EXHIBIT
13
 CONSOLIDATED
FINANCIAL STATEMENTS


BCB
Bancorp, Inc. and Subsidiaries
 
 Consolidated
Financial Report
 
 December 31,
2009
  
 
 BCB Bancorp, Inc. and
      SubsidiariesTable
      of Contents
 
 
 PageReport
      of Independent Registered Public Accounting Firm
                
                1Consolidated
      Financial StatementsConsolidated
      Statements of Financial Condition
                
                2Consolidated
      Statements of Income
                
                3Consolidated
      Statements of Changes in Stockholders’ Equity
                
                4Consolidated
      Statements of Cash Flows
                
                5Notes
      to Consolidated Financial Statements
                
                6
 
 
  
   Graphic
  Report
of Independent Registered Public Accounting Firm
  To the
Board of Directors and Stockholders
  BCB
Bancorp, Inc.
  Bayonne,
New Jersey
  We have
audited the accompanying consolidated statements of financial condition of BCB
Bancorp, Inc. and Subsidiaries (the “Company”) as of December 31, 2009 and
2008 and the related consolidated statements of income, changes in stockholders’
equity, and cash flows for each of the years in the three-year period ended
December 31, 2009.  The Company’s management is responsible for
these consolidated financial statements. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
  We
conducted our audits in accordance with auditing standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material
misstatement.  The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting.
An audit includes consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of BCB Bancorp,
Inc. and Subsidiaries as of December 31, 2009 and 2008, and the
consolidated results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 2009, in conformity with
accounting principles generally accepted in the United States of
America.
  
  Clark,
New Jersey
 March 29,
2010
 BCB Bancorp, Inc. and
      SubsidiariesConsolidated
      Statements of Financial
Condition
  December 31,2009
              
              
              2008(In
      Thousands, except for share data and per share data)AssetsCash
      and amounts due from depository institutions
              
              $
              3,587
              
              
              $
              3,495Interest-bearing
      deposits
              
              
              63,760
              
              
              
              3,266Cash
      and Cash Equivalents
              
              
              67,347
              
              
              
              6,761Securities
      available for sale
              
              
              1,346
              
              
              
              888Securities
      held to maturity, fair value $133,050 and
      $143,087  respectively
              
              
              132,644
              
              
              
              141,280Loans
      held for sale
              
              
              4,275
              
              
              
              1,422Loans
      receivable, net of allowance for loan losses of $6,644 and $5,304
      respectively
              
              
              401,872
              
              
              
              406,826Premises
      and equipment
              
              
              5,359
              
              
              
              5,627Federal
      Home Loan Bank of New York stock
              
              
              5,714
              
              
              
              5,736Interest
      receivable
              
              
              3,799
              
              
              
              3,884Real
      Estate Owned
              
              
              1,270
              
              
              
              1,435Deferred
      income taxes
              
              
              3,618
              
              
              
              3,113Other
      assets
              
              
              4,259
              
              
              
              1,652Total
      Assets
              
              $
              631,503
              
              
              $
              578,624Liabilities
      and Stockholders’ EquityLiabilitiesNon-interest
      bearing deposits
              
              $
              37,082
              
              
              $
              30,561Interest
      bearing deposits
              
              
              426,656
              
              
              
              379,942Total
      deposits
              
              
              463,738
              
              
              
              410,503Short-term
      borrowings
              
              
              -
              
              
              
              2,000Long-term
      debt
              
              
              114,124
              
              
              
              114,124Other
      liabilities
              
              
              2,250
              
              
              
              2,282Total
      Liabilities
              
              
              580,112
              
              
              
              528,909Stockholders’
      EquityCommon
      stock, stated value $0.064; 20,000,000 and 10,000,000 shares,
      respectively, authorized; 5,195,658 and 5,183,731 shares, respectively,
      issued; 4,657,906 and 4,650,051 shares, respectively,
      outstanding
              
              
              332
              
              
              
              331Paid-in
      capital
              
              
              46,926
              
              
              
              46,864Treasury
      stock, at cost, 537,752 and 533,680 shares, respectively
              
              
              (8,719
              )
              
              
              (8,680
              )Retained
      earnings
              
              
              12,839
              
              
              
              11,325Accumulated
      other comprehensive income (loss)
              
              
              13
              
              
              
              (125
              )Total
      Stockholders’ Equity
              
              
              51,391
              
              
              
              49,715Total
      Liabilities and Stockholders’ Equity
              
              $
              631,503
              
              
              $
              578,624
  See
notes to consolidated financial statements.
 2
 
 BCB Bancorp, Inc. and
      SubsidiariesConsolidated
      Statements of
Income
 Years Ended
    December 31,2009
              
              
              2008
              
              
              2007(In
      Thousands, Except for Per Share Data)Interest
      IncomeLoans,
      including fees
              
              $
              27,349
              
              
              $
              27,248
              
              
              $
              24,365Securities
              
              
              6,982
              
              
              
              9,185
              
              
              
              8,843Other
      interest-earning assets
              
              
              47
              
              
              
              190
              
              
              
              1,182Total
      Interest Income
              
              
              34,378
              
              
              
              36,623
              
              
              
              34,390Interest
      ExpenseDeposits:Demand
              
              
              877
              
              
              
              1,046
              
              
              
              1,006Savings
      and club
              
              
              1,157
              
              
              
              1,370
              
              
              
              1,866Certificates
      of deposit
              
              
              7,984
              
              
              
              9,106
              
              
              
              10,10910,018
              
              
              
              11,522
              
              
              
              12,981Borrowed
      money
              
              
              4,976
              
              
              
              5,141
              
              
              
              4,236Total
      Interest Expense
              
              
              14,994
              
              
              
              16,663
              
              
              
              17,217Net
      Interest Income
              
              
              19,384
              
              
              
              19,960
              
              
              
              17,173Provision
      for Loan Losses
              
              
              1,550
              
              
              
              1,300
              
              
              
              600Net
      Interest Income after Provision for Loan Losses
              
              
              17,834
              
              
              
              18,660
              
              
              
              16,573Non-Interest  Income
      (Loss)Fees
      and service charges
              
              
              657
              
              
              
              689
              
              
              
              629Gain
      on sales of loans originated for sale
              
              
              225
              
              
              
              137
              
              
              
              420Gain
      on sale of real estate owned
              
              
              13
              
              
              
              1
              
              
              
              13Other
      than temporary impairment on security
              
              
              -
              
              
              
              (2,915
              )
              
              
              -Other
              
              
              36
              
              
              
              34
              
              
              
              30Total
      Non-Interest Income (Loss)
              
              
              931
              
              
              
              (2,054
              )
              
              
              1,092Non-Interest
      ExpensesSalaries
      and employee benefits
              
              
              5,403
              
              
              
              5,492
              
              
              
              5,699Occupancy
      expense of premises
              
              
              1,122
              
              
              
              1,059
              
              
              
              1,000Equipment
              
              
              2,124
              
              
              
              2,019
              
              
              
              1,906Professional
      Fees
              
              
              465
              
              
              
              319
              
              
              
              259Directors
      Fees
              
              
              395
              
              
              
              351
              
              
              
              265Regulatory
      Assessments
              
              
              1,137
              
              
              
              296
              
              
              
              233Advertising
              
              
              273
              
              
              
              241
              
              
              
              326Merger
      related expenses
              
              
              648
              
              
              
              172
              
              
              
              -Loss
      on overdrafts
              
              
              -
              
              
              
              560
              
              
              
              -Other
              
              
              829
              
              
              
              805
              
              
              
              1,030Total
      Non-Interest Expenses
              
              
              12,396
              
              
              
              11,314
              
              
              
              10,718Income
      before Income Taxes
              
              
              6,369
              
              
              
              5,292
              
              
              
              6,947Income
      Taxes
              
              
              2,621
              
              
              
              1,820
              
              
              
              2,509Net
      Income
              
              $
              3,748
              
              
              $
              3,472
              
              
              $
              4,438Net
      Income per Common ShareBasic
              
              $
              0.81
              
              
              $
              0.75
              
              
              $
              0.92Diluted
              
              $
              0.80
              
              
              $
              0.74
              
              
              $
              0.90Weighted
      Average Number of Common Shares OutstandingBasic
              
              
              4,655
              
              
              
              4,629
              
              
              
              4,818Diluted
              
              
              4,676
              
              
              
              4,706
              
              
              
              4,943
  See
notes to consolidated financial statements.
 3
 
 BCB Bancorp, Inc. and
      SubsidiariesConsolidated
      Statements of Changes in Stockholders’
      Equity
  Common
                  Stock
              
              
              Paid-In
                  Capital
              
              
              Treasury
      Stock
              
              
              Retained
      Earnings
              
              
              Accumulated
                Other
                Comprehensive
                Income
      (Loss)
              
              
              Total(In
      Thousands, except for share and per share amounts)Balance
      - December 31, 2006
              
              $
              324
              
              
              $
              45,632
              
              
              $
              (859
              )
              
              $
              6,866
              
              
              $
              -
              
              
              $
              51,963Stock-based
      compensation
              
              
              -
              
              
              
              6
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              6Exercise
      of stock options (15,426 shares)
              
              
              1
              
              
              
              157
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              158Treasury
      stock purchases (385,358 shares)
              
              
              -
              
              
              
              -
              
              
              
              (6,526
              )
              
              
              -
              
              
              
              -
              
              
              
              (6,526
              )Cash
      dividend ($0.32 per share) declared
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,555
              )
              
              
              -
              
              
              
              (1,555
              )Net
      income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              4,438
              
              
              
              -
              
              
              
              4,438Unrealized
      gain on securities available for sale, net of deferred income tax of
      $18
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              26
              
              
              
              26Total
      Comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              4,460Balance
      - December 31, 2007
              
              
              325
              
              
              
              45,795
              
              
              
              (7,385
              )
              
              
              9,749
              
              
              
              26
              
              
              
              48,510Tax
      benefit from exercise of stock options
              
              
              -
              
              
              
              150
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              150Exercise
      of stock options (104,873 shares)
              
              
              6
              
              
              
              919
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              925Treasury
      stock purchases (93,029 shares)
              
              
              -
              
              
              
              -
              
              
              
              (1,295
              )
              
              
              -
              
              
              
              -
              
              
              
              (1,295
              )Cash
      dividend ($0.41 per share) declared
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,896
              )
              
              
              -
              
              
              
              (1,896
              )Net
      income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              3,472
              
              
              
              -
              
              
              
              3,472Loss
      on other than temporary impairment on security, net of deferred income tax
      benefit of $1,164
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,751
              
              
              
