BCB in New Jersey reports big loss and cleanup begins

BCB Bancorp in Bayonne, N.J., reported a $14.8 million second-quarter loss.

The $3.1 billion-asset company, which just hired turnaround expert Tom O’Brien as its CEO, said the loss reflected a $19 million loan-loss provision, a $5.3 million goodwill impairment, and a $2.6 million loss tied to a nonaccrual construction loan moved to held-for-sale.

BCB said it is reviewing its loan portfolio with outside consultants, suspended common and preferred dividends, and stopped originating residential mortgage, home-equity, and consumer loans. The company also plans to seek shareholder approval to reincorporate in Delaware and move to annual director elections.

Regarding the nonaccrual loan, BCB said it wrote the loan down to fair market value, resulting in the loss. The remaining carrying value of the loan is $10.8 million.

“We have been engaged on a comprehensive reevaluation of the company’s credit portfolios with the assistance of independent consultants,” O’Brien said in the release. “Their initial feedback has been reflected in the loan loss reserving decisions … and we are working toward completion of that review by the end of the third quarter. With respect to the much larger commercial real estate portfolio, we are in the early stages of our analysis. Given the absolute size and complexity of these portfolios, this remains a work in progress.”