Piper Sandler has increased its 12-month price target for BCB Bancorp to $9.00 from $8.50 while retaining a Neutral recommendation on the shares. At the time of the note, the stock was trading at $8.35 and carries a price-to-book ratio of 0.52, placing it just under InvestingPro's Fair Value assessment.
The move followed BCB's publication of a $12.5 million net loss for the quarter, which contributed to a total loss of $14.5 million for fiscal 2025. The firm attributed much of the year's shortfall to a sizeable other real estate owned (OREO) writedown that had been disclosed before the earnings release.
Despite the headline losses, several asset-quality measures showed signs of stabilization. Net charge-offs remained elevated at roughly 2.3%, but nonaccrual loans and classified loans both declined on a quarter-over-quarter basis, suggesting progress in the bank's efforts to address problem credits. Piper Sandler described BCB as likely being in the "later innings" of its credit cleanup, while cautioning that normalization of classified and nonaccrual loan balances has not yet been achieved.
The broker's higher target reflects adjustments to its earnings outlook and an improved projected path for tangible book value per share in its model. Piper Sandler's assumptions imply that the stock will continue to trade around its current valuation. Separately, InvestingPro's aggregated analyst expectations indicate a return to profitability for BCB in fiscal 2026, with projected earnings per share of $1.04, even as the company's current financial health metrics are characterized as weak.
BCB has continued its dividend program, paying a dividend for 21 consecutive years and offering a yield of 3.83% at recent prices. Management also disclosed a pre-tax writedown of $15.1 million tied to a cannabis-related real estate asset; this charge is expected to be reflected in fourth-quarter 2025 financials. The company had recorded a specific reserve for the property in the first quarter of 2025, and the loan was reclassified to real estate owned in the third quarter, producing a $12.7 million charge-off.
In separate but related regional banking activity, Central Bancompany reported that the underwriters for its initial public offering exercised their option to purchase an additional 2,666,700 shares of Class A common stock. Those shares were sold at the IPO price of $21.00 apiece, before underwriting discounts and commissions, generating approximately $53.2 million in additional net proceeds. After accounting for underwriting discounts, commissions and estimated offering expenses, Central Bancompany's total net proceeds from the IPO reached about $403.7 million.
Investors and analysts tracking regional banking and related real estate exposures will likely watch subsequent quarterly filings for further signs of credit stabilization or additional asset writedowns. For BCB, the path back to normalized classified and nonaccrual loan levels, and the impact of the disclosed property-related charges on tangible book value, will be key metrics to monitor in the months ahead.
Contextual notes:
- Price target change: $9.00 from $8.50; rating maintained at Neutral.
- Recent trading level cited: $8.35; price-to-book ratio: 0.52.
- Quarterly net loss: $12.5 million; full-year 2025 loss: $14.5 million, primarily due to OREO writedown.
- Net charge-offs: approximately 2.3%; nonaccruals and classified loans declined quarter-over-quarter.
- Cannabis-related property pre-tax write-down: $15.1 million to be recorded in Q4 2025; prior specific reserve in Q1 2025 and $12.7 million charge-off when loan moved to REO in Q3.
- Central Bancompany IPO exercise: 2,666,700 shares at $21.00 each; ~ $53.2 million additional net proceeds; total net IPO proceeds ~ $403.7 million.