[PART I. CONSOLIDATED FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20CONSOLIDATED%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for BCB Bancorp, Inc. as of September 30, 2022, and for the three and nine months then ended, including detailed explanatory notes [Consolidated Statements of Financial Condition](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) | Metric | Sep 30, 2022 (in thousands) | Dec 31, 2021 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$3,265,612** | **$2,967,528** | | Loans receivable, net | $2,787,015 | $2,304,942 | | Total cash and cash equivalents | $221,024 | $411,629 | | **Total Liabilities** | **$2,982,930** | **$2,693,504** | | Total deposits | $2,712,946 | $2,561,402 | | **Total Stockholders' Equity** | **$282,682** | **$274,024** | - Total assets grew to **$3.27 billion** at September 30, 2022, from **$2.97 billion** at December 31, 2021, primarily driven by a significant increase in net loans receivable[4](index=4&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) | Metric (in thousands, except EPS) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net interest income | $30,951 | $24,613 | $83,764 | $72,239 | | (Credit) provision for loan losses | $0 | $680 | ($2,575) | $4,840 | | **Net Income** | **$13,392** | **$8,322** | **$33,507** | **$23,489** | | **Diluted EPS** | **$0.76** | **$0.47** | **$1.89** | **$1.31** | - Net income for Q3 2022 increased by **60.9%** year-over-year to **$13.4 million**, driven by a **25.8%** increase in net interest income and no provision for loan losses[6](index=6&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) | Metric (in thousands) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $13,392 | $8,322 | $33,507 | $23,489 | | Other comprehensive loss | ($3,152) | ($121) | ($7,277) | ($9) | | **Comprehensive income** | **$10,240** | **$8,201** | **$26,230** | **$23,480** | - For the nine months ended September 30, 2022, comprehensive income was significantly impacted by a **$7.3 million** after-tax loss from unrealized losses on available-for-sale debt securities[8](index=8&type=chunk) [Consolidated Statement of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Stockholders'%20Equity) - Total stockholders' equity increased from **$274.0 million** at the beginning of 2022 to **$282.7 million** at September 30, 2022, primarily driven by net income of **$33.5 million**, partially offset by **$7.8 million** in common stock dividends and a **$7.3 million** other comprehensive loss[11](index=11&type=chunk) - During the first nine months of 2022, the company redeemed its Series D and Series G Preferred Stock and issued new Series I Preferred Stock[11](index=11&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (in thousands) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $32,761 | $33,086 | | Net Cash Used In Investing Activities | ($496,880) | $8,215 | | Net Cash Provided by Financing Activities | $273,514 | $140,408 | | **Net (Decrease) Increase in Cash** | **($190,605)** | **$181,709** | - The significant decrease in cash and cash equivalents in the first nine months of 2022 was primarily due to a **$477.4 million** net increase in loans receivable, which was a primary use of cash in investing activities[19](index=19&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) - The company is preparing to adopt the Current Expected Credit Loss ("CECL") model (ASU 2016-13) in 2023, which will shift credit loss accounting from an "incurred loss" to an "expected loss" model[23](index=23&type=chunk) Loan Portfolio Composition | Loan Portfolio Composition (in thousands) | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Commercial and multi-family | $2,164,320 | $1,720,174 | | Residential one-to-four family | $242,238 | $224,534 | | Commercial business | $205,661 | $191,139 | | Construction | $153,103 | $153,904 | | **Total Gross Loans** | **$2,823,931** | **$2,343,937** | - The allowance for loan losses decreased to **$33.2 million** at September 30, 2022, from **$37.1 million** at year-end 2021, following a credit provision of **$2.6 million** for the nine-month period[47](index=47&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a **10.0%** growth in total assets to **$3.27 billion** in the first nine months of 2022, driven by a **20.5%** increase in gross loans, with net interest income growing significantly due to loan growth and a rising rate environment, leading to higher net