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Section 1: 10-Q (10-Q)

10Q 20180930_Taxonomy2017

 



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

Or

 

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

(State or other jurisdiction of

incorporation or organization)

 

(IRS Employer

I.D. No.)

 

 

104-110 Avenue C Bayonne, New Jersey

 

07002

(Address of principal executive offices)

 

(Zip Code)

(201) 823-0700

(Registrant’s telephone number, including area code)

 



Not Applicable

(Former name, former address and former fiscal year if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.       Yes       No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).       Yes       No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “accelerated filer, larger accelerated filer, non-accelerated filer, smaller reporting company, or emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

 

 

Large Accelerated Filer

 

  

Accelerated Filer

 

 

 

 

 

 

Non-Accelerated Filer

 

  

Smaller Reporting Company   

 

 



 

 

 

 

 

 



 

 

 

Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).      Yes      No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 1st, 2018, BCB Bancorp, Inc., had 15,801,875 shares of common stock, no par value, outstanding.


 



 

BCB BANCORP INC. AND SUBSIDIARIES

INDEX

 



 

 

 

 

 

 

 

 

 

 

  

Page

 

PART I. CONSOLIDATED FINANCIAL INFORMATION

  

 

 

 

Item 1. Consolidated Financial Statements

  

 

 

 

Consolidated Statements of Financial Condition as of September 30, 2018 (unaudited) and December 31, 2017 (unaudited)

  

 

  

Consolidated Statements of Income for the three and nine months ended September 30, 2018 and 2017 (unaudited)

  

 

  

Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2018 and 2017 (unaudited)

  

 

 

Consolidated Statement of Changes in Stockholders’ Equity for the nine months ended September 30, 2018 and 2017 (unaudited)

  

 

  

Consolidated Statements of Cash Flows for the nine months ended September 30, 2018 and 2017 (unaudited)

  

 

  

Notes to Unaudited Consolidated Financial Statements

  

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

  

 

39 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

  

 

46 

 

Item 4. Controls and Procedures

  

 

47 

  

 

 

PART II. OTHER INFORMATION

  

 

47 

 

Item 1. Legal Proceedings

  

 

47 

  

Item 1A. Risk Factors

  

 

48 

  

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

  

 

48 

  

Item 3. Defaults Upon Senior Securities

  

 

48 

  

Item 4. Mine Safety Disclosures

  

 

48 

  

Item 5. Other Information

  

 

48 

  

Item 6. Exhibits

 

 

48 

 

 





 

 

 


 

PART I. CONSOLIDATED FINANCIAL INFORMATION

ITEM I. CONSOLIDATED FINANCIAL STATEMENTS

BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Financial Condition

(In thousands, Except Share and Per Share Data, Unaudited)



 



 

 

 

 

 



 

 

 

 

 



September 30,

 

December 31,



2018

 

2017



 

 

 

 

 

ASSETS

 

 

 

 

 

Cash and amounts due from depository institutions

$

32,459 

 

$

16,460 

Interest-earning deposits

 

174,251 

 

 

107,775 

  Total cash and cash equivalents

 

206,710 

 

 

124,235 



 

 

 

 

 

Interest-earning time deposits

 

980 

 

 

980 

Debt securities available for sale

 

119,811 

 

 

114,295 

Equity investments

 

8,052 

 

 

8,294 

Loans held for sale

 

1,772 

 

 

1,295 

Loans receivable, net of allowance for loan losses

 

 

 

 

 

  of $21,504 and $17,375 respectively

 

2,225,001 

 

 

1,643,677 

Federal Home Loan Bank of New York stock, at cost

 

14,755 

 

 

10,211 

Premises and equipment, net

 

20,392 

 

 

18,768 

Accrued interest receivable

 

8,635 

 

 

6,153 

Other real estate owned

 

1,232 

 

 

532 

Deferred income taxes

 

11,607 

 

 

5,144 

Goodwill

 

5,223 

 

 

 -

Other assets

 

13,698 

 

 

9,253 

   Total Assets

$

2,637,868 

 

$

1,942,837 



 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 



 

 

 

