Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x
Annual Report Pursuant To Section 13 or 15(d) Of The Securities Exchange Act of 1934
For the fiscal year ended December 31, 2024.
Or
o
Transition Report Pursuant To Section 13 or 15(d) Of The Securities Exchange Act of 1934
For the transition period from ______________ to ______________.
Commission file number: 000-50275
BCB BANCORP, INC.
(Exact name of registrant as specified in its charter)
New Jersey
26-0065262
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
104-110 Avenue C, Bayonne, New Jersey
07002
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: 1-(800)-680-6872
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Stock, no par value
The NASDAQ Stock Market, LLC
Trading Symbol
BCBP
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
YES o NO x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
YES o NO x
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES x NO o
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that
the Registrant was required to submit such files).
YES x NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,”
“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
Large accelerated filer o
Accelerated filer x
Non-accelerated filer o
Smaller reporting company o Emerging Growth company o
If any emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section
13(a) of the Exchange Act o
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act
(15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial
statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of registrant’s executive officers during the relevant recovery
period pursuant to §240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO x
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, computed by reference to the last sale price on June 30, 2024, as reported by the Nasdaq Global Market, was
approximately $158.2 million.
As of March 1, 2025, there were 17,162,627 shares of the Registrant’s Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE:
(1) Proxy Statement for the 2024 Annual Meeting of Stockholders of the Registrant (Part III)
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Table of Contents
TABLE OF CONTENTS
Item
Page
Number
ITEM 1.
BUSINESS
1
ITEM 1A.
RISK FACTORS
15
ITEM 1B.
UNRESOLVED STAFF COMMENTS
21
ITEM 1C.
CYBERSECURITY
21
ITEM 2.
PROPERTIES
23
ITEM 3.
LEGAL PROCEEDINGS
24
ITEM 4.
MINE SAFETY DISCLOSURES
24
ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
24
ITEM 6.
[RESERVED]
26
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
26
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
31
ITEM 8.
FINANICAL STATEMENTS AND SUPPLEMENTARY DATA
32
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
75
ITEM 9A.
CONTROLS AND PROCEDURES
75
ITEM 9B.
OTHER INFORMATION
75
ITEM 9C
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
75
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
76
ITEM 11.
EXECUTIVE COMPENSATION
76
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
76
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
76
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
76
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
77
ITEM 16.
FORM 10-K SUMMARY
78
ITEM 17.
SIGNATURES
79
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Table of Contents
PART I
ITEM 1. BUSINESS
BCB Bancorp, Inc.
BCB Bancorp, Inc. (individually referred to herein as the “Parent Company” and together with its subsidiaries, collectively referred to herein as the “Company”) is a New Jersey corporation established
in 2003 and is the holding company parent of BCB Community Bank (the “Bank”). The Company has not engaged in any significant business activity other than owning all of the outstanding common
stock of BCB Community Bank. Our executive office is located at 104-110 Avenue C, Bayonne, New Jersey 07002. Our telephone number is 1-(800)-680-6872 and our website is www.bcb.bank.
Information on our website is not incorporated into this Annual Report on Form 10-K. At December 31, 2024 we had $3.599 billion in consolidated assets, $2.751 billion in deposits and $323.9 million
in consolidated stockholders’ equity. The Parent Company is subject to extensive regulation by the Board of Governors of the Federal Reserve System.
BCB Community Bank
The Bank opened for business on November 1, 2000, as Bayonne Community Bank, a New Jersey chartered commercial bank. The Bank changed its name from Bayonne Community Bank to BCB
Community Bank in April 2007. At December 31, 2024, the Bank operated at twenty-three branches 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, as well as three branches in Staten Island and one in Hicksville, New York,
through executive offices located at 104-110 Avenue C, and an administrative office located at 591-595 Avenue C, Bayonne, New Jersey 07002. The Bank’s deposit accounts are insured by the Federal
Deposit Insurance Corporation (the “FDIC”) and the Bank is a member of the Federal Home Loan Bank (“FHLB”) System.
We are a community-oriented financial institution. Our business is to offer FDIC-insured deposit products and to invest funds held in deposit accounts at the Bank, together with funds generated from
operations, in loans and investment securities. We offer our customers:
loans, including commercial and multi-family real estate loans, one-to-four family mortgage loans, commercial business loans, construction loans, home equity loans, and consumer
loans. In recent years the primary growth in our loan portfolio has been in loans secured by commercial real estate and multi-family properties;
FDIC-insured deposit products, including savings and club accounts, interest and non-interest-bearing demand accounts, money market accounts, certificates of deposit, and
individual retirement accounts; and,
retail and commercial banking services including wire transfers, money orders, safe deposit boxes, night depository, debit cards, online banking, mobile banking, fraud detection
(positive pay), and automated teller services.
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Recent Events
On December 31, 2024, the Company completed a private placement of 497 shares of Series K 6.0% Noncumulative Perpetual Stock, par value $0.01 per share (the “Series J Preferred Stock”),
resulting in gross proceeds of $4,970,000.
On November 30, 2024, the Company redeemed 1,001 outstanding shares of its Series I 3.0% Noncumulative Perpetual Preferred Stock, at their face value of $10,000 per share, for a total redemption
amount of $10,010,000.
On November 1, 2024, the Company redeemed all of its issued and outstanding 5.625% Fixed-to-Floating Rate Subordinated Notes due 2028, which had an aggregate principal amount of $24.1
million as of such date, plus accrued and unpaid interest thereon.
Business Strategy
Our business strategy is to operate as a well-capitalized, profitable, and independent community-oriented financial institution dedicated to providing the highest quality customer service. Management’s
and the Board of Directors’ extensive knowledge of the markets we serve helps to differentiate us from our competitors. Our business strategy incorporates the following elements: maintaining a
community focus, focusing on profitability, strengthening our balance sheet, emphasizing real estate- based lending, capitalizing on market dynamics, providing attentive and personalized service, and
attracting highly qualified and experienced personnel. These attributes coupled with our desire to seek out under-served markets for banking products and services, facilitate the growth of our franchise
footprint organically and synergistically.
Maintaining a community focus. Our management and Board of Directors have strong ties to the communities we serve. Many members of the management team are New Jersey natives and are active
in the communities we serve through non-profit board membership, local business development organizations, and industry associations. In addition, our board members are well-established
professionals and business leaders in the communities we serve. Management and the Board are interested in making a lasting contribution to these communities, and they have succeeded in attracting
deposits and loans through attentive and personalized service.
Focusing on profitability. Management is focused on optimizing profitability while also meeting the needs of businesses and individuals in its community. The persistently high interest rate
environment and competition for liquidity have negatively impacted margins for our industry. Management continues to prudently manage its balance sheet to protect its spread income in a challenging
operating environment. Additionally, Management continues to be committed to managing and controlling our non-interest expenses to improve our efficiency ratio.
Strengthening our balance sheet. Management has slowed its balance sheet growth to strengthen its liquidity and capital position. Management is focused on reducing reliance on wholesale borrowing
that is expensive and not core to the Bank’s operating philosophy. Additionally, slower balance sheet growth combined with profitability are expected to continue to enhance the Company’s capital
position. Management remains committed to strengthening the Company’s statements of financial condition and maintaining profitability by diversifying the products, pricing, and services we offer.
Additionally, the Company is very committed to improving our asset quality as the industry continues to face challenges from an uncertain macroeconomic environment.
Emphasizing real estate-based lending. A primary focus of our business strategy is to originate loans secured by commercial and multi-family properties. Such loans generally provide higher returns
than loans secured by one-to-four family properties. As a result of our underwriting practices, including debt service requirements for commercial real estate and multi-family loans, management
believes that such loans offer us an opportunity to obtain higher returns without a significant increased level of risk.
Capitalizing on market dynamics. The consolidation of the banking industry in northeast New Jersey has provided a unique opportunity for a customer-focused banking institution, such as our Bank.
We believe our local roots and community focus provide the Bank with an opportunity to capitalize on the consolidation in our market area. This consolidation has moved decision making away from
local, community-based banks to much larger banks headquartered outside of New Jersey. We believe our local roots and community focus provide the Bank with an opportunity to capitalize on the
consolidation in our market area.
Providing attentive and personalized service. Management believes that providing attentive and personalized service is the key to gaining deposit and loan relationships in the markets we serve and
their surrounding communities.
Attracting highly experienced and qualified personnel. An important part of our strategy is to hire bankers who have prior experience in the markets we serve, as well as pre-existing business
relationships. Our management team averages over decades of banking experience, while our lenders and branch personnel have significant experience at community banks and regional banks
throughout the region. Management believes that its knowledge of these markets has been a critical element in the success of the Bank. Management’s extensive knowledge of the local communities
has allowed us to develop and implement a highly focused and disciplined approach to lending, and has enabled the Bank to attract a high percentage of low-cost deposits.
Our Market Area
We are located in Bayonne, Jersey City and Hoboken in Hudson County, Edison, Monroe Township, Plainsboro and Woodbridge in Middlesex County, Lyndhurst, River Edge, and Rutherford in
Bergen County, Fairfield, Maplewood, Newark, and South Orange in Essex County, Holmdel in Monmouth County, Parsippany in Morris County, and Union in Union County, New Jersey. The Bank
also operates two branches in Staten Island, New York and one in Hicksville, New York. The Bank’s locations are easily accessible and provide convenient services to businesses and individuals
throughout our market area. These areas are all considered “bedroom” or “commuter” communities to Manhattan. Our market area is well-served by a network of arterial roadways, including Route
440 and the New Jersey Turnpike.
Our market area has a high level of commercial business activity. Businesses are concentrated in the service sector and retail trade areas. Major employers in our market area include certain medical
centers, municipalities, and school districts.
Competition
The banking industry in northeast New Jersey and New York City is extremely competitive. We compete for deposits and loans with existing New Jersey and out-of-state financial institutions that have
longer operating histories, larger capital reserves, and more established customer bases. Our competition includes large financial services companies and other entities, in addition to traditional banking
institutions, such as savings and loan associations, savings banks, commercial banks and credit unions. Our larger competitors have a greater ability to finance wide-ranging advertising campaigns
through greater capital resources. Our marketing efforts depend heavily upon referrals from officers, directors, stockholders, advertising in local media, and through a social media presence. We
compete for business principally on the basis of personal service to customers, customer access to our business development officers, loan officers, executive officers and directors, and competitive
interest rates and fees. We compete for loans primarily on the basis of value and service by building customer relationships through addressing our customers’ entire suite of banking needs,
demonstrating expertise, and providing convenience. We also consider the competitive pricing levels in each of our markets. We compete for deposits similarly on the basis of value and service and by
providing convenience through a banking network of branches and ATMs within our markets and our website at.www.bcb.bank.
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In the financial services industry in recent years, intense market demands, technological and regulatory changes, and economic pressures have eroded industry classifications that were once clearly
defined. Banks have diversified their services, competitively priced their deposit products and become more cost-effective as a result of competition with each other and with new types of financial
service companies, including non-banking competitors. Some of these market dynamics have resulted in a number of new bank and non-bank competitors, increased merger activity, and increased
customer awareness of product and service differences among competitors. FinTechs continue to emerge in key areas of banking. In addition, larger established technology platform companies continue
to evaluate, and in some cases, create businesses focused on banking products. We closely monitor activity in the marketplace to ensure that our products and services are technologically
competitive. Our overall strategy involves seeking to identify partnership and possible investment opportunities in technology-driven companies that can augment our distribution and product
capabilities.
Lending Activities
Loan Maturities. The following table sets forth the contractual maturity of our loan portfolio at December 31, 2024. The amount shown represents outstanding principal balances. Demand loans, loans
having no stated schedule of repayments and no stated maturity and overdrafts are reported as being due in one year or less. The table does not include prepayments or scheduled principal repayments.
Due within 1
Year
Due after 1
through 5
Years
After 5 Years
through 15
Years
After 15 Years
Total
(In Thousands)
Residential One-to-four family
$
40
$
9,381
$
24,125
$
206,324
$
239,870
Construction
130,551
-
-
4,883
135,434
Commercial business
112,385
64,648
64,074
8,745
249,852
Business express
29,848
247
62,852
-
92,947
Commercial and multi-family
168,532
550,778
379,294
1,148,073
2,246,677
Home equity (1)
518
2,003
11,173
53,075
66,769
Consumer
213
1,540
482
-
2,235
Total amount due
$
442,087
$
628,597
$
542,000
$
1,421,100
$
3,033,784
(1) Includes home equity lines of credit.
Loans with Fixed or Floating or Adjustable Rates of Interest. The following table sets forth the dollar amount of all loans at December 31, 2024 that are due after December 31, 2025, and have fixed
interest rates or that have floating or adjustable interest rates.
Fixed Rates
Floating or
Adjustable
Rates
Total
(In Thousands)
Residential One-to-four family
$
145,580
$
94,250
$
239,830
Construction
-
4,883
4,883
Commercial business
48,173
89,294
137,467
Business express
62,852
247
63,099
Commercial and multi-family
332,346
1,745,799
2,078,145
Home equity (1)
12,329
53,922
66,251
Consumer
1,432
590
2,022
Total amount due
$
602,712
$
1,988,985
$
2,591,697
(1) Includes home equity lines of credit.
Commercial and Multi-family Real Estate Loans. Commercial real estate loans are secured by improved property such as office buildings, mixed use buildings, retail stores, shopping centers,
warehouses, and other non-residential buildings. Loans secured by multi-family properties contain five or more residential units. Generally, the Bank offers fully amortizing loans on both property
types at loan amounts up to 75 percent of the appraised value of the property. Both commercial and multi-family real estate loans are generally made at rates that adjust above the Federal Home Loan
Bank of New York interest rate, with terms of up to 30 years. In addition, the Bank offers balloon loans with fixed interest rates which generally mature in three to five years with amortization periods
up to 30 years. The Bank’s owner-occupied loans represented 22% of total Commercial and multi-family loans as of December 31, 2024, and the Bank’s multi-family portfolio represented 23% of the
total Commercial and multi-family real estate loans. The rent controlled portion comprised 5% of total multi-family loans. The Bank’s multi-family loan portfolio had average LTVs of 55%. As of
December 31, 2024, the Bank’s largest commercial real estate loan had an outstanding principal balance of $42.5 million. The borrower is a well-known private university, and the loan is secured by
various properties which are associated with university functions. This loan is performing in accordance with its terms at December 31, 2024.
Loans secured by commercial and multi-family real estate are generally larger and involve a greater degree of risk than one-to-four family residential mortgage loans. The borrower’s creditworthiness,
as well as the property’s continued viability and cash flow potential are of primary concern in commercial and multi-family real estate lending. Commercial loans secured by owner occupied properties
involve different risks when measured against one-to-four family residential and non-owner-occupied commercial mortgage loans. Cash flow on owner occupied properties is often dependent on the
success of the business operation contained within the subject property. The Bank intends to continue the origination of loans secured by commercial real estate and multi-family properties.
Construction Loans. The Bank offers loans to finance the construction of various types of commercial and residential properties. Generally, construction loans are offered with terms of up to thirty
months, with adjustable interest rates tied to a margin above Prime Rate. Customarily, the Bank originates loans on projects which have all necessary permits in place to the Bank’s satisfaction.
Construction loan funds are disbursed as the project progresses. The Bank also offers construction loans that convert to a permanent mortgage on the property upon completion of the project, provided
compliance with conditions set forth at loan approval. Terms of such permanent mortgage loans are similar to other mortgage loans secured by similar properties, with the interest rate established at the
time of conversion. As of December 31, 2024, the Bank’s largest construction loan has a borrowing capacity of $19.4 million, of which $5.3 million has not been disbursed. The loan is recourse to a
well-capitalized borrower, with proceeds used to construct a multifamily development in northern New Jersey. This loan is performing in accordance with its terms at December 31, 2024.
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Construction financing is generally considered a higher risk lending product. To mitigate risks, the Bank will, among other things, obtain a plan and cost review from a third-party vendor, which
reviews the borrowers proposed construction budget for appropriateness. The Bank will also obtain an appraisal report which provides values based on various possible project results. These reports
generally include value scenarios such as “As Is,” “As Completed,” “As a Rental,” “As Sellout,” and “As a Bulk Sale.”
Commercial Business Loans. The Bank offers a variety of commercial business loans in the form of either lines of credit or fully amortizing term loans. Lines of credit (LOCs) are typically utilized for
working capital purposes. LOCs are either revolving or non-revolving and provide loan terms between one and three years. LOC repayment is generally interest only with adjustable interest rates tied
to a margin above Prime Rate. Term loans are typically utilized for the purchase of a business or equipment for a business and carry fully amortizing terms up to seven years. Term loan interest rates
may be fixed or adjustable and tied to a margin above the Federal Home Loan Bank of New York rate. Commercial business loans are underwritten based upon the borrower’s ability to service such
debt from income. These loans are generally made to small and mid-sized companies located within the Bank’s primary and secondary lending areas. Depending on the circumstances, a commercial
business loan may be secured by equipment, accounts receivable, inventory, chattel, or other assets. As of December 31, 2024, the Bank’s largest commercial business loan has an outstanding balance
of $22.5 million and is collateralized by 2nd mortgages on various franchises. This loan is performing in accordance with its terms at December 31, 2024.
Commercial business loans generally have higher rates and shorter terms than one-to-four family residential loans but may also involve higher average balances and a higher risk of default, as their
repayment generally depends on the success of the borrower’s business. The Bank has further segregated its commercial business portfolio into commercial business express loans that carry higher risk
relative to other commercial business loans. The Bank had originated commercial business express loans to support small business owners coming out of the COVID crisis. The portfolio consists of a
large number of loans with majority of the loans carrying a balance of $250,000 or lower. The portfolio is relatively new and has not run through its interest-only maturity cycle yet. As business express
loans mature, management is offering longer extension terms to its customers with pricing reflective of the current higher rate environment compared to when these loans were originated in the past.
Management is also following a very strict loan loss reserving and charge-off policy for these loans where the business express loans, as a rule, are given a specific reserve at the 60-days delinquent
mark and charged-off once the loans hit 90-days delinquent status. In some circumstances, based on discussions with the customers and review of their financial situation, management may offer
alternative terms. On December 31, 2024, the size of the business express loans portfolio was $92.9 million and the total loan loss reserves for the portfolio totaled $7.8 million. The significantly higher
level of loan loss reserves established for business express loans reflect the higher losses experienced in the portfolio during 2024 that has informed management’s view on the remaining lifetime losses
in the portfolio. The business express loans are expected to cycle through their interest-only maturity profile by the end of the second quarter of 2025. Management continues to gather more empirical
data to refine its estimate of the lifetime losses in the business express loans portfolio and believes the level of loan loss reserves established on December 31, 2024, reflect the current view on the
remaining losses left in the portfolio based on available information at that time. The Bank discontinued the origination of business express loans during 2023 and no longer offers this product to its
customers.
SBA Lending. The Bank offers qualifying business loans guaranteed by the U.S. Small Business Administration (“SBA”). Amongst other characteristics, SBA borrowers are often sound businesses, but
may have a smaller amount of equity funds to invest in their businesses, may be at an emergent stage of business development, or have other characteristics that may make them ineligible for
conventional bank loans. There is a well-developed market for the sale of the guaranteed portion of SBA 7(a) loans. As of December 31, 2024, the Bank’s largest SBA loan has an outstanding balance
of $4.9 million and is secured by a gym located in Marlboro, NJ. This loan is performing in accordance with its terms at December 31, 2024.
Residential Lending. Residential loans are secured by one-to-four family dwellings, condominiums and cooperative units. Residential mortgage loans are secured by properties located in our primary
lending areas of Bergen, Essex, Middlesex, Hudson, Monmouth and Richmond Counties; adjoining counties are considered as our secondary lending areas. Generally, we originate residential mortgage
loans up to 80 percent loan-to-value at a maximum loan amount of $2.5 million and 75 percent loan-to-value at a maximum loan amount of $5.0 million for primary residences. The loan-to-value ratio
is based on the lesser of the appraised value or the purchase price without the requirement of private mortgage insurance. We will originate loans with loan-to-value ratios up to 90 percent, provided the
borrower obtains private mortgage insurance approval. We originate both fixed and adjustable rate residential loans with a term of up to 30 years. We offer 15, 20, and 30 year fixed, 15/30-year balloon
and 3/1, 5/1, 7/1 and 10/1 adjustable rate loans with payments being calculated to include principal, interest, taxes and insurance. The 3/1 and 5/1 adjustable rate loans are qualified at 2.0 percent above
the start rate; all other loans are qualified at the start rate. We have a number of correspondent relationships with third party lenders in which we deliver closed first mortgage loans. Our correspondent
banking relationships allow us to offer customers competitive long-term fixed and adjustable rate loans we could not otherwise originate, while providing the Bank a source of fee income. During 2024,
loans totaling approximately $6.2 million were sold in the secondary market and gains of approximately $89,000 were recognized from the sale of such loans.
Home Equity Loans and Home Equity Lines of Credit. The Bank offers home equity loans and lines of credit that are secured by either the borrower’s primary residence, a secondary residence, or an
investment property. Our home equity loans can be structured as loans that are disbursed in full at closing or as lines of credit. Home equity lines of credit are offered with terms up to 20 years.
Virtually all of our home equity loans are originated with fixed rates of interest and home equity lines of credit are originated with adjustable interest rates tied to the prime rate. Home equity loans and
lines of credit are underwritten utilizing the same criteria used to underwrite one-to-four family residential loans. Home equity lines of credit may be underwritten with a loan-to-value ratio of up to 80
percent in a first lien position. At December 31, 2024, the outstanding and committed balances of home equity loans and lines of credit totaled $66.8 million and $38.8 million, respectively.
Consumer Loans. The Bank makes secured passbook, automobile and, on occasion, unsecured consumer loans. Consumer loans generally have terms between one and five years. They generally are
made on a fixed rate basis, fully-amortizing.
Loan Approval Authority and Underwriting. The Bank’s Lending Policy has established lending limits for executive management. Two senior officers have the authority to approve loan requests up to
$2.0 million (Level 1). Two executive officers (CLO or COO and CCO or CEO) have authority to approve loan requests up to $20.0 million (Level 2). For loan requests greater than $20.0 million, or
with certain policy exceptions, Level 3 authorization is required. Level 3 requires Level 2 signatures plus a majority of the Bank’s Loan Committee Members. Loans approved by the Loan Committee
shall be presented to the Board of Directors for ratification in a timely manner.
The Bank will customarily begin its underwriting analysis of a loan request upon receipt of a completed loan application, and all appropriate financial information from a prospective borrower.
Property valuations or appraisals are required for all real estate collateralized loans above $500,000. Appraisals are prepared by a state certified independent appraiser approved by the Bank Board of
Directors.
Loan Commitments. Written commitments are given to prospective borrowers on all approved loans. Generally, we honor commitments for up to 60 days from the date of issuance. At December 31,
2024, our outstanding loan origination commitments totaled $1.5 million, standby letters of credit totaled $2.5 million, undisbursed construction funds totaled $16.7 million, and undisbursed lines of
credit funds totaled $173.2 million.
Loan Delinquencies. Notices of nonpayment are generated to borrowers once the loan account(s) becomes either 10 or 15 days past due, as specified in the applicable promissory note. A nonresponsive
borrower will receive collection calls and a site visit from a bank representative in addition to follow-up delinquency notices. If such payment is not received after 60 days, a notice of right to cure
default is sent to the borrower providing 30 additional days to bring the loan current before foreclosure or other remedies are commenced. The Bank utilizes various reporting tools to closely monitor
the performance and asset quality of the loan portfolio. The Bank complies with all federal, state and local laws regarding collection of its delinquent accounts.
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Nonaccrual Status. Loans are placed on a nonaccrual status when the loan becomes more than 90 days delinquent or when, in our opinion, the collection of payment is doubtful. Once placed on
nonaccrual status, the accrual of interest income is discontinued until the loan has been returned to accrual status. At December 31, 2024, the Bank had $44.7 million in non-accruing loans. The largest
exposure of non-performing loans was a commercial real estate loan with an outstanding principal balance of approximately $16.5 million fully collateralized by a mixed-use office and retail building
in New York.
As of December 31, 2024, nonaccrual loans differed from the amount of total loans past due greater than 90 days due to loans that were previously 90 days past due which are maintained on nonaccrual
status for a minimum of six months until the borrower has demonstrated their ability to satisfy the terms of the loan.
Troubled Debt Restructuring. The Company adopted Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage
Disclosures (“ASU 2022-02”) effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measurement of troubled debt restructurings and enhanced disclosures for
loan modifications to borrowers experiencing financial difficulty. The Company had $79.8 million in loans that were both experiencing financial difficulty and modified during the twelve months
ending December 31, 2024.
Criticized and Classified Loans. The Bank’s Lending Policy contains an internal rating system which evaluates the overall risk of a problem loan. When a loan is classified and determined to be
impaired, the Bank may establish specific allowances for credit losses. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending
activities, but which, unlike specific allowances, have not been allocated to particular problem assets. A portion of general loss allowances established to cover possible losses related to assets classified
as substandard or doubtful may be included in determining our regulatory capital. Specific valuation allowances for credit losses generally do not qualify as regulatory capital. At December 31, 2024,
the Bank reported $152.7 million in classified assets.
The Company’s internal credit risk grades are based on the definitions currently utilized by the banking regulatory agencies. The grades assigned and definitions are as follows, and loans graded
excellent, above average, good and watch list (risk ratings 1-5) are treated as “pass” for grading purposes. The “criticized” risk rating (6) and the “classified” risk ratings (7-9) are detailed below:
6 – Special Mention- Loans currently performing but with potential weaknesses including adverse trends in borrower’s operations, credit quality, financial strength, or possible collateral deficiency.
7 – Substandard- Loans that are inadequately protected by current sound worth, paying capacity, and collateral support. Loans on “nonaccrual” status. The loan needs special and corrective attention.
8 – Doubtful- Weaknesses in credit quality and collateral support make full collection improbable, but pending reasonable factors remain sufficient to defer the loss status.
9 – Loss- Continuance as a bankable asset is not warranted. However, this does not preclude future attempts of recovery.
The grades are determined through the use of qualitative and quantitative matrices that consider various characteristics of the loan such as payment performance, quality of management,
principals’/guarantors’ character, balance sheet strength, collateral quality, cash flow coverage, position within the industry, loan structure and documentation.
Allowance for Credit Losses. The allowance for credit losses represents the estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the balance
sheet date. The measurement of expected credit losses is applicable to loans receivable and securities measured at amortized cost. It also applies to off-balance sheet credit exposures such as loan
commitments and unused lines of credit. The allowance is established through a provision for credit losses that is charged against income. The methodology for determining the allowance for credit
losses is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the
forecasted economic environment that could result in changes to the amount of the recorded allowance for credit losses. The allowance for credit losses is reported separately as a contra-asset on the
consolidated statements of financial condition. The expected credit loss for unfunded lending commitments and unfunded loan commitments is reported on the consolidated statements of financial
condition in other liabilities while the provision for credit losses related to unfunded commitments is reported in other non-interest expense.
Allowance for Credit Losses on Loans Receivable. The allowance for credit losses on loans is deducted from the amortized cost basis of the loan to present the net amount expected to be collected.
Expected losses are evaluated and calculated on a collective, or pooled, basis for those loans which share similar risk characteristics. If the loan does not share risk characteristics with other loans, the
Company will evaluate the loan on an individual basis. Individually evaluated loans are primarily nonaccrual and collateral dependent loans. Furthermore, the Company evaluates the pooling
methodology at least annually to ensure that loans with similar risk characteristics are pooled appropriately. Loans are charged off against the allowance for credit losses when the Company believes the
balances to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off.
The Company has chosen to segment its portfolio consistent with the manner in which it manages credit risk. The Company calculates estimated credit losses for these loan segments using quantitative
models and qualitative factors. Further information on loan segmentation and the credit loss estimation is included in Note 7 – Loan Receivables and Allowance for Credit Losses.
Individually Evaluated Loans. On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics. When the Company
determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash
flows or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost
basis of the loan, the Company will charge off the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan.
Allowance for Credit Losses on Off-Balance Sheet Commitments. The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance
calculation, other than those that are unconditionally cancelable. To arrive at that reserve, the Company relies on a third-party econometric model that calculates current utilization rates and projected
utilization rates for different loan segments. The model then develops projections for future draws on the lines and forecasts losses to estimate reserves for each loan segment. The allowance for credit
losses on unfunded loan commitments is included in other liabilities on the consolidated statements of financial condition and the related credit expense is recorded in other non-interest expense in the
consolidated statements of income.
5
Table of Contents
Allowance for Credit Losses on Available for Sale Securities. For available for sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more than likely
than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is
written down to fair value through income. For securities available for sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or
other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost and adverse conditions related to the security, among other factors. If this
assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of
the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value
is less than the amortized cost. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of tax. The Company elected the
practical expedient of zero loss estimates for securities issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are
highly rate by major agencies and have a long history of no credit losses.
Changes in the allowance for credit losses are recorded as provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of
an available for sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
Accrued Interest Receivable. The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans and available for sale securities. Accrued
interest receivable on loans and securities is reported as a component of accrued interest receivable on the consolidated statements of financial condition.
Allocation of the Allowance for Credit losses. The following table illustrates the allocation of the allowance for credit losses for each category of loan. The allocation of the allowance to each category
is not necessarily indicative of future loss in any particular category and does not restrict our use of the allowance to absorb losses in other loan categories.
December 31,
2024
2023
2022
Amount
Percent of
Loans in each
Category to
Total Loans
Amount
Percent of
Loans in each
Category to
Total Loans
Amount
Percent of
Loans in each
Category to
Total Loans
(Dollars in Thousands)
Residential one-to-four family
$
1,947
7.91%
$
2,344
7.48 %
$
2,474
8.11%
Commercial and multi-family
11,706
74.06
16,301
73.38
21,749
76.08
Construction
2,020
4.46
3,841
5.81
2,094
4.70
Commercial business
10,737
8.24
5,811
8.12
4,495
9.03
Business express
7,769
3.06
4,542
3.10
872
0.12
Home equity (1)
594
2.20
691
2.00
485
1.85
Consumer
16
0.07
78
0.11
24
0.11
Unallocated
-
-
-
-
180
-
Total
$
34,789
100.00%
$
33,608
100.00%
$
32,373
100.00%
(1) Includes home equity lines of credit.
6
Table of Contents
The following table presents, for the years indicated, an analysis of the allowance for credit losses and other related data.
Years Ended December 31,
2024
2023
2022
Allowance for credit losses to total loans outstanding
1.15%
1.01 %
1.05 %
Allowance for credit losses
$
34,789
$
33,608
$
32,373
Total loans outstanding, net of deferred loan fees
$
3,031,048
$
3,313,316
$
3,077,704
Nonaccrual loans to total loans outstanding
1.48%
0.57 %
0.17 %
Nonaccrual loans
$
44,708
$
18,783
$
5,109
Total loans outstanding, net of deferred loan fees
$
3,031,048
$
3,313,316
$
3,077,704
Allowance for credit losses to nonaccrual loans
77.80%
178.90 %
633.65 %
Allowance for credit losses
$
34,789
$
33,608
$
32,373
Nonaccrual loans
$
44,708
$
18,783
$
5,109
Net charge-offs (recovery) during the period to daily average loans outstanding
Residential one-to-four family
(0.02)%
(0.02)%
0.01 %
Net charge-off (recovery) during the period
(48)
(45)
(23)
Average amount outstanding
$
243,912
$
248,847
$
232,916
Commercial and multi-family
0.02%
-%
-%
Net charge-off (recovery) during the period
531
-
-
Average amount outstanding
$
2,344,981
$
2,445,876
$
1,981,862
Construction
-%
-%
-%
Net charge-off (recovery) during the period
-
-
-
Average amount outstanding
$
168,355
$
162,984
$
147,411
Commercial business
0.53%
(0.01)%
1.07%
Net charge-off (recovery) during the period
1,428
(29)
1,904
Average amount outstanding
$
271,566
$
258,635
$
178,629
Business express
8.07%
0.80%
-%
Net charge-off (recovery) during the period
8,011
794
0
Average amount outstanding
$
99,255
$
99,413
$
30,367
Home equity
-%
(0.03)%
0.02 %
Net charge-off (recovery) during the period
-
(16)
(12)
Average amount outstanding
$
66,321
$
62,311
$
53,038
Consumer
21.74%
-%
7.96 %
Net charge-off (recovery) during the period
467
0
(198)
Average amount outstanding
$
2,148
$
3,268
$
2,487
Total Loans
0.33%
0.02 %
(0.06)%
Net charge-off (recovery) during the period
10,389
704
1,671
Average amount outstanding
$
3,196,538
$
3,281,334
$
2,626,710
Investment Activities
Investment Securities. We are required, under federal regulations, to maintain a minimum amount of liquid assets that may be invested in specified short-term securities and certain other investments.
The level of liquid assets varies depending upon several factors, including: (i) the yields on investment alternatives, (ii) our judgment as to the attractiveness of the yields then-available in relation to
other opportunities, (iii) expectation of future yield levels, and (iv) our projections as to the short-term demand for funds to be used in loan origination and other activities. Debt securities, including
mortgage-backed securities, are classified at the time of purchase, based upon management’s intentions and abilities, as securities held-to-maturity or securities available-for-sale. Debt securities
acquired with the intent and ability to hold to maturity may be classified as held-to-maturity and stated at cost and adjusted for amortization of premium and accretion of discount, which are computed
using the level yield method and recognized as adjustments of interest income. All other debt securities are classified as available-for-sale to serve principally as a source of liquidity.
As of December 31, 2024, there were no securities classified as held-to-maturity or trading. We had $101.7 million in securities classified as available for sale and $9.5 million in equity investments.
Securities classified as available for sale were reported for financial reporting purposes at the fair value with net changes in the fair value from period to period included as a separate component of
stockholders’ equity, net of income taxes. Changes in the fair value of debt securities classified as held-to-maturity or available-for-sale do not affect our income, unless we determine there to be an
other-than-temporary impairment for those securities in an unrealized loss position. As of December 31, 2024, management concluded that all unrealized losses were temporary in nature since they
were related to interest rate fluctuations rather than any underlying credit quality of the issuers.
As of December 31, 2024, our investment policy allowed investments in instruments such as: (i) U.S. Treasury obligations; (ii) U.S. federal agency or federally sponsored enterprise obligations;
(iii) mortgage-backed securities; (iv) municipal obligations; (v) equity securities (including preferred stock); (vi) certificates of deposit; and (vii) corporate debt (including subordinated debt). The
Board of Directors may authorize additional investments.
To supplement our lending activities, we have invested in residential mortgage-backed securities. Mortgage-backed securities generally yield less than the loans that underlie such securities because of
payment guarantees or credit enhancements that reduce credit risk. Mortgage-backed securities can serve as collateral for borrowings, to insure New Jersey municipal deposits through the
Governmental Unit Deposit Protection Act (“GUDPA”) and, through repayments, as a source of liquidity. Mortgage-backed securities represent a participation interest in a pool of single-family or other
types of mortgages. Principal and interest payments are passed from the mortgage
7
Table of Contents
originators, through intermediaries (generally government-sponsored enterprises) that pool and repackage the participation interests in the form of securities, to investors. The government-sponsored
enterprises guarantee the payment of principal and interest to investors and include Freddie Mac, Ginnie Mae, and Fannie Mae.
Mortgage-backed securities typically are issued with stated principal amounts. The securities are backed by pools of mortgage loans that have interest rates that are within a set range and have varying
maturities. The underlying pool of mortgages can be composed of either fixed rate or adjustable rate mortgage loans. Mortgage-backed securities are generally referred to as mortgage participation
certificates or pass-through certificates. The interest rate risk characteristics of the underlying pool of mortgages (i.e., fixed rate or adjustable rate) and the prepayment risk, are passed on to the
certificate holder. The life of a mortgage-backed pass-through security is equal to the life of the underlying mortgages. Expected maturities will differ from contractual maturities due to scheduled
repayments and because borrowers may have the right to call or prepay obligations with or without prepayment penalties.
Maturities and yields of Securities Portfolio. The following table sets forth information regarding the scheduled maturities, amortized cost, estimated fair values, and weighted average yields for the
Bank’s debt securities portfolio at December 31, 2024 by final contractual maturity. Average yield calculation equals the investments estimated annual income divided by the amortized cost. The
following table does not take into consideration the effects of scheduled repayments, the effects of possible prepayments, or equity investments. Certain securities have interest rates that are adjustable
and will reprice annually within the various maturity ranges. The effect of these repricings are not reflected in the table below.
More than one to five
years
More than five to ten
years
More than ten years
Total investment securities
Amortized
Cost
Average
Yield
Amortized
Cost
Average
Yield
Amortized
Cost
Average
Yield
Fair
Value
Amortized
Cost
Average
Yield
Mortgage-backed securities
$
1,286
2.18
% $
2,395
2.91
% $
45,345
4.04
% $
45,514
$
49,026
3.94
%
Corporate debt securities
37,488
6.30
22,076
4.38
-
-
56,203
59,564
5.59
Total Debt Securities
$
38,774
6.16
% $
24,471
4.24
% $
45,345
4.04
% $
101,717
$
108,590
4.84
%
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Table of Contents
Sources of Funds
Our major external source of funds for lending and other investment purposes is deposits. Funds are also derived from the receipt of payments on loans, prepayment of loans, maturities of investment
securities and mortgage-backed securities and borrowings. Scheduled loan principal repayments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are
significantly influenced by general interest rates and market conditions.
Deposits. Consumer and commercial deposits are attracted principally from within our primary market area through the offering of a selection of deposit instruments including demand, NOW, savings
and club accounts, money market accounts, and term certificate accounts. Deposit account terms vary according to the minimum balance required, the time period the funds must remain on deposit, and
the interest rate.
The interest rates paid by us on deposits are set at the direction of our senior management. Interest rates are determined based on our liquidity requirements, interest rates paid by our competitors, our
growth goals, and applicable regulatory restrictions and requirements. As of December 31, 2024, we had $177.6 million in brokered certificate deposits. Reciprocal deposits are not considered brokered
deposits under applicable regulations.
Deposit Accounts. The following table sets forth the dollar amount of deposits in the various types of deposit programs we offered as of the dates indicated.
December 31,
2024
2023
2022
Weighted
Average Rate(1)
Amount
Weighted
Average Rate(1)
Amount
Weighted
Average Rate(1)
Amount
(Dollars in Thousands)
Non-interest bearing accounts
-%
$
520,387
-%
$
536,264
-%
$
613,910
Interest bearing checking
1.75
553,731
1.28
564,912
0.40
757,615
Savings and club accounts
0.23
252,491
0.20
284,273
0.13
329,752
Money market
3.35
395,004
2.54
370,934
0.66
305,556
Certificates of deposit
4.81
1,029,245
3.99
1,222,697
1.12
804,774
Total
3.34%
$
2,750,858
2.49%
$
2,979,080
0.61%
$
2,811,607
__________
(1) Represents annual interest expense divided by daily average balance.
The following table sets forth our deposit flows during the years indicated.
Years Ended December 31,
2024
2023
2022
(Dollars in Thousands)
Beginning of year
$
2,979,080
$
2,811,607
$
2,561,402
Net change in deposits
(307,771)
113,286
238,502
Interest credited on deposit accounts
79,549
54,187
11,703
Total (decrease) increase in deposit accounts
(228,222)
167,473
250,205
Ending balance
$
2,750,858
$
2,979,080
$
2,811,607
Percent (decrease) increase
(7.66)%
5.96%
9.77%
Uninsured Deposits. The following table indicates the amount of uninsured deposits and the portion of uninsured time deposits in excess of FDIC insurance limits by time remaining until maturity.
For the Year Ended December 31,
2024
2023
2022
(Dollars in thousands)
Uninsured deposits
$
1,161,219 $
1,111,756 $
1,087,703
Uninsured U.S. time deposits with
a maturity of:
3 months or less
$
68,325 $
97,312 $
35,089
Over 3 months through 6 months
128,968
35,657
26,826
Over 6 months through 12 months
84,465
99,638
67,584
Over 12 months
8,968
5,611
8,705
Total
$
290,726 $
238,218 $
138,204
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Table of Contents
The following table presents, by rate category, our certificate of deposit accounts as of the dates indicated.
At December 31,
2024
2023
2022
Amount
Percent
Amount
Percent
Amount
Percent
(Dollars in Thousands)
Certificate of deposit rates:
0.00% - 0.99%
$
62,693
6.09%
$
89,455
7.32%
$
219,120
27.23%
1.00% - 1.99%
651
0.06
5,471
0.45
45,228
5.62
2.00% - 2.99%
2,975
0.29
17,686
1.45
89,872
11.17
3.00% - 3.99%
90,222
8.77
68,877
5.63
206,496
25.66
4.00% - 4.99%
518,534
50.38
177,750
14.54
226,734
28.17
5.00% - 5.99%
354,170
34.41
863,458
70.61
17,324
2.15
Total
$
1,029,245
100.00%
$
1,222,697
100.00%
$
804,774
100.00%
The following table presents, by rate category, the remaining period to maturity of certificate of deposit accounts outstanding as of December 31, 2024.
Maturity Date
1 Year
Over 1
Over 2
Over
or Less
to 2 Years
to 3 Years
3 Years
Total
(In Thousands)
Interest rate:
0.00% - 0.99%
$
54,716
$
4,685
$
1,440
$
1,852
$
62,693
1.00% - 1.99%
646
-
-
5
651
2.00% - 2.99%
1,211
1,066
698
-
2,975
3.00% - 3.99%
73,452
16,094
90
586
90,222
4.00% - 4.99%
518,411
73
-
50
518,534
5.00% - 5.99%
352,588
1,582
-
-
354,170
Total
$
1,001,024
$
23,500
$
2,228
$
2,493
$
1,029,245
Borrowings. The Overnight Advance Program permits the Bank to borrow overnight up to its maximum borrowing capacity at the FHLB. At December 31, 2024, the Bank’s total credit exposure
cannot exceed 50 percent of its total assets, or $1.799 billion, based on the borrowing limitations outlined in the FHLB member products guide. The total credit exposure limit to 50 percent of total
assets is recalculated each quarter. Additionally, at December 31, 2024 we had floating rate junior subordinated debentures of $4.1 million which have been callable at the Bank’s option since June 17,
2009, and quarterly thereafter, and fixed-to-floating rate 10-year subordinated debentures of $40.0 million.
The following table sets forth information concerning balances and interest rates on our overnight borrowings at the dates and for the years indicated.
At or For the Years Ended December 31,
2024
2023
2022
(Dollars in Thousands)
Balance at end of year
$
-
$
-
$
60,000
Average balance during year
$
2
$
804
$
1,313
Maximum outstanding at any month end
$
-
$
65,000
$
87,000
Weighted average interest rate at end of year
-
%
-
%
4.61
%
Average interest rate during year
6.33
%
4.77
%
3.13
%
Subsidiaries
We have three non-bank subsidiaries. BCB Holding Company Investment Corp. was established in 2004 for the purpose of holding and investing in securities. Only securities authorized to be
purchased by BCB Community Bank are held by BCB Holding Company Investment Corp. At December 31, 2024, this company held $111.2 million in securities. As a part of the merger with IAB in
April, 2018, the Company acquired Special Asset REO 1, LLC and Special Asset REO 2, LLC. Special Asset REO 2, LLC was formed to hold Other Real Estate Owned, but did not have any assets at
December 31, 2024. The Bank changed the name of Special Asset REO 1, LLC to BCB Capital Finance Group, LLC in November 2023. It has not conducted any business as of December 31, 2024.