              1,751Unrealized
      loss on securities available for sale, net of deferred income tax of
      $1,266
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,902
              )
              
              
              (1,902
              )Total
      Comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              3,321Balance
      - December 31, 2008
              
              
              331
              
              
              
              46,864
              
              
              
              (8,680
              )
              
              
              11,325
              
              
              
              (125
              )
              
              
              49,715Exercise
      of stock options (11,933 shares)
              
              
              1
              
              
              
              62
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              63Treasury
      stock purchases (4,072 shares)
              
              
              -
              
              
              
              -
              
              
              
              (39
              )
              
              
              -
              
              
              
              -
              
              
              
              (39
              )Cash
      dividend ($0.48 per share) declared
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (2,234
              )
              
              
              -
              
              
              
              (2,234
              )Net
      income
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              3,748
              
              
              
              -
              
              
              
              3,748Unrealized
      gain on securities available for sale, net of deferred income tax of
      $93
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              138
              
              
              
              138Total
      Comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              3,886Balance
      - December 31, 2009
              
              $
              332
              
              
              $
              46,926
              
              
              $
              (8,719
              )
              
              $
              12,839
              
              
              $
              13
              
              
              $
              51,391
  See
notes to consolidated financial statements.
 4
 
 BCB Bancorp, Inc. and
      SubsidiariesConsolidated
      Statements of Cash
      Flows
  Years Ended
    December 31,2009
              
              
              2008
              
              
              2007(In
      Thousands)Cash
      Flows from Operating ActivitiesNet
      income
              
              $
              3,748
              
              
              $
              3,472
              
              
              $
              4,438Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      of premises and equipment
              
              
              363
              
              
              
              401
              
              
              
              394Amortization
      (accretion), net
              
              
              367
              
              
              
              (684
              )
              
              
              (664
              )Provision
      for loan losses
              
              
              1,550
              
              
              
              1,300
              
              
              
              600Stock-based
      compensation
              
              
              -
              
              
              
              -
              
              
              
              6Deferred
      income tax benefit
              
              
              (598
              )
              
              
              (1,659
              )
              
              
              (132
              )Other
      than temporary impairment loss
              
              
              -
              
              
              
              2,915
              
              
              
              -Loans
      originated for sale
              
              
              (19,576
              )
              
              
              (6,705
              )
              
              
              (22,993
              )Proceeds
      from sales of loans originated for sale
              
              
              16,948
              
              
              
              7,552
              
              
              
              24,257Gain
      on sales of loans originated for sale
              
              
              (225
              )
              
              
              (137
              )
              
              
              (420
              )Gain
      on sale of real estate owned
              
              
              (13
              )
              
              
              (1
              )
              
              
              (13
              )Decrease
      (increase) in interest receivable
              
              
              85
              
              
              
              (108
              )
              
              
              (79
              )Increase
      in other assets
              
              
              (2,607
              )
              
              
              (718
              )
              
              
              (258
              )(Decrease)
      increase in accrued interest payable
              
              
              (120
              )
              
              
              (59
              )
              
              
              214Increase
      (decrease) in other liabilities
              
              
              88
              
              
              
              317
              
              
              
              (191
              )Net
      Cash Provided by Operating Activities
              
              
              10
              
              
              
              5,886
              
              
              
              5,159Cash
      Flows from Investing ActivitiesProceeds
      from repayments and calls on securities held to maturity
              
              
              155,553
              
              
              
              84,400
              
              
              
              21,010Purchases
      of securities held to maturity
              
              
              (147,647
              )
              
              
              (60,606
              )
              
              
              (37,338
              )Purchases
      of securities available for sale
              
              
              (227
              )
              
              
              (2,000
              )
              
              
              (2,012
              )Proceeds
      from sales of participation interests in loans
              
              
              1,238
              
              
              
              2,523
              
              
              
              6,315Proceeds
      from sale of real estate owned
              
              
              307
              
              
              
              288
              
              
              
              1,172Purchases
      of loans
              
              
              (1,744
              )
              
              
              (113
              )
              
              
              (9,593
              )Net
      decrease (increase) in loans receivable
              
              
              4,202
              
              
              
              (46,449
              )
              
              
              (44,645
              )Improvements
      to real estate owned
              
              
              (58
              )
              
              
              (241
              )
              
              
              -Additions
      to premises and equipment
              
              
              (95
              )
              
              
              (99
              )
              
              
              (438
              )Redemption
      (purchase) of Federal Home Loan Bank of New York stock
              
              
              22
              
              
              
              (176
              )
              
              
              (1,836
              )Net
      Cash Provided by (Used in) Investing Activities
              
              
              11,551
              
              
              
              (22,473
              )
              
              
              (67,365
              )Cash
      Flows from Financing ActivitiesNet
      increase in deposits
              
              
              53,235
              
              
              
              11,684
              
              
              
              16,072Proceeds
      of long-term debt
              
              
              -
              
              
              
              -
              
              
              
              55,000Repayment  of
      long-term debt
              
              
              -
              
              
              
              -
              
              
              
              (15,000
              )Net
      change in short-term borrowings
              
              
              (2,000
              )
              
              
              2,000
              
              
              
              -Purchase
      of treasury stock
              
              
              (39
              )
              
              
              (1,295
              )
              
              
              (6,526
              )Cash
      dividends paid
              
              
              (2,234
              )
              
              
              (1,896
              )
              
              
              (1,555
              )Net
      proceeds from issuance of common stock
              
              
              63
              
              
              
              925
              
              
              
              158Tax
      benefit from exercise of stock options
              
              
              -
              
              
              
              150
              
              
              
              -Net
      Cash Provided by Financing Activities
              
              
              49,025
              
              
              
              11,568
              
              
              
              48,149Net
      Increase (Decrease) in Cash and Cash Equivalents
              
              
              60,586
              
              
              
              (5,019
              )
              
              
              (14,057
              )Cash
      and Cash Equivalents - Beginning
              
              
              6,761
              
              
              
              11,780
              
              
              
              25,837Cash
      and Cash Equivalents - Ending
              
              $
              67,347
              
              
              $
              6,761
              
              
              $
              11,780Supplementary
      Cash Flows InformationCash
      paid during the year for:Income
      taxes
              
              $
              3,220
              
              
              $
              3,903
              
              
              $
              2,860Interest
              
              $
              15,114
              
              
              $
              16,722
              
              
              $
              17,003Transfer
      of loans to real estate owned
              
              $
              71
              
              
              $
              1,194
              
              
              $
              1,446
  See
notes to consolidated financial statements.
 5
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Notes
to Consolidated Financial Statements
 
 Note
1 - Organization and Stock Offerings
 
 BCB
Bancorp, Inc. (the “Company”) is incorporated in the State of New Jersey and is
a bank holding company. The common stock of the Company is listed on the Nasdaq
Electronic Bulletin Board and trades under the symbol “BCBP.”
 
 On
April 27, 2005, the Company announced that the Board of Directors had
approved a stock repurchase program for the repurchase of up to 5% of the
Company’s outstanding common stock equal to approximately 187,096 shares. The
repurchases may be made from time to time as market conditions warrant. In 2007,
the Company completed the initial stock repurchase plan. On April 26, 2007, the
Company announced a second stock repurchase plan which provided for the
repurchase of  5% or 249,080 shares of the Company’s common
stock.  During 2007, the Company began and completed the repurchase of
all of the shares associated with the second 5% stock repurchase plan.
Consequently, on November 20, 2007, the Company announced a third stock
repurchase plan which provided for the repurchase of 5% or 234,002 shares of the
Company’s common stock.  During 2009, 2008 and 2007, a total of 4,072,
93,029 and 385,358 shares of the Company’s common stock was repurchased at a
cost of approximately $39,000, $1.3 million and $6.5 million or $9.51, $13.92
and $16.93 per share, respectively.
 
 The
Company’s primary business is the ownership and operation of BCB Community Bank
(the “Bank”).  The Bank is a New Jersey commercial bank which, as of
December 31, 2009, operated at four locations in Bayonne and Hoboken, New
Jersey, and is subject to regulation, supervision, and examination by the New
Jersey Department of Banking and Insurance and the Federal Deposit Insurance
Corporation.  The Bank is principally engaged in the business of
attracting deposits from the general public and using these deposits, together
with borrowed funds, to invest in securities and to make loans collateralized by
residential and commercial real estate and, to a lesser extent, consumer
loans.  BCB Holding Company Investment Corp. (the “Investment
Company”) was organized in January 2005 under New Jersey law as a New Jersey
investment company primarily to hold investment and mortgage-backed
securities.
  6
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
2 - Summary of Significant Accounting Policies
 
 Basis
of Consolidated Financial Statement Presentation
 
 The
consolidated financial statements which include the accounts of the Company and
its wholly-owned subsidiaries, the Bank and the Investment Company, have been
prepared in conformity with accounting principles generally accepted in the
United States of America.  All significant intercompany accounts and
transactions have been eliminated in consolidation.
 
 In
preparing the consolidated financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the consolidated statement of financial condition
and revenues and expenses for the periods then ended.  Actual results
could differ significantly from those estimates.  Material estimates
that are particularly susceptible to significant change relates to the
determination of the allowance for loan losses and the identification of
other-than-temporary impairment of securities. Management believes that the
allowance for loan losses is adequate and that no securities in unrealized loss
positions are other-than-temporarily impaired. While management uses available
information to recognize losses on loans, future additions to the allowance for
loan losses may be necessary based on changes in economic conditions in the
market area. Management’s assessment regarding impairment of securities is based
on future projections of cash flow which are subject to change.
 
 In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Bank’s allowance for loan
losses.  Such agencies may require the Bank to recognize additions to
the allowance based on their judgments about information available to them at
the time of their examination.
 
 Effective
April 1, 2009, the Company adopted guidance issued by the Financial Accounting
Standards Board (“FASB”) on subsequent events. The guidance establishes general
standards for accounting for and disclosure of events that occur after the
balance sheet date but before financial statements are issued. The guidance sets
forth the period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may occur for
potential recognition in the financial statements, identifies the circumstances
under which an entity should recognize events or transactions occurring after
the balance sheet date in its financial statements, and the disclosures that
should be made about events or transactions that occur after the balance sheet
date. In preparing these consolidated financial statements, the Company
evaluated the events that occurred between December 31, 2009 and the date these
consolidated financial statements were issued.
 
 Cash
and Cash Equivalents
 
 Cash and
cash equivalents include cash and amounts due from depository institutions and
interest-bearing deposits in other banks having original maturities of three
months or less.
 
