BCB Bancorp, Inc., Announces an Increase in Quarterly Earnings, Quarterly Cash Dividend

BCB Bancorp, Inc., Bayonne, NJ (NASDAQ:BCBP) announced an increase in quarterly earnings of $290,000 or 45.9% to $922,000 for the three months ended June 30, 2010 from $632,000 for the three months ended June 30, 2009. Basic and diluted earnings per share were $0.20 for the three months ended June 30, 2010 as compared to $0.14 per share for the three months ended June 30, 2009. The Company further reported net earnings of $1.64 million for the six months ended June 30, 2010, as compared to $2.0 million for the six months ended June 30, 2009. Basic and diluted earnings per share were $0.35 for the six months ended June 30, 2010 from $0.43 for the six months ended June 30, 2009. The Board of Directors unanimously approved a cash dividend payment of $0.12 per common share for shareholders of record as of July 30, 2010, payable on August 16, 2010. The results of operations and discussion of our financial condition does not include the effects of our recent acquisition of Pamrapo Bancorp, Inc., which was completed on July 6, 2010.

Total assets increased by $20.1 million or 3.2% to $651.6 million at June 30, 2010 from $631.5 million at December 31, 2009. Total cash and cash equivalents increased by $52.5 million or 78.0% to $119.8 million at June 30, 2010 from $67.3 million at December 31, 2009. The increase in cash and cash equivalents reflects management’s decision to increase the Bank’s liquidity position while it determines where the best investment opportunities exist during a period of low interest rates and a weak economy. Investment securities classified as held-to-maturity decreased by $17.0 million or 12.8% to $115.6 million at June 30, 2010 from $132.6 million at December 31, 2009. Loans receivable decreased by $13.0 million or 3.2% to $388.9 million at June 30, 2010 from $401.9 million at December 31, 2009. Deposit liabilities increased by $20.4 million or 4.4% to $484.1 million at June 30, 2010 from $463.7 million at December 31, 2009. Stockholders’ equity increased by $481,000 or 1.0% to $51.9 million at June 30, 2010 from $51.4 million at December 31, 2009. The increase in stockholders’ equity is primarily attributable to net income of the Company for the six months ended June 30, 2010 of $1.64 million and a $31,000 increase resulting from the exercise of stock options for 5,844 shares, partially offset by the payment of two quarterly cash dividends totaling $1.1 million representing two $0.12 per share payments during the six months ended June 30, 2010, a $58,000 decrease in the market value of our available-for-sale securities portfolio, net of tax, and $12,000 paid to repurchase 1,311 shares of the Company’s common stock.

Net income increased by $290,000 or 45.9% to $922,000 for the three months ended June 30, 2010 from $632,000 for the three months ended June 30, 2009. The increase in net income was due to increases in net interest income and non-interest income and a decrease in non-interest expense, partially offset by an increase in income taxes. Net interest income increased by $355,000 or 8.2% to $4.69 million for the three months ended June 30, 2010 from $4.34 million for the three months ended June 30, 2009. This increase in net interest income resulted primarily from an increase of $29.1 million or 4.9% in the average balance of interest earning assets to $628.6 million for the three months ended June 30, 2010 from $599.5 million for the three months ended June 30, 2009, partially offset by a decrease in the yield on interest earning assets to 4.91% for the three months ended June 30, 2010 from 5.50% for the three months ended June 30, 2009. The average balance of interest bearing liabilities increased by $26.9 million or 5.1% to $552.4 million for the three months ended June 30, 2010 from $525.5 million for the three months ended June 30, 2009 and the average cost of interest bearing liabilities decreased by seventy-eight basis points to 2.19% for the three months ended June 30, 2010 from 2.97% for the three months ended June 30, 2009. As a consequence of the aforementioned, our net interest margin increased to 2.98% for the three months ended June 30, 2010 from 2.89% for the three months ended June 30, 2009.

Net income decreased by $355,000 or 17.8% to $1.64 million for the six months ended June 30, 2010 from $2.0 million for the six months ended June 30, 2009. The decrease in net income was due to an increase in non-interest expense and an increase in the provision for loan losses, partially offset by an increase in net interest income and non-interest income and a decrease in income taxes. Net interest income increased by $176,000 or 1.9% to $9.43 million for the six months ended June 30, 2010 from $9.26 million for the six months ended June 30, 2009. This increase in net interest income resulted primarily from a increase of $39.0 million or 6.7% in the average balance of interest earning assets to $625.6 million for the six months ended June 30, 2010 from $585.6 million for the six months ended June 30, 2009, partially offset by a decrease in the average yield on interest earning assets to 5.02% for the six months ended June 30, 2010 from 5.84% for the six months ended June 30, 2009. The average balance of interest bearing liabilities increased by $35.7 million or 7.0% to $549.3 million for the six months ended June 30, 2010 from $513.6 million for the six months ended June 30, 2009, while the average cost of interest bearing liabilities decreased to 2.27% for the six months ended June 30, 2010 from 3.06% for the six months ended June 30, 2009. As a consequence of the decrease in the average yield earned on our interest earning assets, and despite the increase in the balance of average interest earning assets, our net interest margin decreased to 3.02% for the six months ended June 30, 2010 from 3.16% for the six months ended June 30, 2009.

