BCB Bancorp, Inc., Announces Quarterly Earnings
BAYONNE, N.J. - October 24, 2008 - BCB Bancorp, Inc., Bayonne, NJ (NASDAQ: BCBP)
announced a quarterly loss of $1.25 million for the three months ended September
30, 2008 as compared to net income of $1.03 million for the three months ended
September 30, 2007. Basic and diluted earnings per share were $(0.27) and
$(0.27) per share respectively for the three months ended September 30, 2008, as
compared to $0.22 and $0.21 per share respectively for the three months ended
September 30, 2007.
The net loss for the three months ended September 30, 2008 is the result of an
other than temporary impairment (OTTI) charge of $2.8 million on a $3.0 million
investment in Federal National Mortgage Association (FNMA) preferred stock. A
tax benefit of $1.1 million on the impairment charge will be recognized in the
fourth quarter of 2008 as a result of the Emergency Economic Stabilization Act
of 2008, which was enacted in October 2008. Exclusive of the OTTI charge, net
income would have increased by $477,000 or 46.3% to $1.51 million for the three
months ended September 30, 2008 from $1.03 million for the three months ended
September 30, 2007. Basic and diluted earnings per share would have been $0.32
and $0.32 respectively for the three months ended September 30, 2008 as compared
to $0.22 and $0.21 per share respectively for the three months ended September
30, 2007.
The Company further reported net income of $1.3 million for the nine months
ended September 30, 2008, as compared to $3.4 million for the nine months ended
September 30, 2007. The results for the nine months ended September 30, 2008
reflect the impact of the OTTI charge discussed above. Basic and diluted
earnings per share were $0.29 and $0.28 respectively for the nine months ended
September 30, 2008 as compared to $0.70 and $0.68 per share respectively for the
nine months ended September 30, 2007.
Exclusive of the OTTI charge, net income would have increased by $667,000 or
19.5% to $4.1 million for the nine months ended September 30, 2008 from $3.4
million for the nine months ended September 30, 2007. Basic and diluted earnings
per share would have been $0.88 and $0.87 respectively for the nine months ended
September 30, 2008 as compared to $0.70 and $0.68 per share respectively for the
nine months ended September 30, 2007.
Total assets increased by $19.0 million or 3.4% to $582.5 million at September
30, 2008 from $563.5 million at December 31, 2007. Total cash and cash
equivalents decreased by $4.1 million or 34.7% to $7.7 million at September 30,
2008 from $11.8 million at December 31, 2007. Loans receivable increased by
$35.5 million or 9.7% to $400.2 million at September 30, 2008 from $364.7
million at December 31, 2007. Investment securities held-to-maturity decreased
by $12.6 million or 7.6% to $152.4 million at September 30, 2008 from $165.0
million at December 31, 2007. Deposits increased by $4.7 million or 1.2% to
$403.5 million at September 30, 2008 from $398.8 million at December 31, 2007.
Stockholders' equity decreased by $453,000 to $48.1 million at September 30,
2008 from $48.5 million at December 31, 2007. The decrease in stockholders'
equity is primarily attributable to the payment of three quarterly cash
dividends totaling $1.3 million as well as $1.0 million paid to repurchase
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67,341 shares of common stock and a $170,000 decrease in the market value of our
available-for-sale securities portfolio, net of tax, partially offset by net
income of the Company of $1.3 million for the nine months ended September 30,
2008 and $622,000 from 69,278 shares issued from stock option exercises as well
as a $112,000 tax benefit from the exercise of those stock options. At September
30, 2008 the Bank's Tier 1, Tier 1 Risk-Based and Total Risk Based Capital
Ratios were 8.83%, 12.92% and 14.14% respectively.
