BCB BANCORP INC - Quarter Report: 2011 March (Form 10-Q)

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

form10q-116289_bcb.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011.

	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-50275

BCB Bancorp, Inc.

(Exact name of registrant as specified in its charter)

New Jersey		26-0065262
(State or other jurisdiction of incorporation or organization)		(IRS Employer I.D. No.)

104-110 Avenue C Bayonne, New Jersey		07002
(Address of principal executive offices)		(Zip Code)

(201) 823-0700

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. T Yes o No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and larger accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). o Yes T No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 13, 2011, BCB Bancorp, Inc., had 9,383,276 shares of common stock, no par value, outstanding.

BCB BANCORP INC. AND SUBSIDIARIES

INDEX

	Page
PART I. CONSOLIDATED FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Consolidated Statements of Financial Condition as of March 31, 2011 and December 31, 2010 (unaudited)	1

Consolidated Statements of Income for the three months ended March 31, 2011 and March 31, 2010 (unaudited)	2

Consolidated Statement of Changes in Stockholders’ Equity for the three months ended March 31, 2011 (unaudited)	3

Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and March 31, 2010 (unaudited)	4

Notes to Unaudited Consolidated Financial Statements	5

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3. Quantitative and Qualitative Disclosures about Market Risk	27

Item 4T. Controls and Procedures	28

PART II. OTHER INFORMATION	29

Item 1. Legal Proceedings	29

Item 1A. Risk Factors	29

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3. Defaults Upon Senior Securities	29

Item 4. Removed and Reserved	29

Item 5. Other Information	29

Item 6. Exhibits	29

Index

PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Financial Condition

(In Thousands, Except Share and Per Share Data, Unaudited)

	March 31, 2011			December 31, 2010

ASSETS
Cash and amounts due from depository institutions	$	23,975		$	22,065
Interest-earning deposits		42,248			99,062

Total Cash and Cash equivalents		66,223			121,127


Securities available for sale		1,257			1,098
Securities held to maturity, fair value $227,508 and $166,785; respectively		226,208			165,572
Loans held for sale		1,739			5,572
Loans receivable, net of allowance for loan losses of $8,387 and $8,417; respectively		765,397			773,101
Premises and equipment		12,625			11,359
Property held for sale		1,017			1,017
Federal Home Loan Bank of New York stock		6,723			6,723
Interest receivable		5,587			5,203
Real estate owned		3,431			3,602
Deferred income taxes		5,842			5,785
Other assets		3,818			6,729

Total Assets	$	1,099,867		$	1,106,888


LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES
Non-interest bearing deposits	$	70,941		$	69,471
Interest bearing deposits		807,930			816,817

Total deposits		878,871			886,288
Long-term debt		114,124			114,124
Other Liabilities		6,891			7,502

Total Liabilities		999,886			1,007,914


STOCKHOLDERS’ EQUITY
Common stock, stated value $0.064; 20,000,000 shares authorized; 10,163,914 and 10,144,830 shares respectively, issued; 9,397,647 and 9,383,695 shares, respectively, outstanding		649			649
Paid-in capital		85,499			85,327
Treasury stock, at cost, 766,267 and 761,135 shares, respectively		(10,814	)		(10,760	)
Retained Earnings		24,546			23,753
Accumulated other comprehensive income		101			5

Total Stockholders’ equity		99,981			98,974


Total Liabilities and Stockholders’ equity	$	1,099,867		$	1,106,888

See accompanying notes to consolidated financial statements.

Index

BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Income

(In Thousands, except for per share amounts, Unaudited)

	Three Months Ended March 31,
	2011				2010
Interest income:
Loans		$	11,261		$	6,437
Investments, taxable			1,753			1,504
Investments, non-taxable			12			-
Other interest-earning assets			28			19

Total interest income			13,054			7,960

Interest expense:
Deposits:
Demand			225			212
Savings and club			269			272
Certificates of deposit			1,667			1,513

			2,161			1,997

Borrowed money			1,221			1,221

Total interest expense			3,382			3,218

Net interest income			9,672			4,742
Provision for loan losses			350			450

Net interest income after provision for loan losses			9,322			4,292

Non-interest income:
Fees and service charges			219			160
Gain on sales of loans originated for sale			178			72
Loss on sale of real estate owned			(80	)		—
Other			136			9

Total non-interest income			453			241

Non-interest expense:
Salaries and employee benefits			3,007			1,367
Occupancy expense of premises			779			287
Equipment			1,023			554
Professional fees			203			132
Directors fees			119			106
Regulatory assessments			438			173
Advertising			72			67
Merger related expenses			-			200
Other			988			383

Total non-interest expense			6,629			3,269

Income before income tax provision			3,146			1,264
Income tax provision			1,225			546

Net Income		$	1,921		$	718

Net Income per common share - basic and diluted

Basic		$	0.20		$	0.15
Diluted		$	0.20		$	0.15
Weighted average number of common shares outstanding
Basic			9,393			4,662
Diluted			9,413			4,678

See accompanying notes to consolidated financial statements.

Index

BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statement of Changes in Stockholders’ Equity

(In Thousands, Unaudited)

	Common Stock		Additional Paid-In Capital		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income		Total
Balance at December 31, 2010	$	649	$	85,327	$	(10,760	)	$	23,753		$	5	$	98,974

Exercise of Stock Options (19,084 shares)		—		172		—			—			—		172

Treasury Stock Purchases (5,132 shares)		—		—		(54	)		—			—		(54	)

Cash dividend ($0.12 per share) declared		—		—		—			(1,128	)		—		(1,128	)

Net income for the three months ended March 31, 2011		—		—		—			1,921			—		1,921

Unrealized gain on securities available for sale, net of deferred income tax of $(64)		—		—		—			—			96		96

Total Comprehensive income		—		—		—			—			—		2,017

Balance at March 31, 2011	$	649	$	85,499	$	(10,814	)	$	24,546		$	101	$	99,981

See accompanying notes to consolidated financial statements.

Index

BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In Thousands, Unaudited)

	Three Months Ended March 31,
	2011			2010
Cash flows from operating activities:
Net Income	$	1,921		$	718
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		250			93
Amortization and accretion, net		437			264
Provision for loan losses		350			450
Deferred income tax		(121	)		(7	)
Loans originated for sale		(6,102	)		(6,425	)
Proceeds from sale of loans originated for sale		8,822			6,806
(Gain) on sale of loans originated for sale		(178	)		(72	)
Loss on sale of real estate owned		80			—
(Increase) in interest receivable		(384	)		(285	)
Decrease in other assets		2,911			406
(Decrease) in accrued interest payable		(4	)		(45	)
(Decrease) in other liabilities		(607	)		(443)

Net cash provided by operating activities		7,375			1,460


Cash flows from investing activities:
Purchase of Federal Home Loan Bank of New York stock		—			(1)
Proceeds from calls of securities held to maturity		7,772			22,700
Purchases of securities held to maturity		(78,621	)		(22,411	)
Proceeds from repayments on securities held to maturity		9,703			2,384
Proceeds from sales of participation interest in loans		1,366			—
Proceeds from sale of real estate owned		443			263
Purchases of loans		(835)			—
Net decrease in loans receivable		7,841			9,285
Improvements to other real estate owned		(5)			(13	)
Additions to premises and equipment		(1,516	)		(26	)

Net cash (used in) provided by investing activities		(53,852)			12,181


Cash flows from financing activities:
Net increase in deposits		(7,417)			10,485
Purchases of treasury stock		(54	)		(3	)
Cash dividend paid		(1,128	)		(559	)
Exercise of stock options		172			31

Net cash (used in) provided by financing activities		(8,427	)		9,954


Net (decrease) increase in cash and cash equivalents		(54,904)			23,595
Cash and cash equivalents-beginning		121,127			67,347


Cash and cash equivalents-ending	$	66,223		$	90,942


Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes	$	—		$	2
Interest	$	3,386		$	3,263

Non-cash items:
Transfer of loans to other real estate owned	$	450		$	936
Loans to facilitate sale of other real estate owned	$	103		$	—
Reclassification of loans originated for sale to held to maturity	$	1,291		$	—

See accompanying notes to consolidated financial statements.

