BCB Bancorp, Inc.’s EPS Grows to $0.58 in Second Quarter 2022; NIM Expands to 3.74 Percent and Net Loans Increase 13.7 Percent YTD; Declares Quarterly Cash Dividend of $0.16 Per Share
BAYONNE, N.J., July 21, 2022 (GLOBE NEWSWIRE) -- BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported that net income increased 26.2 percent to $10.2 million for the second quarter of 2022, compared to $8.1 million for the second quarter of 2021, and increased 2.1 percent compared to $10.0 million in the immediate prior quarter. Earnings per diluted share for the second quarter of 2022 were $0.58, compared to $0.56 in the preceding quarter and $0.45 in the second quarter of 2021. For the first six months of the year, net income increased 32.6 percent to $20.1 million, compared to $15.2 million for the first six months of 2021. Year-to-date, earnings per diluted share were $1.13 compared to $0.85 for the first six months of 2021.The Company also announced that its Board of Directors declared a regular quarterly cash dividend of $0.16 per share. The dividend will be payable on August 15, 2022 to common shareholders of record on August 1, 2022.
“Our second quarter earnings were exceptional, and a direct result of the efforts we have put in place to manage our cost of funds, control operating expenses, and grow the balance sheet,” stated Thomas Coughlin, President and Chief Executive Officer. “The highlights of the second quarter include substantial growth in the loan portfolio, increases to our core deposit base, and expansion of the net interest margin.”
“Our approach to managing our funding costs, combined with the increase in loan volume during the quarter, helped to increase our net interest margin by 27 basis points in the second quarter of 2022, compared to the second quarter a year ago. We are well-positioned for rising interest rates with a strong, low-cost core deposit base and other diverse sources of liquidity to support the Bank’s substantial loan pipeline,” said Coughlin.
Mr. Coughlin stated, “Due to the continued, solid performance of our asset quality metrics, we recorded no loan loss provision during the second quarter of 2022. Our non-accrual loans to total loans ratio decreased to 0.35 percent at June 30, 2022, from 0.38 percent at March 31, 2022, and 0.94 percent a year ago.”
*Executive Summary*
· Net income was $10.2 million in the second quarter of 2022, compared to $10.0 million in the prior quarter, and $8.1 million in the second quarter a year ago.
· Earnings per diluted share were $0.58 in the second quarter of 2022, compared to $0.56 in the prior quarter, and $0.45 in the second quarter of 2021.
· Net interest margin was 3.74 percent for the second quarter of 2022, a 28 basis point increase compared to 3.46 percent for the first quarter of 2022, and a 27 basis point increase compared to 3.47 percent for the second quarter of 2021.
· Total cost of interest-bearing liabilities remained flat at 0.50 percent for the second quarter of 2022, compared to 0.50 percent for the first quarter of 2022, and decreased 24 basis points from 0.74 percent for the second quarter of 2021.
· The interest rate spread increased by 28 basis points to 3.60 percent for the second quarter of 2022, compared to 3.32 percent for the first quarter of 2022, and increased 30 basis points from 3.30 percent compared to the second quarter of 2021.
· The efficiency ratio for the second quarter was 47.6 percent compared to 53.0 percent in the prior quarter, and 48.9 percent in the second quarter of 2021.
· The annualized return on average assets ratio for the second quarter was 1.32 percent, compared to 1.33 percent in the prior quarter, and 1.12 percent in the second quarter of 2021.
· The annualized return on average equity ratio for the second quarter was 15.0 percent, compared to 14.7 percent in the prior quarter, and 12.6 percent in the second quarter of 2021.
· The Company had no provision for loan losses for the second quarter of 2022, compared to a credit to the loan loss provision of $2.6 million for the prior quarter, and $2.3 million for the second quarter of 2021.
· Allowance for loan losses as a percentage of non-accrual loans was 370.7 percent at June 30, 2022, compared to 368.1 percent for the prior quarter, and 169.0 percent at June 30, 2021.
· Total non-accrual loans remained steady at $9.2 million for both June 30, 2022 and March 31, 2022, and decreased from $22.2 million at June 30, 2021.
· Total loans receivable, net of allowance for loan losses, increased 13.3 percent to $2.621 billion at June 30, 2022, from $2.313 billion at June 30, 2021.
· Total deposits increased 8.6 percent to $2.655 billion at June 30, 2022, up from $2.446 billion at June 30, 2021, with noninterest bearing deposits increasing 21.0 percent over a year ago.
· The Company’s Board of Directors declared a regular quarterly cash dividend of $0.16 per share, payable August 15, 2022 to common shareholders of record August 1, 2022.
*Balance Sheet Review*
Total assets increased by $105.2 million, or 3.5 percent, to $3.073 billion at June 30, 2022, from $2.968 billion at December 31, 2021. The increase in total assets was mainly related to increases in total loans partially offset by decreases in cash and cash equivalents.
Total cash and cash equivalents decreased by $205.4 million, or 49.9 percent, to $206.2 million at June 30, 2022, from $411.6 million at December 31, 2021. This decrease was primarily due to an increase in loans, partly offset by an increase in deposits.
Loans receivable, gross, increased by $313.9 million, or 13.4 percent, to $2.658 billion at June 30, 2022, from $2.344 billion at December 31, 2021. Total loan increases for the first six months of 2022 included increases of $310.5 million in commercial real estate and multi-family loans, $11.3 million in residential one-to-four family loans, $1.3 million in home equity loans, and $1.2 million in construction loans, partly offset by decreases of $9.3 million in commercial business loans, and $1.1 million in consumer loans. The allowance for loan losses decreased $3.0 million to $34.1 million, or 370.7 percent of non-accruing loans and 1.28 percent of gross loans, at June 30, 2022, as compared to an allowance for loan losses of $37.1 million, or 249.3 percent of non-accruing loans and 1.58 percent of gross loans, at December 31, 2021.