 Securities
Available for Sale and Held to Maturity
 
 Investments
in debt securities that the Company has the positive intent and ability to hold
to maturity are classified as held to maturity securities and reported at
amortized cost. Debt and equity securities that are bought and held principally
for the purpose of selling them in the near term are classified as trading
securities and reported at fair value, with unrealized holding gains and losses
included in earnings.  Debt and equity securities not classified as
trading securities nor as held to maturity securities are classified as
available for sale securities (“AFS”) and reported at fair value, with
unrealized holding gains or losses, net of applicable deferred income taxes,
reported in the accumulated other comprehensive income (loss) component of
stockholders’ equity.
  7
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note 2 – Summary of Significant
Accounting Policies (Continued)
 
 If the
fair value of a security is less than its amortized cost, the security is deemed
to be impaired. Management evaluates all securities with unrealized losses
quarterly to determine if such impairments are “temporary” or
other-than-temporary” in accordance with Accounting Standards Codification
(“ASC”) Topic 320, Investments
– Debt and Equity Securities. Accordingly, temporary impairments are
accounted for based upon the classification of the related securities as either
available for sale or held to maturity. Temporary impairments on available for
sale securities are recognized, on a tax-effected basis, through Other
Comprehensive Income (“OCI”) with offsetting entries adjusting the carrying
value of the securities and the balance of deferred taxes. Conversely, the
carrying values of held to maturity securities are not adjusted for temporary
impairments. Information concerning the amount and duration of temporary
impairments on both available for sale and held to maturity securities is
generally disclosed in the notes to the consolidated financial
statements.
  Other-than-temporary
impairments are accounted for based upon several considerations. First,
other-than-temporary impairments on equity securities and on debt securities
that the Company has decided to sell as of the close of a fiscal period, or
will, more likely than not, be required to sell prior to the full recovery of
fair value to a level equal to or exceeding amortized cost, are recognized in
earnings. If neither of these conditions regarding  the likelihood of
the sale of debt securities are applicable, then the other-than-temporary
impairment is bifurcated into credit-related and noncredit-related components. A
credit-related impairment generally represents the amount by which the present
value of the cash flows that are expected to be collected on a debt security
fall below its amortized cost. The noncredit-related component represents the
remaining portion of the impairment not otherwise designated as credit-related.
Credit-related, other-than-temporary impairments are recognized in earnings and
noncredit-related, other-than-temporary impairments are recognized in OCI.
Equity securities on which there is an unrealized loss that is deemed
other-than-temporary are written down to fair value with the write-down
recognized in earnings.
 
 Premiums
and discounts on all securities are amortized/accreted to maturity using the
interest method.  Interest and dividend income on securities, which
includes amortization of premiums and accretion of discounts, are recognized in
the consolidated financial statements when earned.  Gains or losses on
sales are recognized based on the specific identification method.
 
 Loans
Held For Sale
 
 Loans
held for sale consist primarily of residential mortgage loans intended for sale
and are carried at the lower of cost or estimated fair market value using the
aggregate method. These loans are generally sold with servicing rights released.
Gains and losses recognized on loan sales are based upon the cash proceeds
received and the cost of the related loans sold.
 
 Loans
Receivable
 
 Loans
receivable are carried at unpaid principal balances less net deferred loan
origination fees and the allowance for loan losses.  Loan origination
fees and certain direct loan origination costs are deferred and amortized, as an
adjustment of yield, over the contractual lives of the related
loans.
 
 The
accrual of interest on loans that are contractually delinquent ninety days or
more is discontinued and the related loans placed on nonaccrual
status.  Income is subsequently recognized only to the extent that
cash payments are received until delinquency status is reduced to less than
ninety days, in which case the loan is returned to accrual
status.
  8
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
2 – Summary of Significant Accounting Policies (Continued)
 
 Allowance
for Loan Losses
 
 The
allowance for loan losses is increased through provisions charged to operations
and by recoveries, if any, on previously charged-off loans and reduced by
charge-offs on loans which are determined to be a loss in accordance with Bank
policy.
 
 The
allowance for loan losses is maintained at a level considered adequate to absorb
loan losses.  Management, in determining the allowance for loan
losses, considers the risks inherent in its loan portfolio and changes in the
nature and volume of its loan activities, along with the general economic and
real estate market conditions.  The Bank utilizes a two tier
approach:  (1) identification of impaired loans and establishment of
specific loss allowances on such loans; and (2) establishment of general
valuation allowances on the remainder of its loan portfolio.  The Bank
maintains a loan review system which allows for a periodic review of its loan
portfolio and the early identification of potentially impaired
loans.  Such a system takes into consideration, but is not limited to,
delinquency status, size of loans, types and value of collateral, and financial
condition of the borrowers.  Specific loan loss allowances are
established for impaired loans based on a review of such information and/or
appraisals of the underlying collateral.  General loan loss allowances
are based upon a combination of factors including, but not limited to, actual
loan loss experience, composition of the loan portfolio, current economic
conditions, and management’s judgment.
 
 Although
management believes that adequate specific and general allowances for loan
losses are established, actual losses are dependent upon future events and, as
such, further additions to the level of specific and general loan loss
allowances may be necessary.
 
 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 loan’s observable market price or the fair value of the collateral if the
loan is collateral dependent.  A loan evaluated for impairment is
deemed to be impaired when, based on current information and events, it is
probable that the Bank will be unable to collect all amounts due according to
the contractual terms of the loan agreement.  All loans identified as
impaired are evaluated independently.  The Bank does not aggregate
such loans for evaluation purposes. Payments received on impaired loans are
applied first to accrued interest receivable and then to principal.
 
 Concentration
of Risk
 
 Financial
instruments which potentially subject the Company and its subsidiaries to
concentrations of credit risk consist of cash and cash equivalents, investment
and mortgage-backed securities and loans.
 
 Cash and
cash equivalents include amounts placed with highly rated financial
institutions.  Securities include securities backed by the U.S.
Government and other highly rated instruments.  The Bank’s lending
activity is primarily concentrated in loans collateralized by real estate in the
State of New Jersey.  As a result, credit risk related to loans is
broadly dependent on the real estate market and general economic conditions in
the State.
  9
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
2 – Summary of Significant Accounting Policies (Continued)
 
 Premises
and Equipment
 
 Land is
carried at cost.  Buildings, building improvements, leasehold
improvements and furniture, fixtures and equipment are carried at cost, less
accumulated depreciation and amortization.  Significant renovations
and additions are charged to the property and equipment
account.  Maintenance and repairs are charged to expense in the period
incurred.  Depreciation charges are computed on the straight-line
method over the following estimated useful lives of each type of
asset.
 
 YearsBuildings
              
              40Building
      improvements
              
              7 -
      40Furniture,
      fixtures and equipment
              
              3 -
      40Leasehold
      improvements
              
              Shorter
      of useful life or term of lease
 
 
 Federal
Home Loan Bank (“FHLB”) of New York Stock
 
 Federal
law requires a member institution of the FHLB system to hold stock of its
district FHLB according to a predetermined formula. Such stock is carried at
cost.
 
 Management
evaluates the FHLB of New York stock for impairment in accordance with guidance
on accounting by certain entities that lend to or finance the activities of
others. Management’s determination of whether this investment is impaired is
based on their assessment of the ultimate recoverability of their cost rather
than by recognizing temporary declines in value. The determination of whether a
decline affects the ultimate recoverability of their cost is influenced by
criteria such as (1) the significance of the decline in net assets of the FHLB
of New York as compared to the capital stock amount for the FHLB of New York and
the length of time this situation has persisted, (2) commitments by the FHLB of
New York to make payments required by law or regulation and the level of such
payments in relation to the operating performance of the FHLB of New York, and
(3) the impact of legislative and regulatory changes on institutions and,
accordingly, on the customer base of the FHLB of New York.
 
 No
impairment charges were recorded related to the FHLB of New York stock during
2009 or 2008.
 
 Real
Estate Owned
 
 Assets
acquired through, or in lieu of, loan foreclosures are held for sale and are
initially recorded at fair value less cost to sell at the date of foreclosure,
establishing a new cost basis. Subsequent to foreclosure,
valuations  are periodically performed by management and the assets
are carried at the lower of carrying amount or fair value less cost to sell.
Revenue and expenses from operations and changes in the valuation allowance are
included in net expenses from foreclosed assets. At December 31, 2009, the Bank
owned one property totaling $1,270,000.
  10
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note 2 – Summary of Significant
Accounting Policies (Continued)
 
 Interest
Rate Risk
 
 The Bank
is principally engaged in the business of attracting deposits from the general
public and using these deposits, together with other funds, to make loans
secured by real estate and to purchase securities. The potential for
interest-rate risk exists as a result of the difference in duration of the
Bank’s interest-sensitive liabilities compared to its interest-sensitive
assets.  For this reason, management regularly monitors the maturity
structure of the Bank’s interest-earning assets and interest-bearing liabilities
in order to measure its level of interest-rate risk and to plan for future
volatility.
 
 Income
Taxes
 
 The
Company and its subsidiaries file a consolidated federal income tax
return.  Income taxes are allocated to the Company and its
subsidiaries based upon their respective income or loss included in the
consolidated income tax return.  Separate state income tax returns are
filed by the Company and its subsidiaries.
 
 Federal
and state income tax expense has been provided on the basis of reported
income.  The amounts reflected on the tax returns differ from these
provisions due principally to temporary differences in the reporting of certain
items for financial reporting and income tax reporting purposes. The tax effect
of these temporary differences is accounted for as deferred taxes applicable to
future periods.  Deferred income tax expense or (benefit) is
determined by recognizing deferred tax assets and liabilities for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases.  Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in earnings in the period that includes the enactment date.
The realization of deferred tax assets is assessed and a valuation allowance
provided, when necessary, for that portion of the asset which is not more likely
than not to be realized.
 
 The
Company accounts for uncertainty in income taxes recognized in the consolidated
financial statements in accordance with ASC Topic 740, Income Taxes, which
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return, and also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition. A tax position is recognized as a benefit only if it
is “more likely than not” that the tax position would be sustained in a tax
examination, with a tax examination being presumed to occur. The amount
recognized is the largest amount of tax benefit that has a likelihood of being
realized on examination of more than 50 percent. For tax positions not meeting
the “more likely than not” test, no tax benefit is recorded. Under the
“more-likely-than-not” threshold guidelines, the Company believes no significant
uncertain tax positions exist, either individually or in the aggregate, that
would give rise to the non-recognition of an existing tax benefit. The Company
recognizes interest and penalties on unrecognized tax benefits in income taxes
expense in the Consolidated Statement of Income. The Company did not recognize
any interest and penalties for the years ended December 31, 2009, 2008 and 2007.
The tax years subject to examination by the taxing authorities are the years
ended December 31, 2008, 2007, and 2006.
  11
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
2 – Summary of Significant Accounting Policies (Continued)
 
 Net
Income per Common 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 years ended
December 31, 2009, 2008 and 2007, the difference in the weighted average number
of basic and diluted common shares was due solely to the effects of outstanding
stock options. No adjustments to net income were necessary in calculating basic
and diluted net income per share.
 