Human Capital
The Company’s long-term growth and success depends on its ability to attract, develop and retain a high-performing and diverse workforce. The Company strives to provide a work environment that
promotes collaboration, productivity, and employee engagement, which in turn drives both employee and customer success, as well as benefits the communities in which the Company does business.
The Company’s Board of Directors and executive team oversee the strategic management of the Company’s human capital resources, and the Company’s Human Resources Department manages the
day-to- day of those resources.
Employee profile
As of December 31, 2024, the Company had 264 full-time employees, 52 part-time employees, and no commissioned employees, for a total of 316 employees. In addition, approximately 63% of the
Company’s employees are female and 37% are male, and the average tenure was 6.2 years as of December 31, 2024.
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Table of Contents
Total Rewards
As part of the Company’s compensation philosophy, market competitive programs are maintained for employees to attract and retain superior talent. In addition to competitive base wages, additional
programs include annual bonus compensation opportunities, a Company-matched 401(k) Plan, health and welfare benefits, flexible spending accounts, paid time off, family leave, and employee
assistance programs. Some employees also receive grants of equity awards in the Company’s stock. In addition, the Company promotes health and wellness by encouraging work-life balance, and
offering flexible work schedules.
Talent and Promoting Diversity
A core tenet of the Company’s talent philosophy is to both develop talent from within and supplement with external hires. Whenever possible, the Company seeks to fill positions by promotion and
transfer from within the organization. The Company’s talent acquisition team uses internal and external resources to recruit highly skilled and talented candidates; employee referrals are also
encouraged.
The Company is dedicated to recruitment and career development practices that support its employees and promotes diversity in its workforce at all levels of the Company. The Company is committed
to having a workforce that reflects the communities in which it serves. Partnerships are in place with several sources to assist in attracting diverse talent from a broad population, including the African
American, Asian American, and Latino chamber of commerce affiliations. In addition, career opportunities are shared with colleges and universities with diverse student bodies. The Company’s
internship program also serves as a pipeline of diverse talent for full time employment. Other available tools are also utilized to connect with prospective new hires. As of December 31, 2024, 51% of
the Company’s employees were persons of color.
Following a multi-pronged recruiting strategy, which includes sourcing diverse candidate pools, new hires participate in an onboarding program which includes an introduction to the Company’s
culture, policies, and procedures. Retention strategies include espousing a culture that inspires loyalty and trust through ongoing communication of strategic initiatives, in addition to the benefits
mentioned above in Total Rewards. The Company’s leadership development programs and opportunities offered through the Company’s continuing education program help ensure that motivated
individuals have the opportunity for continuous improvement. Employees each maintain a professional development action plan and participate in regular evaluation and growth opportunities.
This approach has yielded loyalty and commitment from employees which in turn grows the business, products, and customers. This approach has also added new employees and ideas, which support a
continuous improvement mindset and the goals of a diverse and inclusive workforce.
The Company strives to promote inclusion through defined Company values and behaviors. With the support from the Board of Directors, the Company continues to explore additional diversity, equity,
inclusion, and belonging efforts through multiple approaches to inclusion: candidates, employees, and the marketplace. The Company is focused on sourcing and hiring with fair and equitable
approaches, creating an environment where all employees can develop and thrive.
Supervision and Regulation
Bank holding companies and banks are extensively regulated under both federal and state law. These laws and regulations are primarily intended to protect depositors and the deposit insurance funds,
rather than to protect shareholders and creditors. The description below is limited to certain material aspects of the statutes and regulations addressed and is not intended to be a complete description of
such statutes and regulations and their effects on the Parent Company or the Bank.
Set forth below is a summary of certain material regulatory requirements applicable to the Parent Company and the Bank. These and any other changes in applicable laws or regulations, whether by
Congress or regulatory agencies, may have a material effect on the business and prospects of the Parent Company and the Bank.
The Dodd-Frank Act
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) significantly changed bank regulation and has affected the lending, investment, trading, and operating
activities of depository institutions and their holding companies. The Dodd-Frank Act also created the Consumer Financial Protection Bureau (the “CFPB”) with extensive powers to supervise and
enforce consumer protection laws. The CFPB has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions, including the authority to
prohibit “unfair, deceptive, or abusive” acts and practices. The Dodd-Frank Act required the CFPB to issue regulations requiring lenders to make a reasonable good faith determination as to a
prospective borrower’s ability to repay a residential mortgage loan. The final “Ability to Repay” rules, which were effective beginning January 2014, established a “qualified mortgage” safe harbor for
loans whose terms and features are deemed to make the loan less risky.
The Dodd-Frank Act broadened the base for FDIC assessments for deposit insurance and permanently increased the maximum amount of deposit insurance to $250,000 per depositor. The legislation
also, among other things, requires originators of certain securitized loans to retain a portion of the credit risk, stipulates regulatory rate-setting for certain debit card interchange fees, repealed
restrictions on the payment of interest on commercial demand deposits, and contains a number of reforms related to mortgage originations. The legislation also directed the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board") to promulgate rules prohibiting excessive compensation paid to company executives, regardless of whether the company is publicly traded or
not.
Bank Holding Company Regulation
As a bank holding company registered under the Bank Holding Company Act of 1956, as amended, the Company is subject to the regulation and supervision applicable to bank holding companies by
the Federal Reserve Board. The Company is also subject to the provisions of the New Jersey Banking Act of 1948 (the “New Jersey Banking Act”) and the regulations of the Commissioner of the New
Jersey Department of Banking and Insurance (“Commissioner”). The Company is required to file reports with the Federal Reserve Board and the Commissioner regarding its business operations and
those of its subsidiaries.
Federal Regulation. The Company is required to obtain the prior approval of the Federal Reserve Board to acquire all, or substantially all, of the assets of any bank or bank holding company. Prior
Federal Reserve Board approval would be required for the Company to acquire direct or indirect ownership or control of any voting securities of any bank or bank holding company if it would, directly
or indirectly, own or control more than 5.0 percent of any class of voting shares of the bank or bank holding company.
A bank holding company is generally prohibited from engaging in, or acquiring, direct or indirect control of more than 5.0 percent of the voting securities of any company engaged in non-banking
activities. One of the principal exceptions to this prohibition is for activities found by the Federal Reserve Board to be so closely related to banking or managing or controlling banks as to be a proper
incident thereto. Some of the principal activities that the Federal Reserve Board has determined by regulation to be closely related to banking are: (i) making or servicing loans; (ii) performing certain
data processing services; (iii) providing securities brokerage services; (iv) acting
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as fiduciary, investment or financial advisor; (v) leasing personal or real property under certain conditions; (vi) making investments in corporations or projects designed primarily to promote
community welfare; and (vii) acquiring a savings association.
A bank holding company that meets specified conditions, including depository institutions subsidiaries that are “well capitalized” and “well managed,” may opt to become a “financial holding
company.” A “financial holding company” may engage in a broader array of financial activities than permitted a typical bank holding company. Such activities can include insurance underwriting and
investment banking. The Company has not elected “financial holding company” status.
A bank holding company is generally required to give the Federal Reserve Board prior written notice of any purchase or redemption of then-outstanding equity securities if the gross consideration for
the purchase or redemption, when combined with the net consideration paid for all such purchases or redemptions during the preceding 12 months, is equal to 10.0 percent or more of the company’s
consolidated net worth. The Federal Reserve Board may disapprove such a purchase or redemption if it determines that the proposal would constitute an unsafe and unsound practice, or would violate
any law, regulation, Federal Reserve Board order or directive, or any condition imposed by, or written agreement with, the Federal Reserve Board. The Federal Reserve Board has adopted an exception
to that approval requirement for well-capitalized bank holding companies that meet certain other conditions.
The Federal Reserve Board has issued a policy statement regarding the payment of dividends by bank holding companies. In general, the Federal Reserve Board’s policies provide that dividends should
be paid only out of current earnings and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall
financial condition. The Federal Reserve Board’s policies also require that a bank holding company serve as a source of financial strength to its subsidiary banks by using available resources to provide
capital funds during periods of financial stress or adversity and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where
necessary. The Dodd-Frank Act codified the source of strength policy. Under the prompt corrective action laws, the ability of a bank holding company to pay dividends may be restricted if a subsidiary
bank becomes undercapitalized. These regulatory policies could affect the ability of the Company to pay dividends or otherwise engage in capital distributions.
The Company's status as a registered bank holding company under the Bank Holding Company Act will not exempt it from certain federal and state laws and regulations applicable to corporations
generally, including, without limitation, certain provisions of the federal securities laws.
Pause on Major Federal Reserve Rulemakings. In January 2025, the Federal Reserve stated that Vice Chair for Supervision Michael Barr would step down from the position, effective, February 28,
2025. The Federal Reserve stated that it will not issue any major rulemakings from the time of the announcement until a new vice chair for supervision is confirmed by the U.S. Senate.
New Jersey Regulation. Under the New Jersey Banking Act, a company owning or controlling a bank is regulated as a bank holding company and must file certain reports with the Commissioner and
is subject to examination by the Commissioner. Under the New Jersey Banking Act, as well as Federal law, no person may acquire control of the Company or the Bank without first obtaining approval
of such acquisition of control from the Federal Reserve Board and the Commissioner.
Bank Regulation
As a New Jersey-chartered commercial bank, the Bank is subject to the regulation, supervision, and examination of the Commissioner. As a state-chartered bank, the Bank is subject to the regulation,
supervision, and examination of the FDIC as its primary federal regulator. The regulations of the FDIC and the Commissioner impact virtually all of our activities, including the minimum level of
capital we must maintain, our ability to pay dividends, our ability to expand through new branches or acquisitions, and various other matters.
Capital Requirements. Federal regulations require FDIC-insured depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5
percent, a Tier 1 capital to risk-based assets ratio of 6.0 percent, a total capital to risk-based assets of 8.0 percent, and a 4.0 percent Tier l capital to total assets leverage ratio.
In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not
hold a “capital conservation buffer” consisting of 2.5 percent of common equity Tier 1 capital to risk-weighted asset above the amount necessary to meet its minimum risk-based capital requirements.
In lieu of complying with the capital requirements set forth above, qualifying community banking organizations may opt-in to the community bank leverage ratio (“CBLR”) framework (tier 1 capital to
average consolidated assets). Such institutions that maintain a CBLR of at least 9.0 percent, are under $10.0 billion in assets and meet certain other qualifying criteria will automatically be deemed to
be well-capitalized.
Standards for Safety and Soundness. As required by statute, the federal banking agencies adopted final regulations and Interagency Guidelines Establishing Standards for Safety and Soundness to
implement safety and soundness standards. The guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository
institutions before capital becomes impaired. The guidelines address internal controls and information systems, internal audit system, credit underwriting, loan documentation, interest rate exposure,
asset growth, asset quality, earnings, compensation, fees and benefits and, more recently, safeguarding customer information. If the appropriate federal banking agency determines that an institution
fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard.
Business and Investment Activities. Under federal law, all state-chartered FDIC-insured banks have been limited in their activities as principal and in their equity investments to the type and the
amount authorized for national banks, notwithstanding state law. Federal law permits exceptions to these limitations. For example, certain state-chartered banks may, with FDIC approval, continue to
exercise state authority to invest in common or preferred stocks listed on a national securities exchange and in the shares of an investment company registered under the Investment Company Act of
1940, as amended. The maximum permissible investment is the lesser of 100.0 percent of Tier 1 capital or the maximum amount permitted by New Jersey law.
The FDIC is also authorized to permit state banks to engage in state-authorized activities or investments not permissible for national banks (other than non-subsidiary equity investments) if they meet
all applicable capital requirements and it is determined that such activities or investments do not pose a significant risk to the FDIC insurance fund. The FDIC has adopted regulations governing the
procedures for institutions seeking approval to engage in such activities or investments. The Gramm-Leach-Bliley Act of 1999 specified that a state bank may control a subsidiary that engages in
activities as principal that would only be permitted for a national bank to conduct in a “financial subsidiary,” if a bank meets specified conditions and deducts its investment in the subsidiary for
regulatory capital purposes.
Prompt Corrective Regulatory Action. Federal law requires, among other things, that federal bank regulatory authorities take “prompt corrective action” with respect to banks that do not meet
minimum capital requirements. For these purposes, the law establishes five capital categories: well-capitalized, adequately-capitalized, undercapitalized, significantly undercapitalized, and critically
undercapitalized.
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Under FDIC regulations, an institution is deemed to be “well-capitalized” if it has a total risk-based capital ratio of 10.0 percent or greater, a Tier 1 risk-based capital ratio of 8.0 percent or greater, a
leverage ratio of 5.0 percent or greater, and a common equity Tier 1 ratio of 6.5 percent or greater. An institution is “adequately-capitalized” if it has a total risk-based capital ratio of 8.0 percent or
greater, a Tier 1 risk-based capital ratio of 6.0 percent or greater, a leverage ratio of 4.0 percent or greater and a common equity Tier 1 ratio of 4.5 percent or greater. An institution is “undercapitalized”
if it has a total risk-based capital ratio of less than 8.0 percent, a Tier 1 risk-based capital ratio of less than 6.0 percent, a leverage ratio of less than 4.0 percent or a common equity Tier 1 ratio of less
than 4.5 percent. An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0 percent, a Tier 1 risk-based capital ratio of less than 4.0 percent, a
leverage ratio of less than 3.0 percent or a common equity Tier 1 ratio of less than 3.0 percent. An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity (as
defined in the regulations) to total assets that is equal to or less than 2.0 percent.
As noted above, these requirements do not apply to banks with less than $10.0 billion in assets who elect to follow the CBLR. The FDIC’s rule provides that the bank will be well-capitalized, with a
community bank leverage ratio of 9.0 percent or greater. A banking organization that has a leverage ratio that is greater than 8.0 percent and equal to or less than 9.0 percent is allowed a two-quarter
grace period after which it must either (i) again meet all qualifying criteria or (ii) apply and report the generally applicable rule. During this two-quarter period, a banking organization that is an insured
depository institution and that has a leverage ratio that is greater than 8.0 percent would be considered to have met the well-capitalized capital ratio requirements for prompt corrective action purposes.
An electing banking organization with a leverage ratio of 8.0 percent or less is not eligible for the grace period and must comply with the generally applicable rule, i.e. for the quarter in which the
banking organization reports a leverage ratio of 8.0 percent or less. An electing banking organization experiencing or anticipating such an event would be expected to notify its primary federal
supervisory agency, which would respond as appropriate to the circumstances of the banking organization.
“Undercapitalized” banks must adhere to growth, capital distribution (including dividend) and other limitations and are required to submit a capital restoration plan. A bank’s compliance with such a
plan must be guaranteed by any company that controls the undercapitalized institution in an amount equal to the lesser of 5.0 percent of the institution’s total assets when deemed undercapitalized or the
amount necessary to achieve the status of adequately capitalized. If an “undercapitalized” bank fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.” “Significantly
undercapitalized” banks must comply with one or more of a number of additional measures, including, but not limited to, a required sale of sufficient voting stock to become adequately capitalized, a
requirement to reduce total assets, cessation of taking deposits from correspondent banks, the dismissal of directors or officers, restrictions on interest rates paid on deposits, compensation of executive
officers, and capital distributions by the parent holding company. “Critically undercapitalized” institutions are subject to additional measures including, subject to a narrow exception, the appointment
of a receiver or conservator within 270 days after it obtains such status.
Enforcement. The FDIC has extensive enforcement authority over insured state banks, including the Bank. That enforcement authority includes, among other things, the ability to assess civil money
penalties, issue cease and desist orders, and remove directors and officers. In general, enforcement actions may be initiated in response to violations of laws and regulations and unsafe or unsound
practices. The FDIC also has authority under federal law to appoint a conservator or receiver for an insured bank under certain circumstances. The FDIC is required, with certain exceptions, to appoint
a receiver or conservator for an insured state non-member bank if that bank was “critically undercapitalized” on average during the calendar quarter beginning 270 days after the date on which the
institution became “critically undercapitalized.”
Federal Insurance of Deposit Accounts. Our deposits are insured by the FDIC in the maximum amount permitted of $250,000 per depositor.
The Bank pays assessments to the FDIC to support its Deposit Insurance Fund (“DIF”). The FDIC has adopted a risk-based assessment system whereby FDIC-insured institutions pay insurance
premiums at rates based on their risk classification. For institutions like the Bank that are not considered large and highly complex banking organizations, assessments are now based on examination
ratings and financial ratios. The total base assessment rates currently range from 1.5 basis points to 30 basis points. At least semi-annually, the FDIC updates its loss and income projections for the DIF
and, if needed, increases or decreases the assessment rates, following notice and comment on proposed rulemaking. The assessment base against which an FDIC-insured institution’s deposit insurance
premiums paid to the DIF has been calculated since effectiveness of the Dodd-Frank Act based on its average consolidated total assets less its average tangible equity.
The DIF has a designated reserve (target) ratio (“DRR”) of 2.00% of the estimated insured deposits. When the reserve ratio was 1.30 percent as of June 30, 2020, the FDIC adopted a restoration plan
to ensure that the DIF reserve ratio reaches 1.35 percent within 8 years. However, increased loss provisions associated with the failures of Silicon Valley Bank, Signature Bank and First Republic Bank
in 2023 that reduced the DIF balance coupled with strong growth in uninsured deposits, resulted in the reserve ratio declining to 1.10 percent as of June 30, 2023. The reserve ratio increased to 1.21
percent as of June 30, 2024. The Restoration Plan maintains the current schedule of assessment rates for all insured depository institutions. Dividends are required to be paid to the industry should the
DRR exceed 1.50% but grants the FDIC sole discretion in determining whether to suspend or limit the declaration or payment of dividends. The assessment base for insured depository institutions is
the average consolidated total assets during an assessment period less average tangible equity capital during that assessment period.
The FDIC has authority to increase insurance assessments. Any significant increases would have an adverse effect on the operating expenses and results of operations of the Bank. Management cannot
predict what assessment rates will be in the future.
Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations, or has
violated any applicable law, regulation, rule, order, or condition imposed by the FDIC. We do not currently know of any practice, condition or violation that may lead to termination of our deposit
insurance.
Community Reinvestment Act. All FDIC-insured institutions have a responsibility under the Community Reinvestment Act (“CRA”) and related regulations to help meet the credit needs of their
communities, including low- and moderate-income neighborhoods. In connection with its examination of a state-chartered bank, the FDIC is required to assess the institution’s record of compliance
with the CRA. On October 24, 2023, the FDIC, the Federal Reserve Board, and the Office of the Comptroller of the Currency issued a final rule to strengthen and modernize the CRA regulations. The
rule materially revises the current CRA framework, including the assessment areas in which a bank is evaluated to include activities associated with online and mobile banking, the tests used to
evaluate the Bank in its assessment areas, new methods of calculating credit for lending, investment, and service activities, and additional data collection and reporting requirements. Under the final
rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies will evaluate large banks under four performance tests: the
Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test. The rule was expected to take effect on April
1, 2024, with most of its provisions becoming applicable on January 1, 2026, and additional requirements will be applicable on January 1, 2027. Several banking industry groups filed a lawsuit seeking
to invalidate the CRA final rule, in which they argued that the federal banking agencies exceeded their statutory authority in adopting the CRA final rule. In March 2024, a federal judge granted an
injunction to extend the CRA final rule’s effective date, originally set for April 1, 2024. The effective date will be extended each day the injunction remains in place, pending the resolution of the
lawsuit.
BCB Community Bank’s latest FDIC CRA rating dated September 20, 2021, was “satisfactory.”
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Cyber-security. Federal and state legislation and regulations contain extensive cybersecurity and data privacy provisions. Our regulatory agencies including the CFPB, FDIC, and Federal Reserve also
have oversight over us with respect to cybersecurity and data privacy. We are subject to the rules and regulations promulgated under the authority of the CFPB and Federal Trade Commission, which
regulates unfair or deceptive acts or practices, including with respect to cybersecurity and data privacy. In addition, effective April 1, 2022, the Federal Reserve and FDIC issued a rule that, among
other things, requires a banking organization to notify its primary federal regulator as soon as possible and within 36 hours after identifying a “computer-security incident” that the banking organization
believes in good faith could materially disrupt, degrade or impair its business or operations in a manner that would, among other things, jeopardize the viability of its operations, result in customers
being unable to access their deposit and other accounts, result in a material loss of revenue, profit or franchise value, or pose a threat to the stability of the U.S. financial sector.
Federal regulators have issued two related statements regarding cyber-security. One statement indicates that financial institutions should design multiple layers of security controls to establish lines of
defense and ensure their risk management processes also address the risk posed by compromised client credentials, including security measures to reliably authenticate clients accessing internet-based
services of the financial institution. The other statement indicates that a financial institution’s management is expected to maintain sufficient business continuity planning processes to ensure the rapid
recovery, resumption, and maintenance of the institution’s operations after a cyber-attack involving destructive malware. A financial institution is also expected to develop appropriate processes to
enable recovery of data and business operations and address rebuilding network capabilities and restoring data if the institution or its critical service providers fall victim to this type of cyber-attack. If
we fail to observe the regulatory guidance, we could be subject to various regulatory sanctions, including financial penalties.
In the ordinary course of business, we rely on electronic communications and information systems to conduct our operations and to store sensitive data. We employ a variety of preventative and
detective controls and tools to monitor, block, and provide alerts regarding suspicious activity and to report on any suspected advanced persistent threats. We also offset cyber risk through internal
training, testing of our employees, and we procure insurance to provide assistance on significant incidents and to offset potential liability.
We have not experienced a significant compromise, significant data loss, or any material financial losses related to cyber-security attacks. Risks and exposures related to cyber-security attacks are
expected to remain high for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of third-party service providers, internet
banking, mobile banking, and other technology-based products and services by us and our clients.
Compensation. The scope and content of compensation regulation in the financial industry are continuing to develop, and we expect that these regulations and resulting market practices will continue
to evolve over a number of years. The federal bank regulatory agencies have issued joint guidance on executive compensation designed to ensure that the incentive compensation policies of banking
organizations, such as the Company and the Bank, do not encourage imprudent risk taking and are consistent with the safety and soundness of the organization. The SEC has a rule that directs stock
exchanges to require listed companies to implement clawback policies to recover incentive-based compensation from current or former executive officers in the event of certain financial restatements
and requires companies to disclose their clawback policies and their actions under those policies.
Transactions with Affiliates
Transactions between banks and their related parties or affiliates are limited by Sections 23A and 23B of the Federal Reserve Act. An affiliate of a bank is any company or entity that controls, is
controlled by, or is under common control with the bank. In a holding company context, the parent bank holding company and any companies which are controlled by such parent holding company are
affiliates of the bank. Generally, Sections 23A and 23B of the Federal Reserve Act and Regulation W (i) limit the extent to which the bank or its subsidiaries may engage in “covered transactions” with
any one affiliate to an amount equal to 10.0 percent of such institution’s capital stock and surplus, and contain an aggregate limit on all such transactions with all affiliates to an amount equal to 20.0
percent of such institution’s capital stock and surplus and (ii) require that all such transactions be on terms substantially the same, or at least as favorable, to the institution or subsidiary as those
provided to non-affiliates. The term “covered transaction” includes the making of loans, purchasing of assets, issuance of a guarantee, and other similar transactions. In addition, loans or other
extensions of credit by the financial institution to the affiliate are required to be collateralized in accordance with the requirements set forth in Section 23A of the Federal Reserve Act. The Sarbanes-
Oxley Act of 2002 generally prohibits loans by a company to its executive officers and directors. However, the law contains a specific exception for loans by a depository institution to its executive
officers and directors in compliance with federal banking laws assuming such loans are also permitted under the law of the institution’s chartering state. Under such laws, the Bank’s authority to extend
credit to executive officers, directors and 10.0 percent shareholders (“insiders”), as well as entities such person’s control, is limited. The law limits both the individual and aggregate amount of loans the
Bank may make to insiders based, in part, on the Bank’s capital position and requires certain board approval procedures to be followed. Such loans are required to be made on terms substantially the
same as those offered to unaffiliated individuals and not involve more than the normal risk of repayment. There is an exception for loans made pursuant to a benefit or compensation program that is
widely available to all employees of the institution and does not give preference to insiders over other employees. Loans to executive officers are further limited by specific categories.
Dividends
The primary source of cash to pay dividends to the Company’s shareholders and to meet the Company’s obligations is dividends paid to the Company by the Bank. The Bank may pay dividends to the
Company as declared from time to time by the Board of Directors out of funds legally available, subject to certain restrictions. Under the New Jersey Banking Act of 1948, as amended, the Bank may
not pay a cash dividend unless, following the payment, the Bank’s capital stock will be unimpaired and the Bank will have a surplus of no less than 50.0 percent of the Bank capital stock or, if not, the
payment of the dividend will not reduce the surplus. In addition, the Bank cannot pay dividends in amounts that would reduce the Bank’s capital below regulatory imposed minimums.
See the discussion above under “Bank Holding Company Regulation” for a description of the Federal Reserve Board’s policy on bank holding companies paying cash dividends. Under New Jersey
law, corporations like the Parent Company may not pay dividends when insolvent.
Federal Securities Laws
The Company’s common stock is registered with the SEC under the Securities Exchange Act of 1934, as amended (“Exchange Act”). The Company is subject to the information, proxy solicitation,
insider trading restrictions, and other requirements under the Securities Exchange Act of 1934. We prepare this Annual Report on Form 10-K, our proxy materials and our other periodic and current
reports as a “smaller reporting company” consistent with the rules of the Securities and Exchange Commission.
Under the Exchange Act, the Company is required to conduct a comprehensive review and assessment of the adequacy of our existing financial systems and controls. For the year ended December 31,
2024, the Company’s auditors are required to audit our internal control over financial reporting.
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AVAILABILITY OF ANNUAL REPORT
Our Annual Report is available on our website, www.bcb.bank. We will also provide our Annual Report on Form 10-K free of charge to shareholders who request a copy in writing from the Corporate
Secretary at 104-110 Avenue C, Bayonne, New Jersey 07002.
ITEM 1A. RISK FACTORS
Our business and results of operations are subject to numerous risks and uncertainties, many of which are beyond our control. The material risks and uncertainties that management believes affect the
Company are described below. Additional risks and uncertainties that management is not aware of or that management currently deems immaterial may also impair the Company’s business operations.
This report is qualified in its entirety by these risk factors. If any of the following risks actually occur, our business, financial condition, and results of operations could be materially and adversely
affected.
Our risk factors can be broadly summarized by the following categories:
Credit and Interest Rate Risks;
Risks Related to the Company’s Common Stock;
Economic Risks;
Operational Risks;
Risks Related to the Regulation of our Industry; and,
Strategic Risks.
CREDIT AND INTEREST RATE RISKS
Our loan portfolio consists of a high percentage of loans secured by commercial real estate and multi-family real estate. These loans are riskier than loans secured by one-to-four family
properties.
At December 31, 2024, $2.247 billion, or 74.06 percent, of our loan portfolio consisted of commercial and multi-family real estate loans. We intend to continue to emphasize the origination
of these types of loans. Another $342.8 million, or 11.3 percent, of our loan portfolio consisted of commercial business loans. These commercial loans generally expose a lender to greater risk of
nonpayment and loss than one-to-four family residential mortgage loans because repayment of the loans often depends on the successful operation and income stream of the collateral that is pledged or
the business itself. Such loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to one-to-four family residential mortgage loans. Consequently, an
adverse development with respect to one loan or one credit relationship can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one-to-four family
residential mortgage loan.
Commercial loans and commercial real estate loans generally carry larger balances and can involve a greater degree of financial and credit risk than other loans. As a result, banking
regulators continue to give greater scrutiny to lenders with a high concentration of commercial real estate loans in their portfolios, such as us, and such lenders are expected to implement stricter
underwriting standards, internal controls, risk management policies, and portfolio stress testing, as well as higher capital levels and loss allowances. The increased financial and credit risk associated
with these types of loans are a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the size of loan balances, the effects of general economic
conditions on income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans. If we cannot effectively manage the risk associated with our high
concentration of commercial real estate loans, our financial condition and results of operations may be adversely affected.
The Bank has further segregated its commercial business portfolio into commercial business express loans that carry higher risk relative to other commercial business loans. The portfolio is
relatively new and has not run through its interest-only maturity cycle yet. Our limited time with these loans does not provide us with a significant payment history pattern with which to judge future
collectability. As a result, it may be difficult to predict the future performance of these loans. These loans may have delinquency or charge off levels above our expectations, which could negatively
affect our performance.
On December 31, 2024, the size of the business express loans portfolio was $92.9 million and the total loan loss reserves for the portfolio totaled $7.8 million. The significantly higher level
of loan loss reserves established for business express loans reflect the higher losses experienced in the portfolio during 2024. During the twelve months of 2024, the Company experienced $10.4
million in net charge offs compared to $704 thousand in net charge offs for the same period in 2023. The elevated charge-offs experienced during 2024 were driven by the deterioration experienced in
the business express loans.
If our allowance for credit losses is not sufficient to cover actual credit losses, our earnings could decrease.
Our loan customers may not repay their loans according to the terms of their loans, and the collateral securing the payment of their loans may be insufficient to assure repayment. We may
experience significant credit losses, which could have a material adverse effect on our operating results. We maintain allowance for credit losses on loans and off-balance sheet exposures. The
calculation of allowance for credit losses utilizes the use of econometric models that rely on various assumptions including but not limited to historical credit loss experience, economic forecasts, and
expected future credit risks and trends. Additionally, Management relies on qualitative adjustments, as deemed necessary, to supplement the quantitative results generated by the models. Several factors
including possibility of a recession, inflation, global pandemics, natural disasters, changes in regulations, identification of additional loan downgrades and other factors that are within and outside of our
control may require a material increase in the allowance for credit losses for both on balance sheet loans and off-balance sheet credit exposures. Any increase in the allowance for credit losses will
negatively impact our net income, possibly capital, and may have an adverse impact on our business and results of operations.
While we have only been operating for 24 years, we have experienced significant growth in our loan portfolio, particularly in loans secured by commercial real estate. Although we believe
we have underwriting standards to manage normal lending risks, it is difficult to assess the future performance of our loan portfolio due to the relatively recent origination of many of these loans. We
can give you no assurance that our non-performing loans will not increase or that our non-performing or delinquent loans will not adversely affect our future performance.
In addition, federal and state regulators periodically review our allowance for credit losses and may require us to increase our allowance for credit losses or recognize further loan charge-
offs. Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory agencies could have a material adverse effect on our results of operations and financial condition.
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The asset quality of our loan portfolio may continue to deteriorate if the economy falters, resulting in a portion of our loans failing to perform in accordance with their terms. Under such
circumstances our profitability will be adversely affected.
At December 31, 2024, we had $152.7 million in classified loans of which none were classified as doubtful or loss. We also had $337.9 million of loans that were classified as special
mention. In addition, at that date we had $44.7 million in non-accruing loans, or 1.48 percent of total loans. We have adhered to stringent underwriting standards in the origination of our loans, but there
can be no assurance that loans that we originated will not experience asset quality deterioration as a result of a downturn in the local or broader economy. Should our local or regional economy weaken,
our asset quality may deteriorate resulting in losses to the Company.
Changes in interest rates could hurt our profits.
Our profitability, like most financial institutions, depends to a large extent upon our net interest income, which is the difference between interest income on interest-earning assets, such as
loans and securities, and interest expense on interest-bearing liabilities, such as deposits and borrowed funds. Accordingly, our results of operations depend largely on movements in market interest
rates and our ability to manage our interest-rate-sensitive assets and liabilities in response to these movements. Factors such as inflation, recession, and instability in financial markets, among other
factors beyond our control, may affect interest rates.
If interest rates rise, and if rates on our deposits and variable rate borrowings reprice upwards faster than the rates on our long-term loans and investments, we could experience compression
of our interest rate spread, which would have a negative effect on our profitability. Conversely, decreases in interest rates can result in increased prepayments of loans and mortgage-related securities, as
borrowers refinance to reduce their borrowing costs. Under these circumstances, we are subject to reinvestment risk, as we may have to redeploy such loan or securities proceeds into lower-yielding
assets, which might also negatively impact our income.
Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our financial condition, liquidity and results of operations. Also, our interest
rate risk-modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our balance sheet or projected operating results.
While we pursue an asset/liability strategy designed to mitigate our risk from changes in interest rates, changes in interest rates can still have a material adverse effect on our financial
condition and results of operations. Changes in the level of interest rates also may negatively affect our ability to originate real estate loans, the value of our assets and our ability to realize gains from
the sale of our assets, all of which ultimately affect our earnings. For further discussion of how changes in interest rates could impact us, see “Item 7A. – Quantitative and Qualitative Disclosure About
Market Risk.”
Rising interest rates have decreased the value of a portion of the Company’s securities portfolio, and the Company would realize losses if it were required to sell such securities to meet
liquidity needs.
As a result of inflationary pressures and the resulting rapid increases in interest rates in 2022 and 2023, our securities classified as available for sale carry unrealized net loss. The Company’s
unrealized net loss on debt securities totaled $6.9 million on a pre-tax basis at December 31, 2024. If the Company were required to sell such securities to meet liquidity needs, including in the event of
deposit outflows or slower deposit growth, it may incur losses, which could negatively impact the Company’s capital, financial condition, and results of operations. While the Company has taken
actions to maximize its funding sources, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs.
RISKS RELATED TO THE COMPANY’S COMMON STOCK
Our dividend policy may change without notice, and our future ability to pay dividends is also subject to regulatory restrictions.
Holders of our common stock are entitled to receive only such cash dividends as our board of directors may declare out of funds legally available for the payment of dividends. We are a
holding company that conducts substantially all of our operations through the Bank. As a result, our ability to make dividend payments on our common stock will depend primarily upon the receipt of
dividends and other distributions from the Bank. Under New Jersey banking law, the Bank may pay a dividend to the Company provided that following the payment of the dividend the capital stock of
the Bank will be unimpaired and the Bank will have a surplus of not less than 50 percent of its capital stock, or if not, the payment of such dividend will not reduce the surplus of the Bank.
Under New Jersey law, the Company may not make a distribution, if, after giving effect to the distribution, it would be unable to pay its debts as they become due in the usual course of
business or if its total assets would be less than its liabilities. Our current intention is to continue to pay a quarterly cash dividend of $0.16 per share. However, any declaration and payment of dividends
on common stock will substantially depend upon our earnings and financial condition, liquidity and capital requirements, regulatory and state law restrictions, general economic conditions and
regulatory climate and other factors deemed relevant by our board of directors. Furthermore, consistent with our strategic plans, growth initiatives, capital availability, projected liquidity needs, and
other factors, we have made, and will continue to make, capital management decisions and policies that could adversely impact the amount of dividends, if any, paid to our stockholders.
Our common stock is not heavily traded, and the stock price may fluctuate significantly.
Our common stock is traded on the NASDAQ under the symbol “BCBP.” Certain brokers currently make a market in the common stock, but such transactions are infrequent and the volume
of shares traded is relatively small. Management cannot predict whether these or other brokers will continue to make a market in our common stock. Prices on stock that is not heavily traded, such as
our common stock, can be more volatile than heavily traded stock. Factors such as our financial results, the introduction of new products and services by us or our competitors, publicity regarding the
banking industry, inflation, changing interest rates, and various other factors affecting the banking industry may have a significant impact on the market price of the shares of the common stock.
Management cannot predict the extent to which an active public market for our common stock will develop or be sustained in the future. Accordingly, stockholders may not be able to sell their shares
of our common stock at the volumes, prices, or times that they desire.
ECONOMIC RISKS
Inflation can have an adverse impact on the Company’s business and its customers.
Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. Commencing in 2022 and continuing
into 2023, in response to a pronounced rise in inflation, the Federal Reserve has raised certain benchmark interest rates to combat inflation. As discussed above under CREDIT AND INTEREST RATE
RISKS— Changes in interest rates could hurt our profits, as inflation increases and market interest rates rise, the value of the Company’s investment securities, particularly those with longer maturities,
decreases, although this effect can be less pronounced for floating rate instruments. In addition, inflation generally increases the cost of goods and services the Company uses in its business operations,
such as electricity and other utilities,
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and also generally increases employee wages, any of which can increase the Company’s non-interest expenses. Furthermore, the Company’s customers are also affected by inflation and the rising costs
of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans with the Company. Sustained higher interest rates by the Federal
Reserve Board to tame persistent inflationary price pressures could also push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States and the
Company’s markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for the Company’s products and services,
all of which, in turn, would adversely affect the Company’s business, financial condition and results of operations.
Events similar to the COVID-19 pandemic could adversely affect our business activities, financial condition, and results of operations.
The occurrence of events which adversely affect the global, national and regional economies, like the COVID-19 pandemic, may have a negative impact on our business. Like other financial
institutions, our business relies upon the ability and willingness of our customers to transact business with us, including banking, borrowing and other financial transactions. A strong and stable
economy at each of the local, federal and global levels is often a critical component of consumer confidence and typically correlates positively with our customers’ ability and willingness to transact
certain types of business with us. Local and global events outside of our control which disrupt the New Jersey, New York, United States and/or global economy may therefore negatively impact our
business and financial condition. A public health crisis such as the COVID-19 pandemic is no exception, and its adverse health and economic effects may adversely impact our business and financial
condition.
Instability in global economic conditions and geopolitical matters could have a material adverse effect on our results of operations and financial condition.
Instability in global economic conditions and geopolitical matters could have a material adverse effect on our results of operations and financial condition. The macroeconomic environment
in the U.S. is susceptible to global events and volatility in financial markets. For example, global conflicts (including the continuing conflicts involving Ukraine and the Russian Federation and those in
the Middle East) or other similar events, as well as government actions of other restrictions in connection with such events, and trade negotiations between the U.S. and other nations could adversely
impact economic and market conditions for the Company and its clients and counterparties. In addition, global supply chain disruptions may cause prolonged inflation, adversely impact consumer and
business confidence, and adversely affect the economy as well as our financial condition and results.
OPERATIONAL RISKS
Our deposit services for businesses in the state licensed cannabis industry could expose us to liabilities and regulatory compliance costs.
In 2014 we implemented specialized deposit services intended for a limited number of state-licensed medical-use cannabis business customers. Medical use cannabis, as well as recreational
use businesses are legal in numerous states and the District of Columbia, including our primary markets of New Jersey and New York. However, such businesses are not legal at the federal level and
marijuana remains a Schedule I drug under the Controlled Substances Act of 1970. In 2014, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) published
guidelines for financial institutions servicing state legal cannabis businesses. We have implemented a comprehensive control framework that includes written policies and procedures related to the on-
boarding of such businesses and the monitoring and maintenance of such business accounts that comports with the FinCEN guidance. Additionally, our policies call for due diligence review of the
cannabis business before the business is on-boarded, including confirmation that the business is properly licensed and maintains the license in good standing in the applicable state. Throughout the
relationship, our policies call for continued monitoring of the business, including site visits, to determine if the business continues to meet our requirements, including maintenance of required licenses
and calls for undertaking periodic financial reviews of the business. The Bank’s program originally was limited to offering depository products to medical cannabis businesses. Deposit transactions are
monitored for compliance with the applicable state medical program rules and other regulations. In 2022, the Bank expanded its cannabis-related business offerings to some limited lending on real
estate and deposit services to licensed recreational dispensaries. The Bank may offer additional banking products and services to such customers in the future.
While we believe our policies and procedures allow us to operate in compliance with the FinCEN guidelines, there can be no assurance that compliance with the FinCEN guidelines will
protect us from federal prosecution or other regulatory sanctions. Federal prosecutors have significant discretion and there can be no assurance that the federal prosecutors will not choose to strictly
enforce the federal laws governing cannabis. Any change in the federal government’s enforcement position could potentially subject us to criminal prosecution and other regulatory sanctions. As a
general matter, the medical and recreational cannabis business is considered high-risk, thus increasing the risk of a regulatory action against our BSA/AML program that has adverse consequences,
including but not limited to, preventing us from undertaking mergers, acquisitions and other expansion activities.
Adverse events in New Jersey and the New York metropolitan area, where our business is generally concentrated, could adversely affect our results and future growth.
Our business, the location of our branches, and the real estate collateralizing our real estate loans are generally concentrated in New Jersey and the New York metropolitan area. As a result,
we are exposed to geographic risks. The occurrence of an economic downturn in New Jersey or the New York metropolitan area, or adverse changes in laws or regulations in New Jersey or the New
York metropolitan area, could impact the credit quality of our assets, the business of our customers and our ability to expand our business.
Our success significantly depends upon the growth in population, income levels, deposits, and housing in our market area. If the communities in which we operate do not grow or if
prevailing economic conditions locally, regionally, or nationally are unfavorable, our business may be negatively affected. In addition, the economies of the communities in which we operate are
substantially dependent on the growth of the economy in the State of New Jersey and the New York metropolitan area. To the extent that economic conditions in New Jersey are unfavorable or do not
continue to grow as projected, the economy in our market area would be adversely affected. Moreover, we cannot give any assurance that we will benefit from any market growth or favorable
economic conditions in our market area if they do occur.
In addition, the market value of the real estate securing loans as collateral could be adversely affected by unfavorable changes in market and economic conditions. As of December 31, 2024,
approximately 89.3 percent of our total loans were secured by real estate. Adverse developments affecting commerce or real estate values in the local economies in our primary market areas could
increase the credit risk associated with our loan portfolio. In addition, a significant percentage of our loans are to individuals and businesses in New Jersey. Our business customers may not have
customer bases that are as diverse as businesses serving regional or national markets. Consequently, any decline in the economy of our market area could have an adverse impact on our revenues and
financial condition. In particular, we may experience increased loan delinquencies, which could result in a higher provision for credit losses and increased charge-offs. Any sustained period of increased
non-payment, delinquencies, foreclosures, or losses caused by adverse market or economic conditions in our market area could adversely affect the value of our assets, revenues, results of operations
and financial condition.
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We depend primarily on net interest income for our earnings rather than fee income.
Net interest income is the most significant component of our operating income. We have less reliance on traditional sources of fee income utilized by some community banks, such as fees
from sales of insurance, securities, or investment advisory products or services. For the years ended December 31, 2024, and 2023, our net interest income was $92.0 million and $104.1 million,
respectively. The amount of our net interest income is influenced by the overall interest rate environment, competition, and the amount of our interest-earning assets relative to the amount of our
interest-bearing liabilities. In the event that one or more of these factors were to result in a decrease in our net interest income, we do not have significant sources of fee income to make up for decreases
in net interest income.
Risks associated with system failures, interruptions, cyber-attacks, or breaches of security, including denial of service attacks, hacking, social engineering attacks targeting our colleagues,
contractors, and customers, malware intrusion or data corruption attempts, and identity theft that could result in the disclosure of confidential, proprietary, personal and other information,
any of which could adversely affect our business or reputation and negatively affect our earnings, as well as create significant legal and financial exposure.
Information technology systems are critical to our business. We use various technology systems to manage our customer relationships, general ledger, securities investments, deposits, and
loans. We have established policies and procedures to prevent or limit the impact of system failures, interruptions, and security breaches (including privacy breaches and cyber-attacks), but such events
may still occur or may not be adequately addressed if they do occur. In addition, any compromise of our systems could deter customers from using our products and services. Although we take
protective measures, the security of our computer systems, software, and networks may be vulnerable to breaches, unauthorized access, misuse, computer viruses, or other malicious code and cyber-
attacks that could have an impact on information security.
In addition, we outsource a majority of our data processing to certain third-party providers. If these third-party providers encounter difficulties, or if we have difficulty communicating with
them, our ability to adequately process and account for transactions could be affected, and our business operations could be adversely affected. Threats to information security also exist in the
processing of customer information through various other vendors and their personnel.
There have been increasing efforts on the part of third parties, including through cyber-attacks, to breach data security at financial institutions or with respect to financial transactions.
