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BCB Bancorp Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 16, 2011 04:29PM

BCB Bancorp Inc. (BCBP) filed Quarterly Report for the period ended 2011-03-31. Bcb Bancorp Inc. has a market cap of $113.81 million; its shares were traded at around $11.2 with a P/E ratio of 28.72 and P/S ratio of 2.11. The dividend yield of Bcb Bancorp Inc. stocks is 4.29%. Bcb Bancorp Inc. had an annual average earning growth of 1.9% over the past 5 years.



Highlight of Business Operations:

Loans receivable decreased by $7.7 million or 1.0% to $765.4 million at March 31, 2011 from $773.1 million at December 31, 2010. The decrease resulted primarily from a $15.7 million decrease in real estate mortgages comprising residential, commercial, construction and participation loans with other financial institution and a $3.1 million decrease in consumer loans, net of amortization, partially offset by a $11.1 million increase in commercial loans comprising business loans and commercial lines of credit, net of amortization, partially offset by a $30,000 decrease in the allowance for loan losses. The balance in the loan pipeline as of March 31, 2011 stood at $72.6 million. At March 31, 2011, the allowance for loan losses was $8.4 million or 19.5% of non-performing loans. As a result of the loans acquired in the business combination transaction being recorded at their fair value, the balance in the allowance for loan losses that was on the balance sheet of the former Pamrapo Bancorp, Inc., was not carried over in the allowance balance previously discussed.

Net income increased by $1.2 million or 171.4% to $1.9 million for the three months ended March 31, 2011 from $718,000 for the three months ended March 31, 2010. The increase in net income was due to increases in net interest income, non-interest income and a decrease in the provision for loan losses, partially offset by increases in non-interest expense and income tax expense. Net interest income increased by $4.93 million or 104.0% to $9.67 million for the three months ended March 31, 2011 from $4.74 million for the three months ended March 31, 2010. The increase in net interest income resulted primarily from an increase in the average balance of interest earning assets of $463.6 million or 74.7% to $1.08 billion for the three months ended March 31, 2011 from $620.8 million for the three months ended March 31, 2010, partially offset by a decrease in the average yield on interest earning assets to 4.82% for the three months ended March 31, 2011 from 5.13% for the three months ended March 31, 2010. The average balance of interest bearing liabilities increased by $384.6 million or 70.4% to $930.9 million for the three months ended March 31, 2011 from $546.3 million for the three months ended March 31, 2010 and the average cost of interest bearing liabilities decreased by ninety-one basis points to 1.45% for the three months ended March 31, 2011 from 2.36% for the three months ended March 31, 2010. The decrease of ninety-one basis points in the average cost of interest bearing liabilities more than offset the decrease of thirty-one basis points in the average yield on interest earning assets. As a consequence of the aforementioned, our net interest margin increased to 3.57% for the three months ended March 31, 2011 from 3.06% for the three months ended March 31, 2010. The increase in the average balance of interest earning assets and the average balance of interest bearing liabilities is primarily attributable to the completion of the business combination transaction with Pamrapo Bancorp, Inc.