Total investment securities decreased by $4.7 million, or 4.2 percent, to $105.7 million at June 30, 2022, from $110.4 million at December 31, 2021, representing repayments, calls and maturities, and sales of $1.2 million, partly offset by purchases of $15.5 million.
Deposit liabilities increased by $93.6 million, or 3.7 percent, to $2.655 billion at June 30, 2022, from $2.561 billion at December 31, 2021. Total increases for the six months ended June 30, 2022, included $142.3 million in NOW deposit accounts, $23.2 million in money market checking accounts, $7.0 million in non-interest-bearing deposit accounts, and $17.5 million in savings and club accounts. The increase in deposits was partly offset by a decrease of $96.4 million in certificates of deposit, including listing service and brokered deposit accounts. The weighted average interest rate of certificates of deposit was 0.60 percent at June 30, 2022 and 0.72 percent at December 31, 2021.
Debt obligations increased by $15.4 million to $124.4 million at June 30, 2022, from $109.0 million at December 31, 2021, and consisted of both Federal Home Loan Bank (“FHLB”) borrowings and subordinated debt balances. The increase in debt obligations related to an overnight FHLB borrowing of $15.0 million. The weighted average interest rate of FHLB advances was 1.38 percent at June 30, 2022, and at December 31, 2021. The fixed interest rate of our subordinated debt balances was 5.625 percent at June 30, 2022, and at December 31, 2021.
Stockholders’ equity decreased by $2.4 million, or 0.9 percent, to $271.6 million at June 30, 2022, from $274.0 million at December 31, 2021. The decrease was primarily attributable to a decrease of $12.4 million in additional paid-in-capital for preferred stock and an increase in accumulated other comprehensive losses of $4.1 million. The decrease was partly offset by an increase in retained earnings of $14.2 million, or 17.5 percent, to $95.4 million at June 30, 2022, from $81.2 million at December 31, 2021, related to the net effect of net income less dividends paid for the six months ended June 30, 2022. The decrease in additional paid-in-capital for preferred stock was primarily related to the redemption of $9.4 million of the Company’s then-outstanding Series D 4.5 percent preferred stock and $5.3 million of the Company’s then-outstanding Series G 6.0 percent preferred stock, partially offset by the issuance of $2.4 million of Series I 3.0 percent preferred stock. Accumulated other comprehensive income decreased by $4.1 million over the prior year, based upon unfavorable market conditions related to the Company’s available for sale debt securities.
*Second Quarter 2022 Income Statement Review*
Net interest income increased by $3.7 million, or 15.3 percent, to $27.7 million for the second quarter of 2022, from $24.1 million for the second quarter of 2021. The increase in net interest income resulted from a $2.5 million increase in interest income as well as a decrease of $1.2 million in interest expense.
Interest income increased by $2.5 million, or 8.8 percent, to $30.5 million for the second quarter of 2022, from $28.0 million for the second quarter of 2021. The average balance of interest-earning assets increased $196.7 million, or 7.1 percent, to $2.969 billion for the second quarter of 2022, from $2.772 billion for the second quarter of 2021, while the average yield increased six basis points to 4.10 percent for the second quarter of 2022, from 4.04 percent for the second quarter of 2021. The increase in the average balance of interest-earning assets mainly related to an increase in the Company’s level of average loans receivable for the second quarter of 2022, as compared to the second quarter of 2021.
The increase in interest income mainly related to an increase in the average balance on loans receivable of $173.5 million to $2.517 billion for the second quarter of 2022, from $2.344 billion for the second quarter of 2021. The increase in the average balance on loans receivable was result of the strength of the Company’s loan pipeline. Interest income on loans also included $152,000 of amortization of purchase credit fair value adjustments related to a prior acquisition for the second quarter of 2022, which added approximately two basis points to the average yield on interest earning assets.
Interest expense decreased by $1.2 million, or 31.0 percent, to $2.7 million for the second quarter of 2022, from $3.9 million for the second quarter of 2021. This decrease resulted primarily from a decrease in the average rate on interest-bearing liabilities of 24 basis points to 0.50 percent for the second quarter of 2022, from 0.74 percent for the second quarter of 2021, partly offset by an increase in the average balance of interest-bearing liabilities of $44.4 million, or 2.1 percent, to $2.174 billion for the second quarter of 2022, from $2.129 billion for the second quarter of 2021. The decrease in the average cost of funds primarily resulted from the low interest rate environment and the Company’s focus on managing funding costs.
Net interest margin was 3.74 percent for the second quarter of 2022, compared to 3.47 percent for the second quarter of 2021. The increase in the net interest margin was the result of an increase in the average volume on loans receivable as well as a decrease in funding costs.
Due to improved quantitative and qualitative factors related to the Company’s asset quality metrics, no provision for loan losses was recorded for the second quarter of 2022. This compared to a $2.3 million provision for loan losses during the second quarter of 2021. During the second quarter of 2022, the Company experienced $133,000 in net recoveries compared to $300,000 in net charge offs for the second quarter of 2021. The Bank had non-accrual loans totaling $9.2 million, or 0.35 percent of gross loans at June 30, 2022, as compared to $22.2 million, or 0.94 percent of gross loans at June 30, 2021. The allowance for loan losses was $34.1 million, or 1.28 percent of gross loans at June 30, 2022, and $37.5 million, or 1.59 percent of gross loans at June 30, 2021.