Cybercrime risks have increased due to the proliferation of new technologies, including AI, and the increased use of electronic and mobile banking activities increased. There have been several recent
instances involving financial services and consumer-based companies reporting the unauthorized disclosure of client or customer information or the destruction or theft of corporate data. In addition,
because the techniques used to cause such security breaches change frequently and often are not recognized until launched against a target and may originate from less regulated and remote areas of the
world, we may be unable to proactively address these techniques or to implement adequate preventative measures. The ability of our customers to bank remotely, including through online and mobile
devices, requires secure transmission of confidential information and increases the risk of data security breaches.
The occurrence of any system failures, interruption, or breach of security could damage our reputation and result in a loss of customers and business, thereby subjecting us to additional
regulatory scrutiny, or could expose us to litigation and possible financial liability. Any of these events could have a material adverse effect on our financial condition and results of operations.
We use AI in connection with our business and operations, which exposes us to inherent risks that may expose us to material harm.
Artificial Intelligence (AI) in the banking industry refers to the use of advanced algorithms, machine learning, and automation to enhance operational efficiency, improve customer
experiences, strengthen security, and optimize financial decision-making. Banks leverage AI for fraud detection, risk assessment, predictive analytics, chatbots for customer service, personalized
financial recommendations, and automated regulatory compliance. By analyzing vast amounts of data in real time, AI helps institutions reduce costs, mitigate risks, detect anomalies, and deliver more
efficient and secure banking services.
We do not utilize AI for decision-making processes or internal bot usage as any automation within the Bank is driven by macros and predefined rule-based workflows rather than AI-driven
models. AI technology, however, is employed within select third-party solutions integrated into our operations. These third-party tools may utilize a limited AI model to support security, risk
management, and operational efficiency but do not influence credit, lending, or other decision-making functions within the Bank.
AI is complex and rapidly evolving, and the introduction of AI, a relatively new and emerging technology in the early stages of commercial use, into our business and operations may subject
us to new or heightened legal, regulatory, ethical, operational, reputational, or other risks. The models underlying AI may be incorrectly or inadequately designed or implemented and trained on, or
otherwise use, data or algorithms that are, and output that may be, incomplete, inadequate, misleading, biased, poor-quality or otherwise flawed, any of which may not be easily detectable. Further,
inappropriate or controversial data practices by developers and end-users or other factors adversely affecting public opinion of AI could impair the acceptance of AI, including those incorporated in our
business and operations. If the AI that we use is deficient, inaccurate or controversial, we could incur operational inefficiencies, competitive harm, legal and regulatory action, brand or reputational
harm, or other adverse impacts on our business and financial results. Further, there can be no assurance that our use of AI will be successful in enhancing our business or operations or otherwise result
in our intended outcomes, and our competitors may incorporate AI into their businesses or operations more quickly or more successfully than us.
AI and the use thereof is also subject to a variety of existing laws and regulations, including fair lending, consumer protection, intellectual property, cybersecurity, data privacy, and equal
opportunity, and is expected to be subject to new laws and regulations or new applications of existing laws and regulations. AI is the subject of evolving review by various governmental and regulatory
agencies, and changes in laws and regulations governing AI may adversely affect our ability to use AI. Additionally, various federal, state and foreign governments and regulators have implemented, or
are considering implementing, general legal and regulatory frameworks for the appropriate use of AI. It is possible that we will not be able to anticipate how to respond to these rapidly developing laws
and regulations. Further, if we do not have sufficient rights to use the data or algorithms on which our AI solutions rely or the output generated thereby, we also may incur liability through the violation
of applicable laws and regulations, such as fair lending laws and regulations, third-party intellectual property, privacy or other rights, or contracts to which we are a party. We may not be able to
sufficiently mitigate or detect any of the foregoing risks or concerns given our and other market participants’ lack of experience with using AI, the pace of technological change, and rapid adoption of
AI by our business partners and competitors. Any actual or perceived failure to address risks or concerns relating to the use of AI, whether unfounded or not, could adversely affect our business and
operations.
The Bank’s reliance on brokered and reciprocal deposits could adversely affect its liquidity and operating results.
Among other sources of funds, the Company, from time to time, relies on brokered deposits to provide funds with which to make loans and provide for other liquidity needs. At
December 31, 2024, the Bank had $177.6 million in brokered certificate deposits. One of the Bank’s sources for brokered deposits is the Certificate of
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Deposit Account Registry Service (“CDARS”). At December 31, 2024, the Bank had $27.3 million in CDARS reciprocal deposits and $30.6 million in Insured Cash Sweep or ICS network deposits.
These amounts are reciprocal and are not considered brokered deposits under recent regulatory reform.
Generally, brokered and reciprocal deposits may not be as stable as other types of deposits. In the future, those depositors may not replace their brokered or reciprocal deposits with us as
they mature, or we may have to pay a higher rate of interest to keep those deposits, or to replace them with other deposits or other sources of funds. Not being able to maintain or replace those deposits
as they mature would adversely affect our liquidity. Paying higher deposit rates to maintain or replace such deposits would adversely affect our net interest margin and operating results.
If deposit levels are not sufficient, it may be more expensive to fund loan originations.
Our deposits have been our primary funding source. In current market conditions, depositors may choose to redeploy their funds into the stock market or other investment alternatives,
regardless of our effort to retain such depositors. If this occurs, it would hamper our ability to grow deposits and could result in a net outflow of deposits. We will continue to focus on deposit growth,
which we use to fund loan originations. However, if we are unable to sufficiently increase our deposit balances, we may be required to increase our use of alternative sources of funding, including
Federal Home Loan Bank advances, or to increase our deposit rates in order to attract additional deposits, each of which would increase our cost of funds.
We could be adversely affected by failure in our internal controls.
A failure in our internal controls could have a significant negative impact not only on our earnings, but also on the perception that customers, regulators and investors may have of us. We
continue to devote a significant amount of effort, time and resources to continually strengthening our internal controls and ensuring compliance with complex accounting standards and banking
regulations.
If we cannot favorably assess the effectiveness of our internal controls over financial reporting or if our independent registered public accounting firm is unable to provide an unqualified
attestation report on our internal controls, we may be subject to additional regulatory scrutiny.
Under the rules of the FDIC and the SEC, Company management is required to prepare a report that contains an assessment by management of the effectiveness of our internal control
structure and procedures for financial reporting (including the Call Report that is submitted to the FDIC) as of the end of each fiscal year. Our independent registered public accounting firm is also
required to examine, attest to and report on the assessment of our management concerning the effectiveness of our internal control structure and procedures for financial reporting. The rules that must
be met for management to assess our internal controls over financial reporting are complex and require significant documentation and testing and possible remediation of internal control weaknesses.
The effort to comply with regulatory requirements relating to internal controls will likely cause us to incur increased expenses and will cause a diversion of management’s time and other internal
resources. We also may encounter problems or delays in completing the implementation of any changes necessary to make a favorable assessment of our internal control over financial reporting. In
addition, in connection with the attestation process, we may encounter problems or delays in completing the implementation of any requested improvements or receiving a favorable attestation from
our independent registered public accounting firm. If we cannot favorably assess the effectiveness of our internal control over financial reporting, or if our independent registered public accounting firm
is unable to provide an unqualified attestation report on our internal controls, investor confidence and the price of our common stock could be adversely affected and we may be subject to additional
regulatory scrutiny.
The increasing use of social media platforms presents new risks and challenges and the inability or failure to recognize, respond to, and effectively manage the accelerated impact of social
media could materially adversely impact the Bank’s business.
There has been a marked increase in the use of social media platforms, including weblogs (blogs), podcasts, social media websites, and other forms of Internet-based communications which
allow individuals’ access to a broad audience of consumers and other interested persons. Social media practices in the banking industry are evolving, which creates uncertainty and risk of
noncompliance with regulations applicable to the Bank’s business. Consumers value readily available information concerning businesses and their goods and services and often act on such information
without further investigation and without regard to its accuracy. Many social media platforms immediately publish the content their subscribers and participants’ post, often without filters or checks on
accuracy of the content posted. Information posted on such platforms at any time may be adverse to the Bank’s interests and/or may be inaccurate. The dissemination of information online could harm
the Bank’s business, prospects, financial condition, and results of operations, regardless of the information’s accuracy. The harm may be immediate without affording the Bank an opportunity for
redress or correction.
Other risks associated with the use of social media include improper disclosure of proprietary information, negative comments about the Bank’s business, exposure of personally identifiable
information, fraud, out-of-date information, and improper use by employees, directors and customers. The inappropriate use of social media by the Bank’s customers, directors or employees could
result in negative consequences such as remediation costs including training for employees, additional regulatory scrutiny and possible regulatory penalties, litigation, or negative publicity that could
damage the Bank’s reputation adversely affecting customer or investor confidence.
Market conditions and economic cyclicality may adversely affect our industry.
Market developments, including unemployment, price levels, stock and bond volatility, and other changes due to world events, affect consumer confidence levels, economic activity and
inflation. Changes in payment behaviors and payment rates may increase in delinquencies and default rates, which could affect our earnings and credit quality.
Negative developments in the banking industry could adversely affect our business operations and our financial condition and results of operations.
Actual events involving bank failures, limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the
financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to negative
media attention and market-wide liquidity problems. The closures by the regulators of First Republic Bank, Silicon Valley Bank, and Signature Bank in the first half of 2023 are examples of these
events. These developments negatively impact customer confidence in regional and community banks, which could prompt customers to maintain their deposits with larger financial institutions.
Further, competition for deposits has increased in recent periods, and the cost of funding has similarly increased, putting pressure on our net interest margin. If we were required to sell a portion of our
securities portfolio to address liquidity needs, we may incur losses, including as a result of the negative impact of rising interest rates on the value of our securities portfolio, which could negatively
affect our earnings and our capital. If we were required to raise additional capital in the current environment, any such capital raise may be on unfavorable terms, thereby negatively impacting book
value and profitability. While we have taken actions to improve our funding, there is no guarantee that such actions will be successful or sufficient in the event of sudden liquidity needs.
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There has also been increased regulatory scrutiny – in the course of routine examinations and otherwise – and new policies and regulations directed towards banks of similar size to the Bank, designed
to address the 2023 negative developments in the banking industry, all of which may increase our costs of doing business and reduce our profitability. Among other things, there may be an increased
focus by both regulators and investors on deposit composition, the level of uninsured deposits, losses embedded in our securities portfolio, contingent liquidity, CRE composition and concentration,
capital position and our general oversight and internal control structures regarding the foregoing. As a result, the Bank could face increased scrutiny or be viewed as higher risk by regulators and the
investor community.
RISKS RELATED TO THE REGULATION OF OUR INDUSTRY
We are subject to stringent capital requirements, which may adversely impact our return on equity or constrain us from paying dividends or repurchasing shares.
Federal regulations require FDIC-insured depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5 percent, a Tier 1
capital to risk-based assets ratio of 6.0 percent, a total capital to risk-based assets of 8.0 percent, and a 4.0 percent Tier l capital to total assets leverage ratio. In addition to establishing the minimum
regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer”
consisting of 2.5 percent of common equity Tier 1 capital to risk-weighted asset above the amount necessary to meet its minimum risk-based capital requirements.
In 2019, the FDIC passed a final rule providing qualifying community banking organizations the ability to opt-in to a new community bank leverage ratio (“CBLR”) framework, (tier 1
capital to average consolidated assets) at 9.0 percent for institutions under $10.0 billion in assets that such institutions may elect to utilize in lieu of the general applicable risk-based capital
requirements under Basel III. Such institutions that meet the CBLR and certain other qualifying criteria will automatically be deemed to be well-capitalized. The Bank decided to opt-in to the new
CBLR, effective for the quarter ended March 31, 2020. Pursuant to the “Regulatory Relief Act”, the Federal Reserve Board raised the asset threshold under its Small Bank Holding Company Policy
Statement from $1.0 billion to $3.0 billion for bank or savings and loan holding companies are permitted to have debt levels higher than would be permitted for larger holding companies, provided that
such companies meet certain other conditions such as not engaging in significant nonbanking activities. The Company no longer met the definition of a Small Bank Holding Company and the
qualifications set forth in the “Regulatory Relief Act” at December 31, 2022 and was subject to the larger company capital requirements at March 31, 2023.
The application of more stringent capital requirements likely will result in lower returns on equity and could require raising additional capital in the future or result in regulatory actions if we
are unable to comply with such requirements.
We operate in a highly regulated environment, and we may be adversely affected by changes in federal, state and local laws and regulations.
We are subject to extensive regulation, supervision, and examination by federal and state banking authorities. Any change in applicable regulations or federal, state or local legislation could
have a substantial impact on us and our operations. Additional legislation and regulations that could significantly affect our powers, authority, and operations may be enacted or adopted in the future,
which could have a material adverse effect on our financial condition and results of operations. Further, regulators have significant discretion and authority to prevent or remedy unsafe or unsound
practices or violations of laws by banks and bank holding companies in the performance of their supervisory and enforcement duties. The exercise of regulatory authority may have a negative impact
on our results of operations and financial condition.
The USA PATRIOT and Bank Secrecy Acts require financial institutions to develop programs to prevent financial institutions from being used for money laundering and terrorist activities.
If such activities are detected, financial institutions are obligated to file suspicious activity reports with the U.S. Treasury’s Office of Financial Crimes Enforcement Network. These rules require
financial institutions to establish procedures for identifying and verifying the identity of customers seeking to open new financial accounts. Failure to comply with these regulations could result in fines
or sanctions, including restrictions on conducting acquisitions or establishing new branches. During the last few years, several banking institutions have received large fines for non-compliance with
these laws and regulations. While we have developed policies and procedures designed to assist in compliance with these laws and regulations, these policies and procedures may not be effective in
preventing violations of these laws and regulations. Because we operate our business in the highly urbanized greater Newark/New York City metropolitan area, we may be at greater risk of scrutiny by
government regulators for compliance with these laws.
The level of our commercial real estate loan portfolio subjects us to additional regulatory scrutiny.
The FDIC and the other federal bank regulatory agencies have promulgated joint guidance on sound risk management practices for financial institutions with concentrations in commercial
real estate lending. Under the guidance, a financial institution that, like us, is actively involved in commercial real estate lending should perform a risk assessment to identify concentrations. A financial
institution may have a concentration in commercial real estate lending if, among other factors, (i) total reported loans for construction, land acquisition and development, and other land represent 100
percent or more of total capital, or (ii) total reported loans secured by multi-family and non-owner occupied, non-farm, non-residential properties, loans for construction, land acquisition and
development and other land, and loans otherwise sensitive to the general commercial real estate market, including loans to commercial real estate related entities, represent 300 percent or more of total
capital. Based on these factors, we have a concentration in loans of the type described in (ii) above of 421 percent of our risk-based capital at December 31, 2024. The purpose of the guidance is to
assist banks in developing risk management practices and capital levels commensurate with the level and nature of real estate concentrations. The guidance states that management should employ
heightened risk management practices including board and management oversight and strategic planning, development of underwriting standards, risk assessment and monitoring through market
analysis and stress testing. Our bank regulators could require us to implement additional policies and procedures consistent with their interpretation of the guidance that may result in additional costs to
us or that may result in a curtailment of our commercial real estate and multi-family lending and/or the requirement that we maintain higher levels of regulatory capital, either of which would adversely
affect our loan originations and profitability.
We are subject to the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to material penalties.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. A
successful regulatory challenge to an institution’s performance under the CRA or fair lending laws and regulations could result in a wide variety of sanctions, including the required payment of
damages and civil money penalties, injunctive relief, imposition of restrictions on mergers and acquisitions activity and restrictions on expansion. Private parties may also have the ability to challenge
an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations.
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Future legislative or regulatory actions responding to perceived financial and market problems could impair our ability to foreclose on collateral.
There have been proposals made by members of Congress and others that would reduce the amount distressed borrowers are otherwise contractually obligated to pay under their mortgage
loans and limit an institution’s ability to foreclose on mortgage collateral. Were proposals such as these, or other proposals limiting our rights as a creditor, to be implemented, we could experience
increased credit losses or increased expense in pursuing our remedies as a creditor.
STRATEGIC RISKS
Strong competition within our market area may limit our growth and profitability.
Competition is intense within the banking and financial services industry in New Jersey and the New York metropolitan area. In our market area, we compete with commercial banks,
savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere.
Many of these competitors have substantially greater resources, higher lending limits and offer services that we do not or cannot provide. This competition makes it more difficult for us to originate
new loans and retain and attract new deposits. Price competition for loans may result in originating fewer loans or earning less on our loans. Price competition for deposits may result in a reduction of
our deposit base or paying more on our deposits.
The small to mid-sized businesses that we lend to may have fewer resources to weather a downturn in the economy, which may impair a borrower’s ability to repay a loan to us that could
materially harm our operating results.
We target our business development and marketing strategy primarily to serve the banking and financial services needs of small to mid-sized businesses. These small to mid-sized businesses
frequently have smaller market share than their competition, may be more vulnerable to economic downturns, often need substantial additional capital to expand or compete and may experience
significant volatility in operating results. In addition, the success of a small to midsized business often depends on the management talents and efforts of one or two persons or a small group of persons,
and the death, disability or resignation of one or more of these persons could have a material adverse impact on the business and its ability to repay a loan. Economic downturns and other events that
negatively impact our market areas could cause us to incur substantial credit losses that could negatively affect our results of operations and financial condition.
We depend on our executive officers and key personnel to continue the implementation of our long-term business strategy and could be harmed by the loss of their services.
We believe that our continued growth and future success will depend in large part on the skills of our management team and our ability to motivate and retain these individuals and other key
personnel. The loss of service of one or more of our executive officers or key personnel could reduce our ability to successfully implement our long-term business strategy, our business could suffer,
and the value of our stock could be materially adversely affected. Leadership changes will occur from time to time, and we cannot predict whether significant resignations will occur or whether we will
be able to recruit additional qualified personnel. We believe our management team possesses valuable knowledge about the banking industry and that their knowledge and relationships would be very
difficult to replicate. Our success also depends on the experience of our branch managers and lending officers and on their relationships with the customers and communities they serve. The loss of
these key personnel could negatively impact our banking operations. The loss of key personnel could have an adverse effect on our business, financial condition, or operating results.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Cybersecurity Risk Management and Strategy
Cybersecurity risks are continually evolving, becoming increasingly complex and pervasive across all industries. To mitigate these cybersecurity risks and protect nonpublic, personally identifiable
customer data, financial transactions and our classified information systems, the Bank has implemented a comprehensive information security program, which is a component of its overarching
enterprise risk management program. Key components of the information security program include:
• A risk assessment process that identifies and prioritizes material cybersecurity risks; defines and evaluates the effectiveness of controls to mitigate the risks; and reports results to executive
management and the Board of Directors.
• Annual security assessments that proactively identify potential vulnerabilities that are both externally facing and internal within the bank’s infrastructure; reports the results for all
assessments to executive management and the Board of Directors with tracking and resolution to potential areas of risk.
• Vulnerability management program that patches known vulnerabilities across operating systems and software platforms.
• Strong controls around user access including creation, changes and termination of access, ongoing user access reviews, multifactor authentication and password policies.
• A technology team covering all critical cyber defense functions such as engineering, data protection, identity and access management, insider risk management, security operations, threat
emulation and threat intelligence.
• A training program that educates employees about cybersecurity risks and how to protect themselves from cyberattacks.
• An awareness program that keeps employees informed about cybersecurity threats and how to stay safe online.
• An incident response plan that outlines the steps the Bank will take to respond to a cybersecurity incident, which is tested on a periodic basis.
• Adoption and implementation of a layered defense / defense in depth model n which security systems are linked or stacked so that the strengths of one security system compensate the
weaknesses of the other system.
• Additional controls that include but not limited to data encryption; change management; end of life management; asset management; malware and antivirus detection, response and
mitigation; physical security; business continuity and disaster recovery management.
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The Bank engages reputable third-party assessors to conduct various independent audits on a regular basis, including but not limited to maturity assessments and various testing. Following a defense-
in-depth strategy, the Bank leverages both in-house resources and third-party service providers to implement and maintain processes and controls to manage the identified risks.
The Bank’s Third-Party / Vendor Risk Management program is designed to ensure that our vendors meet our cybersecurity requirements. This includes conducting periodic risk assessments of vendors,
requiring vendors to implement appropriate cybersecurity controls and monitoring vendor compliance with our cybersecurity requirements.
The Bank’s information security program and strategy are designed to ensure the Bank's information and information systems are resilient and appropriately protected from a variety of threats, both
natural and man-made. Periodic audits and risk assessments are performed to validate control requirements and ensure that the Bank’s information is protected at a level commensurate with its
sensitivity, value, and criticality. Preventative and detective security controls and policies are employed on all media where information is stored, the systems that process it, and infrastructure
components that facilitate its transmission to ensure the confidentiality, integrity, and availability of Bank information. These controls and policies include, but are not limited to access control, data
encryption, data loss prevention, incident response, security monitoring, third party risk management, and vulnerability management.
The Bank's information security program and strategy are regularly reviewed and updated to ensure that they are aligned with the Bank's business objectives and are designed to address evolving
cybersecurity threats and satisfy regulatory requirements and industry standards.
Material Effects of Cybersecurity Threats
While cybersecurity risks have the potential to materially affect the Bank's business, financial condition, and results of operations, the Bank does not believe that risks from cybersecurity threats or
attacks, including as a result of any previous cybersecurity incidents, have materially affected the Bank, including its business strategy, results of operations or financial condition. Accordingly, no
matter how well designed or implemented the Bank’s controls are, there is a risk that it may not be able to anticipate all zero-day cyber security exploits and vulnerabilities, and it may not be able to
implement effective preventive measures against such exploits / vulnerabilities and potentially associated security breaches in a timely manner.
Governance
Board of Directors Oversight
The Bank’s Board of Directors is charged with overseeing the establishment and execution of the Bank’s security management framework and monitoring adherence to related policies required by
applicable statutes, regulations and principles of safety and soundness. Consistent with this responsibility the Board has delegated primary oversight responsibility over the Bank’s security management
framework, including oversight of cybersecurity risk and cybersecurity risk management, to the Information Technology /Information Security Committee of the Board of Directors. The Information
Technology /Information Security Committee receives regular updates on cybersecurity risks and incidents and the cybersecurity program through direct interaction with the Chief Information
Technology Officer and provides periodic updates regarding cybersecurity risks and the cybersecurity program to the full Board of Directors. Additionally, awareness and training on cybersecurity
topics is provided to the Board on an annual basis.
Management's Role
We recognize the critical importance of developing, implementing, assessing, and maintaining robust cybersecurity measures to safeguard our information systems and protect the confidentiality,
integrity, and availability of our data. Senior Management, in collaboration with the Information Technology and Risk Departments, is responsible for the implementation and oversight of the Bank's
Cybersecurity Risk Management Program.
Information security risk is systematically reported to our Board of Directors by the Information Technology and Risk Departments through quarterly management reports, ensuring a structured and
effective flow of cybersecurity risk information to the Board of Directors. Various committees and working groups are dedicated to monitoring and managing information security risks, including the
Cybersecurity Incident Response Team and the Information Technology/Information Security Committee of the Board of Directors. These committees play a pivotal role in establishing and overseeing
policies, programs, and guidance that define clear expectations for managing cybersecurity risk.
Due to the evolving nature of cybersecurity threats, we actively engage with external experts to enhance our security expertise. These subject matter experts provide independent evaluations and testing
of our cybersecurity risk management framework. Our collaboration with these entities includes regular audits, threat assessments, and consultations on security enhancements to reinforce our security
posture.
22
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ITEM 2. PROPERTIES
At December 31, 2024, the Bank conducted its business through an executive office, two administrative offices, and 27 branch offices. 13 offices have drive-up facilities. The Bank has 36 automatic
teller machines at its branch facilities and three other off-site locations. The following table sets forth information relating to each of the Bank’s offices at December 31, 2024. The total net book value
of the Bank’s premises and equipment at December 31, 2024 was $12.6 million.
Location
Year Office Opened
Net Book Value
(In Thousands)
Executive Office
104-110 Avenue C, Bayonne, New Jersey
2003
$
2,106
Administrative and Other Offices
591-597 Avenue C, Bayonne, New Jersey
2010
72 (1)
27 West 18th Street, Bayonne, New Jersey
2014
192 (1)
Branch Offices
860 Broadway, Bayonne, New Jersey
2000
418 (1)
510 Broadway, Bayonne, New Jersey
2003
23 (1)
401 Washington Street, Hoboken, New Jersey
2010
106 (1)
473 Spotswood Englishtown Rd., Monroe Township, New Jersey
2010
85 (1)
611 Avenue C, Bayonne, New Jersey
2010
37 (1)
181 Avenue A, Bayonne, New Jersey
2010
1,912
211 Washington St., Jersey City, New Jersey
2010
-(1)
200 Valley Street, South Orange, New Jersey
2011
887
378 Amboy Road, Woodbridge, New Jersey
2019
3 (1)
165 Passaic Avenue, Fairfield, New Jersey
2014
-(1)
354 New Dorp Lane, Staten Island, New York
2015
2 (1)
190 Park Avenue, Rutherford, New Jersey
2015
17 (1)
1500 Forest Avenue, Staten Island, New York
2016
508 (1)
626 Laurel Avenue, Holmdel, New Jersey
2016
11 (1)
734 Ridge Road, Lyndhurst, New Jersey
2016
38 (1)
2000 Morris Avenue, Union, New Jersey
2016
7 (1)
156 Maplewood Avenue, Maplewood, New Jersey
2018
327 (1)
1630 Oak Tree Road, Edison, New Jersey
2018
10 (1)
1452 Route 46 West, Parsippany, New Jersey
2018
20 (1)
781 Newark Avenue, Jersey City, New Jersey
2018
3,111
70 Broadway, Hicksville, New York
2018
-(1)
10 Schalks Crossing Road, Plainsboro, New Jersey
2018
8 (1)
876 Kinderkamack Road, River Edge, New Jersey
2019
81 (1)
1100 Washington Street, Hoboken, New Jersey
2019
155 (1)
269 Ferry Street, Newark, New Jersey
2020
266 (1)
240 Page Avenue, Staten Island, New York
2023
257 (1)
Net book value of properties
10,659
Net book value of furnishings and equipment
1,910 (2)
Total premises and equipment
$
12,569
(1)
Leased property
(2)
Includes off-site ATMs
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ITEM 3. LEGAL PROCEEDINGS
We are involved, from time to time, as plaintiff or defendant in various legal actions arising in the normal course of business. As of December 31, 2024, we were not involved in any material legal
proceedings the outcome of which, if determined in a manner adverse to the Company, would have a material adverse effect on our financial condition or results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
The Company’s common stock trades on the Nasdaq Global Market under the symbol “BCBP.”
Stockholders.
At March 1, 2025, the Company had approximately 5,900 stockholders of record.
Recent Sales of Unregistered Securities
None.
Dividends
The Company declared and paid cash dividends of $0.16 per share in each quarter for the year ended December 31, 2024. The payment of dividends to shareholders of the Company is dependent on
the Bank paying dividends to the Company. The Bank may pay dividends as declared from time to time by the Board of Directors out of funds legally available, subject to certain restrictions. Under the
New Jersey Banking Act of 1948, as amended, the Bank may not pay a cash dividend unless, following the payment, the Bank’s capital stock will be unimpaired and the Bank will have a surplus of no
less than 50.0 percent of the Bank’s capital stock or, if not, the payment of the dividend will not reduce the surplus. In addition, the Bank cannot pay dividends in amounts that would reduce the Bank’s
capital below regulatory imposed minimums.
Issuer Purchases of Equity Securities
On December 11, 2020, the Company issued a press release announcing the adoption of a new stock repurchase program, effective December 16, 2020. Under the stock repurchase program,
management is authorized to repurchase up to 500,000 shares of the Company’s common stock. On October 17, 2022, the Company issued a press release announcing an amendment to its stock
repurchase program. The amendment to the stock repurchase program increased the number of shares yet to be repurchased from 82,350 shares to a total number of 500,000 shares. No shares were
repurchased during the three and twelve months ended December 31, 2024.
Compensation Plans
Set forth below is information as of December 31, 2024 regarding equity compensation plans that have been approved by shareholders. The Company has no equity-based benefit plans that were not
approved by shareholders.
Plan
Number of securities to be issued
upon exercise of outstanding
options and rights
Weighted average
Exercise price (1)
Number of securities remaining available
for issuance under plans
2011 Stock Option Plan
557,600
11.87
-
2018 Equity Incentive Plan
371,175
10.45
-
2023 Equity Incentive Plan
50,000
-
950,000
Equity compensation plans not approved by shareholders
-
-
-
Total
978,775
10.74
950,000
_____________________________
(1)
The weighted average exercise price reflects the exercise prices ranging from $10.55-$13.68 per share for options granted under the 2011 Stock Option Plan and the 2018 Equity Incentive Plan.
As of December 31, 2023, the 2011 Stock Option Plan and the 2018 Equity Incentive Plan have expired.
24
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Common Stock Performance Graph
Set forth hereunder is a stock performance graph comparing (a) the cumulative total return on the common stock for the period beginning with the closing sales price on December 31, 2019 through
December 31, 2024, (b) the cumulative total return on all publicly traded commercial bank stocks over such period, as repriced on the SNL Banks Index, and (c) the cumulative total return of the
Nasdaq Market Index over such period. Cumulative return assumes the reinvestment of dividends and is expressed in dollars based on an assumed investment of $100.
Period Ending
Index
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
BCB Bancorp, Inc.
100.00
85.00
123.68
149.25
112.27
109.45
NASDAQ Composite Index
100.00
144.92
177.06
119.45
172.77
223.87
S&P U.S. BMI Banks Index
100.00
87.24
118.61
98.38
107.32
143.68
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ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Critical Accounting Estimates
Critical accounting estimates are those accounting policies that can have a significant impact on the Company’s financial position and results of operations that require the use of complex and
subjective estimates based upon past experiences and management’s judgment. Because of the uncertainty inherent in such estimates, actual results may differ from these estimates. Below are those
policies applied in preparing the Company’s consolidated financial statements that management believes are the most dependent on the application of estimates and assumptions. For additional
accounting policies, see Note 2 of “Notes to Consolidated Financial Statements.”
Allowance for Credit losses
On January 1, 2023, the Company adopted ASU 2016-13 (Topic 326), which replaced the incurred loss methodology with a current expected credit losses (“CECL”) model for financial instruments
measured at amortized cost and other commitments to extend credit. Loans receivable are presented net of an allowance for credit losses and net deferred loan fees. In determining the appropriate level
of the allowance, management considers a combination of factors, such as economic and industry trends, real estate market conditions, size and type of loans in portfolio, nature and value of collateral
held, borrowers’ financial strength and credit ratings, and prepayment and default history. The calculation of the appropriate allowance for credit losses relies on econometric models to estimate the
quantitative reserves and also the use of qualitative factors to supplement the quantitative calculation. The process of establishing allowance for credit losses is complex and requires a substantial
amount of judgment regarding the impact of the aforementioned factors, as well as other factors, on the ultimate realization of loans receivable. In addition, our determination of the amount of the
allowance for credit losses is subject to review by the New Jersey Department of Banking and Insurance and the FDIC, as part of their examination process. After a review of the information available,
our regulators might require the establishment of an additional allowance. Any increase in the allowance for loan loss required by regulators would have a negative impact on our earnings. Refer to
Note 5 of the accompanying consolidated financial statements for additional information on the Company’s allowance for credit loss process.
Goodwill
The Company accounts for goodwill and other intangible assets in accordance with FASB ASC Topic 350, Intangibles – Goodwill and Other, which allows an entity to first assess qualitative factors to
determine whether it is necessary to perform the quantitative goodwill impairment test. Based on a qualitative assessment, management determined that the Company’s recorded goodwill totaling
$5.2 million, is not impaired as of December 31, 2024.
26
Table of Contents
Financial Condition at December 31, 2024 and 2023
Total assets decreased by $233.3 million, or 6.1 percent, to $3.599 billion at December 31, 2024, from $3.832 billion at December 31, 2023. The decrease in total assets was due to a decrease in loans
of $283.4 million, offset by an increase of $37.8 million in cash and cash equivalents. The decrease in loans was primarily from loan sales and payoffs/paydowns that exceeded loan originations.
Total cash and cash equivalents increased by $37.8 million, or 13.5 percent, to $317.3 million at December 31, 2024, from $279.5 million at December 31, 2023. The increase was primarily due to loan
sales and payoffs/paydowns that exceeded loan originations.
Loans receivable, net, decreased by $283.4 million, or 8.6 percent, to $2.996 billion at December 31, 2024, from $3.280 billion at December 31, 2023. Total loan decreases during the period included
decreases of $187.4 million in commercial real estate multi-family loans, $57.4 million in construction loans, $29.4 million in commercial business loans, $8.4 million in residential 1-4 family loans,
and $1.4 million in consumer loans. Home equity loans increased $438 thousand. The allowance for credit losses on loans increased $1.2 million to $34.8 million, or 77.8 percent of non-accruing loans
and 1.15 percent of gross loans, at December 31, 2024, as compared to an allowance for credit losses on loans of $33.6 million, or 178.9 percent of non-accruing loans and 1.01 percent of gross loans,
at December 31, 2023.
Total investment securities increased by $14.3 million, or 14.8 percent, to $111.2 million at December 31, 2024, from $96.9 million at December 31, 2023, as excess liquidity has been deployed into
the securities portfolio.
Deposits decreased by $228.2 million, or 7.7 percent, to $2.751 billion at December 31, 2024, from $2.979 billion at December 31, 2023. A majority of the decline was due to a decrease in certificates
of deposit of $193.5 million. The reduction in certificates of deposit was mainly caused by the withdrawal of brokered deposits which was partially offset by an increase in retail time deposits.
Total borrowings decreased by $12.1 million to $498.3 million at December 31, 2024 from $510.4 million at December 31, 2023. The decrease in borrowings was primarily due to the maturity of $18.0
million of FHLB debt that was paid off during 2024. The weighted average interest rate of the Company’s outstanding FHLB advances was 4.35 percent at December 31, 2024 and 4.21 percent at
December 31, 2023. The weighted average maturity of such FHLB advances as of December 31, 2024 was 0.97 years. The interest rate of the Company’s subordinated debt balances was 9.25 percent
at December 31, 2024 and 8.36 percent at December 31, 2023.
Stockholders’ equity increased by $9.9 million, or 3.1 percent, to $323.9 million at December 31, 2024, from $314.1 million at December 31, 2023. The increase was primarily attributable to the
increase in retained earnings of $5.9 million, or 4.4 percent, to $141.9 million at December 31, 2024 from $135.9 million at December 31, 2023. The increase in retained earnings was due to current
year net income of $18.6 million offset primarily by $12.3 million in dividends paid.
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Table of Contents
Analysis of Net Interest Income
Net interest income is the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities. Net interest income depends on the relative amounts of
interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them, respectively.
The following table sets forth average balance sheets, yields and costs, and certain other information for the years indicated. All average balances are daily average balances. No tax-equivalent yield
adjustments have been made as the amounts are not significant. The yields set forth below include the effect of deferred fees, discounts and premiums, which are included in interest income.
Year ended December 31, 2024
Year ended December 31, 2023
Year ended December 31, 2022
Average Daily
Balance
Interest
Earned/Paid
Average
Yield/Rate
Average Daily
Balance
Interest
Earned/Paid
Average
Yield/Rate
Average Daily
Balance
Interest
Earned/Paid
Average
Yield/Rate
(Dollars in Thousands)
Interest-earning assets:
Loans receivable (1) (2)
$
3,196,538 $
172,046
5.38% $
3,281,334 $
169,559
5.17% $
2,626,710 $
123,577
4.70%
Investment securities (3)
99,733
5,331
5.35
100,000
5,106
5.11
109,604
4,731
4.32
Interest-earning deposits
308,248
16,632
5.40
270,659
13,695
5.06
274,649
3,133
1.14
Total interest-earning assets
3,604,519
194,009
5.38%
3,651,993
188,360
5.16%
3,010,963
131,441
4.37%
Non-interest-earning assets
124,441
123,651
106,712
Total assets
$
3,728,960
$
3,775,644
$
3,117,675
Interest-bearing liabilities:
Interest-bearing demand accounts
$
553,013 $
9,701
1.75% $
658,023 $
8,426
1.28% $
751,708 $
2,970
0.40%
Money market accounts
372,205
12,457
3.35
334,353
8,489
2.54
350,207
2,313
0.66
Savings accounts
264,430
620
0.23
305,778
620
0.20
340,232
449
0.13
Certificates of deposit
1,153,235
55,442
4.81
980,617
39,157
3.99
614,346
6,889
1.12
Total interest-bearing deposits
2,342,883
78,220
3.34
2,278,771
56,692
2.49
2,056,493
12,621
0.61
Borrowed funds
511,916
23,768
4.64
594,564
27,606
4.64
149,354
4,875
3.26
Total interest-bearing liabilities
2,854,799
101,988
3.57%
2,873,335
84,298
2.93%
2,205,847
17,496
0.79%
Non-interest-bearing liabilities
554,037
602,691
636,217
Total liabilities
3,408,836
3,476,026
2,842,064
Stockholders' equity
320,124
299,618
275,611
Total liabilities and stockholders' equity
3,728,960
3,775,644
3,117,675
Net interest income
$
92,021
$
104,062
$
113,945
Net interest rate spread (4)
1.81%
2.22%
3.57%
Net interest margin (5)
2.55%
2.85%
3.78%
_______________
(1) Excludes allowance for credit losses.
(2) Includes nonaccrual loans which are immaterial to the yield.
(3) Includes Federal Home Loan Bank of New York stock.
(4) Interest rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income as a percentage of average interest-earning assets.
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Table of Contents
Rate/Volume Analysis
The table below sets forth certain information regarding changes in our interest income and interest expense for the years indicated. For each category of interest-earning assets and interest-bearing
liabilities, information is provided on changes attributable to (i) changes in average volume (changes in average volume multiplied by old rate); (ii) changes in rate (change in rate multiplied by old
average volume); (iii) changes due to combined changes in rate and volume; and (iv) the net change.
Years Ended December 31,
2024 vs. 2023
2023 vs. 2022
2022 vs. 2021
Increase (Decrease) Due to
Increase (Decrease) Due to
Increase (Decrease) Due to
Volume
Rate
Rate/
Volume
Total
Increase
(Decrease)
Volume
Rate
Rate/
Volume
Total
Increase
(Decrease)
Volume
Rate
Rate/
Volume
Total
Increase
(Decrease)
(In thousands)
Interest income:
Loans receivable
$
(4,382)$
7,051$
(182)$
2,487 $
30,798$
12,155$
3,029$
45,982 $
13,825$
1,854$
238 $
15,917
Investment securities
(13)
239
(1)
225
(415)
865
(76)
374
39
731
7
777
Interest-earning deposits
1,902
909
126
2,937
(45)
10,764
(156)
10,563
(261)
3,344
(909)
2,174
Total interest-earning assets
(2,493)
8,199
(57)
5,649
30,338
23,784
2,797
56,919
13,603
5,929
(664)
18,868
Interest expense:
Interest-bearing demand accounts
(1,345)
3,117
(497)
1,275
(370)
6,656
(830)
5,456
475
(138)
(24)
313
Money market deposits
961
2,701
306
3,968
(105)
6,579
(298)
6,176
72
540
23
635
Savings deposits
(84)
97
(13)
-
(46)
241
(24)
171
36
(86)
(6)
(56)
Certificates of Deposits
6,893
7,985
1,407
16,285
4,107
17,643
10,519
32,269
(538)
1,389
(122)
729
Borrowings
(3,837)
(1)
-
(3,838)
14,532
2,060
6,139
22,731
(578)
1,478
(205)
695
Total interest-bearing liabilities
2,588
13,899
1,203
17,690
18,118
33,179
15,506
66,803
(533)
3,183
(334)
2,316
Change in net interest income
$
(5,081)$
(5,700)$
(1,260)$
(12,041) $
12,220$
(9,395)$
(12,709)$
(9,884) $
14,136$
2,746$
(330)$
16,552
Results of Operations for the Years Ended December 31, 2024 and 2023
Net income decreased by $10.9 million, or 36.8 percent, to $18.6 million for the twelve months of 2024 from $29.5 million for the twelve months of 2023. The decrease in net income was driven,
primarily, by a $12.0 million decrease in net interest income, or 11.6 percent, and an increase in the provision for credit losses by $5.5 million, partially offset by a $4.3 million decrease in the income
tax provision and a $3.5 million decrease in non-interest expense.
Net interest income decreased by $12.0 million, or 11.6 percent, to $92.0 million for the first twelve months of 2024 from $104.1 million for the twelve months of 2023. The decrease in net interest
income resulted from an increase in interest expense of $17.7 million, partly offset by an increase in interest income of $5.6 million.
Interest income increased by $5.6 million, or 3.0 percent, to $194.0 million for the twelve months of 2024, from $188.4 million for the twelve months of 2023. The increase was due to an increase of
22 basis points in the yield on interest earning assets, from 5.16 percent to 5.38 percent. Offsetting this, somewhat, was a decrease in average interest earning assets of $47.5 million, which was
comprised of a decrease in average loans of $84.8 million offset by an increase in average other interest-earning assets of $37.6 million.
Interest expense increased by $17.7 million, or 21.0 percent, to $102.0 million for 2024, from $84.3 million for 2023. This increase resulted primarily from an increase in the average rate on interest-
bearing liabilities of 64 basis points to 3.57 percent for the twelve months of 2024, from 2.93 percent for the twelve months of 2023. Offsetting this was a decrease in average interest-bearing liabilities
of $18.5 million over the same comparable time period.
Net interest margin was 2.55 percent for the twelve months of 2024, compared to 2.85 percent for the twelve months of 2023. The decrease in the net interest margin compared to the prior period was
largely the result of an increase in the cost of the Bank’s interest-bearing liabilities.
During the twelve months of 2024, the Company experienced $10.4 million in net charge offs compared to $704 thousand in net charge offs for the same period in 2023. The provision for credit losses
was $11.6 million for the twelve months of 2024 compared to $6.1 million for the same period in 2023. The elevated charge-offs experienced during 2024 were driven by the deterioration experienced
in the Bank’s business express loans as these loans moved through the interest-only maturity cycle during the year. Management has taken several steps to closely monitor, and address asset quality
issues related to the business express loans. A strict policy of establishing specific reserves once the business express loans hit the 60-days delinquent status with a charge-off executed once the loans hit
the 90-days delinquent mark ensures a proactive approach for dealing with credit quality issues in the portfolio. The business express loans have a relatively short loss history that started to develop
during 2024. Management is committed in ensuring that its view on the lifetime losses embedded in the portfolio remains current as more empirical data becomes available. Management has also
established a team of asset recovery experts who are closely working with the Bank’s business express loan customers to ensure a positive outcome for both our customers and the Bank. Although
business express loans are charged-off once they reach the 90-days delinquent status, the Bank’s asset recovery and legal teams continue to work with these customers to recover losses recognized by
the Bank. Refer to the Lending Activities section of this 10K for additional details on the business express loans.
Non-interest income decreased by $1.1 million to $2.9 million for the twelve months of 2024 from $4.1 million for the twelve months of 2023. The decrease was due to losses on sales of loans of $5.3
million in 2024. This was offset by realized and unrealized gains on equity investments of $379 thousand in 2024, which was $3.7 million greater than realized and unrealized loss incurred in 2023, and
income on Bank-owned Life Insurance (BOLI), which was $883 thousand higher, in 2024. The realized and unrealized gains or losses on equity investments are based on prevailing market conditions.