 Stock-Based
Compensation Plans
 
 The
Company, under plans approved by its stockholders in 2003 and 2002, has granted
stock options to employees and outside directors.  See note 12 for
additional information as to option grants. Compensation expense recognized for
all option grants is net of estimated forfeitures and is recognized over the
awards’ respective requisite service periods. The fair values relating to all
options granted are estimated using a Black-Scholes option pricing model.
Expected volatilities are based on historical volatility of our stock and other
factors, such as implied market volatility. The Company use the mid-point of the
original vesting period and original option life to estimate the options’
expected term, which represents the period of time that the options granted are
expected to be outstanding. The risk-free rate for periods within the
contractual life of the option is based on the U.S. Treasury yield curve in
effect at the time of grant. The Company recognize compensation expense for the
fair values of these option awards, which have graded vesting, on a
straight-line basis over the requisite service period of these
awards.
 
 Comprehensive
Income
 
 The
Company records unrealized gains and losses, net of deferred income taxes, on
securities available for sale in accumulated other comprehensive income
(loss).  Realized gains and losses, if any, are reclassified to
non-interest income upon sale of the related securities or upon the recognition
of an impairment loss.  The Company has elected to report the effects
of other comprehensive income in the consolidated statements of changes in
stockholders’ equity.
 
 Recent
Accounting Pronouncements
 
 In June
2009, the FASB issued guidance on accounting for transfers of financial assets.
This guidance prescribes the information that a reporting entity must provide in
its financial reports about a transfer of financial assets; the effects of a
transfer on its financial position, financial performance and cash flows; and a
transferor’s continuing involvement in transferred financial assets.
Specifically, among other aspects, this guidance amends accounting for transfers
and servicing of financial assets andextinguishments of liabilities, by
removing the concept of aqualifying special-purpose entity and removes
the exception from applying
guidance on the variable interest entities that are qualifying special-purpose
entities. It also modifies the financial-components approach and is effective
for fiscal years beginning after November 15, 2009. The adoption of this
guidance is not expected to have a material impact on the Company’s consolidated
financial statements.
  12
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
2 – Summary of Significant Accounting Policies (Continued)
 
 In June
2009, the FASB issued guidance on the consolidation of variable interest
entities to require an enterprise to determine whether it’s variable interest or
interests give it a controlling financial interest in a variable interest
entity. The primary beneficiary of a variable interest entity is the enterprise
that has both (1) the power to direct the activities of a variable interest
entity that most significantly impact the entity’s economic performance and (2)
the obligation to absorb losses of the entity that could potentially be
significant to the variable interest entity or the right to receive benefits
from the entity that could potentially be significant to the variable interest
entity. This guidance also requires ongoing reassessments of whether an
enterprise is the primary beneficiary of a variable interest entity. This
guidance is effective for fiscal years beginning after November 15, 2009. The
adoption of this guidance is not expected to have a material impact on the
Company’s consolidated financial statements.
 
 In August
2009, the FASB issued ASU 2009-05, Fair Value Measurements and
Disclosures (Topic 820): Measuring Liabilities at Fair
Value.The amendments within ASU 2009-05 clarify that in
circumstances in which a quoted price in an active market for the identical
liability is not available, a reporting entity is required to measure fair value
using one or more of the following techniques: (1) A valuation technique that
uses: (a) the quoted price of the identical liability when traded as an asset,
or (b) quoted prices for similar liabilities or similar liabilities when traded
as assets or another valuation technique that is consistent with the principles
of Topic 820. Two examples would be an income approach, such as a present value
technique, or a market approach, such as a technique that is based on the amount
at the measurement date that the reporting entity would pay to transfer the
identical liability or would receive to enter into the identical liability. When
estimating the fair value of a liability, a reporting entity is not required to
include a separate input or adjustment to other inputs relating to the existence
of a restriction that prevents the transfer of the liability. Both a quoted
price in an active market for the identical liability at the measurement date
and the quoted price for the identical liability when traded as an asset in an
active market when no adjustments to the quoted price of the asset are required
are Level 1 fair value measurements. This guidance is effective for the first
reporting period (including interim periods) beginning after issuance. The
adoption of this ASU did not have a material impact on the Company’s
consolidated financial statements.
 
 In
October 2009, the FASB issued ASU 2009-15, Accounting for Own-Share Lending
Arrangements in Contemplation of Convertible Debt Issuance or Other
Financing.  The ASU amends ASC Topic 470 and provides guidance
for accounting and reporting for own-share lending arrangements issued in
contemplation of a convertible debt issuance.  At the date of
issuance, a share-lending arrangement entered into on an entity’s own shares
should be measured at fair value in accordance with Topic 820 and recognized as
an issuance cost, with an offset to additional paid-in
capital.  Loaned shares are excluded from basic and diluted earnings
per share unless default of the share-lending arrangement occurs.  The
amendments also require several disclosures including a description and the
terms of the arrangement and the reason for entering into the
arrangement.  The effective dates of the amendments are dependent upon
the date the share-lending arrangement was entered into and include
retrospective application for arrangements outstanding as of the beginning of
fiscal years beginning on or after December 15, 2009. The adoption of this
guidance is not expected to have a material impact on the Company’s consolidated
financial statements.
 
 In
October 2009, the FASB issued ASU 2009-16, Transfers and Servicing (Topic 860) -
Accounting for Transfers of Financial Assets.  This Update amends the
Codification for the issuance of FASB Statement No. 166, Accounting for
Transfers of Financial Assets-an amendment of FASB Statement No. 140. The
amendments in this Update improve financial reporting by eliminating the
exceptions for qualifying special-purpose entities from the consolidation
guidance and the exception that permitted sale accounting for
certain
  13
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
2 – Summary of Significant Accounting Policies (Continued)
 
 mortgage
securitizations when a transferor has not surrendered control over the
transferred financial assets. In addition, the amendments require enhanced
disclosures about the risks that a transferor continues to be exposed to because
of its continuing involvement in transferred financial assets. Comparability and
consistency in accounting for transferred financial assets will also be improved
through clarifications of the requirements for isolation and limitations on
portions of financial assets that are eligible for sale accounting. This Update
is effective at the start of a reporting entity’s first fiscal year beginning
after November 15, 2009.  Early application is not permitted. The
adoption of this guidance is not expected to have a material impact on the
Company’s consolidated financial statements.
 
 In
October 2009, the FASB issued ASU 2009-17, Consolidations (Topic 810) -
Improvements to Financial Reporting by Enterprises Involved with Variable
Interest Entities.  This Update amends the Codification for the
issuance of FASB Statement No. 167, Amendments to FASB Interpretation
No. 46(R). The amendments in this Update replace the quantitative-based
risks and rewards calculation for determining which reporting entity, if any,
has a controlling financial interest in a variable interest entity with an
approach focused on identifying which reporting entity has the power to direct
the activities of a variable interest entity that most significantly impact the
entity’s economic performance and (1) the obligation to absorb losses of the
entity or (2) the right to receive benefits from the entity. An approach that is
expected to be primarily qualitative will be more effective for identifying
which reporting entity has a controlling financial interest in a variable
interest entity.  The amendments in this Update also require
additional disclosures about a reporting entity’s involvement in variable
interest entities, which will enhance the information provided to users of
financial statements. This Update is effective at the start of a reporting
entity’s first fiscal year beginning after November 15, 2009.  Early
application is not permitted. The adoption of this guidance is not expected to
have a material impact on the Company’s consolidated financial
statements.
 
 In
January 2010, the FASB issued ASU 2010-01, Equity (Topic 505) - Accounting for
Distributions to Shareholders with Components of Stock and
Cash.  The amendments in this Update clarify that the stock
portion of a distribution to shareholders that allows them to elect to receive
cash or stock with a potential limitation on the total amount of cash that all
shareholders can elect to receive in the aggregate is considered a share
issuance that is reflected in earnings per share prospectively and is not a
stock dividend.  This Update codifies the consensus reached in EITF
Issue No. 09-E, “Accounting for Stock Dividends, Including Distributions to
Shareholders with Components of Stock and Cash.” This Update is effective for
interim and annual periods ending on or after December 15, 2009, and should be
applied on a retrospective basis. The adoption of this ASU did not have a
material impact on the Company’s consolidated financial statements.
 
 In
January 2010, the FASB has issued ASU 2010-06, Fair Value Measurements and
Disclosures (Topic 820): Improving Disclosures about Fair Value
Measurements. This ASU requires some new disclosures and clarifies some
existing disclosure requirements about fair value measurement as set forth in
Codification Subtopic 820-10. The FASB’s objective is to improve these
disclosures and, thus, increase the transparency in financial reporting.
Specifically, ASU 2010-06 amends Codification Subtopic 820-10 to now require
that a
reporting entity disclose separately the amounts of significant transfers in and
out of Level 1 and Level 2 fair value measurements and describe the reasons for
the transfers; and present separately information about purchases, sales,
issuances and settlements in the reconciliation for fair value measurements
using significant unobservable inputs. In addition, ASU 2010-06 clarifies the
requirements of the following existing disclosures:
 
 ·
              For
      purposes of reporting fair value measurement for each class of assets and
      liabilities, a reporting entity needs to use judgment in determining the
      appropriate classes of assets and liabilities;
  and
 ·
              A
      reporting entity should provide disclosures about the valuation techniques
      and inputs used to measure fair value for both recurring and nonrecurring
      fair value measurements.
  14
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
2 – Summary of Significant Accounting Policies
(Continued)
 
 ASU
2010-06 is effective for interim and annual reporting periods beginning after
December 15, 2009, except for the disclosures about purchases, sales, issuances,
and settlements in the roll forward of activity in Level 3 fair value
measurements. Those disclosures are effective for fiscal years beginning after
December 15, 2010, and for interim periods within those fiscal years. Early
adoption is permitted. The adoption of this guidance is not expected to have a
material impact on the Company’s consolidated financial statements.
 
