BCB Bancorp, Inc. Earns $8.6 Million in Second Quarter 2023; Reports $0.50 EPS and Declares Quarterly Cash Dividend of $0.16 Per Share
BAYONNE, N.J., July 20, 2023 (GLOBE NEWSWIRE) -- BCB Bancorp, Inc. (the “Company”), (NASDAQ: BCBP), the holding company for BCB Community Bank (the “Bank”), today reported net income of $8.6 million for the second quarter of 2023, compared to $8.1 million in the first quarter of 2023, and $10.2 million for the second quarter of 2022. Earnings per diluted share for the second quarter of 2023 were $0.50, compared to $0.46 in the preceding quarter and $0.58 in the second quarter of 2022. Net income and earnings per diluted share for the second quarter of 2023, adjusted for the unrealized losses on equity investments, were $9.1 million and $0.53, respectively.The Company announced that its Board of Directors declared a regular quarterly cash dividend of $0.16 per share. The dividend will be payable on August 18, 2023 to common shareholders of record on August 4, 2023.
“We continue to be very profitable in a challenging macro environment where competition for deposits and cost of funding remain high. We are focused on protecting our net interest income while also maintaining a strong liquidity position and a robust capital profile. The slowdown in our balance sheet growth during the second quarter, despite high customer demand, is reflective of prudent management of our liquidity and capital resources,” stated Thomas Coughlin, President and Chief Executive Officer.
“Looking ahead, we remain committed to growing our profitability and franchise value. We expect to benefit from the successful execution of a number of internal projects that are designed to enhance our digital footprint and also from the hiring efforts that have increased the overall talent profile of our institution. We firmly believe that our strategic actions will help us come out stronger on the other side of the current economic cycle,” said Mr. Coughlin.
“Our asset quality remains strong and our non-accrual loans to total loans ratio was 0.17 percent at June 30, 2023, compared to 0.16 percent at March 31, 2023, and 0.35 percent a year ago. We adopted the CECL methodology commencing January 1, 2023 and under the new methodology, we recorded a loan loss provision of $1.35 million during the second quarter of 2023 compared to $622,000 during the preceding quarter,” said Mr. Coughlin.
*Executive Summary*
· Total deposits were $2.886 billion at June 30, 2023, up from $2.867 billion at March 31, 2023.
· Net interest margin was 2.92 percent for the second quarter of 2023, compared to 3.15 percent for the first quarter of 2023, and 3.74 percent for the second quarter of 2022.
· Total yield on interest-earning assets increased 25 basis points to 5.11 percent for the second quarter of 2023, compared to 4.86 percent for the first quarter of 2023, and increased 101 basis points from 4.10 percent compared to the second quarter of 2022.
· Total cost of interest-bearing liabilities increased 56 basis points to 2.80 percent for the second quarter of 2023, compared to 2.24 percent for the first quarter of 2023, and increased 230 basis points from 0.50 percent for the second quarter of 2022.
· The efficiency ratio for the second quarter was 52.3 percent compared to 53.7 percent in the prior quarter, and 47.6 percent in the second quarter of 2022.
· The annualized return on average assets ratio for the second quarter was 0.90 percent, compared to 0.90 percent in the prior quarter, and 1.32 percent in the second quarter of 2022.
· The annualized return on average equity ratio for the second quarter was 11.6 percent, compared to 11.0 percent in the prior quarter, and 15.0 percent in the second quarter of 2022.
· The provision for credit losses was $1.35 million in the second quarter of 2023 compared to $622,000 for the first quarter and no provision for the second quarter of 2022.
· Allowance for credit losses (“ACL”) as a percentage of non-accrual loans was 530.3 percent at June 30, 2023, compared to 571.0 percent for the prior quarter-end and 370.7 percent at June 30, 2022. The total non-accrual loans were $5.70 million at June 30, 2023, $5.06 million at March 31, 2023 and $9.20 million at June 30, 2022.
· Total loans receivable, net of allowance for credit losses, increased 26.7 percent to $3.320 billion at June 30, 2023, up from $2.621 billion at June 30, 2022.
*Balance Sheet Review*
Total assets increased by $326.7 million, or 9.2 percent, to $3.873 billion at June 30, 2023, from $3.546 billion at December 31, 2022. The increase in total assets was mainly related to increases in total loans and in cash and cash equivalents.
Total cash and cash equivalents increased by $43.9 million, or 19.1 percent, to $273.2 million at June 30, 2023, from $229.4 million at December 31, 2022. The increase was primarily due to an increase in Federal Home Loan Bank (“FHLB”) borrowings and in deposits.
