EX-99.2 2 dex992.htm EXHIBIT 99.2 Exhibit 99.2

Exhibit 99.2

Unaudited Pro Forma Combined Condensed Consolidated Financial Statements

The following unaudited pro forma combined condensed statement of condition at June 30, 2010 and unaudited pro forma combined consolidated statements of income for the six months ended June 30, 2010 and year ended December 31, 2009 give effect to the merger of Pamrapo Bancorp, Inc. (“Pamrapo”) and BCB Community Bank, Inc. (“BCB”) effective July 6, 2010. The unaudited pro forma combined condensed financial information is set forth as if the transaction had become effective on June 30, 2010, with respect to financial condition data, and at the beginning of the periods presented with respect to operations data.

The unaudited pro forma combined condensed consolidated financial statements give effect to the Pamrapo merger using the purchase method of accounting under U.S. generally accepted accounting principles. All assets acquired and liabilities assumed were reflected at their estimated fair values. The fair value adjustment for loans included a credit adjustment for estimated lifetime losses, and no allowance for credit losses was carried over.

BCB anticipates that the Merger with Pamrapo will provide the combined company with financial benefits that include reduced operating expenses. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenue and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during these periods.

The unaudited pro forma stockholders’ equity and net income are qualified by the statements set forth under this caption and should not be considered indicative of the market value of BCB’s common stock or actual or future results of operations of BCB for any period. Actual results may be materially different from the pro forma information presented.


BCB Bancorp, Inc.

Unaudited Pro Forma Combined Condensed Consolidated Statement of Condition

As of June 30, 2010

(In Thousands)

 

     BCB
Bancorp(1)
    Pamrapo
Bancorp(1)
    Pro Forma
Adjustments(2)
    Combined
Pro Forma
 

Assets

        

Cash and cash equivalents

   $ 119,782      $ 19,872      $ (2,220 )(13)    $ 137,434   

Securities available for sale

     1,248        689        —          1,937   

Securities held to maturity

     115,558        81,906        4,357 (3)      201,821   

Federal home loan bank stock

     5,702        2,878        —          8,580   

Loans held for sale

     1,319        —          —          1,319   

Loans, net

     388,904        409,671        5,493 (4)      804,068   

Premises and equipment

     5,359        2,455        5,000 (5)      12,814   

Other assets

     13,763        9,799        (8,681 )(6)      14,881   
                                

Total assets

   $ 651,635      $ 527,270      $ 3,949      $ 1,182,854   
                                

Liabilities and Stockholders’ Equity

        

Deposits and mortgage escrow accounts

   $ 484,092      $ 433,712      $ 1,245 (7)    $ 919,049   

Borrowings

     110,000        41,000        2,815 (8)      153,815   

Subordinated debt

     4,124        —          —          4,124   

Other liabilities

     1,547        6,203        1,173 (9)      8,923   
                                

Total liabilities

     599,763        480,915        5,233        1,085,911   

Common Stock

     332        69        247 (10)      648   

Additional paid-in capital

     46,957        19,340        18,989 (10)      85,286   

Retained Earnings

     13,359        52,103        (45,677 )(10)      19,785   

Treasury stock

     (8,731     (23,540     23,540 (10)      (8,731

Accumulated other comprehensive (loss)

     (45     (1,617     1,617 (10)      (45
                                

Total Stockholders’ Equity

     51,872        46,355        (1,284     96,943   
                                

Total liabilities and stockholders’ equity

   $ 651,635      $ 527,270      $ 3,949      $ 1,182,854   
                                

Total tangible equity

   $ 51,872      $ 46,355        $ 96,943   

Total tangible assets

   $ 651,635      $ 527,270        $ 1,182,854   

Equity/assets

     7.96     8.79       8.20

Tangible equity/tangible assets

     7.96     8.79       8.20

Outstanding shares

     4,662        4,936          9,598   

 

 

(See notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements)

 

Page 1


BCB Bancorp, Inc.

