BAYONNE, N.J., April 22, 2025 (GLOBE NEWSWIRE) — BCB Bancorp, Inc., (NASDAQ: BCBP), the holding company for BCB Community Bank, today reported a net loss of $8.3 million for the first quarter of 2025, compared to net income of $3.3 million in the fourth quarter of 2024, and net income of $5.9 million for the first quarter of 2024. Its loss per diluted share for the first quarter of 2025 was ($0.51), compared to earnings per diluted share of $0.16 in the preceding quarter and $0.32 in the first quarter of 2024.
The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.16 per share. The dividend will be payable on May 21, 2025 to common shareholders of record on May 7, 2025.
“Our first-quarter loss was primarily driven by a $13.7 million specific reserve tied to a $34.2 million loan in the cannabis sector,” Michael Shriner, President and Chief Executive Officer of BCB Bank, explained. “Although the borrower remains current, the significant deterioration in their financial condition warranted a downgrade to non-accrual status and the establishment of the reserve. We also increased reserves for our discontinued Business Express Loan portfolio by $3.1 million, in response to the portfolio’s continued elevated deterioration and broader macroeconomic headwinds.”
“While these credit actions have impacted short-term results, they reflect our disciplined and proactive approach to risk management,” added Mr. Shriner. “Thanks to the positive capital actions taken throughout 2024, we remain well-capitalized, giving us the flexibility to address credit challenges head-on.”
“BCB Bank has bolstered its credit risk team with new hires who we believe bring deep expertise and a rigorous approach to underwriting,” said Mr. Shriner. “These efforts are part of a broader initiative to strengthen our credit quality oversight. Following a comprehensive portfolio review using a conservative risk framework, we’ve adjusted the risk ratings on a number of loans to better reflect current market realities. Importantly, the majority of our customers remain current on their payments, and our team is actively engaging with borrowers to secure updated financials and support improved risk profiles.”
Executive Summary
- Total deposits were $2.687 billion at March 31, 2025 compared to $2.751 billion at December 31, 2024.
- Net interest margin was 2.59 percent for the first quarter of 2025, compared to 2.53 percent for the fourth quarter of 2024, and 2.50 percent for the first quarter of 2024.
- Total yield on interest-earning assets was 5.20 percent for the first quarter of 2025, compared to 5.33 percent for both the fourth quarter of 2024, and the first quarter of 2024.
- Total cost of interest-bearing liabilities decreased 24 basis points to 3.33 percent for the first quarter of 2025, compared to 3.57 percent for the fourth quarter of 2024, and decreased 21 basis points to 3.54 percent for the first quarter of 2024.
- The efficiency ratio for the first quarter was 61.6 percent compared to 62.1 percent in the prior quarter, and 58.8 percent in the first quarter of 2024.
- The annualized return on average assets ratio for the first quarter was (0.95) percent, compared to 0.36 percent in the prior quarter, and 0.61 percent in the first quarter of 2024.
- The annualized return on average equity ratio for the first quarter was (10.4) percent, compared to 4.0 percent in the prior quarter, and 7.5 percent in the first quarter of 2024.
- The provision for credit losses was $20.8 million in the first quarter of 2025 compared to $4.2 million for the fourth quarter of 2024. In the first quarter of 2024, the Bank recorded a provision of $2.1 million.
- The allowance for credit losses (“ACL”) as a percentage of non-accrual loans was 51.6 percent at March 31, 2025 compared to 77.8 percent for the prior quarter-end and 155.4 percent at March 31, 2024. Total non-accrual loans were $99.8 million at March 31, 2025, $44.7 million at December 31, 2024 and $22.2 million at March 31, 2024.
- Total loans receivable, net of the allowance for credit losses, of $2.918 billion at March 31, 2025, decreased 2.6 percent from $2.996 billion at December 31, 2024, and decreased 9.6 percent, from $3.227 billion at March 31, 2024.
Balance Sheet Review
Total assets decreased by $125.3 million, or 3.5 percent, to $3.474 billion at March 31, 2025, from $3.599 billion at December 31, 2024. The decrease in total assets was mainly related to a decrease in net loans and in cash and cash equivalents.
Total cash and cash equivalents decreased by $64.5 million, or 20.3 percent, to $252.8 million at March 31, 2025, from $317.3 million at December 31, 2024. The decrease in cash was primarily due to the reduction of the Bank’s exposure to wholesale funding by paying down high cost brokered deposits.
Loans receivable, net, decreased by $78.6 million, or 2.6 percent, to $2.918 billion at March 31, 2025, from $2.996 billion at December 31, 2024. Total loan decreases during the period included decreases totaling $62.3 million in commercial real estate and multi-family loans, construction loans, 1-4 family residential loans and home equity loans. The allowance for credit losses increased $16.7 million to $51.5 million, or 51.6 percent of non-accruing loans and 1.73 percent of gross loans, at March 31, 2025, as compared to an allowance for credit losses of $34.8 million, or 77.8 percent of non-accruing loans and 1.15 percent of gross loans, at December 31, 2024.
Total investment securities increased by $14.7 million, or 13.2 percent, to $125.9 million at March 31, 2025, from $111.2 million at December 31, 2024, representing current year purchases.
Deposits decreased by $64.4 million, or 2.3 percent, to $2.687 billion at March 31, 2025, from $2.751 billion at December 31, 2024. Brokered deposits decreased $112.5 million, and were offset by increases in certificates of deposit, money market accounts, transaction accounts and savings accounts which totaled $48.4 million.
