EXHIBIT 13

CONSOLIDATED FINANCIAL STATEMENTS

BCB Bancorp, Inc. and Subsidiaries

Consolidated Financial Report

December 31, 2012

Table of Contents

	Page
Reports of Independent Registered Public Accounting Firm
Consolidated Financial Statements
Consolidated Statements of Financial Condition	1
Consolidated Statements of Operations	2
Consolidated Statements of Comprehensive Income (Loss)	3
Consolidated Statements of Changes in Stockholders’ Equity	4
Consolidated Statements of Cash Flows	5
Notes to Consolidated Financial Statements	7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

BCB Bancorp, Inc.

Bayonne, New Jersey

We have audited the accompanying consolidated statements of financial condition of BCB Bancorp, Inc. and Subsidiaries (collectively the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2012. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of BCB Bancorp, Inc. and Subsidiaries as of December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 18, 2013, expressed an unqualified opinion thereon.  

/s/ Parente Beard LLC                              

Clark, New Jersey

March 18, 2013

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

BCB Bancorp, Inc.

Bayonne, New Jersey

We have audited BCB Bancorp, Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). BCB Bancorp, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report on Management’s Assessment of Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial condition and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders’ equity, and cash flows of the Company, and our report dated March 18, 2013 expressed an unqualified opinion.

/s/ Parente Beard LLC                              

ParenteBeard LLC

Clark, New Jersey

March 18, 2013

BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Financial Condition

	December 31,
	2012			2011
	(In Thousands, Except For Per Share Data)
ASSETS
Cash and amounts due from depository institutions	$	6,242		$	8,692
Interest-earning deposits		28,891			108,395
Total cash and cash equivalents		35,133			117,087
Securities available for sale		1,240			1,045
Securities held to maturity, fair value $171,603 and $213,903;
respectively		164,648			206,965
Loans held for sale		1,602			5,856
Loans receivable, net of allowance for loan losses of $12,363 and
$10,509; respectively		922,301			840,763
Premises and equipment		13,568			13,576
Federal Home Loan Bank of New York stock		7,698			7,498
Interest receivable		4,063			4,997
Other real estate owned		3,274			6,570
Deferred income taxes		10,053			9,940
Other assets		7,778			2,611
Total Assets	$	1,171,358		$	1,216,908
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Non-interest bearing deposits	$	85,950		$	78,589
Interest bearing deposits		854,836			899,034
Total deposits		940,786			977,623
Short-term Debt		17,000			—
Long-term Debt		114,124			129,531
Other Liabilities		7,867			9,706
Total Liabilities		1,079,777			1,116,860
STOCKHOLDERS' EQUITY
Preferred stock: $0.01 per value, 10,000,000 shares authorized,
issued and outstanding 865 shares of series A 6% noncumulative perpetual
preferred stock (liquidation preference value $10,000 per share) at December 31, 2012
and none at December 31, 2011		—			—
Additional paid-in capital preferred stock		8,570			—
Common stock; $0.064 stated value; 20,000,000 shares authorized,
10,841,079 and 10,817,901 shares, respectively, issued;
8,496,508 shares and 9,520,056 shares, respectively outstanding		694			692
Additional paid-in capital common stock		91,846			91,715
Treasury stock, at cost, 2,344,571 and 1,297,845 shares, respectively		(27,177	)		(16,327	)
Retained earnings		18,883			25,255
Accumulated other comprehensive loss, net of taxes		(1,235	)		(1,287	)
Total Stockholders' Equity		91,581			100,048
Total Liabilities and Stockholders' Equity	$	1,171,358		$	1,216,908

See accompanying notes to consolidated financial statements.

1

BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Operations

	Years Ended December 31,
	2012			2011			2010
	(In Thousands, Except for Per Share Data)
Interest income:
Loans	$	47,756		$	45,023		$	34,502
Investments, taxable		5,730			7,720			5,457
Investments, non-taxable		49			49			24
Other interest-earning assets		112			87			117
Total interest income		53,647			52,879			40,100
Interest expense:
Deposits:
Demand		564			849			938
Savings and club		477			1,020			1,304
Certificates of deposit		5,849			6,421			6,220
		6,890			8,290			8,462
Borrowed money		5,057			5,007			5,206
Total interest expense		11,947			13,297			13,668
Net interest income		41,700			39,582			26,432
Provision for loan losses		4,900			4,100			2,450
Net interest income after provision for loan losses		36,800			35,482			23,982
Non-interest income (loss):
Fees and service charges		1,595			846			907
Gain on sales of loans originated for sale		1,220			887			295
Gain on sale of SBA loans acquired		286			—
Loss on bulk sale of impaired loans held in portfolio		(10,804	)		—
Loss on sale of property held for sale		—			(124	)		—
Loss on write-down of fixed assets		—			(592	)		—
Gain on sale of securities held to maturity		349			18			—
Gain on bargain purchase		—			1,162			12,582
Other		129			251			423
Total non-interest (loss) income		(7,225	)		2,448			14,207
Non-interest expense:
Salaries and employee benefits		15,017			12,680			10,785
Occupancy expense of premises		3,558			3,039			1,932
Equipment		4,907			4,301			3,293
Professional fees		2,490			1,287			780
Director fees		728			689			553
Regulatory assessments		1,172			1,181			1,204
Advertising		484			399			336
Merger related expenses		—			538			644
Other real estate owned		1,936			1,204			345
Other		3,597			3,188			2,486
Total non-interest expense		33,889			28,506			22,358
Income (loss) before income tax (benefit) provision		(4,314	)		9,424			15,831
Income tax (benefit) provision		(2,252	)		3,373			1,505
Net Income (loss)	$	(2,062	)	$	6,051		$	14,326
Preferred stock dividends		—			—			—
Net Income (loss) available to common stockholders	$	(2,062	)	$	6,051		$	14,326
Net Income (loss) per common share-basic and diluted
Basic	$	(0.23	)	$	0.64		$	2.06
Diluted	$	(0.23	)	$	0.64		$	2.05
Weighted average number of common shares outstanding
Basic		8,943			9,417			6,968
Diluted		8,943			9,433			6,983

See accompanying notes to consolidated financial statements.

2

BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

	Years Ended December 31,
	2012			2011			2010
	(In Thousands)
Net Income (Loss)	$	(2,062	)	$	6,051		$	14,326
Other comprehensive income (loss):
Unrealized holding gains (losses) on securities available for sale arising during the period
Unrealized holding (losses) gains arising during the period		195			(52	)		(21	)
Less: reclassification adjustment for (gains) losses included in net income (loss)		—			—			—
Benefit plans		(107	)		(2,129	)		7
		88			(2,181	)		(14	)
Income tax effect		(36	)		889			6
		52			(1,292	)		(8	)
Comprehensive income (loss)	$	(2,010	)	$	4,759		$	14,318

See accompanying notes to consolidated financial statements.

3

BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

													Accumulated Other
							Treasury			Retained			Comprehensive
	Preferred Stock		Common Stock		Paid In Capital		Stock			Earnings			Income (Loss)			Total
	(Dollars in Thousands, except per share amounts)
Balance at December 31, 2009	$	—	$	332	$	46,926	$	(8,719	)	$	12,839			13			51,391
Common Stock issued for the acquisition of Pamrapo Bancorp, Inc. (4,935,495 shares, including 30,000 shares transferred to treasury)		—		316		38,329		(235	)		—			—			38,410
Exercise of Stock Options (13,677 shares)		—		1		72		—			—						73
Treasury Stock Purchases (193,383 shares)		—		—		—		(1,806	)		—			—			(1,806	)
Cash dividend ($0.48 per share) declared		—		—		—		—			(3,412	)		—			(3,412	)
Net income		—		—		—		—			14,326			—			14,326
Other comprehensive loss														(8	)		(8	)
Balance at December 31, 2010		—		649		85,327		(10,760	)		23,753			5			98,974
Common stock issued for the acquisition of Allegiance Community Bank (issued 644,434 shares)		—		41		6,126		—			—			—			6,167
Exercise of Stock Options (28,637 shares)		—		2		235		—			—			—			237
Stock compensation expense		—		—		12		—			—			—			12
Tax benefit on stock compensation		—		—		15		—			—			—			15
Treasury Stock Purchases (536,710 shares)		—		—		—		(5,567	)		—			—			(5,567	)
Cash dividends ($0.48 per share) declared		—		—		—		—			(4,549	)		—			(4,549	)
Net income		—		—		—		—			6,051			—			6,051
Other comprehensive loss														(1,292	)		(1,292	)
Balance at December 31, 2011		—		692		91,715		(16,327	)		25,255			(1,287	)		100,048
Proceeds from issuance of series A stock,
net of issuance costs of $80						8,570											8,570
Exercise of Stock Options (29,661 shares)		—		2		107		—			—			—			109
Stock compensation expense		—		—		24		—			—			—			24
Treasury Stock Purchases (1,046,726 shares)		—		—		—		(10,850	)		—			—			(10,850	)
Cash dividends ($0.48 per share) declared		—		—		—		—			(4,310	)		—			(4,310	)
Net Loss		—		—		—		—			(2,062	)		—			(2,062	)
Other comprehensive income		—		—		—		—			—			52			52
Balance at December 31, 2012	$	—	$	694	$	100,416	$	(27,177	)	$	18,883		$	(1,235	)	$	91,581

See accompanying notes to consolidated financial statements.

4

BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Years Ended December 31,
	2012			2011			2010
Cash flows from Operating Activities :	(In Thousands)
Net income (loss)	$	(2,062	)	$	6,051		$	14,326
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation of premises and equipment		1,143			1,055			642
Amortization and accretion, net		1,453			1,306			1,877
Provision for loan losses		4,900			4,100			2,450
Deferred income tax benefit		(149	)		(1,845	)		(341	)
Loans originated for sale		(30,137	)		(31,950	)		(26,142	)
Proceeds from sale of loans originated for sale		32,724			30,884			19,433
Gain on sales of loans originated for sale		(1,220	)		(887	)		(295	)
Loss on sales of other real estated owned		681			498			345
Loss on donated other real estate owned property		128			—			—
Loss on sale of property held for investment		—			124			—
Loss on leasehold improvements on branch closing		—			592			—
Write down of other real estate owned		965			510			—
Gain on bargain purchase		—			(1,162	)		(12,582	)
Gain on sales of securities held to maturity		(349	)		(18	)		—
Gain on sales of SBA loans acquired		(286	)		—			—
Loss on bulk sale of impaired loans held in portfolio		10,804			—			—
Stock compensation expense		24			12			—
Decrease in interest receivable		934			649			501
(Increase) decrease in other assets		(5,167	)		5,227			(1,207	)
(Decrease) increase in accrued interest payable		(24	)		26			(239	)
(Decrease) in other liabilities		(1,922	)		(937	)		(1,159	)
Net Cash Provided by (Used In) Operating Activities		12,440			14,235			(2,391	)
Cash flows from Investing Activities:
Proceeds from repayments, calls, and maturities on securities held to maturity		67,489			85,089			156,757
Purchases of securities held to maturity		(57,331	)		(95,537	)		(104,997	)
Proceeds from sales of securities held to maturity		30,584			2,438			—
Proceeds from sales of SBA loans acquired		10,836			—			—
Proceeds from sales of participation interests in loans		—			4,777			1,708
Proceeds from sales of other real estate owned		4,223			2,722			1,260
Proceeds from bulk sale of impaired loans held in portfolio		15,093			—			—
Proceeds from sale of property held for investment		—			511			—
Purchases of loans		(31,064	)		(2,292	)		—
Net (increase) decrease in loans receivable		(91,105	)		10,325			39,551
Improvements to other real estate owned		(59	)		(113	)		(32	)
Additions to premises and equipment		(1,135	)		(2,246	)		(704	)
Purchase of Federal Home Loan Bank of New York stock		(833	)		—			—
Redemption of Federal Home Loan Bank of New York stock		633			44			1,869
Cash acquired in acquisition		—			5,901			22,979
Net Cash (Used In) Provided by Investing Activities		(52,669	)		11,619			118,391
Cash flows from Financing Activities:
Net decrease in deposits		(36,837	)		(20,030	)		(13,260	)
Repayment of long-term debt		(15,407	)		—			(43,815	)
Net change in short term debt		17,000			—			—
Purchase of treasury stock		(10,850	)		(5,567	)		(1,806	)
Cash dividends paid		(4,310	)		(4,549	)		(3,412	)
Net proceeds from issuance of common stock		109			237			73
Net proceeds from issuance of preferred stock		8,570			—			—
Tax benefit from exercise of stock options		—			15			—
Net Cash (Used In) Financing Activities		(41,725	)		(29,894	)		(62,220	)
Net (Decrease) Increase in Cash and Cash Equivalents		(81,954	)		(4,040	)		53,780
Cash and Cash Equivalents-Begininng		117,087			121,127			67,347
Cash and Cash Equivalents-Ending	$	35,133		$	117,087		$	121,127

5

BCB Bancorp, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Supplementary Cash Flow Information
Cash paid during the year for:
Income taxes	$	3,979	$	4,549	$	2,252
Interest	$	11,971	$	13,271	$	13,907
Non-cash items:
Transfer of loans to other real estate owned	$	4,463	$	7,145	$	6,887
Loans to facilitate sales of other real estate owned	$	1,821	$	942	$	3,771
Reclassification of loans originated for sale to held to maturity	$	2,887	$	1,669	$	5,707
Reclassification of property held for sale to real estate owned	$	—	$	382	$	—
Acquisition of noncash assets and liabilities
Assets acquired	$	—	$	129,235	$	514,523
Liabilities assumed	$	—	$	127,807	$	486,275

6

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1 - Organization and Stock Offerings

BCB Bancorp, Inc. (the “Company”) is incorporated in the State of New Jersey and is a bank holding company. The common stock of the Company is listed on the Nasdaq Electronic Bulletin Board and trades under the symbol “BCBP.”

On December 20, 2012, the Company amended its Restated Certificate of Incorporation to include a new Article V, Part (C) which establishes a Series A 6% Noncumulative Perpetual Preferred Stock and sets forth the number of shares to be included in such series, and to fix the designation, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. Such amendment to the Restated Certificate of Incorporation was approved by the directors of BCB Bancorp, Inc. on October 10, 2012.

On December 31, 2012, the Company closed a private placement of Series A Noncumulative Perpetual Preferred Stock, resulting in the issuance of 865 shares of Series A 6% Non-Cumulative Perpetual Preferred Shares for gross proceeds of $8.65 million. The costs associated with the private placement were approximately $80,000. The shares issued are callable by the Company after December 31, 2015, at $10,000 per share (liquidation preference value). There is no ability to convert the preferred shares to common shares. Dividends on the preferred shares, if and when declared, will be paid quarterly in arrears.

