BCB Bancorp reports net loss of $132.45 million for Q3 2026

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For the quarterly period ended June September 30, 2026

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Securities registered pursuant to section 12(b) of the Securities and Exchange Act of 1934:

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Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of August 1, November 2, 2026, BCB Bancorp, Inc. had 18,101,822 30,751,822 shares of common stock, no par value, outstanding.

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Financial statements 5 changes

Consolidated Statements of Financial Condition as of June September 30, 2026 (unaudited) and December 31, 2025 (unaudited)

Consolidated Statements of Operations for the three and six nine months ended June September 30, 2026 2025 and 2024 (unaudited) 2025

Consolidated Statements of Comprehensive Income (Loss) for the three and six nine months ended June September 30, 2026 2025 and 2024 (unaudited) 2025

Consolidated Statements of Changes in Stockholders' Equity for the three and six nine months ended June September 30, 2026 2025 and 2024 (unaudited) 2025

Consolidated Statements of Cash Flows for the six nine months ended June September 30, 2026 2025 and 2024 (unaudited) 2025

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Exhibits 248 changes

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of $ 44,980 70,270 and $ 33,691 , respectively

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Preferred stock: $ 0.01 par value, 10,000,000 shares authorized; issued and outstanding 2,548 shares Series J 8.0 % and Series K 6.0 % (liquidation value $ 10,000 per share) noncumulative perpetual preferred stock at June September 30, 2026 and December 31, 2025

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Common stock: no par value; 40,000,000 shares authorized; issued 21,335,793 33,985,793 and 20,508,183 at June September 30, 2026 and December 31, 2025, respectively, outstanding 18,101,822 30,751,822 and 17,274,212 , at June September 30, 2026 and December 31, 2025, respectively

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Retained deficit (earnings)

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Treasury stock, at cost, 3,233,971 shares at June September 30, 2026 and December 31, 2025 ( 38,347 )

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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Net interest (loss) income after provision for credit losses on loans ( 92,362 )

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(Loss) Gain (Loss) on sales of loans

Gain on sale of other real estate owned

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Income tax (benefit) provision

Income tax provision (benefit)

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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Income tax (expense) benefit

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Issuance of common stock

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Balance at June September 30, 2026

Balance at April July 1, 2026

Issuance of common stock

Other comprehensive income loss

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Cash dividends on common stock ($ 0.08 per share declared)

Dividend reinvestment plan

Balance at June September 30, 2026

See accompanying notes to unaudited consolidated financial statements.

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Dividends payable on Series J 8.0 % and Series K 6.0 % noncumulative perpetual preferred stock ( 964 1,446 )

Cash dividends on common stock ($ 0.32 0.48 per share declared)

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Balance at June September 30, 2025

Balance at April July 1, 2025

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BCB BANCORP INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity

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

Balance at January 1, 2024

Other comprehensive loss

Issuance of Series J preferred stock

Stock-based compensation expense

Dividends payable on Series I 3.0 % and Series J 8.0 % noncumulative perpetual preferred stock ( 882 )

Cash dividends on common stock ($ 0.32 per share declared)

Dividend reinvestment plan

Balance at June 30, 2024

Balance at April 1, 2024

Other comprehensive loss

Issuance of Series J preferred stock

Stock-based compensation expense

Dividends payable on Series I 3.0 % and Series J 8.0 % noncumulative perpetual preferred stock ( 448 )

Cash dividends on common stock ($ 0.16 per share declared)

Dividend reinvestment plan

Balance at June 30, 2024

Balance at June September 30, 2025

See accompanying notes to unaudited consolidated financial statements.

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Six Months Ended June 30,

Nine Months Ended September 30,

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Deferred income tax (benefit) expense (benefit)

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Gain on sale of fixed assets

Realized and unrealized losses (gains) on equity investments ( 127 )

Gain on sales of other real estate owned

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Proceeds from sale of fixed asset

Proceeds from sales of equity investments securities available for sale

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Proceeds from the sale of other real estate owned

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Redemption (purchase) of Federal Home Loan Bank of New York stock ( 84 )

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Repayment from Federal Home Loan Bank of New York Long Term Advances ( 110,000 235,000 )

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Net (Decrease) Increase (Decrease) in Cash and Cash Equivalents

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Transfer of loans receivable to other real estate

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The Company's primary business is the ownership and operation of BCB Community Bank (the "Bank"). The Bank is a New Jersey based commercial bank which, as of June September 30, 2026, operated at 26 locations in Bayonne, Edison, Fairfield, Hoboken, Holmdel, Jersey City, Lyndhurst, Maplewood, Monroe Township, Newark, Plainsboro, South Orange, River Edge, Rutherford, Union, and Woodbridge New Jersey, as well as Staten Island and Hicksville, New York and is subject to regulation, supervision, and examination by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation ("FDIC"). 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, business and consumer loans. The Bank has two active subsidiaries. BCB Holding Company Investment Corp. (the "New Jersey 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. As a part of the merger with IA Bancorp, Inc. in 2018, the Company acquired Special Asset REO 1, LLC and Special Asset REO 2, LLC. The Bank changed the name of Special Asset REO 1, LLC to BCB Capital Finance Group, LLC in November 2023. This subsidiary is inactive. Special Asset REO 2, LLC had one sold its foreclosed property at June during August 2026 and held no real estate owned assets as of September 30, 2026 totaling $ 5.0 million.

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 Net Income (NI) – Measures the Company's overall profitability and financial performance.

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 Efficiency Ratio – Assesses cost management by comparing non-interest expense to total revenue.

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Note 3 – Reclassification

Certain amounts have been reclassified to conform to the current period's presentation. These changes had no effect on the Company's results of operations or financial position.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) , which requires enhanced disclosures regarding certain expense captions presented on the income statement. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. The standard is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the effect of the adoption of this guidance on its consolidated financial statement disclosures.

Note 4 3 – Equity Compensation Arrangements

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Note 4 – Equity Compensation Arrangements (continued)

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The Company, under the plan approved by its shareholders on April 27, 2023 (the "2023 Equity Incentive Plan"), authorized the issuance of up to 1,000,000 shares of common stock of the Company pursuant to grants of stock options, restricted stock awards, restricted stock units, and performance awards. Employees and Directors of the Company and the Bank are eligible to participate in the 2023 Equity Incentive Plan. All stock options are granted in the form of either "incentive" stock options or "non-qualified" stock options. Incentive stock options have certain tax advantages that must comply with the requirements of Section 422 of the Internal Revenue Code. Only employees are permitted to receive incentive stock options.

The Company, under the plan approved by its shareholders on April 26, 2018 (the "2018 Equity Incentive Plan"), authorized the issuance of up to 1,000,000 shares of common stock of the Company pursuant to grants of stock options and restricted stock units. Employees and Directors of the Company and the Bank were eligible to participate in the 2018 Stock Equity Incentive Plan. All stock options were granted in the form of either "incentive" stock options or "non-qualified" stock options. No further grants will be made under the 2018 Stock Equity Incentive Plan.

The Company, under the plan approved by its shareholders on April 28, 2011 (the "2011 Stock Plan"), authorized the issuance of up to 900,000 shares of common stock of the Company pursuant to grants of stock options. Employees and Directors of the Company and the Bank are eligible to participate in the 2011 Stock Plan. All stock options were granted in the form of either "incentive" stock options or "non-qualified" stock options. No options were permitted to be granted under the 2011 Stock Plan after April 28, 2021.

On February 10, 2026, awards of 47,616 shares of restricted stock, in aggregate were declared for granted to members of the Board of Directors of the Bank and the Company, which vest over a 3 -year period, commencing on the anniversary of the award date. Also, on April 22, 2026, an award of 4,226 shares of restricted stock was declared for granted to a new member of the Board of Directors of the Bank and the Company, which vests over a 3 -year period commencing on the anniversary of the award date.

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On April 25, 2024, awards of 30,000 and 20,000 shares of restricted stock were declared for an executive officer of the Bank and the Company, which vest over a 2 and 3 -year period, respectively, commencing on the anniversary date of the awards.

