BCB BANCORP INC
For the period ended Sep 30, 2026. Filed Nov 6, 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.
Sep 30, 2026 · Filed Nov 6, 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 2026-06-30; filed 2026-08-10.
0001228454-26-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001228454-26-000012
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 150 previous paragraphs and 151 current paragraphs.
73 unchanged; 43 reworded; 33 added; 34 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 4 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 (33)
Current report
the Company’s ability to complete the sale of its remaining loans held for sale;
Current report
the planned sale of the Company’s cannabis business, which may not be completed in accordance with expected plans or the currently contemplated timeline, or at all, and may be disruptive to the Company and/or reduce the Company’s profitability in future periods;
Current report
our ability to complete our proposed reincorporation from New Jersey to Delaware, including our ability to receive shareholder approval of the proposed reincorporation, and our ability to realize the anticipated benefits of the proposed reincorporation;
Current report
changes in accounting principles and guidelines;
Current report
other economic, competitive, governmental, regulatory, geopolitical and technological factors affecting our operations, pricing and services; and
Current report
Executive Summary of Third Quarter Performance
Current report
During the third quarter of 2026, the Company executed several strategic initiatives designed to strengthen capital, improve asset quality, and enhance governance. The Company completed a $98.0 million underwritten public equity offering, which generated $91.4 million of net proceeds, and maintained well-capitalized regulatory capital levels throughout the quarter. The offering consisted of 12,650,000 shares of the Company’s common stock, including the full exercise of the underwriter’s option to purchase 1,650,000 additional shares, at a public offering price of $7.75 per share. The Company intends to use the net proceeds of this offering of common stock for general corporate purposes, including maintaining liquidity, funding working capital needs, supporting Bank capital including in connection with the expected disposition of identified potential problem loans, reducing debt, and maintaining the Company’s capital and liquidity ratios, and the capital and liquidity ratios of the Bank, at acceptable levels. Approximately $20 million of the proceeds was retained at the holding company, significantly enhancing holding company liquidity. At September 30, 2026, the Bank’s leverage capital ratio was 9.0 percent and the Company’s consolidated leverage capital ratio was 8.4 percent.
Current report
During the third quarter of 2026, the Bank completed a series of loan sales totaling $204.3 million of problem loans, the majority of which were risk-rated criticized or classified under the Bank’s internal risk rating system reflecting the results of the re-evaluation of the credit portfolio. The sold portfolio included commercial and multifamily real estate loans with an aggregate unpaid principal balance of approximately $179.7 million, commercial and industrial loans of approximately $14.6 million, and construction loans of approximately $10.0 million, resulting in a $42.3 million charge-off to the allowance for credit losses on loans. The Bank also transferred $70.2 million of cannabis loans, $29.8 million of commercial real estate loans, and $874 thousand of commercial and industrial loans to held-for-sale status and recorded a related $44.2 million charge-off to the allowance for credit losses on these loans to reflect these loans on the balance sheet at the lower of their cost or fair market value, given their held-for-sale status.
Current report
Total special mention and substandard loans were $198.9 million at September 30, 2026, compared to $367.4 million at June 30, 2026. The allowance for credit losses on loans held for investment as a percentage of non-accrual loans was 313.4 percent at September 30, 2026, compared to 73.5 percent at June 30, 2026 and 40.4 percent at September 30, 2025, while total non-accrual loans held for investment were $22.4 million at September 30, 2026,$61.2 million at June 30, 2026, and $93.5 million at September 30, 2025.
Current report
The Company reported a net loss attributable to common stockholders of $132.5 million for the third quarter of 2026, compared to a net loss of $14.8 million in the second quarter of 2026, and net income of $3.8 million for the third quarter of 2025. The Company’s loss per diluted share for the third quarter was ($6.92) compared to a loss per diluted share of ($0.85) in the preceding quarter. The Company had earnings per share of $0.22 in the third quarter of 2025. The net loss for the third quarter of 2026 was primarily driven by a $115.0 million provision for credit losses and the $59.9 million in valuation allowance established against the Company’s deferred tax asset which is reflected in the calculation of our income tax provision for the quarter.
Current report
Recent Developments
Current report
The Company strengthened its Board oversight through the appointment of two independent directors and continued the reorganization of its executive leadership team to better align governance, accountability, and strategic objectives. On October 7, 2026, the Company announced the appointment of Steven E. Gallotta and Denny Kim as independent directors of the Company and the Bank, and the appointment of Patricia M. Schaubeck as Executive Vice President, Chief Legal Officer and Corporate Secretary of the Company and the Bank, in connection with a reorganization of its legal department and executive leadership team.
Current report
In late October 2026, the Company announced a further reorganization of its executive team to better align the Bank’s leadership structure with its strategic priorities and the core experience and leadership strengths of these executives.