Loans receivable, net, increased by $274.4 million, or 9.0 percent, to $3.320 billion at June 30, 2023, from $3.045 billion at December 31, 2022. Total loan increases during 2023 included increases of $145.7 million in commercial real estate and multi-family loans, $86.9 million in commercial business loans, $34.2 million in construction loans, $222,000 in residential one-to-four family loans and $5.5 million in home equity and consumer loans. The allowance for credit losses decreased $2.2 million to $30.2 million, or 530.3 percent of non-accruing loans and 0.90 percent of gross loans, at June 30, 2023, as compared to an allowance for credit losses of $32.4 million, or 633.7 percent of non-accruing loans and 1.05 percent of gross loans, at December 31, 2022. Upon adoption of the CECL methodology, the Day One CECL adjustment resulted in a $4.2 million reduction to our ACL.
Total investment securities decreased by $8.9 million, or 8.2 percent, to $100.5 million at June 30, 2023, from $109.4 million at December 31, 2022, representing unrealized losses, calls and maturities, and repayments.
Deposit liabilities increased by $74.1 million, or 2.6 percent, to $2.886 billion at June 30, 2023, from $2.811 billion at December 31, 2022. Interest bearing demand and savings and club deposits decreased by $65.5 million offset by the increase in non-interest bearing, money market, and certificates of deposits of $139.6 million during the first six months of 2023.
Debt obligations increased by $240.4 million to $660.2 million at June 30, 2023 from $419.8 million at December 31, 2022. The weighted average interest rate of FHLB advances was 4.53 percent at June 30, 2023 and 4.07 percent at December 31, 2022. The weighted average maturity of FHLB advances as of June 30, 2023 was 1.27 years. The fixed interest rate of our subordinated debt balances was 5.62 percent at June 30, 2023 and December 31, 2022.
Stockholders’ equity increased by $8.4 million, or 2.9 percent, to $299.6 million at June 30, 2023, from $291.3 million at December 31, 2022. The increase was primarily attributable to the increase in retained earnings of $13.8 million, or 12.0 percent, to $128.9 million at June 30, 2023 from $115.1 million at December 31, 2022 partially offset by the $2.9 million increase in accumulated other comprehensive loss during the first six months of 2023.
*Second Quarter 2023 Income Statement Review*
Net income was $8.6 million for the second quarter ended June 30, 2023 and $10.2 million for the second quarter ended June 30, 2022. The decline was primarily driven by lower net interest income, higher credit loss provisioning and higher non-interest expenses for the second quarter of 2023 as compared with the second quarter of 2022.
Net interest income decreased by $752,000, or 2.7 percent, to $27.0 million for the second quarter of 2023, from $27.7 million for the second quarter of 2022. The decrease in net interest income resulted from higher interest expense which was partially offset by higher interest income.
Interest income increased by $16.8 million, or 55.1 percent, to $47.2 million for the second quarter of 2023 from $30.5 million for the second quarter of 2022. The average balance of interest-earning assets increased $725.9 million, or 24.5 percent, to $3.695 billion for the second quarter of 2023 from $2.969 billion for the second quarter of 2022, while the average yield increased 101 basis points to 5.11 percent for the second quarter of 2023 from 4.10 percent for the second quarter of 2022.
Interest expense increased by $17.5 million to $20.2 million for the second quarter of 2023 from $2.7 million for the second quarter of 2022. The increase resulted primarily from an increase in the average rate on interest-bearing liabilities of 230 basis points to 2.80 percent for the second quarter of 2023 from 0.50 percent for the second quarter of 2022, while the average balance of interest-bearing liabilities increased by $717.8 million to $2.891 billion for the second quarter of 2023 from $2.174 billion for the second quarter of 2022. The increase in the average cost of funds resulted primarily from the persistently high interest rate environment.
The net interest margin was 2.92 percent for the second quarter of 2023 compared to 3.74 percent for the second quarter of 2022. The decrease in the net interest margin compared to the second quarter of 2022 was the result of the increase in the cost of interest-bearing liabilities partially offset by the increase in the yield on interest-earning assets. In a persistently high interest rate environment, management has been proactive in managing both the yield on earning assets and the cost of funds to protect net interest margin and continue to support the growth of net interest income.
During the second quarter of 2023, the Company experienced $27,000 in net charge-offs compared to $133,000 in net recoveries in the second quarter of 2022. The Bank had non-accrual loans totaling $5.70 million, or 0.17 percent of gross loans, at June 30, 2023 as compared to $9.2 million, or 0.35 percent of gross loans, at June 30, 2022. The allowance for credit losses on loans was $30.2 million, or 0.90 percent of gross loans at June 30, 2023, and $34.1 million, or 1.28 percent of gross loans at June 30, 2022. The provision for credit losses was $1.35 million for the second quarter of 2023 compared to no provisioning for loan losses for the second quarter of 2022. Management believes that the allowance for credit losses on loans was adequate at June 30, 2023 and June 30, 2022.