The following table presents a summary of the status of the Company's restricted shares as of June September 30, 2026 and 2025.

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Non-vested at June September 30, 2026

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Non-vested at June September 30, 2025

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and 168 more changes in the filing

Forward-looking statements 141 changes

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The most significant factors that could cause future results to differ materially from those anticipated by our forward-looking statements include the ongoing global impact of the United States military conflict with Iran, the periodic Federal budget stalemate and funding stalemates in Congress, higher the ongoing impact of global tariffs imposed by the Trump administration, higher inflation levels, current changes in market interest rates and general economic and recessionary concerns, all of which could impact economic growth our customers' businesses and the economy and could cause increased loan delinquencies, a reduction in financial transactions and business activities, including decreased deposits and reduced loan originations. Also significant are our ability to manage liquidity and capital in a rapidly changing and unpredictable market and our level of non-performing assets and the costs associated with resolving any problem loans including litigation and other costs. Other factors that could cause future results to vary materially from current management expectations as reflected in our forward-looking statements include, but are not limited to:

 the global economic trends and geopolitical risks, including the ongoing conflicts in Ukraine and the Middle East, and changes in the rate of investment or economic growth, including as a result of sanctions, tariffs or other measures;

 unfavorable economic conditions in the United States generally and particularly in our primary market area and those of our customers, including the periodic Federal budget and funding stalemates in the U.S. Congress;

 the impact of changes in interest rates and the credit quality and strength of underlying collateral;

 the credit risk associated with our loan portfolio;

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 the Company's ability to complete the sale of its remaining loans held for sale;

 the planned sale of the Company's cannabis business, which may not be completed in accordance with expected plans or the currently contemplated timeline, or at all, and may be disruptive to the Company and/or reduce the Company's profitability in future periods;

 our ability to complete our proposed reincorporation from New Jersey to Delaware, including our ability to receive shareholder approval of the proposed reincorporation, and our ability to realize the anticipated benefits of the proposed reincorporation;

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 the impact of changes in interest rates and the credit quality and strength of underlying collateral and the effect of such changes on the market value of our loan and investment securities portfolios;

 the credit risk associated with our loan portfolio;

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 changes in our ability to access cost-effective funding;

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 legislative and regulatory changes, including but not limited to, increases in Federal Deposit Insurance Corporation FDIC insurance rates;

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 changes in the securities or secondary mortgage loan markets;

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 other factors discussed elsewhere in this report, and in other reports we filed with the SEC, including under "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K, in Part II, Item 1A of our quarterly reports on Form 10-Q, and our other periodic reports that we file with the SEC.

 civil unrest in the communities that we serve; and

 changes in accounting principles and guidelines;

 other economic, competitive, governmental, regulatory, geopolitical and technological factors affecting our operations, pricing and services ; and

 other factors discussed elsewhere in this report, including under "Risk Factors" in Part II, Item 1A.

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BCB Bancorp, Inc. is a New Jersey corporation and is the holding company parent of BCB Community Bank, or the Bank. The Company has not engaged in any significant business activity other than owning all of the outstanding common stock of BCB Community the Bank. Our executive office is located at 104-110 Avenue C, Bayonne, New Jersey 07002. At June September 30, 2026, we had $3.118 $3.021 billion in consolidated assets, $2.636 $2.609 billion in deposits and $291.9 $246.1 million in consolidated stockholders' equity.

BCB Community The Bank opened for business on November 1, 2000, as Bayonne Community Bank, a New Jersey chartered commercial bank. The Bank changed its name from Bayonne Community Bank to BCB Community Bank in April 2007. At June September 30, 2026, the Bank operated twenty-two branches in Bayonne, Edison, Jersey City, Hoboken, Fairfield, Holmdel, Lyndhurst, Maplewood, Monroe Township, Newark, Plainsboro, River Edge, Rutherford, South Orange, Union, and Woodbridge, New Jersey, as well as three branches in Staten Island and one in Hicksville, New York, and through executive offices located at 104-110 Avenue C and an administrative office located at 591-595 Avenue C, Bayonne, New Jersey 07002. The Bank's deposit accounts are insured by the FDIC, and the Bank is a member of the Federal Home Loan Bank ("FHLB") System.

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The Company reported a net loss of $14.8 million, or $(0.85) per diluted share, for the second quarter of 2026, compared to net income of $4.9 million, or $0.26 per diluted share, for the first quarter of 2026, and net income of $3.6 million, or $0.18 per diluted share, for the second quarter of 2025. The net loss for the second quarter of 2026 was primarily driven by a $19.0 million provision for credit losses, reflecting higher reserve requirements within the Company's commercial business loan portfolio, a $5.3 million non-cash goodwill impairment charge, and a $2.6 million loss on the sale of a loan transferred to held-for-sale. These factors were partially offset by a decrease in income tax provision of $4.9 million. Net interest margin improved to 3.03 percent for the second quarter of 2026, compared to 2.95 percent for the first quarter of 2026 and 2.80 percent for the second quarter of 2025, reflecting a decrease in the cost of the Company's interest-bearing liabilities. The efficiency ratio for the second quarter was 96.8 percent compared to 62.4 percent in the prior quarter, and 60.6 percent in the second quarter of 2025.

In connection with these efforts, the Company's Board of Directors approved the suspension of both common and preferred stock dividends during the quarter in order to preserve capital at the Bank and liquidity at the holding company. Additionally, the Company announced in June, and subsequently distributed a notice to the participants in its 2026 Amended and Restated Dividend Reinvestment and Stock Purchase Plan, that the Plan has been suspended in accordance with its terms, effective August 6, 2026. The Company also announced on August 3, 2026, that its Board of Directors approved changing the Company's state of incorporation from New Jersey to Delaware, subject to shareholder approval. The Company intends to call a special meeting of shareholders later in 2026 to seek approval of the reincorporation.

Executive Summary of Second Third Quarter Performance

D uring the third quarter of 2026, the Company executed several strategic initiatives designed to strengthen capital, improve asset quality, and enhance governance. The Company completed a $98.0 million underwritten public equity offering, which generated $91.4 million of net proceeds, and maintained well-capitalized regulatory capital levels throughout the quarter. The offering consisted of 12,650,000 shares of the Company's common stock, including the full exercise of the underwriter's option to purchase 1,650,000 additional shares, at a public offering price of $7.75 per share. The Company intends to use the net proceeds of this offering of common stock for general corporate purposes, including maintaining liquidity, funding working capital needs, supporting Bank capital including in connection with the expected disposition of identified potential problem loans, reducing debt, and maintaining the Company's capital and liquidity ratios, and the capital and liquidity ratios of the Bank, at acceptable levels. Approximately $20 million of the proceeds was retained at the holding company, significantly enhancing holding company liquidity. At September 30, 2026, the Bank's leverage capital ratio was 9.0 percent and the Company's consolidated leverage capital ratio was 8.4 percent.

Since June 1, 2026, The Company has been engaged in completed a comprehensive re-evaluation of its credit portfolios in the third quarter of 2026, including its commercial and multifamily real estate portfolios, with the assistance of independent consultants, as part of its broader effort to strengthen the balance sheet and position the franchise for long-term success. The initial feedback from this re-evaluation has results of these evaluations have been reflected in the Company's loan loss reserving decisions for the second third quarter and the Company is working toward completion of the review by the end of resulted in an increase in the third quarter of 2026. With respect allowance for credit losses to the Company's commercial real estate portfolio, the Company's analysis remains address losses embedded in the early stages, given the absolute size and complexity of this portfolio. portfolios.

During the third quarter of 2026, the Bank completed a series of loan sales totaling $204.3 million of problem loans, the majority of which were risk-rated criticized or classified under the Bank's internal risk rating system reflecting the results of the re-evaluation of the credit portfolio. The sold portfolio included commercial and multifamily real estate loans with an aggregate unpaid principal balance of approximately $179.7 million, commercial and industrial loans of approximately $14.6 million, and construction loans of approximately $10.0 million, resulting in a $42.3 million charge-off to the allowance for credit losses on loans. The Bank also transferred $70.2 million of cannabis loans, $29.8 million of commercial real estate loans, and $874 thousand of commercial and industrial loans to held-for-sale status and recorded a related $44.2 million charge-off to the allowance for credit losses on these loans to reflect these loans on the balance sheet at the lower of their cost or fair market value, given their held-for-sale status.

