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Section 1: 10-K (10-K)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)





 

Annual Report Pursuant To Section 13 or 15(d) Of The Securities Exchange Act of 1934

For the fiscal year ended December 31, 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: 000-50275



BCB BANCORP, INC.

(Exact name of registrant as specified in its charter)





 

 

New Jersey

 

26-0065262

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)



 

 

104-110 Avenue C, Bayonne, New Jersey

 

07002

(Address of principal executive offices)

 

(Zip Code)



Registrant's telephone number, including area code:  (201) 823-0700



Securities registered pursuant to Section 12(b) of the Act: 





 

 

Title of each class

 

Name of each exchange on which registered

Common Stock, no par value

 

The NASDAQ Stock Market, LLC

Securities registered pursuant to Section 12(g) of the Act: None



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES      NO  

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES      NO  

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 such shorter period that the Registrant was required to submit such files).

YES      NO  

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth  company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company, and “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 any 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 Act).  YES      NO  



The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, computed by reference to the last sale price on June 30, 2018, as reported by the Nasdaq Global Market, was approximately $204.0 million.



As of March 1, 2019, there were 16,398,459 shares of the Registrant’s Common Stock outstanding.



DOCUMENTS INCORPORATED BY REFERENCE:



(1) Proxy Statement for the 2019 Annual Meeting of Stockholders of the Registrant (Part III).



 

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TABLE OF CONTENTS





 

 

Item

 

Page Number

ITEM 1.

BUSINESS

1

ITEM 1A.

RISK FACTORS

17

ITEM 1B.

UNRESOLVED STAFF COMMENTS

20

ITEM 2.

PROPERTIES

21

ITEM 3.

LEGAL PROCEEDINGS

22

ITEM 4.

MINE SAFETY DISCLOSURES

22

ITEM 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

22

ITEM 6.

SELECTED CONSOLIDATED FINANCIAL DATA

24

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

25

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

31

ITEM 8.

FINANICAL STATEMENTS AND SUPPLEMENTARY DATA

33

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

54

ITEM 9A.

CONTROLS AND PROCEDURES

54

ITEM 9B.

OTHER INFORMATION

54

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

55

ITEM 11.

EXECUTIVE COMPENSATION

55

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

55

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

55

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

55

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

56

ITEM 16.

FORM 10-K SUMMARY

57



 



 

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PART I

ITEM 1. BUSINESS



Forward-Looking Statements



This report on Form 10-K contains forward-looking statements that are based on assumptions and may describe future plans, strategies and expectations of BCB Bancorp, Inc. and subsidiaries. This document may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions. Although we believe that our plans, intentions and expectations, as reflected in these forward-looking statements are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or realized.  By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Important factors that could cause our actual results and financial condition to differ from those indicated in the forward-looking statements include, among others, those discussed below and under “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. You should not place undue reliance on these forward-looking statements, which reflect our expectations only as of the date of this report. We do not assume any obligation to revise forward-looking statements except as may be required by law.



BCB Bancorp, Inc.



BCB Bancorp, Inc. (individually referred to herein as the “Parent Company” and together with its subsidiaries, collectively referred to herein as the “Company”) is a New Jersey corporation established in 2003, and is the holding company parent of BCB Community Bank (the “Bank”). The Company has not engaged in any significant business activity other than owning all of the outstanding common stock of BCB Community Bank. Our executive office is located at 104-110 Avenue C, Bayonne, New Jersey 07002. Our telephone number is (800) 680-6872 and our website is www.bcb.bank.  Information on our website is not incorporated into this Annual Report on Form 10-K. At December 31, 2018 we had approximately $2.675 billion in consolidated assets, $2.181 billion in deposits and $200.2 million in consolidated stockholders’ equity. The Parent Company is subject to extensive regulation by the Board of Governors of the Federal Reserve System.



BCB Community Bank



BCB Community Bank opened for business on November 1, 2000 as Bayonne Community Bank, a New Jersey chartered commercial bank. The Bank changed its name from Bayonne Community Bank to BCB Community Bank in April 2007. At December 31, 2018, the Bank operated through 28 branches in Bayonne, Carteret, Colonia, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lodi, Lyndhurst, Maplewood, Monroe Township, Parsippany, Plainsboro, Rutherford, South Orange, Union, and Woodbridge, New Jersey, and three branches in Staten Island and Hicksville New York and through executive offices located at 104-110 Avenue C and an administrative office located at 591-595 Avenue C, Bayonne, New Jersey 07002. The Bank’s deposit accounts are insured by the Federal Deposit Insurance Corporation (the “FDIC”) and the Bank is a member of the Federal Home Loan Bank System.



We are a community-oriented financial institution. Our business is to offer FDIC-insured deposit products and to invest funds held in deposit accounts at the Bank, together with funds generated from operations, in loans and investment securities. We offer our customers:



·

loans, including commercial and multi-family real estate loans, one- to four-family mortgage loans, commercial business loans, construction loans, home equity loans, and consumer loans. In recent years the primary growth in our loan portfolio has been in loans secured by commercial real estate and multi-family properties;

·

FDIC-insured deposit products, including savings and club accounts, interest and non-interest bearing demand accounts, money market accounts, certificates of deposit and individual retirement accounts; and

·

retail and commercial banking services including wire transfers, money orders, safe deposit boxes, a night depository, debit cards, online banking, mobile banking, gift cards, fraud detection (positive pay), and automated teller services.