 In
February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855)
Amendments to Certain Recognition and Disclosure Requirements. The
amendment addresses potential conflicts between the requirements to disclose the
date that the financial statements are issued and guidance of the Securities and
Exchange Commission (“SEC”). The update provides the following amendments: (1)
An entity that is an SEC Filer is required to evaluate subsequent events through
the date that the financial statements are issued. (2) The glossary of Topic 855
is amended to include the definition of an SEC filer. An SEC filer is an entity
that is required to file or furnish its financial statement with either the SEC
or, with respect to an entity subject to Section 12(i) of the Securities
Exchange Act of 1934, as amended, the appropriate agency under that Section. It
does not include an entity that is not otherwise an SEC filer whose financial
statements are included in a submission by another SEC filer. (3) An entity that
is an SEC filer is not required to disclose the date through which subsequent
events have been evaluated. This change alleviates potential conflicts between
Subtopic 855-10 and the SEC’s requirements. (4) The glossary of Topic 855 is
amended to remove the definition of public entity. (5) The scope of the
reissuance disclosure requirement is refined to include revised financial
statements only. Revised financial statements include financial statements
revised either as a result of correction of an error or retrospective
application of U.S. generally accepted accounting principles. All of the
amendments in this Update were effective upon issuance of the Update. The
adoption of this ASU did not have a material impact on the Company’s
consolidated financial statements.
  15
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
3 - Related Party Transactions
 
 The Bank
leases a property from NEW BAY LLC (“NEW BAY”), a limited liability corporation
100% owned by a majority of the directors and officers of the
Bank.  In conjunction with the lease, NEW BAY substantially removed
the pre-existing structure on the site and constructed a new building suitable
to the Bank for its banking operations.  Under the terms of the lease,
the cost of this project was reimbursed
to           NEWBAY by
the Bank. The amount reimbursed, which occurred during the year 2000, was
approximately $943,000, and is included in property and equipment under the
caption “Building and improvements” (see    Note
7).
 
 On May 1,
2006, the Company renegotiated the lease to a twenty-five year
term.  The Company will pay NEW BAY $165,000 a year ($13,750 per
month) for the first 60 months which is included in the consolidated statements
of income for 2009 and 2008 within occupancy expense of premises. The rent shall
be reset every five years thereafter at the fair market rental value at the end
of each preceding five year period.
  16
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
4 - Securities Available for Sale
 
 December 31,
      2009Cost
              
              
              Gross
                  Unrealized
                  Gains
              
              
              Gross
                  Unrealized
                  Losses
              
              
              Fair
      Value(In
      Thousands)Equity
      securities
              
              $
              1,324
              
              
              $
              40
              
              
              $
              18
              
              
              $
              1,346
 
 December 31,
      2008Cost
              
              
              Gross
                  Unrealized
                  Gains
              
              
              Gross
                  Unrealized
                  Losses
              
              
              Fair
      Value(In
      Thousands)Equity
      securities
              
              $
              1,097
              
              
              $
              -
              
              
              $
              209
              
              
              $
              888
 
 
 The age
of unrealized losses and fair value of related securities available for sale
were as follows:
 
 Less
      than 12 Months
              
              
              More
      than 12 Months
              
              
              TotalFair
                  Value
              
              
              Unrealized
      Losses
              
              
              Fair
                  Value
              
              
              Unrealized
      Losses
              
              
              Fair
                  Value
              
              
              Unrealized
      Losses(In
      Thousands)December
      31, 2009Equity
      Securities
              
              $
              -
              
              
              $
              -
              
              
              $
              982
              
              
              $
              18
              
              
              $
              982
              
              
              $
              18December
      31, 2008Equity
      Securities
              
              $
              791
              
              
              $
              209
              
              
              $
              -
              
              
              $
              -
              
              
              $
              791
              
              
              $
              209
 
 
 At
December 31, 2009, management concluded that the unrealized losses above (which
relate to two equity issues) are temporary in nature as they primarily relate to
general market fluctuations rather than credit related issues. Additionally, the
Company has not decided to sell these securities and has concluded that it is
unlikely it would be required to sell these securities prior to the anticipated
recovery of the unrealized losses.
 
 During
2008, there was a pre-tax other than temporary impairment (OTTI) charge recorded
of $2.9 million on the $3.0 million investment in Federal National Mortgage
Association (FNMA) preferred stock. The OTTI charge resulted from a significant
decline in the market value of these securities following the announcement by
the Federal Housing Finance Agency (FHFA) that FNMA would be placed under
conservatorship. Additionally, the FHFA eliminated the payment of dividends on
common stock and preferred stock and assumed the powers of the Board and
management of FNMA. Based on these factors, the Company evaluated the impairment
as other than temporary.
  17
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
5 - Securities Held to Maturity
 
 December 31,
      2009Amortized
      Cost
              
              
              Gross
                  Unrealized
                  Gains
              
              
              Gross
                  Unrealized
                  Losses
              
              
              Fair
      Value(In
      Thousands)U.S.
      Government Agencies:Due
      after one through five years
              
              $
              3,315
              
              
              $
              254
              
              
              $
              -
              
              
              $
              3,569Due
      after five through ten years
              
              
              515
              
              
              
              -
              
              
              
              3
              
              
              
              512Due
      after ten years
              
              
              94,193
              
              
              
              11
              
              
              
              1,397
              
              
              
              92,80798,023
              
              
              
              265
              
              
              
              1,400
              
              
              
              96,888Residential
      mortgage-backed securities:Due
      within one year
              
              
              346
              
              
              
              -
              
              
              
              2
              
              
              
              344Due
      after one year through five years
              
              
              39
              
              
              
              1
              
              
              
              -
              
              
              
              40Due
      after five years through ten years
              
              
              6,783
              
              
              
              346
              
              
              
              -
              
              
              
              7,129Due
      after ten years
              
              
              27,453
              
              
              
              1,217
              
              
              
              21
              
              
              
              28,64934,621
              
              
              
              1,564
              
              
              
              23
              
              
              
              36,162$
              132,644
              
              
              $
              1,829
              
              
              $
              1,423
              
              
              $
              133,050
 
 December 31,
      2008Amortized
      Cost
              
              
              Gross
                  Unrealized
                  Gains
              
              
              Gross
                  Unrealized
                  Losses
              
              
              Fair
      Value(In
      Thousands)U.S.
      Government Agencies:Due
      after one through five years
              
              $
              6,315
              
              
              $
              323
              
              
              $
              -
              
              
              $
              6,638Due
      after five through ten years
              
              
              6,000
              
              
              
              6
              
              
              
              -
              
              
              
              6,006Due
      after ten years
              
              
              86,292
              
              
              
              449
              
              
              
              198
              
              
              
              86,54398,607
              
              
              
              778
              
              
              
              198
              
              
              
              99,187Residential
      mortgage-backed securities:Due
      after one year through five years
              
              
              88
              
              
              
              2
              
              
              
              -
              
              
              
              90Due
      after five years through ten years
              
              
              2,336
              
              
              
              81
              
              
              
              -
              
              
              
              2,417Due
      after ten years
              
              
              40,249
              
              
              
              1,144
              
              
              
              -
              
              
              
              41,39342,673
              
              
              
              1,227
              
              
              
              -
              
              
              
              43,900$
              141,280
              
              
              $
              2,005
              
              
              $
              198
              
              
              $
              143,087
  18
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
5 - Securities Held to Maturity (Continued)
 
 There
were no sales of securities during the years ended December 31, 2009, 2008
and 2007. At the years ended December 31, 2009, 2008 and 2007, all residential
mortgage backed securities held in portfolio were Government Sponsored
Enterprise securities. At December 31, 2009 and 2008, mortgage-backed
securities with a carrying value of approximately $719,000 and $759,000,
respectively, were pledged to secure public deposits (see Note 10 for
information on securities pledged for borrowings).
 
 The age
of unrealized losses and fair value of related securities held to maturity were
as follows:
 
 Less
      than 12 Months
              
              
              More
      than 12 Months
              
              
              TotalFair
                  Value
              
              
              Unrealized
      Losses
              
              
              Fair
                  Value
              
              
              Unrealized
      Losses
              
              
              Fair
                  Value
              
              
              Unrealized
      Losses(In
      Thousands)December
      31, 2009:U.S.
      Government Agencies
              
              $
              82,466
              
              
              $
              1,400
              
              
              $
              -
              
              
              $
              -
              
              
              $
              82,466
              
              
              $
              1,400Residential
      mortgage-backed securities
              
              
              1,483
              
              
              
              23
              
              
              
              -
              
              
              
              -
              
              
              
              1,483
              
              
              
              23$
              83,949
              
              
              $
              1,423
              
              
              $
              -
              
              
              $
              -
              
              
              $
              83,949
              
              
              $
              1,423
 
 Less
      than 12 Months
              
              
              More
      than 12 Months
              
              
              TotalFair
                  Value
              
              
              Unrealized
      Losses
              
              
              Fair
                  Value
              
              
              Unrealized
      Losses
              
              
              Fair
                  Value
              
              
              Unrealized
      Losses(In
      Thousands)December
      31, 2008U.S.
      Government Agencies
              
              $
              16,301
              
              
              $
              198
              
              
              $
              -
              
              
              $
              -
              
              
              $
              16,301
              
              
              $
              198$
              16,301
              
              
              $
              198
              
              
              $
              -
              
              
              $
              -
              
              
              $
              16,301
              
              
              $
              198
 
 At
December 31, 2009, management concluded that the unrealized losses above
(which related to 33 U.S. Government Agency bonds and 2 Mortgage-Back
Securities) are  temporary in nature since they are related to
interest rate fluctuations rather than any underlying credit quality of the
issuers. Additionally, the Company has not decided to sell these securities and
has concluded that it is unlikely it would be required to sell these securities
prior to the anticipated recovery of the unrealized losses.
  19
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
6 - Loans Receivable
 
 December 31,2009
              
              
              2008(In
      Thousands)Real
      estate mortgage:Residential
              
              $
              76,490
              
              
              $
              74,039Commercial
              
              
              223,792
              
              
              
              223,179Construction
              
              
              51,330
              
              
              
              62,483351,612
              
              
              
              359,701Commercial:Business
      loans
              
              
              18,256
              
              
              
              10,859Lines
      of credit
              
              
              4,231
              
              
              
              3,23922,487
              
              
              
              14,098Consumer:Passbook
      or certificate
              
              
              238
              
              
              
              297Home
      equity lines of credit
              
              
              5,705
              
              
              
              5,564Home
      equity
              
              
              28,593
              
              
              
              32,501Automobile
              
              
              80
              
              
              
              93Personal
              
              
              42
              
              
              
              7634,658
              
              
              
              38,531Deposit
      overdrafts
              
              
              281
              
              
              
              454Total
      Loans
              
              
              409,038
              
              
              
