BCB Bancorp(BCBP) - 2021 Q1 - Quarterly Report

PART I. CONSOLIDATED FINANCIAL INFORMATION Item 1. Consolidated Financial Statements 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 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 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 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 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] 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][111] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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] - 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] - The bank recognized $328,000 in PPP loan referral fees in Q1 2021 through its partnership with The Loan Source, Inc[108] Financial Condition 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] - Deposits grew by $86.1 million (3.7%) during the quarter, primarily due to government stimulus and PPP loan proceeds[113] - 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] Results of Operations 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] - Noninterest income increased by 185.5%, driven by $701,000 in new BOLI income and $328,000 in PPP loan referral fees[119] Liquidity and Capital Resources 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] 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 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 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] PART II. OTHER INFORMATION Item 1. Legal Proceedings 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] Item 1A. Risk Factors No new risk factors were disclosed by the company during the reporting period - No new risk factors were disclosed in this quarterly report[130] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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]