BCB BANCORP INC
For the period ended Jun 30, 2026. Filed Aug 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 10, 2026
BCBP$9.17+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-01.
0001228454-26-000006
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001228454-26-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 96 previous paragraphs and 150 current paragraphs.
66 unchanged; 25 reworded; 54 added; 5 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 4 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (54)
Current report
changes in the credit performance of our loan portfolio, including levels of criticized and classified loans, nonaccrual loans, and charge-offs;
Current report
changes in liquidity levels, funding sources, or funding costs, and our ability to manage our liquidity risks;
Current report
Executive Summary of Second Quarter Performance
Current report
As of June 30, 2026, the Company had total consolidated assets of $3.118 billion, a decrease of $161.3 million, or 4.9 percent, from $3.279 billion at December 31, 2025, total consolidated deposits of $2.636 billion, a decrease of $37.6 million, or 1.4 percent, from December 31, 2025, and total consolidated stockholders’ equity of $291.9 million, compared to $304.3 million at December 31, 2025. The decrease in total assets was driven primarily by a decrease in net loans and cash and cash equivalents, reflecting the Bank’s paydown of higher-cost brokered deposits and FHLB advances, offset by an increase in debt securities. Total criticized and classified loans were $367.4 million at June 30, 2026, compared to $403.0 million at March 31, 2026. The allowance for credit losses on loans as a percentage of non-accrual loans was 62.5 percent at June 30, 2026, compared to 54.5 percent at March 31, 2026 and 49.8 percent at June 30, 2025, while total non-accrual loans were $72.0 million at June 30, 2026,$59.8 million at March 31, 2026, and $101.8 million at June 30, 2025.
Current report
The Company reported a net loss of $14.8 million, or $(0.85) per diluted share, for the second quarter of 2026, compared to net income of $4.9 million, or $0.26 per diluted share, for the first quarter of 2026, and net income of $3.6 million, or $0.18 per diluted share, for the second quarter of 2025. The net loss for the second quarter of 2026 was primarily driven by a $19.0 million provision for credit losses, reflecting higher reserve requirements within the Company’s commercial business loan portfolio, a $5.3 million non-cash goodwill impairment charge, and a $2.6 million loss on the sale of a loan transferred to held-for-sale. These factors were partially offset by a decrease in income tax provision of $4.9 million. Net interest margin improved to 3.03 percent for the second quarter of 2026, compared to 2.95 percent for the first quarter of 2026 and 2.80 percent for the second quarter of 2025, reflecting a decrease in the cost of the Company’s interest-bearing liabilities. The efficiency ratio for the second quarter was 96.8 percent compared to 62.4 percent in the prior quarter, and 60.6 percent in the second quarter of 2025.
Current report
Since June 1, 2026, the Company has been engaged in a comprehensive re-evaluation of its credit portfolios with the assistance of independent consultants, as part of its broader effort to strengthen the balance sheet and position the franchise for long-term success. The initial feedback from this re-evaluation has been reflected in the Company’s loan loss reserving decisions for the second quarter, and the Company is working toward completion of the review by the end of the third quarter of 2026. With respect to the Company’s commercial real estate portfolio, the Company’s analysis remains in the early stages, given the absolute size and complexity of this portfolio.
Current report
In connection with these efforts, the Company’s Board of Directors approved the suspension of both common and preferred stock dividends during the quarter in order to preserve capital at the Bank and liquidity at the holding company. Additionally, the Company announced in June, and subsequently distributed a notice to the participants in its 2026 Amended and Restated Dividend Reinvestment and Stock Purchase Plan, that the Plan has been suspended in accordance with its terms, effective August 6, 2026. The Company also announced on August 3, 2026, that its Board of Directors approved changing the Company’s state of incorporation from New Jersey to Delaware, subject to shareholder approval. The Company intends to call a special meeting of shareholders later in 2026 to seek approval of the reincorporation.
Current report
Critical accounting estimates are those accounting policies that can have a significant impact on the Company’s financial position and results of operations that require the use of complex and subjective estimates based upon past experiences and management’s judgment. Because of the uncertainty inherent in such estimates, actual results may differ from these estimates. Below are those policies applied in preparing the Company’s consolidated financial statements that management believes are the most dependent on the application of estimates and assumptions.