Non-interest income increased by $1.4 million to $1.1 million for the second quarter of 2023 from a loss of $313,000 for second quarter of 2022. The increase in total non-interest income was mainly related to the decrease in the realized and unrealized losses on equity securities from $2.3 million to $669,000 thousand partially offset by a decrease in BOLI income of $419,000. The realized and unrealized losses on equity securities are based on market conditions.
Non-interest expense increased by $1.7 million, or 12.6 percent, to $14.7 million for the second quarter of 2023 from $13.1 million for the second quarter of 2022. The increase in operating expenses for the first quarter of 2023 was primarily driven by the higher salaries, higher regulatory assessment charges, and increased data processing expenses compared to the second quarter of 2022. The increase in salaries related to targeted hiring and normal compensation increases. The number of full-time equivalent employees for the second quarter of 2023 was 307, as compared to 301 for the same period in 2022.
The income tax provision decreased by $762,000, or 18.1 percent, to $3.4 million for the second quarter of 2023 from $4.2 million for the second quarter of 2022. The consolidated effective tax rate was 28.6 percent for the second quarter of 2023 compared to 29.3 percent for the second quarter of 2022.
*Year-to-Date Income Statement Review*
Net income decreased by $3.4 million, or 16.9 percent, to $16.7 million for the first six months of 2023 from $20.1 million for the first six months of 2022. The decrease in net income was driven primarily by a higher loan loss provision and an increase in operating expenses for 2023 as compared to 2022.
Net interest income increased by $1.6 million, or 3.1 percent, to $54.5 million for the first six months of 2023 from $52.8 million for the first six months of 2022. The increase in net interest income resulted from a $31.4 million increase in interest income, partly offset by an increase of $29.8 million in interest expense.
Interest income increased by $31.4 million, or 54.0 percent, to $89.6 million for the first six months of 2023, from $58.2 million for the first six months of 2022. The average balance of interest-earning assets increased $655.1 million, or 22.3 percent, to $3.590 billion for the first six months of 2023, from $2.935 for the first six months of 2022, while the average yield increased 102 basis points to 4.99 percent from 3.97 percent for the same comparable period. 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 first six months of 2023, as compared to the same period in 2022.
The increase in interest income mainly related to an increase in the average balance of loans receivable of $809.8 million to $3.241 billion for the first six months of 2023, from $2.431 billion for the first six months of 2022. The increase in the average balance of loans receivable was a result of the continued strength of the Company’s loan pipeline.
Interest expense increased by $29.8 million, or 553.9 percent, to $35.1 million for 2023, from $5.4 million for 2022. This increase resulted primarily from an increase in the average rate on interest-bearing liabilities of 203 basis points to 2.53 percent for the first six months of 2023, from 0.50 percent for the first six months of 2022, and an increase in the average balance of interest-bearing liabilities of $635.2 million, or 29.7 percent, to $2.777 billion from $2.142 billion over the same period. The increase in the average cost of funds primarily resulted from the high interest rate environment and an increase in the level of borrowed funds in the first six months of 2023 compared to the same period in 2022.
Net interest margin was 3.03 percent for the first six months of 2023, compared to 3.60 percent for the first six months of 2022. The decrease in the net interest margin compared to the prior period was the result of an increase in the average volume of interest-bearing liabilities as well as an increase in the cost of interest-bearing liabilities.
During the first six months of 2023, the Company experienced $25,000 in net recoveries compared to $431,000 in net charge offs for the same period in 2022. The Bank had non-accrual loans totaling $5.7 million, or 0.17 percent, of gross loans at June 30, 2023 as compared to $9.2 million, or 0.35 percent of gross loans at June 30, 2022. The allowance for credit losses was $30.2 million, or 0.90 percent of gross loans at June 30, 2023, and $34.1 million, or 1.28 percent of gross loans at June 30, 2022. The provision for credit losses was $2.0 million for the first six months of 2023 compared to a credit to the provision for loan losses of $2.6 million for the same period in 2022. Management believes that the allowance for credit losses was adequate at June 30, 2023 and June 30, 2022.
Non-interest income increased by $367,000 to a loss of $546,000 for the first six months of 2023 from a loss of $913,000 for the first six months of 2022. The improvement in total noninterest income was mainly related to a decrease of $1.1 million in the realized and unrealized gains and losses on equity securities (from a loss of $5.0 million to a loss of $3.9 million) partially offset by a decrease of $753,000 in BOLI income. The realized and unrealized gains or losses on equity securities are based on market conditions.