The provision for loan losses totaled $350,000 and $450,000 for the three month periods ended March 31, 2011 and 2010, respectively. The provision for loan losses is established based upon management s review of the Bank s loans and consideration of a variety of factors including, but not limited to, (1) the risk characteristics of the loan portfolio, (2) current economic conditions, (3) actual losses previously experienced, (4) significant level of loan growth and (5) the existing level of reserves for loan losses that are probable and estimable. During the three months ended March 31, 2011, the Bank experienced $380,000 in net charge-offs, (consisting of $380,000 in charge-offs and no recoveries). During the three months ended March 31, 2010, the Bank experienced $434,000 in net charge-offs, (consisting of $446,000 in charge-offs and $12,000 in recoveries). The Bank had non-performing loans totaling $43.1 million or 5.57% of gross loans at March 31, 2011, $41.8 million or 5.35% of gross loans at December 31, 2010 and $13.3 million or 3.33% of gross loans at March 31, 2010. The increase in non-performing loans resulted primarily from the acquisition of Pamrapo Bancorp, whose non-performing loans totaled $26.3 million at March 31, 2011. The allowance for loan losses was $8.4 million or 1.08% of gross loans at March 31, 2011, $8.4 million or 1.08% of gross loans at December 31, 2010 and $6.7 million or 1.67% of gross loans at March 31, 2010. The carrying value of the loans acquired from Pamrapo was $358.0 million at March 31, 2011. These loans were the primary reason for the decrease in the ratio of the allowance for loan losses to gross loans from March 31, 2010 as there was no carryover of the historical Pamrapo allowance for credit losses related to these loans. The amount of the allowance is based on estimates and the ultimate losses may vary from such estimates. Management assesses the allowance for loan losses on a quarterly basis and makes provisions for loan losses as necessary in order to maintain the adequacy of the allowance.While management uses available information to recognize losses on loans, future loan loss provisions may be necessary based on changes in the aforementioned criteria. In addition various regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses and may require the Bank to recognize additional provisions based on their judgment of information available to them at the time of their examination. Management believes that the allowance for loan losses was adequate at March 31, 2011, December 31, 2010 and March 31, 2010.

Total non-interest income increased by $212,000 or 88.0% to $453,000 for the three months ended March 31, 2011 from $241,000 for the three months ended March 31, 2010. The increase in non-interest income resulted primarily from an increase of $186,000 or a 110.0% increase in fees and service charges and other non-interest income to $355,000 for the three months ended March 31, 2011 from $169,000 for the three months ended March 31, 2010, and an increase of $106,000 or 147.2% in gain on sale of loans originated for sale to $178,000 for the three months ended March 31, 2011 from $72,000 for the three months ended March 31, 2010. General fees, service charges and other income increased primarily as a result of a $117,000 recovery of legal fees from the Insurance Company pertaining to Pamrapo Bancorp, Inc. litigation issues.

Total non-interest expense increased by $3.3 million or 100.0% to $6.6 million for the three months ended March 31, 2011 from $3.3 million for the three months ended March 31, 2010. Unless specified otherwise, the increase in the categories of non-interest expense occurred primarily as a result of the acquisition of Pamrapo Bancorp, Inc. Salaries and employee benefits expense increased by $1.6 million or 114.3% to $3.0 million for the three months ended March 31, 2011 from $1.37 million for the three months ended March 31, 2010. This increase occurred primarily as the result of an increase in the number of full time equivalent employees to 182 at March 31, 2011, from 88 at March 31, 2010. Occupancy expense increased by $492,000 or 171.4% to $779,000 for the three months ended March 31, 2011 from $287,000 for the three months ended March 31, 2010. Equipment expense increased by $469,000 or 84.7% to $1.02 million for the three months ended March 31, 2011 from $554,000 for the three months ended March 31, 2010. The primary component of this expense item is data service provider expense which increases with the growth in the Bank s assets.

Professional fees increased by $71,000 or 53.8% to $203,000 for the three months ended March 31, 2011 from $132,000 for the three months ended March 31, 2010. Directors fees increased by $13,000 or 12.3% to $119,000 for the three months ended March 31, 2011 from $106,000 for the three months ended March 31, 2010. Regulatory assessments increased by $265,000 or 153.2% to $438,000 for the three months ended March 31, 2011 from $173,000 for the three months ended March 31, 2010. Advertising expense increased by $5,000 or 7.5% to $72,000 for the three months ended March 31, 2011 from $67,000 for the three months ended March 31, 2010. Merger related expenses decreased by $200,000 to no related expense for the three months ended March 31, 2011 compared to $200,000 for the three months ended March 31, 2010. Other non-interest expense increased by $605,000 or 158.0% to $988,000 for the three months ended March 31, 2011 from $383,000 for the three months ended March 31, 2010. The increase in other expenses occurred primarily as a result of an increase in loan expense and fees associated with the collection process on certain delinquent loan facilities. Additionally, other non-interest expense is also comprised of stationary, forms and printing, check printing, correspondent bank fees, telephone and communication, shareholder relations and other fees and expenses.

Read the The complete Report



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