Current report
Allowance for Credit Losses on Loans Receivable
Current report
The allowance for credit losses represents the estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date. The measurement of expected credit losses is applicable to loans receivable and securities measured at amortized cost. It also applies to off-balance sheet credit exposures such as loan commitments and unused lines of credit. The allowance is established through a provision for credit losses that is charged against income. The methodology for determining the allowance for credit losses is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded allowance for credit losses. The allowance for credit losses is reported separately as a contra-asset on the consolidated statement of financial condition. The expected credit loss for unfunded loan commitments is reported on the consolidated statement of financial condition in other liabilities while the provision for credit losses related to unfunded commitments is reported in other non-interest expense. Changes in the allowance for credit losses are recorded as provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of a receivable is confirmed or when either of the criteria regarding intent or requirement to sell is met.
Current report
The allowance for credit losses on loans is deducted from the amortized cost basis of the loan to present the net amount expected to be collected. Expected losses are evaluated and calculated on a collective, or pooled, basis for those loans which share similar risk characteristics. If the loan does not share risk characteristics with other loans, the Company will evaluate the loan on an individual basis. Individually evaluated loans are primarily non-accrual and collateral dependent loans. Furthermore, the Company evaluates the pooling methodology at least annually to ensure that loans with similar risk characteristics are pooled appropriately. Loans are charged off against the allowance for credit losses when the Company believes the balances to be uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off.
Current report
The Company has chosen to segment its portfolio consistent with the manner in which it manages credit risk. The Company calculates estimated credit losses for these loan segments using quantitative models and qualitative factors. Further information on loan segmentation and the credit loss estimation is included in Note 7 – Loans Receivable and Allowance for Credit Losses.
Current report
Individually Evaluated Loans
Current report
On a case-by-case basis, the Company may conclude that a loan should be evaluated on an individual basis based on its disparate risk characteristics. When the Company determines that a loan no longer shares similar risk characteristics with other loans in the portfolio, the allowance will be determined on an individual basis using the present value of expected cash flows or, for collateral-dependent loans, the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. If the fair value of the collateral is less than the amortized cost basis of the loan, the Company will charge-off the difference between the fair value of the collateral, less costs to sell at the reporting date and the amortized cost basis of the loan.
Current report
Allowance for Credit Losses on Off-Balance Sheet Commitments
Current report
The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance calculation, other than those that are unconditionally cancelable. To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. As noted above, the allowance for credit losses on unfunded loan commitments is included in other liabilities on the consolidated statements of financial condition and the related credit expense is recorded in other non-interest expense in the consolidated statements of operations.
Current report
Allowance for Credit Losses on Available-for-Sale Securities
Current report
For available-for-sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more than likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities available-for-sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss), net of tax. The Company elected the practical expedient of zero loss estimates for securities issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major agencies and have a long history of no credit losses.
Current report
Accrued Interest Receivable
Current report
The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans and available-for-sale securities. Accrued interest receivable on loans and securities is reported as a component of accrued interest receivable on the consolidated statements of financial condition.
Current report
During the quarter ended June 30, 2026, the Company recorded a non-cash goodwill impairment charge of $5.3 million. The goodwill impairment charge resulted from an interim quantitative impairment assessment triggered by the Company’s significant quarterly loss and the continued trading of its stock at a substantial discount to book value. The non-cash impairment charge reduced the goodwill recorded on its balance sheet to zero.
Current report
Total assets decreased by $161.3 million, or 4.9 percent, to $3.118 billion at June 30, 2026, from $3.279 billion at December 31, 2025. The decrease in total assets was mainly related to a decrease in net loans and cash and cash equivalents, offset by an increase in debt securities.
Current report
Loans receivable, net, decreased by $103.1 million, or 3.8 percent, to $2.588 billion at June 30, 2026, from $2.691 billion at December 31, 2025, due to loan payoffs, paydowns and charge-offs. Total loan decreases during the period included decreases of $35.2 million in construction loans, $30.9 million in commercial and multi-family loans, $10.9 million in commercial business loans, $5.9 million in business express loans, $8.0 million in one-to-four family residential loans, and $679,000 in cannabis, home equity loans and consumer loans. The decrease in the loan portfolio also reflects management’s overall strategy to reduce the size of the balance sheet while managing through its problem credits. During the six months ended June 30, 2026, the Bank’s loan origination activity remained below historical levels as it continued to focus on portfolio runoff, balance sheet management and risk-adjusted returns. In addition, the Bank has ceased originating residential mortgage, home equity, and consumer loans, as management believes the current risk-adjusted returns in these categories are not sufficiently attractive.