Net income decreased by $2.28 million to a net loss of $1.25 million for the
three months ended September 30, 2008 from net income of $1.03 million for the
three months ended September 30, 2007. The decrease in net income was due to
primarily to an OTTI charge on two securities in our securities
available-for-sale portfolio, an increase in provision for loan losses, a
decrease in non-interest income and an increase in income tax expense, partially
offset by an increase in net interest income and a decrease in non-interest
expense. The Company recorded an OTTI charge of $2.8 million on its $3.0 million
investment in FNMA preferred stock during the current quarter. The OTTI charge
resulted from a significant decline in the market value of these securities
following the announcement by the Federal Housing Finance Agency (FHFA) that
FNMA would be placed under conservatorship. Additionally, the FHFA eliminated
the payment of dividends on common stock and preferred stock and assumed the
powers of the Board and management of FNMA. Based on these factors, the Company
evaluated the impairment as other than temporary. Given a lack of eligible
capital gain for federal and state income tax purposes to offset capital losses
at September 30, 2008, no tax benefit was recognized for the OTTI charge. A tax
benefit of $1.1 million on the OTTI charge will be recognized in the fourth
quarter of 2008 as a result of the Emergency Economic Stabilization Act of 2008
enacted in October 2008 which allows entities to treat losses on these
securities as ordinary losses for tax purposes.
Net interest income increased by $855,000 or 19.6% to $5.2 million for the three
months ended September 30, 2008 from $4.4 million for the three months ended
September 30, 2007. This increase in net interest income resulted primarily from
an increase of $23.6 million or 4.3% in the average balance of interest earning
assets to $569.3 million for the three months ended September 30, 2008 from
$545.7 million for the three months ended September 30, 2007, partially offset
by a slight decrease in the average yield on interest earning assets to 6.54%
for the three months ended September 30, 2008 from 6.56% for the three months
ended September 30, 2007. The average balance of interest bearing liabilities
increased by $28.0 million or 6.0% to $495.7 million for the three months ended
September 30, 2008 from $467.7 million for the three months ended September 30,
2007 and the average cost of interest bearing liabilities decreased by 62 basis
points to 3.30% for the three months ended September 30, 2008 from 3.92% for the
three months ended September 30, 2007. As a consequence, our net interest margin
increased to 3.67% for the three months ended September 30, 2008 from 3.20% for
the three months ended September 30, 2007.
Net income decreased by $2.1 million to $1.3 million for the nine months ended
September 30, 2008 from $3.4 million for the nine months ended September 30,
2007. The decrease in net income was due to primarily to an OTTI charge on two
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securities in our securities available-for-sale portfolio, an increase in
provision for loan losses, a decrease in non-interest income, an increase in
non-interest expense and an increase in income tax expense, partially offset by
an increase in net interest income. The Company recorded an OTTI charge of $2.8
million on a $3.0 million investment in FNMA preferred stock as discussed
previously. Net interest income increased by $2.02 million or 15.9% to $14.76
million for the nine months ended September 30, 2008 from $12.74 million for the
nine months ended September 30, 2007. The increase in net interest income
resulted primarily from an increase of $43.0 million or 8.3% in the average
balance of interest earning assets to $560.7 million for the nine months ended
September 30, 2008 from $517.7 million for the nine months ended September 30,
2007 while the average yield on interest earning assets remained static at 6.51%
for the respective nine month time periods ended September 30, 2008 and 2007.
The average balance of interest bearing liabilities increased by $45.9 million
or 10.4% to $487.0 million for the nine months ended September 30, 2008 from
$441.1 million for the nine months ended September 30, 2007, while the average
cost of interest bearing liabilities decreased to 3.45% for the nine months
ended September 30, 2008 from 3.79% for the nine months ended September 30,
2007. As a consequence, our net interest margin increased to 3.51% for the nine
months ended September 30, 2008 from 3.28% for the nine months ended September
30, 2007.
Donald Mindiak President & CEO commented that, "exclusive of the OTTI charge
recorded during the third quarter, the Company had our most profitable quarter
ever from an operational perspective. Net income, exclusive of Other Than
Temporary Impairment charges for the three and nine month periods, increased by
46.3% and 19.6%, respectively. Concurrently, our basic earnings per share,
exclusive of Other Than Temporary Impairment charges likewise increased for the
three and nine month time periods by 45.5% and 25.7% respectively. It was this
level of performance operationally, which, earlier this month, prompted our
Board of Directors to increase our quarterly cash dividend by 20% to $0.12 per
common share from $0.10 per common share."
"As loan balances have continued to grow consistent with what our capital levels
and business opportunities permit, we remain mindful of closely monitoring our
asset quality and as appropriate, increasing provision balances as we continue
to manage our business through this dynamic and challenging environment. We are
pleased that our operational performance has been achieved while we are able to
increase our provisions for potential loan losses, thereby improving our ability
to weather the severe economic downturn."