Current report
The Company’s Board of Directors has also approved a proposal to change the Company’s state of incorporation from New Jersey to Delaware, subject to shareholder approval and receipt of any applicable regulatory non-objection or approval and provision of certain regulatory notices, and the Company has called a special meeting of shareholders to be held on November 18, 2026, to consider the proposal.
Current report
The allowance for credit losses is established based upon the Company’s current estimate of expected lifetime credit losses. Determining the appropriate allowance requires significant judgment and ongoing evaluation of the loan portfolio. The Company estimates credit losses on a collective basis for loans with similar risk characteristics using a quantitative model supplemented by qualitative factor adjustments. Management applies judgment in evaluating qualitative factors, including, but not limited to, economic uncertainty, competitive, legal, regulatory, and business conditions, changes in credit concentrations, trends in collateral values, changes in the nature, volume, and composition of the loan portfolio, the volume and severity of past due and adversely classified loans, changes in the experience and expertise of management and lending personnel, changes in lending policies, underwriting standards, collection practices, charge-off and recovery efforts, the effectiveness of the credit review function, changes in borrower financial condition, and environmental and industry-specific conditions affecting borrowers and geographic areas where the Company has concentrations of credit exposure. Loans that no longer share similar risk characteristics with any portfolio segment are individually evaluated and excluded from the collectively assessed pools. Management performs periodic sensitivity analyses using available economic forecasts to evaluate the adequacy of the allowance for credit losses under varying economic scenarios.
Current report
Total cash and cash equivalents increased by $223.8 million, or 80.9 percent, to $500.3 million at September 30, 2026, from $276.6 million at December 31, 2025. The increase in cash was primarily due to proceeds from the loan sales and from the equity capital raise executed in the third quarter.
Current report
Gross loans receivable held for investment decreased by $475.0 million, or 17.4 percent, to $2.252 billion at September 30, 2026, from $2.727 billion at December 31, 2025 due to the loan sales, the transfer of certain loans to held-for-sale, payoffs, paydowns and charge-offs. Total loan decreases during the period included decreases of $287.2 million in commercial and multifamily loans, $65.2 million in cannabis loans, $55.1 million in construction loans, $42.3 million in commercial business loans, $12.0 million in 1-4 family residential loans, $10.4 million in business express loans, and $2.8 million in home equity and consumer loans. The Bank had $67.6 million in loans held for sale at September 30, 2026.
Current report
Stockholders’ equity decreased by $58.2 million, or 19.1 percent, to $246.1 million at September 30, 2026, from $304.3 million at December 31, 2025. The decline was primarily attributable to the Company’s year-to-date net loss, partially offset by proceeds from the aforementioned capital raise.
Current report
The allowance for credit losses on loans of $70.3 million, as of September 30, 2026, increased by $25.3 million, or 56.2 percent, compared to June 30, 2026, and increased by $36.6 million, or 108.6 percent, compared to December 31, 2025. The $25.3 million increase from June 30, 2026 was primarily driven by higher reserves in the commercial and multifamily real estate portfolio following a comprehensive review conducted by the Bank’s lending and credit teams. The $36.6 million increase compared to December 31, 2025, was driven by a $136.7 million provision expense for the first nine months of 2026 that was partially offset by $100.2 million in net charge-offs. The allowance for credit losses was 152.4 percent of classified loans held for investment at September 30, 2026, compared to 28.0 percent of classified loans at June 30, 2026, and 17.9 percent of classified loans at December 31, 2025, respectively.
Current report
As part of its strategy to meaningfully de-risk the balance sheet, the Bank completed a series of loan sales totaling $204.3 million of problem loans, the majority of which were risk-rated criticized or classified under the Bank’s internal risk rating system. The sold portfolio included commercial and multifamily real estate loans with an aggregate unpaid principal balance of approximately $179.7 million, commercial and industrial loans of approximately $14.6 million, and construction loans of approximately $10.0 million, resulting in a $42.3 million charge-off to the allowance for credit losses on loans.
Current report
The Bank also transferred $70.2 million of cannabis loans, $29.8 million of commercial real estate loans, and $874 thousand of commercial and industrial loans to held-for-sale status and recorded a related $44.2 million charge-off to the allowance for credit losses on loans based on the lower of cost or market. Excluding loans sold or transferred to held-for-sale status, charge-offs were primarily attributable to $3.2 million in the commercial business portfolio and $1.0 million in the Business Express loan portfolio.
Current report
Loans receivable classified as Substandard totaled $46.1 million at September 30, 2026, compared to $188.7 million at December 31, 2025, and $228.3 million at September 30, 2025. The decreases were primarily attributed to charge-offs pertaining to the aforementioned loan sales and transfer to held-for-sale, payoffs and paydowns, as well as upgrades in borrower risk ratings. The Bank’s ten largest loan relationships range in size from $26.1 million to $49.8 million, all of which were current as of September 30, 2026. There were two loans classified as substandard with unpaid principal balances over $5.0 million aggregating to $23.0 million with the largest being $15.1 million.