Current report
During the second quarter, the Company also transferred one loan on non-accrual status to held-for-sale, which was written down to fair market value resulting in a loss of $2.6 million reflected in non-interest income under the line item for net loss on the sale of loans. The remaining carrying value of the loan is $10.8 million. Loans held-for-sale are not included in past due loans or classified loans.
Current report
Stockholders’ equity decreased by $12.4 million, or 4.1 percent, to $291.9 million at June 30, 2026, from $304.3 million at December 31, 2025. The decrease was attributable to the decrease in retained earnings of $13.2 million, or 11.3 percent, to $103.2 million at June 30, 2026, from $116.4 million at December 31, 2025, caused largely by the $9.9 million loss in the first six months of 2026.
Current report
Asset Quality
Current report
Since June 1, 2026, the Company has been engaged in a comprehensive re-evaluation of its credit portfolios with the assistance of independent consultants as part of its broader effort to strengthen the balance sheet and position the franchise for long-term success. The initial feedback from this re-evaluation has been reflected in the loan loss reserving decisions made during the second quarter, and the Company is working toward completion of that review by the end of the third quarter of 2026. With respect to the Company’s commercial real estate portfolio, the Company’s analysis remains in the early stages, given the absolute size and complexity of this portfolio. As the evaluation continues in the third quarter, the Company will fully explore various alternatives to strengthen the credits or exit the relationships, which may include workouts and loan restructurings, such as potentially seeking additional collateral, interest rate adjustments, as well as select loan sale.
Current report
The allowance for credit losses on loans of $45.0 million, as of June 30, 2026, increased by $11.3 million, or 33.5 percent, compared to December 31, 2025. The $11.3 million increase compared to December 31, 2025, was driven by a $21.8 million provision expense for the first six months of 2026 that was partially offset by $10.5 million in net charge-offs primarily attributable to the commercial business portfolio, which continued to exhibit elevated levels of credit deterioration. Net charge-offs within the commercial business portfolio totaled $6.6 million for the six months ended June 30, 2026, with $5.8 million recognized in the second quarter compared to $824,000 in the first quarter. In addition, the Bank concluded that full recovery is no longer expected on a previously charged-off $6.3 million commercial business relationship. In light of this development, along with broader adverse credit trends observed within the commercial business portfolio, management performed a targeted qualitative assessment of the portfolio during the second quarter. As a result of this evaluation, the Bank increased the allowance associated with the commercial business portfolio by $10.8 million. For reference and as presented in Note 7, $16.7 million of the $19 million of loan loss provision expense booked in the 2026 second quarter was attributed to the build-up of loan loss reserves for the commercial business portfolio.
Current report
During the three months ended June 30, 2026, there were $7.5 million of charge-offs and $904,000 of recoveries, compared to $6.0 million of charge-offs and $313,000 in recoveries for the three months ended June 30, 2025.
Current report
For the six months ended June 30, 2026, there were $11.6 million charge-offs and $1.1 million recoveries, compared to $10.2 million of charge-offs and $361,000 of recoveries for the six months ended June 30, 2025.
Current report
Loans receivable classified as Substandard totaled $160.5 million at June 30, 2026, compared to $188.7 million at December 31, 2025, and $266.8 million at June 30, 2025. The decreases were primarily attributed to charge-offs, payoffs and paydowns, as well as upgrades in borrower risk ratings. Also, during the second quarter of 2026, the Bank transferred a classified non-accrual loan with a carrying value of $13.4 million to held-for-sale, resulting in a loss of $2.6 million reflected in non-interest income under the line item for net loss on the sale of loans. The remaining value of the loan is $10.8 million. Loans classified as held-for-sale are excluded from both past due loans and classified loan balances.
Current report
As of June 30, 2026, loans classified as substandard have specific reserves of $5.1 million.
Current report
Loans receivable classified as Special Mention totaled $207.0 million at June 30, 2026, compared to $170.8 million at December 31, 2025, and $229.9 million at June 30, 2025. While loans classified as Special Mention increased during the year, they remain below the level reported a year ago. The increase from December 31, 2025, reflects the Bank’s proactive efforts to identify, monitor, and transfer higher credit risks earlier in the process for closer oversight and resolution.