Unaudited Pro Forma Combined Condensed Consolidated Statement of Income

Six months ended June 30, 2010

(In Thousands, except for per share amounts)

 

     BCB
Bancorp
   Pamrapo
Bancorp
    Pro Forma
Adjustments
    Combined
Pro Forma

Loan interest income

   $ 12,806    $ 12,261      $ (2,203 )(11)    $ 22,864

Security interest income

     2,872      2,349        (772 )(11)      4,449
                             

Total Interest income

     15,678      14,610        (2,975     27,313

Deposits

     3,791      3,008        (742 )(11)      6,057

Borrowings

     2,454      1,254        (457 )(11)      3,251
                             

Total Interest expense

     6,245      4,262        (1,199     9,308

Net interest income before provision for loan losses

     9,433      10,348        (1,776     18,005

Provision for loan losses

     750      1,800        —          2,550
                             

Net interest income after provision for loan losses

     8,683      8,548        (1,776     15,455

Noninterest income:

         

Gain on sale of loans originated for sale

     128      —          —          128

Gain on Bargain Purchase

     —        —          13,673 (12)      13,673

Service fees and other noninterest income

     403      566        —          969
                             

Total noninterest income

     531      566        13,673        14,770

Noninterest expense:

         

Compensation and benefits expense

     2,770      3,325        —          6,095

Occupancy and equipment expense

     1,650      1,197        134 (11)      2,981

Professional fees

     193      3,196        —          3,389

Litigation loss reserve

     —        1,005        —          1,005

Merger related expenses

     344      201        2,220 (13)      2,765

Other operating expenses

     1,477      2,077        —          3,554
                             

Total noninterest expense

     6,434      11,001        2,354 (14)      19,789
                             

Income (Loss) before income taxes

     2,780      (1,887     9,543        10,436

Federal and state income taxes (benefits)

     1,140      49        4,301 (15)      5,490
                             

Net Income (Loss)

   $ 1,640    $ (1,936   $ 5,242      $ 4,946
                             

Net income (loss) per share, basic

   $ 0.35    $ (0.39   $ —        $ 0.52

Net income (loss) per share, diluted

   $ 0.35    $ (0.39   $ —        $ 0.51

Average fully basic shares

     4,662      4,936          9,598

Average fully diluted shares

     4,678      4,936          9,614

 

(See notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements)

 

Page 2


Notes to Unaudited Pro Forma Combined Condensed Financial Statements as of

and for the Six Months Ended June 30, 2010

Footnote 1

Assumes the merger of BCB Bancorp, Inc. and Pamrapo Bancorp, Inc. was completed on January 1, 2010. Historical amounts for BCB Bancorp, Inc. and Pamrapo Bancorp, Inc. are as of June 30, 2010 and are derived from each Company’s respective unaudited consolidated financial statements as of June 30, 2010.

Footnote 2

Reflects the purchase accounting and merger adjustments related to the merger for a price of $7.83 per share in stock. Merger consideration assumes that all Pamrapo Bancorp’s shares are exchanged for 4,935,542 shares of BCB Bancorp stock (one for one exchange ratio) at a market value of $7.83 per share as of July 6, 2010.

No stock options are cashed out, rather they are exchanged.

Footnote 3

Represents the fair value adjustment on acquired held to maturity securities.

Footnote 4

Represents the elimination of Pamrapo’s allowance for credit losses, and the fair value adjustment on acquired loans, which included both an interest rate component and a credit adjustment for estimated lifetime losses. Accounting rules prohibit the carryover of Pamrapo’s allowance for credit losses.

Footnote 5

Represents the estimated fair value adjustment on the premises acquired.

Footnote 6

Represents the net deferred tax assets of $3.7 million associated with the fair value adjustments related to the acquired assets and liabilities and the tax effect of the gain on bargain purchase. Deferred tax assets on the taxable transaction costs amounted to $169,000.

Footnote 7

Represents the fair value adjustment on certificates of deposit assumed from Pamrapo Bancorp, Inc.

Footnote 8

Represents the fair value adjustment on FHLB borrowings assumed from Pamrapo Bancorp, Inc.

Footnote 9

Represents the fair value adjustment on benefit plans assumed from Pamrapo Bancorp, Inc.

Footnote 10

Represents the elimination of Pamrapo Bancorp, Inc. stockholders’ equity; the impact of transaction costs relating to the merger after taxes (approximately $2.1 million), primarily professional, legal, and conversion related expenditures; and the impact of the gain bargain purchase, net of tax.

Footnote 11

Represents the amortization/accretion of fair value adjustments related to loans, investment securities, deposits, and borrowings utilizing the level yield method or straight line method, where appropriate, over the estimated useful lives of the related asset or liability.