As of June September 30, 2026, the Company had total consolidated assets of $3.118 $3.021 billion, a decrease of $161.3 $258.4 million, or 4.9 7.9 percent, from $3.279 billion at December 31, 2025, total consolidated deposits of $2.636 $2.609 billion, a decrease of $37.6 $64.4 million, or 1.4 2.4 percent, from December 31, 2025, and total consolidated stockholders' equity of $291.9 $246.1 million, compared to $304.3 million at December 31, 2025. The decrease in total assets was driven primarily by a decrease in net loans and cash and cash equivalents, reflecting the Bank's paydown of higher-cost brokered deposits and FHLB advances, primarily due to loans sales, offset by an increase in debt securities. Total criticized and classified loans were $367.4 million at June 30, 2026, compared to $403.0 million at March 31, 2026. cash from the allowance for credit losses on loans as a percentage of non-accrual loans was 62.5 percent at June 30, 2026, compared to 54.5 percent at March 31, 2026 and 49.8 percent at June 30, 2025, while total non-accrual loans were $72.0 million at June 30, 2026, $59.8 million at March 31, 2026, sale proceeds and $101.8 million at June 30, 2025. the capital raise.

Total special mention and substandard loans were $198.9 million at September 30, 2026, compared to $367.4 million at June 30, 2026. The allowance for credit losses on loans held for investment as a percentage of non-accrual loans was 313.4 percent at September 30, 2026, compared to 73.5 percent at June 30, 2026 and 40.4 percent at September 30, 2025, while total non-accrual loans held for investment were $22.4 million at September 30, 2026, $61.2 million at June 30, 2026, and $93.5 million at September 30, 2025.

The Company reported a net loss attributable to common stockholders of $132.5 million for the third quarter of 2026, compared to a net loss of $14.8 million in the second quarter of 2026, and net income of $3.8 million for the third quarter of 2025. The Company's loss per diluted share for the third quarter was ($6.92) compared to a loss per diluted share of ($0.85) in the preceding quarter. The Company had earnings per share of $0.22 in the third quarter of 2025. The net loss for the third quarter of 2026 was primarily driven by a $115.0 million provision for credit losses and the $59.9 million in valuation allowance established against the Company's deferred tax asset which is reflected in the calculation of our income tax provision for the quarter.

The Company strengthened its Board oversight through the appointment of two independent directors and continued the reorganization of its executive leadership team to better align governance, accountability, and strategic objectives. On October 7, 2026, the Company announced the appointment of Steven E. Gallotta and Denny Kim as independent directors of the Company and the Bank, and the appointment of Patricia M. Schaubeck as Executive Vice President, Chief Legal Officer and Corporate Secretary of the Company and the Bank, in connection with a reorganization of its legal department and executive leadership team.

In late October 2026, the Company announced a further reorganization of its executive team to better align the Bank's leadership structure with its strategic priorities and the core experience and leadership strengths of these executives.

The Company's Board of Directors has also approved a proposal to change the Company's state of incorporation from New Jersey to Delaware, subject to shareholder approval and receipt of any applicable regulatory non-objection or approval and provision of certain regulatory notices, and the Company has called a special meeting of shareholders to be held on November 18, 2026, to consider the proposal.

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The allowance for credit losses represents the estimated amount considered necessary to cover lifetime expected credit losses inherent in financial assets at the balance sheet date. The measurement of expected credit losses is applicable to loans receivable and securities measured at amortized cost. It also applies to off-balance sheet credit exposures such as loan commitments and unused lines of credit. The allowance is established through a provision for credit losses that is charged against income. The methodology for determining the allowance for credit losses is considered a critical accounting policy by management because of the high degree of judgment involved, the subjectivity of the assumptions used, and the potential for changes in the forecasted economic environment that could result in changes to the amount of the recorded allowance for credit losses. The allowance for credit losses is reported separately as a contra-asset on the consolidated statement of financial condition. The expected credit loss for unfunded loan commitments is reported on the consolidated statement of financial condition in other liabilities while the provision for credit losses related to unfunded commitments is reported in other non-interest expense. Changes in the allowance for credit losses are recorded as provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of a receivable is confirmed or when either of the criteria regarding intent or requirement to sell is met.

The allowance for credit losses is established based upon the Company's current estimate of expected lifetime credit losses. Determining the appropriate allowance requires significant judgment and ongoing evaluation of the loan portfolio. The Company estimates credit losses on a collective basis for loans with similar risk characteristics using a quantitative model supplemented by qualitative factor adjustments. Management applies judgment in evaluating qualitative factors, including, but not limited to, economic uncertainty, competitive, legal, regulatory, and business conditions, changes in credit concentrations, trends in collateral values, changes in the nature, volume, and composition of the loan portfolio, the volume and severity of past due and adversely classified loans, changes in the experience and expertise of management and lending personnel, changes in lending policies, underwriting standards, collection practices, charge-off and recovery efforts, the effectiveness of the credit review function, changes in borrower financial condition, and environmental and industry-specific conditions affecting borrowers and geographic areas where the Company has concentrations of credit exposure. Loans that no longer share similar risk characteristics with any portfolio segment are individually evaluated and excluded from the collectively assessed pools. Management performs periodic sensitivity analyses using available economic forecasts to evaluate the adequacy of the allowance for credit losses under varying economic scenarios.

The allowance for credit losses is reported separately as a contra-asset on the consolidated statement of financial condition. The expected credit loss for unfunded loan commitments is reported on the consolidated statement of financial condition in other liabilities while the provision for credit losses related to unfunded commitments is reported in other non-interest expense. Changes in the allowance for credit losses are recorded as provision for, or reversal of, credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of a receivable is confirmed or when either of the criteria regarding intent or requirement to sell is met.

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The Company has chosen to segment its portfolio consistent with the manner in which it manages credit risk. The Company calculates estimated credit losses for these loan segments using quantitative models and qualitative factors. Further information on loan segmentation and the credit loss estimation is included in Note 7 6 – Loans Receivable and Allowance for Credit Losses.

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Allowance for Credit Losses on Off-Balance Sheet Commitments

The Company is required to include unfunded commitments that are expected to be funded in the future within the allowance calculation, other than those that are unconditionally cancelable. To arrive at that reserve, the reserve percentage for each applicable segment is applied to the unused portion of the expected commitment balance and is multiplied by the expected funding rate. As noted above, the allowance for credit losses on unfunded loan commitments is included in other liabilities on the consolidated statements of financial condition and the related credit expense is recorded in other non-interest expense in the consolidated statements of operations.

Allowance for Credit Losses on Available-for-Sale Securities

For available-for-sale securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more than likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security's amortized cost basis is written down to fair value through income. For securities available-for-sale that do not meet the above criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost and adverse conditions related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of the cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income (loss), net of tax. The Company elected the practical expedient of zero loss estimates for securities issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major agencies and have a long history of no credit losses.

Accrued Interest Receivable

The Company made an accounting policy election to exclude accrued interest receivable from the amortized cost basis of loans and available-for-sale securities. Accrued interest receivable on loans and securities is reported as a component of accrued interest receivable on the consolidated statements of financial condition.

See further discussion of critical accounting estimate in Note 7 6 of this Form 10-Q and in Note 5 our Annual Report on Form 10-K for the year ended December 31, 202 5.

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Total cash and cash equivalents decreased by $79.7 million, or 28.8 percent, to $196.9 million at June 30, 2026, from $276.6 million at December 31, 2025. The decrease in cash was primarily due to the reduction of the Bank's exposure to wholesale funding by paying down high cost brokered deposits and FHLB advances.