Noninterest income decreased by $3.1 million, or 111.1 percent, to an expense of $313,000 for the second quarter of 2022, from $2.8 million for second quarter of 2021. The decrease in total noninterest income was mainly related to an increase in the unrealized loss of equity securities, a decrease in gains on the sale of premises, and a lower gain on sale of loans, partly offset by an increase in fees and service charges and other non-interest income. The unrealized loss on equity securities increased $2.8 million to $2.3 million for the second quarter of 2022, from an unrealized gain of $499,000 for the second quarter 2021. The unrealized gains or losses on equity securities are based on market conditions. Gains on the sale of premises sold were $371,000 for the second quarter of 2021 with no comparable gain or loss for the second quarter of 2022. Gains on sales of loans decreased by $175,000, or 80.3 percent, to $43,000 for the second quarter of 2022, from $218,000 for the second quarter of 2021. Factors considered when deciding to sell loans include market conditions, demand, and the loan portfolio. These decreases were partly offset by an increase in fees and service charge income resulting from servicing income, ATM, and other customer account fees.
Noninterest expense decreased by $101,000, or 0.8 percent, to $13.0 million for the second quarter of 2022, from $13.1 million for the second quarter of 2021. The decrease was mainly related to a decrease in debt extinguishment expense and other non-interest expense. The Company recognized an expense of $194,000 for a loss on extinguishment of debt related to the prepayment of higher-cost FHLB borrowings in the second quarter of 2021. There was no comparable expense in the second quarter of 2022. The decrease in other non-interest expense mainly related to a decrease in loan-related legal expenses. Salaries and employee benefits expense increased by $203,000, or 3.1 percent, to $6.7 million for the second quarter of 2022, from $6.5 million for the second quarter of 2021. The increase mainly related to payments made to the estate of former Chief Financial Officer, Thomas Keating. The number of full-time equivalent employees for the second quarter of 2022 was 301, compared to 303 for the first quarter of 2022, and 288 for the same period in 2021.
The income tax provision increased by $827,000, or 24.5 percent, to $4.2 million for the second quarter of 2022, from $3.4 million for the second quarter of 2021. The increase in the income tax provision was a result of higher taxable income for the second quarter of 2022, as compared with that same period for 2021. The consolidated effective tax rate for the second quarter of 2022 was 29.3 percent compared to 29.6 percent for the second quarter of 2021.
*Year-to-Date 2022 Income Statement Review*
Net interest income increased by $5.2 million, or 10.9 percent, to $52.8 million for the first six months of 2022, from $47.6 million for the first six months of 2021. The increase in net interest income resulted from a decrease of $3.1 million in interest expense as well as an increase of $2.1 million in interest income.
Interest income increased by $2.1 million, or 3.8 percent, to $58.2 million for the first six months of 2022, from $56.1 million for the first six months of 2021. The average balance of interest-earning assets increased $195.7 million, or 7.1 percent, to $2.935 billion for the first six months of 2022, from $2.739 billion for the first six months of 2021, while the average yield decreased 13 basis points to 3.97 percent for the first six months of 2022, from 4.10 percent for the first six months of 2021. The increase in the average balance of interest-earning assets mainly related to an increase in the Company’s level of average interest-earning deposits and loans receivable for the first six months of 2022, as compared to the first six months of 2021.
The increase in interest income mainly related to an increase in the average balance on loans receivable of $96.0 million to $2.431 billion for the first six months of 2022, from $2.335 billion for the first six months of 2021. The increase in the average balance on loans receivable was result of the strength of the Company’s loan pipeline. Interest income on loans also included $308,000 of amortization of purchase credit fair value adjustments related to a prior acquisition for the first six months of 2022, which added approximately four basis points to the average yield on interest earning assets.
Interest expense decreased by $3.1 million, or 36.4 percent, to $5.4 million for the first six months of 2022, from $8.5 million for the first six months of 2021. This decrease resulted primarily from a decrease in the average rate on interest-bearing liabilities of 30 basis points to 0.50 percent for the first six months of 2022, from 0.80 percent for the first six months of 2021, partly offset by an increase in the average balance of interest-bearing liabilities of $17.0 million, or 0.8 percent, to $2.141 billion for the first six months of 2022, from $2.124 billion for the first six months of 2021. The decrease in the average cost of funds primarily resulted from the low interest rate environment and the Company’s focus on managing funding costs.
Net interest margin was 3.60 percent for the first six months of 2022, compared to 3.48 percent for the first six months of 2021. The increase in the net interest margin compared to the first six months of 2021 was the result of an increase in the average volume on loans receivable as well as a decrease in funding costs.
The Company recorded a credit to the provision for loan losses of $2.6 million for the first six months of 2022, compared to a $4.2 million provision for loan losses for the first six months of 2021. During the first six months of 2022, the Company recorded $431,000 in net charge offs compared to $327,000 in net charge offs for the first six months of 2021.