"We remain committed stewards of our shareholders' capital and will strive to
research and implement initiatives whose benefit will ultimately inure to our
shareholders."
BCB Community Bank presently operates four offices, three located in Bayonne,
and one located in Hoboken, New Jersey.
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Forward-looking Statements and Associated Risk Factors
This release, like many written and oral communications presented by BCB
Bancorp, Inc., and our authorized officers, may contain certain forward-looking
statements regarding our prospective performance and strategies within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. We intend such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and are including this statement for purposes of said safe harbor
provisions.
Forward-looking statements, which are based on certain assumptions and describe
future plans, strategies, and expectations of the Company, are generally
identified by use of words "anticipate," "believe," "estimate," "expect,"
"intend," "plan," "project," "seek," "strive," "try," or future or conditional
verbs such as "could," "may," "should," "will," "would," or similar expressions.
Our ability to predict results or the actual effects of our plans or strategies
is inherently uncertain. Accordingly, actual results may differ materially from
anticipated results.
There are a number of factors, many of which are beyond our control, that could
cause actual conditions, events, or results to differ significantly from those
described in our forward-looking statements. These factors include, but are not
limited to: general economic conditions and trends, either nationally or in some
or all of the areas in which we and our customers conduct our respective
businesses; conditions in the securities markets or the banking industry;
changes in interest rates, which may affect our net income, prepayment penalties
and other future cash flows, or the market value of our assets; changes in
deposit flows, and in the demand for deposit, loan, and investment products and
other financial services in the markets we serve; changes in the financial or
operating performance of our customers' businesses; changes in real estate
values, which could impact the quality of the assets securing the loans in our
portfolio; changes in the quality or composition of our loan or investment
portfolios; changes in competitive pressures among financial institutions or
from non-financial institutions; changes in our customer base; potential
exposure to unknown or contingent liabilities of companies targeted for
acquisition; our ability to retain key members of management; our timely
development of new lines of business and competitive products or services in a
changing environment, and the acceptance of such products or services by our
customers; any interruption or breach of security resulting in failures or
disruptions in customer account management, general ledger, deposit, loan or
other systems; any interruption in customer service due to circumstances beyond
our control; the outcome of pending or threatened litigation, or of other
matters before regulatory agencies, or of matters resulting from regulatory
exams, whether currently existing or commencing in the future; environmental
conditions that exist or may exist on properties owned by, leased by, or
mortgaged to the Company; changes in estimates of future reserve requirements
based upon the periodic review thereof under relevant regulatory and accounting
requirements; changes in legislation, regulation, and policies, including, but
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not limited to, those pertaining to banking, securities, tax, environmental
protection, and insurance, and the ability to comply with such changes in a
timely manner; changes in accounting principles, policies, practices, or
guidelines; operational issues stemming from, and/or capital spending
necessitated by, the potential need to adapt to industry changes in information
technology systems, on which we are highly dependent; the ability to keep pace
with, and implement on a timely basis, technological changes; changes in the
monetary and fiscal policies of the U.S. Government, including policies of the
U.S. Treasury and the Federal Reserve Board; war or terrorist activities; and
other economic, competitive, governmental, regulatory, and geopolitical factors
affecting our operations, pricing and services.
It also should be noted that the Company occasionally evaluates opportunities to
expand through acquisition and may conduct due diligence activities in
connection with such opportunities. As a result, acquisition discussions and, in
some cases, negotiations, may take place in the future, and acquisitions
involving cash, debt, or equity securities may occur. Furthermore, the timing
and occurrence or non-occurrence of these events may be subject to circumstances
beyond the Company's control.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release. Except as required
by applicable law or regulation, the Company undertakes no obligation to update
these forward-looking statements to reflect events or circumstances that occur
after the date on which such statements were made.
Questions regarding the content of this release should be directed to either
Donald Mindiak, President & CEO, or Thomas Coughlin, COO & Principal Accounting
Officer at 201-823-0700.