Current report
Total loans receivable held for investment greater than 30 days past due were $52.2 million, or 2.32 percent of gross loans held for investment, at September 30, 2026, as compared to $99.1 million, or 3.64 percent of gross loans held for investment, at December 31, 2025, and $174.0 million, or 6.16 percent of gross loans held for investment at September 30, 2025.
Current report
Interest income decreased by $4.7 million, or 10.8 percent, to $38.4 million for the third quarter of 2026 from $43.0 million for the third quarter of 2025. The average balance of interest-earning assets decreased $302.7 million, or 9.3 percent, to $2.962 billion for the third quarter of 2026 from $3.265 billion for the third quarter of 2025. The average yield decreased 9 basis points to 5.14 percent for the third quarter of 2026 from 5.23 percent for the third quarter of 2025.
Current report
Non-interest income increased by $2.4 million to $5.2 million for the third quarter of 2026, compared to $2.7 million for the third quarter of 2025. The increase in total non-interest income was primarily attributable to a $3.3 million gain on the sale of in the third quarter of the cannabis-related OREO, offset by a decrease in gains/losses on equity securities of $427 thousand. Service charges and fee income also declined by $305 thousand.
Current report
Non-interest expense increased by $5.2 million, or 31.6 percent, to $21.8 million for the third quarter of 2026 compared to $16.6 million for the third quarter of 2025. The increase was driven by professional fees, salaries and benefits and other expenses which increased $2.1 million, $1.6 million and $1.4 million, respectively. The increase in professional fees and other expenses can be attributed to the expenses associated with the aforementioned reincorporation in Delaware, additional corporate governance matters, and loan sales. The increase in salaries and benefits included $734 thousand in severance costs recognized during the period.
Current report
The income tax provision for the third quarter of 2026 was $23.5 million compared to $1.5 million for the third quarter of 2025. The substantial change was primarily attributable to a non-cash charge of $59.9 million related to the establishment of a full valuation allowance against the Company’s deferred tax assets. The valuation allowance reflects management’s assessment of the Company’s recent operating results including losses associated with loan sale activity and loans transferred to held-for-sale at the lower of cost or market.
Current report
The provision for credit losses for the first nine months of 2026 was $136.7 million compared to $29.8 million for the same period in 2025. Net charge-offs for the first nine months of 2026 were $100.2 million compared to $26.8 million for the same period in 2025. The higher provision primarily reflected elevated loan losses recognized during the year and increased reserves within the commercial and industrial and commercial and multifamily loan portfolios. Reserve levels were increased following detailed credit reviews conducted by the lending and credit teams, resulting in the allowance for commercial and industrial loans increasing from $6.7 million at December 31, 2025 to $16.0 million at September 30, 2026, and the allowance for commercial and multifamily loans increasing from $12.1 million to $38.7 million over the same period.
Current report
Non-interest income increased by $191 thousand to $6.8 million for the first nine months of 2026 compared to $6.6 million for the same period in 2025. The increase in total non-interest income was primarily attributable to a $3.3 million gain on the sale of OREO and $412 thousand more in income on Bank Owned Life Insurance (“BOLI”), partially offset by an increase in loss on sale of loans of $2.6 million and an increase in losses on equity securities of $545 thousand.
Current report
The income tax provision for the first nine months of 2026 was $21.7 million compared to an income tax benefit of $386 thousand for the same period in 2025. The substantial change was primarily attributable to a non-cash charge of $59.9 million related to the establishment of a full valuation allowance against the Company’s deferred tax assets. The valuation allowance reflects management’s assessment of the Company’s recent operating results including losses associated with loan sale activity and loans transferred to held-for-sale at the lower of cost or market.
Current report
During the nine months ended September 30, 2026, the Company’s liquidity was principally affected by the loan sales completed in the third quarter, the Company’s September 2026 public offering of common stock, and decreases in deposits and borrowings. In the third quarter, the Bank sold $204.3 million of problem loans and transferred $100.9 million of loans to held-for-sale status, and loans held for sale totaled $67.6 million at September 30, 2026.