Index

BCB Bancorp Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

Note 1 – Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of BCB Bancorp, Inc. (the “Company”) and the Company’s wholly owned subsidiaries, BCB Community Bank (the “Bank”), BCB Holding Company Investment Company, and Pamrapo Service Corporation. The Company’s business is conducted principally through the Bank. All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and, therefore, do not necessarily include all information that would be included in audited financial statements. The information furnished reflects all adjustments that are, in the opinion of management, necessary for a fair presentation of consolidated financial condition and results of operations. All such adjustments are of a normal recurring nature. The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2011 or any other future interim period.

These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2010, which are included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission.

In preparing these consolidated financial statements, BCB Bancorp, Inc., evaluated the events and transactions that occurred between March 31, 2011, and the date these consolidated financial statements were issued.

Note 2 – Acquisitions

Allegiance Community Bank

On April 5, 2011, BCB Bancorp, Inc. (the Company), its wholly owned New Jersey Bank subsidiary, BCB Community Bank and Allegiance Community Bank (“Allegiance”), headquartered in South Orange, New Jersey, jointly announced the signing of an agreement and plan of merger, dated as of April 4, 2011 (the “merger agreement”) pursuant to which Allegiance will merge with and into BCB Community Bank. At December 31, 2010, Allegiance had total assets of approximately $121.3 million, including $84.2 million in loans, and deposits of approximately $100.1 million in two branches in South Orange and Woodbridge, New Jersey. Under the terms of the merger agreement, each outstanding share of Allegiance common stock will be converted into the right to receive 0.35 shares of common stock of the Company, subject to adjustment as disclosed in the merger agreement. The merger is expected to close in the third quarter of 2011, pending regulatory approvals, approval of the merger agreement by shareholders of Allegiance and the satisfaction of other customary closing conditions.

Index

Note 3 – Pension and Other Postretirement Plans

The Company acquired, through the merger with Pamrapo Bancorp, Inc., a non-contributory defined benefit pension plan covering all eligible employees of Pamrapo Savings Bank. Effective January 1, 2010, the defined benefit pension plan (“Pension Plan”), was frozen by Pamrapo Savings Bank. All benefits for eligible participants accrued in the “Pension Plan” to the freeze date have been retained. Accordingly, no employees are permitted to commence participation in the Pension Plan and future salary increases and future years of credited service are not considered when computing an employee’s benefits under the Pension Plan. The Pension Plan is funded in conformity with the funding requirements of applicable government regulations. The Company also acquired through the merger with Pamrapo Bancorp, Inc. a supplemental executive retirement plan (“SERP”) in which certain former employees of Pamrapo Savings Bank are covered. A SERP is an unfunded non-qualified deferred retirement plan. Participants who retire at the age of 65 ( the “Normal Retirement Age”), are entitled to an annual retirement benefit equal to 75% of compensation reduced by their retirement plan annual benefits. Participants retiring before the Normal Retirement Age receive the same benefits reduced by a percentage based on years of service to the Company and the number of years prior to the Normal Retirement Age that participants retire.

Periodic pension and SERP cost, which is recorded as part of salaries and employee benefits expense in our Consolidated Statements of Income, is comprised of the following for the three months ended March 31, 2001 and 2010 (In Thousands):

	Three months ended March 31, 2011			Three Months ended March 31, 2010

Pension plan:
Interest cost	$	117		$	-
Expected return on plan assets		(94	)		-


Net periodic pension cost	$	23		$	-


SERP plan:
Interest cost	$	7		$	-


Net periodic postretirement cost	$	7		$	-

Note 4 – Earnings Per Share

Basic net income per common share is computed by dividing net income by the weighted average number of shares of common stock outstanding. The diluted net income per common share is computed by adjusting the weighted average number of shares of common stock outstanding to include the effects of outstanding stock options, if dilutive, using the treasury stock method. For the three months ended March 31, 2011 and 2010, the weighted average of outstanding options considered to be anti-dilutive was 180,684 and 230,264, respectively.

Index

Note 5 – Securities Available for Sale

	March 31, 2011
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)

Equity Securities-Financial Institutions	$	1,097	$	160	$	—	$	1,257

	December 31, 2010
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)

Equity Securities-Financial Institutions	$	1,097	$	32	$	31	$	1,098

There were no sales of securities available for sale for the three months ended March 31, 2011 and 2010.

The unrealized losses, categorized by the length of time of continuous loss position, and fair value of related securities available for sale were as follows:

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)
March 31, 2011
Equity Securities - Financial Institutions	$	—	$	—	$	—	$	—	$	—	$	—

December 31, 2010
Equity Securities - Financial Institutions	$	65	$	31	$	—	$	—	$	65	$	31

Index

Note 6 – Securities Held to Maturity

	March 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)

U.S. Government Agencies:
Due within one year	$	3,315	$	151	$	—	$	3,466
Due after ten years		35,110		81		68		35,123

		38,425		232		68		38,589

Residential mortgage-backed securities:
Due within one year	$	1	$	—	$	—	$	1
Due after one year through five years		679		18		—		697
Due after five years through ten years		49,679		365		146		49,898
Due after ten years		129,647		1,514		623		130,538

		180,006		1,897		769		181,134

Subordinated notes:
Due within one year	$	6,000	$	—	$	—	$	6,000
Due after ten years		403		1		—		404

Municipal obligations:
Due after ten years		1,374		7		—		1,381

		7,777		8		—		7,785

	$	226,208	$	2,137	$	837	$	227,508

Index

Note 6 – Securities Held to Maturity (Continued)

	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In Thousands)

U.S. Government Agencies:
Due after one through five years	$	3,315	$	180	$	—	$	3,495
Due after ten years		27,523		14		62		27,475


		30,838		194		62		30,970

Residential mortgage-backed securities:
Due within one year	$	6	$	—	$	—	$	6
Due after one year through five years		775		24		1		798
Due after five years through ten years		54,629		374		357		54,646
Due after ten years		71,545		1,552		493		72,604


		126,955		1,950		851		128,054

Subordinated notes:
Due within one year	$	6,000	$	—	$	—	$	6,000
Municipal obligations:
Due after ten years		1,376		—		21		1,355
Trust originated preferred security:
Due after ten years		403		3		—		406

	$	165,572	$	2,147	$	934	$	166,785

The amortized cost and carrying values shown above are by contractual final maturity. Actual maturities will differ from contractual final maturities due to scheduled monthly payments related to mortgage–backed securities and due to the borrowers having the right to prepay obligations with or without prepayment penalties. At March 31, 2011 and December 31, 2010, all residential mortgage backed securities held in the portfolio were Government Sponsored Enterprise securities.

There were no sales of securities held to maturity for the three months ended March 31, 2011 and 2010.