Loans receivable, net, decreased by $103.1 million, or 3.8 percent, to $2.588 billion at June 30, 2026, from $2.691 billion at December 31, 2025, due to loan payoffs, paydowns and charge-offs. Total loan decreases during the period included decreases of $35.2 million in construction loans, $30.9 million in commercial and multi-family loans, $10.9 million in commercial business loans, $5.9 million in business express loans, $8.0 million in one-to-four family residential loans, and $679,000 in cannabis, home equity loans and consumer loans. The decrease in the loan portfolio also reflects management's overall strategy to reduce the size of the balance sheet while managing through its problem credits. During the six months ended June 30, 2026, the Bank's loan origination activity remained below historical levels as it continued to focus on portfolio runoff, balance sheet management and risk-adjusted returns. In addition, the Bank has ceased originating residential mortgage, home equity, and consumer loans, as management believes the current risk-adjusted returns in these categories are not sufficiently attractive.

During the second quarter, the Company also transferred one loan on non-accrual status to held-for-sale, which was written down to fair market value resulting in a loss of $2.6 million reflected in non-interest income under the line item for net loss on the sale of loans. The remaining carrying value of the loan is $10.8 million. Loans held-for-sale are not included in past due loans or classified loans.

Stockholders' equity decreased by $12.4 million, or 4.1 percent, to $291.9 million at June 30, 2026, from $304.3 million at December 31, 2025. The decrease was attributable to the decrease in retained earnings of $13.2 million, or 11.3 percent, to $103.2 million at June 30, 2026, from $116.4 million at December 31, 2025, caused largely by the $9.9 million loss in the first six months of 2026.

Since June 1, 2026, the Company has been engaged in a comprehensive re-evaluation of its credit portfolios with the assistance of independent consultants as part of its broader effort to strengthen the balance sheet and position the franchise for long-term success. The initial feedback from this re-evaluation has been reflected in the loan loss reserving decisions made during the second quarter, and the Company is working toward completion of that review by the end of the third quarter of 2026. With respect to the Company's commercial real estate portfolio, the Company's analysis remains in the early stages, given the absolute size and complexity of this portfolio. As the evaluation continues in the third quarter, the Company will fully explore various alternatives to strengthen the credits or exit the relationships, which may include workouts and loan restructurings, such as potentially seeking additional collateral, interest rate adjustments, as well as select loan sale.

The allowance for credit losses on loans of $45.0 million, as of June 30, 2026, increased by $11.3 million, or 33.5 percent, compared to December 31, 2025. The $11.3 million increase compared to December 31, 2025, was driven by a $21.8 million provision expense for the first six months of 2026 that was partially offset by $10.5 million in net charge-offs primarily attributable to the commercial business portfolio, which continued to exhibit elevated levels of credit deterioration. Net charge-offs within the commercial business portfolio totaled $6.6 million for the six months ended June 30, 2026, with $5.8 million recognized in the second quarter compared to $824,000 in the first quarter. In addition, the Bank concluded that full recovery is no longer expected on a previously charged-off $6.3 million commercial business relationship. In light of this development, along with broader adverse credit trends observed within the commercial business portfolio, management performed a targeted qualitative assessment of the portfolio during the second quarter. As a result of this evaluation, the Bank increased the allowance associated with the commercial business portfolio by $10.8 million. For reference and as presented in Note 7, $16.7 million of the $19 million of loan loss provision expense booked in the 2026 second quarter was attributed to the build-up of loan loss reserves for the commercial business portfolio.

Loans receivable classified as Substandard totaled $160.5 million at June 30, 2026, compared to $188.7 million at December 31, 2025, and $266.8 million at June 30, 2025. The decreases were primarily attributed to charge-offs, payoffs and paydowns, as well as upgrades in borrower risk ratings. Also, during the second quarter of 2026, the Bank transferred a classified non-accrual loan with a carrying value of $13.4 million to held-for-sale, resulting in a loss of $2.6 million reflected in non-interest income under the line item for net loss on the sale of loans. The remaining value of the loan is $10.8 million. Loans classified as held-for-sale are excluded from both past due loans and classified loan balances.

Loans receivable classified as Special Mention totaled $207.0 million at June 30, 2026, compared to $170.8 million at December 31, 2025, and $229.9 million at June 30, 2025. While loans classified as Special Mention increased during the year, they remain below the level reported a year ago. The increase from December 31, 2025, reflects the Bank's proactive efforts to identify, monitor, and transfer higher credit risks earlier in the process for closer oversight and resolution.

The Bank had non-accrual loans totaling $72.0 million, or 2.73 percent of gross loans, at June 30, 2026, as compared to $63.3 million, or 2.32 percent of gross loans at December 31, 2025, and $101.8 million or 3.50 percent of gross loans at June 30, 2025. Excluding the classified loan transferred to held-for-sale during the second quarter of 2026, non-accrual loan balances remained fairly stable when compared to December 31, 2025, and declined significantly from a year ago. The year over year decrease was primarily due to the charge-off and subsequent transfer to Other Real Estate Owned of a $33.5 million cannabis related loan in the third and fourth quarters of 2025, respectively.

Total loans receivable greater than 30 days past due were $122.8 million, or 4.66 percent of gross loans, at June 30, 2026, as compared to $99.1 million, or 3.64 percent of gross loans, at December 31, 2025, and $111.0 million, or 3.81 percent of gross loans at June 30, 2025. The increase in past due loans during the six months ended June 30, 2026, was primarily reflected in loans 30-59 days past due within the Commercial and multi-family loan portfolio. The increase was largely driven by a one large credit of approximately $16 million, secured by raw land that the Bank anticipates entering into litigation. Management believes tht this land loan is adequately secured, with collateral value expected to support full recovery of the outstanding balance. An additional $8 million increase was attributable to a mixed-use office / garage building that the Bank is in process of restructuring for payment relief.

The following table summarizes the Company's classified loans greater than $5 million at June 30, 2026 (in thousands):

Specialty Use - hospital

Industrial loft and Industrial Warehouse

Mixed Use -retail/office

Mixed use - retail/office

(1) Weighted Average LTV based upon the most recent appraised values available.

(2) Borrower has two loans that are classified and collectively exceed $5 million.

(3) Borrower has ten loans that are classified and collectively exceed $5 million.

The following table summarizes the Bank's top ten relationship loans at June 30, 2026 excluding classified loans which are presented in the table above.

CRE/Commercial Business

Multi-family & Retail

CRE/Commercial Business

Multi-family & Commercial

Income Producing Land

Marijuana Related Business

Multi-family & Mixed Use

CRE/Commercial Business

CRE/Commercial Business

(1) Weighted Average LTV based upon the most recent appraised values available.

(2) Balance includes outstanding and committed amounts.

(3) LTV adjusted to account for commercial business loans with no credit for UCC filing.

See Note 10 9 – Goodwill and Other Intangible Assets of this Form 10-Q and Note 14 in our Annual Report on Form 10-K for additional information on the Company's goodwill and intangibles.

Total assets decreased by $161.3 $258.4 million, or 4.9 7.9 percent, to $3.118 $3.021 billion at June September 30, 2026, from $3.279 billion at December 31, 2025. The decrease in total assets was mainly related to a decrease in net loans and cash and cash equivalents, primarily due to our loan sales in the third quarter, offset by an increase in debt securities. cash.

Total cash and cash equivalents increased by $223.8 million, or 80.9 percent, to $500.3 million at September 30, 2026, from $276.6 million at December 31, 2025. The increase in cash was primarily due to proceeds from the loan sales and from the equity capital raise executed in the third quarter.

Gross loans receivable held for investment decreased by $475.0 million, or 17.4 percent, to $2.252 billion at September 30, 2026, from $2.727 billion at December 31, 2025 due to the loan sales, the transfer of certain loans to held-for-sale, payoffs, paydowns and charge-offs. Total loan decreases during the period included decreases of $287.2 million in commercial and multifamily loans, $65.2 million in cannabis loans, $55.1 million in construction loans, $42.3 million in commercial business loans, $12.0 million in 1-4 family residential loans, $10.4 million in business express loans, and $2.8 million in home equity and consumer loans. The Bank had $67.6 million in loans held for sale at September 30, 2026.