On November 20, 2007, the Company announced a stock repurchase plan which provided for the repurchase of 5% or 234,002 shares of the Company’s common stock. This plan was completed during 2010. On July 14, 2010, the Company announced a stock repurchase plan to repurchase 5% or 479,965 shares of the Company’s common stock. This plan was completed during 2010. On December 20, 2010, the Company entered into an agreement with a broker to administer a Rule 10b5-1 trading plan on behalf of the Company. The Rule 10b5-1 trading plan will permit the broker to purchase up to 450,000 shares of Company common stock at designated prices during periods when the Company would otherwise be unable to purchase its common stock. The Board authorized the Rule 10b5-1 trading plan on December 16, 2010. On December 14, 2011, the Company announced a stock repurchase plan to repurchase 5% or 462,225 shares of the Company’s common stock. This plan was completed during 2012. On May 9, 2012, the Company announced a stock repurchase plan to repurchase 5% or 462,800 shares of the Company’s common stock. This plan was completed during 2012. On June 28, 2012, the Company announced a stock repurchase plan to repurchase 5% or 440,000 shares of the Company’s common stock. During 2012, 2011 and 2010, a total of 1,046,726, 536,710 and 193,383 shares of the Company’s common stock was repurchased under these plans at a cost of approximately $10.9 million, $5.6 million and $1.8 million or $10.37, $10.37 and $9.34 per share, respectively.

The Company’s primary business is the ownership and operation of BCB Community Bank (the “Bank”). The Bank is a New Jersey commercial bank which, as of December 31, 2012, operated at eleven locations in Bayonne, Hoboken, Jersey City, Monroe Township, South Orange, and Woodbridge New Jersey, and is subject to regulation, supervision, and examination by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation. The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with borrowed funds, to invest in securities and to make loans collateralized by residential and commercial real estate and, to a lesser extent, consumer loans. BCB Holding Company Investment Corp. (the “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. Pamrapo Service Corporation was organized in 1975 under New Jersey law to engage in the purchase and sale of real estate. In the 1990’s, the Service Corporation was engaged in the business of selling non-financial products, (annuities, mutual funds and stocks) to the public. The Pamrapo Service Corporation has been inactive since May 2010. BCB New York Management, Inc. (the “New York Management Company”) was organized in October 2012 under New York law as a New York investment company primarily to hold various loan products, investment and mortgage-backed securities. BCB New York Management, Inc. was inactive in 2012.

On July 6, 2010, the Company acquired all of the outstanding common shares of Pamrapo Bancorp, Inc. (“Pamrapo”), the parent company of Pamrapo Savings Bank, and thereby acquired all of Pamrapo Savings Bank’s 10 branch locations. Under the terms of the merger agreement, Pamrapo stockholders received 1.0 share of BCB Bancorp, Inc. common stock in exchange for each share of Pamrapo common stock, resulting in the Company issuing 4.9 million common shares of BCB Bancorp, Inc. common stock with an acquisition date fair value of $38.6 million. See Note 19 for further details.

On October 14, 2011, the Company acquired all of the outstanding common shares of Allegiance Community Bank (“Allegiance”) and thereby acquired all of Allegiance Community Bank’s two branch locations. Under the terms of the merger agreement, Allegiance stockholders received 0.35 of a share of BCB Bancorp, Inc. common stock at a price of $9.57 per share in exchange for each share of Allegiance common stock, resulting in BCB Bancorp, Inc. issuing 644,434 common shares of BCB Bancorp, Inc. common stock with an acquisition date fair value of $6.2 million. See Note 19 for further details.

7

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 - Summary of Significant Accounting Policies

Basis of Consolidated Financial Statement Presentation

The consolidated financial statements which include the accounts of the Company and its wholly-owned subsidiaries, the Bank, the Investment Company and Pamrapo Service Corporation, have been prepared in conformity with accounting principles generally accepted in the United States of America. All significant intercompany accounts and transactions have been eliminated in consolidation.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated statement of financial condition and revenues and expenses for the periods then ended. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for loan losses, the identification of other-than-temporary impairment of securities, the determination as to whether deferred tax assets are realizable, and the determination of the fair value of financial instruments. Management believes that the allowance for loan losses is adequate; no securities in unrealized loss positions are other-than-temporarily impaired; net deferred tax assets have been reduced to an amount which is more-likely-than-not realizable, and the fair values of financial instruments are appropriate. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions in the market area. Management’s assessment regarding impairment of securities is based on future projections of cash flow which are subject to change. The realizability of deferred tax assets is partially based on projections of future taxable income, which is subject to change. The determination of fair value requires the use of various inputs which are subject to frequent and ongoing changes.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

In preparing these consolidated financial statements, the Company evaluated the events that occurred between December 31, 2012 and the date these consolidated financial statements were issued.

Cash and Cash Equivalents

Cash and cash equivalents include cash and amounts due from depository institutions and interest-bearing deposits in other banks having original maturities of three months or less.

Securities Available for Sale and Held to Maturity

Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt and equity securities not classified as trading securities or as held to maturity securities are classified as available for sale securities (“AFS”) and reported at fair value, with unrealized holding gains or losses, net of applicable deferred income taxes, reported in the accumulated other comprehensive income (loss) component of stockholders’ equity.

If the fair value of a security is less than its amortized cost, the security is deemed to be impaired. Management evaluates all securities with unrealized losses quarterly to determine if such impairments are “temporary” or “other-than-temporary” in accordance with Accounting Standards Codification (“ASC”) Topic 320, Investments – Debt and Equity Securities. Accordingly, temporary impairments are accounted for based upon the classification of the related securities as either available for sale or held to maturity. Temporary impairments on available for sale securities are recognized, on a tax-effected basis, through Other Comprehensive Income (“OCI”) with offsetting entries adjusting the carrying value of the securities and the balance of deferred taxes. Conversely, the carrying values of held to maturity securities are not adjusted for temporary impairments. Information concerning the amount and duration of temporary impairments on both available for sale and held to maturity securities is disclosed in the notes to the consolidated financial statements.

Other-than-temporary impairments are accounted for based upon several considerations. First, other-than-temporary impairments on equity securities and on debt securities that the Company has decided to sell as of the close of a fiscal period, or will, more likely than not, be required to sell prior to the full recovery of fair value to a level equal to or exceeding amortized cost, are recognized in earnings. If neither of these conditions regarding the likelihood of the sale of debt securities are applicable, then the other-than-temporary impairment is bifurcated into credit-related and noncredit-related components. A credit-related impairment generally represents the amount by which the present value of the cash flows that are expected to be collected on a debt security fall below its amortized cost. The noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related. Credit-related, other-than-temporary impairments are recognized in earnings and noncredit-related, other-than-temporary impairments are recognized in OCI. Equity securities on which there is an unrealized loss that is deemed other-than-temporary are written down to fair value with the write-down recognized in earnings.

Premiums and discounts on all securities are amortized/accreted to maturity using the interest method. Interest and dividend income on securities, which includes amortization of premiums and accretion of discounts, are recognized in the consolidated financial statements when earned. Gains or losses on sales are recognized based on the specific identification method.

Loans Held For Sale

Loans held for sale consist primarily of residential mortgage loans intended for sale and are carried at the lower of cost or estimated fair market value using the aggregate method. These loans are generally sold with servicing rights released. Gains and losses recognized on loan sales are based upon the cash proceeds received and the cost of the related loans sold.

8

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

Loans Receivable

Loans receivable are stated at unpaid principal balances, less net deferred loan origination fees and the allowance for loan losses. Loan origination fees and certain direct loan origination costs are deferred and amortized/accreted, as an adjustment of yield, over the contractual lives of the related loans.

The accrual of interest on loans that are contractually delinquent more than ninety days is discontinued and the related loans placed on nonaccrual status. Income is subsequently recognized only to the extent that cash payments are received until delinquency status is reduced to less than ninety days, in which case the loan is returned to accrual status.

Acquired Loans

Loans that were acquired in acquisitions are recorded at fair value with no carryover of the related allowance for credit losses. Determining the fair value of the loans involves estimating the amount and timing of principal and interest cash flows expected to be collected on the loans and discounting those cash flows at a market rate of interest.

The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable discount and is recognized into interest income over the remaining life of the loan. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable discount. The nonaccretable discount represents estimated future credit losses expected to be incurred over the life of the loan. Subsequent decreases to the expected cash flows require an evaluation to determine the need for an allowance for credit losses. Subsequent improvements in expected cash flows result in the reversal of a corresponding amount of the nonaccretable discount which is then reclassified as accretable discount that is recognized into interest income over the remaining life of the loan using the interest method. The evaluation of the amount of future cash flows that is expected to be collected is performed in a similar manner as that used to determine our allowance for credit losses. Charge-offs of the principal amount on acquired loans would be first applied to the nonaccretable discount portion of the fair value adjustment.

Acquired loans that met the criteria for nonaccrual of interest prior to the acquisition may be considered performing upon acquisition, regardless of whether the customer is contractually delinquent, if we can reasonably estimate the timing and amount of the expected cash flows on such loans and if we expect to fully collect the new carrying value of the loans. As such, we may no longer consider the loan to be nonaccrual or nonperforming and may accrue interest on these loans, including the impact of any accretable discount. We have determined that we cannot reasonably estimate future cash flows on any such acquired loans that are past due 90 days or more and continue to treat them as non-accrual.

Allowance for Loan Losses

The allowance for loan losses is increased through provisions charged to operations and by recoveries, if any, on previously charged-off loans and reduced by charge-offs on loans which are determined to be a loss in accordance with Bank policy.

The allowance for loan losses is maintained at a level considered adequate to absorb loan losses. Management, in determining the allowance for loan losses, considers the risks inherent in its loan portfolio and changes in the nature and volume of its loan activities, along with the general economic and real estate market conditions. The Bank utilizes a two tier approach: (1) identification of impaired loans and establishment of specific loss allowances on such loans; and (2) establishment of general valuation allowances on the remainder of its loan portfolio. The Bank maintains a loan review system which allows for a periodic review of its loan portfolio and the early identification of potentially impaired loans. Such a system takes into consideration, but is not limited to, delinquency status, size of loans, types and value of collateral, and financial condition of the borrowers. Specific loan loss allowances are established for impaired loans based on a review of such information and/or appraisals of the underlying collateral. General loan loss allowances are based upon a combination of factors including, but not limited to, actual loan loss experience, composition of the loan portfolio, current economic conditions, and management’s judgment.

Although management believes that adequate specific and general allowances for loan losses are established, actual losses are dependent upon future events and, as such, further additions to the level of specific and general loan loss allowances may be necessary.

Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. A loan evaluated for impairment is deemed to be impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. All loans identified as impaired are evaluated independently. The Bank does not aggregate such loans for evaluation purposes. Payments received on impaired loans are applied first to accrued interest receivable and then to principal.

Concentration of Risk

Financial instruments which potentially subject the Company and its subsidiaries to concentrations of credit risk consist of cash and cash equivalents, investment and mortgage-backed securities and loans.

Cash and cash equivalents include amounts placed with highly rated financial institutions. Securities include securities backed by the U.S. Government and other highly rated instruments. The Bank’s lending activity is primarily concentrated in loans collateralized by real estate in the State of New Jersey. As a result, credit risk related to loans is broadly dependent on the real estate market and general economic conditions in the State.

9

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

Premises and Equipment

Land is carried at cost. Buildings, building improvements, leasehold improvements and furniture, fixtures and equipment are carried at cost, less accumulated depreciation and amortization. Significant renovations and additions are charged to the property and equipment account. Maintenance and repairs are charged to expense in the period incurred. Depreciation charges are computed on the straight-line method over the following estimated useful lives of each type of asset.

	Years
Buildings	40
Building improvements	7 - 40
Furniture, fixtures and equipment	3 - 5
Leasehold improvements	Shorter of useful life or term of lease

Federal Home Loan Bank (“FHLB”) of New York Stock

Federal law requires a member institution of the FHLB system to hold stock of its district FHLB according to a predetermined formula. Such stock is carried at cost.

Management evaluates the FHLB of New York stock for impairment in accordance with guidance on accounting by entities that lend to or finance the activities of others. Management’s determination of whether this investment is impaired is based on their assessment of the ultimate recoverability of their cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of their cost is influenced by criteria such as (1) the significance of the decline in net assets of the FHLB of New York as compared to the capital stock amount for the FHLB of New York and the length of time this situation has persisted, (2) commitments by the FHLB of New York to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB of New York, and (3) the impact of legislative and regulatory changes on institutions and, accordingly, on the customer base of the FHLB of New York.

No impairment charges were recorded related to the FHLB of New York stock during 2012, 2011, or 2010.

Other Real Estate Owned

Assets acquired through, or in lieu of, loan foreclosures are held for sale and are initially recorded at fair value less cost to sell at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less cost to sell. Costs relating to development and improvement of property are capitalized, whereas costs relating to the holding of property are expensed. At December 31, 2012, the Bank owned twelve properties totaling $3,274,000. At December 31, 2011, the Bank owned fifteen properties totaling $6,570,000.

Interest Rate Risk

The Bank is principally engaged in the business of attracting deposits from the general public and using these deposits, together with other funds, to make loans secured by real estate and to purchase securities. The potential for interest-rate risk exists as a result of the difference in duration of the Bank’s interest-sensitive liabilities compared to its interest-sensitive assets. For this reason, management regularly monitors the maturity structure of the Bank’s interest-earning assets and interest-bearing liabilities in order to measure its level of interest-rate risk and to plan for future volatility.

Income Taxes

The Company and its subsidiaries file a consolidated federal income tax return. Income taxes are allocated to the Company and its subsidiaries based upon their respective income or loss included in the consolidated income tax return. Separate state income tax returns are filed by the Company and its subsidiaries.

Federal and state income tax expense has been provided on the basis of reported income. The amounts reflected on the tax returns differ from these provisions due principally to temporary differences in the reporting of certain items for financial reporting and income tax reporting purposes. The tax effect of these temporary differences is accounted for as deferred taxes applicable to future periods. Deferred income tax expense or (benefit) is determined by recognizing deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. The realization of deferred tax assets is assessed and a valuation allowance provided, when necessary, for that portion of the asset which is not more likely than not to be realized.

10

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements in accordance with ASC Topic 740, Income Taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a likelihood of being realized on examination of more than 50 percent. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Under the “more-likely-than-not” threshold guidelines, the Company believes no significant uncertain tax positions exist, either individually or in the aggregate, that would give rise to the non-recognition of an existing tax benefit. The Company recognizes interest and penalties on unrecognized tax benefits in income taxes expense in the Consolidated Statement of Operations. The Company did not recognize any interest in 2011, however the Company did recognize $11,000 for penalties assessed during an audit of prior periods. The Company did not recognize any interest and penalties for the years ended December 31, 2012 and 2010. The tax years subject to examination by the taxing authorities are the years ended December 31, 2011, 2010, and 2009.