Index

Note 6 – Securities Held to Maturity (Continued)

The unrealized losses, categorized by the length of time of continuous loss position, and fair value of related securities held to maturity were as follows:

	Less than 12 Months				More than 12 Months				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
	(In Thousands)
March 31, 2011
U.S. Government Agencies	$	16,440	$	68	$	—	$	—	$	16,440	$	68
Residential mortgage-backed securities		97,300		769		—		—		97,300		769

	$	113,740	$	837	$	—	$	—	$	113,740	$	837


December 31, 2010
U.S. Government Agencies	$	20,328	$	62	$	—	$	—	$	20,328	$	62
Residential mortgage-backed securities		74,899		851		—		—		74,899		851
Municipal obligations		1,355		21		—		—		1,355		21

	$	96,582	$	934	$	—	$	—	$	96,582	$	934

Management does not believe that any of the unrealized losses at March 31, 2011, (which are related to three U.S. Government Agency bonds and forty-nine residential mortgage-backed securities) represent an other-than-temporary impairment as they are primarily related to market interest rates and not related to the underlying credit quality of the issuers of the securities as all these securities were issued by U.S. Agencies. Additionally, the Company has the ability, and management has the intent, to hold such securities for the time necessary to recover cost and does not have the intent to sell the securities, and it is more likely than not that it will not have to sell the securities before recovery of their cost.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses

Allowance for Loan Losses

Management reviews the adequacy of the allowance on at least a quarterly basis to ensure that the provision for loan losses has been charged against earnings in an amount necessary to maintain the allowance at a level that is adequate based on management’s assessment of probable estimated losses. The Company’s methodology for assessing the adequacy of the allowance for loan losses consists of several key elements. These elements include a general allocated reserve for impaired loans, a specific reserve for impaired loans and an unallocated portion.

The Company consistently applies the following comprehensive methodology. During the quarterly review of the allowance for loan losses, the Company considers a variety of factors that include:

General economic conditions.

Trends in charge-offs.

Trends and levels of delinquent loans.

Trends and levels of non-performing loans, including loans over 90 days delinquent.

Trends in volume and terms of loans.

Levels of allowance for specific classified loans.

Credit concentrations.

The methodology includes the segregation of the loan portfolio by loands that are performing and loans that are impaired. Loans which are performing are evaluated homogeneously by loan class or loan type. The allowance for performing loans is evaluated based on historical loan loss experience, including consideration of peer loss analysis, with an adjustment for qualitative factors due to economic conditions in the market. Impaired loans are loans which are more than 60 days delinquent or troubled debt restructured. These loans are individually evaluated for loan loss either by current appraisal, estimated economic factor, or net present value. Management reviews the overall estimate for reasonableness and bases the loan loss provision accordingly. The Company also maintains an unallocated allowance. The unallocated allowance is used to cover any factors or conditions which may cause a potential loan loss but are not specifically identifiable. It is prudent to maintain an unallocated portion of the allowance because no matter how detailed an analysis of potential loan losses is performed, these estimates lack some element of precision. Management must make estimates using assumptions and information that is often subjective and changing rapidly. In addition, as an integral part of their examination process, the federal deposit insurance corporation will periodically review the allowance for loan losses and may require us to adjust the allowance based on their analysis of information available to them at the time of their examination.

During the quarter ended March 31, 2011, the Company implemented additional criteria to include the review of performing loans as well as the inclusion of a migration factor for classified loans, specifically those loans classified as special mention, substandard or doubtful. The migration factors assigned to the aforementioned classifications increases with the severity of the classification, thereby increasing the general estimation of credit losses from 1.5% to 3.0% of classified loans. The implementation of this change in methodology during the first quarter is primarily responsible for the increase in the estimation of loan losses by $740,000.00.

Classified Assets. Our policies provide for a classification system for problem assets. Under this classification system, problem assets are classified as “substandard,” “doubtful,” “loss” or “special mention.” An asset is considered substandard if it is inadequately protected by its current net worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard assets include those characterized by the “distinct possibility” that “some loss” will be sustained if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weakness present makes “collection or liquidation in full” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as loss are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted, and the loan, or a portion thereof, is charged-off. Assets may be designated special mention because of potential weaknesses that do not currently warrant classification in one of the aforementioned categories.

When we classify problem loans, we may establish general allowances for loan losses in an amount deemed prudent by management. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. A portion of general loss allowances established to cover possible losses related to assets classified as substandard or doubtful may be included in determining our regulatory capital. Specific valuation allowances for loan losses generally do not qualify as regulatory capital. At March 31, 2011, we had no assets classified as loss, $17.1 million in assets classified as doubtful, of which $5.3 million was classified as impaired, $27.4 million in assets classified as substandard, of which $11.4 million was classified as impaired and $38.4 million in assets classified as special mention, of which $17.4 million was classified as impaired. The loans classified as substandard represent primarily commercial loans secured either by residential real estate, commercial real estate or heavy equipment. The loans that have been classified substandard were classified as such primarily because either updated financial information has not been timely provided, or the collateral underlying the loan is in the process of being revalued.

The Company’s internal credit risk grades are based on the definitions currently utilized by the banking regulatory agencies. The grades assigned and definitions are as follows, and loans graded excellent, above average, good and watch list (risk ratings 1-4) are treated as “pass” for grading purposes:

5 – Special Mention- Loans currently performing but with potential weaknesses including adverse trends in borrower’s operations, credit quality, financial strength, or possible collateral deficiency.

6 – Substandard- Loans that are inadequately protected by current sound worth, paying capacity, and collateral support. Loans on “nonaccrual” status. The loan needs special and corrective attention.

7 – Doubtful- Weaknesses in credit quality and collateral support make full collection improbable, but pending reasonable factors remain sufficient to defer the loss status.

8 – Loss- Continuance as a bankable asset is not warranted. However, this does not preclude future attempts at partial recovery.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the activity in the Bank’s allowance for loan losses for the three months ended March 31, 2011 and recorded investment in financing receivables at March 31, 2011. The following table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of allowance for loan losses that is allocated to each loan type (In Thousands):

	Residential		Commercial & Multi-family		Construction		Commercial Business (1)		Home equity (2)		Consumer		Unallocated		Total
Allowance for credit losses:

Beginning balance	$	171	$	6,179	$	426	$	1,286	$	204	$	18	$	133	$	8,417

Charge-offs	$	-	$	380	$	-	$	-	$	-	$	-	$	-	$	380

Recoveries	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Provisions	$	50	$	-	$	38	$	248	$	2	$	-	$	12	$	350

Ending balance	$	221	$	5,799	$	464	$	1,534	$	206	$	18	$	145	$	8,387

Ending balance: individually evaluated for impairment	$	15	$	627	$	-	$	430	$	2	$	-	$	-	$	1,074

Ending balance: collectively evaluated for impairment	$	206	$	5,172	$	464	$	1,104	$	204	$	18	$	145	$	7,313

Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Loans receivables:

Ending balance	$	229,349	$	400,388	$	17,060	$	65,236	$	60,804	$	1,474	$	-	$	774,311

Ending balance: individually evaluated for impairment	$	926	$	32,560	$	2,910	$	2,811	$	404	$	-	$	-	$	39,611

Ending balance: collectively evaluated for impairment	$	41,901	$	241,072	$	12,462	$	52,583	$	28,442	$	230	$	-	$	376,690

Ending balance: loans acquired with deteriorated credit quality(3)	$	186,522	$	126,756	$	1,688	$	9,842	$	31,958	$	1,244	$	-	$	358,010

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

(3) Includes all loans acquired by acquisition.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the Bank’s allowance for credit losses and recorded investment in financing receivables at December 31, 2010. The following table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of allowance for loan losses that is allocated to each loan type (In Thousands):

	Residential		Commercial & Multi-family		Construction		Commercial Business (1)		Home equity (2)		Consumer		Unallocated		Total