Recent Events



On February 25, 2019, the Company closed a private placement offering of 496,224 shares of its common stock, of which directors and officers of the Company purchased 286,244 shares (the “Offering”). The Offering resulted in gross proceeds of $6.3 million to the Company. There were no underwriting discounts or commissions. The Offering price was $12.64 per share, which was the closing price for the Company’s common stock on the Nasdaq Global Market on February 22, 2019, the trading day prior to the closing of the Offering. Directors and officers paid the same price as other investors. The Company relied on the exemption from registration provided under Rule 506 of Regulation D promulgated under the Securities Act of 1933 (the “Act”). The Offering was made only to accredited investors as that term is defined in Rule 501(a) of Regulation D under the Act.



On February 18, 2019, BCB Community Bank opened its newest branch in River Edge, New Jersey.



On January 30, 2019, the Company closed a private placement of Series G 6.0% Noncumulative Perpetual Preferred Stock, resulting in gross proceeds of $5,330,000 for 533 shares. The sale represents 21percent of the gross proceeds of the Company’s total issued and outstanding Noncumulative Perpetual Preferred Stock. The purchase price was $10,000 per share. The Company relied on the exemption from registration with the Securities and Exchange Commission (“SEC”) provided under SEC Rule 506 of Regulation D.



On January 10, 2019, the Company declared a cash dividend of $0.14 per share which was paid to stockholders on February 22, 2019, with a record date of February 8, 2019.



On July 30, 2018, the Company issued $33.5 million of fixed-to-floating rate subordinated debentures (the “Notes”) in a private placement. The Notes have a ten-year term and bear interest at a fixed annual rate of 5.625% for the first five years of the term (the "Fixed Interest Rate Period"). From and including August 1, 2023, the interest rate will adjust to a floating rate based on the three-month LIBOR plus 2.72% until redemption or maturity (the "Floating Interest Rate Period"). The Notes are scheduled to mature on August 1, 2028. Subject to limited exceptions, the Company cannot redeem the Notes for the first five years of the term. The Company will pay interest in arrears semi-annually during the Fixed Interest Rate Period and quarterly during the Floating Interest Rate Period during the term of the Notes. The Notes constitute an unsecured and subordinated obligation of the Company and rank junior in right of payment to any senior indebtedness and obligations to general and secured creditors. The Notes qualify as Tier 2 capital for the Company for regulatory purposes and the portion that the Company contributes to the Bank will qualify as Tier 1 capital for the Bank. The additional capital will be used for general corporate purposes including organic growth initiatives. Subordinated debt includes associated deferred costs of $1.0 million at December 31, 2018.



On April 17, 2018, the Company completed its acquisition of IA Bancorp, Inc. (“IAB”) and its wholly-owned subsidiary, Indus-American Bank, of Edison, New Jersey. IAB shareholders received 0.189 shares of the Company’s common stock for each share of IAB common stock they owned as of the effective date of the acquisition. In

 

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addition, the Company issued two series of preferred stock, Series E and F, in exchange for two outstanding series, Series C and D, respectively, of IAB preferred stock. The two series of Company preferred shares have terms substantially similar to the terms of the two series of IAB preferred stock. The aggregate consideration paid to IAB shareholders was $20.0 million. The results of IAB’s operations are included in the Company’s unaudited consolidated statements of income beginning April 17, 2018, the date of the acquisition and are included in the audited consolidated financial statements included herein.



Business Strategy



Our business strategy is to operate as a well-capitalized, profitable and independent community-oriented financial institution dedicated to providing the highest quality customer service. Management’s and the Board of Directors’ extensive knowledge of the markets we serve helps to differentiate us from our competitors. Our business strategy incorporates the following elements: maintaining a community focus, focusing on profitability, strengthening our balance sheet, concentrating on real estate- based lending, capitalizing on market dynamics, providing attentive and personalized service, and attracting highly qualified and experienced personnel. These attributes coupled with our desire to seek out under-served markets for banking products and services, facilitate our plan to grow our franchise footprint organically and synergistically.



Maintaining a community focus.  Our management and Board of Directors have strong ties to the communities we serve. Many members of the management team are New Jersey natives and are active in the communities we serve through non-profit board membership, local business development organizations, and industry associations.  In addition, our board members are well-established professionals and business leaders in the communities we serve. Management and the Board are interested in making a lasting contribution to these communities, and they have succeeded in attracting deposits and loans through attentive and personalized service.



Focusing on profitability. The Company intends to continue its growth through opening new branches and acquisitions. While this will serve to expand our geographic footprint, it should also provide additional sources of liquidity and as new branches mature, increase profitability. Management continues to be committed to managing and controlling our non-interest expenses to improve our efficiency ratio, and to remain as a well-capitalized institution.



Strengthening our balance sheet.  For the year ended December 31, 2018, our return on average equity was 8.86% and our return on average assets was 0.70%. Our earnings per diluted share was $1.01 for the year ended December 31, 2018 compared to $0.75 for the year ended December 31, 2017. Management remains committed to strengthening the Bank’s statements of financial condition and maintaining profitability by diversifying the products, pricing and services we offer.



Concentrating on real estate-based lending.  A primary focus of our business strategy is to originate loans secured by commercial and multi-family properties. Such loans generally provide higher returns than loans secured by one- to four-family properties. As a result of our underwriting practices, including debt service requirements for commercial real estate and multi-family loans, management believes that such loans offer us an opportunity to obtain higher returns without a significant increased level of risk.



Capitalizing on market dynamics. The consolidation of the banking industry in northeast New Jersey has provided a unique opportunity for a customer-focused banking institution, such as the Bank. We believe our local roots and community focus provide the Bank with an opportunity to capitalize on the consolidation in our market area. This consolidation has moved decision making away from local, community-based banks to much larger banks headquartered outside of New Jersey. We believe our local roots and community focus provide the Bank with an opportunity to capitalize on the consolidation in our market area.



Providing attentive and personalized service.  Management believes that providing attentive and personalized service is the key to gaining deposit and loan relationships in the markets we serve and their surrounding communities. Since we began operations, our branches have been open seven days a week.