Noninterest income decreased by $5.7 million, or 119.1 percent, to an expense of $913,000 for the first six months of 2022, from $4.8 million for second quarter of 2021. The decrease in total noninterest income was mainly related to an increase in the unrealized loss of equity securities, a lower gain on sales of loans, and a decrease in gains on the sale of premises, partly offset by an increase in fees and service charges. The unrealized loss on equity securities increased $5.3 million to $5.0 million for the first six months of 2022, from an unrealized gain of $303,000 for the first six months of 2021. The unrealized gains or losses on equity securities are based on market conditions. Gains on sales of loans decreased by $384,000, or 78.0 percent, to $108,000 for the first six months of 2022, from $492,000 for the first six months of 2021. Factors considered when deciding to sell loans include market conditions, demand, and the loan portfolio. Gains on the sale of premises sold were $371,000 for the first six months of 2021 with no comparable gain or loss for the first six months of 2022. These decreases were partly offset by an increase in fees and service charge income resulting from servicing income, ATM, and other customer account fees.
Noninterest expense decreased by $725,000, or 2.7 percent, to $26.0 million for the first six months of 2022, from $26.7 million for the first six months of 2021. The decrease was mainly related to a decrease in debt extinguishment expense and other non-interest expense. The Company recognized an expense of $734,000 for a loss on extinguishment of debt related to the prepayment of higher-cost FHLB borrowings in the first six months of 2021. There was no comparable expense in the first six months of 2022. Salaries and employee benefits expense increased by $394,000, or 3.0 percent, to $13.4 million for the first six months of 2022, from $13.0 million for the first six months of 2021. The increase mainly related to payments made to the estate of former Chief Financial Officer, Thomas Keating and normal compensation increases. The number of full-time equivalent employees for the first six months of 2022 was 302 compared to 300 for the same period of 2021.
The income tax provision increased by $2.0 million, or 31.9 percent, to $8.3 million for the first six months of 2022, from $6.3 million for the first six months of 2021. The increase in the income tax provision was a result of higher taxable income for the first six months of 2022, as compared with that same period for 2021. The consolidated effective tax rate for the first six months of 2022 was 29.3 percent compared to 29.4 percent for the first six months of 2021.
*Asset Quality*
The Bank had non-accrual loans totaling $9.2 million, or 0.35 percent of gross loans at June 30, 2022, as compared to $14.9 million, or 0.64 percent of gross loans at December 31,2021 and $22.2 million, or 0.94 percent of gross loans at June 30, 2021. The allowance for loan losses was $34.1 million, or 1.28 percent of gross loans at June 30, 2022, $37.1 million or 1.58 percent of gross loans at December 31,2021and $37.5 million, or 1.59 percent of gross loans at June 30, 2021. The allowance for loan losses was 370.7 percent of non-accrual loans at June 30, 2022, 249.3 percent of non-accrual loans at December 31,2021and 169.0 percent of non-accrual loans at June 30, 2021.
Performing troubled debt restructured (“TDR”) loans that were not included in non-accrual loans at June 30, 2022, were $11.0 million, compared to $12.4 million at December 31, 2021. Borrowers who are in financial difficulty and who have been granted concessions (excluding COVID-19 modifications) that may include interest rate reductions, term extensions, or payment alterations, are categorized as TDR loans.
*About BCB Bancorp, Inc.*
Established in 2000 and headquartered in Bayonne, N.J., BCB Community Bank is the wholly-owned subsidiary of BCB Bancorp, Inc. (NASDAQ: BCBP). The Bank has 29 branch offices in Bayonne, Carteret, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lyndhurst, Maplewood, Monroe Township, Newark, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, and three branches in Hicksville and Staten Island, New York. The Bank provides businesses and individuals a wide range of loans, deposit products, and retail and commercial banking services. For more information, please go to www.bcb.bank.
*Forward-Looking Statements*
This release, like many written and oral communications presented by BCB Bancorp, Inc., and our authorized officers, may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of the Company, are generally identified by use of words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “seek,” “strive,” “try,” or future or conditional verbs such as “could,” “may,” “should,” “will,” “would,” or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain. Accordingly, actual results may differ materially from anticipated results.
In addition to factors previously disclosed in the Company’s reports filed with the U.S. Securities and Exchange Commission (the "SEC") and those identified elsewhere in this release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the inability to close loans in our pipeline; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; supply chain disruptions; the COVID-19 pandemic or any similar future pandemic and the related adverse local and national economic consequences; civil unrest in the communities that the company serves; customer acceptance of the Bank’s products and services; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; economic conditions; and the impact, extent and timing of technological changes, capital management activities, and actions of governmental agencies and legislative and regulatory actions and reforms.
Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
*Explanation of Non-GAAP Financial Measures*
Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release also contains certain supplemental Non-GAAP information that the Company’s management uses in its analysis of the Company’s financial results. The Company’s management believes that providing this information to analysts and investors allows them to better understand and evaluate the Company’s financial results for the periods in question.
The Company provides measurements and ratios based on tangible stockholders' equity and efficiency ratios. These measures are utilized by regulators and market analysts to evaluate a company’s financial condition and, therefore, the Company’s management believes that such information is useful to investors. For a reconciliation of GAAP to Non-GAAP financial measures included in this press release, see "Reconciliation of GAAP to Non-GAAP Financial Measures" below.