The allowance for credit losses on loans increased $11.3 $36.6 million to $45.0 $70.3 million, or 62.5 313.4 percent of non-accruing loans and 1.71 3.12 percent of gross loans held for investment, at June September 30, 2026, as compared to an allowance for credit losses on loans of $33.7 million, or 53.3 percent of non-accruing loans and 1.24 percent of gross loans held for investment, at December 31, 2025. Additional details are provided in the Asset Quality portion of Management's Discussion and Analysis of Financial Condition and Results of Operations.

Total investment securities increased decreased by $16.7 million, $594 thousand, or 12.3 0.4 percent, to $152.3 $135.0 million at June September 30, 2026, from $135.6 million at December 31, 2025, representing current year purchases, sales and paydowns, offset by current year sales. purchases.

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and 61 more changes in the filing

Market risk 2 changes

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Quantitative Analysis. The following table presents the Company's net portfolio value ("NPV"). These calculations were based upon assumptions believed to be fundamentally sound, although they may vary from assumptions utilized by other financial institutions. The information set forth below is based on data that included all financial instruments as of June September 30, 2026. Assumptions have been made by the Company relating to interest rates, loan prepayment rates, core deposit duration, and the market values of certain assets and liabilities under the various interest rate scenarios. Actual maturity dates were used for fixed rate loans and certificate accounts. Investment securities were scheduled at either the maturity date or the next scheduled call date based upon management's judgment of whether the particular security would be called in the current interest rate environment and under assumed interest rate scenarios. Variable rate loans were scheduled as of their next scheduled interest rate repricing date. The NPV at "PAR" represents the difference between the Company's estimated value of assets and estimated value of liabilities assuming no change in interest rates. The NPV for an increase of 200 to 300 basis points has been excluded since it would not be meaningful in the interest rate environment as of June September 30, 2026. The following sets forth the Company's NPV as of June September 30, 2026.

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The table above indicates that at June September 30, 2026, in the event of a 100-basis point decrease in interest rates, we would experience a 0.08 0.11 percent increase decrease in NPV, as compared to a 0.01 percent increase at December 31, 2025.

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Legal proceedings 1 change

We are involved, from time to time, as plaintiff or defendant in various legal actions arising in the normal course of business. As of June September 30, 2026, we were not involved in any material legal proceedings the outcome of which, if determined in a manner adverse to the Company, would have a material adverse effect on our financial condition or results of operations.

A. risk factors 216 changes

Risk Related to Credit

Our comprehensive re-evaluation of our credit portfolios may identify additional loan deterioration, which would adversely impact our financial condition, regulatory capital ratios and results of operations.

Since June 1, 2026, we have been engaged in a comprehensive re-evaluation of our credit portfolios with the assistance of independent consultants, as part of our broader effort to strengthen the balance sheet and position the Bank for long-term success. The initial feedback from this re-evaluation has been reflected in the Company's loan loss reserving decisions for the second quarter of 2026, and the Company is working toward completion of the review by the end of the third quarter of 2026. With respect to the Company's commercial real estate portfolio, the Company's analysis remains in the early stages given the absolute size and complexity of this portfolio.

As our evaluation continues, we will fully explore various alternatives to strengthen the credits identified in this review or exit the relationships, which may include workouts and loan restructurings, such as potentially seeking additional collateral, interest rate adjustments, or select loan sales. It is possible that the process of completing this review, and effecting any resulting workouts, restructurings, or loan sales, could result in higher than anticipated costs, adverse financial impacts, or the identification of additional problem loans or credit deterioration beyond what has already been reflected in our provision for credit losses and allowance for credit losses as of June 30, 2026. If difficulties with completing this review are encountered, the process may take longer than expected, and any resulting increase to our allowance for credit losses would adversely affect our net income and could adversely affect our capital position.

Risk Related to Liquidity

A lack of liquidity could adversely affect our financial condition and results of operations and result in regulatory limits being placed on the Company.

Liquidity is essential to our business. We rely on our ability to generate deposits and effectively manage the repayment and maturity schedules of our loans to ensure that we have adequate liquidity to fund our operations. An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on our liquidity. Our most important source of funds is deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk/return tradeoff, or in response to concerns about our asset quality, financial performance or reputation. If customers move money out of deposits such as money market and time deposit accounts, we will lose a relatively low-cost source of funds, increasing our funding costs and reducing our net interest income and net income. We have in the past relied, and may in the future need to rely, on higher-cost brokered deposits and FHLB advances to fund our operations, and any reduction in our access to or increase in the cost of these funding sources could adversely affect our liquidity and results of operations. Moreover, depending on the capitalization and regulatory treatment of depository institutions, including whether an institution is subject to a supervisory prompt corrective action directive, certain additional regulatory restrictions and prohibitions may apply, including restrictions on growth, restrictions on interest rates paid on deposits, restrictions or prohibitions on payment of dividends and restrictions on the acceptance of brokered deposits. In the event such restrictions on interest rates paid on deposits become applicable to us, we will likely need to reduce our interest rates paid on a large segment of our deposits, which could result in significant deposit withdrawals. Significant deposit withdrawals could materially reduce our liquidity, and, in such an event, we may be required to replace such deposits with higher-costing borrowings.

Our other primary sources of funds are net growth in deposits (primarily retail), principal and interest payments on loans and investment securities, proceeds from the sale of originated loans, and FHLB and other borrowings. We also have access to unsecured overnight lines of credit and other collateralized borrowings from the Federal Reserve Bank Discount Window, the FHLB of New York, and other correspondent banks. At June 30, 2026, we had the ability to obtain additional funding of $499.7 million from the FHLB and $199.5 million from the Federal Reserve Bank Discount Window, utilizing unencumbered loan collateral. Our access to funding sources in amounts adequate to finance or capitalize our activities, or on terms that are acceptable to us, could be impaired by factors that affect us directly or the financial services industry or economy in general, such as disruptions in the financial markets, a downgrade or negative outlook in our credit quality metrics, or negative views and expectations about the prospects for the financial services industry. Our access to funding sources could also be affected by a decrease in the ability to sell loans as a result of a downturn in our markets or by one or more adverse regulatory actions against us. A lack of liquidity could also attract increased regulatory scrutiny and potential restraints imposed on us by regulators.

Any decline in available funding could adversely impact our ability to originate loans, invest in securities, meet our expenses or fulfill obligations such as repaying our borrowings or meeting deposit withdrawal demands, any of which could have a material adverse impact on our liquidity, business, financial condition and results of operations.

In addition, our recurring cash requirements at the holding company level primarily consist of interest expense on subordinated debentures. At June 30, 2026, the Company had $40.0 million of subordinated debentures outstanding and $4.1 million of trust preferred securities. The Company's ability to service this debt, and to meet its other obligations at the holding company level, depends on the amount of cash and liquidity available to the Company directly. Because the Company is a separate legal entity from the Bank, there can be no assurance that sufficient funds will be available to the Company to meet these obligations as they become due. Holding company cash needs are routinely satisfied by dividends collected from the Bank. While we expect that the holding company will continue to receive dividends from the Bank sufficient to satisfy holding company cash needs, in the event that the Bank has insufficient resources or is subject to legal or regulatory restrictions on the payment of dividends, the Bank may be unable to provide dividends or a sufficient level of dividends to the holding company. In that event, the holding company may have insufficient funds to satisfy its obligations as they become due, which in the case of the subordinated debentures would result in an event of default by the Company.

Please see "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and below for information regarding risk factors that could materially affect the Company's business, financial condition, or future results of operations. Other than as set forth below, there have been no other changes with regard to the risk factors disclosed in "Item 1A. Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

Risks Related to the Company's Common Stock

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Our board of directors has approved the suspension of the payment of common and preferred stock dividends. This action followed incurring a net loss for 2025 and for the first six nine months of 2026. Future dividends, if any, will substantially depend upon our future earnings and financial condition, liquidity and capital requirements, regulatory and state law restrictions, general economic conditions and regulatory climate and other factors deemed relevant by our board of directors. We can provide no assurance as to when, or whether, we will resume the payment of dividends, and there is no guarantee as to the amount or level of any dividend we may declare if and when payments resume. The continued suspension of dividends could adversely affect the market price of our common stock and may make it more difficult to raise capital on favorable terms, and there can be no assurance that the suspension will be sufficient to preserve adequate liquidity at the holding company level if adverse conditions continue or worsen.