Attracting highly experienced and qualified personnel.   An important part of our strategy is to hire bankers who have prior experience in the markets we serve, as well as pre-existing business relationships. Our management team averages over 20 years of banking experience, while our lenders and branch personnel have significant experience at community banks and regional banks throughout the region. Management believes that its knowledge of these markets has been a critical element in the success of the Bank. Management’s extensive knowledge of the local communities has allowed us to develop and implement a highly focused and disciplined approach to lending, and has enabled the Bank to attract a high percentage of low cost deposits.



Our Market Area



We are located in Bayonne, Jersey City and Hoboken in Hudson County, Carteret, Colonia, Edison, Monroe Township, Plainsboro and Woodbridge in Middlesex County, Lodi, Lyndhurst, and Rutherford in Bergen County and Fairfield, Maplewood, and South Orange in Essex County, Holmdel in Monmouth County, Parsippany in Morris County, and Union in Union County, New Jersey. The Bank also operates two branches in Staten Island, New York and one in Hicksville, New York. The Bank’s locations are easily accessible and provide convenient services to businesses and individuals throughout our market area. These areas are all considered “bedroom” or “commuter” communities to Manhattan. Our market area is well-served by a network of arterial roadways, including Route 440 and the New Jersey Turnpike. 



Our market area has a high level of commercial business activity. Businesses are concentrated in the service sector and retail trade areas. Major employers in our market area include certain medical centers and local boards of education.



Competition



The banking industry in northeast New Jersey and New York City is extremely competitive. We compete for deposits and loans with existing New Jersey and out-of-state financial institutions that have longer operating histories, larger capital reserves and more established customer bases. Our competition includes large financial services companies and other entities, in addition to traditional banking institutions, such as savings and loan associations, savings banks, commercial banks and credit unions. Our larger competitors have a greater ability to finance wide-ranging advertising campaigns through greater capital resources. Our marketing efforts depend heavily upon referrals from officers, directors, stockholders, advertising in local media and through a social media presence. We compete for business principally on the basis of personal service to customers, customer access to our business development and other officers and directors, and competitive interest rates and fees.



In the financial services industry in recent years, intense market demands, technological and regulatory changes, and economic pressures have eroded industry classifications that were once clearly defined. Banks have diversified their services, competitively priced their deposit products and become more cost-effective as a result of competition with each other and with new types of financial service companies, including non-banking competitors. Some of these market dynamics have resulted in a number of new bank and non-bank competitors, increased merger activity, and increased customer awareness of product and service differences among competitors.



 

 

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Lending Activities



Analysis of Loan Portfolio. Set forth below is selected data relating to the composition of our loan portfolio by type of loan as a percentage of the respective portfolio.







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

At December 31,

 



 

2018

 

 

2017

 

2016

 

2015

 

 

2014

 



 

Amount

 

Percent

 

 

Amount

 

Percent

 

 

Amount

 

Percent

 

 

Amount

 

Percent

 

Amount

 

Percent

 



 

(Dollars in Thousands)

 

Originated loans:

 

 

 

Residential one-to-four family

$  

213,200 

 

9.26 

%

$  

182,544 

 

10.98 

%

$  

142,081 

 

9.44 

%

$  

117,165 

 

8.13 

%

$  

124,642 

 

10.16 

%

Commercial and multi-family

 

1,540,766 

 

66.91 

 

 

1,213,390 

 

72.97 

 

 

1,056,806 

 

70.26 

 

 

982,828 

 

68.23 

 

 

732,791 

 

59.74 

 

Construction

 

106,187 

 

4.61 

 

 

50,497 

 

3.04 

 

 

70,867 

 

4.71 

 

 

64,008 

 

4.44 

 

 

73,497 

 

5.99 

 

Commercial business(1) 

 

136,966 

 

5.95 

 

 

66,775 

 

4.02 

 

 

63,444 

 

4.22 

 

 

70,340 

 

4.88 

 

 

54,244 

 

4.42 

 

Home equity(2) 

 

54,271 

 

2.36 

 

 

38,725 

 

2.33 

 

 

32,417 

 

2.15 

 

 

31,237 

 

2.17 

 

 

30,175 

 

2.46 

 

Consumer

 

726 

 

0.03 

 

 

1,183 

 

0.07 

 

 

1,269 

 

0.08 

 

 

2,365 

 

0.16 

 

 

2,178 

 

0.18 

 

Sub-total

 

2,052,116 

 

89.12 

 

 

1,553,114 

 

93.41 

 

 

1,366,884 

 

90.86 

 

 

1,267,943 

 

88.01 

 

 

1,017,527 

 

82.95 

 

Acquired loans initially recorded at fair value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential one-to-four family

 

43,495 

 

1.89 

 

 

47,808 

 

2.88 

 

 

56,310 

 

3.74 

 

 

67,587 

 

4.69 

 

 

81,051 

 

6.61 

 

Commercial and multi-family

 

150,239 

 

6.52 

 

 

46,609 

 

2.80 

 

 

60,422 

 

4.02 

 

 

79,308 

 

5.51 

 

 

95,191 

 

7.76 

 

Construction

 

1,596 

 

0.07 

 

 

 -

 

 -

 

 

 -

 

 -

 

 

-

 

-

 

 

-

 

-

 

Commercial business(1) 

 

27,373 

 

1.19 

 

 

4,057 

 

0.24 

 

 

4,460 

 

0.30 

 

 

4,281 

 

0.30 

 

 

6,381 

 

0.52 

 

Home equity(2) 

 

18,376 

 

0.80 

 

 

8,955 

 

0.54 

 

 

13,877 

 

0.92 

 

 

18,851 

 