Debt obligations decreased by $49.8 million to $448.5 million at March 31, 2025 from $498.3 million at December 31, 2024, due to maturities and paydowns of our FHLB advances. The weighted average interest rate of FHLB advances was 4.33 percent at March 31, 2025 and 4.35 percent at December 31, 2024. The weighted average maturity of FHLB advances as of March 31, 2025 was 0.83 years. The interest rate of our subordinated debt balances was 9.25 percent at March 31, 2025 and at December 31, 2024.
Stockholders’ equity decreased by $9.2 million, or 2.8 percent, to $314.7 million at March 31, 2025, from $323.9 million at December 31, 2024. The decrease was attributable to the decrease in retained earnings of $11.6 million, or 8.2 percent, to $130.3 million at March 31, 2025 from $141.9 million at December 31, 2024. Offsetting this were increases in accumulated other comprehensive income, and additional paid in capital on stock, which totaled $2.4 million.
First Quarter 2025 Income Statement Review
The Company reported a net loss of $8.3 million for the first quarter ended March 31, 2025 as compared to net income of $5.9 million for the first quarter ended March 31, 2024. The decline was primarily driven by an increase to the Provision for loan losses of $18.8 million. offset by $5.8 million decrease in income tax provisioning. Also, net interest income decreased by $1.1 million, or 4.9 percent, to $22.0 million for the first quarter of 2025, from $23.1 million for the first quarter of 2024. The decrease in net interest income resulted from lower interest income which was partially offset by lower interest expense.
Interest income decreased by $5.1 million, or 10.3 percent, to $44.2 million for the first quarter of 2025 from $49.3 million for the first quarter of 2024. The average balance of interest-earning assets decreased $255.9 million, or 6.9 percent, to $3.444 billion for the first quarter of 2025 from $3.699 billion for the first quarter of 2024, while the average yield decreased 13 basis points to 5.20 percent for the first quarter of 2025 from 5.33 percent for the first quarter of 2024.
Interest expense decreased by $4.0 million to $22.2 million for the first quarter of 2025 from $26.1 million for the first quarter of 2024. The decrease resulted from a decrease in the average rate paid on interest-bearing liabilities of 21 basis points to 3.33 percent for the first quarter of 2025 from 3.54 percent for the first quarter of 2024, while the average balance of interest-bearing liabilities decreased by $256.2 million to $2.701 billion for the first quarter of 2025 from $2.957 billion for the first quarter of 2024.
The net interest margin was 2.59 percent for the first quarter of 2025 compared to 2.50 percent for the first quarter of 2024. The increase in the net interest margin compared to the first quarter of 2024 was the result of a decrease in the cost of interest-bearing liabilities partially offset by the decrease in the yield on interest-earning assets.
During the first quarter of 2025, the Company recognized $4.2 million in net charge-offs compared to $1.1 million in net charge-offs in the first quarter of 2024. The Bank had non-accrual loans totaling $99.8 million, or 3.36 percent of gross loans, at March 31, 2025 as compared to $44.7 million, or 1.48 percent of gross loans, at December 31, 2024. The allowance for credit losses on loans was $51.5 million, or 1.73 percent of gross loans, at March 31, 2025, and $34.8 million, or 1.15 percent of gross loans, at December 31, 2024. The provision for credit losses was $20.8 million for the first quarter of 2025 compared to $4.2 million for the fourth quarter of 2024. Management believes that the allowance for credit losses on loans was adequate at March 31, 2025 and December 31, 2024.
Non-interest income decreased by $318 thousand to $1.8 million for the first quarter of 2025 from $2.1 million in the first quarter of 2024. The decrease in total non-interest income was mainly related to decreases in gains on equity securities and BOLI income of $245 thousand and $67 thousand, respectively.
Non-interest expense decreased by $178 thousand, or 1.2 percent, to $14.7 million for the first quarter of 2025 when compared to non-interest expense of $14.8 million for the first quarter of 2024. The decrease in these expenses for the first quarter of 2025 was primarily driven by lower regulatory assessment charges, offset by higher salaries and employee benefits.
The income tax provision decreased by $5.8 million, to an income tax credit of $3.4 million for the first quarter of 2025 when compared to a $2.5 million provision for the first quarter of 2024.
Asset Quality
During the first quarter of 2025, the Company recognized $4.2 million in net charge offs, compared to $1.1 million in net charge-offs for the first quarter of 2024.
The Bank had non-accrual loans totaling $99.8 million, or 3.36 percent of gross loans, at March 31, 2025, as compared to $22.2 million, or 0.68 percent of gross loans, at March 31, 2024. More than 60% of the non-accrual loans are current with all payments of principal, interest, taxes and insurance, including the previously mentioned loan that has been allocated a specific reserve. However, given that the normal standard for non-accrual is a 90 day delinquency, logic and transparency dictates that this population of loans possess certain weaknesses that are beyond payment status and therefore, even though they are current, they should be placed on non-accrual. Although our borrowers have made payment of their loan obligations to BCB a priority, our evaluation of their financial condition causes some concern about their continued ability to do so. The allowance for credit losses was $51.5 million, or 1.73 percent of gross loans, at March 31, 2025, and $34.6 million, or 1.06 percent of gross loans, at March 31, 2024. The allowance for credit losses was 51.6 percent of non-accrual loans at March 31, 2025, and 155.4 percent of non-accrual loans at March 31, 2024.
About BCB Bancorp, Inc.
Established in 2000 and headquartered in Bayonne, N.J., BCB Community Bank is the wholly-owned subsidiary of BCB Bancorp, Inc. (NASDAQ: BCBP). The Bank has twenty-three branch offices in Bayonne, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lyndhurst, Maplewood, Monroe Township, Newark, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, and four branches in Hicksville and Staten Island, New York. The Bank provides businesses and individuals a wide range of loans, deposit products, and retail and commercial banking services. For more information, please go to www.bcb.bank.