Net Income (Loss) per Common Share

Basic net income (loss) per common share is computed by dividing net income (loss) less dividends on preferred stock by the weighted average number of shares of common stock outstanding. The diluted net income (loss) per common share is computed by adjusting the weighted average number of shares of common stock outstanding to include the effects of outstanding stock options, if dilutive, using the treasury stock method. Dilution is not applicable in periods of net loss. For the years ended December 31, 2011 and 2010, the difference in the weighted average number of basic and diluted common shares was due solely to the effects of outstanding stock options. No adjustments to net income (loss) were necessary in calculating basic and diluted net income (loss) per share. For the years ended December 31, 2011 and 2010, the weighted average number of outstanding options considered to be anti-dilutive was 209,441, and 243,884.

Stock-Based Compensation Plans

The Company, under plans approved by its stockholders in 2011, 2003 and 2002, has granted stock options to employees and outside directors. See note 12 for additional information as to option grants. Compensation expense recognized for all option grants is net of estimated forfeitures and is recognized over the awards’ respective requisite service periods. The fair values relating to all options granted are estimated using a Black-Scholes option pricing model. Expected volatilities are based on historical volatility of our stock and other factors, such as implied market volatility using this options expected term. The Company used the mid-point of the original vesting period and original option life to estimate the options’ expected term, which represents the period of time that the options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company recognizes compensation expense for the fair values of these option awards, which have graded vesting, on a straight-line basis over the requisite service period of these awards.

Benefit Plans

The Company acquired through the merger with Pamrapo Bancorp, Inc. a non-contributory defined benefit pension plan covering all eligible employees of Pamrapo Savings Bank. Effective January 1, 2010, the defined benefit pension plan (the “Pension Plan”), was frozen by Pamrapo Savings Bank. All benefits for eligible participants accrued in the “Pension Plan” to the freeze date have been retained. The benefits are based on years of service and employee’s compensation. The defined benefit plan is funded in conformity with funding requirements of applicable government regulations. Prior service costs for the defined benefit plan generally are amortized over the estimated remaining service periods of employees. Additionally, with the merger with Pamrapo Bancorp, Inc., certain former employees of Pamrapo Bank are covered under a Supplemental Executive Retirement Plan (“SERP”), an unfunded non-qualified deferred retirement plan. Participants who retire at the age of 65 (the “Normal Retirement Age”), are entitled to an annual retirement benefit equal to 75% of compensation reduced by their retirement plan annual benefits. Participants retiring before the Normal Retirement Age receive the same benefits reduced by a percentage based on years of service to the Company and the number of years prior to the Normal Retirement Age that participants retire.

Comprehensive Income (Loss)

The Company records unrealized gains and losses, net of deferred income taxes, on securities available for sale in accumulated other comprehensive income (loss). Realized gains and losses, if any, are reclassified to non-interest income upon sale of the related securities or upon the recognition of an impairment loss. Accumulated other comprehensive income (loss) also includes benefit plan amounts recognized in accordance with ASC 715, Compensation-Retirement Benefits, which reflect, net of tax, the unrecognized gains (losses) on the benefit plans.

Reclassification

Certain amounts as of and for the years ended December 31, 2011 and 2010 have been reclassified to conform to the current year’s presentation. These changes had no effect on the Company’s results of operations or financial position.

11

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2 – Summary of Significant Accounting Policies (Continued)

Recent Accounting Pronouncements

In February 2013, the FASB issued ASU 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting reclassifications out of accumulated other comprehensive income. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the consolidated financial statements under U.S. GAAP.

The new amendments will require an organization to present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income, but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. The new amendments will also require an organization to present cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g. pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). Nonpublic company are required to meet the reporting requirements of the amended paragraphs about the roll forward of accumulated other comprehensive income for both interim and annual reporting periods. However, private companies are only required to provide the information about the impact of reclassifications on line items of net income for annual reporting periods, not for interim reporting periods.

The amendments of ASU 2013-02 are effective for reporting periods beginning after December 15, 2012, for public companies and are effective for reporting periods beginning after December 15, 2013, for nonpublic companies. The Company does not believe this pronouncement, when adopted, will have a material impact on operations or financial position.

In December 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-12, “Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.” This standard indefinitely defers certain provisions of ASU 2011-05 (described below). The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this guidance did not result in a change in the presentation of comprehensive income in the Company’s consolidated financial statements.

In June 2011, the FASB issued Accounting Standards Update (ASU) No. 2011-05, Comprehensive Income. The ASU eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and will require it be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The single statement format would include the traditional income statement and the components of total other comprehensive income as well as total comprehensive income. In the two statement approach, the first statement would be the traditional income statement which would be immediately followed by a separate statement which includes the components of other comprehensive income, total other comprehensive income and total comprehensive income. The amendments in this ASU will be applied retrospectively. For public companies, they are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Adoption of ASU 2011-05 did not have a significant impact on the Company’s consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this update result in common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards (IFRS). Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Some of the amendments in this update clarify the FASB’s intent about the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.  This update is effective during interim and annual periods beginning on or after December 15, 2011 and is to be applied prospectively.  Adoption of ASU 2011-04 did not have a significant impact on the Company’s consolidated financial statements.

Note 3 - Related Party Transactions

The Bank leases a property from NEW BAY LLC (“NEW BAY”), a limited liability corporation 100% owned by a majority of the Directors and officers of the Bank. In conjunction with the lease, NEW BAY substantially removed the pre-existing structure on the site and constructed a new building suitable to the Bank for its banking operations. Under the terms of the lease, the cost of this project was reimbursed to NEWBAY by the Bank. The amount reimbursed, which occurred during the year 2000, was $943,000, and is included in property and equipment under the caption “Building and improvements” (see Note 7).

On May 1, 2006, the Bank renegotiated the lease to a twenty-five year term. The Bank paid NEW BAY $165,000 a year ($13,750 per month) for the first 60 months which is included in the consolidated statements of operations for 2012, 2011, and 2010 within occupancy expense of premises. The rent shall be reset every five years thereafter at the fair market rental value at the end of each preceding five year period. The Bank expects to pay NEW BAY $165,000 for the year 2013.

On February 8, 2012, the Bank entered into a two year lease of a warehouse with a Director of the Bank. The purpose of the lease is to store documents, consumable supplies, equipment, and furniture not currently in use by the Bank. The Bank paid $18,700 in the year 2012, which is reflected in the 2012 Consolidated Statement of Operations within occupancy expense of premises. The Bank expects to pay $20,400 for the year 2013.

The Bank leases a property in Woodbridge, New Jersey from ACB Development LLC, owned by the former Directors of Allegiance Community Bank, including Director Gary Stetz and Director Spencer Robbins. The Bank paid $108,000 in rent in the year 2012, which is reflected in the 2012 Consolidated Statement of Operations within occupancy expense of premises. The Bank expects to pay $110,000 for the year 2013.

12

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 4- Securities Available for Sale

	December 31, 2012
			Gross		Gross
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
Equity Securities-Financial Institutions	$	1,097	$	143	$	—	$	1,240

	December 31, 2011
			Gross		Gross
			Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(In Thousands)
Equity Securities-Financial Institutions	$	1,097	$	70	$	122	$	1,045

The unrealized losses, categorized by the length of time of continuous loss position, and fair value of related securities available for sale were as follows:

	Less than 12 Months				More than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In Thousands)
December 31, 2012
Equity Securities-Financial Institutions	$	—	$	—	$	—	$	—	$	—	$	—
December 31, 2011
Equity Securities-Financial Institutions	$	878	$	122	$	—	$	—	$	878	$	122

13

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 5 – Securities Held to Maturity

	December 31, 2012
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In Thousands)
Residential mortgage-backed securities:
Due within one year	$	—	$	—	$	—	$	—
Due after one year through five years		4		—		—		4
Due after five years through ten years		9,480		171		18		9,633
Due after ten years		153,425		6,747		38		160,134
		162,909		6,918		56		169,771
Municipal obligations:
Due after five to ten years		388		28		—		416
Due after ten years		975		65		—		1,040
		1,363		93		—		1,456
Trust originated preferred security:
Due after ten years		376		—		—		376
	$	164,648	$	7,011	$	56	$	171,603

The amortized cost and carrying values shown above are by contractual final maturity. Actual maturities will differ from contractual final maturities due to scheduled monthly payments related to mortgage–backed securities and due to the borrowers having the right to prepay obligations with or without prepayment penalties. As of December 31, 2012 and December 31, 2011, all residential mortgage backed securities held in the portfolio were Government Sponsored Enterprise securities.

In 2012 and 2011, management decided to sell certain mortgage-backed securities that were issued by the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). While these securities were classified as held to maturity, ASC 320 (formerly FAS 115) allows sales of securities so designated, provided that a substantial portion (at least 85%) of the principal balance has been amortized prior to the sale. During the years ended December 31, 2012 and 2011, proceeds from sales of securities held to maturity totaled approximately $30.6 million and $2.4 million, respectively, and resulted in gross gains of approximately $405,000 and $25,000, respectively, and gross losses of approximately $56,000 and $7,000, respectively.

14

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 5 – Securities Held to Maturity (Continued)

	December 31, 2011
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In Thousands)
U.S. Government Agencies:
Due within one year	$	3,315	$	38	$	—	$	3,353
Due after ten years		3,000		12		—		3,012
		6,315		50		—		6,365
Residential mortgage-backed securities:
Due within one year		9		—		—		9
Due after one year through five years		1,325		32		3		1,354
Due after five years through ten years		37,034		417		44		37,407
Due after ten years		160,509		6,464		73		166,900
		198,877		6,913		120		205,670
Municipal obligations:
Due after five to ten years		391		30		—		421
Due after ten years		979		59		—		1,038
		1,370		89		—		1,459
Trust originated preferred security:
Due after ten years		403		6		—		409
	$	206,965	$	7,058	$	120	$	213,903

15

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 5 – Securities Held to Maturity (Continued)

The unrealized losses, categorized by the length of time of continuous loss position, and fair value of related securities held to maturity were as follows:

	Less than 12 Months				More than 12 Months				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In Thousands)
December 31, 2012
Residential mortgage-backed securities	$	14,093	$	56	$	—	$	—	$	14,093	$	56
	$	14,093	$	56	$	—	$	—	$	14,093	$	56
December 31, 2011
Residential mortgage-backed securities	$	16,949	$	82	$	5,942	$	38	$	22,891	$	120
	$	16,949	$	82	$	5,942	$	38	$	22,891	$	120

At December 31, 2012, management concluded that the unrealized losses above (which related to 16 mortgage-backed securities) are temporary in nature since they are related to interest rate fluctuations rather than any underlying credit quality of the issuers. Additionally, the Company has not decided to sell these securities and has concluded that it is unlikely it would be required to sell these securities prior to the anticipated recovery of the unrealized losses.

16

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses

The following table presents the recorded investment in loans receivable at December 31, 2012 and December 31, 2011 by segment and class.

	December 31, 2012			December 31, 2011
	(In Thousands)
Real estate mortgage:
Residential	$	202,926		$	218,085
Commercial and multi-family		588,268			472,424
Construction		23,310			17,000
		814,504			707,509
Commercial:
Business loans		20,415			30,290
Lines of credit		39,253			44,283
		59,668			74,573
Consumer:
Passbook or certificate		736			809
Home equity lines of credit		17,841			18,923
Home equity		42,552			50,152
Automobile		37			103
Personal		567			301
		61,733			70,288
Deposit overdrafts		294			95
Total Loans		936,199			852,465
Deferred loan fees, net		(1,535	)		(1,193	)
Allowance for loan losses		(12,363	)		(10,509	)
		(13,898	)		(11,702	)
Net Loans	$	922,301		$	840,763

At December 31, 2012 and 2011, loans serviced by the Bank for the benefit of others, which consist of participation interests in loans originated by the Bank, totaled approximately $11.6 million and $6.3 million, respectively.

17

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table presents unpaid principal balance and the related recorded investment in loans acquired via acquisitions of other companies included in our Consolidated Statements of Financial Condition.

	December 31,		December 31,
	2012		2011
	(In Thousands)		(In Thousands)
Unpaid principal balance	$	330,090	$	410,057
Recorded investment		326,717		405,951

The following table presents changes in the accretable discount on loans acquired during the periods indicated:

	December 31,
	2012			2011			2010
	(In Thousands)			(In Thousands)			(In Thousands)
Beginning Balance	$	180,722		$	205,491		$	—
Acquisitions		—			17,318			229,805
Accretion		(44,513	)		(42,087	)		(24,314	)
Ending Balance	$	136,209		$	180,722		$	205,491

No interest income is being recognized on loans acquired where the fair value of the loan was based on the cash flows expected to be received from the foreclosure and sale of the underlying collateral. The carrying value of these loans at December 31, 2012, December 31, 2011, and December 31, 2010 was $6.4 million, $13.3 million, and $11.7 million, respectively.

18

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The Bank grants loans to its officers and directors and to their associates. Related party loans are made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than normal risk of collectibility. The activity with respect to loans to directors, officers and associates of such persons, is as follows:

	Years Ended December 31,
	2012			2011
	(In Thousands)
Balance – beginning	$	8,509		$	7,270
Loans originated		400			613
Changes in related party status		—			1,105
Collections of principal		(854	)		(479	)
Balance - ending	$	8,055		$	8,509

Allowance for Loan Losses

Management reviews the adequacy of the allowance on at least a quarterly basis to ensure that the provision for loan losses has been charged against earnings in an amount necessary to maintain the allowance at a level that is adequate based on management’s assessment of probable estimated losses.  The Company’s methodology for assessing the adequacy of the allowance for loan losses consists of several key elements.  These elements include a general allocated reserve for impaired loans, a specific reserve for impaired loans and an unallocated portion.  

The Company consistently applies the following comprehensive methodology.  During the quarterly review of the allowance for loan losses, the Company considers a variety of factors that include:

· General economic conditions.

· Trends in charge-offs.

· Trends and levels of delinquent loans.

· Trends and levels of non-performing loans, including loans over 90 days delinquent.

· Trends in volume and terms of loans.

· Levels of allowance for specific classified loans.

