BCB Bancorp(BCBP) - 2025 Q1 - Quarterly Results

Press Release Overview BCB Bancorp, Inc. announced its first-quarter 2025 results, reporting a net loss of $8.3 million and declaring a quarterly cash dividend of $0.16 per share Headline and Contact Information BCB Bancorp, Inc. announced its first-quarter 2025 results, reporting a net loss of $8.3 million and declaring a quarterly cash dividend of $0.16 per share - BCB Bancorp, Inc. reported a net loss of $8.3 million for Q1 2025[2] - The company declared a regular quarterly cash dividend of $0.16 per share, payable on May 21, 2025, to shareholders of record on May 7, 2025[3] Q1 2025 Net Income and EPS Comparison | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :----------------------- | :------ | :------ | :------ | | Net Income (Loss) | ($8.3M) | $3.3M | $5.9M | | Diluted EPS | ($0.51) | $0.16 | $0.32 | Management Commentary CEO Michael Shriner attributed the Q1 loss primarily to a $13.7 million specific reserve for a cannabis sector loan and an additional $3.1 million reserve for the Business Express Loan portfolio, reflecting a proactive approach to risk management CEO Statement on Q1 Performance and Risk Management CEO Michael Shriner attributed the Q1 loss primarily to a $13.7 million specific reserve for a cannabis sector loan and an additional $3.1 million reserve for the Business Express Loan portfolio, reflecting a proactive approach to risk management. The company remains well-capitalized and is strengthening its credit risk team and oversight - The Q1 loss was primarily driven by a $13.7 million specific reserve for a $34.2 million loan in the cannabis sector, despite the borrower remaining current[4] - An additional $3.1 million was added to reserves for the discontinued Business Express Loan portfolio due to elevated deterioration and macroeconomic headwinds[4] - BCB Bank has bolstered its credit risk team with new hires and adjusted risk ratings on loans following a comprehensive portfolio review, emphasizing a disciplined and proactive approach to risk management[4] Executive Summary of Key Financials The executive summary highlights a net loss for Q1 2025, driven by a significant increase in the provision for credit losses, alongside decreased deposits and mixed profitability ratios Key Financial Highlights The executive summary highlights a net loss for Q1 2025, driven by a significant increase in the provision for credit losses. Key metrics show a decrease in total deposits and a mixed performance in profitability ratios, with net interest margin improving while return on assets and equity declined Key Financial Metrics (Q1 2025 vs. Prior Periods) | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--------------------------- | :---------- | :---------- | :---------- | | Total Deposits | $2.687B | $2.751B | N/A | | Net Interest Margin | 2.59% | 2.53% | 2.50% | | Total Yield on Interest-Earning Assets | 5.20% | 5.33% | 5.33% | | Total Cost of Interest-Bearing Liabilities | 3.33% | 3.57% | 3.54% | | Efficiency Ratio | 61.6% | 62.1% | 58.8% | | Annualized Return on Average Assets | (0.95)% | 0.36% | 0.61% | | Annualized Return on Average Equity | (10.4)% | 4.0% | 7.5% | | Provision for Credit Losses | $20.8M | $4.2M | $2.1M | - Total deposits decreased by $64 million to $2.687 billion at March 31, 2025, compared to December 31, 2024[5] - The provision for credit losses significantly increased to $20.8 million in Q1 2025 from $4.2 million in Q4 2024 and $2.1 million in Q1 2024[5] Detailed Financial Review This section provides a comprehensive review of the company's balance sheet, income statement, and asset quality, highlighting significant changes in assets, liabilities, profitability, and credit risk metrics Balance Sheet Review BCB Bancorp's balance sheet at March 31, 2025, showed a decrease in total assets, primarily driven by reductions in net loans and cash equivalents. Deposits also declined, mainly due to a decrease in brokered deposits, while investment securities saw an increase Balance Sheet Changes (Q1 2025 vs. Q4 2024) | Metric | March 31, 2025 | December 31, 2024 | Change ($M) | Change (%) | | :------------------------- | :------------- | :---------------- | :---------- | :--------- | | Total Assets | $3.474B | $3.599B | ($125.3) | -3.5% | | Cash & Cash Equivalents | $252.8M | $317.3M | ($64.5) | -20.3% | | Loans Receivable, Net | $2.918B | $2.996B | ($78.6) | -2.6% | | Investment