1.31 

 

 

22,698 

 

1.85 

 

Consumer

 

83 

 

 -

 

 

122 

 

0.01 

 

 

225 

 

0.01 

 

 

263 

 

0.02 

 

 

652 

 

0.05 

 

Sub-total

 

241,162 

 

10.47 

 

 

107,551 

 

6.47 

 

 

135,294 

 

8.99 

 

 

170,290 

 

11.83 

 

 

205,973 

 

16.79 

 

Acquired loans with deteriorated credit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential one-to-four family

 

1,390 

 

0.06 

 

 

1,413 

 

0.08 

 

 

1,443 

 

0.10 

 

 

1,474 

 

0.10 

 

 

1,595 

 

0.13 

 

Commercial and multi-family

 

6,832 

 

0.30 

 

 

731 

 

0.04 

 

 

753 

 

0.05 

 

 

669 

 

0.05 

 

 

1,130 

 

0.09 

 

Commercial business(1) 

 

854 

 

0.04 

 

 

 -

 

 -

 

 

 -

 

 -

 

 

167 

 

0.01 

 

 

369 

 

0.03 

 

Home equity(2) 

 

248 

 

0.01 

 

 

 -

 

 -

 

 

 -

 

 -

 

 

71 

 

 -

 

 

82 

 

0.01 

 

Sub-total

 

9,324 

 

0.41 

 

 

2,144 

 

0.12 

 

 

2,196 

 

0.15 

 

 

2,381 

 

0.16 

 

 

3,176 

 

0.26 

 

Total Loans

 

2,302,602 

 

100.00 

%

 

1,662,809 

 

100.00 

%

 

1,504,374 

 

100.00 

%

 

1,440,614 

 

100.00 

%

 

1,226,676 

 

100.00 

%

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred loan fees, net

 

1,751 

 

 

 

 

1,757 

 

 

 

 

2,006 

 

 

 

 

2,454 

 

 

 

 

2,675 

 

 

 

Allowance for loan losses

 

22,359 

 

 

 

 

17,375 

 

 

 

 

17,209 

 

 

 

 

18,042 

 

 

 

 

16,151 

 

 

 

   Total loans, net

$  

2,278,492 

 

 

 

$  

1,643,677 

 

 

 

$  

1,485,159 

 

 

 

$  

1,420,118 

 

 

 

$  

1,207,850 

 

 

 

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.



 

 

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Loan Maturities.  The following table sets forth the contractual maturity of our loan portfolio at December 31, 2018. The amount shown represents outstanding principal balances. Demand loans, loans having no stated schedule of repayments and no stated maturity and overdrafts are reported as being due in one year or less. The table does not include prepayments or scheduled principal repayments.







 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

Due within 1 Year

 

 

Due after 1 through 5 Years

 

 

Due After 5 Years

 

 

Total



 

(In Thousands)

One- to four-family

 

$

1,489 

 

$

1,243 

 

$

255,353 

 

$

258,085 

Construction

 

 

62,431 

 

 

30,073 

 

 

15,279 

 

 

107,783 

Commercial business(1) 

 

 

20,160 

 

 

65,755 

 

 

79,278 

 

 

165,193 

Commercial and multi-family

 

 

53,380 

 

 

159,981 

 

 

1,484,476 

 

 

1,697,837 

Home equity(2) 

 

 

10,021 

 

 

5,830 

 

 

57,044 

 

 

72,895 

Consumer

 

 

424 

 

 

184 

 

 

201 

 

 

809 

Total amount due

 

$

147,905 

 

$

263,066 

 

$

1,891,631 

 

$

2,302,602 

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.



Loans with Fixed or Floating or Adjustable Rates of Interest.  The following table sets forth the dollar amount of all loans at December 31, 2018 that are due after December 31, 2019, and have fixed interest rates or that have floating or adjustable interest rates.







 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 



 

 

Fixed Rates

 

 

Floating or Adjustable Rates

 

 

Total



 

 

(In Thousands)

One- to four-family

 

$

118,251 

 

$

138,345 

 

$

256,596 

Construction

 

 

 -

 

 

45,352 

 

 

45,352 

Commercial business(1) 

 

 

21,912 

 

 

123,121 

 

 

145,033 

Commercial and multi-family

 

 

193,907 

 

 

1,450,550 

 

 

1,644,457 

Home equity(2) 

 

 

21,577 

 

 

41,297 

 

 

62,874 

Consumer

 

 

349 

 

 

36 

 

 

385 

Total amount due

 

$

355,996 

 

$

1,798,701 

 

$

2,154,697 

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.



Commercial and Multi-family Real Estate Loans.   Commercial real estate loans are secured by improved property such as office buildings, mixed use buildings retail stores, shopping centers, warehouses, and other non-residential buildings. Loans secured by multi-family residential units are properties consisting of five or more residential units. The Bank offers fully amortizing loans on commercial and multi-family properties at loan amounts up to 75% of the appraised value of the property. Commercial and multi-family real estate loans are generally made at rates that adjust above the five year Federal Home Loan Bank of New York interest rate, with terms of up to 30 years. The Bank also offers balloon loans with fixed interest rates which generally mature in three to five years with amortization periods up to 30 years. As of December 31, 2018, the Bank’s largest commercial real estate loan had an outstanding principal balance of $21.0 million. This loan is secured by an office/retail building located in Hoboken, NJ. This loan is performing in accordance with its terms at December 31, 2018.  



Loans secured by commercial and multi-family real estate are generally larger and involve a greater degree of risk than one-to-four family residential mortgage loans. The borrower’s creditworthiness and the feasibility and cash flow potential of the project is of primary concern in commercial and multi-family real estate lending. Loans secured by owner occupied properties are generally larger and involve greater risks than one-to-four family residential and non-owner occupied commercial mortgage loans because payments on loans secured by owner occupied properties are often dependent on the successful operation or management of the business. The Bank intends to continue emphasizing the origination of loans secured by commercial real estate and multi-family properties.