Current report
Cash and cash equivalents increased $223.8 million, or 80.9 percent, to $500.3 million at September 30, 2026, from $276.6 million at December 31, 2025. The increase in cash was primarily due to proceeds from the loan sales and from the equity capital raise executed in the third quarter. Deposits decreased $64.4 million, or 2.4 percent, to $2.609 billion at September 30, 2026, from $2.674 billion at December 31, 2025, with brokered deposits decreasing $80.5 million. FHLB advances decreased by $135.0 million to $100.0 million at September 30, 2026, from $235.0 million at December 31, 2025, due to maturities and paydowns. The Company’s September 2026 public offering generated $91.4 million of net proceeds, and approximately $20 million of the proceeds was retained at the holding company. In June 2026, the Company suspended the payment of dividends on its common and preferred stock; cash dividends paid during the nine months ended September 30, 2026 were $2.7 million on common stock and $0.5 million on preferred stock. The Company’s Dividend Reinvestment and Stock Purchase Plan was also suspended effective August 6, 2026.
Current report
The Company’s recurring cash requirements at the holding company level primarily consist of interest expense on subordinated debentures. At September 30, 2026, the Company had $40.0 million of subordinated debentures outstanding and $4.1 million of trust preferred securities. Holding company cash needs are routinely satisfied by dividends collected from the Bank, and the Bank’s ability to pay dividends to the Company is subject to New Jersey banking law. Approximately $20 million of the proceeds from the September 2026 public offering was retained at the holding company, significantly enhancing holding company liquidity.
Removed paragraphs (34)
Previous report
changes in our ability to access cost-effective funding;
Previous report
Executive Summary of Second Quarter Performance
Previous 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.
Previous 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.
Previous report
Allowance for Credit Losses on Off-Balance Sheet Commitments
Previous 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.
Previous report
Allowance for Credit Losses on Available-for-Sale Securities
Previous 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.
Previous report
Accrued Interest Receivable
Previous 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.
Previous report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
The following table summarizes the Company’s classified loans greater than $5 million at June 30, 2026 (in thousands):
Previous report
(1) Weighted Average LTV based upon the most recent appraised values available.
Previous report
(2) Borrower has two loans that are classified and collectively exceed $5 million.
Previous report
(3) Borrower has ten loans that are classified and collectively exceed $5 million.
Previous 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.
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(1) Weighted Average LTV based upon the most recent appraised values available.
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(2) Balance includes outstanding and committed amounts.
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(3) LTV adjusted to account for commercial business loans with no credit for UCC filing.
Previous report
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 report
The provision for credit losses was $19.0 million for the second quarter of 2026 compared to $4.9 million for the second quarter of 2025. The increase was primarily driven by higher reserve requirements within the commercial business loan portfolio. Thecommercial business portfolio generated net charge-offs of $824 thousand in the first quarter of 2026, increasing to $5.8 million in the second quarter. In addition, the Bank determined that a full recovery is no longer expected on a previously charged-off $6.3 million commercial business relationship. Reflecting these developments and broader credit trends observed within thecommercial business portfolio, management separately evaluated the portfolio under its qualitative reserve framework during the second quarter, resulting in a $10.8 million increase to the allowance established for the portfolio. Additional details are provided in the Asset Quality portion of Management’s Discussion and Analysis of Financial Condition and Results of Operation.
Previous report
Non-interest income decreased by $2.5 million to a loss of $470 thousand for the second quarter of 2026, compared to income of $2.1 million for the second quarter of 2025. The decrease in total non-interest income was primarily attributable to a $2.6 million loss on a loan transferred to held for sale, compared to no such loss in the prior year period, and a $108 thousand increase in mark-to-market losses on investment securities, partially offset by a $131 thousand increase in Bank Owned Life Insurance (“BOLI”) income.
Previous report
Non-interest expense increased by $6.9 million, or 45.0 percent, to $22.1 million for the second quarter of 2026 compared to $15.3 million for the second quarter of 2025. The increase was primarily driven by a $5.3 million non-cash goodwill impairment charge, a $1.7 million increase in salaries and benefits expense, and $273 thousand increase in advertising and promotion expenses. The increase in salaries and benefits included $814 thousand severance costs related to the departure of our former Chief Executive Officer and certain other employees, as well as higher compensation costs necessary to attract and retain qualified staff. These increases were partially offset by a $205 thousand decrease in professional fees.
Previous report
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 report
The provision for credit losses decreased by $4.0 million to $21.8 million for the first six months of 2026 from $25.7 million for the same period in 2025. The elevated provision in the prior-year period reflected a previously disclosed $13.7 million specific reserve related to a $34.2 million cannabis-sector lending relationship. The 2026 provision was primarily driven by increased reserve requirements within the commercial business loan portfolio. During the first six months of 2026, the Company experienced $10.5 million in net charge-offs compared to $9.9 million in net charge-offs for the same period in 2025.
Previous report
Non-interest income decreased by $2.2 million to $1.6 million for the first six months of 2026, compared to $3.9 million for the same period in 2025. The decrease was primarily attributable to a $2.6 million loss on a loan transferred to held for sale in 2026, compared to no such loss in the prior year period. Partially offsetting this was a $469 thousand increase in income from Bank Owned Life Insurance (“BOLI”).
