BCB BANCORP INC Income Taxes Disclosure
The components of income tax (benefit) expense are summarized as follows:
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| Years Ended December 31, | |||||||
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| 2025 |
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| 2024 |
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| 2023 |
| (In Thousands) | |||||||
Current income tax (benefit) expense: |
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Federal | $ | (783) |
| $ | 4,529 |
| $ | 8,917 |
State |
| 954 |
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| 2,860 |
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| 5,592 |
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| 171 |
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| 7,389 |
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| 14,509 |
Deferred income tax (benefit) expense: |
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Federal |
| (3,778) |
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| 351 |
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| (1,634) |
State |
| (2,164) |
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| (93) |
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| (903) |
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| (5,942) |
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| 258 |
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| (2,537) |
Total Income Tax (Benefit) Expense | $ | (5,771) |
| $ | 7,647 |
| $ | 11,972 |
Note 16 - 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:
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| December 31, | ||||
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| 2025 |
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| 2024 |
Deferred income tax assets: | (In Thousands) | ||||
OREO write down | $ | 4,310 |
| $ | - |
Allowance for credit losses |
| 9,868 |
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| 10,176 |
Nonaccrual interest |
| 1,868 |
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| 749 |
Net operating loss carry forwards |
| 2,542 |
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| 1,070 |
Lease liability |
| 3,184 |
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| 3,756 |
Unrealized loss on securities |
| 1,330 |
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| 2,149 |
Capital loss carryover (1) |
| 477 |
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| 477 |
Deferred fees and costs |
| 498 |
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| 782 |
Other |
| 1,932 |
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| 2,094 |
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| 26,009 |
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| 21,253 |
Reserve against capital loss carryover |
| (477) |
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| - |
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| 25,532 |
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| 21,253 |
Deferred income tax liabilities: |
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Purchase accounting adjustment on premises and equipment acquired |
| (66) |
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| (69) |
Right-of-use assets |
| (3,047) |
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| (3,626) |
SBA servicing asset |
| (210) |
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| (252) |
Borrowing modification |
| - |
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| (125) |
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| (3,323) |
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| (4,072) |
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Net Deferred Tax Asset | $ | 22,209 |
| $ | 17,181 |
(1) Tax benefit relating to capital loss on securities sold in 2023 which will expire in 2028.
A summary of the change in the net deferred tax asset is as follows:
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| Years Ended December 31, | ||||
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| 2025 |
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| 2024 |
| (In Thousands) | ||||
Balance at beginning of year: | $ | 17,181 |
| $ | 18,213 |
Deferred tax benefit |
| 5,942 |
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| (258) |
Other comprehensive income |
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Available-for-sale securities |
| (892) |
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| (618) |
Benefit plan |
| (22) |
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| (156) |
Balance at end of year | $ | 22,209 |
| $ | 17,181 |
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. The Company has determined that it would not be able to realize a portion of its net deferred tax asset in the future, and a $477,000 adjustment to the net deferred tax asset was charged to earnings. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and capital gains during the periods in which temporary differences are deductible and carry forwards are available. The Company believes it will generate sufficient future taxable income to realize the tax benefits related to the remaining net deferred tax assets in our consolidated statements of financial condition.
In conjunction with the Company’s acquisition of IA Bancorp in 2018, the Company acquired a federal net operating loss carry forward of $8.7 million. This carry forward is available for use through ; however, in accordance with Internal Revenue Code Section 382, usage of the carry forward is limited to $459,000 annually on a cumulative basis (portions of the $459,000 not used in a particular year may be added to subsequent usage). At both December 31, 2025 and 2024, the Company had $5.1 million remaining of this federal net operating loss carry forward available to offset future taxable income for federal tax reporting purposes.
In 2025, the Company has generated a $4.4 million federal net operating loss carryover with no expiration date and $7.1 million state net operating loss carryover that expires in .
Note 16 - Income Taxes (continued)
The following table presents a reconciliation between the reported income tax expense and the income tax expense which would be computed by applying the normal federal income tax rate of 21.0 percent to income before income tax expense.
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| Years Ended December 31, | ||||||||||||||||
| 2025 |
| 2024 |
| 2023 | ||||||||||||
| (In Thousands) |
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| Amount |
| Percent |
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| Amount |
| Percent |
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| Amount |
| Percent |
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Federal income tax (benefit) expense at statutory rate | $ | (3,843) |
| 21.00 | % |
| $ | 5,517 |
| 21.00 | % |
| $ | 8,706 |
| 21.00 | % |
Increases (decreases) in income taxes resulting from: |
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State income tax, net of federal income tax effect (1) |
| (1,175) |
| 6.42 |
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| 2,186 |
| 8.32 |
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| 3,704 |
| 8.94 |
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Tax-exempt income |
| (15) |
| 0.08 |
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| (13) |
| (0.05) |
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| (30) |
| (0.07) |
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Bank-owned life insurance earnings |
| (698) |
| 3.81 |
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| (553) |
| (2.10) |
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| (368) |
| (0.89) |
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Capital loss carryover valuation allowance |
| 477 |
| (2.60) |
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| - |
| - |
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| - |
| - |
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Other items, net |
| (517) |
| 2.83 |
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| 510 |
| 1.94 |
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| (40) |
| (0.10) |
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Effective Income Tax Expense | $ | (5,771) |
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| $ | 7,647 |
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| $ | 11,972 |
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Effective Income Tax Rate |
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| 31.54 | % |
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| 29.11 | % |
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| 28.88 | % |
(1) State benefits in New Jersey make up the majority (greater than 50%) of the tax effect in this category.
The Company adopted ASU 2023-09 on a retrospective basis for the years ended December 31, 2025, 2024 and 2023 and has included the following table as a result of the adoption, which presents income taxes paid net of refunds received (in thousands):
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| Years Ended December 31, | |||||||
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| 2025 |
| 2024 |
| 2023 | |||
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| (In Thousands) | |||||||
U.S. Federal |
| $ | 291 |
| $ | 4,300 |
| $ | 10,600 |
State and Local income tax, net of federal income tax effect: |
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New Jersey |
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| 715 |
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| 1,400 |
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| 5,130 |
New York State |
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| 442 |
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| 597 |
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| 1,258 |
New York City |
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| 253 |
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| 502 |
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| 939 |
Pennsylvania |
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| 100 |
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| 80 |
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| 100 |
Total income taxes paid |
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| 1,801 |
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| 6,879 |
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| 18,027 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 7, 2025 | |
| 2023 | Mar 8, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Mar 9, 2022 | |
| 2020 | Mar 10, 2021 | |
| 2019 | Mar 11, 2020 | |
| 2018 | Mar 18, 2019 | |
| 2017 | Mar 6, 2018 | |
| 2016 | Mar 13, 2017 | |
| 2015 | Mar 14, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.