Construction Loans. The Bank offers loans to finance the construction of various types of commercial and residential properties. Construction loans to builders generally are offered with terms of up to thirty months and interest rates tied to the prime rate plus a margin. These loans generally are offered as adjustable rate loans.  The Bank will originate construction loans to customers provided all necessary plans and permits are in order. Construction loan funds are disbursed as the project progresses. The Bank also offers construction loans that convert to a permanent mortgage on the property upon completion of the construction and adherence to conditions established at the time the construction loan was first approved. Terms of such permanent mortgage loans are similar to other mortgage loans secured by similar properties, with the interest rate established at the time of conversion. As of December 31, 2018, the Bank’s largest construction loan has a borrowing capacity of $19.0 million, of which $8.2 million has been disbursed. This loan is performing in accordance with its terms at December 31, 2018.



Construction financing is generally considered to involve a higher degree of risk than commercial real estate loans or one-to-four family residential lending. To mitigate these risks the Bank will obtain a plan and cost review from a third party vendor to review the proposed construction budget in an effort to avoid cost overruns. The Bank also obtains multiple appraised values based upon various possible outcomes of the project. These values include “As Is,” “As Completed,” “As a Rental,” “As Sellout,” and “As a Bulk Sale.” 



Commercial Business Loans. The Bank offers a variety of commercial business loans in forms of either lines of credit or term loans that are fully amortized. Lines of credit are typically utilized for working capital purposes. These loans are either revolving or non-revolving and provide loan terms between one to three years. The re-payment is generally interest only and the interest rate is adjustable based upon, the prime rate. Term loans are typically for purchasing a business or equipment for a business. Term loans have terms between five to twenty-five years and are fully amortizing. The interest rate is adjustable and tied to the five year Federal Home Loan Bank of New York rate. Commercial business loans are underwritten on the basis of the borrower’s ability to service such debt from income. These loans are generally made to small and mid-sized companies located within the Bank’s primary and secondary lending areas. A commercial business loan may be secured by equipment, accounts receivable, inventory, chattel or other assets. As of December 31, 2018, the Bank’s largest commercial business loan is a revolving line of credit to a school district in Hudson County, NJ secured by plant, equipment, and accounts receivable. The borrowing capacity at December 31, 2018 was $15.0 million, of which no dollars have been dispersed. Additionally, the Bank has a Warehouse Line of Credit secured by commercial real estate with a borrowing capacity of $15.0 million at December 31, 2018, of which $12.2 million has been disbursed. This loan is performing in accordance with its terms at December 31, 2018.



Commercial business loans generally have higher rates and shorter terms than one to four family residential loans, but they may also involve higher average balances and a higher risk of default since their repayment generally depends on the successful operation of the borrower’s business.



SBA Lending. The Bank offers qualifying business loans guaranteed by the U.S. Small Business Administration (“SBA”). Amongst other characteristics, SBA borrowers are often sound businesses, but may have lower equity funds to invest in their businesses, may be at an earlier stage of business development, or have other characteristics that may make them ineligible for conventional unguaranteed bank loans. There is a well-developed market for the sale of the guaranteed portion of SBA 7(a) loans.  During 2018, we originated approximately $26.1 million SBA loans, sold $20.2 million guaranteed portions, with a recognition of gains of approximately $1.93 million from the sale of such loans. As of December 31, 2018, the Bank’s largest SBA loan is secured by a hotel building located in Brooklyn, NY. The borrowing capacity is $4.9 million. This loan is performing in accordance with its terms at December 31, 2018.



Residential Lending. Residential loans are secured by one-to-four family dwellings, condominiums and cooperative units. Residential mortgage loans are secured by properties located in our primary lending areas of Bergen, Essex, Middlesex, Hudson, Monmouth and Richmond Counties; adjoining counties are considered as our secondary lending areas. We generally originate residential mortgage loans up to 80% loan-to-value at a maximum loan amount of $1.5 million and 75% loan-to-value at a maximum loan amount of $3.0 million for primary residences. The loan-to-value ratio is based on the lesser of the appraised value or the purchase price without the requirement of private mortgage insurance. We will originate loans with loan-to-value ratios up to 90%, provided the borrower obtains private mortgage insurance approval. We originate both fixed rate and adjustable rate residential loans with a term of up to 30 years. We offer 15, 20, and 30 year fixed, 15/30 year balloon and 3/1, 5/1, 7/1 and 10/1 adjustable rate loans with payments being calculated to include principal, interest, taxes and insurance. The 3/1 and 5/1 adjustable rate loans are qualified at 2% above the start rate; all other loans are qualified at the start rate. We have a number of correspondent relationships with third party lenders in which we deliver closed first mortgage loans. Our correspondent banking relationships allow us to offer customers competitive long term fixed rate and adjustable rate loans we could not otherwise originate, while providing the Bank a source of fee income. During 2018, 63 loans were sold for approximately $22.8 million in the secondary market and recognized gains of approximately $381,000 from the sale of such loans.



Home Equity Loans and Home Equity Lines of Credit. The Bank offers home equity loans and lines of credit that are secured by either the borrower’s primary residence, a secondary residence or an investment property. Our home equity loans can be structured as loans that are disbursed in full at closing or as lines of credit. Home equity lines of credit are offered with terms up to 30 years. Virtually all of our home equity loans are originated with fixed rates of interest and home equity lines of credit are originated with adjustable interest rates tied to the prime rate. Home equity loans and lines of credit are underwritten under the same criteria that we use to underwrite one to four family residential loans. Home equity lines of credit may be underwritten with a loan-to-value ratio of up to 80% in a first lien position. At December 31, 2018, the outstanding balances of home equity loans and lines of credit totaled $72.9 million.