Non-interest expense decreased by $3.5 million, or 5.7 percent, to $57.1 million for the twelve months of 2024 from $60.6 million for the same period in 2023. The decrease in operating expenses for
2024 was driven primarily by decreases in salaries and employee benefits of $2.6 million and advertising and promotional costs of $485 thousand. The 2023 salaries and benefits expense included a
previously disclosed one-time payment of $1.17 million to a former executive officer.
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The income tax provision decreased by $4.3 million, or 36.6 percent to $7.6 million for the twelve months of 2024 from $12.0 million for the same period in 2023, due to reduced taxable income in
2024. The consolidated effective tax rate was 29.1 percent for the twelve months of 2024 compared to 28.9 percent for the twelve months of 2023.
Results of Operations for the Years Ended December 31, 2023 and 2022
The results of operations comparison of 2023 compared to 2022 can be found in the Company’s previously filed Annual Report on Form 10-K for the year-ended December 31, 2023 under Item 7
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”- Results of Operations for the Years Ended December 31, 2023 and 2022 on pages 28 and 29.
Liquidity and Capital Resources
The overall objective of our liquidity management practices is to ensure the availability of sufficient funds to meet financial commitments and to take advantage of lending and investment
opportunities. The Company manages liquidity in order to meet deposit withdrawals on demand or at contractual maturity, to repay borrowings and other obligations as they mature, and to fund loan
and investment portfolio opportunities as they arise.
The Company’s primary sources of funds to satisfy its objectives are net growth in deposits (primarily retail), principal and interest payments on loans and investment securities, proceeds from the sale
of originated loans and FHLB and other borrowings. The scheduled amortization of loans is a predictable source of funds. Deposit flows and mortgage prepayments are greatly influenced by general
interest rates, economic conditions and competition. The Company has other sources of liquidity if a need for additional funds arises, including unsecured overnight lines of credit and other
collateralized borrowings from the Federal Reserve Bank Discount Window, the FHLB and other correspondent banks. Our Asset / Liability Management Committee is responsible for establishing and
monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs of our customers as well as unanticipated contingencies.
At December 31, 2024 and 2023, the Company had no overnight borrowings outstanding with the FHLB, respectively. The Company utilizes overnight borrowings from time to time to fund short-term
liquidity needs. The Company had total outstanding borrowings of $498.3 million at December 31, 2024 as compared to $510.4 million at December 31, 2023.
At December 31, 2024, the Company had the ability to obtain additional funding from the FHLB of $135.7 million and $333.0 million from the Federal Reserve Bank Discount Window, utilizing
unencumbered loan collateral. The Company expects to have sufficient funds available to meet current loan commitments in the normal course of business through typical sources of liquidity. Time
deposits scheduled to mature in one year or less totaled $1.001 billion at December 31, 2024. Based upon historical experience data, management estimates that a significant portion of such deposits
will remain with the Company.
The Company was well-positioned with adequate levels of cash and liquid assets as of December 31, 2024 and a significant amount of available borrowing capacity with FHLB and Federal Reserve
Bank Discount Window.
At December 31, 2024 and 2023, the capital ratios of the Bank exceeded the quantitative capital ratios required for an institution to be considered “well-capitalized” under prompt corrective action
provisions.
Forward-Looking Statements
This report on Form 10-K contains forward-looking statements that are based on assumptions and may describe future plans, strategies and expectations of BCB Bancorp, Inc. and subsidiaries. This
document may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company intends 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 is including this statement
for purposes of said safe harbor provisions. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to
a number of factors, which include, but are not limited to, factors discussed in this Annual Report on Form 10-K and in other documents filed with the Securities and Exchange Commission. These
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 the words “anticipate,”
“believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “will,” “would,” “should,” “could,” “may,” or similar expressions. Although we
believe that our plans, intentions, and expectations, as reflected in these forward-looking statements are reasonable, we can give no assurance that these plans, intentions, or expectations will be
achieved or realized. By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results and financial condition may differ, possibly materially, from the
anticipated results and financial condition indicated in these forward-looking statements. Important factors that could cause our actual results and financial condition to differ from those indicated in the
forward-looking statements include, among others, changes in market interest rates, general economic conditions, legislation, and regulation; changes in monetary and fiscal policies of the United
States Government, including policies of the United States Treasury and Federal Reserve Board; changes in the quality or composition of the loan or investment portfolios; changes in deposit flows,
competition, and demand for financial services, loans, deposits and investment products in our local markets; changes in accounting principles and guidelines; war or terrorist activities; and other
economic, competitive, governmental, regulatory, geopolitical and technological factors affecting the our operations, pricing and services, and those discussed under “Risk Factors” in Part I, Item 1A of
this Annual Report on Form 10-K. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,
performance, or achievements. You should not place undue reliance on these forward-looking statements, which reflect our expectations only as of the date of this report. We do not assume any
obligation to revise forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as may be required by law.
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Management of Market Risk
Qualitative Analysis. The majority of our assets and liabilities are monetary in nature. Consequently, one of our most significant forms of market risk is interest rate risk. Our assets, consisting
primarily of mortgage loans, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and reduce the
exposure of our net interest income to changes in market interest rates. Accordingly, our Board of Directors has established an Asset/Liability Committee which is responsible for evaluating the interest
rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives, and
for managing this risk consistent with the guidelines approved by the Board of Directors. Senior management monitors the level of interest rate risk on a regular basis and the Asset/Liability
Committee, which consists of senior management and outside directors operating under a policy adopted by the Board of Directors, meets as needed to review our asset/liability policies and interest
rate risk position.
Quantitative Analysis. The following table presents the Company’s net portfolio value (“NPV”). These calculations were based upon assumptions believed to be fundamentally sound, although they
may vary from assumptions utilized by other financial institutions. The information set forth below is based on data that included all financial instruments as of December 31, 2024. Assumptions have
been made by the Company relating to interest rates, loan prepayment rates, core deposit duration, and the market values of certain assets and liabilities under the various interest rate scenarios. Actual
maturity dates were used for fixed rate loans and certificate accounts. Investment securities were scheduled at either the maturity date or the next scheduled call date based upon management’s
judgment of whether the particular security would be called in the current interest rate environment and under assumed interest rate scenarios. Variable rate loans were scheduled as of their next
scheduled interest rate repricing date. Additional assumptions made in the preparation of the NPV table include prepayment rates on loans and mortgage-backed securities, core deposits without stated
maturity dates were scheduled with an assumed term of 48 months, and money market and noninterest bearing accounts were scheduled with an assumed term of 24 months. The NPV at “PAR”
represents the difference between the Company’s estimated value of assets and estimated value of liabilities assuming no change in interest rates. The NPV for a decrease of 200 to 300 basis points has
been excluded since it would not be meaningful in the interest rate environment as of December 31, 2024. The following sets forth the Company’s NPV as of December 31, 2024.
NPV as a % of Assets
Change in calculation
Net Portfolio Value
$ Change from PAR
% Change from PAR
NPV Ratio
Change
(Dollars in Thousands)
+100bp
$
367,584
$
(20,780)
(5.35)
%
10.68
%
(0.41)
%
PAR
388,363
-
-
11.09
-
-100bp
404,684
16,320
4.20
11.36
0.27
-200bp
413,816
25,452
6.55
11.43
0.34
-300bp
420,368
32,005
8.24
11.40
0.31
_________
bps-basis point
The table above indicates that at December 31, 2024, in the event of a 100-basis point decrease in interest rates, we would experience a 0.27 basis point increase in NPV, as compared to a 0.66 percent
decrease at December 31, 2023.
Certain shortcomings are inherent in the methodology used in the above interest rate risk measurement. Modeling changes in NPV require making certain assumptions that may or may not reflect the
manner in which actual yields and costs respond to changes in market interest rates. In this regard, the NPV table presented assumes that the composition of our interest-sensitive assets and liabilities
existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the
duration or repricing of specific assets and liabilities. Accordingly, although the NPV table provides an indication of our interest rate risk exposure at a particular point in time, such measurements are
not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of BCB Bancorp, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial condition of BCB Bancorp, Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of
operations, comprehensive income, changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes to the consolidated
financial statements (collectively, the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31,
2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with accounting principles generally accepted
in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of
December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 and our
report dated March 7, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2 to the financial statements, the Company changed its method of accounting for the recognition and measurement of credit losses as of January 1, 2023 upon the adoption of
Accounting Standards Codification Topic 326, Financial Instruments – Credit Losses (“ASC 326”).
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit
committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which they relate.
Allowance for Credit Losses – Loans Evaluated on a Collective Basis
As described in Notes 2 and 5 to the financial statements, the Company has recorded an allowance for credit losses on loans (“ACL”) in the amount of $34.8 million as of December 31, 2024,
representing management’s estimate of credit losses over the remaining expected life of the Company’s loan portfolio as of that date.
The Company’s methodology to determine its ACL incorporates the use of third-party software to arrive at an expected life-of-loan loss amount that incorporates a probability of default approach for
commercial and commercial real estate loans and a discounted cash flow approach for residential real estate and consumer loans. Both of these approaches use industry-based loss history and Company
specific prepayment rates that are adjusted based on various current and forecasted economic factors including, as relevant, home price indices, treasury yields, national and local unemployment rates
and national real disposable income growth rates which incorporate reasonable and supportable forecasts. The results of these calculations are then qualitatively adjusted by management based on
portfolio specific attributes including recent growth trends, credit concentrations, personnel changes and other portfolio relevant information. We determined that performing procedures relating to
these components of the Company’s methodology is a critical audit matter.
The principal considerations for our determination are (i) the application of significant judgment and estimation on the part of management, which in turn led to a high degree of auditor judgment and
subjectivity in performing procedures and evaluating audit evidence obtained, and (ii) significant audit effort was necessary in evaluating management’s methodology, significant assumptions and
calculations.
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How the Critical Audit Matter was addressed in the Audit
Following are some of the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the
Company’s measurement of the collective ACL, including controls over the:
Methodologies used to calculate the estimate
External model validation of the third-party model for appropriateness of model usage along with recalculation of model results
Completeness and accuracy of loan data
Evaluation of model assumptions including economic forecasts and loss-given default rates
Development of qualitative adjustments to model results
Addressing the above matters involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures
also included, among others, reviewing the Company’s model validation ensuring appropriate recalculation of the models used along with management’s review of model validation results, testing
various assumptions used in the calculation, testing management’s process for determining the qualitative reserve component, evaluating the appropriateness of management’s methodology relating to
the qualitative reserve component and testing the completeness and accuracy of data utilized by management.
/s/ Wolf & Company, P.C.
Auditor ID: 392
Boston, Massachusetts
March 7, 2025
We have served as the Company’s auditor since 2018.
.
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Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of BCB Bancorp, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited BCB Bancorp Inc. and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013. In our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of
December 31, 2024 and 2023 and each of the years in the three-year period then ended and our report dated March 7, 2025 expressed an unqualified opinion.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting
included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Wolf & Company, P.C.
Auditor ID: 392
Boston, Massachusetts
March 7, 2025
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BCB Bancorp, Inc. and Subsidiaries
Consolidated Statements of Financial Condition
December 31,
2024
2023
(In Thousands, Except Share and Per Share Data)
ASSETS
Cash and amounts due from depository institutions
$
14,075 $
16,597
Interest-earning deposits
303,207
262,926
Total cash and cash equivalents
317,282
279,523
Interest-earning time deposits
735
735
Debt securities available for sale, at fair value
101,717
87,769
Equity investments, at fair value
9,472
9,093
Loans held for sale
-
1,287
Loans receivable, net of allowance for credit losses of $34,789 and
$33,608, respectively
2,996,259
3,279,708
Federal Home Loan Bank of New York stock, at cost
24,272
24,917
Premises and equipment, net
12,569
13,057
Accrued interest receivable
15,176
16,072
Deferred income taxes
17,181
18,213
Goodwill and other intangibles
5,253
5,253
Operating lease right-of-use assets
12,686
12,935
Bank-owned life insurance ("BOLI")
76,040
73,407
Other assets
10,476
10,428
Total Assets
$
3,599,118 $
3,832,397
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Non-interest-bearing deposits
$
520,387 $
536,264
Interest bearing deposits
2,230,471
2,442,816
Total deposits
2,750,858
2,979,080
FHLB Advances
455,361
472,811
Subordinated debentures
42,961
37,624
Operating lease liability
13,139
13,315
Other liabilities
12,874
15,512
Total Liabilities
3,275,193
3,518,342
STOCKHOLDERS' EQUITY
Preferred stock: $0.01 par value, 10,000,000 shares authorized; issued and outstanding 2,496 shares of Series J 8.0% and Series K 6.0%
(liquidation value $10,000 per share) noncumulative perpetual preferred stock at December 31, 2024 and 2,528 shares of Series I 3.0% and
Series J 8.0% (liquidation value $10,000 per share) noncumulative perpetual preferred stock at December 31, 2023
-
-
Additional paid-in capital preferred stock
24,723
25,043
Common stock: no par value; 40,000,000 shares authorized, issued 20,296,748 and 20,138,294 at December 31, 2024 and December 31,
2023, respectively, outstanding 17,062,777 shares and 16,904,323 shares, at December 31, 2024 and December 31, 2023, respectively
-
-
Additional paid-in capital common stock
200,935
198,923
Retained earnings
141,853
135,927
Accumulated other comprehensive loss
(5,239)
(7,491)
Treasury stock, at cost, 3,233,971 and 3,233,971 shares at December 31, 2024 and December 31, 2023, respectively
(38,347)
(38,347)
Total Stockholders' Equity
323,925
314,055
Total Liabilities and Stockholders' Equity
$
3,599,118 $
3,832,397
See accompanying notes to consolidated financial statements.
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BCB Bancorp, Inc. and Subsidiaries
Consolidated Statements of Operations
Years Ended December 31,
2024
2023
2022
(In Thousands, Except for Per Share Data)
Interest and dividend income:
Loans, including fees
$
172,046
$
169,559
$
123,577
Mortgage-backed securities
1,378
880
564
Other investment securities
3,953
4,226
4,167
FHLB stock dividends and other interest-earning assets
16,632
13,695
3,133
Total interest and dividend income
194,009
188,360
131,441
Interest expense:
Deposits:
Demand and money market accounts
22,158
16,915
5,283
Savings and club
620
620
449
Certificates of deposit
55,442
39,157
6,889
78,220
56,692
12,621
Borrowings
23,768
27,606
4,875
Total interest expense
101,988
84,298
17,496
Net interest income
92,021
104,062
113,945
Provision (benefit) for credit losses
11,570
6,104
(3,075)
Net interest income after provision (benefit) for credit losses
80,451
97,958
117,020
Non-interest income:
Fees and service charges
4,717
5,334
4,816
BOLI income
2,633
1,751
2,671
(Loss) gain on sale of loans
(5,325)
36
129
Gain on sales of other real estate owned
-
77
-
Realized and unrealized gain (loss) on equity investments
379
(3,361)
(6,269)
Other
536
251
248
Total non-interest income
2,940
4,088
1,595
Non-interest expense:
Salaries and employee benefits
28,229
30,827
28,021
Occupancy and equipment
10,247
10,340
10,627
Data processing service fees
6,960
6,968
6,033
Professional fees
2,416
2,735
3,766
Director fees
1,151
1,083
1,253
Regulatory assessments
3,530
3,585
1,243
Advertising and promotional
863
1,348
941
Other real estate owned, net
-
7
10
Other
3,725
3,698
3,611
Total non-interest expense
57,121
60,591
55,505
Income before income tax provision
26,270
41,455
63,110
Income tax provision
7,647
11,972
17,531
Net Income
$
18,623
$
29,483
$
45,579
Preferred stock dividends
1,832
702
796
Net Income available to common stockholders
$
16,791
$
28,781
$
44,783
Net Income per common share-basic and diluted
Basic
$
0.99
$
1.71
$
2.64
Diluted
$
0.99
$
1.70
$
2.58
Weighted average number of common shares outstanding
Basic
17,007
16,870
16,969
Diluted
17,018
16,932
17,349
See accompanying notes to consolidated financial statements.
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BCB Bancorp, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended December 31,
2024
2023
2022
(In Thousands)
Net Income
$
18,623
$
29,483
$
45,579
Other comprehensive income (loss), net of tax:
Unrealized losses on available-for-sale securities:
Unrealized holding gains (losses) arising during the period
2,507
(1,493)
(10,327)
Net unrealized gains (losses)
2,507
(1,493)
(10,327)
Tax effects
(618)
355
2,560
Net-of-tax amount
1,889
(1,138)
(7,767)
Benefit Plans:
Actuarial gain
519
131
212
Income tax (expense) benefit
(156)
7
(64)
Net-of-tax amount
363
138
148
Total other comprehensive income (loss)
2,252
(1,000)
(7,619)
Comprehensive income
$
20,875
$
28,483
$
37,960
See accompanying notes to consolidated financial statements.
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BCB Bancorp, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity
Preferred
Stock
Common
Stock
Additional
Paid In
Capital
Retained
Earnings
Treasury
Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders'
Equity
(In Thousands, Except Per Share Data)
Balance at December 31, 2021
$
- $
- $
222,850 $
81,171 $
(31,125) $
1,128 $
274,024
Net income
-
-
-
45,579
-
-
45,579
Other comprehensive (loss)
-
-
-
-
-
(7,619)
(7,619)
Redemption of Series D and G Preferred Stock
-
-
(14,730)
-
-
-
(14,730)
Issuance of Series I Preferred Stock
-
-
6,810
-
-
-
6,810
Exercise of Stock Options (72,846 shares)
-
-
220
-
-
-
220
Stock-based compensation expense
-
-
1,132
-
-
-
1,132
Dividends payable on Series D 4.5%, Series G 6%, Series H 3.5% and
Series I 3% noncumulative perpetual preferred stock
-
-
-
(796)
-
-
(796)
Cash dividends on common stock ($0.64 per share declared)
-
-
-
(10,379)
-
-
(10,379)
Dividend Reinvestment Plan
-
-
466
(466)
-
-
-
Stock Purchase Plan
-
-
419
-
-
-
419
Treasury Stock Purchases (198,976 shares)
-
-
-
-
(3,406)
-
(3,406)
Balance at December 31, 2022
$
- $
- $
217,167 $
115,109 $
(34,531) $
(6,491) $
291,254
Effect of adopting ASU No. 2016-13 ("CECL")
-
-
-
2,870
-
-
2,870
Beginning Balance at January 1, 2023
-
-
217,167
117,979
(34,531)
(6,491)
294,124
Net income
-
-
-
29,483
-
-
29,483
Other comprehensive (loss)
-
-
-
-
-
(1,000)
(1,000)
Redemption of Series H Preferred Stock
-
-
(11,230)
-
-
-
(11,230)
Issuance of Series J Preferred Stock
-
-
15,270
-
-
15,270
Exercise of Stock Options (51,372 shares)
-
-
418
-
-
-
418
Stock-based compensation expense
-
-
593
-
-
-
593
Dividends payable on Series H 3.5%, Series I 3.0% and Series J 8%
noncumulative perpetual preferred stock
-
-
-
(702)
-
-
(702)
Cash dividends on common stock ($0.64 per share declared)
-
-
-
(10,440)
-
-
(10,440)
Dividend Reinvestment Plan
-
-
393
(393)
-
-
-
Stock Purchase Plan
-
-
1,355
-
-
-
1,355
Treasury Stock Purchases (266,753 shares)
-
-
-
-
(3,816)
-
(3,816)
Balance at December 31, 2023
$
- $
- $
223,966 $
135,927 $
(38,347) $
(7,491) $
314,055
Net income
-
-
-
18,623
-
-
18,623
Other comprehensive income
-
-
-
-
-
2,252
2,252
Redemption of Series I Preferred Stock
-
-
(10,010)
-
-
-
(10,010)
Issuance of Series J and K Preferred Stock
-
-
9,690
-
-
-
9,690
Stock-based compensation expense
-
-
767
-
-
-
767
Dividends payable on Series I 3.0% and Series J 8% noncumulative
perpetual preferred stock
-
-
-
(1,833)
-
-
(1,833)
Cash dividends on common stock ($0.64 per share declared)
-
-
-
(10,443)
-
-
(10,443)
Dividend Reinvestment Plan
-
-
421
(421)
-
-
-
Stock Purchase Plan
-
-
824
-
-
-
824
Ending balance at December 31, 2024
$
- $
- $
225,658 $
141,853 $
(38,347) $
(5,239) $
323,925
See accompanying notes to consolidated financial statements.
38
Table of Contents
BCB Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31,
2024
2023
2022
Cash flows from Operating Activities:
(In Thousands)
Net income
$
18,623 $
29,483 $
45,579
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of premises and equipment
1,713
1,978
2,246
Amortization and accretion, net
(1,464)
(2,533)
(1,607)
Provision (benefit) for credit losses
11,570
6,104
(3,075)
Deferred income tax expense (benefit)
258
(2,537)
(1,007)
Loans originated for sale
(4,874)
(2,964)
(6,608)
Proceeds from sale of loans
40,096
2,371
7,031
Loss (gain) on sales of loans
5,325
(36)
(129)
Gain on sales of fixed asset
(4)
-
-
Realized and unrealized loss (gain) on equity investments
(379)
3,361
6,269
Gain from sales of other real estate owned
-
(77)
-
Increase in cash surrender value of BOLI
(2,633)
(1,751)
(2,671)
Stock-based compensation expense
767
593
1,132
Net change in accrued interest receivable
896
(2,617)
(4,272)
Net change in other assets
(48)
(890)
(1,552)
Net change in accrued interest payable
(582)
2,704
2,022
Net change in other liabilities
(1,537)
1,969
(2,469)
Net Cash Provided by Operating Activities
67,727
35,158
40,889
Cash flows from Investing Activities:
Proceeds from repayments, calls, and maturities on securities
3,769
14,745
10,102
Purchases of securities
(15,224)
(12,498)
(27,468)
Proceeds from sales of securities
-
5,232
1,232
Proceeds from sales of premises
4
-
-
Proceeds from BOLI
-
-
3,500
Proceeds from sales of other real estate owned
-
152
-
Proceeds from sale of loans held in portfolio
6,127
-
-
Net decrease (increase) in loans receivable
228,676
(231,622)
(734,321)
Additions to premises and equipment
(1,225)
(4,527)
(518)
Purchase (redemption) of Federal Home Loan Bank of New York stock
645
(4,804)
(14,029)
Net Cash Provided by (Used In) Investing Activities
222,772
(233,322)
(761,502)
Cash flows from Financing Activities:
Net (decrease) increase in deposits
(228,222)
167,473
250,205
Proceeds from Federal Home Loan Bank of New York Long Term Advances
-
400,000
150,000
Repayments Federal Home Loan Bank of New York Long Term Advances
(18,000)
(150,000)
-
Net change in Federal Home Loan Bank of New York Short Term Advances
-
(160,000)
160,000
Purchase of treasury stock
-
(3,816)
(3,406)
Cash dividends paid on common stock
(10,443)
(10,440)
(10,379)
Cash dividends paid on preferred stock
(1,833)
(702)
(796)
Net proceeds from issuance of common stock
824
1,355
419
Net proceeds from issuance of preferred stock
9,690
15,270
6,810
Payments for redemption of preferred stock
(10,010)
(11,230)
(14,730)
Net proceeds from issuance of subordinated debt
38,754
-
-
Net payment from redemption of subordinated debt
(33,500)
-
-
Exercise of stock options
-
418
220
Net Cash (Used In) Provided by Financing Activities
(252,740)
248,328
538,343
Net (Decrease) Increase in Cash and Cash Equivalents
37,759
50,164
(182,270)
Cash and Cash Equivalents-Beginning
279,523
229,359
411,629
Cash and Cash Equivalents-Ending
$
317,282 $
279,523 $
229,359
39
Table of Contents
BCB Bancorp, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31,
2024
2023
2022
(In Thousands)
Supplementary Cash Flow Information
Cash paid during the year for:
Income taxes
$
6,879
$
18,027
$
18,804
Interest
$
102,570
$
81,594
$
15,475
See accompanying notes to consolidated financial statements.
40
Table of Contents
Note 1 - Organization
BCB Bancorp, Inc. (the “Company”) is incorporated in the State of New Jersey and is a bank holding company. The common stock of the Company is listed on the NASDAQ Global Market and trades
under the symbol “BCBP”.
The Company’s primary business is the ownership and operation of BCB Community Bank (the “Bank”). The Bank is a New Jersey based commercial bank which, as of December 31, 2024, operated
at 27 locations in Bayonne, Edison, Fairfield, Hoboken, Holmdel, Jersey City, Lyndhurst, Maplewood, Monroe Township, Newark, Parsippany, Plainsboro, South Orange, River Edge, Rutherford,
Union, and Woodbridge New Jersey, as well as Staten Island and Hicksville, New York and is subject to regulation, supervision, and examination by the New Jersey Department of Banking and
Insurance and the Federal Deposit Insurance Corporation. The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with
borrowed funds, to invest in securities and to make loans collateralized by residential and commercial real estate and, to a lesser extent, business and consumer loans. BCB Holding Company
Investment Corp. (the “New Jersey Investment Company”) was organized in January 2005 under New Jersey law as a New Jersey investment company primarily to hold investment and mortgage-
backed securities. As a part of the merger with IA Bancorp, Inc., the Company acquired Special Asset REO 1, LLC and Special Asset REO 2, LLC. Special Asset REO 2 had no assets at December 31,
2024. The Bank changed the name of Special Asset REO 1, LLC to BCB Capital Finance Group, LLC in November 2023.
Note 2 - Summary of Significant Accounting Policies
Basis of Consolidated Financial Statement Presentation
The consolidated financial statements which include the accounts of the Company and its wholly-owned subsidiaries, the Bank, the New Jersey Investment Company, BCB Capital Finance Group
LLC, and Special Asset REO 2, LLC have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). All significant intercompany accounts and transactions have been
eliminated in consolidation.
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the years then ended. Material estimates that are particularly susceptible to
significant change relate to the determination of the allowance for credit losses and a determination as to possible impairment of goodwill. Management believes that the allowance for credit losses is
adequate. While management uses available information to recognize losses on loans, future additions to the allowance for credit losses may be necessary based on changes in economic conditions in
the market area. Management’s assessment regarding impairment of securities is based on future projections of cash flow which are subject to change. Management performed a quantitative assessment
of goodwill and determined there was no impairment as of December 31, 2024.
In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for credit losses. Such agencies may require the Bank to recognize
additions to the allowance based on their judgments about information available to them at the time of their examination.
In preparing these consolidated financial statements, the Company evaluated the events that occurred between December 31, 2024, and the date these consolidated financial statements were issued.
Cash and Cash Equivalents
Cash and cash equivalents include cash and amounts due from depository institutions and interest-earning deposits in other banks having original maturities of three months or less.
41
Table of Contents
Note 2 - Summary of Significant Accounting Policies (continued)
Debt Securities
Investments in debt securities that the Bank has the positive intent and ability to hold to maturity are classified as held-to-maturity securities and reported at amortized cost. Debt securities that are
bought and held principally for the purpose of selling them in the near-term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings.
Debt securities not classified as trading securities or as held-to-maturity securities are classified as available-for-sale securities (“AFS”) and reported at fair value, with unrealized holding gains or
losses, net of applicable deferred income taxes, reported in the accumulated other comprehensive income (loss) component of stockholders’ equity. Gains and losses on the sale of securities are
recorded on the trade date and are determined using the specific identification method. There were no debt securities classified as held-to-maturity on December 31, 2024, and 2023.
For debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more than likely than not that it will be required to sell the security before recovery of its
amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities available-for-
sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the
extent to which fair value is less than amortized cost and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash
flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost
basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost. Any impairment that has not been
recorded through an allowance for credit losses is recognized in other comprehensive income, net of tax. The Company elected the practical expedient of zero loss estimates for securities issued by U.S.
government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major agencies, and have a long history of no credit losses.
Discounts on securities are amortized/accreted to maturity using the interest method. Premiums on securities are amortized to maturity or the earliest call date for callable securities using the interest
method. Interest and dividend income on securities, which includes amortization of premiums and accretion of discounts, are recognized in the consolidated financial statements when earned.
Loans Held For Sale
Loans held for sale consist primarily of residential mortgage loans intended for sale and are carried at the lower of cost or estimated fair market value using the aggregate method. These loans are
generally sold with servicing rights released. Gains and losses recognized on loan sales are based upon the cash proceeds received and the amortized cost of the related loans sold.
Loans Receivable
Loans receivable are stated at unpaid principal balances, less net deferred loan origination fees and the allowance for credit losses. Loan origination fees and certain direct loan origination costs are
deferred and amortized/accreted, as an adjustment of yield, over the contractual lives of the related loans.
Generally, the accrual of interest on loans that are contractually delinquent more than ninety days is discontinued and the related loans are placed on nonaccrual status. All payments received while in
nonaccrual status, are applied to principal until the loan has performed as expected for a minimum of six (6) months or until the loan is determined to qualify for return to normal accruing status. Loans
may be returned to accrual status when all the principal and interest contractually due are brought current and future payments are reasonably assured.
Concentration of Risk
Financial instruments which potentially subject the Company and its subsidiaries to concentrations of credit risk consist of cash and cash equivalents, investment and mortgage-backed securities and
loans.
Cash and cash equivalents include amounts placed with highly rated financial institutions. Securities include securities backed by the U.S. Government and other highly rated instruments. The Bank’s
lending activity is primarily concentrated in loans collateralized by real estate in the State of New Jersey and the New York metropolitan area as a result, credit risk related to loans is broadly dependent
on the real estate market and general economic conditions in the area.
42
Table of Contents
Note 2 - Summary of Significant Accounting Policies (continued)
Allowance for Credit losses
The allowance for credit losses represents the estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date. The
measurement of expected credit losses is applicable to loans receivable and securities measured at amortized cost. It also applies to off-balance sheet credit exposures such as loan commitments and
unused lines of credit. The allowance is established through a provision for credit losses that is charged against income. The methodology for determining the allowance for credit losses is considered a
critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic
environment that could result in changes to the amount of the recorded allowance for credit losses. The allowance for credit losses is reported separately as a contra-asset on the consolidated statements
of financial condition. The expected credit loss for unfunded lending commitments and unfunded loan commitments is reported on the consolidated statements of financial condition in other liabilities
while the provision for credit losses related to unfunded commitments is reported in other non-interest expense.
Allowance for Credit Losses on Loans Receivable
The allowance for credit losses on loans is deducted from the amortized cost basis of the loan to present the net amount expected to be collected. Expected losses are evaluated and calculated
on a collective, or pooled, basis for those loans which share similar risk characteristics. If the loan does not share risk characteristics with other loans, the Company will evaluate the loan on an
individual basis. Individually evaluated loans are primarily nonaccrual and collateral dependent loans. Furthermore, the Company evaluates the pooling methodology at least annually to ensure that
loans with similar risk characteristics are pooled appropriately. Loans are charged off against the allowance for credit losses when the Company believes the balances to be uncollectible. Expected
recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off.
The Company has chosen to segment its portfolio consistent with the manner in which it manages credit risk. The Company calculates estimated credit losses for these loan segments using
quantitative models and qualitative factors. Further information on loan segmentation and the credit loss estimation is included in Note 5 – Loan Receivables and Allowance for Credit Losses.
Individually Evaluated Loans
On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics. When the Company determines that a loan
no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, for collateral-
dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost basis of the loan, the
Company will charge off the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan.
Allowance for Credit Losses on Off-Balance Sheet Commitments
The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance calculation, other than those that are unconditionally cancelable.
To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. As
noted above, the allowance for credit losses on unfunded loan commitments is included in other liabilities on the consolidated statements of financial condition and the related credit expense is recorded
in other non-interest expense in the consolidated statements of operations.
Allowance for Credit Losses on Available-for-Sale Securities
For available-for-sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more than likely than not that it will be required to sell the security
before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For
securities available-for-sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the
Company considers the extent to which fair value is less than amortized cost and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the
present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than
the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost. Any impairment
that has not been recorded through an allowance for credit losses is recognized in other comprehensive income, net of tax. The Company elected the practical expedient of zero loss estimates for
securities issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major agencies, and have a long
history of no credit losses.
Accrued Interest Receivable
The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans and available-for-sale securities. Accrued interest receivable on
loans and securities is reported as a component of accrued interest receivable on the consolidated statements of financial condition. Changes in the allowance for credit losses are recorded as provision
for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the
criteria regarding intent or requirement to sell is met.
Premises and Equipment
Land is carried at cost. Buildings, building improvements, leasehold improvements and furniture, fixtures and equipment are carried at cost less accumulated depreciation and amortization. Significant
renovations and additions are charged to the property and equipment account. Maintenance and repairs are charged to expense in the period incurred. Depreciation charges are computed on the straight-
line method over the following estimated useful lives of each type of asset.
Buildings
40
Building improvements
7 - 40
Furniture, fixtures and equipment
5 - 7
Leasehold improvements
Shorter of useful life or term of lease
43
Table of Contents
Note 2 - Summary of Significant Accounting Policies (continued)
Federal Home Loan Bank of New York Stock
Federal law requires a member institution of the FHLB system to purchase and hold restricted stock of its district FHLB according to a predetermined formula. Such stock is carried at cost. The
Company reviews for impairment based on the ultimate recoverability of the cost basis of the stock. No impairment charges were recorded related to the FHLB of New York stock during 2024, 2023 or
2022.
Other Real Estate Owned
Assets acquired through, or in lieu of, loan foreclosures are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to
foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Costs relating to development and
improvement of property are capitalized, whereas costs relating to the holding of property are expensed. At December 31, 2024 and 2023 the Bank owned no foreclosed properties.
Interest Rate Risk
The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other funds, to make loans primarily secured by real estate and to
purchase securities. The potential for interest-rate risk exists as a result of the difference in duration of the Bank’s interest-sensitive liabilities compared to its interest-sensitive assets. For this reason,
management regularly monitors the maturity structure of the Bank’s interest-earning assets and interest-bearing liabilities in order to measure its level of interest-rate risk and to plan for future
volatility.
Fair Value Hierarchy
Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair
value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs
(Level 3 measurements). The three levels of the fair value hierarchy are as follows:
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).
An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.
Mortgage Servicing Rights
The Company recognizes as separate assets the rights to service mortgage loans for others. The right to service loans for others is generally obtained through the sale of loans with servicing retained.
The initial asset recognized for originated mortgage servicing rights (“MSR”) is measured at fair value. The estimated fair value of MSR is obtained through independent third-party valuations through
an analysis of future cash flows, incorporating assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing
costs, default rates and other market driven data, including the market’s perception of future interest rate movements. MSR are amortized in proportion to and over the period of estimated net servicing
income. We apply the amortization method for measurements of our MSR. MSR are assessed for impairment based on fair value at each reporting date. MSR impairment, if any, is recognized in a
valuation allowance through charges to earnings as a component of fees and service charges. Subsequent increases in the fair value of impaired MSR are recognized only up to the amount of the
previously recognized valuation allowance. Fees earned for servicing loans are reported as income when the related mortgage loan payments are collected.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales, when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been
isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company
does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
Bank-Owned Life Insurance
Bank-Owned Life Insurance policies are reflected on the consolidated statements of financial condition at cash surrender value. Changes in the net cash surrender value of the policies, as well as
insurance proceeds received in excess of carrying value, are reflected in non-interest income on the consolidated statements of operations and are not subject to income taxes.
Goodwill and Other Intangible Assets
Goodwill resulting from a business combination is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired as of the acquisition
date. Goodwill acquired in a business combination and determined to have an indefinite useful life is not amortized but tested for impairment at least annually. The Company has selected October 31 as
the date to perform the annual goodwill impairment test.
Income Taxes
The Company and its subsidiaries file a consolidated federal income tax return. Income taxes are allocated to the Company and its subsidiaries based upon their respective income or loss included in
the consolidated income tax return. Separate state income tax returns are filed by the Company and its subsidiaries.
44
Table of Contents
Note 2 – Summary of Significant Accounting Policies (continued)
Federal and state income tax expense has been provided on the basis of reported income. The amounts reflected on the tax returns differ from these provisions due principally to temporary differences
in the reporting of certain items for financial reporting and income tax reporting purposes. The tax effect of these temporary differences is accounted for as deferred taxes applicable to future periods.
Deferred income tax expense or (benefit) is determined by recognizing deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that
includes the enactment date. The realization of deferred tax assets is assessed and a valuation allowance provided, when necessary, for that portion of the asset which is not more likely than not to be
realized.
The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements in accordance with ASC Topic 740, Income Taxes, which prescribes a recognition threshold
and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods, disclosure and transition. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be
sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a likelihood of being realized on examination of
more than 50 percent. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Under the “more likely than not” threshold guidelines, the Company believes no
significant uncertain tax positions exist, either individually or in the aggregate, which would give rise to the non-recognition of an existing tax benefit. The Company recognizes interest and penalties
on unrecognized tax benefits in income taxes expense in the consolidated statements of operations. The Company did not recognize any interest and penalties for the years ended December 31, 2024,
2023, or 2022. The tax years subject to examination by the Federal taxing authority are the years ended December 31, 2023, 2022, and 2021. The tax years subject to examination by the State taxing
authorities are the years ended December 31, 2023, 2022, and 2021.
Net Income per Common Share
Basic net income per common share is computed by dividing net income less dividends on preferred stock by the weighted average number of shares of common stock outstanding. The diluted net
income per common share is computed by adjusting the weighted average number of shares of common stock outstanding to include the effects of outstanding stock options, if dilutive, using the
treasury stock method. Dilution is not applicable in periods of net loss. For the years ended December 31, 2024 and 2023, the difference in the weighted average number of basic and diluted common
shares was due solely to the effects of outstanding stock options. No adjustments to net income were necessary in calculating basic and diluted net income per share. For the year ended December 31,
2024, the Company had 436,000 shares considered to be anti-dilutive. For the year ended December 31, 2023, the Company had 6,476 shares considered to be anti-dilutive.
For the Year Ended December 31,
2024
2023
2022
Net Income
Shares
Per Share
Net Income
Shares
Per Share
Net Income
Shares
Per Share
(Numerator)
(Denominator)
Amount
(Numerator)
(Denominator)
Amount
(Numerator)
(Denominator)
Amount
(In Thousands, Except per share data)
Net income
$
18,623
$
29,483
$
45,579
Basic earnings per share-
Income available to
Common stockholders
$
16,791
17,007
$
0.99
$
28,781
16,870
$
1.71
$
44,783
16,969
$
2.64
Effect of dilutive securities:
Stock options
11
62
380
Diluted earnings per share-
Income available to
Common stockholders
$
16,791
17,018
$
0.99
$
28,781
16,932
$
1.70
$
44,783
17,349
$
2.58
Stock-Based Compensation Plans
The Company, under plans approved by its stockholders in 2018 and 2011, has granted stock options to employees and outside directors. See Note 12 for additional information as to option grants.
Compensation expense recognized for option grants is net of estimated forfeitures and is recognized over the awards’ respective requisite service periods. The fair values relating to options granted are
estimated using a Black-Scholes option pricing model. Expected volatilities are based on historical volatility of the Company’s stock and other factors, such as implied market volatility using the
respective options’ expected term. The Company used the mid-point of the original vesting period and original option life to estimate the options’ expected term, which represents the period of time that
the options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The
Company recognizes compensation expense for the fair values of option awards, which have graded vesting, on a straight-line basis.
Benefit Plans
The Company acquired, through the merger with Pamrapo Bancorp, Inc., a non-contributory defined benefit pension plan covering all eligible employees of Pamrapo Savings Bank. Effective
January 1, 2010, the defined benefit pension plan (the “Pension Plan”), was frozen by Pamrapo Savings Bank. All benefits for eligible participants accrued in the Pension Plan to January 1, 2010, have
been retained. The benefits are based on years of service and employee’s compensation. The Pension Plan is funded in conformity with funding requirements of applicable government regulations.
Prior service costs for the Pension Plan generally are amortized over the estimated remaining service periods of employees.
The Bank entered into a Supplemental Executive Retirement Agreement (the “SERP Agreement”) with its previous Chief Executive Officer (“the CEO”) in December 2021. Upon the CEO’s
retirement, the Bank will provide for a monthly retirement payment for his lifetime. The SERP Agreement provides the CEO with supplemental retirement income payable in the form of a life annuity.
Upon the Executive’s separation from service after reaching normal retirement age (age 65), for any reason other than death, benefit payments will commence on the first day of the second month
following CEO’s separation from service, payable monthly and continuing for the CEO’s lifetime. The monthly benefit payment will be $10,000 and is expected to commence in February 2025. The
amount charged to expense follows the vesting schedule in the SERP Agreement and was $44,632, $350,000, and $328,000 during the years ended December 31, 2024, 2023 and 2022, respectively.
45
Table of Contents
Note 2 – Summary of Significant Accounting Policies (continued)
Operating Segments
The Company operates as a single reportable segment under ASC 280, as the Chief Operating Decision Maker (CODM) reviews financial performance and allocates resources based on the
consolidated results of the Company as a whole. The Company, through its bank subsidiary, provides banking services to individuals and companies primarily in New Jersey and New York. These
services include commercial lending, residential lending, and consumer lending, checking, savings and time deposits, and cash management. The CODM primarily evaluates performance using net
interest income and net income as reported in the consolidated statement of operations. The Company’s primary measure of profitability is net interest income, which represents interest earned on loans
and investment securities, net of interest expense on deposits and borrowings. In addition, the CODM considers net income as a key measure of overall financial performance. The Company’s CODM
is the President & Chief Executive Officer.
Other performance indicators regularly reviewed by management include:
Net Interest Margin (NIM) – Measures the profitability of interest-earning assets.
Return on Assets (ROA) and Return on Equity (ROE) – Evaluates efficiency and shareholder returns.
Efficiency Ratio – Assesses cost management by comparing non-interest expense to total revenue.
Comprehensive Income (Loss)
The Company records unrealized gains and losses, net of deferred income taxes, on securities available-for-sale in accumulated other comprehensive income (loss). Realized gains and losses, if any,
are reclassified to non-interest income upon sale of the related securities or upon the recognition of an impairment loss. Accumulated other comprehensive income (loss) also includes benefit plan
amounts recognized in accordance with ASC 715, Compensation-Retirement Benefits, which reflect, net of tax, the unrecognized actuarial gains (losses) on the benefit plans.
Recent Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures.
The ASU is intended to enhance the transparency of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU require a
tabular reconciliation using both percentages and reporting currency amounts, with prescribed categories and separate disclosure of reconciling items with an effect equal to 5% or more of the amount
determined by multiplying pretax income (or loss) from continuing operations by the applicable statutory income tax rate; a qualitative description of the states and local jurisdictions that make up the
majority (greater than 50%) of the effect of the state and local income taxes; and the amount of income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes and by
individual jurisdictions when 5% or more of total income taxes paid, net of refunds received. The ASU also includes other amendments to improve the effectiveness of income tax disclosures. The
update is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The transition method is prospective with retrospective method permitted. The Company is
currently evaluating the impact on disclosures.
In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update require public entities with
reportable segments to provide additional and more detailed disclosures. The update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning
after December 15, 2024. Early adoption permitted. The adoption of ASU 2023-07 did not have an impact on its consolidated financial statements.