Securities | $125.9M | $111.2M | $14.7 | 13.2% | | Deposits | $2.687B | $2.751B | ($64.4) | -2.3% | | Debt Obligations | $448.5M | $498.3M | ($49.8) | -10.0% | | Stockholders' Equity | $314.7M | $323.9M | ($9.2) | -2.8% | - The decrease in cash and cash equivalents was primarily due to reducing exposure to wholesale funding by paying down high-cost brokered deposits[7] - The allowance for credit losses increased by $16.7 million to $51.5 million, representing 51.6% of non-accruing loans and 1.73% of gross loans at March 31, 2025[8] First Quarter 2025 Income Statement Review The Company reported a net loss of $8.3 million for Q1 2025, a significant decline from net income in prior periods, primarily due to an $18.8 million increase in the provision for loan losses. Net interest income decreased, influenced by lower interest income partially offset by reduced interest expense, while non-interest income and expense saw minor changes Income Statement Highlights (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | Change ($M) | Change (%) | | :--------------------------- | :---------- | :---------- | :---------- | :--------- | | Net (Loss) Income | ($8.3M) | $5.9M | ($14.2) | -241.9% | | Provision for Loan Losses | $20.8M | $2.1M | $18.7 | 890.5% | | Net Interest Income | $22.0M | $23.1M | ($1.1) | -4.9% | | Interest Income | $44.2M | $49.3M | ($5.1) | -10.3% | | Interest Expense | $22.2M | $26.1M | ($4.0) | -15.1% | | Non-Interest Income | $1.8M | $2.1M | ($0.3) | -15.1% | | Non-Interest Expense | $14.7M | $14.8M | ($0.2) | -1.2% | | Income Tax (Benefit) Provision | ($3.4M) | $2.5M | ($5.8) | -232.0% | - The net interest margin increased to 2.59% in Q1 2025 from 2.50% in Q1 2024, driven by a decrease in the cost of interest-bearing liabilities, partially offset by a decrease in the yield on interest-earning assets[17] - Non-accrual loans significantly increased to $99.8 million (3.36% of gross loans) at March 31, 2025, from $44.7 million (1.48% of gross loans) at December 31, 2024[18] Asset Quality Asset quality deteriorated in Q1 2025, marked by a substantial increase in net charge-offs and non-accrual loans. Despite many non-accrual loans being current on payments, management reclassified them due to underlying financial weaknesses, leading to a lower allowance for credit losses as a percentage of non-accrual loans Asset Quality Metrics (Q1 2025 vs. Prior Periods) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--------------------------- | :------------- | :---------------- | :------------- | | Net Charge-Offs | $4.2M | N/A | $1.1M | | Non-Accrual Loans | $99.8M | $44.7M | $22.2M | | Non-Accrual Loans as % of Gross Loans | 3.36% | 1.48% | 0.68% | | Allowance for Credit Losses | $51.5M | $34.8M | $34.6M | | ACL as % of Gross Loans | 1.73% | 1.15% | 1.06% | | ACL as % of Non-Accrual Loans | 51.6% | 77.8% | 155.4% | - More than 60% of the non-accrual loans are current on payments, but were reclassified due to underlying financial weaknesses beyond payment status[23] - Management believes the allowance for credit losses on loans was adequate at March 31, 2025, despite the significant increase in non-accrual loans[18] About BCB Bancorp, Inc. BCB Bancorp, Inc., established in 2000, operates BCB Community Bank through 23 New Jersey and four New York branches, offering diverse banking services Company Overview BCB Bancorp, Inc., established in 2000 and headquartered in Bayonne, N.J., operates BCB Community Bank, offering a wide range of banking services to businesses and individuals through 23 branch offices in New Jersey and four in New York - BCB Bancorp, Inc. (NASDAQ: BCBP) is the holding company for BCB Community Bank, established in 2000[24] - The Bank operates 23 branch offices in New Jersey and four in New York, providing loans, deposit products, and retail/commercial banking services[24] Forward-Looking Statements & Risk Factors This section provides a disclaimer regarding forward-looking statements, emphasizing that actual results may differ materially due to various economic, regulatory, and operational uncertainties Disclaimer and Key Risks This section provides a disclaimer regarding forward-looking statements, emphasizing that actual results may differ materially from projections due to various uncertainties. Significant risk factors include economic conditions, inflation, loan delinquencies, liquidity management, supply chain disruptions, labor