Pamrapo Bancorp (PBCI)

Provision For Loan Losses

During the years ended December 31, 2005 and 2004, the Bank provided $110,000 and $82,000, respectively, for loan losses. At December 31, 2005 and 2004, the Bank’s loan portfolio included loans totaling $2.0 million and $2.6 million, respectively which were delinquent ninety days or more. The Bank maintains an allowance for loan losses based on management’s evaluation of the risk inherent in its loan portfolio, which gives due consideration to changes in general market conditions and in the nature and volume of the Bank’s loan activity. The allowance for loan losses amounted to $2.76 million at December 31, 2005, representing .62% of total loans and 139.93% of loans delinquent ninety days or more compared to an allowance of $2.50 million at December 31, 2004, representing .62% of total loans and 96.44% of loans delinquent ninety days or more. During the years ended December 31, 2005 and 2004, the Bank charged off loans aggregating $21,000 and $107,000, respectively. Recoveries totaled $171,000 and $5,000, respectively.

PROVISION FOR LOAN LOSSES

During the years ended December 31, 2004 and 2003, the Bank provided $82,000 and $84,000, respectively, for loan losses. At December 31, 2004 and 2003, the Bank’s loan portfolio included loans totaling $2.6 million and $1.6 million, respectively, which were delinquent ninety days or more. The Bank maintains an allowance for loan losses based on management’s evaluation of the risk inherent in its loan portfolio which gives due consideration to changes in general market conditions and in the nature and volume of the Bank’s loan activity. The allowance for loan losses amounted to $2.50 million at December 31, 2004, representing .62% of total loans and 96.15% of loans delinquent ninety days or more compared to an allowance of $2.52 million at December 31, 2003, representing .65% of total loans and 161.53% of loans delinquent ninety days or more. During the years ended December 31, 2004 and 2003, the Bank charged off loans aggregating $107,000 and $126,000, respectively. The Bank monitors its loan portfolio and intends to continue to provide for loan losses based on its ongoing periodic review of the loan portfolio and general market conditions.