· Credit concentrations

The methodology includes the segregation of the loan portfolio into two divisions. Loans that are performing and loans that are impaired. Loans which are performing are evaluated homogeneously by loan class or loan type. The allowance of performing loans is evaluated based on historical loan experience, including

consideration of peer loss analysis, with an adjustment for qualitative factors due to economic conditions in the market. Impaired loans are loans which are more than 90 days delinquent or troubled debt restructured. These loans are individually evaluated for loan loss either by current appraisal, estimated economic factor, or net present value. Management reviews the overall estimate for feasibility and bases the loan loss provision accordingly.

The loan portfolio is segmented into the following loan classes, where the risk level for each class is analyzed when determining the allowance for loan losses:

Residential single family real estate loans involve certain risks such as interest rate risk and risk of non-repayment. Adjustable-rate residential family real estate loans decreases the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. At the same time, the marketability of the underlying property may be adversely affected by higher interest rates. Repayment risk may be affected by a number of factors including, but not necessarily limited to, job loss, divorce, illness and personal bankruptcy of the borrower.

19

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

Construction lending is generally considered to involve a high risk due to the concentration of principal in a limited number of loans and borrowers and the effects of the general economic conditions on developers and builders. Moreover, a construction loan can involve additional risks because of the inherent difficulty in estimating both a property’s value at completion of the project and the estimated cost (including interest) of the project. The nature of these loans is such that they are generally difficult to evaluate and monitor. In addition, speculative construction loans to a builder are not necessarily pre-sold and thus pose a greater potential risk to the Bank than construction loans to individuals on their personal residence.

Commercial and multi-family real estate lending entails significant additional risks as compared with residential family property lending. Such loans typically involve large loan balances to single borrowers or groups of related borrowers. The payment experience on such loans is typically dependent on the successful operation of the real estate project. The success of such projects is sensitive to changes in supply and demand conditions in the market for commercial real estate as well as economic conditions generally.

Commercial business lending, including lines of credit, is generally considered higher risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general economic conditions on the business. Commercial business loans are primarily secured by inventories and other business assets. In most cases, any repossessed collateral for a defaulted commercial business loans will not provide an adequate source of repayment of the outstanding loan balance.

Home equity lending entails certain risks such as interest rate risk and risk of non-repayment. The marketability of the underlying property may be adversely affected by higher interest rates, decreasing the collateral securing the loan. Repayment risk can be affected by job loss, divorce, illness and personal bankruptcy of the borrower. Home equity line of credit lending entails securing an equity interest in the borrower’s home. In many cases, the Bank’s position in these loans is as a junior lien holder to another institution’s superior lien. This type of lending is often priced on an adjustable rate basis with the rate set at or above a predefined index. Adjustable-rate loans decreases the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default.

Other consumer loans generally have more credit risk because of the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans generally have shorter terms and higher interest rates than other lending. In addition, consumer lending collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely effected by job loss, divorce, illness and personal bankruptcy. In most cases, any repossessed collateral for a defaulted consumer loan will not provide an adequate source of repayment of the outstanding loan.

The Company also maintains an unallocated allowance.  The unallocated allowance is used to cover any factors or conditions which may cause a potential loan loss but are not specifically identifiable.  It is prudent to maintain an unallocated portion of the allowance because no matter how detailed an analysis of potential loan losses is performed, these estimates lack some element of precision.  Management must make estimates using assumptions and information that is often subjective and changing rapidly.

Classified Assets. Our policies provide for a classification system for problem assets. Under this classification system, problem assets are classified as “substandard,” “doubtful,” “loss” or “special mention.” An asset is considered substandard if it is inadequately protected by its current net worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard assets include those characterized by the “distinct possibility” that “some loss” will be sustained if the deficiencies are not corrected. Assets classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weakness present makes “collection or liquidation in full” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as loss are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted, and the loan, or a portion thereof, is charged-off. Assets may be designated special mention because of potential weaknesses that do not currently warrant classification in one of the aforementioned categories.

When we classify problem assets, we may establish general allowances for loan losses in an amount deemed prudent by management. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. A portion of general loss allowances established to cover possible losses related to assets classified as substandard or doubtful may be included in determining our regulatory capital. Specific valuation allowances for loan losses generally do not qualify as regulatory capital. As of December 31, 2012, we had $5.7 million in assets classified as doubtful, of which $5.7 million were classified as impaired, $22.2 million in assets classified as substandard, of which $18.6 million were classified as impaired and $25.1 million in assets classified as special mention, of which $17.3 million were classified as impaired. The loans classified as substandard represent primarily commercial loans secured either by residential real estate, commercial real estate or heavy equipment. The loans that have been classified substandard were classified as such primarily because either updated financial information has not been timely provided, or the collateral underlying the loan is in the process of being revalued. As a result of Hurricane Sandy, our levels of classified assets are expected to remain elevated through at least the first half of 2013. As of December 31, 2011, we had $576,000 in assets classified as loss, all of which is considered impaired, $7.1 million in assets classified as doubtful, of which $4.3 million was classified as impaired, $36.5 million in assets classified as substandard, of which $24.3 million was classified as impaired and $28.2 million in assets classified as special mention, of which $15.5 million was classified as impaired. The loans classified as substandard represent primarily commercial loans secured either by residential real estate, commercial real estate or heavy equipment. The loans that have been classified substandard were classified as such primarily because either updated financial information has not been timely provided, or the collateral underlying the loan is in the process of being revalued.

The Company’s internal credit risk grades are based on the definitions currently utilized by the banking regulatory agencies.  The grades assigned and definitions are as follows, and loans graded excellent, above average, good and watch list (risk ratings 1-4) are treated as “pass” for grading purposes:

5 – Special Mention- Loans currently performing but with potential weaknesses including adverse trends in borrower’s operations, credit quality, financial strength, or possible collateral deficiency.

6 – Substandard- Loans that are inadequately protected by current sound worth, paying capacity, and collateral support. Loans on “nonaccrual” status. The loan needs special and corrective attention.

7 – Doubtful- Weaknesses in credit quality and collateral support make full collection improbable, but pending reasonable factors remain sufficient to defer the loss status.

8 – Loss- Continuance as a bankable asset is not warranted. However, this does not preclude future attempts at partial recovery.

20

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the activity in the Bank’s allowance for loan losses for the year ended December 31, 2012 and recorded investment in loans receivable at December 31, 2012. The table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of the allowance for loan losses that is allocated to each loan class (In Thousands):

			Commercial  &				Commercial		Home
	Residential		Multi-family		Construction		Business (1)		equity (2)			Consumer		Unallocated		Total
Allowance for credit losses:
Beginning balance
	$	2,679	$	5,798	$	304	$	1,041	$	677		$	10	$	—	$	10,509
Charge-offs	$	793	$	1,360	$	292	$	612	$	24		$	—	$	—	$	3,081
Recoveries	$	—	$	35	$	—	$	—	$	—		$	—	$	—	$	35
Provisions	$	81	$	3,578	$	947	$	391	$	(178	)	$	49	$	32	$	4,900
Ending balance	$	1,967	$	8,051	$	959	$	820	$	475		$	59	$	32	$	12,363
Ending balance: individually evaluated for impairment	$	392	$	1,061	$	96	$	353	$	113		$	—	$	—	$	2,015
Ending balance: collectively evaluated for impairment	$	1,470	$	6,990	$	863	$	467	$	362		$	59	$	32	$	10,243
Ending balance: loans acquired with deteriorated credit quality	$	105	$	—	$	—	$	—	$	—		$	—	$	—	$	105
Loans receivables:
Ending balance	$	202,926	$	588,268	$	23,310	$	59,668	$	60,393		$	1,634	$	—	$	936,199
Ending balance: individually evaluated for impairment	$	13,785	$	27,030	$	130	$	3,928	$	2,697		$	—	$	—	$	47,570
Ending balance: collectively evaluated for impairment	$	186,205	$	557,795	$	23,180	$	55,499	$	57,556		$	1,634	$	—	$	881,869
Ending balance: loans acquired with deteriorated credit quality	$	2,936	$	3,443	$	—	$	241	$	140		$	—	$	—	$	6,760

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

21

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the activity in the Bank’s allowance for loan losses for the year ended December 31, 2011 and recorded investment in loans receivable at December 31, 2011. The table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of the allowance for loan losses that is allocated to each loan class (In Thousands):

			Commerical				Commercial			Home
	Residential		& Multi-family		Construction		Business (1)			equity (2)		Consumer		Unallocated			Total
Allowance for credit losses:
Beginning balance
	$	171	$	6,179	$	426	$	1,286		$	204	$	18	$	133		$	8,417
Charge-offs	$	122	$	1,173	$	687	$	24		$	—	$	27	$	—		$	2,033
Recoveries	$	—	$	25	$	—	$	—		$	—	$	—	$	—		$	25
Provisions	$	2,630	$	767	$	565	$	(221	)	$	473	$	19	$	(133	)	$	4,100
Ending balance	$	2,679	$	5,798	$	304	$	1,041		$	677	$	10	$	—		$	10,509
Ending balance: individually evaluated for impairment	$	550	$	2,674	$	—	$	95		$	72	$	—	$	—		$	3,391
Ending balance: collectively evaluated for impairment	$	1,548	$	2,654	$	189	$	792		$	572	$	10	$	—		$	5,765
Ending balance: loans acquired with deteriorated credit quality	$	581	$	470	$	115	$	154		$	33	$	—	$	—		$	1,353
Loans receivables:
Ending balance	$	218,085	$	472,424	$	17,000	$	74,573		$	69,075	$	1,308	$	—		$	852,465
Ending balance: individually evaluated for impairment	$	14,006	$	39,461	$	1,513	$	4,307		$	1,850	$	—	$	—		$	61,137
Ending balance: collectively evaluated for impairment	$	194,862	$	429,355	$	13,236	$	70,012		$	66,613	$	1,308	$	—		$	775,386
Ending balance: loans acquired with deteriorated credit quality	$	9,217	$	3,608	$	2,251	$	254		$	612	$	—	$	—		$	15,942

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

22

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the Bank’s allowance for credit losses and recorded investment in financing receivables for the year ended December 31, 2010. The following table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of the allowance for loan losses that is allocated to each loan type (In Thousands):

			Commerical				Commercial		Home
	Residential		& Multi-family		Construction		Business (1)		equity (2)		Consumer		Unallocated		Total
Allowance for credit losses:
Ending balance	$	171	$	6,179	$	426	$	1,286	$	204	$	18	$	133	$	8,417
Ending balance: individually evaluated for impairment	$	—	$	1,656	$	—	$	449	$	2	$	—	$	—	$	2,107
Ending balance: collectively evaluated for impairment	$	171	$	4,523	$	426	$	837	$	202	$	18	$	133	$	6,310
Ending balance: loans acquired with deteriorated credit quality	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans receivables:
Ending balance	$	234,435	$	410,212	$	17,848	$	54,160	$	63,603	$	1,816	$	—	$	782,074
Ending balance: individually evaluated for impairment	$	89	$	27,422	$	2,910	$	2,809	$	372	$	—	$	—	$	33,602
Ending balance: collectively evaluated for impairment	$	219,795	$	379,907	$	14,938	$	51,275	$	63,231	$	1,816	$	—	$	730,962
Ending balance: loans acquired with deteriorated credit quality	$	14,551	$	2,883	$	—	$	76	$	—	$	—	$	—	$	17,510

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

23

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the activity in the Bank’s allowance for credit losses for the year ended December 31, 2010 (In Thousands):

	Year Ended December 31,
	2010
Balance at beginning of period	$	6,644
Charge-offs		689
Recoveries		12
Net charge-offs		677
Provisions charged to operations		2,450
Ending balance	$	8,417

24

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The table below sets forth the amounts and types of non-accrual loans in the Bank’s loan portfolio, at December 31, 2012 and 2011 , respectively. Loans are placed on non-accrual status when they become more than 90 days delinquent, or when the collection of principal and/or interest become doubtful. As of December 31, 2012 and 2011, non-accrual loans differed from the amount of total loans past due greater than 90 days due to troubled debt restructuring of loans which are maintained on non-accrual status for a minimum of six months until the borrower has demonstrated its ability to satisfy the terms of the restructured loan.

	Years Ended December 31,
	2012		2011
	(Dollars in Thousands)
Non-accruing loans:
Residential	$	2,163	$	15,511
Construction		130		4,040
Commerical business		3,159		4,265
Commercial and multi-family(1)		13,043		22,280
Home equity(2)		1,564		1,729
Consumer		—		—
Total	$	20,059	$	47,825

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

Had non-accrual loans been performing in accordance with their original terms, the interest income recognized for the years ended December 31, 2012, 2011 and 2010 would have been approximately $1.06 million, $2.85 million and $1.95 million, respectively. Interest income recognized on such loans was approximately $649,000, $968,000 and $280,000 respectively. The Bank is not committed to lend additional funds to the borrowers whose loans have been placed on a nonaccrual status. At December 31, 2012, there were $2.84 million in loans which were more than ninety days past due and still accruing interest.

During 2012, the Bank sold approximately $25.9 million of non-performing loans for the purposes of eliminating future carrying costs associated with these non-interest earning assets and improving the overall quality of the loan portfolio. The sale of this sub-set of the non-performing loan portfolio for approximately $15.1 million in cash proceeds resulted in a pre-tax loss of approximately $10.8 million. The loans sold consisted of $14.6 million of commercial and multi-family real estate loans, $9.1 million in residential mortgage loans, $1.1 million of home equity loans, $781,000 of commercial business loans, and $313,000 of construction loans.