 

 

LIABILITIES

 

 

 

 

 

Non-interest bearing deposits

$

276,998 

 

$

201,043 

Interest bearing deposits

 

1,839,626 

 

 

1,368,327 

 Total deposits

 

2,116,624 

 

 

1,569,370 

FHLB advances

 

275,800 

 

 

185,000 

Subordinated debt

 

36,519 

 

 

4,124 

Other liabilities and accrued interest payable

 

13,162 

 

 

7,889 

   Total Liabilities

 

2,442,105 

 

 

1,766,383 



 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

Preferred stock: $0.01 par value, 10,000,000 shares authorized;

 

 

 

 

 

 issued and outstanding 7,807 shares of series C 6%, series D 4.5%, (liquidation value $10,000 per share)

 

 

 

 

 

 and series F 6% (liquidation value $1,000 per share) noncumulative perpetual preferred stock

 

 

 

 

 

 at September 30, 2018 and 1,342 shares of series C 6% and series D 4.5% (liquidation value $10,000 per share)

 

 

 

 

 

 noncumulative perpetual preferred stock at December 31, 2017

 

 -

 

 

 -

Additional paid-in capital preferred stock

 

19,706 

 

 

13,241 

Common stock: no par value; 20,000,000 shares authorized; issued 18,313,476 and 17,572,942

 

 

 

 

 

 at September 30, 2018 and December 31, 2017, respectively, outstanding 15,782,713 shares and

 

 

 

 

 

 15,042,179 shares, at September 30, 2018 and December 31, 2017, respectively

 

 -

 

 

 -

Additional paid-in capital common stock

 

175,970 

 

 

164,230 

Retained earnings

 

35,693 

 

 

31,241 

Accumulated other comprehensive (loss)

 

(6,490)

 

 

(3,142)

Treasury stock, at cost, 2,530,763 shares at September 30, 2018 and December 31, 2017

 

(29,116)

 

 

(29,116)

   Total Stockholders' Equity

 

195,763 

 

 

176,454 



 

 

 

 

 

    Total Liabilities and Stockholders' Equity

$

2,637,868 

 

$

1,942,837 



 

 

 

 

 



See accompanying notes to unaudited consolidated financial statements

 

1


 

BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Income

(In thousands, Except for Per Share Amounts, Unaudited)





 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



Three Months Ended September 30,

 

Nine Months Ended September 30,



 

2018

 

 

2017

 

 

2018

 

 

2017



 

 

 

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 Loans, including fees

$

26,019 

 

$

18,399 

 

$

69,588 

 

$

53,967 

 Mortgage-backed securities

 

827 

 

 

581 

 

 

2,363 

 

 

1,712 

 Municipal bonds and other debt

 

116 

 

 

113 

 

 

416 

 

 

377 

 FHLB stock and other interest earning assets

 

1,009 

 

 

313 

 

 

2,242 

 

 

874 

    Total interest income

 

27,971 

 

 

19,406 

 

 

74,609 

 

 

56,930 



 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 Deposits:

 

 

 

 

 

 

 

 

 

 

 

    Demand

 

1,130 

 

 

700 

 

 

2,902 

 

 

2,050 

    Savings and club

 

116 

 

 

100 

 

 

318 

 

 

299 

    Certificates of deposit

 

4,591 

 

 

2,284 

 

 

10,726 

 

 

6,437 



 

5,837 

 

 

3,084 

 

 

13,946 

 

 

8,786 

    Borrowings

 

2,054 

 

 

748 

 

 

4,153 

 

 

2,902 

      Total interest expense

 

7,891 

 

 

3,832 

 

 

18,099 

 

 

11,688 



 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

20,080 

 

 

15,574 

 

 

56,510 

 

 

45,242 

Provision for loan losses

 

907 

 

 

511 

 

 

4,309 

 

 

1,785 



 

 

 

 

 

 

 

 

 

 

 

Net interest income after provision for loan losses

 

19,173 

 

 

15,063 

 

 

52,201 

 

 

43,457 



 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

  Fees and service charges

 

1,092 

 

 

749 

 