 

     6/30/2010     6/30/2011     6/30/2012     6/30/2013     6/30/2014    ThereAfter

Loans

   $ 2,203      $ 1,673      $ 1,240      $ 587      $ 45    $ 0

Investment Securities

     772        2,851        731        3        0      0

Premises

     134        267        267        267        267      2,798

Deposits

     (742     (357     (133     (13     0      0

Borrowings

     (457     (914     (914     (530     0      0
                                             

TOTAL

   $ 1,910      $ 3,520      $ 1,191      $ 314      $ 312    $ 2,798
                                             

 

Page 3


Notes to Unaudited Pro Forma Combined Condensed Financial Statements as of

and for the Six Months Ended June 30, 2010

Footnote 12

A reconciliation of the consideration paid by BCB Bancorp and Pamrapo Bancorp’s net assets acquired is as follows (in thousands):

 

Cost to Acquire Pamrapo Bancorp:

    

Cash

     —       

Stock

   $ 38,645     

Consideration paid

     $ 38,645   

Pamrapo Bancorp’s Tangible Equity

       46,355   

Fair Value Adjustments:

    

Investments HTM

     4,357     

Loans—yield adjustment

     5,748     

Loans—credit adjustment

     (8,425  

Allowance for loan losses

     8,170     

Premise and equipment

     5,000     

Time deposits

     (1,245  

Borrowings

     (2,815  

Liability for benefit plans

     (1,173  
          

Fair value adjustment sub-total

     9,617     

Tax effect on fair value adjustments

     (3,654  
          

Total adjustments to net assets

       5,963   
          

Adjusted net assets acquired

       52,318   

Core deposit intangible

     —       

Tax effect on core deposit intangible

     —       
          

Net core deposit intangible

       —     
          

Estimated goodwill recognized, gain on bargain purchase

       (13,673
          

Gain on bargain purchase

     $ 13,673   
          

Footnote 13

Transaction costs associated with the merger are estimated to be $2.1 million, net of taxes. A summary of these costs is as follows (in thousands):

 

Professional Fees

   $ 1,519  

Merger related compensation and benefits

     526  

Facilities and systems

     175  

Other merger related expenses

     —    
        

Estimated pre-tax merger costs

     2,220   (20% deductible)

Less: tax benefit

     169  
        

Estimated after-tax transaction costs

   $ 2,051  
        

Footnote 14

Noninterest expenses do not reflect anticipated cost savings.

Footnote 15

Represents the adjustment to record the tax effect of the pro forma adjustments using BCB Bancorp’s marginal statutory tax rate of 38%.

 

Page 4


BCB Bancorp, Inc.

Unaudited Pro Forma Combined Condensed Consolidated Statement of Income

Year Ended December 31, 2009

(In Thousands, except for per share amounts)

 

     BCB Bancorp
Historical(1)
   Pamrapo Bancorp
Historical(1)
    Pro Forma
Adjustments(2)
    Combined
Pro Forma(1)

Loan interest income

   $ 27,349    $ 25,915      $ (3,226 )(3)    $ 50,038

Security interest income

     7,029      5,812        (1,544 )(3)      11,297
                             

Total Interest income

     34,378      31,727        (4,770     61,335

Deposits

     10,018      8,303        (991 )(3)      17,330

Borrowings

     4,976      3,187        (914 )(3)      7,249
                             

Total Interest expense

     14,994      11,490        (1,905     24,579

Net interest income before provision for loan losses

     19,384      20,237        (2,865     36,756

Provision for loan losses

     1,550      4,025        —          5,575
                             

Net interest income after provision for loan losses

     17,834      16,212        (2,865     31,181

Noninterest income:

         

Gain on sale of loans originated for sale

     225      —          —          225

Gain on sale of branch and deposits

     —        492        —          492

Gain on sale of real estate owned

     13      —          —          13

Gain on Bargain Purchase

     —        —          14,574 (4)      14,574

Service fees and other noninterest income

     693      1,554        —          2,247
                             

Total noninterest income

     931      2,046        14,574        17,551

Noninterest expense:

         

Compensation and benefits expense

     5,403      8,013        —          13,416

Occupancy and equipment expense

     3,246      2,547        267 (3)      6,060

Professional fees

     465      4,885        —          5,350

Litigation loss reserve

     —        5,000        —          5,000

Merger related expenses

     648      918        2,564 (5)      4,130

Other operating expenses

     2,634      4,197        —          6,831
                             

Total noninterest expense

     12,396      25,560        2,831 (6)      40,787
                             

Income (Loss) before income taxes

     6,369      (7,302     8,878        7,945

Federal and state income taxes (benefits)