*Statements of Income - Three Months Ended,* *June 30, 2022* *March 31, 2022* *June 30, 2021* June 30, 2022 vs. March 31, 2022 June 30, 2022 vs. June 30, 2021
*Interest and dividend income: * *(In thousands, except per share amounts, Unaudited)* Loans, including fees *$* * 28,781* *$* * 26,321* *$* * 26,888* 9.3 % 7.0 % Mortgage-backed securities *47* *159* *167* -70.4 % -71.9 % Other investment securities *939* *948* *747* -0.9 % 25.7 % FHLB stock and other interest earning assets *694* *296* *202* 134.5 % 243.6 %
* Total interest and dividend income* *30,461* *27,724* *28,004* 9.9 % 8.8 %
*Interest expense:*
Deposits: Demand *946* *758* *1,150* 24.8 % -17.7 % Savings and club *110* *108* *127* 1.9 % -13.4 % Certificates of deposit *849* *980* *1,639* -13.4 % -48.2 % *1,905* *1,846* *2,916* 3.2 % -34.7 % Borrowings *815* *806* *1,024* 1.1 % -20.4 %
* Total interest expense* *2,720* *2,652* *3,940* 2.6 % -31.0 %
*Net interest income* *27,741* *25,072* *24,064* 10.6 % 15.3 %
*(Reversal) provision for loan losses* *-* *(2,575* *)* *2,295* -100.0 % -100.0 %
*Net interest income after provision for loan losses* *27,741* *27,647* *21,769* 0.3 % 27.4 %
*Non-interest income:* Fees and service charges *1,213* *1,214* *1,029* -0.1 % 17.9 % Gain on sales of loans *43* *65* *218* -33.8 % -80.3 % Loss on sale of impaired loans *-* *-* *(64* *)* Gain on sale of premises *-* *-* *371* Realized and unrealized (loss) gain on equity investments *(2,302* *)* *(2,685* *)* *499* -14.3 % -561.3 % BOLI income *686* *755* *729* -9.1 % -5.9 % Other *47* *51* *38* -7.8 % 23.7 %
* Total non-interest income* *(313* *)* *(600* *)* *2,820* -47.8 % -111.1 %
Non-interest expense: Salaries and employee benefits *6,715* *6,736* *6,512* -0.3 % 3.1 % Occupancy and equipment *2,673* *2,695* *2,668* -0.8 % 0.2 % Data processing and communications *1,469* *1,465* *1,527* 0.3 % -3.8 % Professional fees *489* *494* *491* -1.0 % -0.4 % Director fees *296* *321* *310* -7.8 % -4.5 % Regulatory assessment fees *244* *304* *314* -19.7 % -22.3 % Advertising and promotions *254* *141* *109* 80.1 % 133.0 % Other real estate owned, net *4* *1* *19* 300.0 % -78.9 % Loss from extinguishment of debt *-* *-* *194* -100.0 % Other *912* *802* *1,013* 13.7 % -10.0 %
* Total non-interest expense* *13,056* *12,959* *13,157* 0.7 % -0.8 %
*Income before income tax provision* *14,372* *14,088* *11,432* 2.0 % 25.7 % Income tax provision *4,209* *4,136* *3,382* 1.8 % 24.5 %
*Net Income* *10,163* *9,952* *8,050* 2.1 % 26.2 % Preferred stock dividends *138* *276* *284* -49.9 % -51.4 %
*Net Income available to common stockholders* *$* * 10,025* *$* * 9,676* *$* * 7,766* 3.6 % 29.1 %
*Net Income per common share-basic and diluted* Basic *$* * 0.59* *$* * 0.57* *$* * 0.45* 3.5 % 31.1 % Diluted *$* * 0.58* *$* * 0.56* *$* * 0.45* 2.9 % 28.0 %
*Weighted average number of common shares outstanding* Basic *16,997* *16,980* *17,126* 0.1 % -0.8 % Diluted *17,404* *17,343* *17,282* 0.4 % 0.7 %
*Statements of Income - Six Months Ended,* *June 30,2022* *June 30, 2021* June 30, 2022 vs. June 30, 2021
*Interest and dividend income: * *(In thousands, except per share amounts, Unaudited)* Loans, including fees *$* * 55,102* *$* * 53,751* 2.5 % Mortgage-backed securities *206* *373* -44.8 % Other investment securities *1,887* *1,531* 23.3 % FHLB stock and other interest earning assets *990* *424* 133.5 %
* Total interest and dividend income* *58,185* *56,079* 3.8 %
*Interest expense:* Deposits: Demand *1,704* *2,348* -27.4 % Savings and club *218* *245* -11.0 % Certificates of deposit *1,829* *3,631* -49.6 % *3,751* *6,224* -39.7 % Borrowings *1,621* *2,229* -27.3 %
* Total interest expense* *5,372* *8,453* -36.4 %
*Net interest income* *52,813* *47,626* 10.9 %
* (Reversal) provision for loan losses* *(2,575* *)* *4,160* -161.9 %
*Net interest income after provision for loan losses* *55,388* *43,466* 27.4 %
*Non-interest income:* Fees and service charges *2,427* *2,140* 13.4 % Gain on sales of loans *108* *492* -78.0 % Loss on sale of impaired loans *-* *(64* *)* -100.0 % Realized and unrealized (loss) gain on equity investments *(4,987* *)* *303* -1745.9 % BOLI income *1,441* *1,430* 0.8 % Gain on sale of premises *-* *371* -100.0 % Other *98* *98* 0.0 %
* Total non-interest income* *(913* *)* *4,770* -119.1 %
*Non-interest expense: * Salaries and employee benefits *13,451* *13,057* 3.0 % Occupancy and equipment *5,368* *5,621* -4.5 % Data processing and communications *2,934* *2,982* -1.6 % Professional fees *983* *903* 8.9 % Director fees *617* *557* 10.8 % Regulatory assessments *548* *690* -20.6 % Advertising and promotions *395* *193* 104.7 % Other real estate owned, net *5* *23* -78.3 % Loss from extinguishment of debt *-* *734* -100.0 % Other *1,714* *1,980* -13.4 %
* Total non-interest expense* *$* * 26,015* *$* * 26,740* -2.7 %
*Income before income tax provision* *28,460* *21,496* 32.4 % Income tax provision *8,345* *6,329* 31.9 %