Previous report
The income tax benefit decreased by $157 thousand or 8.1 percent, to an income tax benefit of $1.8 million for the first six months of 2026 when compared to a $1.9 million income tax benefit for the same period in 2025. While the pretax loss increased to $11.6 million from $6.7 million in the prior period, the income tax credit declined primarily because the $5.3 million non-cash goodwill impairment charge recognized in 2026 is not deductible for income tax purposes and therefore did not generate a corresponding tax benefit.
Previous report
At its June 2026 meeting, the Company’s Board of Directors approved the suspension of both common and preferred dividends in order to help preserve capital at the Bank and liquidity at the holding company. Additionally, on July 7, 2026, 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 announcing that the Plan has been suspended in accordance with its terms, effective August 6, 2026.
Reworded paragraphs (43)
Previous wording
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 the Federal budget stalemate in Congress, higher tariffs imposed by the Trump administration, higher inflation levels, current 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. Also significant are our ability to manage liquidity and capital in a rapidly changing and unpredictable market and our level of non-performing assets and the costs associated with resolving any problem loans including litigation and other costs. Other factors that could cause future results to vary materially from current management expectations as reflected in our forward-looking statements include, but are not limited to:
Current wording
The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the global impact of the United States military conflict with Iran, the periodic Federal budget and funding stalemates in Congress, the ongoing impact of global tariffs imposed by the Trump administration, higher inflation levels, changes in market interest rates and general economic concerns, all of which could impact our customers’ businesses and the economy and could cause increased loan delinquencies, a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations. Also significant are our ability to manage liquidity and capital in a rapidly changing and unpredictable market and our level of non-performing assets and the costs associated with resolving any problem loans including litigation and other costs. Other factors that could cause future results to vary materially from current management expectations as reflected in our forward-looking statements include, but are not limited to:
Previous wording
the global economic trends and geopolitical risks, including the ongoing conflicts in Ukraine and the Middle East, and changes in the rate of investment or economic growth, including as a result of sanctions, tariffs or other measures;
Current wording
the global economic trends and geopolitical risks, including the ongoing conflicts in the Middle East, and changes in the rate of investment or economic growth, including as a result of sanctions, tariffs or other measures;
Previous wording
unfavorable economic conditions in the United States generally and particularly in our primary market area and those of our customers;
Current wording
unfavorable economic conditions in the United States generally and particularly in our primary market area and those of our customers, including the periodic Federal budget and funding stalemates in the U.S. Congress;
Previous wording
the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of our loan and investment securities portfolios;
Current wording
the impact of changes in interest rates and the credit quality and strength of underlying collateral;
Previous wording
legislative and regulatory changes, including but not limited to, increases in Federal Deposit Insurance Corporation (“FDIC”) insurance rates;
Current wording
legislative and regulatory changes, including but not limited to, increases in FDIC insurance rates;
Previous wording
changes in the securities or secondary mortgage markets;
Current wording
changes in the securities or secondary loan markets;
Previous wording
civil unrest in the communities that we serve; and
Current wording
civil unrest in the communities that we serve;
Previous wording
other factors discussed elsewhere in this report, 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, in Part II, Item 1A of our quarterly reports on Form 10-Q, and our other periodic reports that we file with the SEC.
Current wording
other factors discussed elsewhere in this report, including under “Risk Factors” in Part II, Item 1A.
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 June 30, 2026, we had $3.118 billion in consolidated assets, $2.636 billion in deposits and $291.9 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 the Bank. Our executive office is located at 104-110 Avenue C, Bayonne, New Jersey 07002. At September 30, 2026, we had $3.021 billion in consolidated assets, $2.609 billion in deposits and $246.1 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 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.
Current wording
The Bank opened for business on November 1, 2000, as Bayonne Community Bank, a New Jersey chartered commercial bank. The Bank changed its name from Bayonne Community Bank to BCB Community Bank in April 2007. At September 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 Federal Home Loan Bank (“FHLB”) System.
Previous wording
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 wording
The Company completed a comprehensive re-evaluation of its credit portfolios in the third quarter of 2026, including its commercial and multifamily real estate 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 results of these evaluations have been reflected in the Company’s loan loss reserving decisions for the third quarter and resulted in an increase in the allowance for credit losses to address losses embedded in the portfolios.
Previous wording
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 wording
As of September 30, 2026, the Company had total consolidated assets of $3.021 billion, a decrease of $258.4 million, or 7.9 percent, from $3.279 billion at December 31, 2025, total consolidated deposits of $2.609 billion, a decrease of $64.4 million, or 2.4 percent, from December 31, 2025, and total consolidated stockholders’ equity of $246.1 million, compared to $304.3 million at December 31, 2025. The decrease in total assets was driven primarily by a decrease in net loans primarily due to loans sales, offset by an increase in cash from the sale proceeds and the capital raise.