 

2,773 

 

 

2,383 

  Gain on sales of loans

 

738 

 

 

540 

 

 

1,897 

 

 

1,611 

  Loss on bulk sale of impaired loans held in portfolio

 

 -

 

 

 -

 

 

(24)

 

 

 -

  Gain on sales of other real estate owned

 

14 

 

 

222 

 

 

 

 

1,570 

  Gain on sale of investment securities

 

 -

 

 

97 

 

 

 -

 

 

97 

  Unrealized loss on equity investments

 

(82)

 

 

 -

 

 

(242)

 

 

 -

  Other

 

90 

 

 

25 

 

 

2,393 

 

 

307 

     Total non-interest income

 

1,852 

 

 

1,633 

 

 

6,801 

 

 

5,968 



 

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

  Salaries and employee benefits

 

7,156 

 

 

5,925 

 

 

20,548 

 

 

17,893 

  Occupancy and equipment

 

2,490 

 

 

2,038 

 

 

7,028 

 

 

6,185 

  Data processing and service fees

 

942 

 

 

703 

 

 

2,499 

 

 

2,034 

  Professional fees

 

437 

 

 

491 

 

 

1,475 

 

 

2,237 

  Director fees

 

192 

 

 

198 

 

 

594 

 

 

576 

  Regulatory assessments

 

419 

 

 

318 

 

 

948 

 

 

1,010 

  Advertising and promotional

 

129 

 

 

117 

 

 

314 

 

 

375 

  Other real estate owned, net

 

22 

 

 

 

 

213 

 

 

64 

  Merger related costs

 

119 

 

 

 -

 

 

2,303 

 

 

 -

  Other

 

2,485 

 

 

1,500 

 

 

6,460 

 

 

4,635 

     Total non-interest expense

 

14,391 

 

 

11,299 

 

 

42,382 

 

 

35,009 



 

 

 

 

 

 

 

 

 

 

 

Income before income tax provision

 

6,634 

 

 

5,397 

 

 

16,620 

 

 

14,416 

Income tax provision

 

2,040 

 

 

2,180 

 

 

5,081 

 

 

5,773 



 

 

 

 

 

 

 

 

 

 

 

Net Income

$

4,594 

 

$

3,217 

 

$

11,539 

 

$

8,643 

Preferred stock dividends

 

263 

 

 

166 

 

 

691 

 

 

449 

Net Income available to common stockholders

$

4,331 

 

$

3,051 

 

$

10,848 

 

$

8,194 



 

 

 

 

 

 

 

 

 

 

 

Net Income per common share-basic and diluted

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.27 

 

$

0.25 

 

$

0.70 

 

$

0.71 

Diluted

$

0.27 

 

$

0.25 

 

$

0.69 

 

$

0.70 



 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

Basic

 

15,789 

 

 

12,142 

 

 

15,482 

 

 

11,572 

Diluted

 

15,896 

 

 

12,226 

 

 

15,609 

 

 

11,664 

See accompanying notes to unaudited consolidated financial statements.

 

 

2


 

BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(In thousands, Unaudited)







 

 

 

 

 

 

 

 

 

 

 



Three Months Ended September 30,

 

Nine Months Ended September 30,



2018

 

2017

 

2018

 

2017



 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

Net Income

$

4,594 

 

$

3,217 

 

$

11,539 

 

$

8,643 

Other comprehensive (loss) income, net of tax:

 

 

 

 

 

 

 

 

 

 

 

Unrealized (losses) gains on available-for-sale debt securities:

 

 

 

 

 

 

 

 

 

 

 

Unrealized holding (losses) gains arising during the period

 

(845)

 

 

496 

 

 

(4,189)

 

 

2,833 

Tax Effect

 

155 

 

 

(203)

 

 

967 

 

 

(1,157)

Net of Tax Effect

 

(690)

 

 

293 

 

 

(3,222)

 

 -

1,676 

Other comprehensive (loss) income

 

(690)

 

 

293 

 

 

(3,222)

 

 

1,676 

Comprehensive income

$

3,904 

 

$

3,510 

 

$

8,317 

 

$

10,319 



See accompanying notes to unaudited consolidated financial statements.