Consumer Loans. The Bank makes secured passbook, automobile and occasionally unsecured consumer loans. Consumer loans generally have terms between one and five years. They generally are made on a fixed rate basis, fully-amortizing.



Loan Approval Authority and Underwriting. The Bank’s Lending Policy has established lending limits for executive management. Two Officers with authority, one of which is a Senior Credit Officer and one Executive Officer, have authority to approve loan requests up to $2.5 million. Loan requests in excess of $2.5 million but not exceeding $4.0 million shall be presented to the Chairman of the Loan Committee. Loan requests exceeding $4.0 million shall be presented to the Bank’s Board of Directors Loan Committee, which shall be comprised of a quorum of the Bank’s Board of Directors.



Upon receipt of a completed loan application including all appropriate financial information from a prospective borrower, the Bank will conduct its due diligence analysis. Property valuations or appraisals are required for all real estate collateralized loans. Appraisals are prepared by a state certified independent appraiser approved by the Bank Board of Directors.



Loan Commitments. Written commitments are given to prospective borrowers on all approved loans. Generally, we honor commitments for up to 60 days from the date of issuance. At December 31, 2018, our outstanding loan origination commitments totaled $27.9 million, standby letters of credit totaled $3.1 million, undisbursed construction funds totaled $96.7 million, and undisbursed lines of credit funds totaled $112.2 million.



Loan Delinquencies.  Notices of nonpayment are generated to borrowers once the loan account(s) becomes either 10 or 15 days past due, as specified in the applicable promissory note. A nonresponsive borrower will receive collection calls and a site visit from a bank representative in addition to follow-up delinquency notices. If such payment is not received after 60 days, a notice of right to cure default is sent to the borrower providing 30 additional days to bring the loan current before foreclosure or other remedies are commenced. The Bank utilizes various reporting tools to closely monitor the performance and asset quality of the loan portfolio. The Bank complies with all federal, state and local laws regarding collection of its delinquent accounts.



Non-Accrual Status.  Loans are placed on a non-accrual status when the loan becomes more than 90 days delinquent or when, in our opinion, the collection of payment is doubtful. Once placed on non-accrual status, the accrual of interest income is discontinued until the loan has been returned to normal accrual.  At December 31, 2018, the Bank had $7.2 million in non-accruing loans. The largest exposure of non-performing loans was a commercial real estate loan with an outstanding principal balance of approximately $920,000 fully collateralized by a residential property.



Impairment Status.  A loan is considered impaired when it is probable the borrower will not repay the loan according to the original contractual terms of the loan agreement. Impaired loans can be loans which are more than 90 days delinquent, troubled debt restructured, part of our special residential program, in the process of foreclosure, or a forced Bankruptcy plan. We have determined that an insignificant delay (less than 90 days) will not cause a loan to be classified as impaired if we expect to collect all amounts due including interest accrued at the contractual interest rate for the period of delay. We independently evaluate all loans identified as impaired. We estimate credit losses on impaired loans based on the present value of expected cash flows or the fair value of the underlying collateral if the loan repayment will be derived from the sale or operation of such collateral. Impaired loans, or portions of such loans, are charged off when we determine a realized loss has occurred. Until such time, an allowance for loan losses is maintained for estimated losses. Cash receipts on impaired loans are applied first to accrued interest receivable unless otherwise required by the loan terms, except when an impaired loan is also a nonaccrual loan, in which case the portion of the receipts related to interest is applied to principal. At December 31, 2018, we had 127 loans with carrying balance totaling $42.4 million which are classified as impaired and on which loan loss allowances totaling $2.2 million have been established. 



Troubled Debt Restructuring. A troubled debt restructuring (“TDR”) is a loan that has been modified whereby the Bank has agreed to make certain concessions to a borrower to meet the needs of both the borrower and the Bank to maximize the ultimate recovery of a loan. A  TDR occurs when a borrower is experiencing, or is expected to experience, financial difficulties and the loan is modified using a modification that would otherwise not be granted to the borrower. The types of concessions granted generally included, but were not limited to, interest rate reductions, limitations on the accrued interest charged, term extensions, and deferment of principal. The total troubled debt restructured loans were $26.6 million at December 31, 2018. 



The Bank had allocated $772,000 and $666,000 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2018, and December 31, 2017, respectively



If management determines that the value of the modified loan is less than the recorded investment in the loan, impairment is recognized through an allowance estimate or charge-off to the allowance. This process is used, regardless of loan type, and for loans modified as TDRs that subsequently default on their modified terms.



Criticized and Classified Loans.  The Bank’s Lending Policy contains an internal rating system which evaluates the overall risk of a problem loan. When a loan is classified and determined to be impaired, the Bank may establish specific allowances for loan losses. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. A portion of general loss allowances established to cover possible losses related to assets classified as substandard or doubtful may be included in determining our regulatory capital. Specific valuation allowances for loan losses generally do not qualify as regulatory capital. At December 31, 2018, the Bank reported $26.2 million in classified assets. The loans classified are represented by loans secured either by one-to-four family, commercial business, or commercial real estate.



The Company’s internal credit risk grades are based on the definitions currently utilized by the banking regulatory agencies.  The grades assigned and definitions are as follows, and loans graded excellent, above average, good and watch list (risk ratings 1-5) are treated as “pass” for grading purposes. The “criticized” risk rating (6) and the “classified” risk rating (7-9) are detailed below:



6 – Special Mention- Loans currently performing but with potential weaknesses including adverse trends in borrower’s operations, credit quality, financial strength, or possible collateral deficiency.