Allowance for credit losses:

Ending balance	$	171	$	6,179	$	426	$	1,286	$	204	$	18	$	133	$	8,417

Ending balance: individually evaluated for impairment	$	-	$	1,656	$	-	$	449	$	2	$	-	$	-	$	2,107

Ending balance: collectively evaluated for impairment	$	171	$	4,523	$	426	$	837	$	202	$	18	$	133	$	6,310

Ending balance: loans acquired with deteriorated credit quality	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Loans receivables:

Ending balance	$	234,435	$	410,212	$	17,848	$	54,160	$	63,603	$	1,816	$	-	$	782,074

Ending balance: individually evaluated for impairment	$	89	$	27,422	$	2,910	$	2,809	$	372	$	-	$	-	$	33,602

Ending balance: collectively evaluated for impairment	$	39,524	$	250,494	$	13,532	$	41,541	$	28,992	$	332	$	-	$	374,415

Ending balance: loans acquired with deteriorated credit quality(3)	$	194,821	$	132,296	$	1,406	$	9,811	$	34,240	$	1,483	$	-	$	374,057

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

(3) Includes all loans acquired by acquisition.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The table below sets forth the amounts and types of non-accrual loans in the Bank’s loan portfolio, at March 31, 2011. Loans are placed on non-accrual status when they become more than 90 days delinquent, or when the collection of principal and/or interest become doubtful.

	At March 31, 2011
	(In Thousands)
Non-accruing loans:
Residential	$	15,038
Construction		4,081
Commercial business(1)		728
Commercial and multi-family		22,021
Home equity(2)		1,023
Consumer		240
Total	$	43,131

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

The table below sets forth the amounts and types of non-accrual loans in the Bank’s loan portfolio, at December 31, 2010.

	At December 31, 2010
	(In Thousands)
Non-accruing loans:
Residential	$	15,115
Construction		2,773
Commercial business(1)		861
Commercial and multi-family		21,147
Home equity(2)		1,632
Consumer		283
Total	$	41,811

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table summarizes information in regards to impaired loans by loan portfolio class as of March 31, 2011 (In Thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential Mortgages	$	517	$	517	$	-	$	303	$	-
Commercial and Multi-family		21,420		21,420		-		15,565		126
Construction		2,910		2,910		-		2,910		-
Commercial Business(1)		1,002		1,002		-		992		10
Home Equity(2)		291		291		-		240		2
Consumer		-		-		-		-		-

With an allowance recorded:
Residential Mortgages	$	409	$	409	$	15	$	205	$	4
Commercial and Multi-family		11,140		11,140		627		14,427		140
Construction		-		-		-		-		-
Commercial Business(1)		1,809		1,809		430		1,819		-
Home Equity(2)		113		113		2		148		2
Consumer		-		-		-		-		-

Total:
Residential Mortgages	$	926	$	926	$	15	$	508	$	4
Commercial and Multi-family		32,560		32,560		627		29,992		266
Construction		2,910		2,910		-		2,910		-
Commercial Business(1)		2,811		2,811		430		2,811		10
Home Equity(2)		404		404		2		388		4
Consumer		-		-		-		-		-

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table summarizes information in regards to impaired loans by loan type as of December 31, 2010 (In Thousands):

	Recorded Investment		Unpaid Principal Balance		Related Allowance

With no related allowance recorded:

Residential	$	89	$	89	$	-
Commercial and multi-family		9,709		9,709		-
Construction		2,910		2,910		-
Commercial business (1)		981		981		-
Home equity (2)		189		189		-
Consumer		-		-		-

With an allowance recorded:
Residential		-		-		-
Commercial and multi-family	$	17,713	$	17,713	$	1,656
Construction		-		-		-
Commercial business (1)		1,828		1,828		449
Home equity (2)		183		183		2
Consumer		-		-		-


Total:
Residential	$	89	$	89	$	-
Commercial and multi-family		27,422		27,422		1,656
Construction		2,910		2,910		-
Commercial business		2,809		2,809		449
Home equity		372		372		2
Consumer		-		-		-

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the delinquency status of total loans receivable at March 31, 2011.

	As of March 31, 2011
	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable>90 Days and Accruing
	(In Thousands)

Residential	$	8,994	$	1,494	$	15,038	$	25,526	$	203,823	$	229,349		—
Commercial and multi-family		19,869		2,927		22,021		44,817		355,571		400,388		—
Construction		1,747		—		4,081		5,828		11,232		17,060		—
Commercial business(1)		1,617		325		728		2,670		62,566		65,236		—
Home equity(2)		1,614		236		1,023		2,873		57,931		60,804		—
Consumer		60		—		240		300		1,174		1,474		—
Total	$	33,901	$	4,982	$	43,131	$	82,014	$	692,297	$	774,311		—

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the delinquency status of total loans receivable at December 31, 2010.

	As of December 31, 2010
	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans Receivables		Loans Receivable>90 Days and Accruing
	(In Thousands)

Residential	$	5,010	$	3,706	$	15,115	$	23,831	$	210,604	$	234,435		—
Commercial and multi-family		20,071		5,391		21,147		46,609		363,603		410,212		—
Construction		1,889		—		2,773		4,662		13,186		17,848		—
Commercial business(1)		1,377		456		861		2,694		51,466		54,160		—
Home equity(2)		870		694		1,632		3,196		60,407		63,603		—
Consumer		106		5		283		394		1,422		1,816		—
Total	$	29,323	$	10,252	$	41,811	$	81,386	$	700,688	$	782,074		—

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table presents the loan portfolio types summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful, and loss within the Company’s internal risk rating system as of March 31, 2011 (In Thousands):

	Pass		Special Mention		Substandard		Doubtful		Loss		Total

Residential	$	211,021	$	5,354	$	8,879	$	4,095	$	-	$	229,349
Commercial and multi-family		346,165		29,049		14,017		11,157		-		400,388
Construction		12,687		-		3,706		667		-		17,060
Commercial business(1)		61,300		3,159		317		460		-		65,236
Home equity(2)		58,934		819		474		577		-		60,804
Consumer		1,333		5		-		136		-		1,474
Total	$	691,440	$	38,386	$	27,393	$	17,092	$	-	$	774.311

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

	Pass		Special Mention		Substandard		Doubtful		Loss		Total

Residential	$	217,459	$	4,930	$	8,874	$	3,172	$	-	$	234,435
Commercial and multi-family		349,219		30,538		17,760		12,578		117		410,212
Construction		12,763		689		4,005		391		-		17,848
Commercial business(1)		50,248		3,113		339		25		435		54,160
Home equity(2)		61,682		807		488		510		116		63,603
Consumer		1,673		7		-		136		-		1,816
Total	$	693,044	$	40,084	$	31,466	$	16,812	$	668	$	782,074

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

Index

Note 7 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table presents outstanding principal balance and the related carrying amount of acquired loans included in our Consolidated Statements of Financial Condition.


	March 31,		December 31,
	2011		2010
	(In Thousands)
Outstanding principal balance	$	362,530	$	378,000
Carrying amount		358,010		374,057

The following table presents changes in the accretable discount on loans acquired in the Pamrapo acquisition for the three months ended March 31, 2011 (In Thousands):

Balance – beginning	$	205,491
Pamrapo acquisiton
Accretion		(12,126	)

Balance - ending	$	193,365

No interest income is being recognized on loans acquired where the fair value of the loan was based on the cash flows expected to be received from the foreclosure and sale of the underlying collateral. The carrying value of these loans at March 31, 2011 and December 31, 2010 was $11,644,000 and $11,661,000.