shortages, geopolitical conflicts, changes in interest rates, and regulatory changes - Forward-looking statements are subject to inherent uncertainties, and actual results may differ materially from anticipated results[25] - Significant risk factors include the impact of global tariffs, higher inflation, general economic and recessionary concerns, which could lead to increased loan delinquencies and reduced financial transactions[26] - Other risks include managing liquidity and capital, supply chain disruptions, labor shortages, geopolitical conflicts (Ukraine, Middle East), changes in interest rates, real estate values, and expanding regulatory requirements[26] Non-GAAP Financial Measures Explanation The Company provides supplemental Non-GAAP financial information, such as tangible stockholders' equity and efficiency ratios, to aid analysts and investors in evaluating financial results Purpose and Utility of Non-GAAP Measures The Company provides supplemental Non-GAAP financial information, such as measurements and ratios based on tangible stockholders' equity and efficiency ratios, to help analysts and investors better understand and evaluate its financial results, as these measures are utilized by regulators and market analysts - The press release includes supplemental Non-GAAP information to aid analysts and investors in understanding and evaluating financial results[28] - Non-GAAP measures provided include those based on tangible stockholders' equity and efficiency ratios, which are used by regulators and market analysts[29] Financial Statements and Supplemental Data This section presents detailed financial statements, including statements of operations, financial condition, average balances, and quarterly operating data, along with reconciliations of non-GAAP measures Statements of Operations - Three Months Ended The Statements of Operations detail the company's financial performance for the three months ended March 31, 2025, compared to prior quarters. It shows a net loss driven by a substantial increase in the provision for credit losses, despite a decrease in total interest expense Statements of Operations (Three Months Ended) | Metric (In thousands) | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :-------------------- | :------------- | :---------------- | :------------- | | Total interest and dividend income | $44,192 | $46,653 | $49,285 | | Total interest expense | $22,187 | $24,459 | $26,142 | | Net interest income | $22,005 | $22,194 | $23,143 | | Provision for credit losses | $20,845 | $4,154 | $2,088 | | Total non-interest income | $1,791 | $938 | $2,109 | | Total non-interest expense | $14,660 | $14,367 | $14,838 | | Net (Loss) Income | ($8,324) | $3,272 | $5,866 | | Net (Loss) Income per common share-diluted | ($0.51) | $0.16 | $0.32 | - Provision for credit losses increased by 401.8% QoQ and 898.3% YoY, significantly impacting net income[30] - Net interest income decreased by 0.9% QoQ and 4.9% YoY[30] Statements of Financial Condition The Statements of Financial Condition present the company's assets, liabilities, and stockholders' equity at March 31, 2025, compared to previous periods. It shows a decrease in total assets, primarily from cash and loans, and a corresponding decrease in total liabilities, mainly from deposits and FHLB advances Statements of Financial Condition (In Thousands) | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :------------------------- | :------------- | :---------------- | :------------- | | Total Assets | $3,473,822 | $3,599,118 | $3,849,195 | | Total cash and cash equivalents | $252,750 | $317,282 | $352,448 | | Loans receivable, net | $2,917,610 | $2,996,259 | $3,226,877 | | Total deposits | $2,686,508 | $2,750,858 | $2,991,659 | | FHLB advances | $405,499 | $455,361 | $472,949 | | Total Liabilities | $3,159,100 | $3,275,193 | $3,529,064 | | Total Stockholders' Equity | $314,722 | $323,925 | $320,131 | - Total assets decreased by 3.5% QoQ and 9.8% YoY[31] - Loans receivable, net, decreased by 2.6% QoQ and 9.6% YoY[31] Average Balances and Yields/Rates This section provides a detailed breakdown of average balances, interest earned/paid, and average yields/rates for interest-earning assets and interest-bearing liabilities for the three months ended March 31, 2025, and 2024. It highlights a decrease in the average balance of interest-earning assets and interest-bearing liabilities, alongside a