 



 

 

3


 



BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity

(In thousands, Except Share and Per Share Data, Unaudited) 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Preferred Stock

 

Common Stock

 

Additional             Paid-In Capital

 

Retained Earnings

 

Treasury Stock

 

Accumulated Other Comprehensive Loss

 

Total



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2017

$

 -

 

$

 -

 

$

177,471 

 

$

31,241 

 

$

(29,116)

 

$

(3,142)

 

$

176,454 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of IA Bancorp

 

 -

 

 

 -

 

 

17,405 

 

 

 -

 

 

 -

 

 

 -

 

 

17,405 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of Stock Options (200 shares)

 

 -

 

 

 -

 

 

 

 

 -

 

 

 -

 

 

 -

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 -

 

 

 -

 

 

230 

 

 

 -

 

 

 -

 

 

 -

 

 

230 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends payable on Series C 6%, Series D 4.5%, and Series F 6% noncumulative perpetual preferred stock

 

 -

 

 

 -

 

 

 -

 

 

(691)

 

 

 -

 

 

 -

 

 

(691)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends on common stock ($0.14 per share declared)

 

 -

 

 

 -

 

 

 -

 

 

(6,275)

 

 

 -

 

 

 -

 

 

(6,275)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Reinvestment Plan

 

 -

 

 

 -

 

 

247 

 

 

(247)

 

 

 -

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock Purchase Plan

 

 -

 

 

 -

 

 

321 

 

 

 -

 

 

 -

 

 

 -

 

 

321 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 -

 

 

 -

 

 

 -

 

 

11,539 

 

 

 -

 

 

 -

 

 

11,539 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification of unrealized gains on AFS equity securities

 

 -

 

 

 -

 

 

 -

 

 

126 

 

 

 -

 

 

(126)

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

(3,222)

 

 

(3,222)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2018

$

 -

 

$

 -

 

$

195,676 

 

$

35,693 

 

$

(29,116)

 

$

(6,490)

 

$

195,763 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Preferred Stock

 

Common Stock

 

Additional             Paid-In Capital

 

Retained Earnings

 

Treasury Stock

 

Accumulated Other Comprehensive Income (Loss)

 

Total



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2016

$

 -

 

$

 -

 

$

135,881 

 

$

28,159 

 

$

(29,103)

 

$

(3,856)

 

$

131,081 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Issuance of Common Stock

 

 

 

 

 

 

 

42,759 

 

 

 

 

 

 

 

 

 

 

 

42,759 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redemption of Series A and B Preferred Stock

 

 -

 

 

 -

 

 

(11,720)

 

 

 -

 

 

 -

 

 

 -

 

 

(11,720)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Series D Preferred Stock

 

 -

 

 

 -

 

 

9,497 

 

 

 -

 

 

 -

 

 

 -

 

 

9,497 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise of Stock Options (200 shares)

 

 -

 

 

 -

 

 

 

 

 -

 

 

 -

 

 

 -

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 -

 

 

 -

 

 

126 

 

 

 -

 

 

 -

 

 

 -

 

 

126 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury stock purchases

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

(13)

 

 

 

 

 

(13)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends payable on Series C 6% and Series D 4.5% noncumulative perpetual preferred stock

 

 -

 

 

 -

 

 

 -

 

 

(449)

 

 

 -

 

 

 -

 

 

(449)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends on common stock ($0.14 per share declared)

 

 -

 

 

 -

 

 

 -

 

 

(4,519)

 

 

 -

 

 

 -

 

 

(4,519)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Reinvestment Plan

 

 -

 

 

 -

 

 

221 

 

 

(221)

 

 

 -

 

 

 -

 

 

 -



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock Purchase Plan

 

 -

 

 

 -

 

 

485 

 

 

 -

 

 

 -

 

 

 -

 

 

485 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 -

 

 

 -

 

 

 -

 

 

8,643 

 

 

 -

 

 

 -

 

 

8,643 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

1,676 

 

 

1,676 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2017

$

 -

 

$

 -

 

$

177,251 

 

$

31,613 

 

$

(29,116)

 

$

(2,180)

 

$

177,568 

See accompanying notes to unaudited consolidated financial statements.

