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BCB Bancorp Inc. Reports Operating Results (10-Q)

November 15, 2010 | About:
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10qk

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BCB Bancorp Inc. (BCBP) filed Quarterly Report for the period ended 2010-09-30.

Bcb Bancorp Inc. has a market cap of $87.83 million; its shares were traded at around $9.15 with a P/E ratio of 17.94 and P/S ratio of 2.49. The dividend yield of Bcb Bancorp Inc. stocks is 5.25%. Bcb Bancorp Inc. had an annual average earning growth of 7.3% over the past 5 years.

Highlight of Business Operations:

The provision for loan losses totaled $800,000 and $300,000 for the three month periods ended September 30, 2010 and 2009, respectively. The increase in the provision for loan losses resulted primarily from the recognition of the poorly performing economy as well as an increase in both non-performing and impaired loans. The provision for loan losses is established based upon managements review of the Banks 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 September 30, 2010, the Bank experienced $80,000 in net charge-offs, (consisting of $80,000 in charge-offs and no recoveries). During the three months ended September 30, 2009, the Bank experienced $191,000 in net charge-offs, (consisting of $193,000 in charge-offs and $2,000 in recoveries). The Bank had non-performing loans totaling $42.4 million or 5.25% of gross loans at September 30, 2010, $12.5 million or 3.14% of gross loans at June 30, 2010 and $8.6 million or 2.05% of gross loans at September 30, 2009. The increase in non-performing loans resulted primarily from the acquisition of Pamrapo Bancorp, whose non-performing loans totaled $23.9 million at September 30, 2010. The allowance for loan losses was $7.5 million or 0.93% of gross loans at September 30, 2010, $6.8 million or 1.71% of gross loans at June 30, 2010 and $6.0 million or 1.43% of gross loans at September 30, 2009. The carrying value of the loans acquired from Pamrapo was $402.4 million at September 30, 2010. These loans were the primary reason for the decrease in the ratio of the allowance for loan losses to gross loans 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 September 30, 2010, June 30, 2010 and September 30, 2009.

Total non-interest expense increased by $5.4 million or 168.6% to $8.6 million for the three months ended September 30, 2010 from $3.2 million for the three months ended September 30, 2009. 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 $3.32 million or 230.6% to $4.76 million for the three months ended September 30, 2010 from $1.44 million for the three months ended September 30, 2009. This increase occurred primarily as the result of an increase in the number of full time equivalent employees to 173 at September 30, 2010, from 86 at September 30, 2009 as well as the recognition of the payout of voluntary termination packages offered to the employees in conjunction with the acquisition of Pamrapo Bancorp, Inc., totaling $1.1 million. Equipment expense increased by $576,000 or 107.3% to $1.1 million for the three months ended September 30, 2010 from $537,000 for the three months ended September 30, 2009. The primary component of this expense item is data service provider expense which increases with the growth in the Banks assets. Occupancy expense increased by $404,000 or 138.8% to $695,000 for the three months ended September 30, 2010 from $291,000 for the three months ended September 30, 2009. Regulatory assessments increased by $208,000 or 118.9% to $383,000 for the three months ended September 30, 2010 from $175,000 for the three months ended September 30, 2009. Merger related expenses increased by $68,000 or 30.9% to $288,000 for the three months ended September 30, 2010 compared to $220,000 for the three months ended September 30, 2009. Director fees increased by $11,000 or 9.2% to $131,000 for the three months ended September 30, 2010 from $120,000 for the three months ended September 30, 2009. Professional fees increased by $128,000 or 103.2% to $252,000 for the three months ended September 30, 2010 from $124,000 for the three months ended September 30, 2009. Advertising expense increased by $23,000 or 29.9% to $100,000 for the three months ended September 30, 2010 from

The provision for loan losses totaled $1.55 million for the nine months ended September 30, 2010 and $950,000 for the nine months ended September 30, 2009. The increase in the provision for loan losses resulted primarily from the recognition of the poorly performing economy as well as an increase in both non-performing and impaired loans. The provision for loan losses is established based upon managements review of the Banks 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 nine months ended September 30, 2010, the Bank experienced $677,000 in net charge-offs (consisting of $689,000 in charge-offs and $12,000 in recoveries). During the nine months ended September 30, 2009, the Bank experienced $207,000 in net charge-offs (consisting of $209,000 in charge-offs and $2,000 in recoveries). The Bank had non-performing loans totaling $42.4 million or 5.25% of gross loans at September 30, 2010, $11.9 million or 2.92% of gross loans at December 31, 2009 and $8.6 million or 2.05% of gross loans at September 30, 2009. The increase in non-performing loans resulted primarily from the acquisition of Pamrapo Bancorp, whose non-performing loans totaled $23.9 million at September 30, 2010. The allowance for loan losses was $7.5 million or 0.93% of gross loans at September 30, 2010, $6.6 million or 1.62% of gross loans at December 31, 2009 and $6.0 million or 1.43% of gross loans at September 30, 2009. The carrying value of the loans acquired from Pamrapo was $402.4 million at September 30, 2010. These loans were the primary reason for the decrease in the ratio of the allowance for loan losses to gross loans 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 September 30, 2010, December 31, 2009 and September 30, 2009.

Total non-interest income increased by $10.48 million to $11.1 million for the nine months ended September 30, 2010 from a $650,000 for the nine months ended September 30, 2009. The increase in non-interest income resulted primarily from the gain on bargain purchase associated with the completion of the acquisition of Pamrapo Bancorp, Inc. of $10.2 million for the nine months ended September 30, 2010 from no such corresponding gain for the nine months ended September 30, 2009. A bargain purchase is defined as a business combination in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any non-controlling interest in the acquiree, and it requires the acquirer to recognize that excess in earnings as a gain attributable to the acquisition. The increase in non-interest income is further explained by an increase of $279,000 or a 60.0% increase in fees and service charges and other non-interest income to $744,000 for the nine months ended September 30, 2010 from $465,000 for the nine months ended September 30, 2009, and an increase of $15,000 or 8.3% in gain on sales of loans originated for sale to $195,000 for the nine months ended September 30, 2010 from $180,000 for the nine months ended September 30, 2009, partially offset by a decrease of $19,000 in gain on sale of real estate owned to a loss of $14,000 for the nine months ended September 30, 2010 from $5,000 for the nine months ended September 30, 2009. General fees, service charges and other income increased primarily as a result of a $67,000 recovery received through litigation on a real estate facility where insurance proceeds were improperly retained by a third party. The increase in gain on sale of loans originated for sale 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.

Total non-interest expense increased by $6.0Read the The complete Report

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10qk
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