In March 2022, FASB issued ASU 2022-02, Financial Instruments—Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. The amendments in this update eliminate the
existing accounting guidance for troubled debt restructures ("TDRs") by creditors in Subtopic 310-40, Receivables - Troubled Debt Restructurings by Creditors and instead requires that an entity
evaluate whether a modification represents a new loan or a continuation of an existing loan. The amendments also enhance disclosure requirements for certain loan refinancing and restructuring by
creditors when a borrower is experiencing financial difficulty. All amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those
fiscal years. The Company adopted ASU 2016-13 on January 1, 2023. The adoption of this standard did not have a material effect on the Company's financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses ASU 2016-13, and related guidance, requires entities to report “expected” credit losses on financial instruments and
other commitments to extend credit rather than the current “incurred loss” model. The Company adopted ASU 2016-13 on January 1, 2023, for all financial assets measured at amortized cost and off-
balance sheet credit exposures using the modified retrospective method. Results for the twelve months ended December 31, 2023, are presented under ASC 326, Financial Instruments – Credit Losses,
while prior period amounts continue to be reported with previously applicable GAAP and have not been restated. Effective January 1, 2023, the Company recorded a $4.2 million decrease in allowance
for credit losses on loans that is referred to as the current expected credit loss (“CECL”) methodology (previously allowance for loan losses), an elimination of $1.1 million of reserves related to
acquired loans, and a $1.3 million increase related to allowance for off-balance sheet credit exposures included in other liabilities section of the consolidated statements of financial condition, which
resulted in a total cumulative effect adjustment of $2.9 million and an increase to retained earnings, a component of the stockholders’ equity (net of tax). Further information regarding the impact of
CECL can be found in Note 5 – Loan Receivable and Allowance for Credit Losses.
46
Table of Contents
Note 3 - Related Party Transactions
The Bank leases a property from New Bay, LLC. (“New Bay”), a limited liability company 100 percent owned by Directors of the Bank and the Company. In conjunction with the lease, New Bay
substantially removed the pre-existing structure on the site and constructed a new building suitable to the Bank for its banking operations. Under the terms of the lease, the cost of this project was
reimbursed to New Bay by the Bank. The amount reimbursed, which occurred during the year 2000, was $943,000, and is included in premises and equipment under the caption “Building and
improvements” (see Note 6). On May 1, 2006, the Bank renegotiated the lease to a twenty-five-year term. The Bank paid New Bay $165,000 a year ($13,750 per month) which is included in the
consolidated statements of operations for 2024, 2023 and 2022, within occupancy expense. The rent is to be adjusted every five years thereafter at the fair market rental value. The Bank expects to pay
$165,000 in rental expense for the year 2025.
On March 6, 2014, the Bank entered into a ten-year lease of property in Rutherford, New Jersey with 190 Park Avenue, LLC, which is owned by Directors of the Bank and the Company. The rent is
$8,958 per month and lease payments of $117,000, $105,000 and $102,000 were made in years 2024, 2023 and 2022, which is reflected in the consolidated statements of operations within occupancy
expense. The Bank expects to pay $109,645 in rental expense for the year 2025. This was renewed in April 2024 for 10 years.
On August 3, 2018, the Bank entered into a ten-year lease of property in River Edge, New Jersey with 876 Kinderkamack, LLC, which is owned by a majority of the Directors of the Bank and the
Company. The rent is $8,240 per month and lease payments of $99,000, $97,000 and $96,000 were made in the years 2024, 2023 and 2022, which is reflected in the consolidated statements of
operations within occupancy expense. The Bank expects to pay $98,880 in rental expense for the year 2025.
On April 2, 2021, the Bank renewed a five-year lease of property in Lyndhurst, New Jersey with 734 Ridge Realty, LLC, which is owned by Directors of the Bank and the Company. The rent is $7,718
per month and lease payments of $93,000, $93,000 and $93,000 were made in years 2024, 2023 and 2022, which is reflected in the consolidated statements of operations within occupancy expense.
The Bank expects to pay $93,000 in rental expense for the year 2025.
Note 4- Securities
Equity Securities
Equity securities are reported at fair value on the Company’s consolidated statements of financial condition. The Company’s portfolio of equity securities had an estimated fair value of $9.5 million
and $9.1 million as of December 31, 2024, and December 31, 2023, respectively. Included in this category are equity holdings of financial institutions. Equity securities are defined to include (a)
preferred, common and other ownership interests in entities including partnerships, joint ventures and limited liability companies and (b) rights to acquire or dispose of ownership interest in entities
at fixed or determinable prices.
Equity securities are generally required to be measured at fair value with market value adjustments being reflected in net income.
The following table presents the disaggregated net gains and losses on equity securities reported in the consolidated statements of operations (In Thousands):
For the Twelve
Months Ended
December 31, 2024
For the Twelve
Months Ended
December 31, 2023
For the Twelve
Months Ended
December 31, 2022
Net gains (losses) recognized during the period on equity securities
$
379 $
(3,361) $
(6,269)
Less: Net losses recognized during the period on equity securities sold during the period
-
(24)
(59)
Unrealized gains (losses) recognized during the reporting period on equity securities still held at the reporting date
$
379 $
(3,337) $
(6,210)
Debt Securities Available-for-Sale
The following table sets forth information regarding the amortized cost, estimated fair values, and unrealized gains and losses for the Bank’s debt securities portfolio at December 31 by final
contractual maturity. The following table does not take into consideration the effects of scheduled repayments or the effects of possible prepayments. Certain securities have interest rates that are
adjustable and will reprice annually within the various maturity ranges. The effect of these repricings are not reflected in the table below.
December 31, 2024
Gross
Gross
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
(In Thousands)
Residential Mortgage-backed securities:
More than one to five years
$
1,286
$
-
$
57
$
1,229
More than five to ten years
2,395
-
135
2,260
More than ten years
45,345
188
3,508
42,025
Sub-total:
49,026
188
3,700
45,514
Corporate Debt Securities:
More than one to five years
37,488
-
1,081
36,407
More than five to ten years
22,076
-
2,280
19,796
Sub-total:
59,564
-
3,361
56,203
Total Debt Securities Available-for-Sale
$
108,590
$
188
$
7,061
$
101,717
47
Table of Contents
Note 4- Securities (continued)
December 31, 2023
Gross
Gross
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
(In Thousands)
Residential Mortgage-backed securities
More than one to five years
$
605
$
-
$
24
$
581
More than five to ten years
4,147
-
230
3,917
More than ten years
32,833
192
2,910
30,115
Sub-total:
37,585
192
3,164
34,613
Corporate Debt Securities:
More than one to five years
8,981
-
197
8,784
More than five to ten years
50,583
-
6,211
44,372
Sub-total:
59,564
-
6,408
53,156
Total Debt Securities Available-for-Sale
$
97,149
$
192
$
9,572
$
87,769
The unrealized losses, categorized by the length of time of continuous loss position, and fair value of related securities available-for-sale were as follows:
Less than 12 Months
More than 12 Months
Total
Fair
Unrealized
Fair
Unrealized
Fair
Unrealized
Value
Losses
Value
Losses
Value
Losses
(In Thousands)
December 31, 2024
Residential mortgage-backed securities
$
10,558
$
127
$
24,673
$
3,573
$
35,231 $
3,700
Corporate Debt Securities
2,985
19
51,918
3,342
54,903
3,361
$
13,543
$
146
$
76,591
$
6,915
$
90,134 $
7,061
December 31, 2023
Residential mortgage-backed securities
$
5,316
$
98
$
22,153
$
3,066
$
27,469 $
3,164
Corporate Debt Securities
-
-
51,856
6,408
51,856
6,408
$
5,316
$
98
$
74,009
$
9,474
$
79,325 $
9,572
At December 31, 2024, thirty-four residential mortgaged-backed securities, and twenty corporate debt securities have unrealized losses with aggregate depreciation of 10% and 6%, respectively.
At December 31, 2023, thirty-one residential mortgage-backed securities, and twenty corporate debt securities have unrealized losses with aggregate depreciation of 10% and 11%, respectively.
Note 5 - Loans Receivable and Allowance for Credit losses
The following table presents the recorded investment in loans receivable at December 31, 2024 and December 31, 2023 by segment and class:
December 31, 2024
December 31, 2023
(In Thousands)
Loans:
Residential one-to-four family
$
239,870
$
248,295
Commercial and multi-family
2,246,677
2,434,115
Construction
135,434
192,816
Commercial business
249,852
269,274
Business express
92,947
102,928
Home equity (1)
66,769
66,331
Consumer
2,235
3,643
Total Loans
3,033,784
3,317,402
Less:
Deferred loan fees, net
(2,736)
(4,086)
Allowance for credit losses
(34,789)
(33,608)
(37,525)
(37,694)
Total Loans, net
$
2,996,259
$
3,279,708
(1) Includes home equity lines of credit.
The Company occasionally transfers a portion of its originated commercial loans to participating lending partners. The amounts transferred have been accounted for as sales and are therefore not
included in the Company’s accompanying consolidated statements of financial condition. The Company and its lending partners share proportionally in any gains or losses that may result from a
borrower’s lack of compliance with contractual terms of the loan. The Company continues to service the loans, collects cash payments from the borrowers, remits payments (net of servicing fees), and
disburses required escrow funds to relevant parties.
48
Table of Contents
Note 5 - Loans Receivable and Allowance for Credit losses (continued)
At December 31, 2024 and 2023, loans serviced by the Bank for the benefit of others totaled $116.5 million and $135.4 million, respectively.
Related-Party Loans
The Bank grants loans to its officers and directors and to their associates. The activity with respect to loans to directors, officers and associates of such persons, is as follows:
Years Ended December 31,
2024
2023
(In Thousands)
Balance – beginning
$
28,208
$
26,265
Loans originated
-
2,882
Collections of principal
(1,703)
(939)
Balance - ending
$
26,505
$
28,208
Allowance for Credit losses
The Company engages a third-party vendor to assist in the CECL calculation and has established a robust internal governance framework to oversee the quarterly estimation process for the allowance
for credit losses (“ACL”). The ACL calculation methodology relies on regression-based discounted cash flow (“DCF”) models that correlate relationships between certain financial metrics and external
market and macroeconomic variables. The following are some of the key factors and assumptions that are used in the Company’s CECL calculations:
methods based on probability of default and loss given default which are modeled based on macroeconomic scenarios;
a reasonable and supportable forecast period determined based on management’s current review of macroeconomic environment;
a reversion period after the reasonable and supportable forecast period;
estimated prepayment rates based on the Company’s historical experience and future macroeconomic environment;
estimated credit utilization rates based on the Company’s historical experience and future macroeconomic environment; and
incorporation of qualitative factors not captured within the modeled results. The qualitative factors include but are not limited to changes in lending policies, business conditions,
changes in the nature and size of the portfolio, portfolio concentrations, and external factors such as competition.
Allowance for credit losses are aggregated for the major loan segments, with similar risk characteristics, summarized below. However, for the purposes of calculating the reserves, these segments may
be further broken down into loan classes by risk characteristics that include but are not limited to regulatory call codes, industry type, geographic location, and collateral type.
Residential one-to-four family real estate loans involve certain risks such as interest rate risk and risk of non-repayment. Adjustable-rate residential real estate loans decrease the interest rate risk to the
Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan,
thereby increasing the potential for default. At the same time, the marketability of the underlying properties may be adversely affected by higher interest rates. Repayment risk may be affected by a
number of factors including, but not necessarily limited to, job loss, divorce, illness and personal bankruptcy of the borrower.
Commercial and multi-family real estate lending entails additional risks as compared with residential family property lending. Such loans typically involve large loan balances to single borrowers or
groups of related borrowers. The payment experience on such loans is typically dependent on the successful operation of the real estate project. The success of such projects is sensitive to changes in
supply and demand conditions in the market for commercial real estate as well as general economic conditions.
Construction lending is generally considered to involve a high risk due to the concentration of principal in a limited number of loans and borrowers and the effects of the general economic conditions
on developers and builders. Moreover, a construction loan can involve additional risks because of the inherent difficulty in estimating both a property’s value at completion of the project and the
estimated cost (including interest) of the project. The nature of these loans is such that they are generally difficult to evaluate and monitor. In addition, speculative construction loans to a builder are not
necessarily pre-sold and thus pose a greater potential risk to the Bank than construction loans to individuals on their personal residence.
Commercial business lending, including lines of credit, is generally considered higher risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general
economic conditions on the business. Commercial business loans are primarily secured by inventories and other business assets. In many cases, any repossessed collateral for a defaulted commercial
business loan will not provide an adequate source of repayment of the outstanding loan balance.
Home equity lending entails certain risks such as interest rate risk and risk of non-repayment. The marketability of the underlying property may be adversely affected by higher interest rates, decreasing
the collateral value securing the loan. Repayment risk can be affected by job loss, divorce, illness and personal bankruptcy of the borrower. Home equity line of credit lending entails securing an equity
interest in the borrower’s home. In many cases, the Bank’s position in these loans is as a junior lien holder to another institution’s superior lien. This type of lending is often priced on an adjustable rate
basis with the rate set at or above a predefined index. Adjustable-rate loans decrease the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily
because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default.
Other consumer loans generally have more credit risk because of the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans generally have shorter terms and
higher interest rates than other lending. In addition, consumer lending collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job
loss, divorce, illness and personal bankruptcy. In many cases, any repossessed collateral for a defaulted consumer loan will not provide an adequate source of repayment of the outstanding loan.
49
Table of Contents
Note 5- Loans Receivable and Allowance for Credit losses (continued)
The following tables set forth the activity in the Bank’s allowance for credit losses and recorded investment in loans receivable at December 31, 2024, December 31, 2023 and December 31, 2022. The
table also details the amount of total loans receivable, which are evaluated individually, and collectively, for impairment, and the related portion of the allowance for credit losses that is allocated to
each loan class (In Thousands):
Residential Commercial &
Multi-family
Construction
Commercial
Business
Business
Express
Home
Equity (1)
Consumer
Unallocated
Total
Allowance for credit losses:
Beginning Balance, December 31, 2023
$
2,344 $
16,301 $
3,841 $
5,811 $
4,542 $
691 $
78 $
- $
33,608
Charge-offs
-
(531)
-
(1,799)
(8,038)
-
(467)
-
(10,835)
Recoveries
48
-
-
371
27
-
-
-
446
Provision (benefit)
(445)
(4,064)
(1,821)
6,354
11,238
(97)
405
-
11,570
Ending Balance, December 31, 2024
$
1,947 $
11,706 $
2,020 $
10,737 $
7,769 $
594 $
16 $
- $
34,789
Ending Balance attributable to loans:
Individually evaluated
$
- $
1,473 $
- $
4,725 $
5,619 $
- $
- $
- $
11,817
Collectively evaluated
1,947
10,233
2,020
6,012
2,150
594
16
-
22,972
Ending Balance, December 31, 2024
$
1,947 $
11,706 $
2,020 $
10,737 $
7,769 $
594 $
16 $
- $
34,789
Loans Receivables:
Individually evaluated
$
853 $
64,735 $
586 $
11,163 $
5,619 $
443 $
- $
- $
83,399
Collectively evaluated
239,017
2,181,942
134,848
238,689
87,328
66,326
2,235
-
2,950,385
Total Gross Loans
$
239,870 $
2,246,677 $
135,434 $
249,852 $
92,947 $
66,769 $
2,235 $
- $
3,033,784
(1) Includes home equity lines of credit.
Residential Commercial &
Multi-family
Construction Commercial
Business
Business
Express
Home
Equity (1)
Consumer Unallocated
Total
Allowance for credit losses:
Ending Balance, December 31, 2022
2,474
21,749
2,094
4,495
872
485
24
180
32,373
Effect of adopting ASU No. 2016-13
("CECL")
144
(7,123)
1,387
1,734
(316)
182
7
(180)
(4,165)
Beginning Balance, January 1, 2023
$
2,618 $
14,626 $
3,481 $
6,229 $
556 $
667 $
31 $
- $
28,208
Charge-offs
-
-
-
-
(805)
-
-
-
(805)
Recoveries
45
-
-
29
11
16
-
-
101
Provision (benefit)
(319)
1,675
360
(447)
4,780
8
47
-
6,104
Ending Balance, December 31, 2023
$
2,344 $
16,301 $
3,841 $
5,811 $
4,542 $
691 $
78 $
- $
33,608
Ending Balance attributable to loans:
Individually evaluated
$
- $
990 $
310 $
2,132 $
797 $
- $
- $
- $
4,229
Collectively evaluated
2,344
15,311
3,531
3,679
3,745
691
78
-
29,379
Ending Balance, December 31, 2023
$
2,344 $
16,301 $
3,841 $
5,811 $
4,542 $
691 $
78 $
- $
33,608
Loans Receivables:
Individually evaluated
$
444 $
42,259 $
4,292 $
6,015 $
797 $
212 $
- $
- $
54,019
Collectively evaluated
247,851
2,391,856
188,524
263,259
102,131
66,119
3,643
-
3,263,383
Total Gross Loans
$
248,295 $
2,434,115 $
192,816 $
269,274 $
102,928 $
66,331 $
3,643 $
- $
3,317,402
(1) Includes home equity lines of credit.
50
Table of Contents
Note 5- Loans Receivable and Allowance for Credit losses (continued)
Residential Commercial &
Multi-family
Construction
Commercial
Business
Business
Express
Home
Equity (1)
Consumer
Unallocated
Total
Allowance for credit losses:
Beginning Balance, December 31, 2021
$
4,094 $
22,065 $
2,231 $
8,000 $
- $
533 $
14 $
182 $
37,119
Charge-offs
-
-
-
(2,095)
-
-
-
-
(2,095)
Recoveries
23
-
-
191
-
12
198
-
424
Provision (credit)
(1,643)
(316)
(137)
(1,601)
872
(60)
(188)
(2)
(3,075)
Ending Balance, December 31, 2022
$
2,474 $
21,749 $
2,094 $
4,495 $
872 $
485 $
24 $
180 $
32,373
Ending Balance attributable to loans:
Individually evaluated
$
196 $
- $
518 $
2,066 $
- $
4 $
- $
- $
2,784
Collectively evaluated
2,278
21,749
1,576
2,429
872
481
24
180
29,589
Ending Balance, December 31, 2022
$
2,474 $
21,749 $
2,094 $
4,495 $
872 $
485 $
24 $
180 $
32,373
Loans Receivables:
Individually evaluated
$
5,147 $
15,397 $
3,180 $
3,821 $
- $
727 $
- $
- $
28,272
Collectively evaluated
244,976
2,329,832
141,751
211,619
66,567
56,161
3,240
-
3,054,146
Total Gross Loans
$
250,123 $
2,345,229 $
144,931 $
215,440 $
66,567 $
56,888 $
3,240 $
- $
3,082,418
(1) Includes home equity lines of credit.
The following table presents the activity in the allowance for credit losses on off-balance sheet exposures for the years ended December 31, 2024, and 2023.
Twelve Months Ended December 31,
2024
Twelve Months Ended December
31, 2023
Allowance for Credit Losses:
Beginning Balance
$
694
$
-
Impact of adopting ASU No. 2016-13 ("CECL") effective January 1, 2023
-
1,266
Provision (benefit) for credit losses
119
(572)
$
813
$
694
51
Table of Contents
Note 5- Loans Receivable and Allowance for Credit losses (continued)
The tables below set forth the amounts and types of nonaccrual loans in the Bank’s loan portfolio at December 31, 2024, and 2023, respectively. Loans are generally placed on nonaccrual status when
they become more than 90 days delinquent, or when the collection of principal and/or interest become doubtful.
As of December 31, 2024, nonaccrual loans differed from the amount of total loans past due greater than 90 days due to loans 90 days past due but still accruing interest or loans that were previously
90 days past due both of which are maintained on nonaccrual status for a minimum of six months until the borrower has demonstrated their ability to satisfy the terms of the loan.
As of December 31, 2024
(in Thousands)
Nonaccrual loans with an
Allowance for Credit Losses
Nonaccrual loans without an
Allowance for Credit Losses
Total Nonaccrual loans
Amortized Cost of Loans Past
Due 90 Days and Still Accruing
Residential one-to-four family
$
534
$
853
$
1,387
$
-
Commercial and multi-family
4,823
28,151
32,974
6,049
Construction
-
586
586
-
Commercial business
5,208
2,425
7,633
-
Business express
1,706
191
1,897
1,677
Home equity (1)
-
231
231
-
Total
$
12,271
$
32,437
$
44,708
$
7,726
(1) Includes home equity lines of credit.
As of December 31, 2023
(in Thousands)
Nonaccrual loans with an
Allowance for Credit Losses
Nonaccrual loans without an
Allowance for Credit Losses
Total Nonaccrual loans
Amortized Cost of Loans Past
Due 90 Days and Still Accruing
Residential one-to-four family
$
-
$
270
$
270
$
-
Commercial and multi-family
2,029
6,655
8,684
-
Construction
2,312
1,980
4,292
-
Commercial business
2,599
2,892
5,491
-
Business express
-
-
-
-
Home equity (1)
-
46
46
-
Total
$
6,940
$
11,843
$
18,783
$
-
(1) Includes home equity lines of credit.
Had nonaccrual loans been performing in accordance with their original terms, the interest income recognized for the years ended December 31, 2024 and 2023 would have been approximately $5.6
million and $1.9 million, respectively. Interest income recognized on loans returned to accrual was approximately $1.4 million and $314,000, respectively. The Bank is not committed to lend additional
funds to the borrowers whose loans have been placed on a nonaccrual status. At December 31, 2024, there were $7.7 million in loans which were more than ninety days past due and still accruing
interest. At December 31, 2023, there were no loans that were more than ninety days past due and still accruing interest.
52
Table of Contents
Note 5- Loans Receivable and Allowance for Credit losses (continued)
The following table sets forth the delinquency status of total loans receivable at December 31, 2024:
Greater Than
Loans Receivable
30-59 Days
60-90 Days
90 Days
Total Past
Total Loans
>90 Days
Past Due
Past Due
Past Due
Due
Current
Receivable
and Accruing
(In Thousands)
Residential one-to-four family
$
3,229
$
-
$
302
$
3,531
$
236,339
$
239,870
$
-
Commercial and multi-family
8,279
2,673
30,903
41,855
2,204,822
2,246,677
6,049
Construction
-
1,829
586
2,415
133,019
135,434
-
Commercial business
9,125
580
3,795
13,500
236,352
249,852
-
Business express
6,714
3,452
3,141
13,307
79,640
92,947
1,677
Home equity (1)
1,846
18
231
2,095
64,674
66,769
-
Consumer
-
-
-
-
2,235
2,235
-
Total
$
29,193
$
8,552
$
38,958
$
76,703
$
2,957,081
$
3,033,784
$
7,726
(1) Includes home equity lines of credit.
The following table sets forth the delinquency status of total loans receivable at December 31, 2023:
Greater Than
Loans Receivable
30-59 Days
60-90 Days
90 Days
Total Past
Total Loans
>90 Days
Past Due
Past Due
Past Due
Due
Current
Receivable
and Accruing
(In Thousands)
Residential one-to-four family
$
4,701
$
-
$
270
$
4,971
$
243,324
$
248,295
$
-
Commercial and multi-family
1,853
7,876
6,842
16,571
2,417,544
2,434,115
-
Construction
3,641
-
586
4,227
188,589
192,816
-
Commercial business
2,314
363
1,081
3,758
265,516
269,274
-
Business express
1,922
248
50
2,220
100,708
102,928
-
Home equity (1)
907
-
-
907
65,424
66,331
-
Consumer
-
-
-
-
3,643
3,643
-
Total
$
15,338
$
8,487
$
8,829
$
32,654
$
3,284,748
$
3,317,402
$
-
(1) Includes home equity lines of credit.
Modifications
The Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) effective January 1, 2023. The
amendments in ASU 2022-02 eliminated the recognition and measurement of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty.
The following table shows the amortized cost basis of loans modified to borrowers experiencing financial difficulty, disaggregated by loan category and type of concession granted for the twelve
months ended December 31, 2024.
For the Twelve Months Ended December 31, 2024
(In Thousands)
Number
Payment Delay
Term Extension
Rate & Term
Reduction
Total Principal
% of Total Class of
Financing Receivable
Residential one-to-four family
1
$
173
$
-$
-
$
173
0.07%
Commercial and multi-family
1
-
-
15,036
15,036
0.67
Commercial business
1
1,294
-
-
1,294
0.52
Business express
276
-
63,299
-
63,299
68.10
279
$
1,467
$
63,299$
15,036
$
79,802
2.63%
The following table presents loan modifications made during 2024 by payment status as of December 31, 2024.
For the Twelve Months Ended December 31, 2024
(In Thousands)
Current
30-59 Days Past
Due
60-90 Days Past
Due
Greater than 90
Days Past Due &
Accruing
Nonaccrual
Total
Residential one-to-four family
$
-
$
173
$
-$
-
$
-
$
173
Commercial and multi-family
15,036
-
-
-
-
15,036
Commercial business
-
-
-
-
1,294
1,294
Business express
62,791
74
-
-
434
63,299
$
77,827
$
247
$
-$
-
$
1,728
$
79,802
The Company monitors the performance of loans modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts.
The Company did not have any loans that were both experiencing financial difficulty and modified during the twelve months ended During 31, 2023.
53
Table of Contents
Note 5 - Loans Receivable and Allowance for Credit losses (continued)
Criticized and Classified Assets
The Company’s policies provide for a classification system for problem assets. Under this classification system, problem assets are classified as “substandard,” “doubtful,” or “loss.”
When the Company classifies problem assets, the Company may establish general allowances for credit losses in an amount deemed prudent by management. General allowances represent loss
allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. A
portion of general loss allowances established to cover possible losses related to assets classified as substandard or doubtful may be included in determining our regulatory capital. Specific valuation
allowances for credit losses generally do not qualify as regulatory capital. As of December 31, 2024, the Company had $152.7 million in assets classified as substandard, of which $83.4 million were
individually evaluated. As of December 31, 2023, the Company had $85.7 million in assets classified as substandard, of which $54.0 were also individually evaluated. The loans classified as
substandard are comprised of unsecured commercial loans, and commercial loans secured by commercial real estate, commercial business assets, and residential real estate. The loans that have been
classified substandard were classified as such primarily due to payment status, because updated financial information has not been timely provided, or the collateral underlying the loan is in the process
of being revalued.
The Company’s internal credit risk grades are based on the definitions currently utilized by the banking regulatory agencies. The grades assigned and definitions are as follows, and loans graded
excellent, above average, good and watch list (risk ratings 1-5) are treated as “pass” for grading purposes. The “criticized” risk rating (6) and the “classified” risk ratings (7-9) are detailed below:
6 – Special Mention- Loans currently performing but with potential weaknesses including adverse trends in borrower’s operations, credit quality, financial strength, or possible collateral deficiency.
7 – Substandard- Loans that are inadequately protected by current sound worth, paying capacity, and collateral support. Loans on “nonaccrual” status. The loan needs special and corrective attention.
8 – Doubtful- Weaknesses in credit quality and collateral support make full collection improbable, but pending reasonable factors remain sufficient to defer the loss status.
9 – Loss- Continuance as a bankable asset is not warranted. However, this does not preclude future attempts at partial recovery.
Residential, home equity, and consumer loans are rated pass at origination with subsequent adjustments based on delinquency status.
54
Table of Contents
Note 5 - Loans Receivable and Allowance for Credit losses (continued)
The following table presents the loan portfolio types summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful, and loss within the Company’s
internal risk rating system as of December 31, 2024, and 2023 (In Thousands):
Loans by Year of Origination at December 31, 2024
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans to
Term Loans
Total
Residential one-to-four family
Pass
$
12,059 $
16,586 $
47,544 $
37,639 $
28,550 $
92,376 $
- $
- $
234,754
Special Mention
-
-
3,555
-
-
174
-
-
3,729
Substandard
-
-
301
173
-
913
-
-
1,387
Total one-to-four family
$
12,059 $
16,586 $
51,400 $
37,812 $
28,550 $
93,463 $
- $
- $
239,870
Commercial and multi-family
Pass
$
9,105 $
202,931 $
631,493 $
157,054 $
166,242 $
709,239 $
2,610 $
- $
1,878,674
Special Mention
-
9,761
132,712
37,600
9,232
47,756
140
-
237,201
Substandard
-
10,115
33,958
13,070
11,782
61,877
-
-
130,802
Total Commercial and multi-family
$
9,105 $
222,807 $
798,163 $
207,724 $
187,256 $
818,872 $
2,750 $
- $
2,246,677
Construction
Pass
$
4 $
34,906 $
37,625 $
- $
- $
- $
5,824 $
- $
78,359
Special Mention
-
1,521
3,792
47,174
3,745
-
-
-
56,232
Substandard
-
257
-
-
586
-
-
-
843
Total Construction
$
4 $
36,684 $
41,417 $
47,174 $
4,331 $
- $
5,824 $
- $
135,434
Commercial business
Pass
$
- $
2,477 $
266 $
475 $
3,711 $
28,902 $
163,444 $
663 $
199,938
Special Mention
-
8,874
-
1,878
194
4,835
20,298
409
36,488
Substandard
-
-
-
-
-
5,884
7,542
-
13,426
Total Commercial business
$
- $
11,351 $
266 $
2,353 $
3,905 $
39,621 $
191,284 $
1,072 $
249,852
Business express
Pass
$
- $
- $
- $
- $
- $
- $
23,739 $
59,189 $
82,928
Special Mention
-
-
-
-
-
-
1,506
2,894
4,400
Substandard
-
-
-
-
-
-
3,082
2,537
5,619
Total Business express
$
- $
- $
- $
- $
- $
- $
28,327 $
64,620 $
92,947
Home equity
Pass
$
300 $
3,767 $
1,369 $
501 $
549 $
5,754 $
51,829 $
2,186 $
66,255
Special Mention
-
-
-
-
-
18
-
-
18
Substandard
-
-
53
-
81
-
-
362
496
Total Home equity
$
300 $
3,767 $
1,422 $
501 $
630 $
5,772 $
51,829 $
2,548 $
66,769
Consumer
Pass
$
623 $
1,117 $
389 $
5 $
95 $
- $
6 $
- $
2,235
Special Mention
-
-
-
-
-
-
-
-
-
Substandard
-
-
-
-
-
-
-
-
-
Total Consumer
$
623 $
1,117 $
389 $
5 $
95 $
- $
6 $
- $
2,235
Total Loans
$
22,091 $
292,312 $
893,057 $
295,569 $
224,767 $
957,728 $
280,020 $
68,240 $
3,033,784
Gross charge-offs
$
446 $
20 $
- $
174 $
- $
1,133 $
8,381 $
681 $
10,835
55
Table of Contents
Note 5 - Loans Receivable and Allowance for Credit losses (continued)
Loans by Year of Origination at December 31, 2023
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Revolving
Loans to
Term Loans
Total
Residential one-to-four family
Pass
$
17,080 $
53,623 $
38,178 $
31,420 $
12,067 $
93,764 $
- $
- $
246,132
Special Mention
-
492
91
-
-
-
-
-
583
Substandard
-
-
1,310
-
-
270
-
-
1,580
Total one-to-four family
$
17,080 $
54,115 $
39,579 $
31,420 $
12,067 $
94,034 $
- $
- $
248,295
Commercial and multi-family
Pass
$
222,435 $
778,076 $
224,823 $
214,768 $
50,755 $
824,375 $
1,922 $
- $
2,317,154
Special Mention
9,908
34,375
-
-
529
4,453
140
-
49,405
Substandard
-
14,931
4,023
3,575
-
45,027
-
-
67,556
Total Commercial and multi-family
$
232,343 $
827,382 $
228,846 $
218,343 $
51,284 $
873,855 $
2,062 $
- $
2,434,115
Construction
Pass
$
21,730 $
74,180 $
59,564 $
21,462 $
- $
5,878 $
5,710 $
- $
188,524
Special Mention
-
-
-
-
-
-
-
-
-
Substandard
-
1,394
-
586
-
2,312
-
-
4,292
Total Construction
$
21,730 $
75,574 $
59,564 $
22,048 $
- $
8,190 $
5,710 $
- $
192,816
Commercial business
Pass
$
3,179 $
297 $
2,967 $
4,234 $
7,080 $
33,675 $
201,008 $
150 $
252,590
Special Mention
-
-
-
-
317
830
4,410
-
5,557
Substandard
-
-
-
-
-
4,703
6,424
-
11,127
Total Commercial business
$
3,179 $
297 $
2,967 $
4,234 $
7,397 $
39,208 $
211,842 $
150 $
269,274
Business express
Pass
$
- $
- $
- $
- $
- $
- $
101,531 $
- $
101,531
Special Mention
-
-
-
-
-
-
600
-
600
Substandard
-
-
-
-
-
-
797
-
797
Total Business express
$
- $
- $
- $
- $
- $
- $
102,928 $
- $
102,928
Home equity
Pass
$
5,022 $
1,487 $
553 $
769 $
1,280 $
6,181 $
50,111 $
553 $
65,956
Special Mention
-
-
-
-
-
-
-
-
-
Substandard
-
46
-
-
-
-
117
212
375
Total Home equity
$
5,022 $
1,533 $
553 $
769 $
1,280 $
6,181 $
50,228 $
765 $
66,331
Consumer
Pass
$
1,497 $
471 $
1,521 $
109 $
39 $
- $
6 $
- $
3,643
Special Mention
-
-
-
-
-
-
-
-
-
Substandard
-
-
-
-
-
-
-
-
-
Total Consumer
$
1,497 $
471 $
1,521 $
109 $
39 $
- $
6 $
- $
3,643
Total Loans
$
280,851 $
959,372 $
333,030 $
276,923 $
72,067 $
1,021,468 $
372,776 $
915 $
3,317,402
Gross charge-offs
$
- $
- $
- $
- $
- $
- $
805 $
- $
805
56
Table of Contents
Note 6 - Premises and Equipment
Premises and equipment as of December 31, 2024, 2023 and 2022 consists of the following:
December 31,
2024
2023
2022
(In Thousands)
Land
$
1,646
$
1,646
$
1,447
Buildings and improvements
10,048
10,023
6,514
Leasehold improvements
12,160
12,009
12,750
Furniture, fixtures and equipment
8,364
8,928
9,111
32,218
32,606
29,822
Accumulated depreciation and amortization
(19,649)
(19,549)
(19,314)
$
12,569
$
13,057
$
10,508
Depreciation and amortization expense for the years ended December 31, 2024, 2023, and 2022 was $1.7 million, $2.0 million, and $2.2 million, respectively.
Buildings and improvements include a building constructed on property leased from a related party (see Note 3).
Note 7 - Interest Receivable
The distribution of accrued interest receivable at December 31, 2024 and 2023 was as follows:
December 31,
2024
2023
(In Thousands)
Loans
$
14,344
$
15,188
Securities
832
884
$
15,176
$
16,072
Note 8 – Deposits
The distribution of deposits at December 31, 2024 and 2023 were as follows:
December 31,
2024
2023
(In Thousands)
Demand:
Non-interest bearing
$
520,387
$
536,264
Interest bearing
553,731
564,912
Money market
395,004
370,934
1,469,122
1,472,110
Savings and club
252,491
284,273
Certificates of deposit
1,029,245
1,222,697
$
2,750,858
$
2,979,080
Deposits of certain municipalities and local government agencies are collateralized by $32.2 million of investment securities and by a $320.0 million Municipal Letter of Credit with the FHLB.
At December 31, 2024, and 2023, certificates of deposit of $250,000 or more totaled approximately $398.0 million and $341.9 million, respectively.
At December 31, 2024, deposits from officers, directors and their associates totaled approximately $69.3 million.
The scheduled maturities of certificates of deposit at December 31, 2024, were as follows (In thousands):
Amount
2025
$
1,001,024
2026
23,500
2027
2,228
2028
1,112
2029
816
Thereafter
565
$
1,029,245
As of December 31, 2024, and 2023, the Company had $177.6 and $505.4 million in brokered certificate deposits, respectively. The Company had no brokered demand deposits at December 31, 2024
and 2023. Reciprocal deposits are not considered brokered deposits under applicable regulations.
57
Table of Contents
Note 9 - Short-Term Debt and Long-Term Debt
Information regarding short-term borrowings is as follows:
December 31,
2024
2023
Amount
Amount
(In Thousands)
Balance at end of period
$
-
$
-
Average balance outstanding during the year
$
2
$
60,941
Highest month-end balance during the year
$
-
$
350,000
Average interest rate during the year
6.42 %
5.25 %
Weighted average interest rate at year-end
-%
-%
Long-term debt consists of the following:
December 31,
2024
2023
Weighted Average
Rate
Amount ($000s)
Weighted Average
Rate
Amount ($000s)
Federal Home Loan Bank Advances:
Maturing by December 31,
2024
- %
$
-
0.48 %
$
18,000
2025
4.15
220,361
4.15
219,811
2026
4.53
235,000
4.53
235,000
4.35 %
$
455,361
4.21 %
$
472,811
FHLB advances are presented net of unamortized prepayment penalties totaling $439,000 at December 31, 2024 and $988,000 at December 31, 2023.
At December 31, 2024 and 2023, loans with carrying values of approximately $1.4 billion and $1.7 billion, respectively, were pledged to secure the above noted Federal Home Loan Bank of New York
borrowings. In addition, at December 31, 2024 and 2023, loans with carrying values of approximately $546.7 million and $497.4 million, respectively, were pledged with the Federal Reserve Discount
window. There were no outstanding borrowings with the Federal Reserve at December 31, 2024, and 2023. No securities were pledged for borrowings at December 31, 2024 and 2023.
At December 31, 2024, the Company had the ability to obtain additional funding from the FHLB of $135.7 million and $333.0 million from the Federal Reserve Bank Discount Window, utilizing
unencumbered loan collateral.
The Bank’s total credit exposure cannot exceed 50.0 percent of its total assets, or $1.799 billion, based on the borrowing limitations outlined in the FHLB of New York’s member products guide. The
total credit exposure limit of 50.0 percent of total assets is recalculated each quarter.
Note 10 – Subordinated Debt
On August 29, 2024, the Company issued $40 million of fixed-to-floating subordinated debentures (the “New Notes”) in a private placement to certain qualified institutional investors. The New Notes
have a 10-year term and bear interest at a fixed rate of 9.250% for the first five years of the term. The fixed interest rate is payable semiannually for the first five years and will be reset quarterly
thereafter to the then-current three-month SOFR (defined below) plus 582 basis points. The Notes qualify as Tier 2 capital for the Company for regulatory purposes, when applicable, and the portion
that the Company contributes to the Bank will qualify as Tier 1 capital for the Bank. The Notes constitute an unsecured and subordinated obligation of the Company and rank junior in right of payment
to any senior indebtedness and obligations to general and secured creditors. The Company used the net proceeds from the offering to repurchase $33.5 million of subordinated debt issued on July 30,
2018 (the “Old Notes”) and for general corporate purposes. The Tier 2 capital credit related to the Old Notes started to amortize as the Old Notes reached their five-year anniversary on August 1, 2023.
Subordinated debt included associated deferred costs of $1.2 million at December 31, 2024.
The Company also has $4.1 million of mandatory redeemable trust preferred securities. The interest rate on these floating rate junior subordinated debentures adjusts quarterly and had been equal to the
three-month LIBOR plus 2.65%. They mature on June 17, 2034.
In accordance with the Adjustable Interest Rate Act (the “LIBOR Act”) and the regulation issued by the Board of Governors of the Federal Reserve System implementing the LIBOR Act, the Company
has selected the three-month CME Term SOFR as the applicable successor rate for the trust preferred securities. The calculation of the amount of interest payable, based on the three-month CME Term
SOFR, will also include the applicable tenor spread adjustment of 0.26161% per annum as specified in the LIBOR Act. At December 31, 2024, the interest rate for the trust preferred securities was
7.260%.
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Table of Contents
Note 11 - Regulatory Matters
The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can initiate certain mandatory and
possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and
the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance sheet
items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings
and other factors.
In July 2013, the FDIC and the other federal bank regulatory agencies issued a final rule that revised their leverage and risk-based capital requirements and the method for calculating risk-weighted
assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. Among other things, the new rule
established a new common equity (“C/E”) Tier 1 minimum capital requirement (4.5 percent of risk-weighted assets), increased the minimum Tier 1 capital to risk-based assets requirement (from 4.0
percent to 6.0 percent of risk-weighted assets) and assigned a higher risk weight (150 percent) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial
real estate facilities that finance the acquisition, development or construction of real property. The final rule also requires unrealized gains and losses on certain available-for-sale securities holdings and
defined benefit plan obligations to be included for purposes of calculating regulatory capital requirements unless a one-time opt-in or opt-out is exercised. The Bank exercised the opt-out election.
On September 17, 2019, the FDIC passed a final rule providing qualifying community banking organizations the ability to opt-in to a new community bank leverage ratio (“CBLR”) framework, (tier 1
capital to average consolidated assets) at 9.0 percent for institutions under $10.0 billion in assets that such institutions may elect to utilize in lieu of the general applicable risk-based capital
requirements under Basel III. Such institutions that meet the community bank leverage ratio and certain other qualifying criteria will automatically be deemed to be well-capitalized.
The Bank opted into the community bank leverage ratio (tier 1 capital to average consolidated assets) (“CBLR”) framework, with a minimum requirement of 9% for institutions under $10 billion in
assets. Such institutions meeting that requirement may elect to utilize the CBLR in lieu of the general applicable risk-based capital requirements under Basel III. Such institutions that meet the CBLR
and certain other qualifying criteria will automatically be deemed to be well-capitalized.
At December 31, 2024 and December 31, 2023, the Bank exceeded all of its regulatory capital requirements. The following table sets forth the regulatory capital ratios for the Bank as well as
regulatory capital requirements for the periods presented.
For Capital Adequacy
To be Well Capitalized under
Prompt Corrective
Actual
Purposes
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in Thousands)
As of December 31, 2024
Bank
Community Bank Leverage Ratio
$
363,697
10.03%
$
290,087
8.00%
$
326,348
9.00%
As of December 31, 2023
Bank
Community Bank Leverage Ratio
$
350,749
9.09%
$
308,608
8.00%
$
347,184
9.00%
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Note 11 - Regulatory Matters (continued)
The following tables set forth the regulatory capital ratios for the Company as well as the regulatory requirements for the year ended December 31, 2024, and 2023.
For Capital Adequacy
To be Well Capitalized under
Prompt Corrective
Actual
Purposes
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in Thousands)
As of December 31, 2024
Bancorp
Total Capital (to Risk-Weighted Assets)
$
400,591
12.89 %
$
248,621
8.00 %
$
310,777
10.00 %
Tier 1 Capital (to Risk-Weighted Assets)
326,965
10.52
186,482
6.00
186,482
6.00
C/E Tier 1 Capital (to Risk-Weighted Assets)
298,118
9.59
139,889
4.50
-
-
Tier 1 Capital (to adjusted total assets)
326,965
9.02
144,996
4.00
-
-
For Capital Adequacy
To be Well Capitalized under
Prompt Corrective
Actual
Purposes
Action Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in Thousands)
As of December 31, 2023
Bancorp
Total Capital (to Risk-Weighted Assets)
$
379,562
11.14 %
$
272,564
8.00 %
$
340,705
10.00 %
Tier 1 Capital (to Risk-Weighted Assets)
319,154
9.37
204,422
6.00
204,422
6.00
C/E Tier 1 Capital (to Risk-Weighted Assets)
289,987
8.51
153,317
4.50
-
-
Tier 1 Capital (to adjusted total assets)
319,154
8.27
154,315
4.00
-
-
For the Company to be “well capitalized” under Federal Reserve definitions for bank holding companies, the Company is only required to have a Tier 1 Capital to Risk Weighted Assets ratio of at least
6.00% and a Total Capital to risk Weighted Assets ratio of at least 10.00%.
As of December 31, 2024, and 2023, the most recent notification from the Company and the Bank’s regulators categorized the Bank as “well-capitalized” under the regulatory framework for prompt
corrective action. There are no conditions or events occurring since that notification that management believes have changed the Company’s or the Bank’s category.