Index

Note 8 – Fair Values of Financial Instruments

Guidance on fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or no market activity).

An asset or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

The only assets or liabilities that the Company measured at fair value on a recurring basis were as follows (In Thousands):

Description	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
As of March 31, 2011:

Securities available for sale	$	1,257	$	1,257	$	—	$	—

As of December 31, 2010:

Securities available for sale	$	1,098	$	1,098	$	—	$	—

There were no significant transfers of assets or liabilities into or out of Level 1, Level 2, or Level 3 of the fair value hierarchy during the three months ended March 31, 2011.

The only assets or liabilities that the Company measured at fair value on a nonrecurring basis were as follows (In Thousands):

Description	Total		(Level 1) Quoted Prices in Active Markets for Identical Assets		(Level 2) Significant Other Observable Inputs		(Level 3) Significant Unobservable Inputs
As of March 31, 2011:

Impaired loans	$	12,397	$	—	$	—	$	12,397

As of December 31, 2010:

Impaired Loans	$	17,617	$	—	$	—	$	17,617
Real estate owned	$	513	$	—	$	—	$	513

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at March 31, 2011 and December 31, 2010.

Cash and Cash Equivalents (Carried at Cost)

The carrying amounts reported in the consolidated statements of financial condition for cash and short-term instruments approximate those assets’ fair values.

Securities

The fair value of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices. For certain securities which are not traded in active markets and/or are subject to transfer restrictions, valuations are adjusted to reflect illiquidity and/or non-transferability, and such adjustments are generally based on available market evidence (Level 3). In the absence of such evidence, management’s best estimate is used. Management’s best estimate consists of both internal and external support on certain Level 3 investments. Internal cash flow models using a present value formula that includes assumptions market participants would use along with indicative exit pricing obtained from broker/dealers (where available) were used to support fair values of certain Level 3 investments.

Index

Note 8 – Fair Values of Financial Instruments (Continued)

Loans Held for Sale (Carried at Lower of Cost or Fair Value)

The fair value of loans held for sale is determined, when possible, using quoted secondary-market prices. If no such quoted prices exist, the fair value of a loan is determined using quoted prices for a similar loan or loans, adjusted for specific attributes of that loan. Loans held for sale are carried at their cost at March 31, 2011 and December 31, 2010.

Loans Receivable (Carried at Cost)

The fair values of loans are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.

Impaired Loans (Generally Carried at Fair Value)

A loan is impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or as a practical expedient, at the loans observable market price or the fair value of the collateral if the loan is collateral dependent. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair value consists of the loan balances of $13,471,000 and $19,724,000, net of a valuation allowance of $1,074,000 and $2,107,000 at March 31, 2011 and December 31, 2010, respectively.

Real Estate Owned (Generally Carried at Fair Value)

Real Estate Owned is generally carried at fair value when the carrying value is written down to fair value, which is determined based upon independent third-party appraisals of the properties or based upon the expected proceeds from a pending sale. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements.

FHLB of New York Stock (Carried at Cost)

The carrying amount of restricted investment in bank stock approximates fair value, and considers the limited marketability of such securities.

Interest Receivable and Payable (Carried at Cost)

The carrying amount of interest receivable and interest payable approximates its fair value.

Deposits (Carried at Cost)

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Long-Term Debt (Carried at Cost)

Fair values of long-term debt are estimated using discounted cash flow analysis, based on quoted prices for new long-term debt with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party.

Off-Balance Sheet Financial Instruments

Fair values for the Company’s off-balance sheet financial instruments (lending commitments and unused lines of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. The fair value of these commitments was deemed immaterial and is not presented in the accompanying table.

Index

Note 8 – Fair Values of Financial Instruments (Continued)

The carrying values and estimated fair values of financial instruments were as follows at March 31, 2011 and December 31, 2010:

	March 31,				December 31,
	2011				2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In Thousands)

Financial assets:
Cash and cash equivalents	$	66,223	$	66,223	$	121,127	$	121,127
Securities available for sale		1,257		1,257		1,098		1,098
Securities held to maturity		226,208		227,508		165,572		166,785
Loans held for sale		1,739		1,774		5,572		5,633
Loans receivable		765,397		780,935		773,101		779,858
FHLB of New York stock		6,723		6,723		6,723		6,723
Interest receivable		5,587		5,587		5,203		5,203

Financial liabilities:
Deposits		878,871		883,777		886,288		890,402
Long-term debt		114,124		131,286		114,124		126,895
Interest payable		783		783		787		787

Note 9 – New Accounting Pronouncements

Accounting Standards Update (ASU) No. 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The ASU clarifies which loan modifications constitute troubled debt restructurings. It is intended to assist creditors in determining whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for purposes of recording an impairment loss and for disclosure of troubled debt restructurings. In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial difficulties. The amendments to FASB Accounting Standards Codification Topic 310, Receivables, clarify the guidance on a creditor’s evaluation of whether it has granted a concession and whether a debtor is experiencing financial difficulties. For public companies, the new guidance is effective for interim and annual periods beginning on or after June 15, 2011, and applies retrospectively to restructurings occurring on or after the beginning of the fiscal year of adoption. Early application is permitted. The Company is currently evaluating the potential impact the new pronouncement will have on its consolidated financial statements.

Note 10- Subsequent Events

At the Annual Meeting of the Shareholders held on April 28, 2011 (the "Annual Meeting"), the shareholders of BCB Bancorp, Inc. approved the adoption of the BCB Bancorp, Inc. 2011 Stock Option Plan ("2011 Stock Plan"). The 2011 Stock Plan authorizes the issuance of up to 900,000 shares of common stock of BCB Bancorp, Inc. pursuant to grants of stock options. Employees and directors of BCB Bancorp, Inc. and BCB Community Bank are eligible to participate in the 2011 Stock Plan. All stock options will be granted in the form of either "incentive" stock options or "non-qualified" stock options. Incentive stock options have certain tax advantages that must comply with the requirements of Section 422 of the Internal Revenue Code. Only employees are permitted to receive incentive stock options. Additionally, at the Annual Meeting, the shareholders approved the amendment to the BCB Bancorp, Inc. Certificate of Incorporation to authorize the issuance of up to 10 million shares of preferred stock, par value $0.01 per share.

Index

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Recent Developments

New Federal Legislation

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted. The Dodd-Frank Act will significantly change the current bank regulatory structure and affect the lending, investment, trading and operating activities of financial institutions and their holding companies. The Dodd-Frank Act will eliminate the Office of Thrift Supervision. The Dodd-Frank Act also authorizes the Board of Governors of the Federal Reserve System to supervise and regulate all savings and loan holding companies, in addition to bank holding companies which it currently regulates. As a result, the Federal Reserve Board’s current regulations applicable to bank holding companies, including holding company capital requirements, will apply to savings and loan holding companies. The Dodd-Frank Act also requires the Federal Reserve Board to set minimum capital levels for bank holding companies that are as stringent as those required for the insured depository subsidiaries, and the components of Tier 1 capital would be restricted to capital instruments that are currently considered to be Tier 1 capital for insured depository institutions. BCB Bancorp will be subject to the new capital requirements. Under the Dodd-Frank Act, the proceeds of trust preferred securities are excluded from Tier 1 capital unless such securities were issued prior to May 19, 2010 by bank or savings and loan holding companies with less than $15 billion of assets. The legislation also establishes a floor for capital of insured depository institutions that cannot be lower than the standards in effect today, and directs the federal banking regulators to implement new leverage and capital requirements within 18 months from the date of enactment that take into account off-balance sheet activities and other risks, including risks relating to securitized products and derivatives.