Previous wording
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 wording
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 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.
Previous 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.
Current wording
See further discussion of critical accounting estimate in Note 6 of this Form 10-Q and in Note 5 our Annual Report on Form 10-K for the year ended December 31,2025.
Previous wording
See Note 10 – Goodwill and Other Intangible Assets of this Form 10-Q and in our Annual Report on Form 10-K for additional information on the Company’s goodwill and intangibles.
Current wording
See Note 9 – Goodwill and Other Intangible Assets of this Form 10-Q and Note 14 in our Annual Report on Form 10-K for additional information on the Company’s goodwill and intangibles.
Previous wording
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 wording
Total assets decreased by $258.4 million, or 7.9 percent, to $3.021 billion at September 30, 2026, from $3.279 billion at December 31, 2025. The decrease in total assets was mainly related to a decrease in net loans primarily due to our loan sales in the third quarter, offset by an increase in cash.
Previous 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.
Current wording
The allowance for credit losses on loans increased $36.6 million to $70.3 million, or 313.4 percent of non-accruing loans and 3.12 percent of gross loans held for investment, at September 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 held for investment, at December 31, 2025.
Previous 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.
Current wording
Total investment securities decreased by $594 thousand, or 0.4 percent, to $135.0 million at September 30, 2026, from $135.6 million at December 31, 2025, representing current year sales and paydowns, offset by current year purchases.
Previous 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.
Current wording
Deposits decreased by $64.4 million, or 2.4 percent, to $2.609 billion at September 30, 2026, from $2.674 billion at December 31, 2025. Brokered deposits, certificates of deposit accounts and savings accounts decreased $80.5 million, $18.0 million and $14.6 million, respectively, and were offset by increases in transaction accounts and money market accounts of $27.1 million and $21.5 million, respectively.
Previous 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.
Current wording
FHLB Advances decreased by $135.0 million to$100.0 millionat September 30, 2026, from $235.0 million at December 31, 2025, due to maturities and paydowns. The weighted average interest rate of FHLB advances was 4.03 percent at September 30, 2026, and 4.53 percent at December 31, 2025. The weighted average maturity of FHLB advances as of September 30, 2026, was less than ninety days. The interest rate of the Company’s subordinated debt balances was 9.25 percent at September 30, 2026, and at December 31, 2025.
Previous wording
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 wording
Management also completed a comprehensive review of the commercial and multifamily real estate portfolio, resulting in additional reserves for that segment. As a result of this evaluation, the Bank increased the allowance associated with the commercial and multifamily portfolio by $24.8 million. For reference and as presented in Note 6, $74.7 million of the $115.0 million of loan loss provision expense booked in the third quarter of 2026 was attributed to the build-up of loan loss reserves for the commercial and multifamily portfolio.
Previous wording
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 wording
During the three months ended September 30, 2026, there were $90.9 million of charge-offs and $1.2 million of recoveries, compared to $17.5 million of charge-offs and $559,000 in recoveries for the three months ended September 30, 2025.
Previous wording
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 wording
For the nine months ended September 30, 2026, there were $102.5 million of charge-offs and $2.3 million recoveries, compared to $27.7 million of charge-offs and $920,000 of recoveries for the nine months ended September 30, 2025.
Previous wording
As of June 30, 2026, loans classified as substandard have specific reserves of $5.1 million.
Current wording
As of September 30, 2026, loans classified as substandard have specific reserves of $4.6 million.
Previous wording
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 wording
Loans receivable classified as Special Mention totaled $152.7 million at September 30, 2026, compared to $170.8 million at December 31, 2025, and $220.8 million at September 30, 2025.
Previous wording
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 wording
Total Substandard and Special Mention loans were $198.9 million, or 8.84 percent of gross loans held for investment, at September 30, 2026, as compared to $359.5 million, or 13.19 percent of gross loans held for investment, at December 31, 2025.
Previous wording
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 wording
The Bank had non-accrual loans totaling $22.4 million, or 1.0 percent of gross loans held for investment, at September 30, 2026, as compared to $63.3 million, or 2.32 percent of gross loans held for investment at December 31, 2025, and $93.5 million or 3.31 percent of gross loans held for investment at September 30, 2025. The year over year decrease was primarily due to the sale of $39.1 million held for investment non-accrual loans and the transfer of $28.2 million non-accrual loans to held-for-sale.
Previous wording
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 wording
The allowance for credit losses on loans held for investment was 313.4 percent of non-accrual loans at September 30, 2026, compared to 53.3 percent of non-accrual loans at December 31, 2025, and 40.4 percent at September 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.
Previous 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.
