Oct 29, 2026 earnings call — Loan sales and balance-sheet cleanup
Margin came in at 303, slightly above the estimated range of 290 to 3, and the bank sold over $200 million of criticized and classified loans.
Revenue $0.0B (est $0.0B) · EPS $-6.92 (est $-8.53)
Key quotes
"The sale of mostly criticized and classified loans aggregating over $200 million, along with the write-down to fair market value of another $100 million, have gone a long way to cleaning up the loan quality problems that have dogged BCB in the recent past."
"As a consequence of the restructuring and prior year losses, we established a 100% valuation allowance against our deferred tax asset. That was $60 million."
"Professional fees, legal fees will continue to be a little bit higher in this fourth quarter because of just some of the remaining things that we have going on, including the cannabis transaction."
Analyst Q&A 2
loan quality, reserves and expenses
Q (Justin Crowley · Piper Sandler): He asked how loan problem levels and the allowance might trend into year-end with more sales, how the DTA valuation allowance could be recaptured, and how much of the quarter's higher expenses will drop back.
A: Management said they did a deep review of every loan over $1 million and marked about almost $100 million to market; several of those loans should be cleaned up this quarter and NPLs are down to $22 million. They noted classified loans fell 70% from $160 million to $46 million and reserve coverage rose from 28% to 150%. On the DTA they said it is binary and would be reconsidered by the end of 2027 if earnings in each of the next five quarters support that decision; they also said this quarter had about $5 million of higher expenses, Jawad called out $2.5 million-$3 million of elevated expenses and a good portion should fall back in the fourth quarter as items wind down.
"I would think by the end of 2027, assuming both quantity and quality of earnings in each of the next five quarters support the decision, I think that's probably the first opportunity we'd have to reconsider." — Thomas O'Brien (CEO)
cannabis sale and Business Express loans
Q (Ross Haberman · RLH Investments): He asked whether criticized loans included cannabis, for an update on Business Express balance, loss rate and allowance, whether the cannabis loans and deposits sale will close in Q4, and if any loans had worsened since the initial review.
A: They said the criticized loans number for Q3 is $153 million (not $200 million) and that the cannabis loans were marked to market and were performing. The Business Express portfolio balance is approximately $65 million now; it behaved well, had close to $1 million of losses in the quarter, and reserve coverage rose from 15% to close to 18%. For the cannabis sale, management said it's about $70 million to $80 million in deposits and about $70 million in loans, they are pretty far along and feel good about it, and they have not seen further deterioration after the broad loan reviews that used probability of default and loss given default analysis.
"The Business Express loan portfolio balance is approximately $65 million now, Ross." — Jawad Chaudhry