The Dodd-Frank Act also creates a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws. The Consumer Financial Protection Bureau has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions such as the Bank, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets. Banks and savings institutions with $10 billion or less in assets will be examined by their applicable bank regulators. The new legislation also weakens the federal preemption available for national banks and federal savings associations, and gives state attorneys general the ability to enforce applicable federal consumer protection laws.

The legislation also broadens the base for Federal Deposit Insurance Corporation insurance assessments. Assessments will now be based on the average consolidated total assets less tangible equity capital of a financial institution. The Dodd-Frank Act also permanently increases the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor, retroactive to January 1, 2009, and non-interest bearing transaction accounts have unlimited deposit insurance through December 31, 2013. Lastly, the Dodd-Frank Act will increase stockholder influence over boards of directors by requiring companies to give stockholders a non-binding vote on executive compensation and so-called “golden parachute” payments, and authorizing the Securities and Exchange Commission to promulgate rules that would allow stockholders to nominate their own candidates using a company’s proxy materials. The legislation also directs the Federal Reserve Board to promulgate rules prohibiting excessive compensation paid to bank holding company executives, regardless of whether the company is publicly traded or not.

Completion of Acquisition

On July 6, 2010, the acquisition of Pamrapo Bancorp, Inc. was completed. The 100% stock transaction was valued at approximately $38.6 million based on the closing price of BCB Bancorp, Inc. of $7.83 per share. In accordance with the terms of the merger agreement, each share of Pamrapo Bancorp common stock has been converted into 1.00 share of BCB Bancorp’s common stock. BCB Bancorp common stock continues to be listed on the NASDAQ Global Market under the symbol “BCBP.”

Financial Condition

Total assets decreased by $7.0 million or 0.63% to $1.10 billion at March 31, 2011 from $1.11 billion at December 31, 2010. The decrease in total assets occurred primarily as a result of a decrease in cash and cash equivalents of $54.9 million and loans receivable of $7.7 million partially offset by an increase in securities held to maturity of $60.6 million. Management is concentrating on controlled balance sheet growth and maintaining adequate liquidity in the anticipation of funding loans in the loan pipeline as well as seeking opportunities in the secondary market that provide reasonable returns. During the first quarter, the composition of the Bank’s balance sheet shifted out of cash and cash equivalents to investment securities. The initial intention of accumulating liquidity was to explore the possibility of repaying certain wholesale advances in an effort to reduce interest expense. Diligent monitoring of the penalties associated with the early prepayment of these advances proved cost prohibitive. Consequently, management decided to deploy the liquidity into pools of government sponsored enterprise (GSE) mortgage backed securities, providing yields of approximately three hundred fifty basis points higher than the yield on the cash deposits. Investing in mortgage backed securities of intermediate terms of fifteen and twenty years ensures regular cash flow with accelerated amortization over long term investments, thereby positively impacting net interest income, spread, and margin. It is our intention to grow the balance sheet at a measured pace consistent with our capital levels and as business opportunities permit.

Total cash and cash equivalents decreased by $54.9 million or 45.3% to $66.2 million at March 31, 2011 from $121.1 million at December 31, 2010. Investment securities classified as held-to-maturity increased by $60.6 million or 36.6% to $226.2 million at March 31, 2011 from $165.6 million at December 31, 2010. This increase in investment securities occurred as a result of purchases of $78.6 million during the three months ended March 31, 2011, partially offset by call options exercised on $7.8 million of callable agency securities and $9.7 million in repayments and prepayments in the mortgage backed security portfolio during the three months ended March 31, 2011.

Loans receivable decreased by $7.7 million or 1.0% to $765.4 million at March 31, 2011 from $773.1 million at December 31, 2010. The decrease resulted primarily from a $15.7 million decrease in real estate mortgages comprising residential, commercial, construction and participation loans with other financial institution and a $3.1 million decrease in consumer loans, net of amortization, partially offset by a $11.1 million increase in commercial loans comprising business loans and commercial lines of credit, net of amortization, partially offset by a $30,000 decrease in the allowance for loan losses. The balance in the loan pipeline as of March 31, 2011 stood at $72.6 million. At March 31, 2011, the allowance for loan losses was $8.4 million or 19.5% of non-performing loans. As a result of the loans acquired in the business combination transaction being recorded at their fair value, the balance in the allowance for loan losses that was on the balance sheet of the former Pamrapo Bancorp, Inc., was not carried over in the allowance balance previously discussed.

Deposit liabilities decreased by $7.4 million or 0.83% to $878.9 million at March 31, 2011 from $886.3 million at December 31, 2010. The decrease resulted primarily from a $8.6 million decrease in time deposit accounts and $1.4 million decrease in transaction accounts, partially offset by an $2.6 million increase in the savings and club accounts. During the three months ended March 31, 2011, the Federal Open Market Committee (FOMC) has continued its low short term interest rate policy. This has resulted in a steepening of the yield curve, resulting in lower short term time deposit account yields which in turn has had the effect of decreasing interest expense.

The balance of borrowed money remained constant at $114.1 million for the periods ended March 31, 2011 and December 31, 2010. The purpose of the borrowings reflects the use of long term Federal Home Loan Bank advances to augment deposits as the Bank’s funding source for originating loans and investing in GSE investment securities.

Index

Stockholders’ equity increased by $1.0 million or 1.0% to $100.0 million at March 31, 2011 from $99.0 million at December 31, 2010. The increase in stockholders’ equity is primarily attributable to net income for the three months ended March 31, 2011 of $1.9 million, a $172,000 increase resulting from the exercise of stock options totaling 19,084 shares and a $96,000 increase in the market value of our available-for-sale securities portfolio, net of tax partially offset by the payment of a quarterly cash dividend totaling $1.1 million representing a $0.12 per share payment during the three months ended March 31, 2011 and $54,000 paid to repurchase 5,132 shares of the Company’s common stock. At March 31, 2011, the Bank’s Tier 1, Tier 1 Risk-Based and Total Risk Based Capital Ratios were 9.33%, 16.91% and 18.10% respectively.

Results of Operations

Net income increased by $1.2 million or 171.4% to $1.9 million for the three months ended March 31, 2011 from $718,000 for the three months ended March 31, 2010. The increase in net income was due to increases in net interest income, non-interest income and a decrease in the provision for loan losses, partially offset by increases in non-interest expense and income tax expense. Net interest income increased by $4.93 million or 104.0% to $9.67 million for the three months ended March 31, 2011 from $4.74 million for the three months ended March 31, 2010. The increase in net interest income resulted primarily from an increase in the average balance of interest earning assets of $463.6 million or 74.7% to $1.08 billion for the three months ended March 31, 2011 from $620.8 million for the three months ended March 31, 2010, partially offset by a decrease in the average yield on interest earning assets to 4.82% for the three months ended March 31, 2011 from 5.13% for the three months ended March 31, 2010. The average balance of interest bearing liabilities increased by $384.6 million or 70.4% to $930.9 million for the three months ended March 31, 2011 from $546.3 million for the three months ended March 31, 2010 and the average cost of interest bearing liabilities decreased by ninety-one basis points to 1.45% for the three months ended March 31, 2011 from 2.36% for the three months ended March 31, 2010. The decrease of ninety-one basis points in the average cost of interest bearing liabilities more than offset the decrease of thirty-one basis points in the average yield on interest earning assets. As a consequence of the aforementioned, our net interest margin increased to 3.57% for the three months ended March 31, 2011 from 3.06% for the three months ended March 31, 2010. The increase in the average balance of interest earning assets and the average balance of interest bearing liabilities is primarily attributable to the completion of the business combination transaction with Pamrapo Bancorp, Inc.