Current wording
The Company reported a net loss of $132.5 million for the quarter ended September 30, 2026, compared to net income of $4.3 million for the quarter ended September 30, 2025. The net loss was primarily due to a $110.9 million increase in loan loss provisioning. The net loss also reflects a $21.9 million increase in tax provision, a $2.1 million increase in professional fees and a $1.6 million increase in salaries and employee benefits.
Previous 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.
Current wording
Net interest income decreased by $1.1 million, or 4.7 percent, to $22.6 million for the third quarter of 2026 from $23.7 million for the third quarter of 2025 reflecting the overall decline in the balance sheet offset in part by a modest improvement in our interest rate spread and net interest margin. The net interest margin was 3.03 percent for the third quarter of 2026 compared to 2.88 percent for the third quarter of 2025. The increase in the net interest margin compared to the third quarter of 2025 was the result of the decrease in the average cost of interest-bearing liabilities exceeding the decline in the average rate earned on earning assets.
Previous 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.
Current wording
Interest expense decreased by $3.6 million to $15.8 million for the third quarter of 2026 from $19.3 million for the third quarter of 2025. The decrease resulted from a decrease in the average rate paid on interest-bearing liabilities of 29 basis points to 2.77 percent for the third quarter of 2026 from 3.06 percent for the third quarter of 2025, while the average balance of interest-bearing liabilities decreased by $249.6 million to $2.256 billion for the third quarter of 2026 from $2.505 billion for the third quarter of 2025.
Previous 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.
Current wording
The provision for credit losses was $115.0 million for the third quarter of 2026 compared to $4.1 million for the third quarter of 2025. The increase was primarily driven by elevated net charge-offs recognized during the quarter related to loan sale transactions and the transfer of loans to held-for-sale status, as well as higher loan loss reserves for the commercial and multifamily portfolio resulting from a detailed loan review. During the third quarter of 2026, the Company recognized $89.7 million in net charge-offs compared to $16.9 million in net charge-offs in the third quarter of 2025. The Bank had non-accrual loans totaling $22.4 million, or 1.00 percent of gross loans held for investment, at September 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 $70.3 million, or 3.12 percent of gross loans, at September 30, 2026, and $33.7 million, or 1.24 percent of gross loans, at December 31, 2025. See “Asset Quality”.
Previous wording
Results of Operations Comparison for Six Months Ended June 30, 2026 and 2025
Current wording
Results of Operations Comparison for Nine Months Ended September 30, 2026 and 2025
Previous wording
Net income decreased by $5.1 million to a net loss of $9.9 million for the first six months of 2026, compared to a net loss of $4.8 million for the first six months of 2025. The Company’s loss per diluted share for the six months ended June 30, 2026 was ($0.60) compared to a loss per diluted share of ($0.33) for the six months ended June 30, 2025. The increased net loss was primarily attributable to a $5.3 million non-cash goodwill impairment charge, a $2.6 million loss on the sale of loans and a $2.6 million increase in salaries and employee benefits.
Current wording
Net loss for the first nine months of 2026 was $142.3 million compared to a net loss of $498 thousand for the first nine months of 2025. The Company’s loss per diluted share for the nine months ended September 30, 2026 was ($7.98) compared to a loss per diluted share of ($0.11) for the nine months ended September 30, 2025. The increased net loss was primarily attributable to the Bank recording $106.9 million more in loan loss provisioning and recording $13.0 million more in non-interest expense.
Previous wording
Net interest margin was 2.99 percent for the first six months of 2026, compared to 2.70 percent for the first six months of 2025. The increase in the net interest margin compared to the prior period was the result of a decrease in the cost of the Company’s interest-bearing liabilities, by 35 basis points to 2.90 percent and an increase in the rate earned on earning assets, by 1 basis point to 5.23 percent.
Current wording
Net interest income was $68.8 million for each of the nine months ended September 30, 2026, and the nine months ended September 30, 2025. The 2026 nine-month period reflects the impact of the overall decline of the balance sheet offset by the benefit of the improvement in our interest rate spread and net interest margin. Net interest margin was 3.00 percent for the first nine months of 2026 compared to a net interest margin of 2.76 percent for the first nine months of 2025. The increase in the net interest margin compared to the prior period was the result of a decrease in the cost of the Company’s interest-bearing liabilities, by 33 basis points to 2.86 percent offset by a decrease in the rate earned on earning assets, by 2 basis points to 5.20 percent.