*Net Income* *20,115* *15,167* 32.6 % Preferred stock dividends *414* *567* -27.0 %
*Net Income available to common stockholders* *$* * 19,701* *$* * 14,600* 34.9 %
*Net Income per common share-basic and diluted* Basic *$* * 1.16* *$* * 0.85* 36.4 % Diluted *$* * 1.13* *$* * 0.85* 33.4 %
*Weighted average number of common shares outstanding* Basic *16,989* *17,120* -0.8 % Diluted *17,375* *17,257* 0.7 %
*Statements of Financial Condition* *June 30, 2022* *March 31, 2022* *June 30, 2021* June 30, 2022 vs. March 31, 2022 June 30, 2022 vs. June 30, 2021
*ASSETS* (In Thousands, Unaudited)
Cash and amounts due from depository institutions *$* * 10,182* *$* * 8,448* *$* * 9,039* 20.5 % 12.6 %
Interest-earning deposits *195,990* *388,205* *319,218* -49.5 % -38.6 % Total cash and cash equivalents *206,172* *396,653* *328,257* -48.0 % -37.2 %
Interest-earning time deposits *735* *735* *735* - -
Debt securities available for sale *86,749* *86,307* *83,543* 0.5 % 3.8 %
Equity investments *18,968* *21,269* *20,841* -10.8 % -9.0 %
Loans held for sale *5* *325* *3,154* -98.5 % -99.8 %
Loans receivable, net of allowance for loan losses of $34,113, $33,980 and $37,472, respectively *2,620,630* *2,395,930* *2,312,559* 9.38 % 13.32 %
Federal Home Loan Bank of New York stock, at cost *6,781* *6,128* *8,881* 10.7 % -23.6 %
Premises and equipment, net *11,075* *11,646* *13,819* -4.9 % -19.9 %
Accrued interest receivable *10,315* *9,593* *10,621* 7.5 % -2.9 %
Other real estate owned *75* *75* *414* 0.0 % -81.9 %
Deferred income taxes *13,583* *13,016* *13,778* 4.4 % -1.4 %
Goodwill and other intangibles *5,406* *5,417* *5,458* -0.2 % -1.0 %
Operating lease right-of-use asset *12,194* *11,883* *13,980* 2.6 % -12.8 %
Bank-owned life insurance ("BOLI") *70,426* *73,240* *70,963* -3.8 % -0.8 %
Other assets *9,657* *8,093* *8,187* 19.3 % 18.0 %
* Total Assets* *$* * 3,072,771* *$* * 3,040,310* *$* * 2,895,190* 1.1 % 6.1 %
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*LIABILITIES*
Non-interest bearing deposits *$* * 595,167* *$* * 621,402* *$* * 492,014* -4.2 % 21.0 %
Interest bearing deposits *2,059,863* *2,009,773* *1,953,800* 2.5 % 5.4 % Total deposits *2,655,030* *2,631,175* *2,445,814* 0.9 % 8.6 %
FHLB advances *86,986* *71,848* *128,436* 21.1 % -32.3 %
Subordinated debentures *37,391* *37,333* *37,159* 0.2 % 0.6 %
Operating lease liability *12,496* *12,180* *14,256* 2.6 % -12.3 %
Other liabilities *9,231* *11,615* *11,001* -20.5 % -16.1 %
* Total Liabilities * *2,801,134* *2,764,151* *2,636,666* 1.3 % 6.2 %
*STOCKHOLDERS' EQUITY*
Preferred stock: $0.01 par value, 10,000 shares authorized *-* *-* *-*
Additional paid-in capital preferred stock *16,563* *26,213* *25,723* -36.8 % -35.6 %
Common stock: no par value, 40,000 shares authorized *-* *-* *-*
Additional paid-in capital common stock *194,567* *194,222* *192,968* 0.2 % 0.8 %
Retained earnings *95,393* *88,132* *68,123* 8.2 % 40.0 %
Accumulated other comprehensive loss *(2,997* *)* *(1,275* *)* *(93* *)* 135.1 % 3122.6 %
Treasury stock, at cost *(31,889* *)* *(31,133* *)* *(28,197* *)* 2.4 % 13.1 %
* Total Stockholders' Equity* *271,637* *276,159* *258,524* -1.6 % 5.1 %
* Total Liabilities and Stockholders' Equity* *$* * 3,072,771* *$* * 3,040,310* *$* * 2,895,190* 1.1 % 6.1 %
*Outstanding common shares* *16,960* *16,985* *17,077*
*Three Months Ended June 30,* *2022*
*2021*
*Average Balance* *Interest Earned/Paid* *Average Yield/Rate (3)* *Average Balance* *Interest Earned/Paid* *Average Yield/Rate (3)* *(Dollars in thousands)*
*Interest-earning assets:*
Loans Receivable (4)(5) *$* * 2,517,283* *$* * 28,781* *4.57* *%* $ 2,343,775 $ 26,888 4.59 %
Investment Securities *107,132* *986* *3.68* *%* 105,520 914 3.46 %
FHLB stock and other interest-earning assets *344,510* *694* *0.81* *%* 322,966 202 0.25 % Total Interest-earning assets *2,968,926* *30,461* *4.10* *%* 2,772,262 28,004 4.04 %
Non-interest-earning assets *107,156* 107,412 Total assets *$* * 3,076,081* $ 2,879,673
*Interest-bearing liabilities:*
Interest-bearing demand accounts *$* * 796,227* *$* * 569* *0.29* *%* $ 631,568 $ 703 0.45 %
Money market accounts *356,062* *376* *0.42* *%* 335,877 447 0.53 %
Savings accounts *346,432* *110* *0.13* *%* 315,210 127 0.16 %
Certificates of Deposit *565,479* *850* *0.60* *%* 676,163 1,639 0.97 % Total interest-bearing deposits *2,064,199* *1,905* *0.37* *%* 1,958,818 2,916 0.60 %
Borrowed funds *109,436* *815* *2.98* *%* 170,433 1,024 2.40 % Total interest-bearing liabilities *2,173,636* *2,720* *0.50* *%* 2,129,250 3,940 0.74 %
Non-interest-bearing liabilities *631,430* 494,929 Total liabilities *2,805,066* 2,624,179
Stockholders' equity *271,015* 255,494 Total liabilities and stockholders' equity *$* * 3,076,081* $ 2,879,673
Net interest income *$* * 27,741* $ 24,064
Net interest rate spread^(1) *3.60* *%* 3.30 %
Net interest margin^(2) *3.74* *%* 3.47 %
(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.
