BCB Bancorp(BCBP) - 2022 Q3 - Quarterly Report

PART I. CONSOLIDATED FINANCIAL INFORMATION Item 1. Consolidated Financial Statements 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 | 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] Consolidated Statements of Income | 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] Consolidated Statements of Comprehensive Income | 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] Consolidated Statement of Changes in Stockholders' Equity - 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] - 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] Consolidated Statements of Cash Flows | 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] Notes to Unaudited Consolidated Financial Statements - 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] 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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] - 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] - 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] - 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][117] Item 3. Quantitative and Qualitative Disclosures about Market Risk 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] Item 4. Controls and Procedures 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] - 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] PART II. OTHER INFORMATION Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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) 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][126] Signatures and Exhibits