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Note 12- Benefits Plans
Pension Plan
The Company acquired, through the merger with Pamrapo Bancorp, Inc. a non-contributory defined benefit pension plan (“Pension Plan”) covering all eligible employees of Pamrapo Savings Bank.
Effective January 1, 2010, the Pension Plan was frozen by Pamrapo Savings Bank. All benefits for eligible participants accrued in the Pension Plan to the freeze date have been retained. The benefits
are based on years of service and employee’s compensation. The Pension Plan is funded in conformity with funding requirements of applicable government regulations. Prior service costs for the
Pension Plan generally are amortized over the estimated remaining service periods of employees.
The following tables set forth the Pension Plan's funded status at December 31, 2024, 2023 and 2022 and components of net periodic pension cost for the years ended December 31, 2024, 2023 and
2022:
Change in Benefit Obligation:
December 31,
2024
2023
2022
(In Thousands)
Benefit obligation, beginning of year
$
4,802
$
4,935
$
6,492
Interest cost
224
238
178
Actuarial gain (1)
(256)
(25)
(1,362)
Benefits paid
(363)
(346)
(363)
Lump sum distributions
(179)
-
(10)
Benefit obligation, ending
$
4,228
$
4,802
$
4,935
Change in Plan Assets:
Fair value of assets, beginning of year
$
6,012
$
5,965
$
7,144
Actual return on plan assets
612
393
(806)
Benefits paid
(363)
(346)
(363)
Lump sum distributions
(179)
-
(10)
Fair value of assets, ending
$
6,082
$
6,012
$
5,965
Fair value of assets
$
6,082
$
6,012
$
5,965
Projected benefit obligation
4,228
4,802
4,935
Funded status, included in other assets, net
$
1,854
$
1,210
$
1,030
Valuation assumptions used to determine benefit obligation at period end:
Discount rate
5.54%
4.83%
5.02%
Salary increase rate
N/A
N/A
N/A
(1) Actuarial gain comes about when the actual plan results are more favorable than the actuarial assumptions used to perform the calculations. The primary actuarial assumptions used are interest and
mortality as well as the rate of return on the plan assets. Differences between expected and actual results in each year are included in the net actuarial gain.
Net Periodic Pension Expense:
December 31,
2024
2023
2022
(In Thousands)
Interest cost
$
224
$
238
$
178
Expected return on assets
(350)
(346)
(417)
Amortization of net loss
-
55
66
Net periodic pension benefit
$
(126)
$
(53)
$
(173)
Valuation assumptions used to determine net periodic benefit for the year:
Discount rate
4.83%
5.02%
2.83%
Long term rate of return on plan assets
6.00%
6.00%
6.00%
Salary increase rate
N/A
N/A
N/A
At December 31, 2024, 2023 and December 31, 2022, unrecognized net losses of $62,000, $580,000 and $559,000, respectively, were included, net of deferred income tax, in accumulated other
comprehensive loss in accordance with ASC 715-20 and ASC 715-30.
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Note 12 - Benefits Plan (continued)
Plan Assets
Investment Policies and Strategies
The primary long-term objective for the Pension Plan is to maintain assets at a level that will sufficiently cover future beneficiary obligations. The Pension Plan is structured to include a volatility
reducing component (the fixed income commitment) and a growth component (the equity commitment).
To achieve the Bank’s long-term investment objectives, the trustee invests the assets of the Pension Plan in a diversified combination of asset classes, investment strategies, and pooled vehicles. The
asset allocation guidelines in the table below reflect the Bank’s risk tolerance and long-term objectives for the Pension Plan. These parameters will be reviewed on a regular basis and subject to change
following discussions between the Bank and the trustee.
The following asset allocation targets and ranges guides the trustee in structuring the overall allocation in the Pension Plan’s investment portfolio. The Bank or the trustee may amend these allocations
to reflect the most appropriate standards consistent with changing circumstances. Any such fundamental amendments in strategy will be discussed between the Bank and the trustee prior to
implementation.
Based on the above considerations, the following asset allocation ranges will be implemented:
Asset Allocation Parameters by Asset Class
Minimum
Target
Maximum
Equity
Large-Cap U.S.
42%
Mid/Small-Cap U.S.
11%
Non-U.S.
26%
Total-Equity
40%
55%
60%
Fixed Income
Long/Short Duration
43%
Money Market/Certificates of Deposit
2%
Total-Fixed Income
40%
45%
60%
The parameters for each asset class provide the trustee with the latitude for managing the Pension Plan within a minimum and maximum range. The trustee has full discretion to buy, sell, invest and
reinvest in these asset segments based on these guidelines which includes allowing the underlying investments to fluctuate within the stated policy ranges. The Pension Plan maintains a cash
equivalents component (not to exceed 3 percent under normal circumstances) within the fixed income allocation for liquidity purposes.
The trustee monitors the actual asset segment exposures of the Pension Plan on a regular basis and, periodically, may adjust the asset allocation within the ranges set forth above as it deems appropriate.
Periodic reallocations of assets are based on the trustee’s perception of the changing risk/return opportunities of the respective asset classes.
Determination of Long-Term Rate of Return
The long-term rate of return on assets assumption was set based on historical returns earned by equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the
Pension Plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn real rates of return in the ranges of 6.0 to 10.0 percent and 2.0 to 6.0 percent, respectively.
The long-term inflation rate was estimated to be 3.0 percent. When these overall return expectations are applied to the Pension Plan’s target allocation, the result is an expected rate of return of 4.0 to
7.0 percent.
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Note 12 - Benefits Plan (continued)
The fair values of the Pension Plan assets at December 31, 2024, by asset category (see Note 2 for the definitions of levels), are as follows (In Thousands):
Asset Category
Total
(Level 1)
(Level 2)
(Level 3)
Mutual funds-Equity
Large-Cap Value (a)
$
1,035
$
1,035
$
-
$
-
Large-Cap Growth (b)
-
-
-
-
Diversified Emerging Markets (f)
88
88
-
-
Large Blend (d)
1,253
1,253
-
-
Technology (g)
168
168
-
-
Mutual Funds-Fixed Income
Long Government (h)
38
38
-
-
Multi-Sector Bond (c)
1,181
1,181
-
-
High Yield Bond (e)
622
622
-
-
Intermediate Core Bond (i)
595
595
BCB Common Stock
590
590
-
-
Cash Equivalents
Money Market
512
512
-
-
Total
$
6,082
$
6,082
$
-
$
-
The fair values of the Company’s pension plan assets at December 31, 2023, by asset category (see Note 2 for the definitions of levels), are as follows (In Thousands):
Asset Category
Total
(Level 1)
(Level 2)
(Level 3)
Mutual funds-Equity
Large-Cap Value (a)
$
1,120
$
1,120
$
-
$
-
Large-Cap Growth (b)
261
261
-
-
Diversified Emerging Markets (f)
95
95
-
-
Large Blend (d)
1,025
1,025
-
-
Technology (g)
137
137
-
-
Mutual Funds-Fixed Income
Long Government (h)
46
46
-
-
Multi-Sector Bond (c)
1,244
1,244
-
-
High Yield Bond (e)
648
648
-
-
Intermediate Core Bond (i)
656
656
-
-
BCB Common Stock
666
666
-
-
Cash Equivalents
Money Market
114
114
-
-
Total
$
6,012
$
6,012
$
-
$
-
a)
Large Cap value portfolios invest primarily in big U.S. companies that are less expensive or growing more slowly than other large-cap stocks. Stocks in the top 70 percent of the
capitalization of the U.S. equity market are defined as large cap. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for
earnings, sales, book value, and cash flow).
b)
Large Cap Growth Stocks of large cap companies that are projected to grow faster than other large cap stocks. Stocks in the top 70% of the capitalization of the U.S. equity market defined
as large cap. Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields).
c)
Multi Sector portfolios seek income by diversifying their assets among several fixed-income sectors, usually U.S. government obligations, foreign bonds, and high-yield domestic debt
securities.
d)
This fund invests in 500 of the largest U.S. companies, which span many different industries and account for about three-fourths of the U.S. Stock Markets value.
e)
High Yield Bond funds invest at least 65 percent of assets in bonds rated below BBB. This fund seeks to provide shareholders with a high level of current income with capital growth as a
secondary objective.
f)
The fund invests at least 80% of the value of its assets in equity securities and equity related instruments that are tied economically to emerging markets.
g)
The fund normally invests at least 80% of the fund’s net assets in securities of issuers principally engaged in offering, using or developing products, processes or services that will provide
or benefit significantly from technological advances and improvements.
h)
The fund normally invests at least 80% of assets in securities included in the Bloomberg Barclays U.S. Long Treasury Bond Index.
i)
Intermediate term core bond portfolios invest primarily in investment grade U.S. fixed-income issues including government, corporate, and securitized debt, and hold less than 5% in
below-investment grade exposures.
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Note 12 - Benefits Plan (continued)
The Company does not expect to contribute, based upon actuarial estimates, to the Pension Plan in 2025.
Benefit payments are expected to be paid for the years ended December 31 as follows (In thousands):
2025
$
374
2026
373
2027
374
2028
371
2029
361
2030-2034
1,619
Equity Incentive Plans
The Company, under the plan approved by its shareholders on April 27, 2023 (“2023 Equity Incentive Plan”), authorized the issuance of up to 1,000,000 shares of common stock of the Company
pursuant to grants of stock options, restricted stock awards, restricted stock units, and performance awards. Employees and directors of the Company and the Bank are eligible to participate in the 2023
Equity Incentive Plan. All stock options are granted in the form of either "incentive" stock options or "non-qualified" stock options. Incentive stock options have certain tax advantages that must
comply with the requirements of Section 422 of the Internal Revenue Code. Only employees are permitted to receive incentive stock options.
The Company, under the plan approved by its shareholders on April 26, 2018 (“2018 Equity Incentive Plan”), authorized the issuance of up to 1,000,000 shares of common stock of the Company
pursuant to grants of stock options and restricted stock units. Employees and directors of the Company and the Bank are eligible to participate in the 2018 Stock Plan. All stock options are granted in
the form of either "incentive" stock options or "non-qualified" stock options. Incentive stock options have certain tax advantages that must comply with the requirements of Section 422 of the Internal
Revenue Code. Only employees are permitted to receive incentive stock options.
The Company, under the plan approved by its shareholders on April 28, 2011 (“2011 Stock Plan”), authorized the issuance of up to 900,000 shares of common stock of the Company pursuant to grants
of stock options. Employees and directors of the Company and the Bank are eligible to participate in the 2011 Stock Plan. All stock options were granted in the form of either "incentive" stock options
or "non-qualified" stock options. Incentive stock options have certain tax advantages that must comply with the requirements of Section 422 of the Internal Revenue Code. Only employees are
permitted to receive incentive stock options.
On April 25, 2024, awards of 30,000 and 20,000 shares of restricted stock were declared for an executive officer of the Bank and the Company, which vest over a 2 and 3-year period, respectively,
commencing on the anniversary date of the awards.
On January 31, 2023, awards of 27,000 shares of restricted stock, in aggregate were declared for members of the Board of Directors of the Bank and the Company, which vest over a 4-year period,
commencing on the anniversary of the award date.
On June 30, 2023, an award of 25,252 shares of restricted stock was declared for a director and executive officer of the Bank and the Company, which fully vests on the anniversary of the award date.
The following table presents the share-based compensation expense for the years ended December 31, 2024, 2023 and 2022 (In Thousands).
Years Ended December 31,
2024
2023
2022
Stock Option Expense
$
128
$
133
$
216
Restricted Stock Expense
639
460
916
Total share-based compensation expense
$
767
$
593
$
1,132
The following is a summary of the status of the Company’s restricted shares as of December 31, 2024.
Number of Shares
Awarded
Weighted Average
Grant Date Fair Value
Non-vested at December 31, 2023
86,752
$ 14.98
Granted
50,000
9.44
Vested
(50,227)
13.85
Forfeited
(1,725)
14.92
Non-vested at December 31, 2024
84,800
$ 12.38
The remaining non-vested restricted shares outstanding as of December 31, 2024, will be charged to expense in 2025-2027, totaling $636,000.
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Note 12 - Benefits Plan (continued)
A summary of stock option activity, follows:
Number of Options
Range of
Exercise Price
Weighted Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term
Aggregate Intrinsic
Value (000's)
Outstanding at January 1, 2023
1,036,975
$
9.03-13.68
$
11.72
4.47
$
6,502
Options forfeited
-
-
-
-
-
Options exercised (1)
(61,000)
9.03
9.03
-
-
Options granted
-
-
-
-
-
Options expired
-
-
-
-
-
Outstanding at December 31, 2023
975,975
$
10.55-13.68 $
11.89
3.83
$
984
Options forfeited
-
-
-
-
-
Options exercised (2)
(2,000)
12.19
12.19
-
-
Options granted
-
-
-
-
-
Options expired
(80,000)
13.32
13.32
-
-
Outstanding at December 31, 2024
893,975
$
10.55-13.68 $
11.76
3.16
$
355
Exercisable at December 31, 2024
799,955
(1) Includes 9,628 cashless exercise of options during 2023.
(2) Includes 2,000 cashless exercise of options during 2024.
It is Company policy to issue new shares upon share option exercise. Expected future compensation expense relating to the 94,020 shares of unvested options outstanding as of December 31, 2024, is
$150,000 and will be recognized over a weighted average period of 2.14 years.
There were no options awarded during the years ended December 31, 2024, and 2023.
Supplemental Executive Retirement Plan
The Bank entered into a Supplemental Executive Retirement Agreement (the “SERP Agreement”) with its former Chief Executive Officer (“the CEO”) in December 2021, payable in the form of a life
annuity.
The SERP Agreement was an unfunded arrangement maintained primarily to provide supplemental retirement benefits and comply with Section 409A of the Internal Revenue Code. The cost of the
benefit is being amortized over a three-year vesting period beginning in 2021. The Bank recorded compensation expense of $45,000, $350,000, and $328,000 related to the Plan during the years ended
December 31, 2024, 2023 and 2022, respectively. For each of the years ended December 31, 2025, and 2026, the anticipated expense is $50,000 and $49,000, respectively. The Bank has elected to fund
the retirement benefit by purchasing annuities that have been designed to provide a future source of funds for the lifetime retirement benefits of the SERP Agreement, totaling $1.80 million, which is
included in other assets.
Note 13 – Stockholders’ Equity
On December 31, 2024, the Company completed a private placement of 497 shares of Series K 6% Noncumulative Perpetual Stock, par value $0.01 per share (the “Series K Preferred Stock”), resulting
in gross proceeds of $4,970,000.
On November 30, 2024, the Company redeemed 1,001 outstanding shares of its Series I 3.0% Noncumulative Perpetual Preferred Stock, at their face value of $10,000 per share, for a total redemption
amount of $10,010,000.
On September 25, 2024, the Company closed a private placement of Series J 8% Noncumulative Perpetual Stock, par value $0.01 per share (the “Series J Preferred Stock”), resulting in gross proceeds
of $1,360,000 for 136 shares.
On June 21, 2024, the Company closed a private placement of Series J Preferred Stock, resulting in gross proceeds of $670,000 for 67 shares.
On March 29, 2024, the Company closed a private placement of Series J Preferred Stock, resulting in gross proceeds of $2,690,000 for 269 shares.
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Note 14 – Goodwill and Other Intangible Assets
The Company’s intangible assets consist of goodwill and core deposit intangibles in connection with acquisitions. The initial recording of goodwill and other intangible assets requires subjective
judgments concerning estimates of the fair value of the acquired assets and assumed liabilities. Goodwill is not amortized but is subject to annual tests for impairment or more often if events or
circumstances indicate it may be impaired.
Amortization expense of the core deposit intangibles was $129,000, and $49,000 for the years ended December 31, 2023, and 2022, respectively. The core deposit intangibles were fully amortized
during the year ended December 31, 2023. The amount of goodwill at December 31, 2024 and 2023 was $5.2 million, respectively.
The Company’s core deposit intangibles are amortized on an accelerated basis using an estimated life of 10 years and in accordance with U.S. GAAP are evaluated annually for impairment. An
impairment loss will be recognized if the carrying amount of the intangible asset is not recoverable and exceeds fair value. The carrying amount of the intangible asset is not considered recoverable if it
exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.
The Company conducts impairment analysis on goodwill at least annually or more often as conditions require. Pursuant to ASC 350-20-35, the Company conducted a qualitative assessment of
goodwill as of October 31, 2024, and determined that it was more likely than not that goodwill was not impaired. Accordingly, there was no impairment at December 31, 2024.
Note 15 - Dividend Restrictions
Payment of cash dividends on common stock is conditional on earnings, financial condition, cash needs, capital considerations, the discretion of the Board of Directors of the Company, and compliance
with regulatory requirements. State and federal law and regulations impose limitations on the Bank’s ability to pay dividends to the Company. Under New Jersey law, the Company is permitted to
declare dividends on its common stock only if, after payment of the dividend, the capital stock of the Bank will be unimpaired and the Bank will have a surplus of no less than 50 percent of its capital
stock or, if not, the payment of the dividend will not reduce the Bank’s surplus. During 2024, 2023, and 2022, the Bank paid the Company total dividends of $19,387,000, $20,580,000, and
$22,338,000, respectively. The Company’s ability to declare dividends is dependent upon the amount of dividends paid to the Company by the Bank.
Note 16 - Income Taxes
The components of income tax expense are summarized as follows:
Years Ended December 31,
2024
2023
2022
(In Thousands)
Current income tax expense:
Federal
$
4,529
$
8,917
$
12,323
State
2,860
5,592
6,215
7,389
14,509
18,538
Deferred income tax benefit:
Federal
351
(1,634)
(967)
State
(93)
(903)
(40)
258
(2,537)
(1,007)
Total Income Tax Expense
$
7,647
$
11,972
$
17,531
The tax effects of existing temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are as follows:
December 31,
2024
2023
Deferred income tax assets:
(In Thousands)
Allowance for credit losses
$
10,176
$
9,805
Benefit plans
7
-
Nonaccrual interest
749
176
Benefit plan-accumulated other comprehensive loss
10
166
Net operating loss carry forwards
1,070
1,166
Lease liability
3,756
3,806
Unrealized loss on securities
2,149
2,860
Capital loss carryover (1)
477
477
Deferred fees and costs
782
1,168
Other
2,077
3,002
21,253
22,626
Deferred income tax liabilities:
Purchase accounting adjustment on premises and equipment acquired
69
71
Right-of-use assets
3,626
3,697
SBA servicing asset
252
319
Borrowing modification
125
282
Benefit plans
-
44
4,072
4,413
Net Deferred Tax Asset
$
17,181
$
18,213
(1) Tax benefit relating to capital loss on securities sold in 2023 which will expire in 2028.
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Note 16 - Income Taxes (continued)
A summary of the change in the net deferred tax asset is as follows:
Years Ended December 31,
2024
2023
(In Thousands)
Balance at beginning of year:
$
18,213
$
16,462
Effect of adopting ASU No. 2016-13 ("CECL")
-
(1,148)
Deferred tax benefit
(258)
2,537
Other comprehensive income
Available-for-sale securities
(618)
355
Benefit plan
(156)
7
Balance at end of year
$
17,181
$
18,213
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. In making this
assessment, management has considered the profitability of current core operations, future market growth, forecasted earnings, future taxable income, and ongoing, feasible and permissible tax
planning strategies. If the Company was to determine that it would not be able to realize a portion of its net deferred tax asset in the future for which there is currently no valuation allowance, an
adjustment to the net deferred tax asset would be charged to earnings in the period such determination was made. The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income and capital gains during the periods in which temporary differences are deductible and carry forwards are available. The Company believes it will generate sufficient future
taxable income and taxable gains to realize the tax benefits related to the remaining net deferred tax assets in our consolidated statements of financial condition.
In conjunction with the Company’s acquisition of IA Bancorp in 2018, the Company acquired a federal net operating loss carry forward of $8.7 million. This carry forward is available for use through
2035; however, in accordance with Internal Revenue Code Section 382, usage of the carry forward is limited to $459,000 annually on a cumulative basis (portions of the $459,000 not used in a
particular year may be added to subsequent usage). At December 31, 2024 and 2023, the Company had approximately $5.1 million and $5.6 million remaining of this federal net operating loss carry
forward available to offset future taxable income for federal tax reporting purposes.
The following table presents a reconciliation between the reported income tax expense and the income tax expense which would be computed by applying the normal federal income tax rate of 21.0
percent to income before income tax expense.
Years Ended December 31,
2024
2023
2022
(In Thousands)
Federal income tax expense at statutory rate
$
5,517
$
8,706
$
13,253
Increases (decreases) in income taxes resulting from:
State income tax, net of federal income tax effect
2,186
3,704
4,878
Tax-exempt income
(13)
(30)
(63)
Bank-owned life insurance earnings
(553)
(368)
(561)
Other items, net
510
(40)
24
Effective Income Tax Expense
$
7,647
$
11,972
$
17,531
Effective Income Tax Rate
29.1%
28.9%
27.8%
Note 17- Commitments and Contingencies
The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments primarily include
commitments to extend credit. The Bank’s exposure to credit loss, in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, is represented by the
contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.
Outstanding loan related commitments were as follows:
December 31,
2024
2023
2022
(In Thousands)
Loan origination commitments
$
1,505
$
975
$
165,579
Standby letters of credit
2,450
13,353
3,701
Construction loans in process
16,673
63,395
96,905
Unused lines of credit
173,169
235,329
218,865
$
193,797
$
313,052
$
485,050
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or
other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent
future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is
based on management’s credit evaluation of the counterparty. Collateral held varies but primarily includes residential real estate properties.
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Note 17- Commitments and Contingencies (continued)
Leases
At December 31, 2024, the Company leased 26 of its offices under various operating lease agreements. The leases have remaining terms of 1 year to 12 years. The leases contain provisions for the
payment by the Company of its pro-rata share of real estate taxes, insurance, common area maintenance and other variable expenses. The Company will allocate payments made under such leases
between lease and non-lease components. Some leases contain renewal options and options to purchase the assets.
The Company evaluates its contracts and service agreements in order to determine if there is an asset imbedded in such contracts and agreements. Such determination is based upon whether there is a
specific asset covered by the agreement, whether the Company is entitled to all of the economic benefits to the asset over the term of the agreement, and whether the Company has full control and use
of the asset over the term of the agreement without substitution rights or direction of use of the asset by the lessor.
The Company includes in its determination of its lease liability and concurrent right-of-use asset those renewal or purchase options for which it is reasonably certain it will exercise. Currently, the
Company does not expect to exercise such purchase options and, accordingly, those are excluded in the determination of the lease liabilities and the concurrent right-of-use assets.
The Company has elected not to recognize a lease liability and a right-of-use asset for leases with a lease term of 12 or fewer months.
To calculate its lease liabilities, the Company used a discount rate based upon the applicable borrowing rates of the Federal Home Loan Bank at the inception of the lease agreement, which corresponds
to the length of the lease term.
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Table of Contents
Note 17- Commitments and Contingencies (continued)
The following tables present certain information related to the Company’s lease obligations (in thousands):
Twelve Months Ended
December 31, 2024
Twelve Months Ended
December 31, 2023
Operating lease cost
$
3,596
$
3,591
Variable lease cost-operating leases
1,096
1,056
$
4,692
$
4,647
At December 31, 2024
At December 31, 2023
Supplemental balance sheet information related to leases:
Operating Leases
Operating lease right-of-use assets
$
12,686
$
12,935
Operating Lease Liabilities:
Current liabilities
$
3,189
$
3,094
Operating lease liabilities (noncurrent portion)
11,299
11,526
Imputed interest
(1,349)
(1,305)
Total operating lease liabilities
$
13,139
$
13,315
The following tables summarize the Company’s weighted average remaining lease terms and weighted average discount rates:
2024
2023
Weighted Average Remaining Lease Term
Operating leases
5.39 years
5.77 years
Weighted Average Discount Rate
Operating leases
3.40 %
3.02 %
The following table summarizes the Company’s maturity of lease obligations for operating leases at December 31, 2024 (in thousands):
Maturities of lease liabilities (discounted):
At December 31, 2024
Operating Leases
One year or less
$
3,189
Over one year through three years
5,680
Over three years through five years
3,213
Over five years
2,406
Gross Operating Lease Liabilities
$
14,488
Imputed Interest
(1,349)
Total Operating Lease Liabilities
$
13,139
Legal Contingencies
The Company is involved, from time to time, as plaintiff or defendant in various legal actions arising in the normal course of business. As of December 31, 2024, the Company was not involved in any
material legal proceedings the outcome of which, if determined in a manner adverse to the Company, would have a material adverse effect on our financial condition or results of operations.
69
Table of Contents
Note 18 - Fair Value Measurements and Fair Values of Financial Instruments
Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially
all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair
value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these consolidated financial statements subsequent to those respective
dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.
ASC Topic 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest
priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. There were no liabilities measured at fair value on a
recurring or nonrecurring basis at December 31, 2024, and 2023.
For assets measured at fair value on a recurring basis, the fair value measurements, by level, within the fair value hierarchy are as follows:
(Level 1)
(Level 2)
Quoted Prices in
Significant
(Level 3)
Active Markets
Other
Significant
for Identical
Observable
Unobservable
Description
Total
Assets
Inputs
Inputs
(In Thousands)
As of December 31, 2024:
Securities Available-for-Sale
Debt Securities Available-for-Sale
$
101,717 $
- $
101,717 $
-
Marketable Equities
9,472
9,472
-
-
Total Securities Available-for-Sale
$
111,189 $
9,472 $
101,717 $
-
As of December 31, 2023:
Securities Available for Sale
Debt Securities Available-for-Sale
$
87,769 $
- $
87,769 $
-
Marketable Equities
9,093
9,093
-
-
Total Securities Available-for-Sale
$
96,862 $
9,093 $
87,769 $
-
For assets measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy are as follows:
(Level 1)
(Level 2)
Quoted Prices in
Significant
(Level 3)
Active Markets
Other
Significant
for Identical
Observable
Unobservable
Description
Total
Assets
Inputs
Inputs
(In Thousands)
As of December 31, 2024:
Individually Evaluated Loans
$
19,391
$
-
$
-
$
19,391
As of December 31, 2023:
Individually Evaluated Loans
$
23,585
$
-
$
-
$
23,585
Certain individually evaluated loans were adjusted to the fair value, less costs to sell, of the underlying collateral securing these loans resulting in losses. The loss is not recorded directly as
an adjustment to current earnings, but rather as a component in determining the allowance for credit losses. Fair value was measured using appraised values of collateral and adjusted as necessary by
management based on unobservable inputs for specific properties. Losses (recoveries) on individually evaluated loans for the years ended December 31, 2024 and 2023 were $7.6 million and $1.4
million, respectively.
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Table of Contents
Note 18 - Fair Value Measurements and Fair Values of Financial Instruments (continued)
The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized adjusted Level 3 inputs to
determine fair value, (Dollars in thousands):
Quantitative Information about Level 3 Fair Value Measurements
Fair Value
Valuation
Unobservable
Range
Estimate
Techniques
Input
December 31, 2024:
Individually Evaluated Loans
$
19,391
Appraisal of collateral (1)
Appraisal adjustments (2)
0%-10%
Quantitative Information about Level 3 Fair Value Measurements
Fair Value
Valuation
Unobservable
Range
Estimate
Techniques
Input
December 31, 2023:
Individually Evaluated Loans
$
23,585
Appraisal of collateral (1)
Appraisal adjustments (2)
0%-10%
(1)
Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.
(2)
Appraisals may be adjusted by management for qualitative factors such as age of appraisal, expected condition of property, economic conditions, and estimated liquidation expenses. The range of
liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets
and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies
may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at December 31, 2024 and 2023.
Cash and Cash Equivalents (Carried at Cost)
The carrying amounts reported in the consolidated statements of financial condition for cash and interest-earning deposits approximate those assets’ fair values.
Securities (Carried at Fair Value)
The fair value of securities is determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique
used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark
quoted prices.
Loans Held for Sale (Carried at Lower of Cost or Fair Value)
The fair value of loans held for sale is determined, when possible, using quoted secondary-market prices. If no such quoted prices exist, the fair value of a loan is determined using quoted prices for a
similar loan or loans, adjusted for specific attributes of that loan. Loans held for sale are carried at the lower of cost or fair value.
Loans Receivable (Carried at Amortized Cost)
The fair values of loans, except for certain individually evaluated loans, are estimated using discounted cash flow analyses, using market rates at the date of the statements of financial condition that
reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal.
Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.
Individually Evaluated Loans (Generally Carried at Fair Value)
Individually evaluated loans are those for which the Company has measured and recorded an ACL generally based on the fair value of the loan’s collateral, less estimated costs to sell. Fair value is
generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based
upon the lowest level of input that is significant to the fair value measurements. The fair value at December 31, 2024 and 2023 consists of the loan balances of $31.2 million and $27.8 million net of an
ACL of $11.8 million and $4.2 million, respectively.
FHLB of New York Stock (Carried at Cost)
The carrying amount of restricted investment in bank stock approximates fair value and considers the limited marketability of such securities.
Accrued Interest Receivable and Payable (Carried at Cost)
The carrying amount of accrued interest receivable and accrued interest payable approximates its fair value.
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Table of Contents
Note 18 - Fair Value Measurements and Fair Values of Financial Instruments (continued)
Deposits (Carried at Amortized Cost)
The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the
reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in
the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.
Debt Including Subordinated Debentures (Carried at Amortized Cost)
Fair values of debt are estimated using discounted cash flow analysis, based on quoted prices for new long-term debt with similar credit risk characteristics, terms and remaining maturity. These prices
obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party.
Off-Balance Sheet Financial Instruments
Fair values for the Bank’s off-balance sheet financial instruments (lending commitments and unused lines of credit) are based on fees currently charged in the market to enter into similar agreements,
taking into account, the remaining terms of the agreements and the counterparties’ credit standing. The fair value of these commitments was deemed immaterial and is not presented in the
accompanying table.
The carrying values and estimated fair values of financial instruments were as follows at December 31, 2024 and 2023:
As of December 31, 2024
Quoted Prices in Active
Significant
Significant
Carrying
Markets for Identical Assets
Other Observable Inputs
Unobservable Inputs
Value
Fair Value
(Level 1)
(Level 2)
(Level 3)
(In Thousands)
Financial assets:
Cash and cash equivalents
$
317,282
$
317,282 $
317,282 $
-
$
-
Interest-earning time deposits
735
735
-
735
-
Debt securities available-for-sale
101,717
101,717
-
101,717
-
Equity investments
9,472
9,472
9,472
-
-
Loans held for sale
-
-
-
-
-
Loans receivable, net
2,996,259
2,900,892
-
-
2,900,892
FHLB of New York stock, at cost
24,272
24,272
-
24,272
-
Accrued interest receivable
15,176
15,176
-
15,176
-
Financial liabilities:
Deposits
2,750,858
2,751,625
1,721,602
1,030,023
-
Debt
455,361
456,290
-
456,290
-
Subordinated debentures
42,961
41,594
-
41,594
-
Accrued interest payable
5,195
5,195
-
5,195
-
As of December 31, 2023
Quoted Prices in Active
Significant
Significant
Carrying
Markets for Identical Assets
Other Observable Inputs
Unobservable Inputs
Value
Fair Value
(Level 1)
(Level 2)
(Level 3)
(In Thousands)
Financial assets:
Cash and cash equivalents
$
279,523
$
279,523 $
279,523 $
-
$
-
Interest-earning time deposits
735
735
-
735
-
Debt securities available-for-sale
87,769
87,769
-
87,769
-
Equity investments
9,093
9,093
9,093
-
-
Loans held for sale
1,287
1,287
-
1,287
-
Loans receivable, net
3,279,708
3,112,980
-
-
3,112,980
FHLB of New York stock, at cost
24,917
24,917
-
24,917
-
Accrued interest receivable
16,072
16,072
-
16,072
-
Financial liabilities:
Deposits
2,979,080
2,978,654
2,120,514
858,140
-
Debt
472,811
472,184
-
472,184
-
Subordinated debentures
37,624
39,299
-
39,299
-
Accrued interest payable
5,777
5,777
-
5,777
-
+
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Table of Contents
Note 19 - Accumulated Other Comprehensive Loss
The components of accumulated other comprehensive loss included in stockholders' equity are as follows:
At December 31,
2024
2023
2022
(In Thousands)
Net unrealized loss on securities available-for-sale
$
(6,873)
$
(9,380)
$
(7,887)
Tax effect
1,692
2,310
1,955
Net of tax amount
(5,181)
(7,070)
(5,932)
Benefit plan adjustments
(68)
(587)
(718)
Tax effect
10
166
159
Net of tax amount
(58)
(421)
(559)
Accumulated other comprehensive loss
$
(5,239)
$
(7,491)
$
(6,491)
Note 20 - Parent Only Condensed Financial Information
STATEMENTS OF FINANCIAL CONDITION
Years Ended December 31,
2024
2023
(In Thousands)
Assets
Cash and due from banks
$
3,289
$
1,290
Investment in subsidiaries
364,781
349,775
Restricted common stock
124
124
Other assets
402
1,172
Total assets
368,596
352,361
Liabilities and Stockholders' Equity
Liabilities
Subordinated debentures
$
42,961
$
37,624
Other liabilities
1,710
682
Total liabilities
44,671
38,306
Stockholders' Equity
323,925
314,055
Total Liabilities and Stockholders' Equity
$
368,596
$
352,361
STATEMENTS OF OPERATIONS
Years Ended December 31,
2024
2023
2022
(In Thousands)
Dividends from Bank
$
19,387
$
20,580
$
22,338
Interest and dividends from investments
2
2
-
Total Income
19,389
20,582
22,338
Interest expense, borrowed money
3,894
2,725
2,299
Other
442
422
366
Total Expense
4,336
3,147
2,665
Income before Income Tax Benefit and Equity in Undistributed Earnings of Subsidiaries
15,053
17,435
19,673
Income tax benefit
(1,273)
(924)
(843)
Income before Equity in Undistributed Earnings of Subsidiaries
16,326
18,359
20,516
Equity in undistributed earnings of subsidiaries
2,297
11,124
25,063
Net Income
$
18,623
$
29,483
$
45,579
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Table of Contents
Note 20 - Parent Only Condensed Financial Information
STATEMENTS OF CASH FLOWS
Years Ended December 31,
2024
2023
2022
(In Thousands)
Cash Flows from Operating Activities
Net Income
$
18,623
$
29,483
$
45,579
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization
83
116
233
Equity in undistributed earnings of subsidiaries
(2,297)
(11,124)
(25,063)
Decrease (increase) in other assets
770
(1,062)
1,223
(Decrease) increase in other liabilities
1,028
(303)
(149)
Net Cash Provided By Operating Activities
18,207
17,110
21,823
Cash Flows from Investing Activities
Additional investment in subsidiary
(9,690)
(8,227)
(2,220)
Net Cash Used In Investing Activities
$
(9,690)
$
(8,227)
$
(2,220)
Cash Flows from Financing Activities
Proceeds from issuance of preferred stock
9,690
15,270
6,810
Redemption of preferred stock
(10,010)
(11,230)
(14,730)
Proceeds from issuance of common stock
824
1,773
639
Proceeds from issuance of subordinated debt
38,754
-
-
Redemption of subordinated debt
(33,500)
-
-
Cash dividends paid
(12,276)
(11,142)
(11,175)
Purchase of treasury stock
-
(3,816)
(3,406)
Net Cash Provided by (Used in) Financing Activities
(6,518)
(9,145)
(21,862)
Net Increase (Decrease) in Cash and Cash Equivalents
1,999
(263)
(2,259)
Cash and Cash Equivalents - Beginning
$
1,290
$
1,553
$
3,812
Cash and Cash Equivalents - Ending
$
3,289
$
1,290
$
1,553
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Note 21 - Subsequent Events
Subsequent Events are events or transactions that occur after the balance sheet date but before financial statements are issued or available to be issued. Financial statements are considered issued when
they are widely distributed to stockholders and other financial statement users for general use and reliance in a form and format that complies with GAAP.
On January 28, 2025, the Company declared a cash dividend of $0.16 per share and was paid to stockholders on February 24, 2025, with a record date of February 7, 2025.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
(a)
Evaluation of disclosure controls and procedures.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2024 (the “Evaluation Date”). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective in timely alerting them to the material information
relating to us (or our consolidated subsidiaries) required to be included in our periodic SEC filings.
(b)
Management’s Annual Report on Internal Control over Financial Reporting.
Management of BCB Bancorp, Inc., and subsidiaries (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s system of
internal control is designed under the supervision of management, including our Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of our
financial reporting and the preparation of the Company’s consolidated financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United
States of America (“GAAP”).
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and
dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts
and expenditures are made only in accordance with the authorization of management and the Board of Directors; and provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on our consolidated financial statements. Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Projections on any evaluation of effectiveness to future periods are subject to the risk that the controls may become inadequate because of
changes in conditions or that the degree of compliance with policies and procedures may deteriorate.
As of December 31, 2024, management assessed the effectiveness of the Company’s internal control over financial reporting based upon the framework established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon its assessment, management believes that the Company’s internal control
over financial reporting as of December 31, 2024, is effective and meets the criteria of the Internal Control – Integrated Framework (2013).
There were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fourth fiscal quarter of
2024 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Wolf and Company, P.C., the independent registered public accounting firm that audited the Company’s consolidated financial statements, has issued an audit report on the Company’s internal control
over financial reporting as of December 31, 2024, that appears in Item 8 of this Form 10-K.
ITEM 9B. OTHER INFORMATION
(a)
During the three months ended December 31, 2024, no directors or executive officers of the Company adopted or terminated any contract, instruction or written plan for the purchase or sale of the
Company securities that was included to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or any “Rule 10b5-1 trading arrangement”.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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Table of Contents
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The Company has adopted a Code of Ethics that applies to the Company’s Chief Executive Officer, Chief Financial Officer, Controller, and/or any persons performing similar functions. It is
entitled the Conflicts of Interest, Usurpation of Corporate Opportunity & Code of Conduct Policy. This Code of Ethics is available for free by writing to: President and Chief Executive Officer, BCB
Bancorp, Inc., 104-110 Avenue C, Bayonne, New Jersey 07002. This Code of Ethics was filed as an exhibit to a Report on Form 8-K filed on March 21, 2023, and is incorporated by reference as an
exhibit to this report.
The Company has an insider trading policy governing the purchase, sale, and other disposition of the Company’s securities by directors, officers, and employees, that the Company believes
is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the Nasdaq listing standards. This insider trading policy is filed as Exhibit 19 to this report.
The section of the Company’s definitive Proxy Statement for the Company’s 2024 Annual Meeting of Stockholders (the “2024 Proxy Statement”) entitled “PROPOSAL NO. 1 ELECTION
OF THE DIRECTOR NOMINEES OF THE BOARD OF DIRECTORS” is incorporated herein by reference.
In addition, the information under the captions “EXECUTIVE OFFICERS”, “DELINQUENT SECTION 16(A) REPORTS”, and “CORPORATE GOVERNANCE - Committees of our
Board of Directors – Audit Committee” – and “Code of Business Conduct and Ethics” of the 2024 Proxy Statement is incorporated herein by reference.
There have been no changes during the last year in the procedures by which security holders may recommend nominees to the Company’s board of directors.
ITEM 11. EXECUTIVE COMPENSATION
The sections of the 2024 Proxy Statement entitled “NAMED EXECUTIVE OFFICER COMPENSATION”, “NON-EMPLOYEE DIRECTOR COMPENSATION” and “CORPORATE
GOVERNANCE - Committees of our Board of Directors – Compensation Committee Interlocks and Insider Participation” are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The section of the 2024 Proxy Statement entitled “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” is incorporated herein by reference.
The disclosure in this Form 10-K under the caption “ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES - Compensation Plans” is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The sections of the 2024 Proxy Statement entitled “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS” and “CORPORATE GOVERNANCE - Independence of Directors”
are incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information required by Item 14 is incorporated by reference to the sections of the 2024 Proxy Statement entitled “AUDIT COMMITTEE REPORT - Fees of Independent Auditors’ and ‘--
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services by Independent Auditors.”
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Table of Contents
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements
The exhibits and financial statement schedules filed as a part of this Form 10-K are as follows:
(A) Report of Independent Registered Public Accounting Firm
(B) Consolidated Statements of Financial Condition as of December 31, 2024 and 2023
(C) Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022
(D) Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022
(E) Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022
(F) Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
(G) Notes to Consolidated Financial Statements
(a)(2) Financial Statement Schedules
All schedules are omitted because they are not required or applicable, or the required information is shown in the consolidated statements or the notes thereto.
(b) Exhibits
3.1
Restated Certificate of Incorporation of BCB Bancorp, Inc.
3.2
Bylaws of BCB Bancorp, Inc. (1)
4.1
Specimen Stock Certificate (2)
4.2
Description of Common Stock (3)
4.3
Indenture, dated August 28, 2024, between BCB Bancorp, Inc. and UMB Bank, National Association, as trustee (4)
4.4
Form of 9.25% Fixed-to-Floating Rate Subordinated Note due 2034 (Included in Exhibit 4.3)
10.1
BCB Community Bank Executive and Director Deferred Compensation Plan (5)
10.2
Employment Agreement with Michael A. Shriner (6)
10.3
BCB Bancorp, Inc. 2011 Stock Option Plan (7)
10.4
BCB Bancorp, Inc. 2018 Equity Incentive Plan (8)
10.5
Defined Benefit Supplemental Executive Retirement Plan (9)
10.6
Employment Agreement with Ryan Blake (10)
10.7
Employment Agreement with Sandra L. Sievewright (11)
10.8
BCB Bancorp, Inc. 2023 Equity Incentive Plan (12)
10.9
Employment Agreement with Jawad Chaudhry (13)
10.10
Form of Subordinated Note Purchase Agreement (14)
10.11
Form of Registration Rights Agreement (15)
14
Conflicts of Interest, Usurpation of Corporate Opportunity & Code of Conduct Policy (16)
19
BCB Bancorp Inc., Insider Trading Policy
21
Subsidiaries of the Company
23
Consent of Independent Registered Public Accounting Firm – Wolf & Company, P.C..
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1
BCB Bancorp Inc., Clawback Policy (17)
77
Table of Contents
(1)
Incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the Securities and Exchange Commission on February 25, 2025.
(2)
Incorporated by reference to Exhibit 4 to the Form 8-K-12g3 filed with the Securities and Exchange Commission on May 1, 2003.
(3)
Incorporated by reference to Exhibit 4.3 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2020.
(4)
Incorporated by reference to Exhibit 4.1 to the Form 8-K filed with the Securities and Exchange Commission on August 29, 2024.
(5)
Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on March 21, 2023.
(6)
Incorporated by reference to Exhibit 10.2 to the Annual Report on Form 10-K filed with the Security and Exchange Commission on March 8, 2024.
(7)
Incorporated by reference to Appendix A to the proxy statement for the Company’s Annual Meeting of Shareholders (File No. 000-50275), filed by the Company with the Securities and Exchange
Commission on Schedule 14A on March 28, 2011.
(8)
Incorporated by reference to Appendix A to the proxy statement for the Company’s Annual Meeting of Stockholders by the Company with the Securities and Exchange Commission on March 26,
2018.
(9)
Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange Commission on January 3, 2022.
(10) Incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2022.
(11) Incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 9, 2022.
(12) Incorporated by reference to Appendix A to the proxy statement for the Company’s 2023 Annual Meeting of Stockholders filed by the Company with the Securities and Exchange Commission on
March 21, 2023.
(13) Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.
