News Column

BCB Bancorp Updates on Increase in Annual Earnings

February 11, 2014

BCB Bancorp, Inc., Bayonne, New Jersey announced 2013 year end net income of $9.4 million for the year ended December 31, 2013 as compared to a loss of $2.1million for the year ended December 31, 2012.

In a release on January 31, the Company noted that basic and diluted earnings per share were $1.06 for the year ended December 31, 2013 compared with a $(0.23) loss per share for the year ended December 31, 2012. The weighted average number of common shares outstanding for the year ended December 31, 2013 for basic and diluted earnings per share calculations was approximately 8,397,000 and 8,402,000, respectively. The weighted average number of common shares outstanding for the year ended December 31, 2012 for basic and diluted earnings per share calculations was approximately 8,943,000 and 8,943,000, respectively.

Total assets increased by $36.6 million or 3.1 percent to $1.208 billion at December 31, 2013 from $1.171 billion at December 31, 2012. Total cash and cash equivalents decreased by $4.3 million or 12.6 percent to $29.8 million at December 31, 2013 from $34.1 million at December 31, 2012. Investment securities classified as held-to-maturity decreased by $50.4 million or 30.6 percent to $114.2 million at December 31, 2013 from $164.6 million at December 31, 2012. Loans receivable, net increased by $98.0 million or 10.6 percent to $1.02 billion at December 31, 2013 from $922.3 million at December 31, 2012. Deposits increased by $27.9 million or 3.0 percent to $968.7 million at December 31, 2013 from $940.8 million at December 31, 2012. Short-term borrowings increased by $1.0 million or 5.9 percent to $18.0 million at December 31, 2013 compared with $17.0 million at December 31, 2012. Long-term borrowings remained constant at $114.1 million at December 31, 2013 and 2012, respectively. Stockholders' equity increased by $8.5 million or 9.3 percent to $100.1 million at December 31, 2013 from $91.6 million at December 31, 2012.

Net income was $9.4 million for the year ended December 31, 2013 compared with a net loss of $2.1 million for year ended December 31, 2012. The loss sustained in the fiscal year ended December 31, 2012 resulted primarily from the sale of approximately $25.9 million in non-performing loans during the second and third quarter of 2012. These sales resulted in a pre-tax loss of $10.8 million. The primary reason for this transaction was the elimination of carrying and legacy costs associated with these non-interest earning assets. Additionally, the return to net income was due to increases in net interest income and total non-interest income along with decreases in total non-interest expense and provision for loan losses, partially offset by an increase in income tax provision.

Net interest income increased by $5.1 million or 12.2 percent to $46.8 million for the year ended December 31, 2013 from $41.7 million for the year ended December 31, 2012. The increase in net interest income resulted primarily from an increase in the average yield on interest earning assets of thirty-four basis points to 4.97 percent for the year ended December 31, 2013 from 4.63 percent for the year ended December 31, 2012, partially offset by a slight decrease in the average balance of interest earning assets of $4.6 million or 0.4 percent to $1.153 billion for the year ended December 31, 2013 from $1.158 billion for the year ended December 31, 2012. The increased yield on assets was the result of an improved asset mix which saw increased loan balances and decreased balances of investment securities and interest-earning cash. The average balance of interest bearing liabilities decreased by $30.0 million or 3.0 percent to $974.7 million for the year ended December 31, 2013 from $1.004 billion for the year ended December 31, 2012, while the average cost of interest bearing liabilities decreased by ten basis points to 1.09 percent for the year ended December 31, 2013 from 1.19 percent for the year ended December 31, 2012. As a consequence of the aforementioned, our net interest margin increased by forty- six basis points to 4.06 percent for the year ended December 31, 2013 from 3.60 percent for the year ended December 31, 2012.

Total non-interest income was $3.4 million for the year ended December 31, 2013 compared with a loss of $7.2 million for the year ended December 31, 2012. Total non-interest income during 2013 benefitted primarily from a decrease of $10.3 million in loss on bulk sale of impaired loss held in portfolio to a loss of $474,000 for the year ended December 31, 2013 from a loss of $10.8 million for the year ended December 31, 2012.

Total non-interest expense decreased by $2.5 million or 7.4 percent to $31.4 million for the year ended December 31, 2013 from $33.9 million for the year ended December 31, 2012. Expense reductions occurred in occupancy expense, professional fees, director fees, regulatory assessments, OREO expense and other non- interest expense, partially offset by increases in salary and employee benefits, equipment, and advertising.

Donald Mindiak, Chief Executive Officer commented, "Our earnings and earnings per share were both positively impacted as a result of the successful implementation of several initiatives executed during 2012. An asset re-allocation initiative coupled with the sale of a significant portion of our non-performing loan portfolio resulted in the redeployment of the cash proceeds into yielding instruments. Net loan balances increased by $98.0 million or 10.6 percent to $1.02 billion at December 31, 2013 as compared to $922.3 million at December 31, 2012. As a result of this increase in net loans, interest income on loans increased by $5.7 million or 11.9 percent to $53.5 million for the year ended December 31, 2013 from $47.8 million for the year ended December 31, 2012. As a result of the aforementioned, we were able to realize an increase in our net interest spread to 3.89 percent at December 31, 2013 as compared to 3.45 percent at December 31, 2012, and an increase in our net interest margin to 4.06 percent at December 31, 2013 as compared to 3.60 percent at December 31, 2012. Additionally, cost containment efforts in several areas such as occupancy, professional fees, director fees, regulatory assessments, OREO expense and other non- interest expense provided a positive impact in reducing total non- interest expense by approximately $2.5 million or 7.4 percent to $31.4 million for the year ended December 31, 2013 from $33.9 million for the year ended December 31, 2012."

"Efforts to raise capital in both 2012 and 2013 proved successful as a total of $12.6 million in additional capital was raised as a way to provide the Company the ability to continue to grow and strengthen our balance sheet and explore initiatives which may have the capacity to increase franchise and shareholder value."

BCB Community Bank presently operates ten full service offices in Bayonne, Hoboken, Jersey City, Monroe Township and South Orange and an office of the Bank of Woodbridge, a division of BCB Community Bank, in Woodbridge, New Jersey.

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