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BCB BANCORP INC. AND SUBSIDIARIES
Consolidated Statements of Financial Condition at
September 30, 2008 and December 31, 2007
(Unaudited)
(in thousands except for share data )
At At
30-Sep-08 31-Dec-07
ASSETS
Cash and amounts due from depository institutions $ 2,927 $ 2,970
Interest-earning deposits 4,821 8,810
-------- --------
Total cash and cash equivalents 7,748 11,780
-------- --------
Securities available for sale 1,016 2,056
Securities held to maturity, fair value $151,592 and $165,660
respectively 152,406 165,017
Loans held for sale 1,310 2,132
Loans receivable, net of allowance for loan losses of $4,854 and
$4,065 respectively 400,150 364,654
Premises and equipment 5,682 5,929
Federal Home Loan Bank of New York stock 6,299 5,560
Interest receivable, net 3,597 3,776
Other real estate owned 1,435 287
Deferred income taxes 1,782 1,352
Other assets 1,062 934
-------- --------
Total assets $582,487 $563,477
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Non-interest bearing deposits $ 32,317 $ 35,897
Interest bearing deposits 371,163 362,922
-------- --------
Total deposits 403,480 398,819
Short-term Borrowings 14,500 -
Long-term Debt 114,124 114,124
Other Liabilities 2,326 2,024
-------- --------
Total Liabilities 534,430 514,967
STOCKHOLDERS' EQUITY
Common stock, stated value $0.06
10,000,000 shares authorized; 5,148,136 and
5,078,858 shares respectively, issued 329 325
Additional paid-in capital 46,525 45,795
Treasury stock, at cost, 507,992 and 440,651 shares,
respectively (8,394) (7,385)
Retained Earnings 9,741 9,749
Accumulated other comprehensive income (loss) (144) 26
-------- --------
Total stockholders' equity 48,057 48,510
-------- --------
Total liabilities and stockholders' equity $582,487 $563,477
======== ========
See accompanying notes to consolidated financial statements.
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BCB BANCORP INC. AND SUBSIDIARIES
Consolidated Statements of Income (Loss)
For the three and nine months ended
September 30, 2008 and 2007
(Unaudited)
( in thousands except for per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- -----------------------------
2008 2007 2008 2007
------------------------------- -----------------------------
Interest income:
Loans ............................................ $ 6,949 $ 6,271 $ 20,217 $ 17,903
Securities ....................................... 2,348 2,353 6,968 6,459
Other interest-earning assets .................... 7 323 188 926
Total interest income ......................... 9,304 8,947 27,373 25,288
Interest expense:
Deposits:
Demand ........................................ 247 271 789 674
Savings and club .............................. 337 442 1,036 1,442
Certificates of deposit ....................... 2,209 2,641 6,950 7,498
2,793 3,354 8,775 9,614
Borrowed money ................................ 1,294 1,231 3,834 2,934
Total interest expense ...................... 4,087 4,585 12,609 12,548
Net interest income ................................ 5,217 4,362 14,764 12,740
Provision for loan losses .......................... 300 200 850 200
Net interest income after provision for loan losses . 4,917 4,162 13,914 12,540
Non-interest income:
Fees and service charges ......................... 165 146 470 436
Gain on sales of loans originated for sale ....... 15 108 115 358
Gain on sale of securities ....................... - - - -
Other than temporary write-down on security ...... (2,756) - (2,756) -
Other ............................................ 7 7 23 21
Total non-interest income ..................... (2,569) 261 (2,148) 815
Non-interest expense:
Salaries and employee benefits ................... 1,368 1,463 4,121 4,264
Occupancy expense of premises .................... 281 268 806 748
Equipment ........................................ 511 487 1,513 1,425
Advertising ...................................... 59 73 181 268
Other ............................................ 488 486 1,452 1,268
Total non-interest expense .................... 2,707 2,777 8,073 7,973
Income (Loss) before income tax provision ........... (359) 1,646 3,693 5,382
Income tax provision ................................ 890 616 2,362 1,962
Net Income (Loss) ................................... $ (1,249) $ 1,030 $ 1,331 $ 3,420
Net Income (Loss) per common share
basic .................................... $ (0.27) $ 0.22 $ 0.29 $ 0.70
diluted .................................. $ (0.27) $ 0.21 $ 0.28 $ 0.68
Weighted average number of common shares outstanding-
basic .................................... 4,640 4,743 4,620 4,866
diluted .................................. 4,714 4,862 4,708 4,993
See accompanying notes to consolidated financial statements.