Donald Mindiak, President & CEO commented,” Net interest income for the three and six month periods ended June 30, 2010 recorded a gradual improvement as compared to the three and six month periods ended June 30, 2009. Additionally, the three month time period ended June 30, 2010 recorded a 45.9% increase in net income as compared to the three months ended June 30, 2009. The six month time period ended June 30, 2010 recorded a 17.8% decrease in net income as compared to the six months ended June 30, 2009, primarily as a result of increased merger related expenses.”

"I am pleased to report that the business combination transaction with Pamrapo Bancorp Inc., was completed on July 6, 2010. Over the next several months, staff, business and systems integration will be occurring to facilitate a seamless transition for both our customers and shareholders alike. We are diligently working to maximize the accretive nature of this transaction as expeditiously as is practicable. Lastly, the declaration and maintenance of our quarterly cash dividend at $0.12 per share reinforces the Board’s confidence in our ability to provide a competitive return on investment to all of our shareholders. We recently announced a 5% buyback program for our common stock which we view as an opportunity for our Company. We welcome the shareholders of Pamrapo Bancorp Inc., into the BCB Bancorp Inc., family of shareholders and look forward to the opportunity of enacting initiatives that have the potential of enhancing franchise and shareholder value.”

Questions regarding the content of this release should be directed to either Donald Mindiak, President & CEO, or Thomas Coughlin, COO 201-823-0700.

Forward-looking Statements and Associated Risk Factors

This release, like many written and oral communications presented by BCB Bancorp, Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions.

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 words "anticipate,” "believe,” "estimate,” "expect,” "intend,” "plan,” "project,” "seek,” "strive,” "try,” or future or conditional verbs such as "could,” "may,” "should,” "will,” "would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.

There are a number of factors, many of which are beyond our control, that could cause actual conditions, events, or results to differ significantly from those described in our forward-looking statements. These factors include, but are not limited to: general economic conditions and trends, either nationally or in some or all of the areas in which we and our customers conduct our respective businesses; conditions in the securities markets or the banking industry; changes in interest rates, which may affect our net income, prepayment penalties and other future cash flows, or the market value of our assets; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services in the markets we serve; changes in the financial or operating performance of our customers’ businesses; changes in real estate values, which could impact the quality of the assets securing the loans in our portfolio; changes in the quality or composition of our loan or investment portfolios; changes in competitive pressures among financial institutions or from non-financial institutions; changes in our customer base; potential exposure to unknown or contingent liabilities of companies targeted for acquisition; our ability to retain key members of management; our timely development of new lines of business and competitive products or services in a changing environment, and the acceptance of such products or services by our customers; any interruption or breach of security resulting in failures or disruptions in customer account management, general ledger, deposit, loan or other systems; any interruption in customer service due to circumstances beyond our control; the outcome of pending or threatened litigation, or of other matters before regulatory agencies, or of matters resulting from regulatory exams, whether currently existing or commencing in the future; environmental conditions that exist or may exist on properties owned by, leased by, or mortgaged to the Company; changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; changes in legislation, regulation, and policies, including, but not limited to, those pertaining to banking, securities, tax, environmental protection, and insurance, and the ability to comply with such changes in a timely manner; changes in accounting principles, policies, practices, or guidelines; operational issues stemming from, and/or capital spending necessitated by, the potential need to adapt to industry changes in information technology systems, on which we are highly dependent; the ability to keep pace with, and implement on a timely basis, technological changes; changes in the monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board; war or terrorist activities; and other economic, competitive, governmental, regulatory, and geopolitical factors affecting our operations, pricing and services.

It also should be noted that the Company occasionally evaluates opportunities to expand through acquisition and may conduct due diligence activities in connection with such opportunities. As a result, acquisition discussions and, in some cases, negotiations, may take place in the future, and acquisitions involving cash, debt, or equity securities may occur. Furthermore, the timing and occurrence or non-occurrence of these events may be subject to circumstances beyond the Company’s control.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Except as required by applicable law or regulation, the Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.