Non-interest expense increased by $2.5 million, or 9.8 percent, to $28.6 million for the first six months of 2023 from $26.0 million for the same period in 2022. The increase in operating expenses for 2023 was driven primarily by the increase in salaries and employee benefits, higher data processing expenses, and an increase in the regulatory assessments. The increase in salaries related to targeted hiring of additional staff. The number of full-time equivalent employees for the period ended June 30, 2023 was 307, as compared with 301 for the same period in 2022.
The income tax provision decreased by $1.7 million or 20.0 percent, to $6.7 million for the first six months of 2023 from $8.3 million for the same period in 2022. The decrease in the income tax provision was a result of the lower taxable income for the six months ended June 30, 2023 compared to the same period in 2022. The consolidated effective tax rate was 28.5 percent for the first six months of 2023 compared to 29.3 percent for the first six months of 2022.
*Asset Quality*
The Bank had non-accrual loans totaling $5.7 million, or 0.17 percent, of gross loans at June 30, 2023, as compared to $5.1 million, or 0.17 percent, of gross loans at December 31, 2022. The allowance for credit losses was $30.2 million, or 0.90 percent of gross loans at June 30, 2023, and $32.4 million, or 1.05 percent of gross loans at December 31, 2022. The allowance for credit losses was 530.3 percent of non-accrual loans at June 30, 2023, and 633.6 percent of non-accrual loans at December 31, 2022.
*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 24 branch offices in Bayonne, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lyndhurst, Maplewood, Monroe Township, Newark, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, and four branches in Hicksville and Staten Island, New York. The Bank provides businesses and individuals a wide range of loans, deposit products, and retail and commercial banking services. For more information, please go to www.bcb.bank.
*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.
The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing impact of higher inflation levels, higher interest rates and general economic and recessionary concerns, all of which could impact economic growth and could cause a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations; our ability to manage liquidity in a rapidly changing and unpredictable market; supply chain disruptions, labor shortages; and additional interest rate increases by the Federal Reserve. Other factors that 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; any future pandemics 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; the impact, extent and timing of technological changes, capital management activities, actions of governmental agencies and legislative and regulatory actions and reforms, other factors discussed elsewhere in this release, and in other reports we filed with the SEC, including under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year-ended December 31, 2022, and in Part II, Item 1A of our quarterly report on Form 10-Q for the quarter-ended March 31, 2023, and our other periodic reports that we file with the SEC.
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, 2023* *March 31, 2023* *June 30, 2022* June 30, 2023 vs.
Mar. 31, 2023 June 30, 2023 vs.
June 30, 2022
*Interest and dividend income: * *(In thousands, except per share amounts, Unaudited)*
Loans, including fees *$* * 42,644* *$* * 38,889* *$* * 28,781* 9.7 % 48.2 %
Mortgage-backed securities *184* *186* *47* -1.1 % 291.5 %
Other investment securities *1,070* *1,120* *939* -4.5 % 14.0 %
FHLB stock and other interest earning assets *3,339* *2,157* *694* 54.8 % 381.1 %
* Total interest and dividend income* *47,237* *42,352* *30,461* 11.5 % 55.1 %
*Interest expense:*
Deposits:
Demand *4,190* *3,154* *946* 32.8 % 342.9 %
Savings and club *143* *118* *110* 21.2 % 30.0 %
Certificates of deposit *8,474* *6,453* *849* 31.3 % 898.1 % *12,807* *9,725* *1,905* 31.7 % 572.3 %
Borrowings *7,441* *5,156* *815* 44.3 % 813.0 %
* Total interest expense* *20,248* *14,881* *2,720* 36.1 % 644.4 %
*Net interest income* *26,989* *27,471* *27,741* -1.8 % -2.7 %