Previous wording
Net interest income increased $1.1 million for the first six months of 2026, as interest expense decreased by $7.6 million, or 17.9 percent, to $34.7 million from $42.3 million for the first six months of 2025 and interest income decreased $6.5 million, from $87.4 million to $80.9 million for the same period. The average balance of interest-earning assets decreased $257.1 million, or 7.6 percent, to $3.118 billion from $3.375 billion, while the average yield on interest-earning assets increased 1 basis point to 5.23 percent from 5.22 percent. The decline in average interest-earning assets was primarily due to a $279.5 million decrease in average loans, partially offset by a $19.2 million increase in average investment securities. The decrease in interest expense was driven by declines in interest expense on borrowings and deposits of $4.0 million and $3.6 million, respectively. Average borrowings decreased $201.4 million, while the average rate paid on borrowings increased by 70 basis points to 5.56 percent. Average deposits declined $10.1 million and the average rate paid on deposits declined 32 basis points to 2.59 percent.
Current wording
Net interest income for the first nine months of 2026 decreased $37 thousand, as interest income decreased by $11.2 million, or 8.6 percent, to $119.2 million compared to $130.4 million for the first nine months of 2025 and interest expense decreased $11.1 million to $50.5 million for the first nine months of 2026, compared to $61.6 million for the first nine months of 2025. The average balance of interest-earning assets decreased $272.5 million, or 8.2 percent, to $3.065 billion for the first nine months of 2026 compared to $3.338 billion for the first nine months of 2025. The average yield on interest-earning assets decreased 2 basis points to 5.20 percent for the first nine months of 2026 compared to 5.22 percent for the first nine months of 2025. The decline in average interest-earning assets was primarily due to a $283.1 million decrease in average loans, partially offset by a $17.0 million increase in average investment securities. The decrease in interest expense was driven by declines in interest expense on borrowings and deposits of $5.8 million and $5.3 million, respectively. Average borrowings decreased $194.2 million, while the average rate paid on borrowings increased by 74 basis points to 5.60 percent. Average deposits declined $30.1 million and the average rate paid on deposits declined 29 basis points to 2.58 percent.
Previous wording
Non-interest expense increased by $7.8 million, or 25.9 percent, to $37.7 million for the first six months of 2026 from $29.9 million for the same period in 2025. The increase was primarily driven by a $5.3 million non-cash goodwill impairment charge and a $2.6 million increase in salaries and employee benefits expense, which included $814 thousand severance costs related to the departure of our former Chief Executive Officer and certain other employees, as well as higher compensation costs necessary to attract and retain qualified staff. Advertising expenses and OREO expenses increased $294 thousand and $280 thousand, respectively. Partially offsetting these increases were decreases in professional fees, director fees and regulatory assessments of $270 thousand, $241 thousand and $98 thousand, respectively.
Current wording
Non-interest expense increased by $13.0 million, or 27.9 percent, to $59.5 million for the first nine months of 2026 from $46.5 million for the same period in 2025. The increase was driven by a $5.3 million non-cash goodwill impairment charge and a $4.2 million increase in salaries and employee benefits expense. The increase in salaries and benefits included $1.5 million in severance costs recognized during the first nine months of the year. Professional fees, other expenses, advertising expenses and OREO expenses increased $1.8 million, $1.2 million, $417 thousand and $454 thousand, respectively. Partially offsetting these increases were decreases in director fees and regulatory assessments of $302 thousand and $277 thousand, respectively.
Previous wording
The Company’s primary sources of funds to satisfy its objectives are net growth in deposits (primarily retail), principal and interest payments on loans and investment securities, proceeds from the sale of originated loans and FHLB and other borrowings. The scheduled amortization of loans is a predictable source of funds. Deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition. The Company has other sources of liquidity if a need for additional funds arises, including unsecured overnight lines of credit and other collateralized borrowings from the Federal Reserve Bank Discount Window, the FHLB and other correspondent banks. Our Asset / Liability Management Committee is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs of our customers as well as unanticipated contingencies.
Current wording
The Company has other sources of liquidity if a need for additional funds arises, including unsecured overnight lines of credit and other collateralized borrowings from the Federal Reserve Bank Discount Window, the FHLB and other correspondent banks. Our Asset / Liability Management Committee is responsible for establishing and monitoring our liquidity targets and strategies in order to ensure that sufficient liquidity exists for meeting the borrowing needs of our customers as well as unanticipated contingencies.
Previous 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.
Current wording
At September 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 $143.4 million at September 30, 2026 ascompared to $278.2 million at December 31, 2025.
Previous 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.
Current wording
At September 30, 2026, the Company had the ability to obtain additional funding of $509.3 million from the FHLB and $184.3 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 $862.7 million at September 30, 2026. Based upon historical experience data, management estimates that a significant portion of such deposits will remain with the Company.
Showing the first 40 of 43 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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 — wording carried from elsewhere
The Company’s primary sources of funds to satisfy its objectives are net growth in deposits (primarily retail), principal and interest payments on loans and investment securities, proceeds from the sale of originated loans and FHLB and other borrowings. The scheduled amortization of loans is a predictable source of funds. Deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.