income, also covering improving asset quality, changes in liabilities, and the company's strong liquidity and capital position - Total assets increased by **$298.1 million (10.0%)** to **$3.266 billion** at September 30, 2022, from year-end 2021, primarily due to a **$479.9 million (20.5%)** increase in gross loans[104](index=104&type=chunk) - For Q3 2022, net interest income increased **25.8%** year-over-year to **$30.9 million**, and the net interest margin expanded to **4.18%** from **3.46%** in Q3 2021[110](index=110&type=chunk) - For the nine months ended September 30, 2022, noninterest income decreased by **91.2%** to **$0.53 million**, mainly due to **$5.5 million** in unrealized losses on equity investments[112](index=112&type=chunk) - The Bank remains well-capitalized, with a Community Bank Leverage Ratio (CBLR) of **10.33%** as of September 30, 2022, exceeding the **9.00%** regulatory requirement[116](index=116&type=chunk)[117](index=117&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, BCB Bancorp, Inc. is not required to provide these disclosures - This section is not required for smaller reporting companies[119](index=119&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and Interim CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of the end of the quarter, with no material changes to internal controls over financial reporting during the period - The Chief Executive Officer and Interim Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective as of the end of the reporting period[120](index=120&type=chunk) - No changes in the Company's internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[120](index=120&type=chunk) [PART II. OTHER INFORMATION](index=35&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not involved in any material legal proceedings that would have a material adverse effect on its financial condition or results of operations - As of September 30, 2022, the company was not involved in any material legal proceedings[122](index=122&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes to the risk factors from the Company's 2021 Form 10-K were reported[123](index=123&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity during the third quarter of 2022, where a total of **71,513** shares were bought back under a publicly announced plan Share Repurchase Activity | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2022 | 19,113 | $16.99 | | August 2022 | - | - | | September 2022 | 52,400 | $17.31 | | **Total Q3 2022** | **71,513** | **$17.23** | [Other Items (3, 4, 5)](index=35&type=section&id=Other%20Items%20(3,%204,%205)) The company reports that there were no defaults upon senior securities, no mine safety disclosures to be made, and no other information to report for the period - Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information) were reported as not applicable or had no information to disclose[125](index=125&type=chunk)[126](index=126&type=chunk) [Signatures and Exhibits](index=36&type=section&id=Signatures%20and%20Exhibits)

PART I. CONSOLIDATED FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) BCB Bancorp, Inc.'s Q1 2021 unaudited financial statements show total assets of $2.85 billion and net income of $7.1 million, a substantial increase year-over-year [Consolidated Statements of Financial Condition](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets reached $2.85 billion by March 31, 2021, driven by increased cash and deposits, while loans remained stable and equity grew slightly Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2021 (In thousands) | December 31, 2020 (In thousands) | | :--- | :--- | :--- | | **Total Assets** | **$2,852,460** | **$2,821,016** | | Total cash and cash equivalents | $296,938 | $261,229 | | Loans receivable, net | $2,296,434 | $2,295,021 | | **Total Liabilities** | **$2,599,006** | **$2,571,805** | | Total deposits | $2,404,135 | $2,318,050 | | FHLB advances | $133,298 | $191,161 | | **Total Stockholders' Equity** | **$253,454** | **$249,211** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q1 2021 surged to $7.1 million, driven by a substantial increase in net interest income and reduced interest expense, boosting EPS to $0.40 Quarterly Income Statement Summary (Unaudited) | Metric | Three Months Ended March 31, 2021 (In thousands) | Three Months Ended March 31, 2020 (In thousands) | | :--- | :--- | :--- | | Net Interest Income | $23,562 | $18,778 | | Provision