*Provision for credit losses* *1,350* *622* *-* 117.0 %
*Net interest income after provision for credit losses* *25,639* *26,849* *27,741* -4.5 % -7.6 %
*Non-interest income:*
Fees and service charges *1,442* *1,098* *1,213* 31.3 % 18.9 %
Gain on sales of loans *-* *6* *43* -100.0 % -100.0 %
Realized and unrealized loss on equity investments *(669* *)* *(3,227* *)* *(2,302* *)* -79.3 % -70.9 %
BOLI income *267* *421* *686* -36.6 % -61.1 %
Other *78* *38* *47* 105.3 % 66.0 %
* Total non-interest income (loss)* *1,118* *(1,664* *)* *(313* *)* -167.2 % -457.2 %
*Non-interest expense: *
Salaries and employee benefits *7,711* *7,618* *6,715* 1.2 % 14.8 %
Occupancy and equipment *2,560* *2,552* *2,673* 0.3 % -4.2 %
Data processing and communications *1,795* *1,665* *1,469* 7.8 % 22.2 %
Professional fees *622* *566* *489* 9.9 % 27.2 %
Director fees *270* *265* *296* 1.9 % -8.8 %
Regulatory assessment fees *796* *536* *244* 48.5 % 226.2 %
Advertising and promotions *350* *278* *254* 25.9 % 37.8 %
Other real estate owned, net *1* *1* *4* 0.0 % -75.0 %
Other *601* *373* *912* 61.1 % -34.1 %
* Total non-interest expense* *14,706* *13,854* *13,056* 6.1 % 12.6 %
*Income before income tax provision* *12,051* *11,331* *14,372* 6.4 % -16.1 %
Income tax provision *3,447* *3,225* *4,209* 6.9 % -18.1 %
*Net Income* *8,604* *8,106* *10,163* 6.1 % -15.3 %
Preferred stock dividends *174* *173* *138* 0.6 % 26.2 %
*Net Income available to common stockholders* *$* * 8,430* *$* * 7,933* *$* * 10,025* 6.3 % -15.9 %
*Net Income per common share-basic and diluted*
Basic *$* * 0.50* *$* * 0.47* *$* * 0.59* 7.1 % -15.0 %
Diluted *$* * 0.50* *$* * 0.46* *$* * 0.58* 8.6 % -13.0 %
*Weighted average number of common shares outstanding*
Basic *16,824* *16,949* *16,997* -0.7 % -1.0 %
Diluted *16,831* *17,208* *17,404* -2.2 % -3.3 %
*Statements of Income - Six Months Ended,* *June 30, 2023* *June 30, 2022* June 30, 2023 vs.
June 30, 2022
*Interest and dividend income: * *(In thousands, except per share amounts, Unaudited)*
Loans, including fees *$* * 81,533* *$* * 55,102* 48.0 %
Mortgage-backed securities *370* *206* 79.6 %
Other investment securities *2,190* *1,887* 16.1 %
FHLB stock and other interest earning assets *5,496* *990* 455.2 %
* Total interest and dividend income* *89,589* *58,185* 54.0 %
*Interest expense:*
Deposits:
Demand *7,344* *1,704* 331.0 %
Savings and club *261* *218* 19.7 %
Certificates of deposit *14,927* *1,829* 716.1 % *22,532* *3,751* 500.7 %
Borrowings *12,597* *1,621* 677.1 %
* Total interest expense* *35,129* *5,372* 553.9 %
*Net interest income* *54,460* *52,813* 3.1 %
* Provision (benefit) for credit losses* *1,972* *(2,575* *)* -176.6 %
*Net interest income after provision (credit) for credit losses* *52,488* *55,388* -5.2 %
*Non-interest income:*
Fees and service charges *2,540* *2,427* 4.7 %
Gain on sales of loans *6* *108* -94.4 %
Realized and unrealized (loss) gain on equity investments *(3,896* *)* *(4,987* *)* -21.9 %
BOLI income *688* *1,441* -52.3 %
Other *116* *98* 18.4 %
* Total non-interest loss* *(546* *)* *(913* *)* -40.2 %
*Non-interest expense: *
Salaries and employee benefits *15,329* *13,451* 14.0 %
Occupancy and equipment *5,112* *5,368* -4.8 %
Data processing and communications *3,460* *2,934* 17.9 %
Professional fees *1,188* *983* 20.9 %
Director fees *535* *617* -13.3 %
Regulatory assessments *1,332* *548* 143.1 %
Advertising and promotions *628* *395* 59.0 %
Other real estate owned, net *2* *5* -60.0 %
Other *974* *1,714* -43.2 %
* Total non-interest expense* *28,560* *26,015* 9.8 %
*Income before income tax provision* *23,382* *28,460* -17.8 %
Income tax provision *6,672* *8,345* -20.0 %
*Net Income* *16,710* *20,115* -16.9 %
Preferred stock dividends *347* *414* -16.2 %
*Net Income available to common stockholders* *$* * 16,363* *$* * 19,701* -16.9 %
*Net Income per common share-basic and diluted*
Basic *$* * 0.97* *$* * 1.16* -16.4 %
Diluted *$* * 0.96* *$* * 1.13* -15.2 %
*Weighted average number of common shares outstanding*
Basic *16,886* *16,989* -0.6 %
Diluted *17,010* *17,375* -2.1 %
*Statements of Financial Condition* *June 30,2023* *March 31,2023* *December 31, 2022* June 30, 2023 vs.
March 31, 2023 June 30, 2023 vs.