25

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table summarizes information in regards to impaired loans by loan portfolio class for the year ended December 31, 2012 and average recorded investment and actual interest income recognized for the twelve months ended December 31, 2012 (In Thousands):

	Recorded		Unpaid Principle		Related		Avearge Recorded		Interest Income
	Investment		Recognized		Allowance		Investment		Recognized
With no related allowance recorded:
Residential Mortgages	$	6,147	$	6,147	$	—	$	5,684	$	215
Commercial and Multi-family		13,827		13,827		—		20,230		503
Construction		—		—		—		1,174		102
Commercial Business (1)		2,550		2,550		—		2,559		69
Home Equity (2)		1,959		1,959		—		1,927		43
Consumer		—		—		—		2		—
	$	24,483	$	24,483	$	—	$	31,576	$	932
With an allowance recorded:
Residential Mortgages	$	7,638	$	7,638	$	497	$	8,817	$	480
Commercial and Multi-family		13,203		13,203		1,061		12,886		588
Construction		130		130		96		180		6
Commercial Business (1)		1,378		1,378		353		2,330		31
Home Equity (2)		738		738		113		616		28
Consumer		—		—		—		48		—
Total:	$	23,087	$	23,087	$	2,120	$	24,877	$	1,133
Residential Mortgages	$	13,785	$	13,785	$	497	$	14,501	$	695
Commercial and Multi-family		27,030		27,030		1,061		33,116		1,091
Construction		130		130		96		1,354		108
Commercial Business (1)		3,928		3,928		353		4,889		100
Home Equity (2)		2,697		2,697		113		2,543		71
Consumer		—		—		—		50		—
Total:	$	47,570	$	47,570	$	2,120	$	56,453	$	2,065

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

26

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table summarizes information in regards to impaired loans by loan portfolio class for the year ended December 31, 2011 and average recorded investment and actual interest income recognized for the twelve months ended December 31, 2011 (In Thousands):

	Recorded		Unpaid Principle		Related		Avearge Recorded		Interest Income
	Investment		Recognized		Allowance		Investment		Recognized
With no related allowance recorded:
Residential Mortgages	$	6,142	$	6,142	$	—	$	3,370	$	157
Commercial and Multi-family		23,417		23,417		—		22,910		793
Construction		1,513		1,513		—		2,415		19
Commercial Business (1)		2,366		2,366		—		1,653		94
Home Equity (2)		1,301		1,301		—		711		52
Consumer		—		—		—		—		—
	$	34,739	$	34,739	$	—	$	31,059	$	1,115
With an allowance recorded:
Residential Mortgages	$	7,864	$	7,864	$	550	$	3,945	$	303
Commercial and Multi-family		16,044		16,044		2,674		15,447		582
Construction		—		—		—		330		—
Commercial Business (1)		1,941		1,941		95		2,019		24
Home Equity (2)		549		549		72		411		19
Consumer		—		—		—		—		—
Total:	$	26,398	$	26,398	$	3,391	$	22,152	$	928
Residential Mortgages	$	14,006	$	14,006	$	550	$	7,315	$	460
Commercial and Multi-family		39,461		39,461		2,674		38,357		1,375
Construction		1,513		1,513		—		2,745		19
Commercial Business (1)		4,307		4,307		95		3,672		118
Home Equity (2)		1,850		1,850		72		1,122		71
Consumer		—		—		—		—		—
Total:	$	61,137	$	61,137	$	3,391	$	53,211	$	2,043

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

During the year ended December 31, 2010, the average balance of impaired loans was $29.5 million and interest income recognized on impaired loans was $2.11 million.

27

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

A troubled debt restructuring (“TDR”) is a loan that has been modified whereby the Bank has agreed to make certain concessions to a borrower to meet the needs of both the borrower and the Bank to maximize the ultimate recovery of a loan. TDR occurs when a borrower is experiencing, or is expected to experience, financial difficulties and the loan is modified using a modification that would otherwise not be granted to the borrower. The types of concessions granted are generally included, but not limited to interest rate reductions, limitations on the accrued interest charged, term extensions, and deferment of principal.

The following table summarizes information in regards to troubled debt restructurings for the years ended December 31, 2012 and 2011, (In thousands):

			Pre-Modification Outstanding		Post-Modification Outstanding
Year Ended December 31, 2012	Number of Contracts		Recorded Investments		Recorded Investments
Residential		13	$	4,440	$	4,440
Commercial and multi-family		14	$	8,384	$	8,384
Commercial business		1	$	531	$	531
Home equity		6	$	534	$	534

			Pre-Modification Outstanding		Post-Modification Outstanding
Year Ended December 31, 2011	Number of Contracts		Recorded Investments		Recorded Investments
Residential		20	$	5,985	$	5,985
Commercial and multi-family		12	$	5,368	$	5,368
Home equity		2	$	470	$	470

The loans included above are considered TDRs as a result of the Bank implementing one or more of the following concessions: granting a material extension of time, issuing a forbearance agreement, adjusting the interest rate to a below market rate, accepting interest only for a period of time or a change in amortization period. As of December 31, 2012 and 2011, TDRs totaled $13.9 million and $11.8 million, respectively. All TDRs were considered impaired and therefore were individually evaluated for impairment in the calculation of the allowance for loan losses. Prior to their classification as TDRs, certain of these loans had been collectively evaluated for impairment in the calculation of the allowance for loan losses.

28

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table summarizes information in regards to troubled debt restructurings for which there was a payment default, within twelve months of restructuring, (In thousands):

Year Ended December 31, 2012	Number of Contracts		Recorded Investment
Residential	3	$	395
Commercial and multi-family	2	$	1,109

Year Ended December 31, 2011	Number of Contracts		Recorded Investment
Residential	2	$	506
Commercial and multi-family	2	$	1,429

29

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table sets forth the delinquency status of total loans receivable at December 31, 2012.

	As of December 31, 2012
													Loans Receivable
	30-59 Days		60-90 Days		Greater Than		Total Past				Total Loans		>90 Days
	Past Due		Past Due		90 Days		Due		Current		Receivable		and Accruing
	(In Thousands)
Residential	$	7,566	$	1,941	$	2,348	$	11,855	$	191,071	$	202,926	$	1,223
Commercial and multi-family		23,816		5,245		9,275		38,336		549,932		588,268		1,386
Construction		2,537		1,174		130		3,841		19,469		23,310		—
Commercial business(1)		1,495		152		1,514		3,161		56,507		59,668		—
Home equity(2)		1,380		717		1,516		3,613		56,780		60,393		227
Consumer		—		—		—		—		1,634		1,634		—
Total	$	36,794	$	9,229	$	14,783	$	60,806	$	875,393	$	936,199	$	2,836

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

The following table sets forth the delinquency status of total loans receivable at December 31, 2011.

	As of December 31, 2011
													Loans Receivable
	30-59 Days		60-90 Days		Greater Than		Total Past				Total Loans		>90 Days
	Past Due		Past Due		90 Days		Due		Current		Receivable		and Accruing
	(In Thousands)
Residential	$	6,166	$	2,495	$	11,847	$	20,508	$	197,557	$	218,085	$	—
Commercial and multi-family		16,977		6,340		21,080		44,417		428,077		472,424		—
Construction		3,688		130		3,660		7,478		9,522		17,000		—
Commercial business(1)		536		—		1,785		2,321		72,252		74,573		—
Home equity(2)		2,474		1,018		1,181		4,673		64,402		69,075		—
Consumer		33		10		—		43		1,265		1,308		—
Total	$	29,894	$	9,993	$	39,553	$	79,440	$	773,025	$	852,465	$	—

__________

(1) Includes business lines of credit.

(2) Includes home equity lines of credit.

30

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6 - Loans Receivable and Allowance for Loan Losses (Continued)

The following table presents the loan portfolio types summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful, and loss within the Company’s internal risk rating system as of December 31, 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Residential	$	190,054	$	6,300	$	5,653	$	919	$	—	$	202,926
Commercial and multi-family		556,814		15,036		13,206		3,212		—		588,268
Construction		22,739		—		441		130		—		23,310
Commercial business(1)		54,100		2,696		1,452		1,420		—		59,668
Home equity(2)		57,857		1,091		1,445		—		—		60,393
Consumer		1,598		—		36		—		—		1,634
Total	$	883,162	$	25,123	$	22,233	$	5,681	$	—	$	936,199

The following table presents the loan portfolio types summarized by the aggregate pass rating and the classified ratings of special mention, substandard, doubtful, and loss within the Company’s internal risk rating system as of December 31, 2011:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
Residential	$	203,317	$	5,316	$	7,632	$	1,437	$	383	$	218,085
Commercial and multi-family		426,983		19,620		23,618		2,203		—		472,424
Construction		13,697		—		2,619		684		—		17,000
Commercial business(1)		67,593		2,827		1,245		2,784		124		74,573
Home equity(2)		67,126		468		1,412		—		69		69,075
Consumer		1,308		—		—		—		—		1,308
Total	$	780,024	$	28,231	$	36,526	$	7,108	$	576	$	852,465

31

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 7 - Premises and Equipment

	December 31,
	2012			2011
	(In Thousands)
Land	$	1,837		$	1,837
Buildings and improvements		11,490			11,080
Leasehold improvements		1,208			1,053
Furniture, fixtures and equipment		4,031			3,462
		18,566			17,432
Accumulated depreciation and amortization		(4,998	)		(3,856	)
	$	13,568		$	13,576

Buildings and improvements include a building constructed on property leased from a related party (see Note 3).

Rental expenses related to the occupancy of premises and related shared costs for common areas totaled $1,229,000, $987,000 and $693,000 for the years ended December 31, 2012, 2011, and 2010, respectively. The minimum obligation under non-cancelable lease agreements expiring through April 30, 2031, for each of the years ended December 31 is as follows (in thousands):

2013	$	1,007
2014		916
2015		725
2016		737
2017		663
Thereafter		3,912
	$	7,960

Note 8 - Interest Receivable

	December 31,
	2012		2011
	(In Thousands)
Loans	$	3,509	$	4,181
Securities		554		816
	$	4,063	$	4,997

32

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 9 - Deposits

	December 31,
	2012		2011
	(In Thousands)
Demand:
Non-interest bearing	$	85,950	$	78,589
NOW		120,765		112,605
Money market		63,834		67,592
		270,549		258,786
Savings and club		256,769		265,546
Certificates of deposit		413,468		453,291
	$	940,786	$	977,623

At December 31, 2012 and 2011, certificates of deposit of $100,000 or more totaled approximately $234.6 million and $255.2 million respectively.

The scheduled maturities of certificates of deposit at December 31, 2012, were as follows (In thousands):

	Amount
2013	$	286,161
2014		72,881
2015		20,942
2016		18,278
2017		15,008
Thereafter		198
	$	413,468

33

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 10 - Short-Term Borrowings and Long-Term Debt

Long-term debt consists of the following:

	December 31,
	2012							2011
	Weighted Average Rate					Amount		Weighted Average Rate				Amount
Federal Home Loan Bank Advances:
		Maturing by December 31,
			2013	0.31		$	17,000,000		—		$	—
			2016	4.28			55,000,000		4.28			57,000,000
			2017	4.39			55,000,000		4.37			56,500,000
			2018	—			—		2.51			10,500,000
				3.75	%		127,000,000		4.33	%		124,000,000
(1) Fair Value Adjustments
							—					1,406,986
						$	127,000,000				$	125,406,986

(1) Fair value adjustments represents the difference between the fair market value and the book value of the $10.5 million of FHLB advances acquired from Allegiance Community Bank acquisition based on pricing from the Federal Home Loan Bank of New York at date of acquisition. The adjustment is being amortized over the life of the acquired advances. During the first quarter of 2012, this advance was prepaid along with a prepayment penalty of $49,000.

Beginning September 7, 2010, the Federal Home Loan Bank of New York (“FHLBNY”) replaced the existing Overnight Repricing Advance Program and its associated companion products, the Overnight Line of Credit (“OLOC”), OLOC Plus, OLOC Companion, and OLOC Companion Plus with the new Overnight Advance. The new Overnight advance permits the Bank to borrow overnight up to its maximum borrowing capacity at the FHLBNY. The Bank is no longer restricted to the previous borrowing limits of 10% (OLOC) or up to 20% (OLOC Plus) of total assets. At December 31, 2012, the Bank’s total credit exposure cannot exceed 50% of its total assets, or $585,679,000, based on the borrowing limitations outlined in the Federal Home Loan Bank of New York’s member products guide. The total credit exposure limit of 50% of total assets is recalculated each quarter.

		2012						2011
		Coupon Rate				Amount		Coupon Rate			Amount
Trust preferred junior subordinated debenture:
	Maturing by December 31,
			2034	2.958	%	$	4,124,000		3.21	%	$	4,124,000

The Trust Preferred floating rate junior subordinated debenture matures on June 17, 2034; interest rate adjusts quarterly to LIBOR plus 2.65%, the rate paid as of December 31, 2012 was 2.958%.

34

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 10 - Short-Term Borrowings and Long-Term Debt (Continued)

The trust preferred debenture became callable, at the Company’s option, on June 17, 2009, and quarterly thereafter.

Additional information regarding short-term borrowings is as follows:

	December 31,
	2012			2011		2010
	(In Thousands)
Average balance outstanding during the year	$	145		$	—	$	—
Highest month-end balance during the year	$	17,000		$	—	$	—
Average interest rate during the year		0.31	%	$	—	$	—
Weighted average interest rate at year-end		0.31	%	$	—	$	—

At December 31, 2012 and 2011 securities held to maturity with carrying values of approximately $133.9 million and $139.2 million, respectively, were pledged to secure the above noted Federal Home Loan Bank of New York borrowings. In addition, there was a blanket pledge on the residential mortgage portfolio at December 31, 2011.

Note 11 - Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The Holding Company’s capital adequacy guidelines are not materially different than the capital adequacy guidelines for the Bank.

Quantitative measures, established by regulation to ensure capital adequacy, require the Bank to maintain minimum amounts and ratios of Total and Tier 1 capital (as defined in the regulations), to risk-weighted assets, (as defined), and of Tier 1 capital to average assets (as defined). The following table presents information as to the Bank’s capital levels.

35

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 11 - Regulatory Matters (Continued)

Actual

For Capital Adequacy Purposes

To be Well Capitalized under Prompt Corrective Action Provisions

Amount

Ratio

Amount

Ratio

Amount

Ratio

(Dollars in Thousands)

As of December 31, 2012:

Total capital (to risk-weighted assets)

$

105,233

14.03

%

$

>59,991

>8.00

%

$

>74,988

>10.00

%

Tier 1 capital (to risk-weighted assets)

95,845

12.78

>29,995

>4.00

>44,993

>6.00

Tier 1 capital (to average assets)

95,845

8.38

>45,741

>4.00

>57,177

>5.00

As of December 31, 2011:

Total capital (to risk-weighted assets)

$

112,802

16.42

%

$

>54,960

>8.00

%

$

>68,699

>10.00

%

Tier 1 capital (to risk-weighted assets)

105,376

15.34

>27,480

>4.00

>41,219

>6.00

Tier 1 capital (to average assets)

105,376

8.66

>48,646

>4.00

>60,808

>5.00

As of December 31, 2012 and 2011, the most recent notification from the Bank’s regulators categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. There are no conditions or events occurring since that notification that management believes have changed the Bank’s category.

36

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12- Benefits Plans

Pension Plan

The Company acquired through the merger with Pamrapo Bancorp, Inc. a non-contributory defined benefit pension plan covering all eligible employees of Pamrapo Savings Bank. Effective January 1, 2010, the defined benefit pension plan (“Pension Plan”), was frozen by Pamrapo Savings Bank. All benefits for eligible participants accrued in the Pension Plan to the freeze date have been retained. The benefits are based on years of service and employee’s compensation. The Pension Plan is funded in conformity with funding requirements of applicable government regulations. Prior service costs for the Pension Plan generally are amortized over the estimated remaining service periods of employees.

