BCB BANCORP INC

BCB Bancorp, Inc. operates as a community-oriented financial institution through its wholly owned subsidiary, BCB Community Bank, a New Jersey chartered commercial bank. The company offers FDIC-insured deposit products and invests funds in loans and investment securities, competing in the highly competitive northeast New Jersey and New York City banking market against large financial services companies, savings and loan associations, savings banks, commercial banks, credit unions, and emerging FinTechs.

The company competes for business principally on the basis of personal service, customer access to business development officers and executive officers, and competitive interest rates and fees. Management believes its local roots and community focus provide an opportunity to capitalize on consolidation in the market area, which has moved decision making away from local community-based banks to much larger banks headquartered outside of New Jersey.

BCB Bancorp generates revenue primarily through net interest income from its loan and investment securities portfolio, funded by 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. The company also earns fee income from retail and commercial banking services such as wire transfers, money orders, safe deposit boxes, night depository, debit cards, online banking, mobile banking, fraud detection (positive pay), and automated teller services, as well as from correspondent banking relationships where it delivers closed first mortgage loans to third party lenders.

The company's primary lending focus is on commercial and multi-family real estate loans, which generally provide higher returns than one-to-four family residential loans. At December 31, 2025, the loan portfolio totaled $2,726,523,000 ¹ in outstanding principal balances, with commercial and multi-family real estate loans (excluding cannabis related) comprising $2,040,768,000 ² or 74.85% of total loans. The company also originates construction loans with terms up to twenty-four months and adjustable interest rates tied to a margin above Prime Rate, commercial business loans in the form of lines of credit or fully amortizing term loans, residential one-to-four family mortgage loans up to 80% loan-to-value at a maximum loan amount of $2.5 million ³ and 75% loan-to-value at a maximum loan amount of $5.0 million ⁴ for primary residences, home equity loans and lines of credit, and consumer loans. The Bank discontinued the origination of business express loans during 2023 and no longer offers this product. During 2025, loans totaling approximately $1.7 million ⁵ were sold in the secondary market and gains of approximately $29,000 ⁶ were recognized from the sale of such loans.

The company's investment securities portfolio at December 31, 2025 consisted of $126.4 million ⁷ in securities classified as available for sale and $9.2 million ⁸ in equity investments, with no securities classified as held-to-maturity or trading. The investment policy allows investments in U.S. Treasury obligations, U.S. federal agency or federally sponsored enterprise obligations, mortgage-backed securities, municipal obligations, equity securities (including preferred stock) with certain regulatory limitations, certificates of deposit, and corporate debt (including subordinated debt). The company also invests in residential mortgage-backed securities, which can serve as collateral for borrowings and to insure New Jersey municipal deposits through the Governmental Unit Deposit Protection Act.

On March 15, 2025, the Company completed a private placement of 52 shares ⁹ of Series K 6.0% Noncumulative Perpetual Stock, par value $0.01 per share, resulting in gross proceeds of $520,000 ¹⁰. Management took proactive steps throughout 2025 to address asset quality and strengthen capital position and liquidity profile, including slowing balance sheet growth to reduce reliance on wholesale borrowing. The company incurred substantial loan charge-offs during 2025 that adversely affected profitability, with net charge-offs of $43,109,000 ¹¹ for the year, compared to $10,389,000 ¹² in 2024 and $704,000 ¹³ in 2023.

For the fiscal year ended December 31, 2025, BCB Bancorp reported total interest income of $183,878,000 ¹⁴ and total interest expense of $93,919,000 ¹⁵, resulting in net interest income of $89,959,000 ¹⁶. Net income was $1,243,000 ¹⁷ for 2025, compared to $14,896,000 ¹⁸ in 2024. Basic earnings per share were $0.07 ¹⁹ in 2025 versus $0.85 ²⁰ in 2024, and diluted earnings per share were $0.07 ²¹ versus $0.85 ²² in the prior year. Total assets at December 31, 2025 were $3.279 billion ²³, with total deposits of $2.674 billion ²⁴ and consolidated stockholders' equity of $304.3 million ²⁵.