December 31,2022
*ASSETS* (In Thousands, Unaudited)
Cash and amounts due from depository institutions *$* * 13,378* *$* * 13,213* *$* * 11,520* 1.2 % 16.1 %
Interest-earning deposits *259,834* *247,862* *217,839* 4.8 % 19.3 %
Total cash and cash equivalents *273,212* *261,075* *229,359* 4.6 % 19.1 %
Interest-earning time deposits *735* *735* *735* - -
Debt securities available for sale *87,648* *86,988* *91,715* 0.8 % -4.4 %
Equity investments *12,825* *14,458* *17,686* -11.3 % -27.5 %
Loans held for sale *-* *-* *658* - -100.0 %
Loans receivable, net of allowance for credit losses
of $30,205, $28,882 and $32,373, respectively *3,319,721* *3,231,864* *3,045,331* 2.72 % 9.01 %
Federal Home Loan Bank of New York stock, at cost *31,667* *26,875* *20,113* 17.8 % 57.4 %
Premises and equipment, net *13,561* *10,106* *10,508* 34.2 % 29.1 %
Accrued interest receivable *15,384* *14,717* *13,455* 4.5 % 14.3 %
Other real estate owned *75* *75* *75* - -
Deferred income taxes *16,445* *15,178* *16,462* 8.3 % -0.1 %
Goodwill and other intangibles *5,324* *5,359* *5,382* -0.7 % -1.1 %
Operating lease right-of-use asset *13,658* *15,111* *13,520* -9.6 % 1.0 %
Bank-owned life insurance ("BOLI") *72,344* *72,077* *71,656* 0.4 % 1.0 %
Other assets *10,254* *8,438* *9,538* 21.5 % 7.5 %
* Total Assets* *$* * 3,872,853* *$* * 3,763,056* *$* * 3,546,193* 2.9 % 9.2 %
*LIABILITIES AND STOCKHOLDERS' EQUITY*
*LIABILITIES*
Non-interest bearing deposits *$* * 620,509* *$* * 604,935* *$* * 613,910* 2.6 % 1.1 %
Interest bearing deposits *2,265,212* *2,262,274* *2,197,697* 0.1 % 3.1 %
Total deposits *2,885,721* *2,867,209* *2,811,607* 0.6 % 2.6 %
FHLB advances *622,536* *532,399* *382,261* 16.9 % 62.9 %
Subordinated debentures *37,624* *37,566* *37,508* 0.2 % 0.3 %
Operating lease liability *14,003* *15,436* *13,859* -9.3 % 1.0 %
Other liabilities *13,346* *12,828* *9,704* 4.0 % 37.5 %
* Total Liabilities * *3,573,230* *3,465,438* *3,254,939* 3.1 % 9.8 %
*STOCKHOLDERS' EQUITY*
Preferred stock: $0.01 par value, 10,000 shares authorized *-* *-* *-*
Additional paid-in capital preferred stock *21,003* *21,003* *21,003* 0.0 % 0.0 %
Common stock: no par value, 40,000 shares authorized *-* *-* *-*
Additional paid-in capital common stock *197,521* *197,197* *196,164* 0.2 % 0.7 %
Retained earnings *128,867* *123,121* *115,109* 4.7 % 12.0 %
Accumulated other comprehensive loss *(9,421* *)* *(6,613* *)* *(6,491* *)* 42.5 % 45.1 %
Treasury stock, at cost *(38,347* *)* *(37,090* *)* *(34,531* *)* 3.4 % 11.1 %
* Total Stockholders' Equity* *299,623* *297,618* *291,254* 0.7 % 2.9 %
* Total Liabilities and Stockholders' Equity* *$* * 3,872,853* *$* * 3,763,056* *$* * 3,546,193* 2.9 % 9.2 %
*Outstanding common shares* *16,788* *16,884* *16,931*
*Three Months Ended June 30,* *2023* *2022* *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) *$* * 3,315,120* *$* * 42,644* *5.15* *%* $ 2,517,283 $ 28,781 4.57 %
Investment Securities *100,971* *1254* *4.97* *%* 107,132 986 3.68 %
FHLB stock and other interest-earning assets *278,746* *3,339* *4.79* *%* 344,510 694 0.81 %
Total Interest-earning assets *3,694,837* *47,237* *5.11* *%* 2,968,926 30,461 4.10 %
Non-interest-earning assets *125,032* 107,156
Total assets *$* * 3,819,869* $ 3,076,081
*Interest-bearing liabilities:*
Interest-bearing demand accounts *$* * 712,414* *$* * 2,209* *1.24* *%* $ 796,227 $ 569 0.29 %
Money market accounts *331,339* *1,981* *2.39* *%* 356,062 376 0.42 %
Savings accounts *312,201* *143* *0.18* *%* 346,432 110 0.13 %
Certificates of Deposit *904,766* *8,474* *3.75* *%* 565,479 850 0.60 %
Total interest-bearing deposits *2,260,721* *12,807* *2.27* *%* 2,064,199 1,905 0.37 %
Borrowed funds *630,706* *7,441* *4.72* *%* 109,436 815 2.98 %
Total interest-bearing liabilities *2,891,427* *20,248* *2.80* *%* 2,173,636 2,720 0.50 %
Non-interest-bearing liabilities *630,928* 631,430
Total liabilities *3,522,355* 2,805,066
Stockholders' equity *297,514* 271,015
Total liabilities and stockholders' equity *$* * 3,819,869* $ 3,076,081
Net interest income *$* * 26,989* $ 27,741
Net interest rate spread^(1) *2.31* *%* 3.60 %
Net interest margin^(2) *2.92* *%* 3.74 %
(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 credit losses.