37

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plans

The following tables set forth the Plan's funded status at December 31, 2012 and 2011 and components of net periodic pension cost for the years ended December 31, 2012 and 2011:

Change in Benefit Obligation:	December 31,
	2012			2011
	(In Thousands)
Benefit obligation, beginning of year	$	10,338		$	8,723
Interest Cost		444			469
Actuarial loss		454			1,807
Benefits paid		(514	)		(503	)
Settlements		(752	)		(158	)
Benefit obligation, ending	$	9,970		$	10,338
Change in Plan Assets:
Fair value of assets, beginning of year	$	4,973		$	4,746
Actual return on plan assets		597			76
Employer contributions		2,700			812
Benefits paid		(514	)		(503	)
Settlements		(752	)		(158	)
Fair value of assets, ending	$	7,004		$	4,973
Reconciliation of Funded Status:
Accumulated benefit obligation	$	9,970		$	10,338
Projected benefit obligation	$	9,970		$	10,338
Fair value of assets		(7,004	)		(4,973	)
Funded status, included in other liabilities	$	(2,996	)	$	(5,365	)
Valuation assumptions used to determine
benefit obligation at period end:
Discount rate		4.05	%		4.40	%
Salary Increase Rate		N/A			N/A

38

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plans (Continued)

Net Periodic Pension Expense:	December 31,
	2012			2011
	(In Thousands)
Interest cost	$	444		$	469
Expected return on assets		(463	)		(375	)
Amortization of net (gain) or loss		63			—
Settlement loss		164			—
Net Periodic Pension Cost	$	208		$	94
Valuation assumptions used to determine net periodic benefit cost for the year:
Discount rate		4.40	%		5.54	%
Long term rate of return on plan assets		8.00	%		8.00	%
Salary Increase Rate		N/A			N/A

At December 31, 2012 and December 31, 2011, unrecognized net loss of $(2,187,000) and $(2,094,000), respectively, was included, net of deferred income tax, in accumulated other comprehensive loss in accordance with ASC 715-20 and ASC 715-30. We expect $73,000 of the unrecognized net loss to be recognized in net periodic pension expense for the year ended December 31, 2013.

39

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

Plan Assets

Investment Policies and Strategies

The primary long-term objective for the Plan is to maintain assets at a level that will sufficiently cover future beneficiary obligations. The Plan will be structured to include a volatility reducing component (the fixed income commitment) and a growth component (the equity commitment).

To achieve the Plan Sponsor’s long-term investment objectives, the Trustee will invest the assets of the Plan in a diversified combination of asset classes, investment strategies, and pooled vehicles. The asset allocation guidelines in the table below reflect the Bank’s risk tolerance and long-term objectives for the Plan. These parameters will be reviewed on a regular basis and subject to change following discussions between the Bank and the Trustee.

Initially, the following asset allocation targets and ranges will guide the Trustee in structuring the overall allocation in the Plan’s investment portfolio. The Bank or the Trustee may amend these allocations to reflect the most appropriate standards consistent with changing circumstances. Any such fundamental amendments in strategy will be discussed between the Bank and the Trustee prior to implementation.

Based on the above considerations, the following asset allocation ranges will be implemented:

Asset Allocation Parameters by Asset Class
	Minimum	Target	Maximum
Equity
Large-Cap U.S.		26%
Mid/Small-Cap U.S.		12%
Non-U.S.		12%
Total-Equity	40%	50%	60%
Fixed Income
Long Duration		47%
Money Market/Certificates of Deposit		3%
Total-Fixed Income	40%	50%	60%

The parameters for each asset class provide the Trustee with the latitude for managing the Plan within a minimum and maximum range. The Trustee will have full discretion to buy, sell, invest and reinvest in these asset segments based on these guidelines which includes allowing the underlying investments to fluctuate within the stated policy ranges. The Plan will maintain a cash equivalents component (not to exceed 3% under normal circumstances) within the fixed income allocation for liquidity purposes.

The Trustee will monitor the actual asset segment exposures of the Plan on a regular basis and, periodically, may adjust the asset allocation within the ranges set forth above as it deems appropriate. Periodic reallocations of assets will be based on the Trustee’s perception of the changing risk/return opportunities of the respective asset classes.

Determination of Long-Term Rate–of Return

The long-term rate-of-return-on assets assumption was set based on historical returns earned by equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn real rates of return in the ranges of 5-9% and 2-6%, respectively. The long-term inflation rate was estimated to be 3%. When these overall return expectations are applied to the Plan’s target allocation, the result is an expected rate of return of 7% to 11%.

40

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

The fair values of the Company’s pension plan assets at December 31, 2012, by asset category (see Note 16 for the definitions of levels), are as follows:

Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Mutual funds-Equity
Large-Cap Value (a)	$	766,221	$	766,221	$		$
Mid-Cap Value (b)		385,766		385,766		—		—
Small-Cap Value (c)		367,800		367,800		—		—
Foreign Large Growth (d)		230,043		230,043		—		—
Mutual Funds-Fixed Income
World Bond (e)		793,273		793,273		—		—
Intermediate Government (f)		727,626		727,626		—		—
Inflation Protected (g)		666,735		666,735		—		—
Mutual Funds-Asset Allocation/Balanced
Conservative Allocation (h)		2,219,131		2,219,131		—		—
World Allocation (i)		340,332		340,332		—		—
Stock
BCB Common Stock		477,225		477,225		—		—
Cash Equivalents
Money Market	$	30,348	$	30,348	$	—	$	—
Total	$	7,004,500	$	7,004,500	$	—	$	—

41

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

(a) Large-value portfolios invest primarily in big U.S. companies that are less expensive or growing more slowly than other large-cap stocks. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow.

(b) Some mid-cap value portfolios focus on medium-size companies while others land here because they own a mix of small-, mid-, and large-cap stocks. All look for U.S. stocks that are less expensive or growing more slowly than the market. The U.S. mid-cap range for market capitalization typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow).

(c) Small-value portfolios invest in small U.S. companies with valuations and growth rates below other small-cap peers. Stocks in the bottom 10% of the capitalization of the U.S. equity market are defined as small cap. Value is defined based on low valuations (low price ratios and high dividend yields) and slow growth (low growth rates for earnings, sales, book value, and cash flow).

(d) Foreign large-growth portfolios focus on high-priced growth stocks, mainly outside of the United States. Most of these portfolios divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany. These portfolios primarily invest in stocks that have market caps in the top 70% of each economically integrated market (such as Europe or Asia ex-Japan). Growth is defined based on fast growth (high growth rates for earnings, sales, book value, and cash flow) and high valuations (high price ratios and low dividend yields). These portfolios typically will have less than 20% of assets invested in U.S. stocks.

(e) World-bond portfolios invest 40% or more of their assets in foreign bonds. Some world-bond portfolios follow a conservative approach, favoring high-quality bonds from developed markets. Others are more adventurous and own some lower-quality bonds from developed or emerging markets. Some portfolios invest exclusively outside the U.S., while others regularly invest in both U.S. and non- U.S. bonds.

(f) Intermediate-government portfolios have at least 90% of their bond holdings in bonds backed by the U.S. government or by government-linked agencies. This backing minimizes the credit risk of these portfolios, as the U.S. government is unlikely to default on its debit. These portfolios have durations typically between 3.5 and 6.0 years. Consequently, the group’s performance-and its level of volatility- tends to fall between that of the short government and long government bond categories.

(g) Inflation-protected bond portfolios invest primarily in debt securities that adjust their principal values in line with the rate of inflation. These bonds can be issued by any organization, but the U.S. Treasury is currently the largest issuer for these types of securities.

(h) Conservative-allocation portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. These portfolios tend to hold smaller positions in stocks than moderate-allocation portfolios. These portfolios typically have 20% to 50% of assets in equities and 50% to 80% of assets in fixed income and cash.

(i) World-allocation portfolios seek to provide both capital appreciation and income by investing in three major areas: stocks, bonds, and cash. While these portfolios do explore the whole world, most of them focus on the U.S., Canada, Japan, and the larger markets in Europe. It is rare for such portfolios to invest more than 10% of their assets in emerging markets. These portfolios typically have at least 10% of assets in bonds, less than 70% of assets in stocks, and at least 40% of assets in non-U.S. stocks or bonds.

The Company expects to contribute, based upon actuarial estimates, approximately $330,000 to the pension plan in 2013.

Benefit payments are expected to be paid for the years ended December 31 as follows (In thousands):

2013	$	587
2014		591
2015		586
2016		596
2017		590
2018-2022		2,977

42

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

The fair values of the Company’s pension plan assets at December 31, 2011, by asset category (see Note 16 for the definitions of levels), are as follows:

Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Mutual funds-Equity
Large-Cap Value (a)	$	266,863	$	266,863	$		$
Large-Cap Core (b)		327,673		327,673		—		—
Mid-Cap Core (c)		—		—		—		—
Small-Cap Core (d)		158,806		158,806		—		—
International Cap (e)		277,059		277,059		—		—
Mutual Funds-Fixed Income
US Core (f)		519,981		519,981		—		—
Core Plus (g)		—		—		—		—
Common/Collective Trusts-Equity
Large-Cap Value (i)		286,944		—		286,944		—
Large-Cap Growth (j)		525,035		—		525,035		—
International Core (k)		272,948		—		272,948		—
Exchange Traded Funds
Fixed Income (h)		537,986		537,986		—		—
Stock
BCB Common Stock		494,410		494,410		—		—
Cash Equivalents
Money Market		14,637		14,637		—		—
BCB Bank CD	$	1,290,457	$	—	$	1,290,457	$	—
Total	$	4,972,799	$	2,597,415	$	2,375,384	$	—

(a) This category consists of a mutual fund holding 100-160 stocks, designed to track and outperform the Russell 1000 Value Index.

(b) This category contains stocks of the S&P 500 Index. The stocks are maintained in approximately the same weightings as the index.

(c) This category contains stocks of the MSCI U.S. Mid Cap 450 Index. The stocks are maintained in approximately the same weightings as the index.

(d) This category consists of 400 or more small and micro-cap companies, with as much as 25% invested in non-U.S. equities.

(e) This category consists of investments with long-term growth potential located primarily in Europe and the Pacific Basin, with a smaller portion located in developing economies.

(f) This category consists of mutual funds that invest in long-term treasury and investment grade corporate bond securities with a dollar-weighted average maturity of 15 to 30 years.

(g) This category consists of a diversified portfolio of bonds and other fixed income securities, including mortgage-related and asset backed securities. Up to 15% may be invested in below investment grade domestic and foreign securities.

(h) This category consists of an exchange traded fund (ETF) that seeks to approximate the total rate of return of the Barclays Capital U.S. 20+ Year Treasury Bond Index.

(i) This category contains large-cap stocks with above-average yield. The portfolio typically holds between 60 and 70 stocks.

(j) This category consists of a portfolio of between 45 and 65 stocks that will typically overweight technology and health care.

(k) This category consists of a portfolio of over 200 stocks in non-U.S. domiciled companies, with up to 35% invested in emerging markets.

43

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

Supplemental Executive Retirement Plan

The Company acquired through the merger with Pamrapo Bancorp, Inc. a supplemental executive retirement plan (“SERP”) in which certain former employees of Pamrapo Bank are covered. A SERP is an unfunded non-qualified deferred retirement plan. Participants who retire at the age of 65 (the “Normal Retirement Age”), are entitled to an annual retirement benefit equal to 75% of compensation reduced by their retirement plan annual benefits. Participants retiring before the Normal Retirement Age receive the same benefits reduced by a percentage based on years of service to the Company and the number of years prior to the Normal Retirement Age that participants retire.

The following tables set forth the SERP's funded status and components of net periodic SERP cost:

Change in Benefit Obligation:	December 31,
	2012			2011
	(In Thousands)
Benefit obligation, beginning of year	$	511		$	596
Interest Cost		21			29
Actuarial loss		16			25
Benefits paid		(74	)		(139	)
Benefit obligation, ending	$	474		$	511
Change in Plan Assets:
Fair value of assets, beginning of year	$	—		$	—
Employer contributions		74			139
Benefits paid		(74	)		(139	)
Fair value of assets, ending	$	—		$	—
Reconciliation of Funded Status:
Accumulated benefit obligation	$	474		$	511
Projected benefit obligation	$	474		$	511
Fair value of assets		—			—
Funded status, included in other liabilities	$	474		$	511
Valuation assumptions used to determine
benefit obligation at period end:
Discount rate		4.05	%		4.40	%
Salary Increase Rate		N/A			N/A

44

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

	December 31,
Net Periodic SERP Expense:	2012			2011
	(In Thousands)
Interest Cost	$	21		$	29
Net Periodic SERP Cost	$	21		$	29
Valuation assumptions used to determine net periodic benefit cost for the year:
Discount rate		4.40	%		5.54	%
Rate of increase in compensation		N/A			N/A	%

At December 31, 2012 and December 31, 2011, unrecognized net loss of $46,000 and $30,000, respectively, was included, net of deferred income tax, in accumulated other comprehensive income in accordance with ASC 715-20 and ASC 715-30. None of the unrecognized net loss is expected to be recognized in net periodic SERP cost for the year ended December 31, 2012.

The Company expects to contribute, based upon actuarial estimates, approximately $62,000 to the SERP plan in 2013.

Benefit payments are expected to be paid for the years ended December 31 as follows (In thousands):

2013	$	62
2014		62
2015		62
2016		62
2017		62
2018-2022		218

45

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

Stock Options

The Company has three stock-related compensation plans, the 2002 Stock Option Plan, 2003 Stock Option Plan, and the 2011 Stock Option Plan (the “Plans”). All stock options granted have a ten year term. For the 2002 Stock Option Plan and the 2003 Stock Option Plan all shares granted have vested and all but 5,469 options authorized under the Plans have been granted as of December 31, 2012. For the 2011 Stock Option Plan, stock option awards vest at a rate of 10% per year, over ten years commencing on the first anniversary of the grant date. As of December 31, 2012, 60,000 options had been granted, with 840,000 shares authorized under the Plan remaining to be granted. During the years ended December 31, 2012 and 2011, the Company recorded $24,000 and $12,000, respectively, as stock option compensation expense. During the year ended December 31, 2010, the Company recorded no share-based compensation expense.