slight increase in net interest margin Average Balances, Interest, and Yields/Rates (Three Months Ended March 31) | Metric | Q1 2025 Average Balance | Q1 2025 Interest Earned/Paid | Q1 2025 Average Yield/Rate | Q1 2024 Average Balance | Q1 2024 Interest Earned/Paid | Q1 2024 Average Yield/Rate | | :--------------------------- | :---------------------- | :--------------------------- | :------------------------- | :---------------------- | :--------------------------- | :------------------------- | | Loans Receivable | $2,994,529 | $38,927 | 5.27% | $3,299,938 | $43,722 | 5.30% | | Total Interest-earning assets | $3,443,542 | $44,192 | 5.20% | $3,699,455 | $49,285 | 5.33% | | Total interest-bearing deposits | $2,212,743 | $16,331 | 2.99% | $2,446,824 | $20,406 | 3.34% | | Total interest-bearing liabilities | $2,701,161 | $22,187 | 3.33% | $2,957,327 | $26,142 | 3.54% | | Net interest income | N/A | $22,005 | N/A | N/A | $23,143 | N/A | | Net interest margin | N/A | N/A | 2.59% | N/A | N/A | 2.50% | - The average balance of interest-earning assets decreased by $255.9 million (6.9%) YoY, while the average yield decreased by 13 basis points[14][32] - The average balance of interest-bearing liabilities decreased by $256.2 million YoY, and the average rate paid decreased by 21 basis points[16][32] Quarterly Financial Condition and Operating Data This section provides a quarterly overview of key financial condition and operating data, illustrating trends in assets, liabilities, equity, income, and expenses over the past five quarters. It highlights the significant increase in provision for credit losses and non-accrual loans in Q1 2025, leading to a net loss and reduced profitability ratios Financial Condition Data by Quarter (In thousands) | Metric | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Total assets | $3,473,822 | $3,599,118 | $3,613,770 | $3,793,941 | $3,849,195 | | Deposits | $2,686,508 | $2,750,858 | $2,724,580 | $2,935,239 | $2,991,659 | | Stockholders' equity | $314,722 | $323,925 | $328,113 | $320,732 | $320,131 | | Book value per common share | $16.87 | $17.54 | $17.50 | $17.17 | $17.24 | Operating Data by Quarter (In thousands) | Metric | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Net interest income | $22,005 | $22,194 | $23,045 | $23,639 | $23,143 | | Provision for credit losses | $20,845 | $4,154 | $2,890 | $2,438 | $2,088 | | Net (loss) income | ($8,324) | $3,272 | $6,668 | $2,817 | $5,866 | | Net (loss) income per diluted share | ($0.51) | $0.16 | $0.36 | $0.14 | $0.32 | | Common Dividends declared per share | $0.16 | $0.16 | $0.16 | $0.16 | $0.16 | Financial Ratios by Quarter | Ratio | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Return on average assets | (0.95%) | 0.36% | 0.72% | 0.30% | 0.61% | | Return on average stockholders' equity | (10.40%) | 4.04% | 8.29% | 3.52% | 7.46% | | Net interest margin | 2.59% | 2.53% | 2.58% | 2.60% | 2.50% | | Efficiency Ratio | 61.61% | 62.11% | 53.22% | 68.55% | 58.76% | Asset Quality Ratios by Quarter This section provides a quarterly trend of asset quality ratios, showing a significant increase in non-accrual loans and a corresponding decrease in the allowance for credit losses as a percentage of non-accrual loans in Q1 2025 Asset Quality Ratios by Quarter (In thousands, except for ratio %) | Metric | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Non-Accrual Loans | $99,833 | $44,708 | $35,330 | $32,448 | $22,241 | | Non-Accrual Loans as a % of Total Loans | 3.36% | 1.48% | 1.13% | 1.01% | 0.68% | | ACL as % of Non-Accrual Loans | 51.6% | 77.8% | 98.2% | 108.6% | 155.4% | | Classified Loans | $251,989 | $152,714 | $98,316 | $87,033 | $97,739 | - Non-Accrual Loans increased by 123.3% QoQ and 348.0% YoY[34] - The Allowance for Credit Losses (ACL) as a percentage of Non-Accrual Loans decreased significantly from 77.8% in Q4 2024 to 51.6% in Q1 2025[34] Recorded Investment in Loans Receivable by Quarter This table details the recorded investment in loans receivable by category across five quarters, showing a general decline in most loan types, particularly commercial and multi-family loans, and construction loans, from Q1 2024 to Q1 2025 Recorded Investment in Loans Receivable by Quarter (In thousands) | Loan Type | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Residential one-to-four family | $232,456 | $239,870 | $241,050 | $242,706 | $244,762 | | Commercial and multi-family | $2,221,218 | $2,246,677 | $2,296,886 | $2,340,385 | $2,392,970 | | Construction | $118,779 | $135,434 | $146,471 | $173,207 | $180,975 | | Commercial business | $330,358 | $342,799 | $371,365 | $375,355 | $378,073 | | Home equity | $66,479 | $66,769 | $67,566 | $66,843 | $65,518 | | Consumer | $2,271 | $2,235 | $2,309 | $2,053 | $2,847 | | Total loans, net | $2,917,610 | $2,996,259 | $3,087,914 | $3,161,925 | $3,226,877 | - Commercial and multi-family loans, the largest category, decreased by $25.4 million QoQ and $171.7 million YoY[37] - Construction loans decreased by $16.7 million QoQ and $62.2 million YoY[37] Non-Accruing Loans in Portfolio by Quarter This table provides a quarterly breakdown of non-accruing loans by portfolio type, showing a significant increase in non-accruing commercial and multi-family loans in Q1 2025, which is the primary driver of the overall rise in non-accrual loans Non-Accruing Loans in Portfolio by Quarter (In thousands) | Loan Type | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Residential one-to-four family | $1,138 | $1,387 | $410 | $350 | $429 | | Commercial and multi-family | $89,296 | $32,974 | $27,693 | $27,796 | $12,627 | | Construction | $586 | $586 | $586 | $586 | $3,225 | | Commercial business | $8,374 | $9,530 | $6,498 | $3,673 | $5,916 | | Home equity | $439 | $231 | $123 | $434 | $44 | | Consumer | — | — | $20 | — | — | | Total | $99,833 | $44,708 | $35,330 | $32,448 | $22,241 | - Non-accruing commercial and multi-family loans increased by $56.3 million QoQ, representing the largest component of the overall increase in non-accrual loans[37] Distribution of Deposits by Quarter This table illustrates the quarterly distribution of deposits by type, showing a decrease in total deposits from Q4 2024 to Q1 2025, primarily driven by a reduction in certificates of deposit, partially offset by an increase in non-interest bearing demand deposits Distribution of Deposits by Quarter (In thousands) | Deposit Type | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Non-Interest Bearing Demand | $542,620 | $520,387 | $528,089 | $523,816 | $531,112 | | Interest Bearing Demand | $537,468 | $553,731 | $527,862 | $549,239 | $552,295 | | Money Market | $405,793 | $395,004 | $366,655 | $371,689 | $361,791 | | Savings and Club | $254,732 | $252,491 | $255,115 | $258,680 | $272,051 | | Certificates of Deposit | $945,895 | $1,029,245 | $1,046,859 | $1,231,815 | $1,274,410 | | Total Deposits | $2,686,508 | $2,750,858 | $2,724,580 | $2,935,239 | $2,991,659 | - Certificates of Deposit decreased by $83.3 million QoQ and $328.5 million YoY[37] - Non-Interest Bearing Demand deposits increased by $22.2 million QoQ[37] Reconciliation of GAAP to Non-GAAP Financial Measures by Quarter This section provides reconciliations for non-GAAP financial measures, specifically tangible book value per share and the efficiency ratio, across five quarters. It shows a decrease in tangible book value per common share and a slight improvement in the efficiency ratio in Q1 2025 compared to the prior quarter Tangible Book Value per Share Reconciliation (In thousands, except per share amounts) | Metric | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Total Stockholders' Equity | $314,722 | $323,925 | $328,113 | $320,732 | $320,131 | | Less: goodwill | $5,253 | $5,253 | $5,253 | $5,253 | $5,253 | | Less: preferred stock | $25,243 | $24,723 | $29,763 | $28,403 | $27,733 | | Total tangible common stockholders' equity | $284,226 | $293,949 | $293,097 | $287,076 | $287,145 | | Shares common shares outstanding | 17,163 | 17,063 | 17,048 | 17,029 | 16,957 | | Book value per common share | $16.87 | $17.54 | $17.50 | $17.17 | $17.24 | | Tangible book value per common share | $16.56 | $17.23 | $17.19 | $16.86 | $16.93 | Efficiency Ratios Reconciliation (In thousands, except for ratio %) | Metric | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | | :------------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Net interest income | $22,005 | $22,194 | $23,045 | $23,639 | $23,143 | | Non-interest income (loss) | $1,791 | $938 | $3,127 | ($3,234) | $2,109 | | Total income | $23,796 | $23,132 | $26,172 | $20,405 | $25,252 | | Non-interest expense | $14,660 | $14,367 | $13,929 | $13,987 | $14,838 | | Efficiency Ratio | 61.61% | 62.11% | 53.22% | 68.55% | 58.76% | - Tangible book value per common share decreased from $17.23 in Q4 2024 to $16.56 in Q1 2025[38]