for loan losses | $1,865 | $1,500 | | Non-interest income | $1,950 | $683 | | Non-interest expense | $13,583 | $14,364 | | **Net Income** | **$7,117** | **$2,521** | | **Net Income available to common stockholders** | **$6,834** | **$2,179** | | **EPS (Basic & Diluted)** | **$0.40** | **$0.12** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Q1 2021 saw a $35.7 million net increase in cash, with operating activities providing $14.4 million and financing activities $25.2 million, partially offset by investing outflows Summary of Cash Flows (Unaudited) | Activity | Three Months Ended March 31, 2021 (In thousands) | Three Months Ended March 31, 2020 (In thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $14,368 | $5,665 | | Net Cash (Used In) Provided by Investing Activities | ($3,879) | $12,634 | | Net Cash Provided by Financing Activities | $25,220 | $26,534 | | **Net Increase in Cash and Cash Equivalents** | **$35,709** | **$44,833** | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, COVID-19 impacts, CECL adoption, loan portfolio, allowance for loan losses, securities, and fair value measurements - The company is preparing for the adoption of ASU 2016-13 (CECL) in 2023, shifting credit loss reporting to an "expected loss" model, with a task group formed for implementation[17](index=17&type=chunk) Loan Portfolio Composition (March 31, 2021) | Loan Category | Amount (In thousands) | | :--- | :--- | | Commercial and multi-family | $1,700,113 | | Residential one-to-four family | $234,375 | | Commercial business | $177,340 | | Construction | $167,224 | | Home equity | $53,360 | | Consumer | $851 | | **Total Gross Loans** | **$2,333,263** | - The allowance for loan losses increased from **$33.6 million** at year-end 2020 to **$35.5 million** at March 31, 2021, with a **$1.87 million** provision recorded, covering **1.52%** of total gross loans[39](index=39&type=chunk)[111](index=111&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights Q1 2021's 182.3% net income growth, driven by increased net interest income and reduced expenses, alongside stable financial condition and strong capital [COVID-19 Overview](index=27&type=section&id=COVID-19%20Overview) The company actively managed COVID-19 impacts, concluding all loan deferments, increasing loan loss allowance, and earning $328,000 from PPP referral fees - The company has **no deferred loans** as of March 31, 2021, with prior deferments converted to modification plans, mainly short-term interest-only periods[108](index=108&type=chunk) - The provision for loan losses increased by **$1.9 million** in Q1 2021, reflecting heightened risk from the COVID-19 pandemic's economic impact[107](index=107&type=chunk) - The bank recognized **$328,000** in PPP loan referral fees in Q1 2021 through its partnership with The Loan Source, Inc[108](index=108&type=chunk) [Financial Condition](index=28&type=section&id=Financial%20Condition) Q1 2021 saw total assets grow to $2.85 billion, driven by increased cash and deposits, while debt decreased due to FHLB advance extinguishment, and equity rose - **Total assets** increased by **1.1%** to **$2.852 billion** as of March 31, 2021[110](index=110&type=chunk) - **Deposits** grew by **$86.1 million (3.7%)** during the quarter, primarily due to government stimulus and PPP loan proceeds[113](index=113&type=chunk) - The company extinguished **$53.0 million** in FHLB advances at a **1.83%** weighted average rate, reducing FHLB borrowing costs by approximately **20 basis points** annually[113](index=113&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q1 2021 net income surged to $7.1 million, driven by a 182.3% increase, expanded net interest margin, and higher noninterest income, despite a debt extinguishment loss Key Performance Metrics (Q1 2021 vs Q1 2020) | Metric | Q1 2021 (in millions) | Q1 2020 (in millions) | | :--- | :--- | :--- | | Net Income | $7.1 | $2.5 | | Net Interest Income | $23.6 | $18.8 | | Net Interest Margin | 3.48% | 2.63% | | Avg. Cost of Interest-Bearing Liabilities | 0.85% | 1.78% | - **Total interest expense** decreased by **57.6%** year-over-year, primarily due to a **93 basis point** reduction in the average rate on interest-bearing liabilities[117](index=117&type=chunk) - **Noninterest income** increased by **185.5%**, driven by **$701,000** in new BOLI income and **$328,000** in PPP loan referral fees[119](index=119&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with