A summary of stock option activity, adjusted to retroactively reflect subsequent stock dividends, follows:

	Number of Options			Range of Exercise Price		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (000's)
Outstanding at December 31, 2010		289,613			$5.29-$29.25	$	12.00
Options forfeited		(3,000	)		29.25		29.25
Options exercised		(28,637	)		8.26		8.26			$	70
Options granted		60,000			8.93		8.93
Options expired		—			—		—
Outstanding at December 31, 2011		317,976			$5.29-$29.25		11.61		4.46 years		231
Options forfeited		(11,000	)		8.93-29.25		17.06
Options exercised		(29,661	)		5.29-9.34		6.01				131
Options granted		—			—		—
Options expired		(3,019	)		5.29-15.11		11.80
Outstanding at December 31, 2012		274,296			$8.93-$29.25		11.97		2.96 years		34
Exercisable at December 31, 2012		224,796			$8.93-$29.25		12.64		1.71 years		6

46

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 12 - Benefits Plan (Continued)

The key valuation assumptions and fair value of stock options granted during the year ended December 31, 2011 were:

Expected life	7.25 years
Risk-free interest rate	1.44%
Volatility	29.80%
Dividend yield	4.71%
Fair value	$1.49

It is Company policy to issue new shares upon share option exercise. Expected future compensation expense relating to the 49,500 unexercisable options outstanding as of December 31, 2012 is $54,000 over a weighted average period of 8.75 years.

47

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 13 - Dividend Restrictions

Payment of cash dividends on common stock is conditional on earnings, financial condition, cash needs, capital considerations, the discretion of the Board of Directors, and compliance with regulatory requirements. State and federal law and regulations impose substantial limitations on the Bank’s ability to pay dividends to the Company. Under New Jersey law, the Bank is permitted to declare dividends on its common stock only if, after payment of the dividend, the capital stock of the Bank will be unimpaired and either the Bank will have a surplus of not less than 50% of its capital stock or the payment of the dividend will not reduce the Bank’s surplus. During 2012, 2011 and 2010, the Bank paid the Company total dividends of $15,745,000, $9,611,000, and $5,334,000 respectively. The Company’s ability to declare dividends is dependent upon the amount of dividends declared by the Bank.

48

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 14 - Income Taxes

The components of income tax (benefit) expense are summarized as follows:

	Years Ended December 31,
	2012			2011			2010
	(In Thousands)
Current income tax expense (benefit):
Federal	$	(2,366	)	$	4,382		$	1,982
State		263			836			(136	)
		(2,103	)		5,218			1,846
Deferred income tax expense (benefit):
Federal		802			(1,592	)		5
State		(951	)		(253	)		(346	)
		(149	)		(1,845	)		(341	)
Total Income Tax (Benefit) Expense	$	(2,252	)	$	3,373		$	1,505

49

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 14 - Income Taxes (Continued)

The tax effects of existing temporary differences that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities are as follows:

	December 31,
	2012		2011
Deferred income tax assets:
Allowance for loan losses	$	5,537	$	4,822
Other real estate owned expenses		435		—
Depreciation		137		199
Other than temporary impairment on security		1,191		1,191
Non-accrual interest		455		397
Benefit Plans		424		1,530
Benefit Plan-accumulated other comprehensive loss		912		868
Valuation adjustment on loans receivable acquired		812		1,677
Valuation adjustment on securities		371		—
Valuation adjustment on time deposits acquired		138		347
Valuation adjustment on borrowings acquired		—		575
Net operating loss carry forwards (net of valuation allowances)		1,069		345
Unrealized loss on securities available for sale		—		21
Other		134		318
		11,615		12,290
Deferred income tax liabilities:
Unrealized gain on securities available for sale		59		—
Valuation adjustment on securities		—		748
Valuation adjustment on premises and equipment acquired		1,503		1,602
		1,562		2,350
Net Deferred Tax Asset	$	10,053	$	9,940

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. In making this assessment, management has considered the profitability of current core operations, future market growth, forecasted earnings, future taxable income, and ongoing, feasible and permissible tax planning strategies. If the Company was to determine that it would not be able to realize a portion of its net deferred tax asset in the future for which there is currently no valuation allowance, an adjustment to the net deferred tax asset would be charged to earnings in the period such determination was made. Conversely, if the Company was to make a determination that it is more likely than not that the deferred tax assets for which there is a valuation allowance would be realized, the related valuation allowance would be reduced and a benefit to earnings would be recorded. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and carry forwards are available.

At December 31, 2012, gross deferred tax assets related to net operating loss carry forwards totaled $1,128,000, consisting of $345,000 of federal assets acquired in the 2011 acquisition of Allegiance, $724,000 in state assets related to the Bank, and $59,000 in state assets related to the stand-alone Company. Comparable amounts at December 31, 2011, were gross deferred tax assets of $432,000 consisting of $345,000 of federal assets acquired in the Allegiance acquisition, $37,000 in state assets related to the Bank, and $50,000 in state assets related to the stand-alone Company.

At December 31, 2012 and 2011, the stand-alone Company had $1.0 million and $863,000, respectively, of state net operating loss carry forwards, with related gross deferred tax assets of $59,000 and $50,000, respectively. Due to the uncertainty regarding the ability to realize these carry forwards within the statutory time limits, the related deferred tax asset has been fully offset by valuation allowances of $59,000 and $50,000, respectively, at December 31, 2012 and 2011.

In conjunction with the Company’s acquisition of Allegiance in 2011, the Company acquired a federal net operating loss carry forward of $1.2 million. This carry forward is available for use through 2030; however, in accordance with Internal Revenue Code Section 382, usage of the carry forward is limited to $235,000 annually on a cumulative basis (portions of the $235,000 not used in a particular year may be added to subsequent usage). At December 31, 2012 and 2011, the Company had approximately $987,000 remaining of this federal net operation loss carry forward available to offset future taxable income for federal tax reporting purposes; Based on the current profitability or core operations and expectations that such profitability will continue, the Company’s expects to fully utilize this federal net operation loss carry forward by 2016 ($470,000 in 2013, $235,000 in both 2014 and 2015, and $87,000 in 2016).

50

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 14 - Income Taxes (Continued)

At December 31, 2012 and 2011, the Bank had $12.4 million and $635,000, respectively, of state net operating loss carry forwards; the $635,000 at December 31, 2011, which is also included in the December 31, 2012 balance, relates to 2010 and is expected to be recoverable in full via carry forward to a to-be-amended 2011 state tax return. The additional $11.7 million at December 31, 2012, was generated in 2012 and will expire, to the extent not utilized, in 2032. The Bank’s 2012 state net operating loss was the largely the result of two planned transactions designed to enhance the future operations of the Company and the Bank; as discussed in Note 6, the Bank engaged in two bulk sales of impaired loans at a realized loss of $10.8 million. Similar transactions in future periods are not contemplated or anticipated. The Bank, when consolidated with its investment company subsidiary, has generated consistently strong core earnings and projects similarly strong results going forward. The Bank currently employs a state tax planning strategy designed to reduce state taxes by taking advantage of the lower corporate tax rates applicable to investment companies. Accordingly, most of the state taxable income of the consolidated Bank resides in its investment company subsidiary. In order to utilize the 2012 net operating loss of the stand-alone Bank, a portion of the existing strategy will be reversed to increase the level of Bank-consolidated taxable income that will reside in the stand-alone Bank. The expected continuance of the profitable core operations of the consolidated Bank along with the available, feasible and currently in use tax planning strategy will allow full utilization of this net operating loss carry forward.

The following table presents a reconciliation between the reported income tax expense and the income tax expense which would be computed by applying the normal federal income tax rate of 35% in 2012 and 2011 and 34% in 2010 to income before income tax expense:

	Years Ended December 31,
	2012			2011			2010
	(In Thousands)
Federal income tax (benefit) expense at statutory rate	$	(1,510	)	$	3,298		$	5,382
Increases (reductions) in income taxes resulting from:
State income tax (benefit), net of federal income tax effect		(451	)		380			(318	)
Merger related items		—			(219	)		(4,066	)
Other items, net		(291	)		(86	)		507
Effective Income Tax	$	(2,252	)	$	3,373		$	1,505
Effective Income Tax Rate		(52.2	)%		35.8	%		9.5	%

51

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 15- Commitments and Contingencies

The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments primarily include commitments to extend credit. The Bank’s exposure to credit loss, in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, is represented by the contractual amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments.

Outstanding loan related commitments were as follows:

	December 31,
	2012		2011
	(In Thousands)
Loan origination	$	39,093	$	39,133
Standby letters of credit		2,414		1,538
Construction loans in process		13,774		3,588
Unused lines of credit		41,824		29,261
	$	97,105	$	73,520

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation of the counterparty. Collateral held varies but primarily includes residential real estate properties.

The Company and its subsidiaries also have, in the normal course of business, commitments for services and supplies. Management does not anticipate losses on any of these transactions.

The Company and its subsidiaries, from time to time, may be party to litigation which arises primarily in the ordinary course of business. In the opinion of management, the ultimate disposition of such litigation should not have a material effect on the consolidated financial statements. As of December 31, 2012, the Company and its subsidiaries were not parties to any material litigation.

52

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 16 - Fair Value Measurements and Fair Values of Financial Instruments

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent weaknesses in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction on the dates indicated. The estimated fair value amounts have been measured as of their respective year-ends and have not been re-evaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.

ASC Topic 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy that prioritizes the inputs to valuation methods used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

Level 1:	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2:	Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
Level 3:	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity).

An asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

For assets and liabilities measured at fair value on a recurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

53

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 16 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)

			(Level 1)		(Level 2)
			Quoted Prices in		Significant		(Level 3)
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
Description	Total		Assets		Inputs		Inputs
As of December 31, 2012:
Securities available for sale — Equity Securities	$	1,240	$	1,240	$	—	$	—
As of December 31, 2011:
Securities available for sale — Equity Securities	$	1,045	$	1,045	$	—	$	—

For assets and liabilities measured at fair value on a nonrecurring basis, the fair value measurements by level within the fair value hierarchy are as follows:

			(Level 1)		(Level 2)
			Quoted Prices in		Significant		(Level 3)
			Active Markets		Other		Significant
			for Identical		Observable		Unobservable
Description	Total		Assets		Inputs		Inputs
As of December 31, 2012:
Impaired loans	$	20,967	$	—	$	—	$	20,967
Other Real estate owned	$	2,215	$	—	$	—	$	2,215
As of December 31, 2011:
Impaired Loans	$	23,007	$	—	$	—	$	23,007
Other Real estate owned	$	300	$	—	$	—	$	300

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company has utilized adjusted Level 3 inputs to determine fair value, (Dollars in thousands):

Quantitative Information about Level 3 Fair Value Measurements
		Fair Value	Valuation	Unobservable	Range
		Estimate	Techniques	Input
December 31, 2012:
Impaired Loans	$	20,967	Appraisal of collateral (1)	Appraisal adjustments (2)	0%-10%
				Liquidation expenses (3)	0%-10%
Other Real Estate Owned	$	2,215	Appraisal of collateral (1)	Appraisal adjustments (2)	0%-20%

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally include various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

54

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 16 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)

The following information should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only provided for a limited portion of the Company’s assets and liabilities. Due to a wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company’s disclosures and those of other companies may not be meaningful. The following methods and assumptions were used to estimate the fair values of the Company’s financial instruments at December 31, 2012 and 2011:

Cash and Cash Equivalents (Carried at Cost)

The carrying amounts reported in the consolidated statements of financial condition for cash and short-term instruments approximate those assets’ fair values.

Securities

The fair value of securities available for sale (carried at fair value) and held to maturity (carried at amortized cost) are determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

Loans Held for Sale (Carried at Lower of Cost or Fair Value)

The fair value of loans held for sale is determined, when possible, using quoted secondary-market prices. If no such quoted prices exist, the fair value of a loan is determined using quoted prices for a similar loan or loans, adjusted for specific attributes of that loan. Loans held for sale are carried at their cost.

Loans Receivable (Carried at Cost)

The fair values of loans, except for certain impaired loans, are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the loans. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. Generally, for variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values.

Impaired Loans (Generally Carried at Fair Value)

Impaired loans are those for which the Company has measured and recorded an impairment generally based on the fair value of the loan’s collateral. Fair value is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values, based upon the lowest level of input that is significant to the fair value measurements. The fair value at December 31, 2012 and 2011 consists of the loan balances of $23,087,000 and $26,398,000, net of a valuation allowance of $2,120,000 and $3,391,000, respectively.

FHLB of New York Stock (Carried at Cost)

The carrying amount of restricted investment in bank stock approximates fair value, and considers the limited marketability of such securities.

Interest Receivable and Payable (Carried at Cost)

The carrying amount of interest receivable and interest payable approximates its fair value.

Deposits (Carried at Cost)

The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings and money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amounts). Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the market on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Long-Term Debt (Carried at Cost)

Fair values of long-term debt are estimated using discounted cash flow analysis, based on quoted prices for new long-term debt with similar credit risk characteristics, terms and remaining maturity. These prices obtained from this active market represent a market value that is deemed to represent the transfer price if the liability were assumed by a third party.

Off-Balance Sheet Financial Instruments (Disclosed at Cost)

Fair values for the Bank’s off-balance sheet financial instruments (lending commitments and unused lines of credit) are based on fees currently charged in the market to enter into similar agreements, taking into account, the remaining terms of the agreements and the counterparties’ credit standing. The fair value of these commitments was deemed immaterial and is not presented in the accompanying table.