Current report
Total Substandard and Special Mention loans were $367.4 million, or 13.94 percent of gross loans, at June 30, 2026, as compared to $360.0 million, or 13.19 percent of gross loans, at December 31, 2025.
Current report
The Bank had non-accrual loans totaling $72.0 million, or 2.73 percent of gross loans, at June 30, 2026, as compared to $63.3 million, or 2.32 percent of gross loans at December 31, 2025, and $101.8 million or 3.50 percent of gross loans at June 30, 2025. Excluding the classified loan transferred to held-for-sale during the second quarter of 2026, non-accrual loan balances remained fairly stable when compared to December 31, 2025, and declined significantly from a year ago. The year over year decrease was primarily due to the charge-off and subsequent transfer to Other Real Estate Owned of a $33.5 million cannabis related loan in the third and fourth quarters of 2025, respectively.
Current report
The allowance for credit losses on loans was 62.5 percent of non-accrual loans at June 30, 2026, compared to 53.3 percent of non-accrual loans at December 31, 2025, and 49.8 percent at June 30, 2025. The increase in coverage reflects the results of the Bank’s ongoing evaluation of its credit portfolio. Loans are generally returned to accrual status after six months of satisfactory loan payment performance and when management determines that full collection of principal and interest is reasonably assured.
Current report
Total loans receivable greater than 30 days past due were $122.8 million, or 4.66 percent of gross loans, at June 30, 2026, as compared to $99.1 million, or 3.64 percent of gross loans, at December 31, 2025, and $111.0 million, or 3.81 percent of gross loans at June 30, 2025. The increase in past due loans during the six months ended June 30, 2026, was primarily reflected in loans 30-59 days past due within the Commercial and multi-family loan portfolio. The increase was largely driven by a one large credit of approximately $16 million, secured by raw land that the Bank anticipates entering into litigation. Management believes tht this land loan is adequately secured, with collateral value expected to support full recovery of the outstanding balance. An additional $8 million increase was attributable to a mixed-use office / garage building that the Bank is in process of restructuring for payment relief.
Current report
The following table summarizes the Bank’s top ten relationship loans at June 30, 2026 excluding classified loans which are presented in the table above.
Current report
(2) Balance includes outstanding and committed amounts.
Current report
(3) LTV adjusted to account for commercial business loans with no credit for UCC filing.
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Removed paragraphs (5)
Previous report
Estimates and assumptions are necessary in the application of certain accounting policies and can be susceptible to significant change. Critical accounting estimates are defined as those that involve a significant level of estimation uncertainty and have had, or could have, a material impact on the Company’s financial conditions or results of operation. At March 31, 2026, the Company considers the allowance for credit losses to be a critical accounting estimate.
Previous report
Total assets decreased by $10.4 million, or 0.3 percent, to $3.269 billion at March 31, 2026, from $3.280 billion at December 31, 2025. This decrease is the result of fewer net loans, offset by an increase in cash and cash equivalents.
Previous report
Stockholders’ equity increased by $3.1 million, or 1.0 percent, to $307.4 million at March 31, 2026, from $304.3 million at December 31, 2025. The increase was attributable to retained earnings, which increased $3.0 million.
Previous report
Non-interest income increased by $310 thousand to $2.1 million for the first quarter of 2026 from $1.8 million in the first quarter of 2025. The increase in total non-interest income was mainly related to a $338 thousand increase in BOLI income and a decrease in our realized and unrealized loss on equity investments of $22 thousand. Offsetting this was a decrease in other non-interest income of $75 thousand.
Previous report
Non-interest expense increased by $891 thousand, or 6.1 percent, to $15.6 million for the first quarter of 2026 compared to non-interest expense of $14.7 million for the first quarter of 2025. The increase in these expenses for the first quarter of 2026 was primarily driven by salaries and employee benefits, data processing costs and OREO expenses, which rose $924 thousand, $179 thousand and $150 thousand, respectively. Offsetting this was a decline in other non-interest expense and director fees of $203 thousand and $172 thousand, respectively.
Reworded paragraphs (25)
Previous wording
legislative and regulatory changes, including but not limited to, increases in Federal Deposit Insurance Corporation, or FDIC, insurance rates;
Current wording
legislative and regulatory changes, including but not limited to, increases in Federal Deposit Insurance Corporation (“FDIC”) insurance rates;
Previous wording
BCB Bancorp, Inc. is a New Jersey corporation, and is the holding company parent of BCB Community Bank, or the Bank. The Company has not engaged in any significant business activity other than owning all of the outstanding common stock of BCB Community Bank. Our executive office is located at 104-110 Avenue C, Bayonne, New Jersey 07002. At March 31, 2026, we had $3.269 billion in consolidated assets, $2.672 billion in deposits and $307.4 million in consolidated stockholders’ equity.
