BCB Suspends Dividends After $14.8 Million Loss
The New Jersey community-bank holding company swung to a $0.85-a-share loss as C&I provisioning hit $19.0 million and the net interest margin recovered to 3.03%.
BCB Bancorp (BCBP), the holding company for BCB Community Bank, reported a net loss of $14.8 million, or $0.85 a share, in the second quarter of 2026, reversing first-quarter net income of $4.9 million, or $0.26 a share.
The reversal was driven by a $19.0 million provision for credit losses, up from $2.8 million in the first quarter. The company also recorded about $5.3 million of goodwill write-off, the only intangible on the balance sheet.
President and Chief Executive Officer Thomas O’Brien, in his first 60 days, said the bank suspended dividends on common and preferred shares to retain holding-company liquidity and build capital at the bank. The board had declared a $0.08-a-share quarterly cash dividend in the first quarter.
The provision was concentrated in commercial and industrial lending. Of the $19.0 million build, $16.7 million was dedicated to the C&I portfolio, excluding Business Express loans. C&I losses, excluding Business Express, rose to approximately $5.8 million in the second quarter from $0.8 million in the first quarter. Chief Financial Officer Jawad Chaudhry said the company no longer expects a major recovery in that portfolio. Consultants O’Brien brought in scanned the book, and their feedback was used under the company’s CECL qualitative framework.
Business Express, a smaller individual-loan book that has been a source of loss over the past two years, was reviewed more comprehensively, including site visits and FICO and payment-history checks. Year-to-date 2026 losses in that portfolio were $1.1 million versus $10 million in 2025; reserve coverage was 15%. O’Brien said the C&I review was about halfway through and that more work remained in commercial real estate.
Non-accrual loans were $72.0 million at June 30, 2026, up from $59.8 million at March 31. The allowance as a percentage of non-accrual loans rose to 62.5% from 54.5%. Criticized and classified loans declined to $367.4 million from $403.0 million at March 31. O’Brien said the absolute level of criticized and classified loans, while down a little, was still “pretty shockingly high.” The cannabis loan portfolio was $69 million to $70 million at quarter-end and, to Chaudhry’s knowledge, was not in the past-due bucket.
Net interest margin expanded 8 bps to 3.03% from 2.95% in the first quarter. Total cost of interest-bearing liabilities fell 6 bps to 2.87%. Yield on interest-earning assets rose 4 bps to 5.25%. Chaudhry said operating revenue was about $25 million a quarter across the five quarters displayed in the press release and that elevated credit costs had been eating into profitability. The efficiency ratio deteriorated to 96.8% from 62.4% in the first quarter.
Total deposits were $2.636 billion at June 30, 2026, down from $2.672 billion at March 31. Total loans receivable, net of the allowance, fell to $2.588 billion from $2.656 billion at March 31. O’Brien said the bank continues to have a healthy capital base, that the challenge is the absolute level of double leverage at the holding company, and that he has not gone to the board with capital recommendations. He said the company will be in a position to have some meaningful clarity around Labor Day, with the goal of cleansing the financial statements of uncertainty that has existed for a few years and providing a path into the fourth quarter and calendar and fiscal year 2027.
The board determined to change the state of incorporation to Delaware and to eliminate staggered director terms, subject to shareholder approval, to bring the company into a more contemporary corporate structure. O’Brien said the financial restructuring work is ongoing, with a goal of having everything done and announced in the third quarter. He said operating expenses excluding the goodwill charge and severance will be elevated for a couple of quarters because of consultants and legal expenses, and that if the work is done right, they should normalize by 2027.
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