              412,784Deferred
      loan fees, net
              
              
              (522
              )
              
              
              (654
              )Allowance
      for loan losses
              
              
              (6,644
              )
              
              
              (5,304
              )(7,166
              )
              
              
              (5,958
              )$
              401,872
              
              
              $
              406,826
 
 At
December 31, 2009 and 2008, loans serviced by the Bank for the benefit of
others, which consist of participation interests in loans originated by the
Bank, totaled approximately $7,078,000 and $15,211,000.
  20
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
6 - Loans Receivable (Continued)
 
 The Bank
grants loans to its officers and directors and to their
associates.  Related party loans are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with unrelated persons and do not involve more than
normal risk of collectibility.  The activity with respect to loans to
directors, officers and associates of such persons, is as follows:
 
 Years
      Ended December 31,2009
              
              
              2008(In
      Thousands)Balance
      – beginning
              
              $
              7,061
              
              
              $
              6,825Loans
      originated
              
              
              2,800
              
              
              
              1,598Changes
      in related party status
              
              
              (398
              )
              
              
              -Collections
      of principal
              
              
              (2,231
              )
              
              
              (1,362
              )Balance
      - ending
              
              $
              7,232
              
              
              $
              7,061
 
 The
following is an analysis of the allowance for loan losses:
 
 Years
      Ended December 31,2009
              
              
              2008
              
              
              2007(In
      Thousands)Balance
      - beginning
              
              $
              5,304
              
              
              $
              4,065
              
              
              $
              3,733Provision
      charged to operations
              
              
              1,550
              
              
              
              1,300
              
              
              
              600Recoveries
      of loans previously charged off
              
              
              2
              
              
              
              40
              
              
              
              17Loans
      charged off
              
              
              (212
              )
              
              
              (101
              )
              
              
              (285
              )Balance
      - ending
              
              $
              6,644
              
              
              $
              5,304
              
              
              $
              4,065
 
 At
December 31, 2009 and 2008, non-accrual loans for which the accrual of
interest had been discontinued totaled approximately $11,933,000 and $3,728,000,
respectively.  Had non-accrual loans been performing in accordance
with their original terms, the interest income recognized for the years ended
December 31, 2009, 2008 and 2007 would have been approximately $1,064,000,
$289,000 and $287,000, respectively. Interest income recognized on such loans
was approximately $282,000, $138,000 and $64,000 respectively. The Bank is not
committed to lend additional funds to the borrowers whose loans have been placed
on a nonaccrual status. At December 31, 2009 and 2008, there were no loans which
were ninety days or more past due and still accruing interest.
 
 At
December 31, 2009 and 2008, impaired loans were $15,437,000 and $3,728,000,
respectively, and the related specific allocation of allowance for loan losses
totaled $1,373,000 and $881,000 respectively. There were sixteen impaired loans
totaling $8,407,000 which did not have a specific allocation of the allowance
for loan losses at December 31, 2009. There were no impaired loans which did not
have a specific allocation of the allowance for loan losses at December 31,
2008. During the years ended December 31, 2009, 2008, and 2007, the average
balance of impaired loans was $8,662,000, $2,759,000 and  $2,104,000,
and  respectively, and interest income recognized during the period of
impairment totaled $464,000, $138,000 and $64,000 respectively.
  21
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
7 - Premises and Equipment
  December 31,2009
              
              
              2008(In
      Thousands)Land
              
              $
              890
              
              
              $
              890Buildings
      and improvements
              
              
              3,576
              
              
              
              3,572Leasehold
      improvements
              
              
              1,005
              
              
              
              976Furniture,
      fixtures and equipment
              
              
              2,428
              
              
              
              2,3667,899
              
              
              
              7,804Accumulated
      depreciation and amortization
              
              
              (2,540
              )
              
              
              (2,177
              )$
              5,359
              
              
              $
              5,627
 
 Buildings
and improvements include a building constructed on property leased from a
related party (see Note 3).
 
 Rental
expenses related to the occupancy of premises and related shared costs for
common areas totaled $425,000, $415,000, and $413,000 for the years ended
December 31, 2009, 2008, and 2007, respectively. The minimum obligation
under non-cancelable lease agreements expiring through April 30, 2031, for
each of the years ended December 31 is as follows (in thousands):
 
 2010
              
              $
              3662011
              
              
              2442012
              
              
              2372013
              
              
              1652014
              
              
              165Thereafter
              
              
              2,695$
              3,872
 
 Note
8 - Interest Receivable
  December 31,2009
              
              
              2008(In
      Thousands)Loans
              
              $
              2,679
              
              
              $
              2,284Securities
              
              
              1,120
              
              
              
              1,600$
              3,799
              
              
              $
              3,884
  22
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
9 – Deposits
  December 31,2009
              
              
              2008(In
      Thousands)Demand:Non-interest
      bearing
              
              $
              37,082
              
              
              $
              30,561NOW
              
              
              34,270
              
              
              
              25,843Money
      market
              
              
              33,656
              
              
              
              19,539105,008
              
              
              
              75,943Savings
      and club
              
              
              108,170
              
              
              
              99,586Certificates
      of deposit
              
              
              250,560
              
              
              
              234,974$
              463,738
              
              
              $
              410,503
  At
December 31, 2009 and 2008, certificates of deposit of $100,000 or more
totaled approximately $142,331,000 and $118,367,000, respectively.
 
 The
scheduled maturities of certificates of deposit at December 31, 2009, were as
follows (in thousands):
 
 Amount2010
              
              $
              194,6892011
              
              
              16,6122012
              
              
              4,5322013
              
              
              14,3672014
              
              
              20,309Thereafter
              
              
              51$
              250,560
  23
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
10 - Short-Term Borrowings and Long-Term Debt
 
 Long-term
debt consists of the following:
 
 December 31,2009
              
              
              2008(In
      Thousands)Long-term
      debt:Federal
      Home Loan Bank of New York (“FHLB”) Fixed Rate Repurchase
      Agreements:4.50%
      maturing May 22, 2016
              
              $
              10,000
              
              
              $
              10,0004.30%
      maturing August 16, 2016
              
              
              20,000
              
              
              
              20,0004.17%
      maturing August 31, 2016
              
              
              25,000
              
              
              
              25,0004.76%
      maturing June 18, 2017
              
              
              20,000
              
              
              
              20,0004.30%
      maturing July 30, 2017
              
              
              15,000
              
              
              
              15,0004.08%
      maturing July 30, 2017
              
              
              20,000
              
              
              
              20,000Trust
      preferred floating rate junior subordinated debenture maturing
      June 17, 2034; interest rate adjusts quarterly to LIBOR plus 2.65%
      (2.90% at December 31, 2009 and 4.52% at December 31,
      2008)
              
              
              4,124
              
              
              
              4,124$
              114,124
              
              
              $
              114,124
 
 The trust
preferred debenture was callable, at the Company’s option, on June 17,
2009, and quarterly thereafter.
 
 At
December 31, 2009, the Bank has available to it two borrowing facilities
aggregating $119,508,800 from the FHLB of New York, an overnight line of credit
and a companion commitment, both of which expire on August 9, 2010. There was $0
and $2,000,000. outstanding under these borrowing facilities at December 31,
2009 and 2008, respectively.
 
 Additional
information regarding short-term borrowings is as follows:
 
 December 31,2009
              
              
              2008
              
              
              2007(In
      Thousands)Average
      balance outstanding during the year
              
              $
              38
              
              
              $
              4,796
              
              
              
              -Highest
      month-end balance during the year
              
              
              -
              
              
              
              20,500
              
              
              
              -Average
      interest rate during the year
              
              
              0.51
              %
              
              
              1.23
              %
              
              
              -Weighted
      average interest rate at year-end
              
              
              -
              
              
              
              0.44
              %
              
              
              -
 
 At
December 31, 2009 and 2008 cash and securities held to maturity with
carrying values of approximately $114,927,029 and $140,519,000, respectively,
were pledged to secure the above noted Federal Home Loan Bank of New York
borrowings. In addition, there was a blanket pledge on the residential mortgage
portfolio at December 31, 2009.
  24
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
11 - Regulatory Matters
 
 The Bank
is subject to various regulatory capital requirements administered by the
federal banking agencies.  Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Bank.  Under capital adequacy guidelines and
the regulatory framework for prompt corrective action, the Bank must meet
specific capital guidelines that involve quantitative measures of the Bank’s
assets, liabilities, and certain off-balance-sheet items as calculated under
regulatory accounting practices. The Bank’s capital amounts and classifications
are also subject to qualitative judgments by the regulators about components,
risk weightings, and other factors. The Holding Company’s capital adequacy
guidelines are not materially different than the capital adequacy guidelines for
the Bank.
 
 Quantitative
measures, established by regulation to ensure capital adequacy, require the Bank
to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined
in the regulations), to risk-weighted assets, (as defined), and of Tier 1
capital to average assets (as defined).  The following table presents
information as to the Bank’s capital levels.
 
 Actual
              
              
              For
      Capital Adequacy Purposes
              
              
              To
      be Well Capitalized under Prompt Corrective Action
      ProvisionsAmount
              
              
              Ratio
              
              
              Amount
              
              
              Ratio
              
              
              Amount
              
              
              Ratio(Dollars
      in Thousands)As
      of December 31, 2009:Total
      capital (to risk-weighted assets)
              
              $
              59,855
              
              
              
              14.37
              %
              
              $
              >33,331
              
              
              
              >8.00
              %
              
              $
              >41,664
              
              
              
              >10.00
              %Tier
      1 capital (to risk-weighted assets)
              
              
              54,637
              
              
              
              13.11
              
              
              
              >16,666
              
              
              
              >4.00
              
              
              
              >24,998
              
              
              
              >6.00Tier
      1 capital (to average assets)
              
              
              54,637
              
              
              
              8.68
              
              
              
              >25,169
              
              
              
              >4.00
              
              
              
              >31,461
              
              
              
              >5.00As
      of December 31, 2008:Total
      capital (to risk-weighted assets)
              
              $
              58,667
              
              
              
              14.63
              %
              
              $
              >32,079
              
              
              
              >8.00
              %
              
              $
              >40,098
              
              
              
              >10.00
              %Tier
      1 capital (to risk-weighted assets)
              
              
              53,642
              
              
              
              13.38
              
              
              
              >16,039
              
              
              
              >4.00
              
              
              
              >24,059
              
              
              
              >6.00Tier
      1 capital (to average assets)
              
              
              53,642
              
              
              
              9.22
              
              
              
              >23,282
              
              
              
              >4.00
              
              
              
              >29,102
              
              
              
              >5.00
 
 As of
December 31, 2009, the most recent notification from the Bank’s regulators
categorized the Bank as “well capitalized” under the regulatory framework for
prompt corrective action. There are no conditions or events occurring since that
notification that management believes have changed the Bank’s
category.
 