(3) Annualized.
(4) Excludes allowance for loan losses.
(5) Includes non-accrual loans which are immaterial to the yield
*Six Months Ended June 30, * *2022**
* *2021**
* *Average Balance* *Interest Earned/Paid* *Average Yield/Rate (3)* *Average Balance* *Interest Earned/Paid* *Average Yield/Rate (3)* *(Dollars in thousands)*
*Interest-earning assets:*
Loans Receivable (4) (5) *$* * 2,431,043* *$* * 55,102* *4.53* *%* $ 2,335,051 $ 53,751 4.60 %
Investment Securities *108,024* *2,093* *3.88* *%* 109,967 1,904 3.46 %
FHLB stock and other interest-earning assets *395,512* *990* *0.50* *%* 293,827 424 0.29 % Total Interest-earning assets *2,934,580* *58,185* *3.97* *%* 2,738,845 56,079 4.10 %
Non-interest-earning assets *104,666* 108,486 Total assets *$* * 3,039,245* $ 2,847,331
*Interest-bearing liabilities:*
Interest-bearing demand accounts *$* * 751,396* *$* * 967* *0.26* *%* $ 621,287 $ 1,460 0.47 %
Money market accounts *350,842* *736* *0.42* *%* 326,565 888 0.54 %
Savings accounts *341,531* *218* *0.13* *%* 309,010 245 0.16 %
Certificates of Deposit *588,518* *1,828* *0.62* *%* 679,550 3,631 1.07 % Total interest-bearing deposits *2,032,286* *3,751* *0.37* *%* 1,936,413 6,224 0.64 %
Borrowed funds *109,272* *1,621* *2.97* *%* 188,096 2,229 2.37 % Total interest-bearing liabilities *2,141,558* *5,372* *0.50* *%* 2,124,509 8,453 0.80 %
Non-interest-bearing liabilities *626,520* 469,808 Total liabilities *2,768,078* 2,594,317
Stockholders' equity *271,168* 253,014 Total liabilities and stockholders' equity *$* * 3,039,245* $ 2,847,331
Net interest income *$* * 52,813* $ 47,626
Net interest rate spread^(1) *3.46* *%* 3.30 %
Net interest margin^(2) *3.60* *%* 3.48 %
(1) Net interest rate spread represents the difference between the average yield on average interest-earning assets and the average cost of average interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.
(3) Annualized.
(4) Excludes allowance for loan losses.
(5) Includes non-accrual loans which are immaterial to the yield
Financial Condition data by quarter *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021* (In thousands, except book values)
Total assets $ 3,072,771 $ 3,040,310 $ 2,967,528 $ 2,983,787 $ 2,895,190
Cash and cash equivalents 206,172 396,653 411,629 442,938 328,257
Securities 105,717 107,576 110,373 106,137 104,384
Loans receivable, net 2,620,630 2,395,930 2,304,942 2,289,854 2,312,559
Deposits 2,655,030 2,631,175 2,561,402 2,541,405 2,445,814
Borrowings 124,377 109,181 108,986 155,790 165,595
Stockholders’ equity 271,637 276,159 274,024 263,081 258,524
Book value per common share^1 $ 15.02 $ 14.72 $ 14.47 $ 13.93 $ 13.63
Tangible book value per common share^2 $ 14.71 $ 14.41 $ 14.16 $ 13.62 $ 13.32 Operating data by quarter *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021* (In thousands, except for per share amounts)
Net interest income $ 27,741 $ 25,072 $ 25,154 $ 24,613 $ 24,064
(Reversal) provision for loan losses - (2,575 ) (985 ) 680 2,295
Non-interest income (313 ) (600 ) 2,608 1,317 2,820
Non-interest expense 13,056 12,959 13,707 13,528 13,157
Income tax expense 4,209 4,136 4,289 3,400 3,382
Net income $ 10,163 $ 9,952 $ 10,751 $ 8,322 $ 8,050
Net income per diluted share $ 0.58 $ 0.56 $ 0.61 $ 0.47 $ 0.45
Common Dividends declared per share $ 0.16 $ 0.16 $ 0.16 $ 0.16 $ 0.14 Financial Ratios3 *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021*
Return on average assets 1.32 % 1.33 % 1.42 % 1.13 % 1.12 %
Return on average stockholder’s equity 15.00 % 14.67 % 16.25 % 12.84 % 12.60 %
Net interest margin 3.74 % 3.46 % 3.44 % 3.46 % 3.47 %
Stockholder’s equity to total assets 8.84 % 9.08 % 9.23 % 8.82 % 8.93 %
Efficiency Ratio^4 47.60 % 52.95 % 49.37 % 52.17 % 48.94 % Asset Quality Ratios *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021* (In thousands, except for ratio %)
Non-Accrual Loans $ 9,201 $ 9,232 $ 14,889 $ 20,725 $ 22,174
Non-Accrual Loans as a % of Total Loans 0.35 % 0.38 % 0.64 % 0.89 % 0.94 %
ALLL as % of Non-Accrual Loans 370.7 % 368.1 % 249.3 % 184.1 % 169.0 %
Impaired Loans $ 42,411 $ 40,955 $ 49,382 $ 58,863 $ 62,281
Classified Loans $ 31,426 $ 29,850 $ 39,157 $ 48,547 $ 51,926
(1) Calculated by dividing stockholders' equity, less preferred equity, to shares outstanding.