Interest income on loans receivable increased by $4.82 million or 74.8% to $11.26 million for the three months ended March 31, 2011 from $6.44 million for the three months ended March 31, 2010. The increase was primarily attributable to an increase in the average balance of loans receivable of $388.1 million or 95.4% to $794.8 million for the three months ended March 31, 2011 from $406.7 million for the three months ended March 31, 2010, partially offset by a decrease in the average yield on loans receivable to 5.67% for the three months ended March 31, 2011 from 6.33% for the three months ended March 31, 2010. The increase in the average balance of loans is primarily attributable to the acquisition of Pamrapo Bancorp, Inc. The decrease in average yield reflects the competitive price environment prevalent in the Bank’s primary market area on loan facilities as well as the repricing downward of variable rate loans. Further, as the average yield on the loans acquired in the business combination transaction with Pamrapo Bancorp Inc., were less than that of BCB Bancorp, Inc., as a stand-alone institution, the combination of both portfolios decreased the composite yield accordingly.

Interest income on securities increased by $261,000 or 17.4% to $1.8 million for the three months ended March 31, 2011 from $1.5 million for the three months ended March 31, 2010. This increase was primarily due to an increase in the average balance of securities held-to-maturity of $60.5 million or 42.9% to $201.6 million for the three months ended March 31, 2011 from $141.1 million for the three months ended March 31, 2010, partially offset by a decrease in the average yield of securities held-to-maturity to 3.50% for the three months ended March 31, 2011 from 4.26% for the three months ended March 31, 2010.The decrease in the average yield reflects the lower long term interest rate environment during the three months ended March 31, 2011 compared with the three months ended March 31, 2010. The increase in the average balance is primarily attributable to the completion of the acquisition of Pamrapo Bancorp, Inc.

Interest income on other interest-earning assets increased by $9,000 or 47.4% to $28,000 for the three months ended March 31, 2011 from $19,000 for the three months ended March 31, 2010. This increase was primarily due to an increase of $14.9 million or 20.4% in the average balance of other interest-earning assets to $87.9 million for the three months ended March 31, 2011 from $73.0 million for the three months ended March 31, 2010. The average yield on other interest-earning assets increased slightly to 0.13% for the three months ended March 31, 2011from 0.10% for the three month ended March 31, 2010. The static nature of the average yield on other interest earning assets reflects the current philosophy by the FOMC of keeping short term interest rates at historically low levels for the last two years. The increase in the average balance of other interest earning assets is primarily attributable to the completion of the acquisition of Pamrapo Bancorp, Inc.

Total interest expense increased by $164,000 or 5.1% to $3.38 million for the three months ended March 31, 2011 from $3.22 million for the three months ended March 31, 2010 The increase resulted primarily from an increase in the balance of average interest bearing liabilities of $384.6 million or 70.4% to $930.9 million for the three months ended March 31, 2011 from $546.3 million for the three months ended March 31, 2010, partially offset by a decrease in the average cost of interest bearing liabilities of ninety-one basis points to 1.45% for the three months ended March 31, 2011 from 2.36% for the three months ended March 31, 2010. The increase in the balance of average interest bearing liabilities is primarily attributable to the completion of the acquisition of Pamrapo Bancorp, Inc. The decrease in the average cost reflects the Company’s reaction to the lower short term interest rate environment and our ability to reduce our pricing on a select number of retail deposit products.

The provision for loan losses totaled $350,000 and $450,000 for the three month periods ended March 31, 2011 and 2010, respectively. The provision for loan losses is established based upon management’s review of the Bank’s loans and consideration of a variety of factors including, but not limited to, (1) the risk characteristics of the loan portfolio, (2) current economic conditions, (3) actual losses previously experienced, (4) significant level of loan growth and (5) the existing level of reserves for loan losses that are probable and estimable. During the three months ended March 31, 2011, the Bank experienced $380,000 in net charge-offs, (consisting of $380,000 in charge-offs and no recoveries). During the three months ended March 31, 2010, the Bank experienced $434,000 in net charge-offs, (consisting of $446,000 in charge-offs and $12,000 in recoveries). The Bank had non-performing loans totaling $43.1 million or 5.57% of gross loans at March 31, 2011, $41.8 million or 5.35% of gross loans at December 31, 2010 and $13.3 million or 3.33% of gross loans at March 31, 2010. The increase in non-performing loans resulted primarily from the acquisition of Pamrapo Bancorp, whose non-performing loans totaled $26.3 million at March 31, 2011. The allowance for loan losses was $8.4 million or 1.08% of gross loans at March 31, 2011, $8.4 million or 1.08% of gross loans at December 31, 2010 and $6.7 million or 1.67% of gross loans at March 31, 2010. The carrying value of the loans acquired from Pamrapo was $358.0 million at March 31, 2011. These loans were the primary reason for the decrease in the ratio of the allowance for loan losses to gross loans from March 31, 2010 as there was no carryover of the historical Pamrapo allowance for credit losses related to these loans. The amount of the allowance is based on estimates and the ultimate losses may vary from such estimates. Management assesses the allowance for loan losses on a quarterly basis and makes provisions for loan losses as necessary in order to maintain the adequacy of the allowance.While management uses available information to recognize losses on loans, future loan loss provisions may be necessary based on changes in the aforementioned criteria. In addition various regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses and may require the Bank to recognize additional provisions based on their judgment of information available to them at the time of their examination. Management believes that the allowance for loan losses was adequate at March 31, 2011, December 31, 2010 and March 31, 2010.

Total non-interest income increased by $212,000 or 88.0% to $453,000 for the three months ended March 31, 2011 from $241,000 for the three months ended March 31, 2010. The increase in non-interest income resulted primarily from an increase of $186,000 or a 110.0% increase in fees and service charges and other non-interest income to $355,000 for the three months ended March 31, 2011 from $169,000 for the three months ended March 31, 2010, and an increase of $106,000 or 147.2% in gain on sale of loans originated for sale to $178,000 for the three months ended March 31, 2011 from $72,000 for the three months ended March 31, 2010. General fees, service charges and other income increased primarily as a result of a $117,000 recovery of legal fees from the Insurance Company pertaining to Pamrapo Bancorp, Inc. litigation issues.

Index

The increase in gain on sale of loans originated for sale occurred primarily as a result of the active local market for refinancing one-to four-family residential mortgages, aided in large part by the low interest rate environment. The aforementioned increases were partially offset by an $80,000 loss on the sale of certain REO properties for the three months ended March 31, 2011 from no such loss for the three months ended March 31, 2010.

Total non-interest expense increased by $3.3 million or 100.0% to $6.6 million for the three months ended March 31, 2011 from $3.3 million for the three months ended March 31, 2010. Unless specified otherwise, the increase in the categories of non-interest expense occurred primarily as a result of the acquisition of Pamrapo Bancorp, Inc. Salaries and employee benefits expense increased by $1.6 million or 114.3% to $3.0 million for the three months ended March 31, 2011 from $1.37 million for the three months ended March 31, 2010. This increase occurred primarily as the result of an increase in the number of full time equivalent employees to 182 at March 31, 2011, from 88 at March 31, 2010. Occupancy expense increased by $492,000 or 171.4% to $779,000 for the three months ended March 31, 2011 from $287,000 for the three months ended March 31, 2010. Equipment expense increased by $469,000 or 84.7% to $1.02 million for the three months ended March 31, 2011 from $554,000 for the three months ended March 31, 2010. The primary component of this expense item is data service provider expense which increases with the growth in the Bank’s assets.