Current wording
BCB Bancorp, Inc. is a New Jersey corporation and is the holding company parent of BCB Community Bank, or the Bank. The Company has not engaged in any significant business activity other than owning all of the outstanding common stock of BCB Community Bank. Our executive office is located at 104-110 Avenue C, Bayonne, New Jersey 07002. At June 30, 2026, we had $3.118 billion in consolidated assets, $2.636 billion in deposits and $291.9 million in consolidated stockholders’ equity.
Previous wording
BCB Community Bank opened for business on November 1, 2000 as Bayonne Community Bank, a New Jersey chartered commercial bank. The Bank changed its name from Bayonne Community Bank to BCB Community Bank in April 2007. At March 31, 2026, the Bank operated twenty-three branches in Bayonne, Edison, Jersey City, Hoboken, Fairfield, Holmdel, Lyndhurst, Maplewood, Monroe Township, Newark, Parsippany, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, as well as three branches in Hicksville and Staten Island, NY, and through executive offices located at 104-110 Avenue C and an administrative office located at 591-595 Avenue C, Bayonne, New Jersey 07002. The Bank’s deposit accounts are insured by the FDIC, and the Bank is a member of the Federal Home Loan Bank System.
Current wording
BCB Community Bank opened for business on November 1, 2000, as Bayonne Community Bank, a New Jersey chartered commercial bank. The Bank changed its name from Bayonne Community Bank to BCB Community Bank in April 2007. At June 30, 2026, the Bank operated twenty-two branches in Bayonne, Edison, Jersey City, Hoboken, Fairfield, Holmdel, Lyndhurst, Maplewood, Monroe Township, Newark, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, as well as three branches in Staten Island and one in Hicksville, New York, and through executive offices located at 104-110 Avenue C and an administrative office located at 591-595 Avenue C, Bayonne, New Jersey 07002. The Bank’s deposit accounts are insured by the FDIC, and the Bank is a member of the FHLB System.
Previous wording
See further discussion of this critical accounting estimate in Notes 2 and 7 of this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31,2025.
Current wording
See further discussion of critical accounting estimate in Note 7 of this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31,2025.
Previous wording
Goodwill must be tested for impairment at least once a year or when specific events occur that could impact its value. It’s assessed at the reporting unit level. The Company’s policy is to test goodwill every October 31st or earlier if a triggering event takes place. Such events could include poor financial performance, a drop in the Company’s stock price compared to its book value, or broader economic or industry conditions. When a test is triggered, the estimated fair value of the reporting unit is compared to its book value. If the fair value is lower, the difference is recorded as an impairment loss.
Current wording
Goodwill must be tested for impairment at least once a year or when specific events occur that could impact its value. It is assessed at the reporting unit level. The Company’s policy is to test goodwill every October 31st or earlier if a triggering event takes place. Such events could include poor financial performance, a drop in the Company’s stock price compared to its book value, or broader economic or industry conditions. When a test is triggered, the estimated fair value of the reporting unit is compared to its book value. If the fair value is lower, the difference is recorded as an impairment loss.
Previous wording
Total cash and cash equivalents increased by $17.2 million, or 6.2 percent, to $293.7 million at March 31, 2026, from $276.6 million at December 31, 2025. The increase in cash was primarily due to loan cash flows.
Current wording
Total cash and cash equivalents decreased by $79.7 million, or 28.8 percent, to $196.9 million at June 30, 2026, from $276.6 million at December 31, 2025. The decrease in cash was primarily due to the reduction of the Bank’s exposure to wholesale funding by paying down high cost brokered deposits and FHLB advances.
Previous wording
Loans receivable, net, decreased by $35.1 million, or 1.3 percent, to $2.656 billion at March 31, 2026, from $2.691 billion at December 31, 2025, due to loan payoffs, paydowns and charge-offs. Total loan decreases during the period included decreases of $19.3 million in commercial real estate and multi-family loans, $12.1 million in commercial business loans and $4.6 million in 1-4 family residential loans and home equity loans. The allowance for credit losses decreased $1.1 million to $32.6 million, or 54.5 percent of non-accruing loans and 1.21 percent of gross loans, at March 31, 2026, as compared to an allowance for credit losses of $33.7 million, or 53.3 percent of non-accruing loans and 1.24 percent of gross loans, at December 31, 2025.