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Under New Jersey law, the Company may not make a distribution, if, after giving effect to the distribution, it would be unable to pay its debts as they become due in the usual course of business or if its total assets would be less than its liabilities. If our proposed reincorporation from New Jersey to Delaware is approved by our shareholders, the Company's ability to pay dividends will be subject to the restrictions of the Delaware General Corporation Law. It is also the policy of the Federal Reserve that a bank holding company generally may only pay dividends on common stock out of net income available to common shareholders stockholders over the past twelve months and only if the prospective rate of earnings retention appears consistent with a bank holding company's capital needs, asset quality, and overall financial condition. A bank holding company also should not maintain a dividend level that places undue pressure on the capital of such institution's subsidiaries, or that may undermine the bank holding company's ability to serve as a source of strength for such subsidiaries.

Our common stock is not heavily traded, and the stock price may fluctuate significantly.

Our common stock is traded on the Nasdaq Global Market under the symbol "BCBP." Certain brokers currently make a market in the common stock, but such transactions are infrequent and the volume of shares traded is relatively small. Management cannot predict whether these or other brokers will continue to make a market in our common stock. Prices on stock that is not heavily traded, such as our common stock, can be more volatile than heavily traded stock. Factors such as our financial results, the introduction of new products and services by us or our competitors, publicity regarding the banking industry, inflation, changing interest rates, and various other factors affecting the banking industry may have a significant impact on the market price of the shares of the common stock. Management cannot predict the extent to which an active public market for our common stock will develop or be sustained in the future. Accordingly, stockholders may not be able to sell their shares of our common stock at the volumes, prices, or times that they desire.

Our common stock is subordinate to our existing and future preferred stock in the payment of dividends and liquidation and subordinate to our current and future indebtedness.

As of the date of this Quarterly Report on Form 10-Q, we had outstanding 2,548 shares of our Series J 8.0% and Series K 6.0% Noncumulative Perpetual Preferred Stock. These shares have rights that are senior to our common stock. Holders of our preferred stock are entitled to receive discretionary, non-cumulative dividends, payable quarterly. The dividend rate is fixed at 8.0% for our Series J preferred stock and at 6.0% for our Series K preferred stock.

Payments on the preferred stock as described in the paragraph above, if any, are to be made before any dividends can be paid on our common stock and, in the event of our bankruptcy, dissolution or liquidation, the holders of our preferred stock must be satisfied in full before any distributions can be made to the holders of our common stock.

Additionally, our board of directors has the authority to issue an aggregate of up to 10,000,000 shares of preferred stock, and to determine the terms of each issue of preferred stock, without stockholder approval. Accordingly, you should assume that any shares of preferred stock that we may issue in the future will also be senior to our common stock. Because our decision to issue preferred equity securities in the future will depend on market conditions and other factors beyond our control, the amount, timing, nature or success of our future capital raising efforts is uncertain. Thus, holders of our common stock bear the risk that our future issuances of preferred equity securities will negatively affect the market price of our common stock.

In addition, our common stock will rank junior to all existing and future indebtedness and other non-equity claims. At September 30, 2026, the Company had $40.0 million of subordinated debentures and $4.1 million of junior subordinated debentures outstanding.

Our operations may require us to raise additional capital, which may result in dilution to our then-existing stockholders and may not be available when it is needed, or at all.

We are required by regulatory authorities to maintain adequate levels of capital to support our operations. We can offer no assurance that our capital resources following our September 2026 public offering will be adequate to satisfy our capital requirements for the foreseeable future. Accordingly, we may need to raise additional capital by issuing securities. The issuance of additional equity capital could be dilutive to the interests of our then-existing stockholders.

Our ability to raise additional capital, if needed, will depend in part on conditions in the capital markets at that time, which are outside our control, and on our financial performance. Accordingly, we may be unable to raise additional capital, if and when needed, on terms acceptable to us, or at all. If we cannot raise additional capital when needed, we may be unable to comply with regulatory capital requirements, which could cause our federal and state regulators to restrict our operations. Our inability to raise additional capital when needed could have a material adverse effect on our business, financial condition and results of operations.

We may issue additional equity securities, or engage in other transactions which could dilute our book value or affect the priority of our common stock, which may adversely affect the market price of our common stock.

Our board of directors may determine from time to time that we need to raise additional capital by issuing additional shares of our common stock, preferred stock or other securities. We are generally not restricted from issuing additional shares of common stock, including securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors, some of which are beyond our control, we cannot predict or estimate the amount, timing, or nature of any future offerings, or the prices at which such offerings may be effected. Such offerings could be dilutive to holders of our common stock.

Our board of directors is also authorized to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences. New investors may have rights, preferences and privileges that are senior to, and that adversely affect, our then-current holders of our common stock. Additionally, if we raise additional capital by making additional offerings of debt or preferred equity securities, upon liquidation of the Company, holders of our debt securities and shares of preferred stock, and lenders with respect to other borrowings, will receive distributions of our available assets prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both. Holders of our common stock are not entitled to preemptive rights or other protections against dilution.

Anti-takeover provisions could negatively impact our stockholders.

Certain provisions of our restated certificate of incorporation and by-laws and federal banking laws, including regulatory approval requirements, may discourage, delay, limit, or prevent third parties from acquiring control of us or causing us to engage in change-of-control transactions, even if doing so would be perceived to be beneficial to our stockholders. Our certificate of incorporation and by-laws, for example:

• establish a classified board of directors so that not all members of our board of directors are elected at one time;

• provide that vacancies on our board of directors may be filled by a majority of directors then in office, even though less than a quorum, or by a sole remaining director;

• specify that special meetings of our stockholders can be called only by our board of directors, the president, or the chairman of our board of directors;

• provide for the ability of stockholders to take action by written consent;

• establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; and

• authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock.

Under New Jersey law, cumulative voting in the election of directors is not permitted unless a corporation's certificate of incorporation provides for it. There is no cumulative voting in the election of our directors. The absence of cumulative voting means that the holders of a majority of our voting shares can elect all of the directors then standing for election and the holders of the remaining shares will not be able to elect any directors. In addition, under New Jersey law, we may not engage in a business combination with an interested stockholder – generally, a beneficial owner of 10% or more of our voting stock – for five years after the stakeholder became an interested stockholder, unless certain exemptions are met.

The Company's Board of Directors has approved a proposal to change the Company's state of incorporation from New Jersey to Delaware subject to shareholder approval, and the Company has called a special meeting of shareholders to be held on November 18, 2026 to consider the proposal. If the Company reincorporates to the state of Delaware, we will become subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. For example, Section 203 of the Delaware General Corporation Law, an anti-takeover law, prohibits a publicly held Delaware corporation from engaging in a business combination, such as a merger, with a person or group owning 15% or more of the corporation's voting stock, which person or group is considered an interested stockholder, for a period of three years following the date the person became an interested stockholder, unless (with certain exceptions) the business combination or the transaction in which the person became an interested stockholder is approved in a prescribed manner.

By discouraging third parties from seeking to obtain control of us in a tender offer, non-negotiated merger or other business combination, the combination of these provisions could adversely affect the market price of our common stock and, in turn, deprive our stockholders of an opportunity to sell their shares at a premium over prevailing market prices. These provisions could also discourage proxy contests and make it more difficult for holders of our common stock to elect directors other than the candidates nominated by our board of directors.

An investment in our common stock is not an FDIC insured deposit and is subject to risk of loss.

An investment in our common stock is not a bank deposit and is not insured or guaranteed by the FDIC or any other government agency. An investment in our common stock is subject to investment risk, including the loss of your entire investment.