(2) Calculated by dividing tangible stockholders’ common equity, a non-GAAP measure, by shares outstanding. Tangible stockholders’ common equity is stockholders’ equity less goodwill and preferred stock. See “Reconciliation of GAAP to Non-GAAP Financial Measures by quarter.”
(3) Ratios are presented on an annualized basis, where appropriate.
(4) The Efficiency Ratio, a non-GAAP measure, was calculated by dividing non-interest expense by the total of net interest income and non-interest income. See “Reconciliation of GAAP to Non-GAAP Financial Measures by quarter.”
Recorded Investment in Loans Receivable by quarter *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021* (In thousands)
Residential one-to-four family $ 235,883 $ 233,251 $ 224,534 $ 224,330 $ 229,365
Commercial and multi-family 2,030,597 1,804,815 1,720,174 1,739,976 1,714,848
Construction 155,070 141,082 153,904 149,076 181,312
Commercial business 181,868 198,216 191,139 161,416 172,129
Home equity 51,808 52,279 50,469 52,109 53,333
Consumer 2,656 2,726 3,717 2,730 459 $ 2,657,882 $ 2,432,369 $ 2,343,937 $ 2,329,637 $ 2,351,446
Less: Deferred loan fees, net (3,139 ) (2,459 ) (1,876 ) (1,627 ) (1,415 ) Allowance for loan loss (34,113 ) (33,980 ) (37,119 ) (38,156 ) (37,472 )
*Total loans, net* $ 2,620,630 $ 2,395,930 $ 2,304,942 $ 2,289,854 $ 2,312,559 Non-Accruing Loans in Portfolio by quarter *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021* (In thousands)
Residential one-to-four family $ 267 $ 278 $ 282 $ 455 $ 464
Commercial and multi-family 757 757 8,601 13,322 14,673
Construction 3,043 2,954 2,847 2,787 2,787
Commercial business 5,104 5,243 3,132 4,128 4,216
Home equity 30 - 27 33 34
*Total:* $ 9,201 $ 9,232 $ 14,889 $ 20,725 $ 22,174
*Reconciliation of GAAP to Non-GAAP Financial Measures by quarter* *Tangible Book Value per Share* *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021* (In thousands, except per share amounts)
Total Stockholders' Equity $ 271,637 $ 276,159 $ 274,024 $ 263,081 $ 258,524
Less: goodwill 5,252 5,252 5,252 5,252 5,252
Less: preferred stock 16,563 26,213 28,923 25,723 25,723
Total tangible common stockholders' equity 249,822 244,694 239,849 232,106 227,549
Shares common shares outstanding 16,984 16,984 16,940 17,036 17,077
Book value per common share $ 15.02 $ 14.72 $ 14.47 $ 13.93 $ 13.63
Tangible book value per common share $ 14.71 $ 14.41 $ 14.16 $ 13.62 $ 13.32 *Efficiency Ratios* *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021* (In thousands, except for ratio %)
Net interest income $ 27,741 $ 25,072 $ 25,154 $ 24,613 $ 24,064
Non-interest income (313 ) (600 ) 2,608 1,317 2,820
Total income 27,428 24,472 27,762 25,930 26,884
Non-interest expense 13,056 12,959 13,707 13,528 13,157
Efficiency Ratio 47.60 % 52.95 % 49.37 % 52.17 % 48.94 % *Distribution of Deposits by quarter* *Q2 2022* *Q1 2022* *Q4 2021* *Q3 2021* *Q2 2021* *(In thousands)*
Demand: Non-Interest Bearing $ 595,167 $ 621,403 $ 588,207 $ 544,619 $ 492,014 Interest Bearing 810,535 724,020 668,262 644,453 619,163 Money Market 360,356 354,302 337,126 351,508 344,512
Sub-total: $ 1,766,058 $ 1,699,725 $ 1,593,595 $ 1,540,580 $ 1,455,689 Savings and Club 347,279 341,529 329,724 326,807 316,244 Certificates of Deposit 541,693 589,921 638,083 674,018 673,881
*Total Deposits:* $ 2,655,030 $ 2,631,175 $ 2,561,402 $ 2,541,405 $ 2,445,814
Contact:
Thomas Coughlin,
President & CEO
Ryan Blake, COO
1 (800) 680-6872