(14) Incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange Commission on August 29, 2024.
(15) Incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the Securities and Exchange Commission on August 29, 2024.
(16) Incorporated by reference to Exhibit 10.2 to the Form 8-K filed with the Securities and Exchange Commission on March 21, 2023.
(17) Incorporated by reference to Exhibit 97.1 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 8, 2024.
ITEM 16. FORM 10-K SUMMARY
None.
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Table of Contents
Signatures
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BCB BANCORP, INC.
Date:
March 7, 2025
By:
/s/ Michael A. Shriner
Michael A. Shriner
President and Chief Executive Officer
(Principal Executive Officer)
(Duly Authorized Representative)
Pursuant to the requirements of the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates
indicated.
Signatures
Title
Date
/s/ Michael A. Shriner
Michael A. Shriner
President, Chief Executive Officer and Director
March 7, 2025
(Principal Executive Officer)
/s/ Jawad Chaudhry
Jawad Chaudhry
Chief Financial Officer
March 7, 2025
(Principal Financial and Accounting Officer)
/s/ Mark D. Hogan
Mark D. Hogan
Chairman of the Board
March 7, 2025
/s/ Judith Q. Bielan
Judith Q. Bielan
Director
March 7, 2025
/s/ Ryan Blake
Ryan Blake
Director
March 7, 2025
/s/ Thomas Coughlin
Thomas Coughlin
Director
March 7, 2025
/s/ Vincent DiDomenico, Jr.
Vincent DiDomenico, Jr.
Director
March 7, 2025
/s/ Tara L. French
Tara L. French
Director
March 7, 2025
/s/ Joseph Lyga
Joseph Lyga
Director
March 7, 2025
/s/ John Pulomena
John Pulomena
Director
March 7, 2025
/s/ James Rizzo
James Rizzo
Director
March 7, 2025
/s/ Raymond J. Vanaria
Raymond J. Vanaria
Director
March 7, 2025
/s/ Michael J. Widmer
Michael J. Widmer
Director
March 7, 2025
79
Exhibit 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
BCB BANCORP, INC.
ARTICLE I
Corporate Name
The name of the Corporation shall be BCB Bancorp, Inc.
ARTICLE II
Registered Office and Registered Agent
The address of the Corporation’s registered office is:
BCB Bancorp, Inc.
104-110 Avenue C
Bayonne, New Jersey 07002
The name of the registered agent at that address is:
Thomas Coughlin
President and Chief Executive Officer
ARTICLE III
Current Board of Directors and Number of Directors
The number of directors shall be governed by the By-laws of the Corporation. The number of directors constituting
the current Board of Directors shall be twelve (12). The names and addresses of the current Board of Directors are as
follows:
Name
Address
Robert Ballance
76 West 8th Street, Bayonne, New Jersey 07002
Judith Q. Bielan
21 Blaine Avenue, Unit 6, Seaside Heights, New Jersey
08751
Joseph Brogan
300 3rd Avenue, Belmar, New Jersey 07719
James E. Collins
1009 Central Ponds Drive, Summerville, South Carolina
29483
Thomas Coughlin
190 West 52nd Street, Bayonne, New Jersey 07002
Vincent DiDomenico, Jr.
120 Overleigh Road, Bernardsville, New Jersey 07924
Mark Hogan
9 West 8th Street, Bayonne, New Jersey 07002
Joseph Lyga
78 West 14th Street, Bayonne, New Jersey 07002
August Pellegrini
21 Columbus Avenue, Berkeley Heights, New Jersey
07922
John Pulomena
5 Holly Park Drive, South Plainfield, New Jersey 07080
James Rizzo
395 Feronia Way, Rutherford, New Jersey 07070
Spencer B. Robbins
568 Amboy Avenue, Woodbridge, NJ 07095
1
ARTICLE IV
Corporate Purpose
The purpose for which the Corporation is organized is to engage in any activities for which corporations may be
organized under the New Jersey Business Corporation Act.
ARTICLE V
Capital Stock
(A) The aggregate number of shares which the Company shall have authority to issue is 50,000,000 shares,
40,000,000 of which shall be common shares, having no par value (“Common Shares”) and 10,000,000 of which shall be
preferred shares, having a par value of One Cent ($0.01) per share (“Preferred Shares”).
(B) The Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance
of the shares of Preferred Shares in series, and by filing a certificate of amendment pursuant to the applicable law of the
State of New Jersey (such certificate being hereinafter referred to as a “Preferred Share Designation”), to establish from time
to time the number of shares to be included in each such series, and to fix the designation, powers, preferences, and rights of
the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of
Preferred Shares may be increased or decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or
of any series thereof, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation.
(C) Series A 6% Noncumulative Perpetual Preferred Stock:
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series A 6% Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series A Preferred Stock”), and the number of shares constituting the Series A Preferred Stock shall be
1,500. The shares of Series A Preferred Stock shall have a designated face value of $10,000.00.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30,
September 30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid
on a pro rata basis based upon a 360 day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non-cumulative.
Section 3. Voting Rights
The Series A Preferred Stock shall not have any voting rights.
Section 4. Reacquired Shares.
Any shares of Series A Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or winding up.
Upon any liquidation, dissolution or winding up of BCB Community Bank (the “Bank”), the Company, as the sole
holder of the Bank’s capital stock, shall be entitled to receive all of the Bank’s assets available for distribution after payment
or provision for payment of all debts and liabilities of the Bank, including all deposit
2
accounts and accrued interest. Upon liquidation, dissolution or winding up of the Company, the holders of Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, taken together, shall be entitled to receive all of the
assets of the Company available for distribution after payment or provision for payment of all its debts and liabilities and
any security ranking senior to the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock. Holders
of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, taken together, have priority rights over
holders of Common Stock in the liquidation, dissolution or winding up of the Company.
Section 6. Redemption Feature.
Shares of Series A Preferred Stock may not be redeemed until after December 31, 2015 by the Company (in whole
or in part) at its option, upon receipt of necessary regulatory approval, at the face value of $10,000.00 per share plus any pro
rata dividend that may be declared by the Board of Directors.
Section 7. Rank.
Shares of the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, taken together, will
rank senior to common stock, no par value, and will rank junior to all the Company’s indebtedness and other non-equity
claims on the Company.
(D) Series B 6% Noncumulative Perpetual Preferred Stock:
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series B 6% Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series B Preferred Stock”), and the number of shares constituting the Series B Preferred Stock shall be
1,500. The shares of Series B Preferred Stock shall have a designated face value of $10,000.00.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30,
September 30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid
on a pro rata basis based upon a 360 day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non-cumulative.
Section 3. Voting Rights.
The Series B Preferred Stock shall not have any voting rights.
Section 4. Reacquired Shares.
Any shares of Series B Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or winding up.
Upon any liquidation, dissolution or winding up the Bank, the Company, as the sole holder of the Bank’s capital
stock, shall be entitled to receive all of the Bank’s assets available for distribution after payment or provision for payment of
all debts and liabilities of the Bank, including all deposit accounts and accrued interest. Upon liquidation, dissolution or
winding up of the Company, the holders of Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock,
taken together, shall be entitled to receive all of the assets of the Company available for distribution after payment or
provision for payment of all its debts and liabilities and any security
3
ranking senior to the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock. Holders of Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, taken together, have priority rights over holders of
Common Stock in the liquidation, dissolution or winding up of the Company.
Section 6. Redemption Feature.
Shares of Series B Preferred Stock may not be redeemed until after December 31, 2016 by the Company (in whole
or in part) at its option, upon receipt of necessary regulatory approval, at the face value of $10,000.00 per share plus any pro
rata dividend that may be declared by the Board of Directors.
Section 7. Rank.
Shares of the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock, taken together, will
rank senior to common stock, no par value, and will rank junior to all the Company’s indebtedness and other non-equity
claims on the Company.
(E) Series C 6% Noncumulative Perpetual Preferred Stock:
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series C 6% Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series C Preferred Stock”), and the number of shares constituting the Series C Preferred Stock shall be
2,500. The shares of Series C Preferred Stock shall have a designated face value of $10,000.00.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30,
September 30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid
on a pro rata basis based upon a 360 day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non-cumulative.
Section 3. Voting Rights.
The Series C Preferred Stock shall not have any voting rights.
Section 4. Reacquired Shares.
Any shares of Series C Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or winding up.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary
or involuntary, holders of Series C Preferred Stock shall be entitled to receive for each share of Series C Preferred Stock, out
of the assets of the Company or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the
Company, subject to the rights of any creditors of the Company, before any distribution of such assets or proceeds is made to
or set aside for the holders of common stock and any other stock of the Company ranking junior to the Series C Preferred
Stock, payment in full in an amount equal to the sum of: (i) the Series C designated face value (as set forth in Part (E),
Section 1 of this Article); and, (ii) the amount of any declared and unpaid dividend on each such share (such amounts,
collectively, the “Series C Liquidation Preference”).
4
(b) If, in any distribution described in Section 5(a) above, the assets of the Company or proceeds thereof are
not sufficient to pay in full the amounts payable with respect to all outstanding shares of Series C Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Company ranking equally with Series C Preferred
Stock as to such distribution, holders of Series C Preferred Stock and the holders of such other stock of the Company
ranking equally with Series C Preferred Stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c) If the Series C Liquidation Preference has been paid in full to all holders of Series C Preferred Stock and
the corresponding amounts payable with respect to any other stock of the Company ranking equally with Series C Preferred
Stock as to such distribution has been paid in full, the holders of other stock of the Company shall be entitled to receive all
remaining assets of the Company (or proceeds thereof) according to their respective rights and preferences.
(d) For purposes of this Section 5, the merger or consolidation of the Company with any other corporation or
other entity, including a merger or consolidation in which the holders of Series C Preferred Stock receive cash, securities or
other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all
of the assets of the Company, shall not constitute a liquidation, dissolution or winding up of the Company.
Section 6. Redemption Feature.
Shares of Series C Preferred Stock may not be redeemed until after December 31, 2017 by the Company (in whole
or in part) at its option, at the face value of $10,000.00 per share plus any pro rata dividend that may be declared by the
Board of Directors.
Section 7. Rank.
Shares of the Series C Preferred Stock and any other stock of the Company ranking equally with the Series C
Preferred Stock, taken together, will rank senior to common stock, no par value, and will rank junior to all the Company’s
indebtedness and other non-equity claims on the Company.
(F) Series D 4.5% Noncumulative Perpetual Preferred Stock:
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series D 4.5% Noncumulative Perpetual Preferred Stock,” par
value $0.01 per share (the “Series D Preferred Stock”), and the number of shares constituting the Series D Preferred Stock
shall be 2,500. The shares of Series D Preferred Stock shall have a designated face value of $10,000.00.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30,
September 30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid
on a pro rata basis based upon a 360 day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non-cumulative.
Section 3. Voting Rights.
The Series D Preferred Stock shall not have any voting rights.
5
Section 4. Reacquired Shares.
Any shares of Series D Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or winding up.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary
or involuntary, holders of Series D Preferred Stock shall be entitled to receive for each share of Series D Preferred Stock, out
of the assets of the Company or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the
Company, subject to the rights of any creditors of the Company, before any distribution of such assets or proceeds is made to
or set aside for the holders of common stock and any other stock of the Company ranking junior to the Series D Preferred
Stock, payment in full in an amount equal to the sum of: (i) the Series D designated face value (as set forth in Part (F),
Section 1 of this Article); and, (ii) the amount of any declared and unpaid dividend on each such share (such amounts,
collectively, the “Series D Liquidation Preference”).
(b) If, in any distribution described in Section 5(a) above, the assets of the Company or proceeds thereof are
not sufficient to pay in full the amounts payable with respect to all outstanding shares of Series D Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Company ranking equally with Series D Preferred
Stock as to such distribution, holders of Series D Preferred Stock and the holders of such other stock of the Company
ranking equally with Series D Preferred Stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c) If the Series D Liquidation Preference has been paid in full to all holders of Series D Preferred Stock and
the corresponding amounts payable with respect to any other stock of the Company ranking equally with Series D Preferred
Stock as to such distribution has been paid in full, the holders of other stock of the Company shall be entitled to receive all
remaining assets of the Company (or proceeds thereof) according to their respective rights and preferences.
(d) For purposes of this Section 5, the merger or consolidation of the Company with any other corporation or
other entity, including a merger or consolidation in which the holders of Series D Preferred Stock receive cash, securities or
other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all
of the assets of the Company, shall not constitute a liquidation, dissolution or winding up of the Company.
Section 6. Redemption Feature.
Shares of Series D Preferred Stock may not be redeemed until after January 1, 2020 by the Company (in whole or
in part) at its option, at the face value of $10,000.00 per share plus any pro rata dividend that may be declared by the Board
of Directors.
Section 7. Rank.
Shares of the Series D Preferred Stock and any other stock of the Company ranking equally with the Series D
Preferred Stock, taken together, will rank senior to common stock, no par value, and will rank junior to all the Company’s
indebtedness and other non-equity claims on the Company.
(G) Series E Noncumulative Perpetual Preferred Stock
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series E Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series E Preferred Stock”), and the number of shares constituting the Series E Preferred Stock shall be
438,889. The Series E Preferred Stock shall be perpetual, with no maturity date.
Section 2. Dividends and Distributions.
(a) The holders of shares of Series E Preferred Stock shall be entitled to receive out of any funds legally
available therefor noncumulative dividends at the same rate and at the same time as any dividend declared on the
Company’s common stock, when, as and if declared by the Board of Directors; provided that, for the purposes of this
Section 2 only, the holders of the Series E Preferred Stock shall be deemed to own the number of shares of common stock
into which such shares of Series E Preferred Stock are convertible on the record date for such dividend.
(b) So long as any share of Series E Preferred Stock remains outstanding, no dividend or distribution shall be
declared or paid on any series of preferred stock or any class of capital stock of the Company ranking, as to dividends,
junior to (“Series E Junior Stock”) this Series E Preferred Stock (other than dividends payable solely in shares of common
stock) and nor shall any Series E Junior Stock be, directly or indirectly, purchased, redeemed or otherwise acquired for
consideration by the Company or any of its subsidiaries during any Series E Dividend Period, as defined below, unless full
dividends on all outstanding shares of Series E Preferred Stock for the most recently completed Series E Dividend Period
have been or are contemporaneously declared and paid (or have been declared and a sum sufficient for the payment thereof
has been set aside for the benefit of the holders of shares of Series E Preferred Stock on the applicable record date). Series E
Dividend Period shall mean the quarters ending March 31, June 30, September 30 and December 31. The foregoing
limitation shall not apply to redemptions, purchases or other acquisitions of shares of common stock or other Series E Junior
Stock in connection with the administration of any employee benefit plan in the ordinary course of business and consistent
with past practice.
Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or other property) as may be
determined by the Board may be declared and paid on any securities, including other Series E Junior Stock, from time to
time out of any funds legally available for such payment, and holders of Series E Preferred Stock shall not be entitled to
participate in any such dividends.
Section 3. Voting Rights.
Holders of Series E Preferred Stock shall not have the right to receive notice of nor the right to vote at any meeting
of stockholders, and shall not vote together with the common stock; provided, that Holders of the Series E Preferred Stock
shall vote as a separate class on any proposal which would revise the terms of the Series E Preferred Stock, or any other
matter specifically provided by law.
Section 4. Liquidation, Dissolution, or Winding Up.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or involuntary, holders of Series E Preferred Stock shall be entitled to receive for
each share of Series E Preferred Stock, out of the assets of the Company or proceeds thereof (whether capital or surplus)
available for distribution to stockholders of the Company, subject to the rights of any creditors of the Company, before any
distribution of such assets or proceeds is made to or set aside for the holders of common stock and any other Series E Junior
Stock, payment in full in an amount equal to the sum of (i) the Series E Stated Value (as hereinafter defined) and (ii) the
amount of any declared and unpaid dividend on each such share (such amounts collectively, the “Series E Liquidation
Preference”). The Series E Stated Value of the shares shall mean $2.25 per share.
(b) Partial Payment. If in any distribution described in Section 4(a) above the assets of the Company or
proceeds thereof are not sufficient to pay in full the amounts payable with respect to all outstanding shares of Series E
Preferred Stock and the corresponding amounts payable with respect of any other stock of the Company ranking equally
with Series E Preferred Stock as to such distribution, holders of Series E Preferred Stock and the holders of such other stock
shall share ratably in any such distribution in proportion to the full respective distributions to which they are entitled.
(c) Residual Distributions. After the distributions described in Section 4(a) above have been paid, the
remaining assets of the Company available for distribution to stockholders shall be distributed among the holders of Series E
Preferred Stock, the common stock and any other Series E Parity Stock, pro rata, based on the number of shares of common
stock held by each (as if all such shares of Series E Preferred Stock and other Series E Parity Stock had been converted to
common stock).
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 4, the merger or
consolidation of the Company with any other corporation or other entity, including a merger or consolidation in which the
holders of Series E Preferred Stock receive cash, securities or other property for their shares, or the sale, lease or exchange
(for cash, securities or other property) of all or substantially all of the assets of the Company, shall not constitute a
liquidation, dissolution or winding up of the Company.
Section 5. Rank.
For the purposes hereof any stock of any series or class of the Company shall be deemed to rank:
(a) prior to the shares of this Series E Preferred Stock, as to dividends or upon liquidation, if the holders of
such series or class shall be entitled to the receipt of dividends or of amounts distributable upon a Liquidation Event, as the
case may be, in preference or priority to the holders of shares of this Series E Preferred Stock;
(b) as on parity with Series E Preferred Stock (“Series E Parity Stock”), as to dividends or upon liquidation,
whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share or sinking fund
provisions, if any, be different from those of this Series E Preferred Stock, if the holders of such stock shall be entitled to the
receipt of dividends or of amounts distributable upon a Liquidation Event, as the case may be, in proportion to their
respective dividend rates or liquidation prices, without preference or priority, one over the other, as between the holders of
such stock and the holders of shares of this Series E Preferred Stock, including, but not limited to, the Series C Preferred
Stock and the Series D Preferred Stock; and;
(c) as Series E Junior Stock, as to dividends or upon liquidation, if such stock shall be common stock or if the
holders of shares of this Series E Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon a
Liquidation Event, as the case may be, in preference or priority to the holders of shares of such series or class.
Section 6. Conversion.
(a) Right to Convert Series E Preferred Stock. Subject to the limitation contained in Section 6(l) below, each
share of Series E Preferred Stock shall be convertible, without the payment of any additional consideration and at the option
of the holder thereof, at any time, at the office of the Company (or of any transfer agent for the Series E Preferred Stock)
into shares of common stock at the Series E Conversion Rate (as defined in Section 6(c) hereof) and adjusted on a per share
basis giving effect to any adjustment required by Section 6 hereof.
(b) Automatic Conversion. Each share of Series E Preferred Stock may, at the option of the holder thereof be
converted into shares of common stock at the then effective Series E Conversion Rate (as defined in Section 6(c) hereof)
and adjusted on a per share basis giving effect to any adjustments required by Section 6 hereof, upon 30 days’ notice at the
Series E Conversion Rate.
(c) Conversion Ratio. Subject to the adjustments provided in subsections (e) through (g) of this Section 6,
each share of Series E Preferred Stock shall be convertible into 0.189 share of common stock (the “Series E Conversion
Rate”).
(d) Mechanics of Conversion. Before any holder of Series E Preferred Stock shall be entitled to convert the
same into shares of common stock, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Company or of any transfer agent for the Series E Preferred Stock, and shall give written notice to the
Company at its principal corporate office of the election to convert the same and shall state therein the name or names in
which the certificate or certificates for shares of common stock are to be issued. The Company shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series E Preferred Stock, or to the nominee or nominees of such
holder, a certificate or certificates for the number of shares of common stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of
such surrender of the shares of Series E Preferred Stock to be converted, and the person or persons entitled to receive the
shares of common stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of
such shares of common stock as of such date.
(e) Adjustments for Certain Dilutive Issuances, Splits and Combinations.
i. In the event the Company should at any time or from time to time after the date that shares of Series E
Preferred Stock are first issued and sold by the Company (the “Series E Purchase Date”) fix a record date for the
effectuation of a split or subdivision of the outstanding shares of common stock or the determination of holders of common
stock entitled to receive a dividend or other distribution payable in additional shares of common stock or other securities or
lights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of common stock,
including additional shares of common stock issuable upon conversion or exercise thereof (hereinafter referred to as
“Common Stock Equivalents”), then, as of such record date (or the date of such dividend distribution, split or subdivision if
no record date is fixed), the Series E Conversion Rate applicable to the Series E Preferred Stock shall be appropriately
increased so that the number of shares of common stock issuable on conversion of each share of Series E Preferred Stock
shall be increased in proportion to such increase of the aggregate of shares of common stock outstanding and those issuable
with respect to such Common Stock Equivalents.
ii. If the number of shares of common stock outstanding at any time after the Series E Purchase Date is
decreased by a combination of the outstanding shares of common stock, then following the record date of such combination,
the Series E Conversion Rate for the Series E Preferred Stock shall be appropriately decreased so that the number of shares
of common stock issuable on conversion of each share of such Series E Preferred Stock shall be decreased in proportion to
such decrease in outstanding common stock.
(f) Other Distributions. In the event the Company shall declare a distribution payable in securities of other
persons, evidences of indebtedness issued by the Company or other persons, assets (excluding cash dividends) or options or
rights not referred to in Section 6(e), then, in each such case for the purpose of this Section 6(f), the holders of the Series E
Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were the holders of the
number of shares of common stock of the Company into which their shares of Series E Preferred Stock are convertible as of
the record date fixed for the determination of the holders of common stock of the Company entitled to receive such
distribution.
(g) Recapitalizations. If at any time or from time to time there shall be a recapitalization of the common stock
(other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in this Section 6)
provision shall be made so that the holders of the Series E Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series E Preferred Stock the number of shares of stock or other securities or property of the Company or
otherwise, to which a holder of common stock deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 6
with respect to the rights of the holders of the Series E Preferred Stock after the recapitalization to the end that the
provisions of this Section 6 shall be applicable after that event as nearly equivalent as may be practicable.
(h) No Fractional Shares; Certificate as to Adjustments. No fractional shares shall be issued upon the
conversion of any share or shares of the Series E Preferred Stock, and the number of shares of common stock to be issued
shall be rounded to the nearest whole share. Whether or not fractional shares arc issuable upon such conversion shall be
determined on the basis of the total number of shares of Series E Preferred Stock the holder is at the time converting into
common stock and the number of shares of common stock issuable upon such aggregate conversion.
(i) Notices of Record Date. In the event of any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash
dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Company shall mail to each holder of Series E Preferred
Stock, at least 20 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right.
(j) Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep
available out of its authorized but unissued shares of common stock, solely for the purpose of effecting the conversion of the
shares of the Series E Preferred Stock, such number of its shares of common stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series E Preferred Stock; and if at any time the number of authorized
but unissued shares of common stock shall not be sufficient to effect the conversion of all then-outstanding shares of the
Series E Preferred Stock, in addition to such other remedies as shall be available to the holder of such Series E Preferred
Stock, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of common stock to such number of shares as shall be sufficient for such purposes, including,
without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to these
articles.
(k) Notices. Any notice required by the provisions of this Section 6 to be given to the holders of shares of
Series E Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to
each holder of record at his address appearing on the books of the Company.
(l) Limitation. Notwithstanding anything in this Section 6 to the contrary, no shares of the Series E Preferred
Stock held by a single holder, directly or indirectly (as such terms are defined under Section 3:1-2.19(d) of the regulations of
the New Jersey Department of Banking and Insurance) may be converted into shares of the common stock if as a result of
such conversion, such holder would own, directly or indirectly, in excess of 24.9% of the outstanding common stock of the
Company.
Section 7. Severability.
If any provision of this Certificate of Amendment or any application of such provision is determined to be invalid
by any federal or state court having jurisdiction, the validity of the remaining provisions hereunder shall not be affected and
other applications of such provision shall be affected only to the extent necessary to comply with the determination of such
court. To the extent the provisions of this Certificate of Amendment may be inconsistent with any other provision of the
Certificate of Incorporation, this Certificate of Amendment shall be controlling.
(H) Series F Noncumulative Perpetual Preferred Stock
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series F Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series F Preferred Stock”), and the number of shares constituting the Series F Preferred Stock shall be
6,500. The Series F Preferred Stock shall be perpetual, with no maturity date.
Section 2. Dividends and Distributions.
(a) Rate. Holders of Series F Preferred Stock shall be entitled to receive, on each share of Series F Preferred
Stock if, as and when declared by the Board of Directors or any duly authorized committee of the Board of Directors (the
“Board”), but only out of assets legally available therefor, non-cumulative cash dividends at six (6%) percent per annum (the
“Rate”), on a stated value of $1,000 per share (the “Series F Stated Value”), and no more, payable quarterly on January 15,
April 15, July 15 and October 15 or on such other date or dates as may be determined by the Board of Directors (the
“Series F Dividend Payment Date”). In the event that any Series F Dividend Payment Date would otherwise fall on a day
that is not a Business Day, as hereinafter defined, the dividend payment due on that date will be postponed to the next day
that is a Business Day and no additional dividends will accrue as a result of that postponement. The period from and
including any Series F Dividend Payment Date to, but excluding, the next Series F Dividend Payment Date is a “Series F
Dividend Period”. “Business Day” means any day except Saturday, Sunday and any day on which banking institutions in
the State of New Jersey generally are authorized or required by law or other governmental actions to close.
Dividends that are declared and payable on Series F Preferred Stock on any Series F Dividend Payment Date will
be payable to holders of record of Series F Preferred Stock as they appear on the stock register of the Company on the
applicable record date, which shall be the 15th calendar day immediately preceding such Series F Dividend Payment Date or
such other record date fixed by the Board that is not more than 60 nor less than 10 days prior to such Series F Dividend
Payment Date (each, a “Series F Dividend Record Date”). Any such day that is a Series F Dividend Record Date shall be a
Dividend Record Date whether or not such day is a Business Day.
Holders of Series F Preferred Stock shall not be entitled to any dividends, whether payable in cash, securities or
other property, other than dividends (if any) declared and payable on Series F Preferred Stock as specified in this Section 2
(subject to the other provisions of the Certificate of Amendment).
(b) Non-Cumulative. Dividends on shares of Series F Preferred Stock shall be non-cumulative. If the Board
does not declare a dividend on the Series F Preferred Stock in respect of any Series F Dividend Period, the holders of
Series F Preferred Stock shall have no right to receive any dividend for such Series F Dividend Period, and the Company
shall have no obligation to pay a dividend for such Series F Dividend Period, whether or not dividends arc declared for any
subsequent Series F Dividend Period with respect to the Series F Preferred Stock.
(c) Priority of Dividends. So long as any share of Series F Preferred Stock remains outstanding, no dividend
or distribution shall be declared or paid on any series of preferred stock or any class of capital stock of the Company
ranking, as to dividends, on a parity with (“Series F Parity Stock”), which shall be deemed to include the Company’s
Series C Preferred Stock, the Company’s Series D Preferred Stock, and the Company’s Series E Preferred Stock or ranking
junior to (“Series F Junior Stock”) this Series F Preferred Stock (other than dividends payable solely in shares of common
stock) and nor shall any Series F Junior Stock or Series F Parity Stock be, directly or indirectly, purchased, redeemed or
otherwise acquired for consideration by the Company or any of its subsidiaries during any Series F Dividend Period unless
full dividends on all outstanding shares of Series F Preferred Stock for the most recently completed Series F Dividend
Period have been or are contemporaneously declared and paid (or have been declared and a sum sufficient for the payment
thereof has been set aside for the benefit of the holders of shares of Series F Preferred Stock on the applicable record date).
The foregoing limitation shall not apply to redemptions, purchases or other acquisitions of shares of common stock or other
Series F Junior Stock in connection with the administration of any employee benefit plan in the ordinary course of business
and consistent with past practice.
Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or other property) as may be
determined by the Board may be declared and paid on any securities, including common stock and other Series F Junior
Stock, from time to time out of any funds legally available for such payment, and holders of Series F Preferred Stock shall
not be entitled to participate in any such dividends.
Section 3. Voting Rights.
Holders of Series F Preferred Stock shall not have the right to receive notice of nor the right to vote at any meeting
of stockholders; provided, that Holders of the Series F Preferred Stock shall vote as a separate class on any proposal which
would revise the terms of the Series F Preferred Stock, or any other matter specifically provided by law.
Section 4. Liquidation, Dissolution, or Winding Up.
(a) Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the
affairs of the Company, whether voluntary or involuntary, holders of Series F Preferred Stock shall be entitled to receive for
each share of Series F Preferred Stock, out of the assets of the Company or proceeds thereof (whether capital or surplus)
available for distribution to stockholders of the Company, subject to the rights of any creditors of the Company, before any
distribution of such assets or proceeds is made to or set aside for the holders of common stock and any other stock of the
Company ranking junior to the Series F Preferred Stock, payment in full in an amount equal to the sum of (i) the Series F
Stated Value (as hereinafter defined) and (ii) the amount of any declared and unpaid dividend on each such share (such
amounts collectively, the “Series F Liquidation Preference”).
(b) Partial Payment. If in any distribution described in Section 4(a) above the assets of the Company or
proceeds thereof are not sufficient to pay in full the amounts payable with respect to all outstanding shares of Series F
Preferred Stock and the corresponding amounts payable with respect of any other stock of the Company ranking equally
with Series F Preferred Stock as to such distribution, holders of Series F Preferred Stock and the holders of such other stock
shall share ratably in any such distribution in proportion to the full respective distributions to which they are entitled.
(c) Residual Distributions. If the Series F Liquidation Preference has been paid in full to all holders of
Series F Preferred Stock and the corresponding amounts payable with respect of any other stock of the Company ranking
equally with Series F Preferred Stock as to such distribution has been paid in full, the holders of other stock of the Company
shall be entitled to receive all remaining assets of the Company (or proceeds thereof) according to their respective rights and
preferences.
(d) Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 4, the merger or
consolidation of the Company with any other corporation or other entity, including a merger or consolidation in which the
holders of Series F Preferred Stock receive cash, securities or other property for their shares, or the sale, lease or exchange
(for cash, securities or other property) of all or substantially all of the assets of the Company, shall not constitute a
liquidation, dissolution or winding up of the Company.
Section 5. Rank.
For the purposes hereof any stock of any series or class of the Company shall be deemed to rank:
(a) prior to the shares of this Series F Preferred Stock, as to dividends or upon liquidation, if the holders of
such series or class shall be entitled to the receipt of dividends or of amounts distributable upon a Liquidation Event, as the
case may be, in preference or priority to the holders of shares of this Series F Preferred Stock;
(b) as Series F Parity Stock, as to dividends or upon liquidation, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share or sinking fund provisions, if any, be different from those of this
Series F Preferred Stock, if the holders of such stock shall be entitled to the receipt of dividends or of amounts distributable
upon a Liquidation Event, as the case may be, in proportion to their respective dividend rates or liquidation prices, without
preference or priority, one over the other, as between the holders of such stock and the holders of shares of this Series F
Preferred Stock, including, but not limited to, the Series C Preferred Stock, the Series D Preferred Stock, and the Series E
Preferred Stock and;
(c) as Series F Junior Stock, as to dividends or upon liquidation, if such stock shall be common stock or if the
holders of shares of this Series F Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon a
Liquidation Event, as the case may be, in preference or priority to the holders of shares of such series or class.
Section 6. Conversion.
(a) The Series F Preferred Stock may be converted into shares of common stock by any holder at any time
after the date of the issuance of the Series F Preferred Stock. Subject to and upon compliance with the provisions of this
Section 6, the holder of any shares of this Series F Preferred Stock of the Company may convert the shares of this Series F
Preferred Stock into such number of validly issued, fully paid and nonassessable shares of common stock which are equal to
the product obtained by multiplying (1) the Series F Stated Value divided by the product of one and twenty five hundredths
(1.25) times $2.85 by (2) 0.189 (the “Series F Conversion Ratio”) surrendering the shares to be converted, in the manner
provided in Section 6(c) below; provided, that if the Company shall have called some or all of the shares of this Series F
Preferred Stock for redemption, such right shall terminate on the close of business on the third Business Day next preceding
the date fixed for redemption, unless the Company has defaulted in making or providing for the payment due on the date
fixed for redemption.
(b) The Company has the right, upon 30 days prior written notice to each holder, to require that the Series F
Preferred Stock be converted into common stock at any time after the date of issuance of the Series F Preferred Stock upon
the happening of any of the following:
i. a merger, consolidation or similar transaction involving the Company as a result of which the
shareholders of the Company prior to such transaction do not own a majority of the voting power of the resulting entity;
ii. the sale or disposition of all or substantially all of the Company’s assets; or
iii. if the Board, in the exercise of its good faith discretion, in connection with a capital raising
transaction through the sale of the Company’s capital stock, determines that the existence of the outstanding Series F
Preferred Stock presents an impediment to the consummation of such transaction such that the failure to convert the Series F
Preferred Stock would not be in the best interests of the Company and its common stock holders.
The Series F Preferred Stock shall be converted into that number of shares of the Company’s common stock
derived by applying the Series F Conversion Ratio.
(c)
i. In order to exercise the conversion privilege provided for under Section 6(a) hereof: or in the event the
Company gives notice of a mandatory conversion pursuant to Section 6(b) hereof, the holder of each share of this Series F
Preferred Stock to be converted shall surrender the certificate representing such share to the Conversion Agent for this
Series F Preferred Stock appointed for such purpose by the Company (the “Series F Conversion Agent”), or, if no Series F
Conversion Agent has been appointed or if the holder has not received notice of such appointment, then to the Company,
and in the event the conversion is pursuant to Section 6(a) hereof, with the Notice of Election to Convert on the back of said
certificate duly completed and signed at the principal office of the Series F Conversion Agent or the Company, as the case
may be. Unless the shares issuable on conversion are to be issued in the same name as the name in which the shares of this
Series F Preferred Stock are registered, each share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Company, duly executed by the holder or its duly authorized attorney and by funds in an
amount sufficient to pay any transfer or similar tax.
ii. The holders of shares of this Series F Preferred Stock at the close of business on a Dividend Record
Date shall be entitled to receive the dividend payable on those shares on the corresponding Series F Dividend Payment Date
notwithstanding the conversion of the shares after the Dividend Record Date.
iii. As promptly as practicable after the surrender by a holder of the certificates of shares of this Series F
Preferred Stock in accordance with Section 6(c), the Company shall issue and shall deliver at the office of the Series F
Conversion Agent to the holder, or on his written order, a certificate or certificates for the number of full shares of common
stock issuable upon the conversion of those shares in accordance with the provisions of this Section 6(c)(iii), and any
fractional interest in respect of a share of common stock arising upon the conversion shall be settled as provided in
Section 6(d) below.
iv. In the event of a voluntary conversion under Section 6(a) hereof, each conversion shall be deemed to
have been effected as of the close of business on the date on which all of the conditions specified in Section 6(c)(i) above
shall have been satisfied, and, the person or persons in whose name or names any certificate or certificates for shares of
common stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the
shares of common stock represented by those certificates at such time on such date and such conversion shall be at the
Series F Conversion Ratio in effect at such time on such date. All shares of common stock delivered upon conversion of this
Series F Preferred Stock will upon delivery be duly and validly issued and fully paid and nonassessable, free of all liens and
charges are not subject to any preemptive rights. Upon the surrender of certificates representing shares of this Series F
Preferred Stock to be converted, the shares will no longer be deemed to be outstanding and all rights of a holder with respect
to the shares surrendered for conversion shall immediately terminate except the right to receive the common stock or other
securities, cash or other assets as herein provided (including without limitation any dividend payable as specified in
Section 6(b)(ii) above).
v. In the event of a mandatory conversion under Section 6(b) hereof, each conversion shall be deemed to
have been effected as of the close of business on the tenth day after expiration of the 30 day notice period provided for under
Section 6(b) hereof, and thereafter the shares of Series F Preferred Stock called for conversion shall no longer be deemed
outstanding, and no dividends shall thereafter accrue or be payable on such shares, and such shares shall be deemed
converted into common stock of the Company; provided, that the Company shall not be required to issue certificates
representing such shares of common stock until the holder has complied with all of the provisions of this Section 6.
(d) No fractional shares or securities representing fractional shares of common stock shall be issued upon
conversion of this Series F Preferred Stock. Any fractional interest in a share of common stock resulting from conversion of
a share of this Series F Preferred Stock shall be paid in cash based on the value of the common stock at the Series F
Conversion Ratio, or in the discretion of the Company’s management, rounded upward or downward to the nearest whole
share.
(e) If:
i. the Company shall authorize the granting to the holders of the common stock of rights or warrants to
subscribe for or purchase any shares of any class or any other rights or warrants; or
ii. there shall be any reclassification of the common stock (other than a subdivision or combination of
the outstanding common stock and other than a change in the par value, or from par value to no par value, or from no par
value to par value), or any consolidation, merger, or statutory share exchange to which the Company is a party, or any sale
or transfer of all or substantially all the assets of the Company, or
iii. there shall be a voluntary or an involuntary dissolution liquidation or winding up of the Company;
then the Company shall cause to be filed with the Series F Conversion Agent, and shall cause to be mailed to the holders of
shares of this Series F Preferred Stock at their addresses as shown on the stock books of the Company, at least 15 days prior
to the applicable date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of the
dividend, distribution or rights or warrants, or, if a record is not to be taken, the date as of which the holders of common
stock of record to be entitled to the dividend, distribution of rights or warrants are to be determined or (ii) the date on which
the reclassification, consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that holders of common stock of record shall be
entitled to exchange their shares of common stock for securities or other property deliverable upon the reclassification,
consolidation, merger, statutory share exchange, sale, transfer, dissolution, liquidation or winding up. Failure to give any
such notice or any defect in the notice shall not affect the legality or validity of the proceedings described in this
Section 6(e).
(f)
i. The Company covenants that it will at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued shares of common stock or its issued shares of common stock held
in its treasury, or both, for the purpose of effective conversions of this Series F Preferred Stock the full number of shares of
common stock deliverable upon the conversion of all outstanding shares of this Series F Preferred Stock not theretofore
converted.
ii. The Company may impose any such restrictions on the common stock issued upon conversion of the
Series F Preferred Stock as it may deem advisable in order to comply with the Securities Act of 1933, as amended, the
requirements of any stock exchange or automated quotation system upon which the stock is then listed or quoted, any
applicable state securities laws, any provision of the Company’s certificate of incorporation or bylaws, or any other law,
regulation, or binding contract to which the Company is a party, and may request the holder of the Series F Preferred Stock
to provide such investment representations or agreements as may be required to ensure such compliance.
(g) The Company will pay any and all documentary stamp or similar issue or transfer taxes payable in respect
of the issue or delivery of shares of common stock on conversion of this Series F Preferred Stock pursuant hereto; provided,
that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue
or delivery of shares of common stock in a name other than that of the holder of this Series F Preferred Stock to be
converted and no such issue or delivery shall be made unless and until the person requesting the issue or delivery has paid to
the Company the amount of any such tax or has established, to the satisfaction of the Company, that the tax has been paid.
(h) In case of any reclassification or change of outstanding shares of common stock (other than change in par
value, or as a result of subdivision or combination), or in case of any consolidation of the Company with, or merger of the
Company with or into, any other entity that requires the vote of the holders of common stock or that results in a
reclassification, change, conversion, exchange or cancellation of outstanding shares of common stock or any sale or transfer
of all or substantially all of the assets of the Company, each holder of shares of this Series F Preferred Stock then
outstanding shall, in connection with such transaction, have the right to convert the shares of this Series F Preferred Stock
held by the holder into the kind and amount of securities, cash and other property which the holder would have been entitled
to receive upon such reclassification, change, consolidation, merger, sale or transfer if the holder had held the common stock
issuable upon the conversion of the shares of this Series F Preferred Stock immediately prior to the reclassification, change,
consolidation, merger, sale or transfer, and the Company may require the holders of the Series F Preferred Stock to accept
such consideration in exchange for their shares of Series F Preferred Stock in the event such transaction is approved by any
requisite vote of shareholders legally required.
(i) In the event that the Company shall consummate any consolidation or merger or similar business
combination, pursuant to which the outstanding shares of common stock are by operation of law exchanged solely for or
changed, reclassified or converted into stock, securities or cash or any other property, or any combination thereof, then
provision shall be made so that shares of this Series F Preferred Stock that are not immediately converted and receive the
consideration provided in Section 6(h), shall, in connection with such consolidation, merger or similar business
combination, be assumed by and shall become preferred stock of such successor or resulting corporation, having in respect
of such corporation the same powers, preferences and relative rights, and the qualifications, limitations or restrictions
thereon, that this Series F Preferred Stock had immediately prior to the transaction, except that after such transaction each
share of this Series F Preferred Stock shall be immediately convertible into the nature and kind of consideration so
receivable by a holder of the number of shares of common stock into which such shares of this Series F Preferred Stock
could have been converted immediately prior to such transaction. The Company shall not consummate any such merger,
consolidation or similar transaction unless all then outstanding shares of this Series F Preferred Stock (other than such
shares that are converted pursuant to Section 6(h)) shall be assumed and authorized by the successor or resulting corporation
as aforesaid.
Section 7. Exchange for Bank Preferred Stock.
Upon the consummation of any transaction whereby the Company is dissolved, and the holders of the common
stock of the Company immediately prior to such dissolution exchange their shares for common stock of BCB Community
Bank (the “Bank”), the Company’s sole asset and subsidiary, each share of Series F Preferred Stock shall automatically, and
without any further action by the holder thereof, be converted into or exchanged for one share of preferred stock of the Bank
having a liquidation preference and other terms and conditions, including the dividend payment rate and conversion
features, as similar to those of the Series F Preferred Stock as are permitted by applicable law.
Section 8. Redemption.
(a) At any time after the issuance date of the Series F Preferred Stock, shares of this Series F Preferred Stock
shall be redeemable by the Company in whole or, from time to time, in part at the Company’s option at the Series F Stated
Value, plus in each case an amount equal to any dividends declared but unpaid for the then current Series F Dividend Period
at the Rate to, but excluding, the date fixed for redemption.
(b) In the event that fewer than all the outstanding shares of this Series F Preferred Stock are to be redeemed
as permitted by this Section 8, the number of shares to be redeemed shall be determined by the Board, and the shares to be
redeemed shall be determined on a pro rata basis unless another method is required to comply with any rule or regulation of
any stock exchange upon which the shares of this Series F Preferred Stock may at any time be listed.
(c) Notice of any redemption of shares of this Series F Preferred Stock, specifying the date fixed for
redemption (herein referred to as the “Redemption Date”) and place of redemption, shall be given by first class mail to each
holder of record of the shares to be redeemed, at his address of record, not more than 60 nor less than 30 days prior to the
Redemption Date. Each such notice shall also specify the redemption price applicable to the share to be redeemed and that
dividends on shares to be redeemed shall cease to accrue and accumulate on the Redemption Date. If less than all the shares
owned by such stockholder are then to be redeemed, the notice shall also specify the number of shares thereof which are to
be redeemed and the fact that a new certificate or certificates representing any unredeemed shares shall be issued without
cost to such holder.
(d) Notice of redemption of shares of this Series F Preferred Stock having been given as provided in
Section 8(c), then, unless the Company shall have defaulted in providing for the payment of the redemption price and an
amount equal to all declared and unpaid dividends to the Redemption Date, dividends shall cease to accrue on the shares of
this Series F Preferred Stock called for redemption at the Redemption Date, all rights of the holders thereof (except the right
to receive the redemption price and all accrued and unpaid dividends to the Redemption Date) shall cease with respect to
such shares and such shares shall not, after the Redemption Date, be deemed to be outstanding and shall not have the status
of preferred stock. In case fewer than all the shares represented by any certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder thereof.