 Note
12 - Benefits Plan
 
 Stock
Options
 
 The
Company has two stock-related compensation plans, the 2002 Stock Option Plan and
the 2003 Stock Option Plan (the “Plans”). All stock options granted have a ten
year term and were scheduled to vest and become exercisable on a cumulative
basis in equal installments (20% immediately upon grant and an additional 20% at
each of the four succeeding grant anniversary dates). As of December 31, 2009,
all but 3,906 options authorized under the Plans had been
granted.
  25
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
12 - Benefits Plan (Continued)
 
 Stock
Options (Continued)
 
 During
the years ended December 31, 2009, 2008 and 2007, the Company recorded $0,
$0, $6,000 ($4,000 after tax) of share-based compensation expense,
respectively.
 
 A summary
of stock option activity, adjusted to retroactively reflect subsequent stock
dividends, follows:
 
 Number
      of Option Shares
              
              
              Range
      of Exercise Prices
              
              
              Weighted
      Average Exercise PriceOutstanding
      at December 31, 2007
              
              
              400,212
              
              
              $
              5.29-$15.65
              
              
              $
              9.83Options
      exercised
              
              
              (104,873
              )
              
              
              5.29-11.84
              
              
              
              8.82Outstanding
      at December 31, 2008
              
              
              295,339
              
              
              
              5.29-15.65
              
              
              
              10.19Options
      Forfeited
              
              
              (3,906
              )
              
              
              11.84
              
              
              
              11.84Options
      Exercised
              
              
              (11,933
              )
              
              
              5.29
              
              
              
              5.29Outstanding
      at December 31, 2009
              
              
              279,500
              
              
              $
              5.29-$15.65
              
              
              $
              10.38
 
 At
December 31, 2009, all stock options which are granted were exercisable,
having a weighted-average remaining contractual term of 3.9 years and an
aggregate intrinsic value of $183,000. The total intrinsic value of options
exercised during the years ended December 31, 2009, 2008 and 2007, was
$42,000, $446,000 and $85,000, respectively. It is Company policy to issue new
shares upon share option exercise.
 
 The
weighted average grant-date fair values of the stock options granted during
2007, all of which have exercise prices equal to the market price of the common
stock at the grant date, were estimated using the Black-Scholes option-pricing
model.  Such fair value and the weighted average assumptions used for
estimating fair value are as follows:
 
 Years
      Ended December 31,2009
              
              
              2008
              
              
              2007Grant-date
      fair value per share
              
              
              N/A
              
              
              
              N/A
              
              
              $
              2.91Assumptions:Expected
      common stock dividend yield
              
              
              N/A
              
              
              
              N/A
              
              
              
              2.38
              %Expected
      option life
              
              
              N/A
              
              
              
              N/A
              
              
              5.0
      yearsRisk-free
      interest rate
              
              
              N/A
              
              
              
              N/A
              
              
              
              4.30
              %Volatility
              
              
              N/A
              
              
              
              N/A
              
              
              
              19.96
              %
  26
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
13 - Dividend Restrictions
 
 Payment
of cash dividends is conditional on earnings, financial condition, cash needs,
the discretion of the Board of Directors, and compliance with regulatory
requirements.  State and federal law and regulations impose
substantial limitations on the Bank’s ability to pay dividends to the
Company.  Under New Jersey law, the Bank is permitted to declare
dividends on its common stock only if, after payment of the dividend, the
capital stock of the Bank will be unimpaired and either the Bank will have a
surplus of not less than 50% of its capital stock or the payment of the dividend
will not reduce the Bank’s surplus. During 2009, 2008 and 2007, the Bank paid
the Company total dividends of $2,547,000, $0 and $8,500,000 respectively. The
Company’s ability to declare dividends is dependent upon the amount of dividends
declared by the Bank.
  27
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
14 - Income Taxes
 
 The
components of income tax expense (benefit) are summarized as
follows:
 
 Years
      Ended December 31,2009
              
              
              2008
              
              
              2007(In
      Thousands)Current
      income tax expense:Federal
              
              $
              2,730
              
              
              $
              3,097
              
              
              $
              2,391State
              
              
              489
              
              
              
              382
              
              
              
              2503,219
              
              
              
              3,479
              
              
              
              2,641Deferred
      income tax benefit:Federal
              
              
              (467
              )
              
              
              (1,324
              )
              
              
              (102
              )State
              
              
              (131
              )
              
              
              (335
              )
              
              
              (30
              )(598
              )
              
              
              (1,659
              )
              
              
              (132
              )Total
      Income Taxes
              
              $
              2,621
              
              
              $
              1,820
              
              
              $
              2,509
 
 The tax
effects of existing temporary differences that give rise to significant portions
of the deferred income tax assets and deferred income tax liabilities are as
follows:
 
 December 31,2009
              
              
              2008(In
      Thousands)Deferred
      income tax assets:Allowance
      for loan losses
              
              $
              2,654
              
              
              $
              2,119Unrealized
      loss on securities available for sale
              
              
              -
              
              
              
              84Other
      than temporary impairment on security
              
              
              1,164
              
              
              
              1,164Other
              
              
              42
              
              
              
              333,860
              
              
              
              3,400Deferred
      income tax liabilities:Depreciation
              
              
              233
              
              
              
              233Unrealized
      gain on securities available for sale
              
              
              9
              
              
              
              -Other
              
              
              -
              
              
              
              54242
              
              
              
              287Net
      Deferred Tax Asset
              
              $
              3,618
              
              
              $
              3,113
  28
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
14 - Income Taxes (Continued)
 
 The
following table presents a reconciliation between the reported income tax
expense and the income tax expense which would be computed by applying the
normal federal income tax rate of 34% to income before income tax
expense:
 
 Years
      Ended December 31,2009
              
              
              2008
              
              
              2007(In
      Thousands)Federal
      income tax expense at statutory rate
              
              $
              2,165
              
              
              $
              1,799
              
              
              $
              2,362Increases
      (reductions) in income taxes resulting from:State
      income tax, net of federal income tax effect
              
              
              236
              
              
              
              31
              
              
              
              145Non-deductible
      merger related expenses
              
              
              208
              
              
              
              -
              
              
              
              -Other
      items, net
              
              
              12
              
              
              
              (10
              )
              
              
              2Effective
      Income Tax
              
              $
              2,621
              
              
              $
              1,820
              
              
              $
              2,509Effective
      Income Tax Rate
              
              
              41.2
              %
              
              
              34.4
              %
              
              
              36.1
              %
 
 Note
15- Commitments and Contingencies
 
 The Bank
is a party to financial instruments with off-balance-sheet risk in the normal
course of business to meet the financing needs of its
customers.  These financial instruments primarily include commitments
to extend credit.  The Bank’s exposure to credit loss, in the event of
nonperformance by the other party to the financial instrument for commitments to
extend credit, is represented by the contractual amount of those instruments.
The Bank uses the same credit policies in making commitments and conditional
obligations as it does for on-balance-sheet instruments.
 
 Outstanding
loan related commitments were as follows:
 
 December 31,2009
              
              
              2008(In
      Thousands)Loan
      origination
              
              $
              7,171
              
              
              $
              5,692Standby
      letters of credit
              
              
              471
              
              
              
              -Construction
      loans in process
              
              
              5,415
              
              
              
              25,676Unused
      lines of credit
              
              
              11,905
              
              
              
              14,761$
              24,962
              
              
              $
              46,129
  29
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
15- Commitments and Contingencies (Continued)
 
 Commitments
to extend credit are agreements to lend to a customer as long as there is no
violation of any condition established in the contract. Commitments generally
have fixed expiration dates or other termination clauses and may require payment
of a fee.  Since many of the commitments are expected to expire
without being drawn upon, total commitment amounts do not necessarily represent
future cash requirements. The Bank evaluates each customer’s creditworthiness on
a case-by-case basis.  The amount of collateral obtained, if deemed
necessary by the Bank upon extension of credit, is based on management’s credit
evaluation of the counterparty.  Collateral held varies but primarily
includes residential real estate properties.
 
 The
Company and its subsidiaries also have, in the normal course of business,
commitments for services and supplies.  Management does not anticipate
losses on any of these transactions.
 
 The
Company and its subsidiaries, from time to time, may be party to litigation
which arises primarily in the ordinary course of business.  In the
opinion of management, the ultimate disposition of such litigation should not
have a material effect on the consolidated financial statements.  As
of December 31, 2009, the Company and its subsidiaries were not parties to
any material litigation.
 
 Note
16 - Fair Value Measurements and Fair Values of Financial
Instruments
 
 Management
uses its best judgment in estimating the fair value of the Company’s financial
instruments; however, there are inherent weaknesses in any estimation
technique.  Therefore, for substantially all financial instruments,
the fair value estimates herein are not necessarily indicative of the amounts
the Company could have realized in a sales transaction on the dates
indicated.  The estimated fair value amounts have been measured as of
their respective year-ends and have not been re-evaluated or updated for
purposes of these consolidated financial statements subsequent to those
respective dates.  As such, the estimated fair values of these
financial instruments subsequent to the respective reporting dates may be
different than the amounts reported at each year-end.
 
 ASC Topic
820, Fair Value Measurements
and Disclosures, 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 or 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’s 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.
 
 For
assets and liabilities measured at fair value on a recurring basis, the fair
value measurements by level within the fair value hierarchy are as
follows:
  30
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
16 - Fair Value Measurements and Fair Values of Financial Instruments
(Continued)
 
 Description
              
              Total
              
              
              (Level
      1)
                  Quoted
      Prices in Active Markets for Identical Assets
              
              
              (Level
      2)
                  Significant
                  Other
                  Observable
                  Inputs
              
              
              (Level
      3)
                  Significant
                  Unobservable
                  Inputs(In
      Thousands)Securities
      AFS  December 31, 2009
              
              $
              1,346
              
              
              $
              1,346
              
              
              $
              -
              
              
              $
              -Securities
      AFS  December 31, 2008
              
              $
              888
              
              
              $
              888
              
              
              $
              -
              
              
              $
              -
 
 For
assets and liabilities measured at fair value on a nonrecurring basis, the fair
value measurements by level within the fair value hierarchy are as
follows:
 
 Description
              
              Total
              
              
              (Level
      1) Quoted Prices in Active Markets for Identical
    Assets
              
              
              (Level
      2) Significant Other Observable Inputs
              
              
              (Level
      3)
                  Significant
                  Unobservable
      Inputs(In
      Thousands)Impaired
      loans – December 31, 2009
              
              $
              5,657
              
              
              $
              -
              
              
              $
              -
              
              
              $
              5,657Impaired
      loans – December 31, 2008
              
              $
              2,847
              
              
              $
              -
              
              
              $
              -
              
              
              $
              2,847
 
 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
December 31, 2009 and 2008:
 
 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.
  31
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note 16 - Fair Value Measurements and
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.
 