7 – Substandard- Loans that are inadequately protected by current sound worth, paying capacity, and collateral support. Loans on “nonaccrual” status. The loan needs special and corrective attention.



8 – Doubtful- Weaknesses in credit quality and collateral support make full collection improbable, but pending reasonable factors remain sufficient to defer the loss status.



9 – Loss- Continuance as a bankable asset is not warranted. However, this does not preclude future attempts of recovery.



The grades are determined through the uses of a qualitative matrix taking into account various characteristics of the loan such as quality of management, principals’/guarantors’ character, balance sheet strength, collateral quality, cash flow coverage, position within the industry, loan structure and documentation.



Allowances for Loan Losses.  A provision for loan losses is charged to operations based on management’s evaluation of the losses that may be incurred in our loan portfolio. In addition, our determination of the amount of the allowance for loan losses is subject to review by the New Jersey Department of Banking and Insurance and the FDIC, as part of their examination process. After a review of the information available, our regulators might require the establishment of an additional allowance. Any increase in the loan loss allowance required by regulators would have a negative impact on our earnings. Management reviews the adequacy of the allowance on at least a quarterly basis to ensure that the provision for loan losses has been charged against earnings in an amount necessary to maintain the allowance at a level that is adequate based on management’s assessment of probable estimated losses. The Bank’s methodology for assessing the adequacy of the allowance for loan losses consists of several key elements. These elements include a general allocated allowance for non-impaired loans, a specific allowance for impaired loans, and an unallocated portion.



The Bank consistently applies the following comprehensive methodology.  During the quarterly review of the allowance for loan losses, the Bank considers a variety of factors that include:



·

Lending Policies and Procedures

·

Personnel responsible for the particular portfolio - relative to experience and ability of staff

·

Trend for past due, criticized and classified loans

·

Relevant economic factors

·

Quality of the loan review system

·

Value of collateral for collateral dependent loans

·

The effect of any concentrations of credit and the changes in the level of such concentrations

·

Other external factors



The methodology includes the segregation of the loan portfolio into two divisions of performing loans and loans determined to be impaired. Loans which are performing are evaluated homogeneously by loan class or loan type. The allowance for performing loans is evaluated based on historical loan loss experience with an adjustment for qualitative factors due to economic conditions in the market. Impaired loans can be loans which are more than 90 days delinquent, troubled debt restructured, part of our special residential program, in the process of foreclosure, or a forced bankruptcy plan. These loans are individually evaluated for loan loss either by current appraisal, or net present value. Management reviews the overall estimate for feasibility and bases the loan loss provision accordingly. As of December 31, 2018, non-accrual loans differed from the amount of total loans past due greater than 90 days due to troubled debt restructurings of loans which are maintained on non-accrual status for a minimum of six months until the borrower has demonstrated their ability to satisfy the terms of the restructured loan. The Bank also maintains an unallocated allowance.  The unallocated allowance is used to cover any factors or conditions which may cause a potential loan loss but are not specifically identifiable.  It is prudent to maintain an unallocated portion of the allowance because no matter how detailed an analysis of potential loan losses is performed, these estimates lack some element of precision.  Management must make estimates using assumptions and information that is often subjective and subject to change.



The following tables set forth delinquencies in our loan portfolio as of the dates indicated:





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



At December 31, 2018

 

 

At December 31, 2017



60-90 Days

 

Greater than 90 Days

 

 

60-90 Days

 

Greater than 90 Days

 



Number

 

 

Principal

 

 

Number

 

 

Principal

 

 

Number

 

 

Principal

 

 

Number

 

 

Principal

 



of

 

 

Balance

 

 

of

 

 

Balance

 

 

of

 

 

Balance

 

 

of

 

 

Balance

 



Loans

 

 

of Loans

 

 

Loans

 

 

of Loans

 

 

Loans

 

 

of Loans

 

 

Loans

 

 

of Loans

 



(Dollars in Thousands)

Real estate mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to-four family residential

 

$

1,534 

 

 

12 

 

$

3,369 

 

 

 

$

1,983 

 

 

10 

 

$

4,011 

 

Construction

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

Home equity (2)

 

 

109 

 

 

11 

 

 

90 

 

 

 

 

539 

 

 

 

 

51 

 

Commercial and multi-family

 

 

377 

 

 

19 

 

 

7,000 

 

 

 

 

887 

 

 

 

 

850 

 

Total

13 

 

 

2,020 

 

 

42 

 

 

10,459 

 

 

14 

 

 

3,409 

 

 

19 

 

 

4,912 

 

Commercial business (1)

 -

 

 

 -

 

 

36 

 

 

1,201 

 

 

 

 

640 

 

 

 

 

103 

 

Consumer

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

Total delinquent loans

13 

 

$

2,020 

 

 

78 

 

$

11,660 

 

 

17 

 

$

4,049 

 

 

25 

 

$

5,015 

 

Delinquent loans to total loans

 

 

 

0.09 

%

 

 

 

 

0.51 

%

 

 

 

 

0.24 

%

 

 

 

 

0.30 

%











 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



At December 31, 2016

 

 

At December 31, 2015



60-90 Days

 

Greater than 90 Days

 

 

60-90 Days

 

Greater than 90 Days

 



Number

 

 

Principal

 

 

Number

 

 

Principal

 

 

Number

 

 

Principal

 

 

Number

 

 

Principal

 



of

 

 

Balance

 

 

of

 

 

Balance

 

 

of

 

 

Balance

 

 

of

 

 

Balance

 



Loans

 

 

of Loans

 

 

Loans

 

 

of Loans

 

 

Loans

 

 

of Loans

 

 

Loans

 

 

of Loans

 



(Dollars in Thousands)