over $800 million in borrowing capacity and remains well-capitalized, with a CBLR of 10.07% exceeding regulatory requirements - The company has access to over **$800 million** in wholesale borrowing capacity, including an additional **$245.7 million** from the FHLB[121](index=121&type=chunk) BCB Community Bank Capital Ratios (as of March 31, 2021) | Ratio | Actual (%) | Requirement for Well-Capitalized Status (%) | | :--- | :--- | :--- | | Community Bank Leverage Ratio | 10.07 | 8.50 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk, with NPV analysis showing a 0.22% increase for a +100bp rate change and a 21.83% increase for a -100bp change Net Portfolio Value (NPV) Sensitivity Analysis (as of March 31, 2021) | Change in Interest Rates | NPV (in thousands) | % Change from PAR | | :--- | :--- | :--- | | +300bp | $215,473 | (9.48)% | | +200bp | $227,964 | (4.24)% | | +100bp | $238,564 | 0.22% | | PAR | $238,046 | - | | -100bp | $290,021 | 21.83% | [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures are **effective** for timely and accurate SEC reporting[127](index=127&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) As of March 31, 2021, the company was not involved in any material legal proceedings that would adversely affect its financial condition or operations - The company reports **no material legal proceedings** as of the end of the reporting period[128](index=128&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors were disclosed by the company during the reporting period - **No new risk factors** were disclosed in this quarterly report[130](index=130&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **32,093 shares** at an average price of **$12.79** under its stock repurchase program during Q1 2021 Share Repurchase Activity (Q1 2021) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2021 | - | $ - | | Feb 2021 | - | $ - | | Mar 2021 | 32,093 | $12.79 | | **Total** | **32,093** | **$12.79** | - A maximum of **467,907 shares** may still be purchased under the current repurchase program as of March 31, 2021[131](index=131&type=chunk)

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 September 30, 2020 Or o 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 ...

PART I. CONSOLIDATED FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The unaudited financial statements show increased assets but a significant decline in net income due to the COVID-19 pandemic [Consolidated Statements of Financial Condition](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets grew to $2.99 billion, driven by loan growth, while deposits and stockholders' equity also increased Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$2,986,876** | **$2,907,468** | | Total cash and cash equivalents | $412,249 | $550,353 | | Loans receivable, net | $2,343,593 | $2,178,407 | | **Total Liabilities** | **$2,745,857** | **$2,667,995** | | Total deposits | $2,442,233 | $2,362,063 | | **Total Stockholders' Equity** | **$241,019** | **$239,473** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income declined significantly in Q2 and the first half of 2020 due to lower net interest income and higher loan loss provisions Income Statement Summary (in thousands, except per share data) | Metric | Q2 2020 | Q2 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $17,991 | $20,865 | $36,769 | $41,767 | | Provision for Loan Losses | $3,300 | $755 | $4,800 | $1,644 | | Net Income | $2,726 | $5,227 | $5,247 | $10,678 | | Diluted EPS | $0.14 | $0.30 | $0.26 | $0.62 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents decreased by $138.1 million in the first half of 2020, driven by net loan growth and security purchases Six-Month Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $2,609 | $10,813 | | Net Cash Used In Investing Activities | ($210,681) | ($12,649) | | Net Cash Provided by Financing Activities | $69,968 | $34,214 | | **Net (Decrease) Increase In Cash** | **($138,104)** | **$32,378** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail the financial impact of COVID-19, loan portfolio composition, credit loss allowances, and subsequent events - The company is subject to risks and uncertainties from the **COVID-19 pandemic**, the full extent of which on future financial condition is uncertain[12](index=12&type=chunk) - The company will adopt the new **Current Expected Credit Loss (CECL) standard in 2023** and is currently evaluating its