A primary focus of the business strategy in 2026 is to originate loans secured by commercial and multi-family properties, which management believes offer higher returns without a significantly increased level of risk in most cases due to underwriting practices including debt service requirements. The company also seeks to capitalize on the consolidation of the banking industry in northeast New Jersey, which management believes provides a unique opportunity for a customer-focused banking institution as decision making moves away from local community-based banks to larger banks headquartered outside of New Jersey.

Management continues to seek out under-served markets for banking products and services to facilitate the growth of the franchise footprint organically and synergistically. The company closely monitors activity in the marketplace to ensure products and services are technologically competitive, and the overall strategy involves seeking to identify partnerships and possible investment opportunities in technology-driven companies that can augment distribution and product capabilities.

Management continues to be committed to managing and controlling non-interest expenses to improve the efficiency ratio. Management also continues to prudently manage the balance sheet to protect spread income in a challenging operating environment, with slower balance sheet growth combined with profitability expected to continue to enhance the Company's capital position.

Management has slowed balance sheet growth to strengthen liquidity and capital position, focusing on reducing reliance on wholesale borrowing that is expensive and not core to the Bank's operating philosophy. The company remains committed to strengthening the statements of financial condition and maintaining profitability by diversifying the products, pricing, and services offered, and is very committed to improving asset quality as the industry continues to face challenges from an uncertain macroeconomic environment.

The filing does not contain specific R&D spending levels, capital expenditure plans, share repurchase authorization amounts, or dividend policy figures for the outlook period.

The persistently high interest rate environment and competition for liquidity have negatively impacted margins for the industry. The company incurred substantial loan charge-offs during 2025 that adversely affected profitability, and management flagged that the industry continues to face challenges from an uncertain macroeconomic environment.

The company's business express loan portfolio, which was discontinued in 2023, continues to present elevated risk. On December 31, 2025, the size of the business express loans portfolio was $74.9 million ²⁶ and the total loan loss reserves for the portfolio totaled $10.4 million ²⁷. The significantly higher level of loan loss reserves established for business express loans reflect the higher losses experienced in the portfolio during 2025 that has informed management's view on the remaining lifetime losses.

The company faces material credit risk concentrated in its commercial real estate and multi-family loan portfolio, which comprised 74.85% ²⁸ of total loans at December 31, 2025, with nonaccrual loans totaling $63.3 million ²⁹ and the largest non-performing commercial real estate loan having an outstanding principal balance of approximately $16.1 million ³⁰ fully collateralized by a mixed-use office and retail building in New York. The business express loan portfolio, which was discontinued in 2023, presents elevated risk with $74.9 million ³¹ in outstanding balances and $10.4 million ³² in loan loss reserves, reflecting net charge-offs of $9,795,000 ³³ during 2025 representing an 11.99% ³⁴ net charge-off rate. The cannabis related loan portfolio of $69.3 million ³⁵ experienced net charge-offs of $13,520,000 ³⁶ during 2025, representing a 14.67% ³⁷ net charge-off rate. The company faces intense competition from larger financial institutions with greater capital resources and from emerging FinTechs, and the persistently high interest rate environment and competition for liquidity have negatively impacted margins.

Management's message emphasizes operating as a well-capitalized, profitable, and independent community-oriented financial institution dedicated to providing the highest quality customer service, with extensive knowledge of the markets served helping to differentiate the company from competitors. The key strategic priorities emphasized for the period ahead are: maintaining a community focus, focusing on profitability, strengthening the balance sheet, emphasizing real estate-based lending, capitalizing on market dynamics, providing attentive and personalized service, and attracting highly qualified and experienced personnel. Management states that proactive steps taken throughout 2025 to address asset quality and strengthen capital position and liquidity profile have created a more resilient foundation and position the Company well as it enters 2026.