Professional fees increased by $71,000 or 53.8% to $203,000 for the three months ended March 31, 2011 from $132,000 for the three months ended March 31, 2010. Directors fees increased by $13,000 or 12.3% to $119,000 for the three months ended March 31, 2011 from $106,000 for the three months ended March 31, 2010. Regulatory assessments increased by $265,000 or 153.2% to $438,000 for the three months ended March 31, 2011 from $173,000 for the three months ended March 31, 2010. Advertising expense increased by $5,000 or 7.5% to $72,000 for the three months ended March 31, 2011 from $67,000 for the three months ended March 31, 2010. Merger related expenses decreased by $200,000 to no related expense for the three months ended March 31, 2011 compared to $200,000 for the three months ended March 31, 2010. Other non-interest expense increased by $605,000 or 158.0% to $988,000 for the three months ended March 31, 2011 from $383,000 for the three months ended March 31, 2010. The increase in other expenses occurred primarily as a result of an increase in loan expense and fees associated with the collection process on certain delinquent loan facilities. Additionally, other non-interest expense is also comprised of stationary, forms and printing, check printing, correspondent bank fees, telephone and communication, shareholder relations and other fees and expenses.

Income taxes increased by $679,000 or 124.4% to $1.2 million for the three months ended March 31, 2011 from $546,000 for the three months ended March 31, 2010, reflecting increased taxable income during the three month time period ended March 31, 2011. Net income increased substantially in the three months ended March 31, 2011 as compared to the three months ended March 31, 2010, primarily as a result of the increase in the size of the Company’s balance sheet which was attributable to the business combination transaction with the Pamrapo Bancorp, Inc. The consolidated effective tax rate for the three months ended March 31, 2011 was 38.9% compared to 43.2% for the three months ended March 31. 2010 due to nondeductible merger related items which occurred during the three months ended March 31, 2010.

Index

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Management of Market Risk

General. The majority of our assets and liabilities are monetary in nature. Consequently, one of our most significant forms of market risk is interest rate risk. Our assets, consisting primarily of mortgage loans, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and reduce the exposure of our net interest income to changes in market interest rates. Accordingly, our Board of Directors has established an Asset/Liability Committee which is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors. Senior management monitors the level of interest rate risk on a regular basis and the Asset/Liability Committee, which consists of senior management and outside directors operating under a policy adopted by the Board of Directors, meets as needed to review our asset/liability policies and interest rate risk position.

The following table presents the Company’s net portfolio value (“NPV”). These calculations were based upon assumptions believed to be fundamentally sound, although they may vary from assumptions utilized by other financial institutions. The information set forth below is based on data that included all financial instruments as of March 31, 2011. Assumptions have been made by the Company relating to interest rates, loan prepayment rates, core deposit duration, and the market values of certain assets and liabilities under the various interest rate scenarios. Actual maturity dates were used for fixed rate loans and certificate accounts. Investment securities were scheduled at either the maturity date or the next scheduled call date based upon management’s judgment of whether the particular security would be called in the current interest rate environment and under assumed interest rate scenarios. Variable rate loans were scheduled as of their next scheduled interest rate repricing date. Additional assumptions made in the preparation of the NPV table include prepayment rates on loans and mortgage-backed securities, core deposits without stated maturity dates were scheduled with an assumed term of 48 months, and money market and non-interest bearing accounts were scheduled with an assumed term of 24 months. The NPV at “PAR” represents the difference between the Company’s estimated value of assets and estimated value of liabilities assuming no change in interest rates. The NPV for a decrease of 100 to 300 basis points has been excluded since it would not be meaningful, in the interest rate environment as of March 31, 2011. The following sets forth the Company’s NPV as of that date.

Change in	Net Portfolio		$ Change from			% Change from			NPV as a % of Assets
Calculation	Value		PAR			PAR			NPV Ratio			Change
+300bp	$	103,338	$	(26,376	)		-20.33	%		9.79	%		-163 bps
+200bp		119,007		(10,707	)		-8.25			10.96			-46 bps
+100bp		128,476		(1,238)			-0.95			11.53			11 bps
PAR		129,714		—			—			11.42			—

bp – basis points

The table above indicates that at March 31, 2011, in the event of a 100 basis point increase in interest rates, we would experience a 0.95% decrease in NPV.

Certain shortcomings are inherent in the methodology used in the above interest rate risk measurement. Modeling changes in NPV require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the NPV table presented assumes that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the NPV table provides an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income, and will differ from actual results.

Index

ITEM 4T.

Controls and Procedures

Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this quarterly report, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There has been no change in the Company’s internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Index

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved, from time to time, as plaintiff or defendant in various legal actions arising in the normal course of business. At March 31, 2011, we were not involved in any material legal proceedings, the outcome of which would have a material adverse affect on our financial condition or results of operations.

ITEM 1.A. RISK FACTORS

Set forth below are certain factors for our investors to consider.

If Economic Conditions Deteriorate in our Primary Market, Our Results of Operations and Financial Condition could be Adversely Impacted as Borrowers’ Ability to Repay Loans Declines and the Value of the Collateral Securing Loans Decreases.

Our financial results may be adversely affected by changes in prevailing economic conditions, including decreases in real estate values, changes in interest rates which may cause a decrease in interest rate spreads, adverse employment conditions, the monetary and fiscal policies of the federal government and other significant external events. Decreases in real estate values could potentially adversely affect the value of property used as collateral for our mortgage loans. In the event that we are required to foreclose on a property securing a mortgage loan, there can be no assurance that we will recover funds in an amount equal to any remaining loan balance as a result of prevailing general economic conditions, real estate values and other factors associated with the ownership of real property. As a result, the market value of the real estate underlying the loans may not, at any given time, be sufficient to satisfy the outstanding principal amount of the loans. Consequently, we would sustain loan losses and potentially incur a higher provision for loan loss expense. Adverse changes in the economy may also have a negative effect of the ability of borrowers to make timely repayments of their loans, which could have an adverse impact on earnings.

Our Securities Portfolio may be Negatively Impacted by Fluctuations in Market Value.

Our securities portfolio may be impacted by fluctuations in market value, potentially reducing accumulated other comprehensive income and/or earnings. Fluctuations in market value may be caused by decreases in interest rates, lower market prices for securities and lower investor demand. Our securities portfolio is evaluated for other-than-temporary impairment on at least a quarterly basis. If this evaluation shows an impairment to cash flow connected with one or more securities, a potential loss to earnings may occur.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Securities sold within the past three years without registering the securities under the Securities Act of 1933

On July 14, 2010, the Company announced a fourth stock repurchase plan to repurchase 5% or 479,965 shares of the Company’s common stock. The Company’s stock purchases for the three months ended March 31, 2011 are as follows:

Period	Shares Purchased		Average Price		Total Number of Shares Purchased		Maximum Number of Shares That May Yet be Purchased

1/1- 1/31		4,816	$	10.55		4,816		414,186
2/1- 2/28		316	$	11.50		5,132		413,870
3/1- 3/31		—	$	—		—		413,870

Total		5,132	$	10.61		5,132		413,870

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit 11.0 Computation of Earnings per Share.

Exhibit 31.1 and 31.2 Officers’ Certification filed pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32 Officers’ Certification filed pursuant to section 906 of the Sarbanes-Oxley Act of 2002.

Index

Signatures

Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

	BCB BANCORP, INC.

Date: May 16, 2011	By:	/s/ Donald Mindiak
		Donald Mindiak
		President and Chief Executive Officer

Date: May 16, 2011	By:	/s/ Kenneth Walter
		Kenneth Walter
		Chief Financial Officer