 

4


 

BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands, Unaudited)







 

 

 

 

 



Nine Months Ended September 30,



2018

 

2017

Cash Flows from Operating Activities :

 

 

 

 

 

  Net Income

$

11,539 

 

$

8,643 

  Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

        Depreciation of premises and equipment

 

2,039 

 

 

1,927 

        Amortization and accretion, net

 

(2,191)

 

 

(1,013)

        Provision for loan losses

 

4,309 

 

 

1,785 

        Deferred income tax (benefit)

 

(284)

 

 

2,314 

        Loans originated for sale

 

(17,320)

 

 

(19,371)

        Proceeds from sales of loans

 

18,740 

 

 

22,651 

        Gain on sales of loans originated for sale

 

(1,897)

 

 

(1,611)

        Gains on sales of other real estate owned

 

(4)

 

 

(1,570)

        Gains on sales of securities available for sale

 

 -

 

 

(97)

        Fair value adjustment of OREO

 

101 

 

 

 -

        Loss on equity investments

 

242 

 

 

 -

        Loss on bulk sale of impaired loans held in portfolio

 

24 

 

 

 -

        Stock-based compensation expense

 

230 

 

 

126 

        Increase in interest receivable

 

(1,870)

 

 

(235)

        (Increase) decrease in other assets

 

(2,637)

 

 

92 

        Increase (decrease) in accrued interest payable

 

1,132 

 

 

(209)

        Increase in other liabilities

 

1,376 

 

 

311 

Net Cash Provided by Operating Activities

 

13,529 

 

 

13,743 

Cash flows from investing activities:

 

 

 

 

 

        Proceeds from calls on securities available for sale

 

20,286 

 

 

22,423 

        Purchases of securities available for sale

 

(16,353)

 

 

(46,298)

        Proceeds from sales of other real estate owned

 

502 

 

 

4,813 

        Proceeds from bulk sale of impaired loans held

 

250 

 

 

 -

        Proceeds from sales of securities available for sale

 

 -

 

 

21,165 

        Net increase in loans receivable

 

(401,888)

 

 

(135,657)

        Additions to premises and equipment

 

(829)

 

 

(1,804)

        (Purchase) Redemption of Federal Home Loan Bank of New York stock

 

(3,381)

 

 

1,210 

        Cash acquired in acquisition

 

7,597 

 

 

 -

        Cash paid in acquisition

 

(2,550)

 

 

 -

Net Cash Used In Investing Activities

 

(396,366)

 

 

(134,148)

Cash flows from financing activities:

 

 

 

 

 

        Net increase in deposits

 

368,818 

 

 

153,943 

        Proceeds from Federal Home Loan Bank of New York advances

 

175,800 

 

 

38,000 

        Repayments of Federal Home Loan Bank of New York advances

 

(105,000)

 

 

(55,000)

        Net change in short-term debt

 

 -

 

 

(20,000)

        Purchases/adjustments of treasury stock

 

 -

 

 

(13)

        Cash dividends paid on common stock

 

(6,275)

 

 

(4,519)

        Cash dividends paid on preferred stock

 

(691)

 

 

(449)

        Net proceeds from issuance of common stock

 

321 

 

 

43,244 

        Net proceeds from issuance of preferred stock

 

 -

 

 

9,497 

        Net payment on redemption of preferred stock

 

 -

 

 

(11,720)

        Net proceeds from issuance of subordinated debt

 

32,337 

 

 

 -

        Exercise of stock options

 

 

 

Net Cash Provided by Financing Activities

 

465,312 

 

 

152,985 



 

 

 

 

 

Net Increase In Cash and Cash Equivalents

 

82,475 

 

 

32,580 

Cash and Cash Equivalents-Beginning

 

124,235 

 

 

65,038 



 

 

 

 

 

Cash and Cash Equivalents-Ending

$

206,710 

 

$

97,618 



 