(e) Any shares of this Series F Preferred Stock which shall at any time have been redeemed or converted shall,
after such redemption or conversion, have the status of authorized but unissued shares of preferred stock, without
designation as to series until such shares are once more designated as part of a particular Series F by the Board of Directors.
(f) The Series F Preferred Stock will not be subject to any mandatory redemption, sinking fund or other
similar provisions. Holders of Series F Preferred Stock will have no right to require redemption or repurchase of any shares
of Designated Preferred Stock.
Section 9. Severability.
If any provision of this Certificate of Amendment or any application of such provision is determined to be invalid
by any federal or state court having jurisdiction, the validity of the remaining provisions hereunder shall not be affected and
other applications of such provision shall be affected only to the extent necessary to comply with the determination of such
court. To the extent the provisions of this Certificate of Amendment may be inconsistent with any other provision of the
Certificate of Incorporation, this Certificate of Amendment shall be controlling.
(I) Series G 6% Noncumulative Perpetual Preferred Stock
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series G 6% Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series G Preferred Stock”), and the number of shares constituting the Series G Preferred Stock shall be
533. The shares of Series G Preferred Stock shall have a designated face value of $10,000.00. The Series G Preferred Stock
shall be perpetual, with no maturity date.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30,
September 30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid
on a pro rata basis based upon a 360-day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non-cumulative.
(c) So long as any share of Series G Preferred Stock and any other stock of the Company ranking equally with
the Series G Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on any series of
preferred stock or any class of capital stock of the Company ranking, as to dividends, junior to this Series G Preferred Stock
(other than dividends payable solely in shares of common stock) unless full dividends on all outstanding shares of Series G
Preferred Stock for the most recently completed quarter have been or are contemporaneously declared and paid (or have
been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of
Series G Preferred Stock on the applicable record date).
Section 3. Voting Rights.
The Series G Preferred Stock shall not have any voting rights, provided that holders of the Series G Preferred Stock
shall vote as a separate class on any proposal which would revise the terms of the Series G Preferred Stock, or any other
matter specifically provided by law.
Section 4. Reacquired Shares.
Any shares of Series G Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or winding up.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary
or involuntary, holders of Series G Preferred Stock shall be entitled to receive for each share of Series G Preferred Stock, out
of the assets of the Company or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the
Company, subject to the rights of any creditors of the Company, before any distribution of such assets or proceeds is made to
or set aside for the holders of common stock and any other stock of the Company ranking junior to the Series G Preferred
Stock, payment in full in an amount equal to the sum of: (i) the Series G designated face value (as set forth in Part (I),
Section 1 of this Article); and, (ii) the amount of any declared and unpaid dividend on each such share (such amounts
collectively, the “Series G Liquidation Preference”).
(b) If, in any distribution described in Section 5(a), above the assets of the Company or proceeds thereof are
not sufficient to pay in full the amounts payable with respect to all outstanding shares of Series G Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Company ranking equally with Series G Preferred
Stock as to such distribution, holders of Series G Preferred Stock and the holders of such other stock of the Company
ranking equally with Series G Preferred Stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c) If the Series G Liquidation Preference has been paid in full to all holders of Series G Preferred Stock and
the corresponding amounts payable with respect to any other stock of the Company ranking equally with Series G Preferred
Stock as to such distribution has been paid in full, the holders of other stock of the Company shall be entitled to receive all
remaining assets of the Company (or proceeds thereof) according to their respective rights and preferences.
(d) For purposes of this Section 5, the merger or consolidation of the Company with any other corporation or
other entity, including a merger or consolidation in which the holders of Series G Preferred Stock receive cash, securities or
other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all
of the assets of the Company, shall not constitute a liquidation, dissolution or winding up of the Company.
Section 6. Redemption Feature.
Shares of Series G Preferred Stock may not be redeemed until after January 1, 2022 by the Company (in whole or
in part) at its option, at the face value of $10,000.00 per share plus any pro rata dividend that may be declared by the Board
of Directors.
Section 7. Rank.
Shares of the Series G Preferred Stock and any other stock of the Company ranking equally with Series G Preferred
Stock, taken together, will rank senior to common stock, no par value, and will rank junior to all the Company’s
indebtedness and other non-equity claims on the Company.
(J) Series H 3.5% Noncumulative Perpetual Preferred Stock
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series H 3.5% Noncumulative Perpetual Preferred Stock,” par
value $0.01 per share (the “Series H Preferred Stock”), and the number of shares constituting the Series H Preferred Stock
shall be 3,000. The shares of Series H Preferred Stock shall have a designated face value of $10,000.00. The Series H
Preferred Stock shall be perpetual, with no maturity date.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30,
September 30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid
on a pro rata basis based upon a 360‑day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non‑cumulative.
(c) So long as any share of Series H Preferred Stock and any other stock of the Company ranking equally with
Series H Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on any series of preferred
stock or any class of capital stock of the Company ranking, as to dividends, junior to this Series H Preferred Stock (other
than dividends payable solely in shares of common stock) unless full dividends on all outstanding shares of Series H
Preferred Stock for the most recently completed quarter have been or are contemporaneously declared and paid (or have
been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of
Series H Preferred Stock on the applicable record date).
Section 3. Voting Rights.
The Series H Preferred Stock shall not have any voting rights, provided that holders of the Series H Preferred Stock
shall vote as a separate class on any proposal which would revise the terms of the Series H Preferred Stock, or any other
matter specifically provided by law.
Section 4. Reacquired Shares.
Any shares of Series H Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or Winding Up.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary
or involuntary, holders of Series H Preferred Stock shall be entitled to receive for each share of Series H Preferred Stock, out
of the assets of the Company or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the
Company, subject to the rights of any creditors of the Company, before any distribution of such assets or proceeds is made to
or set aside for the holders of common stock and any other stock of the Company ranking junior to the Series H Preferred
Stock, payment in full in an amount equal to the sum of: (i) the Series H designated face value (as set forth in Part (J),
Section 1 of this Article); and, (ii) the amount of any declared and unpaid dividend on each such share (such amounts
collectively, the “Series H Liquidation Preference”).
(b) If, in any distribution described in Section 5(a) above, the assets of the Company or proceeds thereof are
not sufficient to pay in full the amounts payable with respect to all outstanding shares of Series H Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Company ranking equally with Series H Preferred
Stock as to such distribution, holders of Series H Preferred Stock and the holders of such other stock of the Company
ranking equally with Series H Preferred Stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c) If the Series H Liquidation Preference has been paid in full to all holders of Series H Preferred Stock and
the corresponding amounts payable with respect to any other stock of the Company ranking equally with Series H Preferred
Stock as to such distribution has been paid in full, the holders of other stock of the Company shall be entitled to receive all
remaining assets of the Company (or proceeds thereof) according to their respective rights and preferences.
(d) For purposes of this Section 5, the merger or consolidation of the Company with any other corporation or
other entity, including a merger or consolidation in which the holders of Series H Preferred Stock receive cash, securities or
other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all
of the assets of the Company, shall not constitute a liquidation, dissolution or winding up of the Company.
Section 6. Redemption Feature.
Shares of Series H Preferred Stock may not be redeemed until after June 30, 2023. After June 30, 2023, the
Company may redeem shares of Series H Preferred Stock (in whole or in part) at its option, at the face value of $10,000.00
per share plus any pro rata dividend that may be declared by the Board of Directors.
Section 7. Rank.
Shares of the Series H Preferred Stock will rank senior to common stock, no par value, and will rank junior to all
the Company’s indebtedness and other non-equity claims on the Company. Shares of the Series H Preferred Stock will rank
on parity with Shares of the Series C 6% Noncumulative Perpetual Preferred Stock, Shares of the Series D 4.5%
Noncumulative Perpetual Preferred Stock, Shares of the Series F 6% Noncumulative Perpetual Preferred Stock and shares of
the Series G 6% Noncumulative Perpetual Preferred Stock.
(K) Series I Noncumulative Perpetual Preferred Stock
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series I Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series I Preferred Stock”), and the number of shares constituting the Series I Preferred Stock shall be
3,000. The shares of Series I Preferred Stock shall have a designated face value of $10,000.00. The Series I Preferred Stock
shall be perpetual, with no maturity date.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30,
September 30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid
on a pro rata basis based upon a 360-day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non-cumulative.
(c) So long as any share of Series I Preferred Stock and any other stock of the Company ranking equally with
Series I Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on any series of preferred
stock or any class of capital stock of the Company ranking, as to dividends, junior to this Series I Preferred Stock (other than
dividends payable solely in shares of common stock) unless full dividends on all outstanding shares of Series I Preferred
Stock for the most recently completed quarter have been or are contemporaneously declared and paid (or have been declared
and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of Series I Preferred
Stock on the applicable record date).
Section 3. Voting Rights.
The Series I Preferred Stock shall not have any voting rights, provided that holders of the Series I Preferred Stock
shall vote as a separate class on any proposal which would revise the terms of the Series I Preferred Stock, or any other
matter specifically provided by law.
Section 4. Reacquired Shares.
Any shares of Series I Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or Winding Up.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary
or involuntary, holders of Series I Preferred Stock shall be entitled to receive for each share of Series I Preferred Stock, out
of the assets of the Company or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the
Company, subject to the rights of any creditors of the Company, before any distribution of such assets or proceeds is made to
or set aside for the holders of common stock and any other stock of the Company ranking junior to the Series I Preferred
Stock, payment in full in an amount equal to the sum of: (i) the Series I designated face value (as set forth in Section 1
above); and, (ii) the amount of any declared and unpaid dividend on each such share (such amounts collectively, the “Series
I Liquidation Preference”).
(b) If, in any distribution described in Section 5(a) above, the assets of the Company or proceeds thereof are
not sufficient to pay in full the amounts payable with respect to all outstanding shares of Series I Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Company ranking equally with Series I Preferred
Stock as to such distribution, holders of Series I Preferred Stock and the holders of such other stock of the Company ranking
equally with Series I Preferred Stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c) If the Series I Liquidation Preference has been paid in full to all holders of Series I Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Company ranking equally with Series I Preferred
Stock as to such distribution has been paid in full, the holders of other stock of the Company shall be entitled to receive all
remaining assets of the Company (or proceeds thereof) according to their respective rights and preferences.
(d) For purposes of this Section 5, the merger or consolidation of the Company with any other corporation or
other entity, including a merger or consolidation in which the holders of Series I Preferred Stock receive cash, securities or
other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all
of the assets of the Company, shall not constitute a liquidation, dissolution or winding up of the Company.
Section 6. Redemption Feature.
Shares of Series I Preferred Stock may not be redeemed until after August 31, 2024. After August 31, 2024, the
Company may redeem shares of Series I Preferred Stock (in whole or in part) at its option, at the face value of $10,000.00
per share plus any pro rata dividend that may be declared by the Board of Directors. To the extent required by applicable
Federal regulations, any such redemption shall require the prior approval of the Federal Reserve Board.
Section 7. Rank.
Shares of the Series I Preferred Stock will rank senior to the Company’s common stock, no par value, and will rank
junior to all the Company’s indebtedness and other non-equity claims on the Company. Shares of the Series I Preferred
Stock will rank on parity with shares of the Series D 4.5% Noncumulative perpetual Preferred Stock, the Series G 6%
Noncumulative Perpetual Preferred Stock and Series H 3.5% Noncumulative Perpetual Preferred Stock.
(L) Series J Noncumulative Perpetual Preferred Stock
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series J Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series J Preferred Stock”), and the number of shares constituting the Series J Preferred Stock shall be
4,000. The shares of Series J Preferred Stock shall have a designated face value of $10,000.00. The Series J Preferred Stock
shall be perpetual, with no maturity date.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30, September
30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid on a pro
rata basis based upon a 360-day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non-cumulative.
(c) So long as any share of Series J Preferred Stock and any other stock of the Company ranking equally with the
Series J Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on any series of preferred
stock or any class of capital stock of the Company ranking, as to dividends, junior to this Series J Preferred Stock (other
than dividends payable solely in shares of common stock) unless full dividends on all outstanding shares of Series J
Preferred Stock for the most recently completed quarter have been or are contemporaneously declared and paid (or have
been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of
Series J Preferred Stock on the applicable record date).
Section 3. Voting Rights.
The Series J Preferred Stock shall not have any voting rights, provided that holders of the Series J Preferred Stock
shall vote as a separate class on any proposal which would revise the terms of the Series J Preferred Stock, or any other
matter specifically provided by law.
Section 4. Reacquired Shares.
Any shares of Series J Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or Winding Up.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary
or involuntary, holders of Series J Preferred Stock shall be entitled to receive for each share of Series J Preferred Stock, out
of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to stockholders of
the Corporation, subject to the rights of any creditors of the Corporation, before any distribution of such assets or proceeds
is made to or set aside for the holders of the Common Stock and any other stock of the Corporation ranking junior to the
Series J Preferred Stock, payment in full in an amount equal to the sum of: (i) the Series J designated face value (as set forth
in Section 1 above) and, (ii) the amount of any declared and unpaid dividend on each such share (such amounts collectively,
the “Series J Liquidation Preference”). The Series J Liquidation Preference shall be proportionately adjusted in the event of
a stock split, stock combination or similar event so that the aggregate liquidation preference allocable to all outstanding
shares of Series J Preferred Stock immediately prior to such event is the same immediately after giving effect to such event.
(b) If, in any distribution described in Section 5(a) above, the assets of the Corporation or proceeds thereof are not
sufficient to pay in full the amounts payable with respect to all outstanding shares of Series J Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Corporation ranking equally with Series J Preferred
Stock as to such distribution, holders of Series J Preferred Stock and the holders of such other stock of the Corporation
ranking equally with Series J Preferred Stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c) If the Series J Liquidation Preference has been paid in full to all holders of Series J Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Corporation ranking equally with Series J Preferred
Stock as to such distribution has been paid in full, the holders of other stock of the Corporation shall be entitled to receive
all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) For purposes of this Section 5, the merger or consolidation of the Corporation with any other corporation or other
entity, including a merger or consolidation in which the holders of Series J Preferred Stock receive cash, securities or other
property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the
assets of the Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption Feature.
Shares of Series J Preferred Stock may not be redeemed until after the fifth anniversary of the date of issuance of
such Series J Preferred Stock (as applicable, the “Issue Date”). After the fifth anniversary of the Issue Date, the Corporation
may redeem shares of Series J Preferred Stock (in whole or in part) at its option, at the face value of $10,000.00 per share
plus any declared and unpaid dividends thereon to, but not including, the date fixed for redemption. To the extent required
by applicable Federal regulations, any such redemption shall require the prior approval of the Federal Reserve Board.
Section 7. Rank.
The Series J Preferred Stock will rank: (a) senior to the Common Stock, and to all other equity securities issued by
the Corporation other than equity securities referred to in clauses (b) and (c) of this Section 7; (b) on parity with the Series H
3.5% Noncumulative Perpetual Preferred Stock, the Series I Noncumulative Perpetual Preferred Stock, and all equity
securities issued by the Corporation with terms specifically providing that those equity securities rank on parity with the
Series J Preferred Stock; (c) junior to all equity securities issued by the Corporation with terms specifically providing that
those equity securities rank senior to the Series J Preferred Stock; and (d) effectively junior to all existing and future
indebtedness (including indebtedness convertible into our Common Stock or Preferred Stock) of the Corporation and to any
indebtedness and other liabilities of (as well as any preferred equity interest held by others in) existing subsidiaries of the
Corporation. The term “equity securities” shall not include convertible debt securities.
(M) Series K Noncumulative Perpetual Preferred Stock
Section 1. Designation and Amount.
The shares of such series shall be designated as “Series K Noncumulative Perpetual Preferred Stock,” par value
$0.01 per share (the “Series K Preferred Stock”), and the number of shares constituting the Series K Preferred Stock shall
be 4,000. The shares of Series K Preferred Stock shall have a designated face value of $10,000.00. The Series K Preferred
Stock shall be perpetual, with no maturity date.
Section 2. Dividends and Distributions.
(a) Dividends when and if declared will be paid quarterly in arrears (based upon March 31, June 30, September
30 and December 31 quarters) on or about April 15, July 15, October 15 and January 15. Dividends will be paid on a pro
rata basis based upon a 360-day year from the date of the completion of the offering or portion thereof.
(b) Dividends will be discretionary and non-cumulative.
(c) So long as any share of Series K Preferred Stock and any other stock of the Corporation ranking equally
with the Series K Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on any series of
preferred stock or any class of capital stock of the Corporation ranking, as to dividends, junior to this Series K Preferred
Stock (other than dividends payable solely in shares of common stock) unless full dividends on all outstanding shares of
Series K Preferred Stock for the most recently completed quarter have been or are contemporaneously declared and paid (or
have been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of
Series K Preferred Stock on the applicable record date).
Section 3. Voting Rights.
The Series K Preferred Stock shall not have any voting rights, provided that holders of the Series K Preferred
Stock shall vote as a separate class on any proposal which would revise the terms of the Series K Preferred Stock, or any
other matter specifically provided by law.
Section 4. Reacquired Shares.
Any shares of Series K Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
Section 5. Liquidation, Dissolution, or Winding Up.
(a) In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether
voluntary or involuntary, holders of Series K Preferred Stock shall be entitled to receive for each share of Series K Preferred
Stock, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to
stockholders of the Corporation, subject to the rights of any creditors of the Corporation, before any distribution of such
assets or proceeds is made to or set aside for the holders of the Common Stock and any other stock of the Corporation
ranking junior to the Series K Preferred Stock, payment in full in an amount equal to the sum of: (i) the Series K designated
face value (as set forth in Section 1 above) and, (ii) the amount of any declared and unpaid dividend on each such share
(such amounts collectively, the “Series K Liquidation Preference”). The Series K Liquidation Preference shall be
proportionately adjusted in the event of a stock split, stock combination or similar event so that the aggregate liquidation
preference allocable to all outstanding shares of Series K Preferred Stock immediately prior to such event is the same
immediately after giving effect to such event.
(b) If, in any distribution described in Section 5(a) above, the assets of the Corporation or proceeds thereof are
not sufficient to pay in full the amounts payable with respect to all outstanding shares of Series K Preferred Stock and the
corresponding amounts payable with respect to any other stock of the Corporation ranking equally with Series K Preferred
Stock as to such distribution, holders of Series K Preferred Stock and the holders of such other stock of the Corporation
ranking equally with Series K Preferred Stock shall share ratably in any such distribution in proportion to the full respective
distributions to which they are entitled.
(c) If the Series K Liquidation Preference has been paid in full to all holders of Series K Preferred Stock and
the corresponding amounts payable with respect to any other stock of the Corporation ranking equally with Series
K Preferred Stock as to such distribution has been paid in full, the holders of other stock of the Corporation shall be entitled
to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.
(d) For purposes of this Section 5, the merger or consolidation of the Corporation with any other corporation or
other entity, including a merger or consolidation in which the holders of Series K Preferred Stock receive cash, securities or
other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all
of the assets of the Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.
Section 6. Redemption Feature.
Shares of Series K Preferred Stock may not be redeemed until after the fifth anniversary of the date of issuance of
such Series K Preferred Stock (as applicable, the “Issue Date”). After the fifth anniversary of the Issue Date, the Corporation
may redeem shares of Series K Preferred Stock (in whole or in part) at its option, at the face value of $10,000.00 per share
plus any declared and unpaid dividends thereon to, but not including, the date fixed for redemption. To the extent required
by applicable Federal regulations, any such redemption shall require the prior approval of the Federal Reserve Board.
Section 7. Rank.
The Series K Preferred Stock will rank: (a) senior to the Common Stock, and to all other equity securities issued by
the Corporation other than equity securities referred to in clauses (b) and (c) of this Section 7; (b) on parity with the Series I
Noncumulative Perpetual Preferred Stock, the Series J Noncumulative Perpetual Preferred Stock, and all equity securities
issued by the Corporation with terms specifically providing that those equity securities rank on parity with the Series K
Preferred Stock; (c) junior to all equity securities issued by the Corporation with terms specifically providing that those
equity securities rank senior to the Series K Preferred Stock; and (d) effectively junior to all existing and future indebtedness
(including indebtedness convertible into our Common Stock or Preferred Stock) of the Corporation and to any indebtedness
and other liabilities of (as well as any preferred equity interest held by others in) existing subsidiaries of the
Corporation. The term “equity securities” shall not include convertible debt securities.
ARTICLE VI
Limitation of Liability
Subject to the following, a director or officer of the Corporation shall not be personally liable to the Corporation or
its shareholders for damages for breach of any duty owed to the Corporation or its shareholders. The preceding sentence
shall not relieve a director or officer from liability for any breach of duty based upon an act or omission (i) in breach of such
person’s duty of loyalty to the Corporation or its shareholders, (ii) not in good faith or involving a knowing violation of law,
or (iii) resulting in receipt by such person of an improper personal benefit. If the New Jersey Business Corporation Act is
amended to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the
liability of a director or officer or both of the Corporation shall be eliminated or limited to the fullest extent permitted by the
New Jersey Business Corporation Act as so amended. Any amendment to this Certificate of Incorporation, or change in law
which authorizes this paragraph shall not adversely affect any then existing right or protection of a director or officer of the
Corporation.
ARTICLE VII
Indemnification
The Corporation shall indemnify its officers, directors, employees and agents and former officers, directors,
employees and agents, and any other persons serving at the request of the Corporation as an officer, director, employee or
agent of another corporation, association, partnership, joint venture, trust, or other enterprise, against expenses (including
attorneys’ fees, judgments, fines and amounts paid in settlement) incurred in connection with any pending or threatened
action, suit, or proceeding, whether civil, criminal, administrative or investigative, with respect to which such officer,
director, employee, agent or other person is party, or is threatened to be made a party, to the full extent permitted by the New
Jersey Business Corporation Act. The indemnification provided herein (i) shall not be deemed exclusive of any other right to
which any person seeking indemnification may be entitled under any by-law, agreement, or vote of shareholders of
disinterested directors or otherwise, both as to action in his or her official capacity and as to action in any other capacity, and
(ii) shall insure to the benefit of the heirs, executors, and the administrators of any such person. The Corporation shall have
the power, but shall not be obligated, to purchase and maintain insurance on behalf of any person or persons enumerated
above against any liability asserted against or incurred by them or any of them arising out of their status as corporate
directors, officers, employees, or agents whether or not the Corporation would have the power to indemnify them against
such liability under the provisions of this article.
The Corporation shall, from time to time, reimburse or advance to any person referred to in this article the funds
necessary for payment of expenses, including attorneys’ fees, incurred in connection with any action, suit or proceeding
referred to in this article, upon receipt of a written undertaking by or on behalf of such person to repay such amount(s) if a
judgment or other final adjudication adverse to the director or officer establishes that the director’s or officer’s acts or
omissions (i) constitute a breach of the director’s or officer’s duty of loyalty to the corporation or its shareholders, (ii) were
not in good faith, (iii) involved a knowing violation of law, (iv) resulted in the director or officer receiving an improper
personal benefit, or (v) were otherwise of such a character that New Jersey law would require that such amount(s) be repaid.
ARTICLE VIII
Staggered Board of Directors
The number of directors shall be fixed from time to time exclusively by the Board of Directors pursuant to a
resolution adopted by a majority of the whole board. The directors shall be divided into three classes, with the term of office
of the first class to expire at the next annual meeting of stockholders, the term of office of the second class to expire at the
annual meeting of stockholders one year thereafter and the term of office of the third class to expire at the annual meeting of
stockholders two years thereafter. At each annual meeting of stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election.
6
Insider Trading Policy
BCB Community Bank
BCB Bancorp,
Inc. Insider
Trading Policy
BCB Bancorp, Inc., as a public company, is subject to federal and state laws and regulations governing securities
trading. It is the policy of BCB Bancorp, Inc., and its subsidiaries (collectively, the “Company”) to comply fully,
and to assist its directors, management and employees in complying fully, with these laws and regulations.
This policy applies to all members of the Company’s Board of Directors, director emeriti, Executive
Management, and employees (herein, collectively, "employees"), as well as members of such employees'
immediate families, households, and any other party over whom an employee may have dispositive power
(hereinafter, an "Affiliated Party").
The Company depends upon the conduct and diligence of its employees, in both their professional and personal
capacities, to ensure full compliance with this policy. This policy provides procedures and guidelines with respect
to transactions of employees of the Company in the Company’s securities, the protection of the Company's
material, non-public information, and the standard of conduct expected of the Company’s employees in this
highly sensitive area. It is the personal obligation and responsibility of each employee to act in a manner
consistent with this Policy.
LEGAL BACKGROUND
“Insider trading” is an enforcement priority of the Securities and Exchange Commission (“SEC”), the NASDAQ
Global Select Market (“NASDAQ”), and the United States Department of Justice. Criminal prosecutions for
insider trading are commonplace and may result in fines and/or imprisonment for violations.
What is insider trading? The prohibition against such trading generally is understood to prohibit:(1) trading on
the basis of material, non-public information; (2) disclosing or “tipping” material, non-public information to
others, or recommending the purchase or sale of securities on the basis of such information; or (3) assisting
someone who is engaged in any of the above activities.
Who is an insider? The term “insider” applies to anyone who, by virtue of a special relationship with the
Company, possesses material, non-public information regarding the business of the Company. An individual may
be considered an insider for a limited time with respect to certain material, non-public information even though
he or she is not a director or officer. For example, an assistant who knows that an acquisition is about to occur
may be regarded as an insider with respect to that information until the news of such acquisition has been fully
disclosed to the public.
What is material, non-public information? Information is generally deemed to be “material” if there is a
substantial likelihood a “reasonable investor” would rely on it in deciding to purchase, sell or hold a security to
which the information relates. As a practical matter, "materiality" often is determined after the fact, when it is
known that someone has traded on the information and after the information itself has been made public and its
effects upon the market are more certain.
Examples of information generally regarded as material include, but are not limited to, the following:
·
Financial results;
·
Projections that significantly different from external expectations;
2
·
Major proposed or pending acquisitions, investments, divestitures;
·
Significant projects or product developments;
·
Changes in key personnel;
·
Changes in dividends;
·
Stock splits;
·
Stock buybacks;
·
New equity or debt offerings;
·
Positive or negative developments in outstanding, significant litigation;
·
Events that may result in the creation of a significant reserve or write-off, or other significant adjustment
to the Company’s financial statements;
·
Actual or threatened significant litigation or inquiry by a governmental or regulatory unit, authority or
agency; and
·
Any other facts which might cause the Company’s financial results to be substantially affected
“Non-public” information is any information that has not been previously disclosed and is not otherwise available
to investors generally. Filings with the SEC and press releases are generally regarded as public information.
Information about undisclosed financial results or a possible merger, acquisition or other material development,
whether concerning the Company or otherwise, and obtained in the normal course of employment or through a
rumor, tip or just “loose talk,” is not public information.
Information should be considered “non-public” until the beginning of the third (3rd) Trading Day (as defined
below) after such information has been disseminated widely to the general public through press releases, news
tickers, newspaper items, quarterly or annual report filings or other widely disseminated means.
For purposes of this Policy, a “Trading Day” shall mean a day on which the NASDAQ is open for trading.
Potential Criminal and Civil Liability and/or Disciplinary Action. The Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and specifically Rule 10b-5 of the Exchange Act, makes it unlawful for any
person to make false statements or omit to state material facts in connection with the purchase or sale of any
security. There are no limits on the size of a transaction that will trigger insider trading liability. In the past,
relatively small trades have resulted in SEC investigations and lawsuits.
Individuals found liable for insider trading face penalties of up to three (3) times the profit gained or loss
avoided, a criminal fine of up to $5 million and up to twenty (20) years in jail. In addition to the potential
criminal and civil liabilities mentioned above, in certain circumstances the Company may be able to recover all
profits made by an insider who traded illegally, plus collect other damages. In addition, the Company (and its
executive officers and directors) could itself face penalties of the greater of $1 million or three (3) times the profit
gained or loss avoided as a result of an employee’s violation and/or a criminal penalty of up to $25 million for
failing to take steps to prevent insider trading.
Without regard to the civil or criminal penalties that may be imposed by others, willful violation of this Policy
and its procedures may constitute grounds for dismissal from the Company.
The procedures regarding securities trading outlined below are designed to deter and, where possible, prevent
such improper trading.
3
POLICIES REGARDING TRANSACTIONS IN THE COMPANY’S SECURITIES
The following policies apply to all transactions, direct or indirect, in all of the Company’s securities, including,
but not limited to, the Company’s common stock (including those shares of common stock that may be held in
any Company 401(k) retirement savings plan, pension plan, retirement plan, other similar plan or any such
similar plan that the Company may adopt in the future), and derivative securities (including stock options, "put"
or "call" options and other similar securities).
Prohibitions for All Directors, Officers and Employees:
No Trading on Material, Non-Public Information. No employee who is aware of any material, non- public
information concerning the Company or a third-party with whom the Company does business, shall engage in
any transaction in the Company’s or such third party’s securities, including any offer to purchase or sell, during
any period commencing with the date that he or she obtains such material, non- public information and ending at
the beginning of the third (3rd) Trading Day following the date of public disclosure of that information. After
termination of employment, any employee who is in possession of material, non-public information is prohibited
from trading in Company securities until that information has become public or is no longer material.
No Tipping. No employee shall disclose (“tip”) material, non-public information to any other person where such
information may be used by such person, including employees and non-employees, to his or her benefit by
trading in the securities of the company to which such information relates, nor shall an employee make any
recommendations or express any opinions as to trading in the Company’s securities to any other person on the
basis of material, non- public information.
No Short Sales. No employee of the Company shall engage in the "short sale" of the Company’s securities. A
"short sale" is a sale of securities not owned by the seller or, if owned, not delivered against such sale within
twenty (20) days thereafter (a “short against the box”). Short sales of the Company’s securities evidence an
expectation on the part of the seller that the securities will decline in value, and, therefore, signal to the market
that the seller has no confidence in the Company or its short-term prospects. In addition, short sales may reduce
the seller’s incentive to improve the Company’s performance.
401(k) Plan. This Policy does not apply to purchases of Company stock in its 401(k) plan resulting from periodic
contributions of money pursuant to a payroll deduction election. The Policy does apply, however, to certain
elections made under the Company’s 401(k) plan, including: (a) an election to increase or decrease the
percentage of periodic contributions that will be allocated to the Company stock fund; (b) an election to make an
intra-plan transfer of an existing account balance into or out of the Company stock fund; (c) an election to borrow
money against a 401(k) plan account if the loan will result in a liquidation of some or all of the Company stock
fund balance; or (d) an election to pre-pay a plan loan if the pre- payment will result in allocation of loan
proceeds to the Company stock fund.
Prohibitions and Procedures for Section 16 Reporting Persons and Designated Individuals:
The following prohibitions and procedures apply to Section 16 Reporting Persons (as defined below) and certain
other employees that may be designated by the Company from time to time (“Designated Individuals”). “Section
16 Reporting Persons” are members of the Company’s Board of Directors, director emeriti, Executive Officers,
the Controller and all Controlling/Financial department staff, as set forth on Attachment "A." Designated
Individuals will be informed of their individual status by the Company's Chief Financial Officer.
4
Under special circumstances, certain employees who are not normally Section 16 Reporting Persons or
Designated Individuals may gain access to material, non-public information and the Company, in its discretion,
may determine that such employees may also be subject to the following prohibitions and procedures. Such
employees will be notified of such status and will be subject to the following prohibitions and procedures for
such period of time as the Company deems appropriate.
No Trading During Black-Out Periods. Section 16 Reporting Persons, Designated Individuals and Affiliated
Parties are subject to black-out periods during which they are prohibited from conducting any transactions
involving the Company’s securities. Each black-out period begins at the close of the market on the twentieth
(20th) day of the calendar month prior to the close of any fiscal quarter and ends at the open of the market on the
third (3rd) Trading Day following the release of the Company’s quarterly or annual financial results for that
particular quarter (the “Black-Out Period”). The prohibition against trading during the Black-Out Period also
prohibits the fulfillment of “limit orders” by any broker for such Section 16 Reporting Person, Designated
Individual or Affiliated Party, and the brokers with whom any such “limit orders” are placed must be informed of
such prohibition at the time such “limit order” is placed.
Notwithstanding the foregoing, a transaction may be exempt from this prohibition if it is made pursuant to a
written trading plan that has been approved in writing by the Company's General Counsel in advance of a Black-
Out Period while the employee was not in possession of material, non-public information and that meets all of
the requirements of the SEC’s rules and regulations, including Rule 10b5-1 of the Exchange Act.
Additional black-out periods may be implemented with regard to certain employees or groups from time to time
who are in possession of non-public information regarding potentially significant matters.
No Trading in the Company’s Securities on a Short-Term Basis. Any Company securities purchased on the
open market by a Section 16 Reporting Person, Designated Individual or Affiliated Party must be held for a
minimum of six (6) months.
Note that the SEC’s short swing profit rules already penalize Section 16 Reporting Persons who sell any
Company securities within six (6) months of a purchase by requiring such person to disgorge all profits to the
Company whether or not such person had knowledge of any material, non-public information.
Same day “cashless” exercises of stock options are not subject to this prohibition, provided that there were no
previous purchase transactions on the open market within six (6) months of the exercise date.
Anti-Hedging Policy
Options trading. The directors and executive officers of the Company may not buy or sell puts or calls or other
derivative securities on the Company’s securities, except in accordance with a program approved by the
Company’s Board of Directors or a trade cleared by the President and Chief Executive Officer. This restriction
does not apply to the exercise of employee or director stock options.
Hedging. The directors and executive officers of the Company may not enter into hedging or monetization
transactions or similar arrangements with respect to Company securities.
Trading on margin or pledging. Directors and executive officers of the Company may not hold Company
securities in a margin account or pledge Company securities as collateral for any loan, except that (i) such
limitation shall not apply to Company securities pledged as collateral for a loan prior to March 10, 2021; or (ii)
after such date, the board of directors may in its discretion approve in advance a pledge of Company
5
securities as collateral for a loan in a particular case (other than a purpose loan from the Company within the
meaning of Federal Reserve Regulation U) after taking into consideration the magnitude of the number and
market value of shares proposed to be pledged in relation to the number of outstanding shares and the market
value and trading volume of outstanding shares (generally, the aggregate shares pledged should not exceed 3% of
shares outstanding on the date of the pledge), the percentage of shares proposed to be pledged to the total shares
owned by the pledgor, the amount of shares proposed to be pledged in relation to the total shares then pledged by
other Directors and executive officers, and all other factors deemed relevant by the board of directors. Although
the board of directors believes that permitting limited pledging of Company securities to serve as collateral for a
bona fide loan in appropriate circumstances will encourage Directors and executive officers to purchase and
retain shares, the board of directors will not approve any pledge of Company securities as part of a hedging or
monetization strategy designed to or otherwise having the effect of hedging or offsetting any decrease in the
market value of Company securities.
Pre-Clearance of Trading by Section 16 Reporting Persons and Designated Individuals
If a Section 16 Reporting Person, Designated Individual or Affiliated Party is contemplating a transaction in the
Company’s securities, the proposed transaction must be pre-cleared with Executive Management, even if the
proposed transaction is to take place outside of the Black-Out Period. Such preclearance, unless revoked by
Executive Management, shall normally remain valid until the close of trading three business days following the
day on which preclearance of the transaction was granted. If the transaction is not completed during such period,
pre-clearance of the proposed transaction must be re-requested. Pre-clearance is not required for transactions
under an approved trading plan under SEC Rule 10b5-1.If the transaction is cleared to proceed, the Company's
Executive Management will assist a Section 16 Reporting Person in complying with Section 16 and, where
applicable, Rule 144 of the Securities Act of 1933, as amended. If, upon requesting clearance, the Section 16
Reporting Person, Designated Individual or Affiliated Party is advised that Company stock may not be traded, he
or she may not engage in any trade of any type and may not inform anyone of the restriction.
Pre-Clearance for Rule 10b5-1 Plans
Directors and Executive Officers may not implement a trading plan under SEC Rule 10b5- 1 at any time without
prior clearance from Executive Management. Directors and Executive Officers may only enter into a trading plan
when they are not in possession of material, inside information. In addition, Directors and Executive Officers
may not enter into a trading plan during a black-out period. Once a trading plan is pre- cleared, trades made
pursuant to the plan will not require additional pre-clearance, but only if the plan specified the dates, prices, and
amounts of the contemplated trades or establishes a formula for determining dates, prices, and amounts.
Transactions made under a trading plan must be reported to the Company’s Legal Department, which will assist
the Director or Executive Officer in preparing the necessary Form 4.
Exception to the Prohibitions on Trading
Exercises in stock options granted under the Company’s equity compensation plans for cash are excluded from
the aforesaid prohibition on trading. However, this exception does not include the subsequent sale of the shares
acquired pursuant to the exercise of a stock option.
POLICIES REGARDING THE USE, DISCLOSURE AND PROTECTION OF MATERIAL, NON-
PUBLIC INFORMATION
All employees of the Company have ethical and legal responsibilities to maintain the confidentiality of material,
non-public information.
Use and Disclosure of Material, Non-Public Information. As explained previously, under no circumstances
may an employee use material, non-public information about the Company for his or her personal benefit.
Moreover, except as specifically authorized or in the performance of regular corporate duties, under no
circumstances may an employee release to others information that might affect the Company’s securities.
Therefore, it is important that an employee not disclose material, non-public information to anyone, including
other employees of the Company, unless the other employee needs to know such information in order to fulfill
his or her job responsibilities. Under no other circumstances should such information be disclosed to anyone,
including family, relatives or business or social acquaintances. In maintaining the confidentiality of the
information, the individual in possession of such information shall not affirm or deny statements made by others,
either directly or through electronic means, if such affirmation or denial would result in the disclosure of
material, non-public information.
If an employee has any doubt about whether certain information is non-public or material, such doubt should be
resolved in favor of not communicating or trading upon such information. Questions concerning what is or is not
material, non-public information should be directed to the Executive Management or Corporate Secretary.
Disclosure of the aforesaid type of information shall not be made without the prior approval of the above.
Material, Non-Public Information Regarding Other Companies. In the ordinary course of doing business,
employees may come into possession of material, non-public information with respect to other companies. An
individual receiving material, non-public information in such a manner has the same duty not to disclose the
information to others or to use that information in connection with securities transactions of such other company
as such individual has with respect to material, non-public information about the Company.
If the Company is in the process of negotiating a significant transaction with another company, employees are
cautioned not to trade in the stock of that company if they are in possession of material, non-public information
concerning such company.
If an employee is not certain whether it is permissible to trade in the stock of such company, the employee should
contact and receive approval from the Executive Management or Corporate Secretary.
Unauthorized Disclosure of Internal Information. Unauthorized disclosure of internal information about the
Company may create serious problems for the Company whether or not the information is used to facilitate
improper trading in securities of the Company. Therefore, it shall be the duty of each person employed or
affiliated with the Company to maintain the confidentiality of information relating to the Company or obtained
through a relationship of confidence. Employees should not discuss internal Company matters or developments
with anyone outside the Company, except in the performance of regular corporate duties.
Precautions to Prevent Misuse or Unauthorized Disclosure of Sensitive Information. When an employee is
involved in a matter or transaction which is sensitive and, if disclosed, could reasonably be expected to have an
effect on the market price of the securities of the Company or any other company involved in the transaction, that
individual should consider taking extraordinary precautions to prevent misuse or unauthorized disclosure of such
information. Such measures include the following:
1.
Maintaining files securely and avoiding storing information on computer systems that can be accessed by
other individuals;
2.
Avoiding the discussion of confidential matters in areas where the conversation could possibly be
overheard;
3.
Not gossiping about Company affairs; and
4.
Restricting the copying and distribution of sensitive documents within the Company.
Internet. It is inappropriate for any unauthorized person to disclose Company information or to discuss the
Company on the Internet, including in any forum where companies and their prospects are discussed. To avoid
the disclosure of material, inside information, no director, officer or employee may discuss the Company or
Company-related information in an Internet forum under any circumstances.
Inadvertent Disclosure of Material, Non-Public Information. If material, non-public information regarding
the Company is inadvertently disclosed, no matter what the circumstances, by any employee, the person making
or discovering that disclosure should immediately report the facts to the Company’s Executive Management.
Inquiries Regarding Material, Non-public Information. When an inquiry is received regarding information
that may be material, it should be referred, without comment, to the Company’s Investor Relations Department.
Reporting of Violations
Any person who believes that a violation of this policy has taken place shall report such violation promptly to the
Executive Management of the Company.
Any questions concerning this policy should be addressed to the Company’s Chief Financial Officer or Corporate
Secretary.
6
ATTACHMENT A: Section 16 Reporting Persons
·
Board of Directors and director emeriti*
·
Executive Management: (Chief Executive Officer, President, Chief Operating Officer, Chief Financial
Officer, Chief Lending Officer, Chief Compliance Officer, Chief Strategy & Risk Officer) *
·
All Accounting/Financial department staff
* NOTE: SEC Form 4 Filing requirement applicable for all transactions
7
Insider Trading Policy Approval Tracker
Approved: December 2014
Re-approved: December 2015
Re-approved: January18, 2017
Re-approved:
January17,
2018
Re-approved:
January 9, 2019
Re-approved: January 15, 2020
Re-approved: February 10, 2021
Re-approved: March 10, 2021 Re-approved:
March 16, 2022
Re-approved: March 15, 2023
Re-approved: March 20, 2024
8
Exhibit 21
EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
Subsidiaries of the Registrant
The following is a list of the Subsidiaries of BCB Bancorp, Inc.
Name
State of Incorporation
BCB Community Bank
New Jersey
BCB Holding Company Investment Corp.
New Jersey
BCB Capital Finance Group, LLC
New Jersey
Special Asset REO 2, LLC
New Jersey
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements (No. 222-282784) on Form S-4,
(Nos. 333-273416 and 333-197366) on Form S-3 and (Nos. 333-273417, 333-224925, 333-175545, 333-174639,
and 333-165127) on Form S-8 of BCB Bancorp, Inc. (the "Company") of our reports dated March 7, 2025
related to the consolidated financial statements and the effectiveness of internal control over financial reporting
of the Company, as they appear in this Annual Report on Form 10-K of the Company for the year ended
December 31, 2024.
/s/ Wolf & Company, P.C.
Boston, Massachusetts
March 7, 2025
Exhibit 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Michael Shriner, certify that:
1.
I have reviewed this Annual Report on Form 10-K of BCB Bancorp, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this annual report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: March 7, 2025
/s/ Michael A. Shriner
Michael A. Shriner
President and Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
Certification of Principal Accounting Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jawad Chaudhry, certify that:
1.
I have reviewed this Annual Report on Form 10-K of BCB Bancorp, Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by
this annual report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:
a)
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;
b)
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
c)
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such
evaluation; and
d)
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
a)
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: March 7, 2025
/s/ Jawad Chaudhry
Jawad Chaudhry
Chief Financial Officer
(Principal Financial and Accounting Officer)
Exhibit 32
Certification pursuant to
18 U.S.C. Section 1350,
as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
Michael Shriner, President and Chief Executive Officer and Jawad Chaudhry, Chief Financial Officer of BCB Bancorp, Inc. (the “Company”) each certify
in his capacity as an officer of the Company that he has reviewed the annual report of the Company on Form 10-K for the fiscal year ended December 31,
2024 and that to the best of his knowledge:
(1)
the report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2)
the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.
The purpose of this statement is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the
Sarbanes-Oxley Act of 2002.
Date: March 7, 2025
/s/ Michael A. Shriner
President and Chief Executive Officer
(Principal Executive Officer)
Date: March 7, 2025
/s/ Jawad Chaudhry
Chief Financial Officer
(Principal Financial and Accounting Officer)