Real estate mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to-four family residential

 

$

1,478 

 

 

19 

 

$

5,027 

 

 

 

$

1,097 

 

 

21 

 

$

5,089 

 

Construction

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

80 

 

 

 -

 

 

 -

 

Home equity (2)

 

 

350 

 

 

 

 

280 

 

 

 

 

333 

 

 

 

 

816 

 

Commercial and multi-family

 

 

1,210 

 

 

 

 

5,919 

 

 

11 

 

 

4,675 

 

 

18 

 

 

7,760 

 

Total

12 

 

 

3,038 

 

 

37 

 

 

11,226 

 

 

20 

 

 

6,185 

 

 

48 

 

 

13,665 

 

Commercial business (1)

 

 

69 

 

 

 

 

315 

 

 

 -

 

 

 -

 

 

10 

 

 

851 

 

Consumer

 -

 

 

 -

 

 

 

 

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

Total delinquent loans

13 

 

$

3,107 

 

 

45 

 

$

11,547 

 

 

20 

 

$

6,185 

 

 

58 

 

$

14,516 

 

Delinquent loans to total loans

 

 

 

0.21 

%

 

 

 

 

0.77 

%

 

 

 

 

0.43 

%

 

 

 

 

1.01 

%







 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 



At December 31, 2014



60-90 Days

 

 

Greater Than 90 Days

 



Number

 

 

Principal

 

 

Number

 

 

Principal

 



of

 

 

Balance

 

 

of

 

 

Balance

 



Loans

 

 

of Loans

 

 

Loans

 

 

of Loans

 



(Dollars in Thousands)

Real estate mortgage:

 

 

 

 

 

 

 

 

 

 

 

One-to-four family residential

12 

 

$

4,096 

 

 

10 

 

$

2,303 

 

Construction

 -

 

 

 -

 

 

 -

 

 

 -

 

Home equity (2)

 

 

552 

 

 

 

 

216 

 

Commercial and multi-family

 

 

1,815 

 

 

 

 

3,712 

 

Total

23 

 

 

6,463 

 

 

25 

 

 

6,231 

 

Commercial business (1)

 

 

748 

 

 

 

 

391 

 

Consumer

 

 

 

 

 -

 

 

 -

 

Total delinquent loans

26 

 

$

7,220 

 

 

27 

 

$

6,622 

 

Delinquent loans to total loans

 

 

 

0.59 

%

 

 

 

 

0.54 

%



__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.





The table below sets forth the amounts and categories of non-performing assets in the Bank’s loan portfolio. Loans are placed on non-accrual status when delinquent more than 90 days or when the collection of principal and/or interest become doubtful. Foreclosed assets include assets acquired in settlement of loans. 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

At December 31,



 

 

2018

 

 

 

2017

 

 

 

2016

 

 

 

2015

 

 

 

2014

 



 

 

(Dollars in Thousands)

Non-accruing loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to four-family residential

 

3,325 

 

 

4,917 

 

 

7,122 

 

 

8,195 

 

 

7,679 

 

Construction

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Home equity (2)

 

 

319 

 

 

 

208 

 

 

 

1,179 

 

 

 

1,560 

 

 

 

943 

 

Commercial and multi-family

 

 

3,173 

 

 

 

7,612 

 

 

 

6,619 

 

 

 

12,807 

 

 

 

10,355 

 

Commercial business (1)

 

 

404 

 

 

 

299 

 

 

 

726 

 

 

 

885 

 

 

 

627 

 

Consumer

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 -

 

 

 

 -

 

Total

 

 

7,221 

 

 

 

13,036 

 

 

 

15,652 

 

 

 

23,447 

 

 

 

19,604 

 

Accruing loans delinquent more than 90 days:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One-to four-family residential

 

 

545 

 

 

 

315 

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Construction

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Home equity (2)

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Commercial and multi-family

 

 

877 

 

 

 

 -

 

 

 

2,827 

 

 

 

 -

 

 

 

 -

 

Commercial business (1)

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Consumer

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Total

 

 

1,422 

 

 

 

315 

 

 

 

2,827 

 

 

 

 -

 

 

 

 -

 

Total non-performing loans

 

 

8,643 

 

 

 

13,351 

 

 

 

18,479 

 

 

 

23,447 

 

 

 

19,604 

 

Foreclosed assets

 

 

1,333 

 

 

 

532 

 

 

 

3,525 

 

 

 

1,564 

 

 

 

3,485 

 

Total non-performing assets

 

9,976 

 

 

13,883 

 

 

22,004 

 

 

25,011 

 

 

23,089 

 

Total non-performing assets as a percentage of total assets

 

 

0.37 

%

 

 

0.71 

%

 

 

1.29 

%

 

 

1.55 

%

 

 

1.77 

%

Total non-performing loans as a percentage of total loans

 

 

0.38 

%

 

 

0.80 

%

 

 

1.23 

%

 

 

1.63 

%

 

 

1.60 

%



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.



There were $26.6 million of troubled debt restructured loans at December 31, 2018, of which $22.5 million were classified as accruing and $4.1 million were classified as non-accrual.



For the year ended December 31, 2018, gross interest income which would have been recorded had our non-accruing loans been current in accordance with their original terms amounted to $1.0 million.  We received and recorded $1.1 million in interest income for loans which were returned to accruing status during the for the year ended December 31, 2018.



Non-accrual loans in the preceding table do not include loans acquired with deteriorated credit, which were recorded at fair value at acquisition and totaled $7.0 million at December 31, 2018 and $0 at December 31, 2017.



The following table sets forth an analysis of the Bank’s allowance for loan losses. 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Years Ended December 31,



 

2018

 

 

 

2017

 

 

 

2016

 

 

 

2015

 

 

 

2014