55

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 16 - Fair Value Measurements and Fair Values of Financial Instruments (Continued)

The carrying values and estimated fair values of financial instruments were as follows at December 31, 2012 and 2011:

					Quoted Prices
					in Active		Significant		Significant
	Carrying				Markets for		Other		Unobservable
	Value		Fair Value		(Level 1)		(Level 2)		(Level 3)
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	35,133	$	35,133	$	35,133	$	—	$	—
Securities available for sale		1,240		1,240		1,240		—		—
Securities held to maturity		164,648		171,603		—		171,603		—
Loans held for sale		1,602		1,637		—		1,637		—
Loans receivable		922,301		975,835		—		—		975,835
FHLB of New York stock		7,698		7,698		—		7,698		—
Interest receivable		4,063		4,063		—		4,063		—
Financial liabilities:
Deposits		940,786		944,960		527,318		417,642		—
FHLB Borrowings		131,124		144,211		—		144,211		—
Interest payable		789		789		—		789		—

	December 31,
	2011
	Carrying
	Value		Fair Value
Financial assets:
Cash and cash equivalents	$	117,087	$	117,087
Securities available for sale		1,045		1,045
Securities held to maturity		206,965		213,903
Loans held for sale		5,856		6,020
Loans receivable		840,763		890,215
FHLB of New York stock		7,498		7,498
Interest receivable		4,997		4,997
Financial liabilities:
Deposits		977,623		982,500
Long-term debt		129,531		141,108
Interest payable		813		813

56

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 17- Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss included in stockholders' equity are as follows:

	At December 31,
	2012			2011
	(In Thousands)
Net unrealized gain (loss) on securities available for sale	$	143		$	(52	)
Tax effect		(59	)		21
Net of tax amount		84			(31	)
Benefit plan adjustments		(2,231	)		(2,124	)
Tax effect		912			868
Net of tax amount		(1,319	)		(1,256	)
Accumualted other comprehensive loss	$	(1,235	)	$	(1,287	)

57

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 18- Parent Only Condensed Financial Information

STATEMENTS OF FINANCIAL CONDITION
	Years Ended December 31,
	2012		2011
	(In Thousands)
Assets
Cash and due from banks	$	1,052	$	—
Investment in subsidiaries		95,037		104,088
Restricted common stock		124		124
Other assets		58		36
Total assets		96,271		104,248
Liabilities and Stockholders' Equity
Liabilities
Long-term debt	$	4,124	$	4,124
Other Liabilities		566		76
Total Liabilities		4,690		4,200
Stockholder's Equity		91,581		100,048
Total Liabilities and Stockholders' Equity	$	96,271	$	104,248

58

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 18- Parent Only Condensed Financial Information (Continued)

STATEMENTS OF OPERATIONS
	Years Ended December 31,
	2012			2011			2010
	(In Thousands)
Dividends from Bank subsidiary	$	15,745		$	9,611		$	5,334
Total Income		15,745			9,611			5,334
Interest expense, borrowed money		128			120			122
Other		37			(17	)		60
Total Expense		165			103			182
Income before Income Tax Expense (Benefit) and Equity in Undistributed Earnings (Losses) of Subsidiaries		15,580			9,508			5,152
Income tax expense (benefit)		(55	)		97			120
Income before Equity in Undistributed (Losses) Earnings of Subsidiaries		15,635			9,411			5,032
Equity in undistributed (losses) earnings of Subsidiaries		(17,697	)		(3,360	)		9,294
Net (Loss) Income	$	(2,062	)	$	6,051		$	14,326

59

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 18 - Parent Only Condensed Financial Information (Continued)

STATEMENTS OF CASH FLOWS
	Years Ended December 31,
	2012			2011			2010
	(In Thousands)
Cash Flows from Operating Activities
Net (Loss) Income	$	(2,062	)	$	6,051		$	14,326
Adjustments to reconcile net (loss) income to net cash provided by operating activites:
Equity in undistributed losses (earnings) of subsidiaries		17,697			3,360			(9,294	)
Decrease (increase) in other assets		(22	)		95			171
Increase (decrease) in other liabilities		490			18			(129	)
Net Cash Provided By Operating Activities		16,103			9,524			5,074
Cash Flows from Investing Activities
Cash acquired in acquisition		—			—			31
Additional investment in subsidiary		(8,570	)		—			—
Net Cash (Used In) Provided By Investing Activities	$	(8,570	)	$	—		$	31
Cash Flows from Financing Activities
Proceeds from issuance of preferred stock		8,570			—			—
Proceeds from issuance of common stock		109			237			73
Cash dividends paid		(4,310	)		(4,549	)		(3,412	)
Purchase of treasury stock		(10,850	)		(5,567	)		(1,806	)
Net Cash (Used in) Financing Activities		(6,481	)		(9,879	)		(5,145	)
Net Increase (decrease) in Cash and Cash Equivalents		1,052			(355	)		(40	)
Cash and Cash Equivalents - Beginning	$	—		$	355		$	395
Cash and Cash Equivalents - Ending	$	1,052		$	—		$	355
Non-Cash Items:
Transfer of securities available for sale to treasury stock	$	—		$	—		$	235

60

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 19 – Acquisitions

On October 14, 2011, the Company acquired all of the outstanding common shares of Allegiance Community Bank (“Allegiance”) and thereby acquired all of Allegiance Community Bank’s two branch locations. Under the terms of the merger agreement, Allegiance stockholders received 0.35 of a share of BCB Bancorp, Inc. common stock at a price of $9.57 per share in exchange for each share of Allegiance common stock, resulting in BCB Bancorp, Inc. issuing 644,434 common shares of BCB Bancorp, Inc. common stock with an acquisition date fair value of $6.2 million.

The results of Allegiance’s operations are included in our Consolidated Statements of Operations from the date of acquisition. In connection with the merger, the consideration paid and the net assets acquired were recorded at the estimated fair value on the date of acquisition, as summarized in the following table (In thousands).

Consideration paid
BCB Community Bancorp, Inc. common stock issued	$	6,167
Cash paid on fractional shares		1
	$	6,168
Estimated amounts of identifiable assets acwquired and liabilities assumed, at fair value
Cash and cash equivalents	$	5,902
Investment securities		34,969
Loans receivable		88,911
Federal Home Loan Bank of New York stock		819
Premises and equipment		1,618
Interest Receivable		443
Deferred income taxes		1,418
Other assets		1,057
Deposits		(111,365	)
Borrowings		(15,458	)
Other liabilities		(984	)
Total identifiable net assets		7,330
Gain on bargain purchase recognized in non-interest income	$	1,162

ASC 805 “Business Combinations,” permits the use of provisional amounts for the assets acquired and liabilities assumed when the information at acquisition date is incomplete. During the measurement period, which is one year from the acquisition date, amounts provisionally assigned to the acquisition may be adjusted based on new information obtained during the measurement period. Under no circumstances may the measurement period exceed one year from the acquisition date. No adjustments were made during 2012.

The securities portfolio acquired consisted primarily of FHLMC and FNMA mortgage backed securities which were valued as of October 14, 2011 based on matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

We estimated the fair value for most loans acquired from Allegiance by utilizing a methodology wherein loans with comparable characteristics were aggregated by type of collateral, remaining maturity and repricing terms. Cash flows for each pool were estimated using an estimate of future credit losses and an estimated rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. To estimate the fair value of the remaining loans, we analyzed the value of the underlying collateral of the loans, assuming the fair values of the loans are derived from the eventual sale of the collateral. The value of the collateral was based on recently completed appraisals adjusted to the valuation date based on recognized industry indicies. We discounted these values using market derived rates of return with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. There was no carryover of Allegiance’s allowance for credit losses associated with the loans we acquired in accordance with applicable accounting guidance. Information about the acquired Allegiance loan portfolio as of October 14, 2011 is as follows (in thousands):

Contractually required principal and interest at acquisition	$	107,760
Contractual cash flows not expected to be collected (nonaccretabale discount)		(1,531	)
Expected cash flows at acquisition		106,229
Interest component of expected cash flows (accretable discount)		17,318
Fair value of acquired loans	$	88,911

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 19 – Acquisitions (Continued)

The fair value of the office buildings and land is based upon independent third-party appraisals of the properties.

The fair value of savings and transaction deposit accounts acquired from Allegiance was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificates of deposit accounts were valued by calculating the discounted cash flow. The discounted cash flows, at an individual account level, were then aggregated together by category type to determine the market value of each time deposit category. The market values of all time deposit categories were added together to determine the total market value of the time deposit portfolio. The discount rate utilized for the discounted cash flow of each time deposit category was calculated based upon the median interest rate for market time deposits nearest the weighted average remaining maturity for that time deposit category.

The fair value of borrowings assumed was determined by estimating projected future cash outflows and discounting them at the current market rate of interest for similar type of borrowings.

Direct costs related to the acquisition were expensed as incurred. During the year ended December 31, 2011, we incurred $538,000 in merger related expenses related to the transaction, including $533,000 in professional services and $5,000 in other non-interest expenses.

On July 6, 2010, the Company acquired all of the outstanding common shares of Pamrapo Bancorp, Inc. (“Pamrapo”), the parent company of Pamrapo Savings Bank, and thereby acquired all of Pamrapo Savings Bank’s 10 branch locations. Under the terms of the merger agreement, Pamrapo stockholders received 1.0 share of BCB Bancorp, Inc. common stock in exchange for each share of Pamrapo common stock, resulting in us issuing 4.9 million common shares of BCB Bancorp, Inc. common stock with an acquisition date fair value of $38.6 million. Also under the terms of the merger agreement, Pamrapo stock options were converted to BCB Bancorp, Inc. stock options. There were 28,000 Pamrapo options outstanding that had a fair value of $0.00 on the date of acquisition. The strike price of the options acquired ranged from $18.41-$29.25.

The merger with Pamrapo presents a unique opportunity to merge with a leading community financial institution that will strengthen the earning power of BCB Bancorp, as well as the added scale to undertake and solidify leadership positions in key business lines.

The results of Pamrapo’s operations are included in our Consolidated Statements of Operations from the date of acquisition. In connection with the merger, the consideration paid and the net assets acquired were recorded at estimated fair value on the date of acquisition, as summarized in the following table, (in thousands).

Consideration paid
BCB Community Bancorp, Inc. common stock issued	$	38,645
Recognized amounts of identifiable assets acquired and liabilities assumed, at fair value
Cash and cash equivalents	$	22,979
Investment securities		86,770
Loans receivable		412,142
Federal Home Loan Bank of New York stock		2,878
Property held for sale		1,017
Premises and equipment		5,938
Other real estate owned		789
Interest receivable		1,905
Deferred income taxes		1,820
Other assets		1,264
Deposits		(435,810	)
Borrowings		(43,815	)
Other liabilities		(6,650	)
Total identifiable net assets		51,227
Gain on bargain purchase recognized in non-interest income	$	12,582

The securities portfolio acquired consisted primarily of FHLMC and FNMA mortgage backed securities which were valued as of July 6, 2010 based on matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted prices.

62

BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 19 – Acquisitions (Continued)

We estimated the fair value for most loans acquired from Pamrapo by utilizing a methodology wherein loans with comparable characteristics were aggregated by type of collateral, remaining maturity and repricing terms. Cash flows for each pool were estimated using an estimate of future credit losses and an estimated rate of prepayments. Projected monthly cash flows were then discounted to present value using a risk-adjusted market rate for similar loans. To estimate the fair value of the remaining loans, we analyzed the value of the underlying collateral of the loans, assuming the fair values of the loans are derived from the eventual sale of the collateral. The value of the collateral was based on recently completed appraisals adjusted to the valuation date based on recognized industry indicies. We discounted these values using market derived rates of return with consideration given to the period of time and costs associated with the foreclosure and disposition of the collateral. There was no carryover of Pamrapo’s allowance for credit losses associated with the loans we acquired in accordance with applicable accounting guidance. Information about the acquired Pamrapo loan portfolio as of July 6, 2010 is as follows (in thousands):

Contractually required principal and interest at acquisition	$	649,871
Contractual cash flows not expected to be collected (nonaccretabale discount)		(7,924	)
Expected cash flows at acquisition		641,947
Interest component of expected cash flows (accretable discount)		229,805
Fair value of acquired loans	$	412,142

Fair value of acquired loans

The fair value of the office buildings and land is based upon independent third-party appraisals of the properties.

The fair value of other real estate owned is based upon independent third-party appraisals of the properties.

The fair value of savings and transaction deposit accounts acquired from Pamrapo was assumed to approximate the carrying value as these accounts have no stated maturity and are payable on demand. Certificates of deposit accounts were valued by calculating the discounted cash flow. The discounted cash flows, at an individual account level, were then aggregated together by category type to determine the market value of each time deposit category. The market values of all time deposit categories were added together to determine the total market value of the time deposit portfolio. The discount rate utilized for the discounted cash flow of each time deposit category was calculated based upon the median interest rate for market time deposits nearest the weighted average remaining maturity for that time deposit category.

The fair value of borrowings assumed was determined by estimating projected future cash outflows and discounting them at the current market rate of interest for similar type of borrowings.

Direct costs related to the acquisition were expensed as incurred. During the twelve months ended December 31, 2010, we incurred $644,000 in merger related expenses related to the transaction, including $622,000 in professional services and $22,000 in other non-interest expenses.

The following table presents unaudited pro forma information, (in thousands), as if the acquisition of Allegiance had occurred on January 1, 2010. This pro forma information gives effect to certain adjustments, including purchase accounting fair value adjustments, amortization of fair value adjustments and related income tax effects. The pro forma information does not necessarily reflect the results of operations that would have occurred had the Company merged with Allegiance at the beginning of 2011 or 2010. In particular, potential cost savings are not reflected in the unaudited pro forma amounts.

	Pro forma
	Twelve months ended
	December 31, 2011		December 31, 2010
Net interest income	$	41,734	$	28,363
Noninterest income		2,452		15,480
Noninterest expense		30,864		25,203
Net income		6,237		14,475

The amounts of revenue and earnings attributable to Allegiance since the acquisition date included in the consolidated statement of income for the year ended December 31, 2011 are not disclosed due to the fact that the information is impracticable to provide.

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BCB Bancorp, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 20 - Quarterly Financial Data (Unaudited)

	Year Ended December 2012
	First Quarter		Second Quarter			Third Quarter			Fourth Quarter
Interest income	$	13,549	$	13,322		$	13,108		$	13,668
Interest expense		3,252		3,074			2,853			2,768
Net Interest Income		10,297		10,248			10,255			10,900
Provision for loan losses		600		1,200			1,600			1,500
Net Interest Income after Provision for loan losses		9,697		9,048			8,655			9,400
Non-interest income (loss)		1,282		(6,311	)		(2,739	)		543
Non-interest expense		8,382		7,999			9,001			8,507
Income (loss) before Income Taxes		2,597		(5,262	)		(3,085	)		1,436
Income taxes (benefit)		1,009		(1,900	)		(1,740	)		379
Net Income (Loss)	$	1,588	$	(3,362	)	$	(1,345	)	$	1,057
Net income (loss) per common share:
Basic	$	0.17	$	(0.37	)	$	(0.15	)	$	0.12
Diluted	$	0.17	$	(0.37	)	$	(0.15	)	$	0.12
Dividends per common share	$	0.12	$	0.12		$	0.12		$	0.12

	Year Ended December 2011
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter
Interest income	$	13,054	$	13,250	$	12,728	$	13,847
Interest expense		3,382		3,368		3,334		3,213
Net Interest Income		9,672		9,882		9,394		10,634
Provision for loan losses		350		450		800		2,500
Net Interest Income after Provision for loan losses		9,322		9,432		8,594		8,134
Non-interest income		533		509		303		1,103
Non-interest expense		6,709		6,637		6,869		8,291
Income before Income Taxes		3,146		3,304		2,028		946
Income taxes		1,225		1,352		840		(44	)
Net Income (Loss)	$	1,921	$	1,952	$	1,188	$	990
Net income per common share:
Basic	$	0.20	$	0.21	$	0.13	$	0.10
Diluted	$	0.20	$	0.21	$	0.13	$	0.10
Dividends per common share	$	0.12	$	0.12	$	0.12	$	0.12

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