Risks Related to Credit

Our strategies for increasing liquidity and strengthening the balance sheet, including loan sales, will result in substantial losses and may not be successful.

As part of its strategy to meaningfully de-risk the balance sheet, during the third quarter of 2026, the Bank completed a series of loan sales totaling $204.3 million of problem loans, the majority of which were risk-rated criticized or classified under the Bank's internal risk rating system, resulting in a $42.3 million charge-off to the allowance for credit losses on loans. The Bank also transferred $70.2 million of cannabis loans, $29.8 million of commercial real estate loans, and $874 thousand of commercial and industrial loans to held for sale. Loans held for sale are accounted for at the lower of amortized cost or fair value and, as a result, the Bank recorded a related $44.2 million charge-off to the allowance for credit losses on loans based on the lower of cost or market. The actions contributed to $115.0 million provision for credit losses and the net loss of $132.5 million that we recorded for the third quarter of 2026. At September 30, 2026, the Bank has $67.6 million in loans held for sale.

There can be no assurance that the Bank will be able to sell its loans held for sale on acceptable terms, within the expected time frame or at all, or that the final sales prices will be consistent with the estimated fair values at which such loans are currently carried. The Bank may also determine to sell additional loans in the future.

Third parties, including purchasers of sold loans or participations, government-sponsored enterprises, and other counterparties, may assert repurchase demands, indemnification claims, or other obligations arising from representations and warranties made by the Company in connection with loan sales or servicing agreements. The occurrence of such demands or claims in excess of established reserves could adversely affect the Company's liquidity, financial condition, and results of operations.

Our comprehensive re-evaluation of our credit portfolios has identified and may continue to identify additional loan deterioration, which would adversely impact our financial condition, regulatory capital ratios and results of operations.

Since June 1, 2026, we have been engaged in a comprehensive re-evaluation of our credit portfolios with the assistance of independent consultants, as part of our effort to identify and address loan deterioration in our loan portfolio to assist us in strengthening the balance sheet and position the Bank for long-term success. The results of this re-evaluation including a comprehensive review of our commercial and multi-family real estate portfolio, have been reflected in the Company's loan loss reserving decisions for the third quarter of 2026. As a result of this re-evaluation, during the third quarter of 2026, the Bank completed the loan sales and transfers of loans to held for sale described above under "—Our strategies for increasing liquidity and strengthening the balance sheet, including loan sales, have resulted in substantial losses and may not be successful," and recorded a provision for credit losses of $115.0 million, of which $74.7 million related to the commercial and multi-family real estate portfolio. At September 30, 2026, the allowance for credit losses was $70.3 million.

We will continue to monitor the credit risk of our loan portfolios and may pursue various alternatives to strengthen the loans identified in this review or exit the relationships, which may include workouts and loan restructurings, such as potentially seeking additional collateral, interest rate adjustments, or additional loan sales. These efforts could result in higher than anticipated costs, adverse financial impacts, or the identification of additional problem loans or credit deterioration beyond what has already been reflected in our provision for credit losses and allowance for credit losses as of September 30, 2026. Any resulting increase to our allowance for credit losses would adversely affect our net income and could adversely affect our capital position.

A portion of the loans in our portfolio currently include exceptions to our loan policies and supervisory guidelines.

All loans we make are subject to written loan policies adopted by our board of directors and supervisory guidelines imposed by our regulators. Our loan policies are designed to reduce risks by requiring loan officers to take certain steps prior to closing, including documenting and perfecting liens on collateral and requiring proof of adequate insurance coverage.

As part of the Company's internal loan portfolio re-evaluation that started in the second quarter of 2026 and was completed in the third quarter of 2026, we have discovered instances of past noncompliance with internal policies. Between 2021 and 2023, the Bank experienced accelerated loan origination growth, prompted in part by noncompliance with underwriting policies and resulting in a significant number of exceptions, including loans that may have exceeded certain internal size limits, debt service coverage targets, loan to value ratios and collateral requirements.

Loans that do not fully comply with our loan policies are known as "exceptions," which we categorize as policy exceptions, financial statement exceptions, and document exceptions. Loans originated with exceptions may result in a higher number of delinquencies and defaults, which could have a material and adverse effect on our business, results of operations and financial condition. In addition, we may be subject to regulatory action by federal or state banking authorities if they believe the number of exceptions in our loan portfolio represents an unsafe or unsound banking practice under applicable law.

Our loan portfolio consists of a high percentage of loans secured by commercial and multi-family real estate loans. The concentration of our loan portfolio in these types of loans carries various risks, which could increase the potential for future losses.

At September 30, 2026, $1.75 billion, or 77.9 percent, of our loan portfolio consisted of commercial and multi-family real estate loans, excluding cannabis-related commercial real estate. We intend to continue to emphasize the origination of these types of loans in the future. The increased financial and credit risk associated with these types of loans are a result of several factors, including the concentration of principal in a limited number of loans and borrowers, the types of business and collateral, the size of loan balances, the effects of nationwide and regional economic conditions on income-producing properties and businesses and the increased difficulty of evaluating and monitoring these types of loans.

These commercial real estate loans expose us to greater risk of nonpayment and loss than one- to four-family family residential mortgage loans because repayment of the loans often depends on the successful operation and income stream of the borrowers. Economic events, including decreases in office occupancy due to the shift to remote working environments or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow of the affected properties. Commercial real estate loans also typically involve larger loan balances to single borrowers or groups of related borrowers compared to one-to four-family residential loans. Accordingly, charge-offs on these loans may be larger on a per loan basis than those incurred with other loan portfolios. An unexpected adverse development on one or more of these types of loans can expose us to a significantly greater risk of loss compared to an adverse development with respect to a one-to four-family residential mortgage loan.

Additionally, the market value of real estate can fluctuate significantly in a short period of time as a result of interest rates and market conditions in the area in which the real estate is located. Adverse developments affecting real estate values in the Company's market areas could increase the credit risk associated with the Company's loan portfolio. If the loans that are collateralized by real estate become troubled during a time when market conditions are declining or have declined, then the Company may not be able to realize the full value of the collateral that the Company anticipated at the time of originating the loan, which could force the Company to take charge-offs or require the Company to increase the Company's provision for credit losses, which could have a material adverse effect on the Company's business, financial condition, results of operations and growth prospects. If we foreclose on these loans, our holding period for the collateral is also typically longer than for a one- to four-family residential property because there are fewer potential purchasers of the collateral.

As a result of the associated risks, banking regulators continue to give greater scrutiny to lenders with a high concentration of commercial real estate loans in their portfolios, such as us, and such lenders are expected to implement stricter underwriting standards, internal controls, risk management policies, and portfolio stress testing, as well as higher capital levels and loss allowances.

If we cannot effectively manage the risk associated with our high concentration of commercial real estate loans, our financial condition and results of operations may be adversely affected.

Our commercial real estate portfolio includes a subsection of cannabis related loans, which carry higher risk relative to other commercial real estate and commercial business loans, including the possibility of regulatory compliance costs.

In 2014, we implemented specialized deposit services intended for a limited number of state-licensed medical-use cannabis business customers. In 2022, the Bank expanded its cannabis-related business offerings to include lending on real estate and deposit services to state-licensed recreational cannabis businesses. The Bank is no longer originating new cannabis related loans and, during the third quarter of 2026, transferred $70.2 million of cannabis loans to held for sale in connection with its planned exit from the cannabis banking business. At September 30, 2026, the size of the cannabis related loan portfolio held for investment was $4.1 million, and the total loan loss reserve for the portfolio was $86 thousand. During the nine-month period ended September 30, 2026, the Company had $27.7 million in net charge offs related to cannabis related loans. During the third quarter of 2026, the Company completed the sale of its cannabis related OREO for a pre-tax gain of $3.3 million. During 2025, the Company experienced $12.8 million in net charge offs and $15.1 million in OREO expenses related to cannabis commercial real estate.