 

 

 

 

Supplementary Cash Flow Information:

 

 

 

 

 

     Cash paid during the year for:

 

 

 

 

 

        Income taxes

$

6,706 

 

$

4,285 

        Interest

$

16,968 

 

$

11,898 

Non-cash items:

 

 

 

 

 

        Transfer of loans to other real estate owned

$

972 

 

$

1,128 



See accompanying notes to unaudited consolidated financial statements

 

5


 

BCB Bancorp Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements



Note 1 – Basis of Presentation



The accompanying unaudited consolidated financial statements include the accounts of BCB Bancorp, Inc. (the “Company”) and the Company’s wholly owned subsidiaries, BCB Community Bank (the “Bank”), BCB Holding Company Investment Company, BCB New York Asset Management, Inc. and Pamrapo Service Corporation. The Company’s business is conducted principally through the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.



The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and, therefore, do not necessarily include all information that would be included in audited consolidated financial statements. The information furnished reflects all adjustments that are, in the opinion of management, necessary for a fair presentation of consolidated financial condition and results of operations. All such adjustments are of a normal recurring nature. These results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2018 or any other future period. The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statement of financial condition and revenues and expenses for the periods then ended. Actual results could differ significantly from those estimates.



These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2017, which are included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission. In preparing these consolidated financial statements, the Company evaluated the events and transactions that occurred between September 30, 2018, and the date these consolidated financial statements were issued.



Recent Accounting Pronouncements



In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which will supersede the current revenue recognition requirements in Topic 605, Revenue Recognition. The ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year. The scope of ASC 606 excludes net interest income and other revenues associated with financial assets and liabilities, including loans, leases, securities and derivatives, which would then exclude the majority of the Company's revenues. However, the recognition and measurement of certain non-interest income items such as gain on sale of other real estate owned and deposit-related fees, could be affected by ASC 606. The Company adopted the guidance effective January 1, 2018, using the modified retrospective method. Implementation of the guidance did not have a material impact on the Company's consolidated financial statements.



In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which will supersede the current lease requirements in Topic 840. The ASU requires lessees to recognize a right of use asset and related lease liability for all leases, with a limited exception for short-term leases. Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the statement of income. Currently, leases are classified as either capital or operating, with only capital leases recognized on the balance sheet. The reporting of lease related expenses in the statements of operations and cash flows will be generally consistent with the current guidance. The new guidance will be effective for the Company in 2019. Once effective, the standard will be applied using a modified retrospective transition method to the beginning of the earliest period presented. The Company is currently assessing the impacts this new standard will have on its consolidated financial statements.



In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses. ASU 2016-13 requires entities to report “expected” credit losses on financial instruments and other commitments to extend credit rather than the current “incurred loss” model. These expected credit losses for financial assets held at the reporting date are to be based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU will also require enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the consolidated financial statements. The amendments are effective for the Company in 2020. The Company has begun evaluating the impact the adoption of ASU 2016-13 will have on its consolidated financial statements and results of operations. The effect of this change cannot be ascertained at this point, and will depend upon factors including asset components, asset quality and market conditions at the adoption date.



In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments in this update require that an entity account for the effects of a modification unless the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified, the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified and the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The Company adopted ASU 2017-09 on a prospective basis in January 2018. Due to prospective application, the impact on the Company’s consolidated financial statements will be dependent upon the terms of future modifications.



In March, 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities. ASU 2017-08 was issued to enhance the accounting for the amortization of premiums for purchased callable debt securities. This amendment requires that the amortization of the premium be shortened to the earliest call date. The Company adopted ASU 2017-08 as of January 1, 2018 with no effect on the Company’s consolidated financial statements.



In January 2016, the FASB issued ASU 2016-01, Financial Instruments- Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance amends existing guidance to improve accounting standards for financial instruments including clarification and simplification of accounting and disclosure requirements and the requirement for public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. These amendments are effective for public business entities for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company recorded a cumulative effect adjustment to the balance sheet as of January 1, 2018 in the amount of $126,000, representing the unrealized gain of $175,000 at December 31, 2