Current wording
The allowance for credit losses on loans increased $11.3 million to $45.0 million, or 62.5 percent of non-accruing loans and 1.71 percent of gross loans, at June 30, 2026, as compared to an allowance for credit losses on loans of $33.7 million, or 53.3 percent of non-accruing loans and 1.24 percent of gross loans, at December 31, 2025. Additional details are provided in the Asset Quality portion of Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Previous wording
Total investments increased by $7.5 million, or 5.6 percent, to $143.1 million at March 31, 2026, from $135.6 million at December 31, 2025, representing current year purchases, net of maturity and paydowns during 2026.
Current wording
Total investment securities increased by $16.7 million, or 12.3 percent, to $152.3 million at June 30, 2026, from $135.6 million at December 31, 2025, representing current year purchases, offset by current year sales.
Previous wording
Deposits decreased by $1.1 million, or 0.04 percent, to $2.672 billion at March 31, 2026, from $2.674 billion at December 31, 2025. Certificates of deposit, non-interest bearing accounts and savings and club accounts decreased $33.7 million, and were offset by increases in money market accounts and interest bearing deposit accounts which totaled $32.6 million.
Current wording
Deposits decreased by $37.6 million, or 1.4 percent, to $2.636 billion at June 30, 2026, from $2.674 billion at December 31, 2025. Certificates of deposit accounts and savings accounts decreased $45.2 million and $13.1 million, respectively, and were offset by an increase in money market accounts of $20.8 million. Brokered deposits declined by $28.6 million from $80.5 million at December 31, 2025 to $51.9 million at June 30, 2026.
Previous wording
Debt obligations decreased by $9.9 million to$268.3 millionat March 31, 2026, from $278.2 million at December 31, 2025, due to maturities of our FHLB advances. The weighted average interest rate of FHLB advances was 4.70 percent at March 31, 2026, and 4.53 percent at December 31, 2025. The weighted average maturity of FHLB advances as of March 31, 2026 was 0.23 years. The interest rate of our subordinated debt balances was 9.25 percent at March 31, 2026 and December 31, 2025.
Current wording
Debt obligations decreased by $109.9 million to$168.3 millionat June 30, 2026, from $278.2 million at December 31, 2025, due to maturities and paydowns of our Federal Home Loan Bank (“FHLB”) advances. The weighted average interest rate of FHLB advances was 4.88 percent at June 30, 2026, and 4.53 percent at December 31, 2025. The weighted average maturity of FHLB advances as of June 30, 2026, was less than ninety days. The interest rate of our subordinated debt balances was 9.25 percent at June 30, 2026, and at December 31, 2025.
Previous wording
(1) Based on the most recent appraised values available.
Current wording
(1) Weighted Average LTV based upon the most recent appraised values available.
Previous wording
(2) Borrower has two loans that are classified and collectively add up to greater than $5 million.
Current wording
(2) Borrower has two loans that are classified and collectively exceed $5 million.
Previous wording
(3) Borrower has three loans that are classified and collectively add up to greater than $5 million
Current wording
(3) Borrower has ten loans that are classified and collectively exceed $5 million.
Previous wording
The Company reported net income of $4.9 million for the quarter ended March 31, 2026, compared to a net loss of $8.3 million for the quarter ended March 31, 2025. This increase was due to the Bank recording $18.1 million less in loan loss provisioning, offset by the Bank recording $5.1 million more in income taxes.
Current wording
The Company reported a net loss of $14.8 million for the quarter ended June 30, 2026, compared to net income of $3.6 million for the quarter ended June 30, 2025. This decline was primarily due to a $14.1 million increase in loan loss provisioning, a $5.3 million non-cash goodwill impairment charge, a $2.6 million loss on the sale of loans and a $1.7 million increase in salaries and employee benefits. This was offset by a decrease in tax provision of $4.9 million.
Previous wording
Interest income decreased by $3.8 million, or 8.6 percent, to $40.4 million for the first quarter of 2026 from $44.2 million for the first quarter of 2025. The average balance of interest-earning assets decreased $299.2 million, or 8.7 percent, to $3.144 billion for the first quarter of 2026 from $3.444 billion for the first quarter of 2025. The average yield increased 1 basis point to 5.21 percent for the first quarter of 2026 from 5.20 percent for the first quarter of 2025.