Cannabis related loans include commercial and multi-family, construction, and commercial business loans to borrowers involved in the cannabis industry, and have the risks inherent in such loan types discussed herein in addition to risk inherent in this industry. While medical use cannabis and recreational use businesses are legal in numerous states, including our primary markets of New Jersey and New York, such businesses are not legal at the federal level. In April 2026, the U.S. Department of Justice ("DOJ") issued an order reclassifying cannabis subject to a state medical marijuana license and cannabis products approved by the U.S. Food and Drug Administration from Schedule I to Schedule III of the Controlled Substances Act of 1970 ("CSA"). The Drug Enforcement Administration, in response to an Executive Order issued by the Trump Administration, has also taken certain actions, including a formal rule proposal, aimed at a broader rescheduling of all marijuana. The outcome and timing of this rulemaking process, as well as other related actions, remains uncertain at this time. Marijuana outside the scope of the DOJ's order, including adult-use recreational marijuana, remains a Schedule I drug under the CSA.

Any change in the federal government's enforcement position could potentially subject our borrowers to criminal prosecution and other sanctions, which would have a material adverse effect on their businesses. Cannabis-related loans present greater repayment and credit risk than similar loans to borrowers outside the cannabis industry. Cannabis-related businesses are generally not able to seek protection under federal bankruptcy law, which may limit a borrower's ability to reorganize its obligations in the event of financial distress and increases the risk that the Bank will not recover the full amortized cost of a loan upon default. In addition, providing banking services to cannabis-related businesses subjects the Bank to enhanced obligations under the Bank Secrecy Act and related anti-money laundering regulations, including specialized customer due diligence and ongoing monitoring requirements, and the filing of suspicious activity reports specific to marijuana-related accounts. Compliance with these heightened requirements increases the Bank's operational costs and regulatory risk. These factors, combined with the industry's sensitivity to state regulatory and pricing volatility, may result in higher loss severities on cannabis-related loans as compared to the Bank's other loan segments.

Our commercial business loan portfolio includes commercial business express loans, which carry higher risk relative to other commercial real estate and commercial business loans, and have generated elevated losses. The loan loss reserves established for the express loan portfolio may be insufficient to cover additional charge-offs. Any additional increases in charge-offs beyond the established reserves would adversely affect our net income.

The Bank originated commercial business express loans to support small business owners coming out of the COVID crisis. The portfolio consists of a large number of loans with a majority of the loans carrying a balance of $250,000 or lower. These loans were generally originated to provide businesses with expedited access to capital. As a result, the loans may involve characteristics that differ materially from the Bank's traditional commercial business lending activities and may carry a higher risk profile relative to other commercial business loans. In many cases, these loans are unsecured and were underwritten using processes tailored to address borrowers' immediate liquidity needs, which may not have involved the same level of financial analysis and ability-to-repay assessment typically applied to the Bank's broader commercial business loan portfolio. Accordingly, this portfolio is subject to heightened repayment risk and may be more vulnerable to adverse economic or borrower-specific developments than the Bank's traditional commercial business lending portfolio.

On September 30, 2026, the size of the business express loans portfolio was $64.5 million and the total loan loss reserves for the portfolio totaled $11.6 million. The significantly higher level of loan loss reserves established for business express loans reflect the higher losses experienced in the portfolio. During the nine-month period ended September 30, 2026, the Company experienced $2.5 million in net charge offs related to the business express portfolio. During 2025, the Company experienced $9.8 million in net charge offs. The elevated charge-offs experienced were driven by the deterioration experienced in the business express loans. The loan loss reserves established for the express loan portfolio may be insufficient to cover additional charge-offs. Any additional increases in charge-offs beyond the established reserves would adversely affect our net income.

The proposed sale of our cannabis business, if consummated, may materially and adversely affect our results of operations.

In the third quarter of 2026, the Bank commenced marketing for the potential sale of its business lines focused on cannabis related customers, including the sale of certain cannabis related loans having an aggregate unpaid principal balance of $69 million and deposits from cannabis related businesses with an aggregate principal balance of $70 million, in each case as of June 30, 2026. In connection with the planned exit from the cannabis banking business, the Bank transferred $70.2 million of cannabis loans to held for sale during the third quarter of 2026.

There can be no assurance that all or any portion of the Bank's cannabis business will ultimately be sold or that any such sales will be completed during the year ending December 31, 2026, if at all. The Bank may also sell its cannabis business at a significant loss, which could adversely affect our financial condition and results of operations. Following any sale of our cannabis business, the absence of cannabis-related business activities going forward could also materially and adversely affect our future results of operations.

Our commercial business loan portfolio includes commercial and industrial ("C&I") loans, which may expose our Company to greater financial and credit risk than other loans.

At September 30, 2026, $126.2 million, or 5.6 percent, of our loan portfolio consisted of C&I loans, which exposes us to increased credit risk. The credit risk associated with C&I loans is a result of several factors, including the concentration of principal in a limited number of loans and to borrowers in similar lines of business, the size of loan balances, the effects of general economic conditions on the demand for C&I products and services and income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans.

Repayment of C&I loans in some cases is dependent upon the successful operation of the related business or the development or sale of the related real estate. If the actual or potential cash flow from a business or property is reduced, the borrower's ability to repay the loan may be impaired. Underwriting and portfolio management activities cannot completely eliminate all risks related to these loans. Any significant failure to pay on time or other significant default by our clients would materially and adversely affect us. In addition, if the Bank forecloses on the collateral securing C&I loans, the potential market for selling such collateral may be limited to persons already engaged in a similar business. That may result in the Bank recovering an amount for such collateral less than the amount of the loan or taking an extended time to liquidate such collateral.

Sustained economic downturns increase the risk of credit losses or charge-offs related to our commercial and industrial loans. It may therefore be necessary to increase the level of our allowance for credit losses because of the increased risk characteristics associated with these types of loans. Any such increase to our allowance for credit losses would adversely affect our earnings.

The asset quality of our loan portfolio may continue to deteriorate if the economy falters, resulting in a portion of our loans failing to perform in accordance with their terms. Under such circumstances, our financial condition will be adversely affected.

Financial risk, including continued inflation and the possibility of a recession, continues to affect economic conditions in the United States as a whole and in the markets that we serve. Our loan portfolio includes primarily secured real estate loans, demand for which may decrease and delinquencies of which may increase during economic downturns as a result of, among other things, an increase in unemployment, a decrease in real estate values, an increase in interest rates and a slowdown in housing.

At September 30, 2026, total substandard and special mention loans totaled $198.9 million, or 8.84 percent of gross loans held for investment, as compared to $367.4 million at June 30, 2026 and $359.5, or 13.19 percent of gross loans, at December 31, 2025. The Bank had non-accrual loans totaling $22.4 million, or 1.0 percent of gross loans held for investment, at September 30, 2026.

Should our local or regional economy weaken, we could experience higher delinquencies and nonperforming assets, including loan charge offs, as well as increases in nonaccrual loans and loan modifications, which would reduce our net income and result in losses to the Company.

Nonperforming assets adversely affect the Company's net income in various ways. The Company does not record interest income on nonaccrual loans, which adversely affects its income and increases credit administration costs. When the Company receives collateral through foreclosures and similar proceedings, it is required to mark the related asset to the then fair market value of the collateral less estimated selling costs, which may, and often does, result in a loss. An increase in the level of nonperforming assets also increases the Company's risk profile and may impact the capital levels regulators believe are appropriate in light of such risks.

The Company may use various techniques such as workouts, restructurings, and loan sales to manage problem assets. Increases in or negative adjustments in the value of these problem assets, the underlying collateral, or in the borrowers' performance or financial condition, could adversely affect the Company's business, results of operations and financial condition. In addition, the resolution of nonperforming assets requires significant commitments of time from management and staff, which can be detrimental to the performance of their other responsibilities, including generation of new loans.

There can be no assurance that loans that we originated will not experience asset quality deterioration as a result of a downturn in the local or broader economy, which could adversely affect the Company's results of operations and financial condition.

If our allowance for credit losses is not sufficient to cover actual credit losses, our earnings could decrease.

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During the three months ended June September 30, 2026, none of the Company's directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any " non-Rule 10b5-1 trading arrangement".