(5) Includes non-accrual loans which are immaterial to the yield.
*Six Months Ended June 30, * *2023* *2022* *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) *$* * 3,240,812* *$* * 81,533* *5.03* *%* $ 2,431,043 $ 55,102 4.53 %
Investment Securities *104,898* *2,560* *4.88* *%* 108,024 2,093 3.88 %
FHLB stock and other interest-earning assets *243,987* *5,496* *4.51* *%* 395,512 990 0.50 %
Total Interest-earning assets *3,589,697* *89,589* *4.99* *%* 2,934,580 58,185 3.97 %
Non-interest-earning assets *120,965* 104,666
Total assets *$* * 3,710,663* $ 3,039,245
*Interest-bearing liabilities:*
Interest-bearing demand accounts *$* * 713,097* *$* * 3,998* *1.12* *%* $ 751,396 $ 967 0.26 %
Money market accounts *322,930* *3,346* *2.07* *%* 350,842 736 0.42 %
Savings accounts *317,451* *261* *0.16* *%* 341,531 218 0.13 %
Certificates of Deposit *876,762* *14,927* *3.40* *%* 588,518 1,828 0.62 %
Total interest-bearing deposits *2,230,241* *22,532* *2.02* *%* 2,032,286 3,751 0.37 %
Borrowed funds *546,528* *12,597* *4.61* *%* 109,272 1,621 2.97 %
Total interest-bearing liabilities *2,776,769* *35,129* *2.53* *%* 2,141,558 5,372 0.50 %
Non-interest-bearing liabilities *638,406* 626,520
Total liabilities *3,415,175* 2,768,078
Stockholders' equity *295,488* 271,168
Total liabilities and stockholders' equity *$* * 3,710,663* $ 3,039,245
Net interest income *$* * 54,460* $ 52,813
Net interest rate spread^(1) *2.46* *%* 3.46 %
Net interest margin^(2) *3.03* *%* 3.60 %
(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) Presented on an annualized basis, where appropriate.
(4) Excludes allowance for credit losses.
(5) Includes non-accrual loans which are immaterial to the yield.
Financial Condition data by quarter *Q2 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022* (In thousands, except book values)
Total assets $ 3,872,853 $ 3,763,056 $ 3,546,193 $ 3,265,612 $ 3,072,771
Cash and cash equivalents 273,212 261,075 229,359 221,024 206,172
Securities 100,473 101,446 109,401 111,159 105,717
Loans receivable, net 3,319,721 3,231,864 3,045,331 2,787,015 2,620,630
Deposits 2,885,721 2,867,209 2,811,607 2,712,946 2,655,030
Borrowings 660,160 569,965 419,769 249,573 124,377
Stockholders’ equity 299,623 297,618 291,254 282,682 271,637
Book value per common share^1 $ 16.60 $ 16.38 $ 15.96 $ 15.42 $ 15.04
Tangible book value per common share^2 $ 16.28 $ 16.07 $ 15.65 $ 15.11 $ 14.73 Operating data by quarter *Q2 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022* (In thousands, except for per share amounts)
Net interest income $ 26,989 $ 27,471 $ 30,181 $ 30,951 $ 27,741
Provision (benefit) for credit losses 1,350 622 (500 ) - -
Non-interest income (loss) 1,118 (1,664 ) 1,062 1,446 (313 )
Non-interest expense 14,706 13,854 16,037 13,453 13,056
Income tax expense 3,447 3,225 3,634 5,552 4,209
Net income $ 8,604 $ 8,106 $ 12,072 $ 13,392 $ 10,163
Net income per diluted share $ 0.50 $ 0.46 $ 0.69 $ 0.76 $ 0.58
Common Dividends declared per share $ 0.16 $ 0.16 $ 0.16 $ 0.16 $ 0.16 Financial Ratios(3) *Q2 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022*
Return on average assets 0.90% 0.90% 1.46% 1.74% 1.32%
Return on average stockholders' equity 11.57% 11.05% 16.99% 19.42% 15.00%
Net interest margin 2.92% 3.15% 3.76% 4.18% 3.74%
Stockholders' equity to total assets 7.74% 7.91% 8.21% 8.66% 8.84%