Current wording
Interest income decreased by $2.7 million, or 6.3 percent, to $40.5 million for the second quarter of 2026 from $43.2 million for the second quarter of 2025. The average balance of interest-earning assets decreased $215.5 million, or 6.5 percent, to $3.092 billion for the second quarter of 2026 from $3.307 billion for the second quarter of 2025. The average yield increased 1 basis point to 5.25 percent for the second quarter of 2026 from 5.24 percent for the second quarter of 2025.
Previous wording
Interest expense decreased by $4.6 million to $17.6 million for the first quarter of 2026 from $22.2 million for the first quarter of 2025. The decrease resulted from a decrease in the average rate paid on interest-bearing liabilities of 40 basis points to 2.93 percent for the first quarter of 2026 from 3.33 percent for the first quarter of 2025, while the average balance of interest-bearing liabilities decreased by $267.6 million to $2.434 billion in the first quarter of 2026 from $2.702 billion in the first quarter of 2025.
Current wording
Interest expense decreased by $3.0 million to $17.1 million for the second quarter of 2026 from $20.1 million for the second quarter of 2025. The decrease resulted from a decrease in the average rate paid on interest-bearing liabilities of 29 basis points to 2.87 percent for the second quarter of 2026 from 3.16 percent for the second quarter of 2025, while the average balance of interest-bearing liabilities decreased by $156.0 million to $2.393 billion for the second quarter of 2026 from $2.549 billion for the second quarter of 2025.
Previous wording
The net interest margin increased to 2.95 percent for the first quarter of 2026 compared to 2.59 percent for the first quarter of 2025. The increase in the net interest margin compared to the first quarter of 2025 was the result of a decrease in the cost of interest-bearing liabilities, and an increase in the yield on interest-earning assets.
Current wording
The net interest margin was 3.03 percent for the second quarter of 2026 compared to 2.80 percent for the second quarter of 2025. The increase in the net interest margin compared to the second quarter of 2025 was the result of a decrease in the cost of interest-bearing liabilities.
Previous wording
During the first quarter of 2026, the Company recognized $3.9 million in net charge-offs compared to $4.2 million in net charge-offs in the first quarter of 2025. The Bank had non-accrual loans totaling $59.8 million, or 2.22 percent of gross loans, at March 31, 2026, as compared to $63.3 million, or 2.32 percent of gross loans, at December 31, 2025. The allowance for credit losses on loans was $32.6 million, or 1.21 percent of gross loans, at March 31, 2026, and $33.7 million, or 1.24 percent of gross loans, at December 31, 2025. The provision for credit losses was $2.8 million for the first quarter of 2026 compared to $12.2 million for the fourth quarter of 2025 and $20.8 million for the first quarter of 2025. Management believes that the allowance for credit losses on loans was adequate at March 31, 2026 and December 31, 2025.
Current wording
During the second quarter of 2026, the Company recognized $6.6 million in net charge-offs compared to $5.7 million in net charge-offs in the second quarter of 2025. The Bank had non-accrual loans totaling $72.0 million, or 2.73 percent of gross loans, at June 30, 2026, as compared to $63.3 million, or 2.32 percent of gross loans, at December 31, 2025. The allowance for credit losses on loans was $45.0 million, or 1.71 percent of gross loans, at June 30, 2026, and $33.7 million, or 1.24 percent of gross loans, at December 31, 2025. Management believes the allowance for credit losses on loans was adequate at June 30, 2026 and December 31, 2025.
Previous wording
The income tax provision increased by $5.1 million, to an income tax expense of $1.7 million for the first quarter of 2026 when compared to a income tax benefit of $3.4 million for the first quarter of 2025.
Current wording
The income tax provision decreased by $4.9 million, to an income tax benefit of $3.5 million for the second quarter of 2026 when compared to a $1.5 million provision for the second quarter of 2025.
Previous wording
At March 31, 2026 and December 31, 2025, the Company had no overnight borrowings outstanding with the FHLB. The Company utilizes overnight borrowings from time to time to fund short-term liquidity needs. The Company had total outstanding borrowings of $268.3 million at March 31, 2026 ascompared to $278.2 million at December 31, 2025.