     2,621      (697     4,166 (7)      6,090
                             

Net Income (Loss)

   $ 3,748    $ (6,605   $ 4,712      $ 1,855
                             

Net income (loss) per share, basic

   $ 0.81    $ (1.34     $ 0.19

Net income (loss) per share, diluted

   $ 0.80    $ (1.34     $ 0.19

Average fully basic shares

     4,655      4,936          9,591

Average fully diluted shares

     4,676      4,936          9,612

 

(See notes to Unaudited Pro Forma Combined Condensed Consolidated Statement of Income)


Notes to Unaudited Pro Forma Combined Condensed Consolidated Statement of Income

For the Year Ended December 31, 2009

Footnote 1

Assumes the merger of BCB Bancorp, Inc. and Pamrapo Bancorp, Inc. was completed on January 1, 2009. Historical amounts for BCB Bancorp, Inc. and Pamrapo Bancorp, Inc. are as of December 31, 2009 and are derived from each company’s respective audited consolidated financial statements as of December 31, 2009.

Footnote 2

Reflects the purchase accounting and merger adjustments related to the merger for a price of $7.83 per share in stock. Merger consideration assumes that all Pamrapo Bancorp’s shares are exchanged for 4,935,542 shares of BCB Bancorp stock (one for one exchange ratio) at a market value of $7.83 per share as of July 6, 2010.

No stock options are cashed out, rather they are exchanged.

Footnote 3

Represents the amortization/accretion of fair value adjustments related to loans, investment securities, deposits, and borrowings utilizing the level yield method or straight line method, where appropriate, over the estimated useful lives of the related asset or liability.

 

     Year 1     Year 2     Year 3     Year 4     Year 5    ThereAfter

Loans

   $ 3,226      $ 1,099      $ 1,136      $ 287      $ 0    $ 0

Investment Securities

     1,544        2,742        71        0        0      0

Premises

     267        267        267        267        267      2,665

Deposits

     (991     (172     (82     0        0      0

Borrowings

     (914     (914     (914     (73     0      0
                                             

TOTAL

   $ 3,132      $ 3,022      $ 478      $ 481      $ 267    $ 2,665
                                             

Footnote 4

A reconciliation of the consideration paid by BCB Bancorp and Pamrapo Bancorp’s net assets acquired is as follows (in thousands):

 

Cost to Acquire Pamrapo Bancorp:

    

Cash

   $ 0.00     

Stock

   $ 38,645     

Consideration paid

     $ 38,645   

Pamrapo Bancorp’s Tangible Equity

       48,235   

Fair Value Adjustments:

    

Investments HTM

     4,357     

Loans—yield adjustment

     5,748     

Loans—credit adjustment

     (8,425  

Allowance for loan losses

     6,591     

Premise and equipment

     5,000     

Time deposits

     (1,245  

Borrowings

     (2,815  

Liability for benefit plans

     (1,173  
          

Fair value adjustment sub-total

     8,038     

Tax effect on fair value adjustments

     (3,054  
          

Total adjustments to net assets

       4,984   

Adjusted net assets acquired

       53,219   

Core deposit intangible

     —       

Tax effect on core deposit intangible

     —       
          

Net core deposit intangible

       —     

Estimated goodwill recognized, pre-extraordinary gain

       —     
          

Estimated goodwill recognized, gain on bargain purchase

       (14,574
          

Gain on bargain purchase

     $ 14,574   
          

Footnote 5

Transaction costs associated with the merger are estimated to be $2.4 million, net of taxes. A summary of these costs is as follows (in thousands):

 

Professional Fees

   $ 1,863  

Merger related compensation and benefits

     526  

Facilities and systems

     175  

Other merger related expenses

     —    
        

Estimated pre-tax merger costs

     2,564   (20% deductible)

Less: tax benefit

     195  
        

Estimated after-tax transaction costs

   $ 2,369  
        

Footnote 6

Noninterest expenses do not reflect anticipated cost savings.

Footnote 7

Represents the adjustment to record the tax effect of the pro forma adjustments using BCB Bancorp’s marginal statutory tax rate of 38%.