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BCB Bancorp Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2012 12:23PM

BCB Bancorp Inc. (BCBP) filed Quarterly Report for the period ended 2012-06-30. Bcb Bancorp, Inc. has a market cap of $95.7 million; its shares were traded at around $10.44 with a P/E ratio of 17.5 and P/S ratio of 1.8. The dividend yield of Bcb Bancorp, Inc. stocks is 4.6%.



Highlight of Business Operations:

Total cash and cash equivalents decreased by $13.9 million or 11.9% to $103.2 million at June 30, 2012 from $117.1 million at December 31, 2011. Investment securities classified as held-to-maturity decreased by $6.9 million or 3.3% to $200.1 million at June 30, 2012 from $207.0 million at December 31, 2011. This decrease in investment securities resulted primarily from purchases of $47.9 million for the six months ended June 30, 2012 more than offset by allowable sales of $19.8 million of mortgage-backed securities from the held-to-maturity portfolio, $27.4 million of repayments and prepayments in the mortgage-backed securities portfolio, $3.3 million in maturities of certain Government Sponsored Enterprise bonds and $3.0 million of call options exercised on certain callable agency securities for the six months ended June 30, 2012.

Net income decreased by $5.31 million or 272.3% to a net loss of $3.36 million for the three months ended June 30, 2012 compared with net income of $1.95 million for the three months ended June 30, 2011. The decrease in net income was due to increases in non-interest expense and the provision for loan losses and a decrease in non-interest income, partially offset by an increase in net interest income and a decrease in income taxes. Net interest income increased by $366,000 or 3.7% to $10.25 million for the three months ended June 30, 2012 from $9.88 million for the three months ended June 30, 2011. The increase in net interest income resulted primarily from an increase in the average balance of interest earning assets of $96.0 million or 8.9% to $1.175 billion for the three months ended June 30, 2012 from $1.079 billion for the three months ended June 30, 2011, partially offset by a decrease in the average yield on interest earning assets of thirty-eight basis points to 4.53% for the three months ended June 30, 2012 from 4.91% for the three months ended June 30, 2011. The average balance of interest bearing liabilities increased by $89.0 million or 9.6% to $1.012 billion for the three months ended June 30, 2012 from $923.0 million for the three months ended June 30, 2011, and the average cost of interest bearing liabilities decreased by twenty-five basis points to 1.21% for the three months ended June 30, 2012 from 1.46% for the three months ended June 30, 2011. The decrease of thirty-eight basis points in the average yield of interest earning assets more than offset the decrease of twenty-five basis points on the average cost of interest bearing liabilities. As a consequence and in contrast to the increase in net interest income, our net interest margin decreased to 3.49% for the three months ended June 30, 2012 from 3.66% for the three months ended June 30, 2011. The increase in the average balance of interest earning assets and the average balance of interest bearing liabilities reflects the completion of the business combination transaction with Allegiance Community Bank.

The provision for loan losses totaled $1.2 million and $450,000 for the three month periods ended June 30, 2012 and 2011, 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) our level of loan growth and (5) the existing level of reserves for loan losses that are probable and estimable. During the three months ended June 30, 2012, the Bank experienced $723,000 in net charge-offs, (consisting of $723,000 in charge-offs and no recoveries). During the three months ended June 30, 2011, the Bank experienced $121,000 in net charge-offs, (consisting of $146,000 in charge-offs and $25,000 in recoveries). The Bank had non-performing loans totaling $34.5 million or 4.11% of gross loans at June 30, 2012, $47.8 million or 5.61% of gross loans at December 31, 2011 and $42.5 million or 5.49% of gross loans at June 30, 2011. The decrease in non-performing loans resulted primarily from the sale of approximately $17.6 million in non-performing loans during the three months ended June 30, 2012. The sale resulted in a pre-tax loss of approximately $7.3 million. Management continues to evaluate its non-performing loans and, based upon market conditions and the ability to obtain satisfactory pricing, may consider sales of a portion of its non-performing loan portfolio in the future. The allowance for loan losses was $11.4 million or 1.36% of gross loans at June 30, 2012, $10.5 million or 1.23% of gross loans at December 31, 2011 and $8.7 million or 1.13% of gross loans at June 30, 2011. 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 as of June 30, 2012, December 31, 2011 and June 30, 2011.

Total non-interest income (loss) decreased by $6.7 million to a $6.3 million loss for the three months ended June 30, 2012 from income of $429,000 for the three months ended June 30, 2011. The decrease in non-interest income resulted primarily from the aforementioned $7.3 million loss on the sale of non-performing loans partially offset by a $384,000 or 144.9% increase in fees and service charges and other non-interest income to $649,000 for the three months ended June 30, 2012 from $265,000 for the three months ended June 30, 2011, an increase in gain on sale of securities of $48,000 or 266.7% to $66,000 for the three months ended June 30, 2012 from $18,000 for the three months ended June 30, 2011 and an increase of $90,000 or 39.8% in gain on sale of loans to $316,000 for the three months ended June 30, 2012 from $226,000 for the three months ended June 30, 2011. The increase in gain on sale of loans occurred primarily as a result of the active local market for refinancing one-to four-family residential mortgages, aided in large part by the low interest rate environment. The Bank also recorded an increase on gain (loss) on sale of real estate owned of $118,000 or 147.5% to $38,000 for the three months ended June 30, 2012 from a loss of $80,000 for the three months ended June 30, 2011. Loss on sale of loans held in portfolio increased to $7.3 million for the three months ended June 30, 2012 from no such corresponding entry for the three months ended June 30, 2011. As previously discussed, the Bank sold approximately $17.4 million of loans previously categorized as non-performing and realized a pre-tax loss of $7.3 million. The primary reason for this transaction was the elimination of carrying and legacy costs associated with these non-interest earning assets.

Net income decreased by $5.65 million or 145.7% to a net loss of $1.77 million for the six months ended June 30, 2012 compared with net income of $3.87 million for the six months ended June 30, 2011. The decrease in net income was due to increases in the non-interest expense and provision for loans losses, and a decrease in non-interest income (loss) partially offset by an increase in net interest income and a decrease in income taxes. Net interest income increased by $991,000 or 5.1% to $20.55 million for the six months ended June 30, 2012 from $19.55 million for the six months ended June 30, 2011. This increase in net interest income resulted primarily from an increase of $102.0 million or 9.4% in the average balance of interest earning assets to $1.184 billion for the six months ended June 30, 2012 from $1.082 billion for the six months ended June 30, 2011, partially offset by a decrease in the average yield on interest earning assets to 4.54% for the six months ended June 30, 2011 from 4.86% for the six months ended June 30, 2011. The average balance of interest bearing liabilities increased by $99.1 million or 10.7% to $1.026 billion for the six months ended June 30, 2012 from $926.9 million for the six months ended June 30, 2011, while the average cost of interest bearing liabilities decreased to 1.23% for the six months ended June 30, 2012 from 1.46% for the six months ended June 30, 2011. As a consequence of the aforementioned, our net interest margin decreased to 3.47% for the six months ended June 30, 2012 from 3.62% for the six months ended June 30, 2011. The increase in the average balance of interest earning assets and the average balance of interest bearing liabilities reflects the completion of the business combination transaction with Allegiance Community Bank.

Read the The complete Report



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