impact[13](index=13&type=chunk) - Subsequent events include the **redemption of preferred stock**, a new branch opening, and the declaration of a **$0.14 per share common stock dividend**[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial and operational impacts of COVID-19, including increased loan loss provisions and participation in PPP [COVID-19 Overview and Response](index=36&type=section&id=COVID-19%20Overview%20and%20Response) The company increased its allowance for loan losses, provided significant loan deferments, and funded $127 million in PPP loans - The provision for loan losses was increased by **$4.8 million** for the six-month period ended June 30, 2020, due to the COVID-19 pandemic[81](index=81&type=chunk) - Through July 15, 2020, the Bank had closed and funded approximately **$127 million for almost 1,000 Paycheck Protection Program (PPP) loans**[83](index=83&type=chunk) Loan Deferment Summary by Type (in thousands) | Loan Type | Principal Balance (June 30, 2020) | Principal Balance (July 21, 2020) | | :--- | :--- | :--- | | Residential 1-4 family | $50,073 | $27,979 | | Commercial & multi-family | $473,861 | $384,736 | | Construction | $17,959 | $13,645 | | Commercial business | $32,185 | $33,077 | | Home equity | $4,388 | $2,229 | | **Total** | **$578,466** | **$461,666** | [Financial Condition Analysis](index=39&type=section&id=Financial%20Condition%20Analysis) Total assets grew 2.7% to $2.99 billion, driven by a 7.6% increase in net loans including PPP and purchased loans - Loans receivable, net increased by **$165.2 million (7.6%) to $2.344 billion**, which included $127.0 million from the PPP loan program[85](index=85&type=chunk) - Deposit liabilities increased by **$80.2 million (3.4%)**, primarily due to a $119.2 million increase in non-interest-bearing deposits[85](index=85&type=chunk) [Results of Operations Analysis](index=41&type=section&id=Results%20of%20Operations%20Analysis) Q2 net income fell 47.8% year-over-year due to net interest margin compression and a higher provision for loan losses - For Q2 2020, net interest income decreased by **$2.9 million (13.8%) to $18.0 million** compared to Q2 2019, as the average yield on assets fell 95 basis points[90](index=90&type=chunk) - The provision for loan losses increased by **$2.5 million to $3.3 million** for Q2 2020, primarily due to COVID-19 related factors[90](index=90&type=chunk) - Salaries and employee benefits expense decreased by **$1.2 million** in Q2 2020, related to $1.1 million of deferred costs for originating PPP loans[93](index=93&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained strong liquidity and capital, with a Community Bank Leverage Ratio of 8.96% exceeding regulatory requirements - The company had wholesale borrowing capacity of **over $700 million** as of June 30, 2020[98](index=98&type=chunk) Bank Regulatory Capital Ratios (June 30, 2020) | Ratio | Actual | Well-Capitalized Requirement | | :--- | :--- | :--- | | Community Bank Leverage Ratio | 8.96% | 8.00% | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk, with analysis showing a 3.98% NPV decrease for a 100bp rate increase Net Portfolio Value (NPV) Sensitivity Analysis (June 30, 2020) | Change in Interest Rates | % Change from PAR | | :--- | :--- | | +300bp | (10.00)% | | +200bp | (6.51)% | | +100bp | (3.98)% | | PAR | - | | -100bp | 12.37% | [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the quarter's end - The CEO and CFO concluded that the company's **disclosure controls and procedures are effective**[101](index=101&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company was not involved in any material legal proceedings as of June 30, 2020 - The company reports **no material legal proceedings** as of June 30, 2020[101](index=101&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the quarter - **No material changes** to risk factors are reported for the quarter[104](index=104&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company completed its 500,000 share repurchase program during the second quarter at an average price of $9.71 per share - The stock repurchase program for **500,000 shares was completed** in the second quarter of 2020 and is now closed[105](index=105&type=chunk) Share Repurchase Summary (Q2 2020) | Period | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | March 2020 | 127,058 | $10.10 | | April 2020 | 141,724 | $9.77 | | May 2020 | 231,218 | $9.46 | | **Total** | **500,000** | **$9.71** |