 Loans
Receivable (Carried at Cost)
 
 The fair
values of loans, except for certain impaired 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)
 
 Impaired
loans are those for which the Company has measured and recorded an impairment
generally based on the fair value of the loan’s collateral. 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 at December
31, 2009 and 2008 consists of the loan balances of $7,030,000 and $3,728,000,
net of a valuation allowance of $1,373,000 and $881,000,
respectively.
 
 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.
 
 Short-Term
Borrowings (Carried at Cost)
 
 The
carrying amounts of short-term borrowings approximate their fair
values.
 
 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.
  32
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
16- Estimated Fair Value of Financial Instruments (Continued)
 
 Off-Balance
Sheet Financial Instruments (Disclosed at Cost)
 
 Fair
values for the Bank’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.
 
 The
carrying values and estimated fair values of financial instruments were as
follows at December 31, 2009 and 2008:
  December
      31,2009
                
                
                2008Carrying
      Value
                
                
                Fair
      Value
                
                
                Carrying
      Value
                
                
                Fair
      Value(In
      Thousands)Financial
      assets:Cash
      and cash equivalents
                
                $
                67,347
                
                
                $
                67,347
                
                
                $
                6,761
                
                
                $
                6,761Securities
      available for sale
                
                
                1,346
                
                
                
                1,346
                
                
                
                888
                
                
                
                888Securities
      held to maturity
                
                
                132,644
                
                
                
                133,050
                
                
                
                141,280
                
                
                
                143,087Loans
      held for sale
                
                
                4,275
                
                
                
                4,275
                
                
                
                1,422
                
                
                
                1,437Loans
      receivable
                
                
                401,872
                
                
                
                404,399
                
                
                
                406,826
                
                
                
                413,372FHLB
      of New York stock
                
                
                5,714
                
                
                
                5,714
                
                
                
                5,736
                
                
                
                5,736Interest
      receivable
                
                
                3,799
                
                
                
                3,799
                
                
                
                3,884
                
                
                
                3,884Financial
      liabilities:Deposits
                
                
                463,738
                
                
                
                467,371
                
                
                
                410,503
                
                
                
                409,370Short-term
      borrowings
                
                
                --
                
                
                
                --
                
                
                
                2,000
                
                
                
                2,000Long-term
      debt
                
                
                114,124
                
                
                
                136,099
                
                
                
                114,124
                
                
                
                116,317Interest
      payable
                
                
                847
                
                
                
                847
                
                
                
                967
                
                
                
                967
  33
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
17- Parent Only Condensed Financial Information
  STATEMENTS
      OF FINANCIAL CONDITIONDecember 31,2009
              
              
              2008Assets
              
              (In
      Thousands)Cash
      and due from banks
              
              $
              395
              
              
              $
              323Securities
      available for sale
              
              
              237
              
              
              
              -Investment
      in subsidiaries
              
              
              54,641
              
              
              
              53,180Restricted
      common stock
              
              
              124
              
              
              
              124Other
      assets
              
              
              244
              
              
              
              242Total
      Assets
              
              $
              55,641
              
              
              $
              53,869Liabilities
      and Stockholders’ EquityLiabilitiesLong-term
      debt
              
              $
              4,124
              
              
              $
              4,124Other
      liabilities
              
              
              126
              
              
              
              30Total
      Liabilities
              
              
              4,250
              
              
              
              4,154Stockholders’
      equityCommon
      stock
              
              
              332
              
              
              
              331Paid-in
      capital
              
              
              46,926
              
              
              
              46,864Treasury
      stock
              
              
              (8,719
              )
              
              
              (8,680
              )Retained
      earnings
              
              
              12,839
              
              
              
              11,325Accumulated
      other comprehensive income (loss)
              
              
              13
              
              
              
              (125
              )Total
      Stockholders’ Equity
              
              
              51,391
              
              
              
              49,715Total
      Liabilities and Stockholders’ Equity
              
              $
              55,641
              
              
              $
              53,869
 
  34
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
17- Parent Only Condensed Financial Information (Continued)
  STATEMENTS
      OF INCOMEYears Ended in December 312009
              
              
              2008
              
              
              2007(In
      Thousands)Dividends
      from subsidiary
              
              $
              2,547
              
              
              $
              -
              
              
              $
              8,500Interest
      Income
              
              
              -
              
              
              
              3
              
              
              
              10Total
      Income
              
              
              2,547
              
              
              
              3
              
              
              
              8,510Interest
      Expense, borrowed money
              
              
              146
              
              
              
              238
              
              
              
              329Stock-Based
      Compensation
              
              
              -
              
              
              
              -
              
              
              
              6Other
              
              
              -
              
              
              
              -
              
              
              
              -Total
      Expense
              
              
              146
              
              
              
              238
              
              
              
              335Income (Loss) before Income Tax Benefit
      and Equity in Undistributed Earnings (Losses) of
      Subsidiaries
              
              
              2,401
              
              
              
              (235
              )
              
              
              8,175Income
      tax benefit
              
              
              17
              
              
              
              97
              
              
              
              95Income
      (Loss) before Equity in Undistributed  Earnings (Losses) of
      Subsidiaries
              
              
              2,418
              
              
              
              (138
              )
              
              
              8,270Equity
      in undistributed earnings (losses) of subsidiaries
              
              
              1,330
              
              
              
              3,610
              
              
              
              (3,832
              )Net
      Income
              
              $
              3,748
              
              
              $
              3,472
              
              
              $
              4,438
  35
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
17 - Parent Only Condensed Financial Information
(Continued)
  STATEMENTS
      OF CASH FLOWYears Ended December 312009
              
              
              2008
              
              
              2007(In
      Thousands)Cash
      Flows from Operating ActivitiesNet
      income
              
              $
              3,748
              
              
              $
              3,472
              
              
              $
              4,438Adjustments
      to reconcile net income to net cash provided by (used in) operating
      activities:Equity
      in undistributed (earnings) losses
    of  subsidiaries
              
              
              (1,330
              )
              
              
              (3,610
              )
              
              
              3,832Stock
      based compensation
              
              
              -
              
              
              
              -
              
              
              
              6(Increase)
      decrease in other assets
              
              
              (5
              )
              
              
              (158
              )
              
              
              8Increase
      in other liabilities
              
              
              96
              
              
              
              16
              
              
              
              2Net
      Cash Provided By (Used in) Operating Activities
              
              
              2,509
              
              
              
              (280
              )
              
              
              8,286Cash
      Flows from Investing ActivitiesPurchases
      of securities available for sale
              
              
              (227
              )
              
              
              -
              
              
              
              -Net
      Cash Used in Investing Activities
              
              
              (227
              )
              
              
              -
              
              
              
              -Cash
      Flows from Financing ActivitiesProceeds
      from issuance of common stock
              
              
              63
              
              
              
              925
              
              
              
              158Tax
      benefit from exercise of stock options
              
              
              -
              
              
              
              150
              
              
              
              -Cash
      dividends paid
              
              
              (2,234
              )
              
              
              (1,896
              )
              
              
              (1,555
              )Purchase
      of treasury stock
              
              
              (39
              )
              
              
              (1,295
              )
              
              
              (6,526
              )Net
      Cash Used in Financing Activities
              
              
              (2,210
              )
              
              
              (2,116
              )
              
              
              (7,923
              )Net
      Increase (Decrease) in Cash and Cash Equivalents
              
              
              72
              
              
              
              (2,396
              )
              
              
              363Cash
      and Cash Equivalents - Beginning
              
              
              323
              
              
              
              2,719
              
              
              
              2,356Cash
      and Cash Equivalents - Ending
              
              $
              395
              
              
              $
              323
              
              
              $
              2,719
  36
 BCB Bancorp, Inc. and
      SubsidiariesNotes
      to Consolidated Financial
Statements
 
 Note
18 – Acquisition
 
 On June
30, 2009, BCB Bancorp, Inc., the parent company of BCB Community Bank, and
Pamrapo Bancorp, Inc., (“Pamrapo”), the parent company of Pamrapo Savings Bank,
S.L.A., jointly announced the signing of an Agreement and Plan of Merger, dated
as of June 29, 2009 (the “Merger Agreement”) pursuant to which Pamrapo will
merge with and into the Company. Pamrapo Savings Bank, S.L.A., (“Pamrapo Bank”),
a New Jersey-chartered stock savings and loan association and a wholly-owned
subsidiary of Pamrapo, and BCB Community Bank, will also enter into a subsidiary
agreement and plan of merger that provides for the merger of Pamrapo Bank with
and into BCB Community Bank, with BCB Community Bank as the surviving
institution.
 
 Pursuant
to the terms of the Merger Agreement, shareholders of Pamrapo will receive 1.0
share of Company common stock for each share of Pamrapo common stock. In
addition, all outstanding unexercised options to purchase Pamrapo common stock
will be converted into options to purchase Company common stock.
 
 On
December 17, 2009, at a special meeting of stockholders, the stockholders of BCB
Bancorp, Inc., approved the adoption of the Agreement and Plan of Merger, as
amended, by and between the Company and Pamrapo Bancorp Inc. In addition, at the
special meeting of stockholders, the Company approved an amendment to the
Company’s certificate of incorporation to increase the authorized shares of the
Company’s common stock to 20 million shares.
 
 On
February 11, 2010, at a special meeting of stockholders, the stockholders of
Pamrapo Bancorp, Inc., approved the adoption of the Agreement and Plan of
Merger, as amended, by and between Pamrapo Bancorp Inc., and BCB Bancorp,
Inc.
 
 The
transaction is expected to close by the end of the second quarter of 2010,
pending regulatory approvals and the satisfaction of other customary closing
conditions. In the event the merger agreement is terminated, neither the Company
nor Pamrapo will have any liability under the merger agreement, except that
designated provisions of the merger agreement, including the payment of expenses
and a termination fee, will survive termination. Under the terms of the merger
agreement, each party must pay to the other a termination fee of $2.5 million
under certain circumstances, the description of which has been disclosed in the
Form S-4 Registration Statement previously filed with the Securities and
Exchange Commission.




37