bps
+100bp 28,880 (3,520) -10.86 9.89 -81 bps
PAR 32,399 -- -- 10.70 -- bps
- -100bp 34,529 2,130 6.57 11.07 37 bps
bp - basis points
11
The Table above indicates that at December 31, 2003, in the event of a 100 basis
point decrease in interest rates, we would experience a 6.57% increase in NPV.
In the event of a 100 basis point increase in interest rates, we would
experience a 10.86% decrease in NPV.
Certain shortcomings are inherent in the methodology used in the above interest
rate risk measurement. Modeling changes in NPV require making certain
assumptions that may or may not reflect the manner in which actual yields and
costs respond to changes in market interest rates. In this regard, the NPV table
presented assumes that the composition of our interest rate sensitive assets and
liabilities existing at the beginning of a period remains constant over the
period being measured and assumes that a particular change in interest rates is
reflected uniformly across the yield curve regardless of the duration or
repricing of specific assets and liabilities. Accordingly, although the NPV
table provides an indication of our interest rate risk exposure at a particular
point in time, such measurements are not intended to and do not provide a
precise forecast of the effect of changes in market interest rates on our net
interest income, and will differ from actual results.
12
ITEM 4.
Controls and Procedures
Under the supervision and with the participation of the Company's management,
including the Chief Executive Officer and Chief Financial Officer, the Company
has evaluated the effectiveness of the design and operation of its disclosure
controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the
Exchange Act) as of the end of the period covered by this quarterly report.
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that, as of the end of the period covered by this quarterly
report, the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed in the reports that the Company files
or submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. There has been no change in the Company's
internal control over financial reporting during the most recent fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND STOCK
REPURCHASES
Securities sold within the past three years without registering the securities
under the Securities Act of 1933
The Company has not sold any securities during the past three years. In
connection with the Plan of Acquisition completed on May 1, 2003 the Bank
reorganized into the holding company form of ownership and each share of Bank
common stock became a share of Company common stock. No new capital was received
in the reorganization. Lastly, during the last three months the Company did not
engage in any stock repurchases.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K.
Exhibit 31.1 and 31.2 Officers' Certification filed pursuant to section 302 of
the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 Officers' Certification filed pursuant to section 906 of the
Sarbanes-Oxley Act of 2002.
On March 12, 2004 the Company filed a form 8-K to report that certain of its
directors declined to stand for re-election to the Board of Directors. On March
15, 2004 a Form 8-K/A was filed to include the letter of said directors as an
exhibit.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.
BCB Bancorp Inc.
Date: May 14, 2004 By: /s/ Donald Mindiak
------------------------
Donald Mindiak
President & Chief Executive Officer
Date: May 14, 2004 By: /s/ Thomas Coughlin
------------------------
Thomas Coughlin
CFO/COO
15