Current wording
At June 30, 2026 and December 31, 2025, the Company had no overnight borrowings outstanding with the FHLB. The Company utilizes overnight borrowings from time to time to fund short-term liquidity needs. The Company had total outstanding borrowings of $168.3 million at June 30, 2026 ascompared to $278.2 million at December 31, 2025.
Previous wording
At March 31, 2026, the Company had the ability to obtain additional funding of $385.9 million from the FHLB and $200.6 million from the Federal Reserve Bank Discount Window, utilizing unencumbered loan collateral. The Company expects to have sufficient funds available to meet current loan commitments in the normal course of business through typical sources of liquidity. Time deposits scheduled to mature in one year or less totaled $941.6 million at March 31, 2026. Based upon historical experience data, management estimates that a significant portion of such deposits will remain with the Company.
Current wording
At June 30, 2026, the Company had the ability to obtain additional funding of $499.7 million from the FHLB and $199.5 million from the Federal Reserve Bank Discount Window, utilizing unencumbered loan collateral. The Company expects to have sufficient funds available to meet current loan commitments in the normal course of business through typical sources of liquidity. Time deposits scheduled to mature in one year or less totaled $915.7 million at June 30, 2026. Based upon historical experience data, management estimates that a significant portion of such deposits will remain with the Company.
Previous wording
The Company was well-positioned with adequate levels of cash and liquid assets as of March 31, 2026 and a significant amount of available borrowing capacity with FHLB and Federal Reserve Bank Discount Window.
Current wording
The Company was well-positioned with adequate levels of cash and liquid assets as of June 30, 2026 and a significant amount of available borrowing capacity with FHLB and Federal Reserve Bank Discount Window to fund ongoing bank operations.
Previous wording
The Company also has $4.1 million of mandatory redeemable trust preferred securities outstanding. Effective September 18, 2023, the interest rate on these floating rate junior subordinated debentures adjusts quarterly based on the three-month CME Term SOFR, as adjusted by the spread adjustment of 0.26161%, plus 2.650%. The rate paid as of March 31, 2026 and 2025 was 6.595% and 7.211%, respectively. The trust preferred debenture became callable, at the Company’s option, on June 17, 2009, and quarterly thereafter. They mature on June 17, 2034.
Current wording
The Company also has $4.1 million of mandatory redeemable trust preferred securities outstanding. Effective September 18, 2023, the interest rate on these floating rate junior subordinated debentures adjusts quarterly based on the three-month CME Term SOFR, as adjusted by the spread adjustment of 0.26161%, plus 2.650%. The rate paid as of June 30, 2026 and 2025 was 6.579% and 7.222%, respectively. The trust preferred debenture became callable, at the Company’s option, on June 17, 2009, and quarterly thereafter. They mature on June 17, 2034.
Previous wording
The Bank has opted into the community bank leverage ratio (tier 1 capital to average consolidated assets) (“CBLR”) framework, with a minimum requirement of 9% for institutions under $10 billion in assets. Such institutions meeting that requirement may elect to utilize the CBLR in lieu of the general applicable risk-based capital requirements under Basel III. Such institutions that meet the CBLR and certain other qualifying criteria will automatically be deemed to be well-capitalized.
Current wording
The Company and the Bank have determined the organization is a qualifying banking organization and the Bank has opted into the CBLR framework as of June 30, 2026. Such institutions meeting that requirement may elect to utilize the CBLR in lieu of the general applicable risk-based capital requirements under Basel III. Such institutions that meet the CBLR and certain other qualifying criteria will automatically be deemed to be well-capitalized.
Previous wording
The following table sets forth the regulatory capital ratios for the Company as well as the regulatory requirements for March 31, 2026 and December 31, 2025.
Current wording
The following table sets forth the regulatory capital ratios for the Company as well as the regulatory requirements for June 30, 2026 and December 31, 2025. The Company elected to utilize the CBLR framework effective June 30, 2026. Therefore, June 30, 2026 capital ratios are presented under the CBLR framework, while December 31, 2025 capital ratios are presented under the traditional risk-based capital framework.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
(1) Weighted Average LTV based upon the most recent appraised values available.
Current report — wording carried from elsewhere
(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.
Current report — wording carried from elsewhere
(2)Net interest margin represents net interest income divided by average total interest-earning assets.
Current report — wording carried from elsewhere
(4)Excludes allowance for credit losses.
Current report — wording carried from elsewhere
Results of Operations Comparison for Six Months Ended June 30, 2026 and 2025