Efficiency Ratio^4 52.32% 53.68% 51.33% 41.53% 47.60% Asset Quality Ratios *Q2 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022* (In thousands, except for ratio %)
Non-Accrual Loans $ 5,696 $ 5,058 $ 5,109 $ 8,505 $ 9,201
Non-Accrual Loans as a % of Total Loans 0.17% 0.16% 0.17% 0.30% 0.35%
ACL as % of Non-Accrual Loans 530.3% 571.0% 633.6% 390.3% 370.7%
Individually Analyzed Loans 28,250 17,585 28,272 40,524 42,411
(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 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022* (In thousands)
Residential one-to-four family $ 250,345 $ 246,683 $ 250,123 $ 242,238 $ 235,883
Commercial and multi-family 2,490,883 2,466,932 2,345,229 2,164,320 2,030,597
Construction 179,156 162,553 144,931 153,103 155,070
Commercial business 368,948 327,598 282,007 205,661 181,868
Home equity 61,595 58,822 56,888 56,064 51,808
Consumer 3,994 3,383 3,240 2,545 2,656 $ 3,354,921 $ 3,265,971 $ 3,082,418 $ 2,823,931 $ 2,657,882
Less:
Deferred loan fees, net (4,995 ) (5,225 ) (4,714 ) (3,721 ) (3,139 )
Allowance for credit losses (30,205 ) (28,882 ) (32,373 ) (33,195 ) (34,113 )
*Total loans, net* $ 3,319,721 $ 3,231,864 $ 3,045,331 $ 2,787,015 $ 2,620,630 Non-Accruing Loans in Portfolio by quarter *Q2 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022* (In thousands)
Residential one-to-four family $ 178 $ 237 $ 243 $ 263 $ 267
Commercial and multi-family - 340 346 757 757
Construction 4,145 3,217 3,180 3,180 3,043
Commercial business 1,373 1,264 1,340 4,305 5,104
Home equity - - - - 30
*Total:* $ 5,696 $ 5,058 $ 5,109 $ 8,505 $ 9,201 *Distribution of Deposits by quarter* *Q2 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022* *(In thousands)*
Demand:
Non-Interest Bearing $ 620,509 $ 604,935 $ 613,910 $ 610,425 $ 595,167
Interest Bearing 714,420 686,576 757,614 726,012 810,535
Money Market 328,543 361,558 305,556 370,353 360,356
Sub-total: $ 1,663,472 $ 1,653,069 $ 1,677,080 $ 1,706,790 $ 1,766,058
Savings and Club 307,435 319,131 329,753 338,864 347,279
Certificates of Deposit 914,814 895,009 804,774 667,291 541,693
*Total Deposits:* $ 2,885,721 $ 2,867,209 $ 2,811,607 $ 2,712,945 $ 2,655,030
*Reconciliation of GAAP to Non-GAAP Financial Measures by quarter* *Tangible Book Value per Share* *Q2 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022* (In thousands, except per share amounts)
Total Stockholders' Equity $ 299,623 $ 297,618 $ 291,254 $ 282,682 $ 271,637
Less: goodwill 5,252 5,252 5,252 5,252 5,252
Less: preferred stock 21,003 21,003 21,003 21,003 16,563
Total tangible common stockholders' equity 273,368 271,363 264,999 256,427 249,822
Shares common shares outstanding 16,788 16,884 16,931 16,974 16,960
Book value per common share $ 16.60 $ 16.38 $ 15.96 $ 15.42 $ 15.04
Tangible book value per common share $ 16.28 $ 16.07 $ 15.65 $ 15.11 $ 14.73 *Efficiency Ratios* *Q2 2023* *Q1 2023* *Q4 2022* *Q3 2022* *Q2 2022* (In thousands, except for ratio %)
Net interest income $ 26,989 $ 27,471 $ 30,181 $ 30,951 $ 27,741
Non-interest income (loss) 1,118 (1,664 ) 1,062 1,446 (313 )
Total income 28,107 25,807 31,243 32,397 27,428
Non-interest expense 14,706 13,854 16,037 13,453 13,056
Efficiency Ratio 52.32% 53.68% 51.33% 41.53% 47.60%
CONTACT: THOMAS COUGHLIN, PRESIDENT & CEO JAWAD CHAUDHRY, CFO (201) 823-0700