Bad credentials when using Spring Security BCryptPasswordEncoder for hashing passwords

I am using the new BCryptPasswordEncoder to hash User Passwords to the database (which is a MongoDB in my case). When I just test out my login, I set the password encoder in my security config to be a BCryptPasswordEncoder, but I get Bad Credentials back when I try to login (with correct credentials of course). What am I missing?

Security Config:

    import org.springframework.beans.factory.annotation.Autowired;
    import org.springframework.context.annotation.Bean;
    import org.springframework.context.annotation.Configuration;
    import org.springframework.security.config.annotation.authentication.builders.AuthenticationManagerBuilder;
    import org.springframework.security.config.annotation.web.builders.HttpSecurity;
    import org.springframework.security.config.annotation.web.configuration.WebSecurityConfigurerAdapter;
    import org.springframework.security.config.annotation.web.servlet.configuration.EnableWebMvcSecurity;
    import org.springframework.security.crypto.bcrypt.BCryptPasswordEncoder;
    import org.springframework.security.crypto.password.PasswordEncoder;

    @Configuration
    @EnableWebMvcSecurity
    public class VZWebSecurityConfig extends WebSecurityConfigurerAdapter{

    @Autowired
    VZUserDetailsService userDetailsService;

    @Autowired
    public void configureGlobal(AuthenticationManagerBuilder auth) throws Exception{
        auth.userDetailsService(userDetailsService).passwordEncoder(encoder());
    }

    @Override
    protected void configure(HttpSecurity http) throws Exception{
            http
            .authorizeRequests()
                .antMatchers("/", "/home").permitAll()
                .anyRequest().authenticated()
                .and()
            .formLogin()
                .permitAll()
                .and()
            .logout()
                .permitAll();
    }

    @Bean
    public PasswordEncoder encoder(){
        return new BCryptPasswordEncoder();
    }

    }

To start out with some valid users, I initialize the DB with some users:

import java.util.ArrayList;
import java.util.List;

import org.springframework.beans.factory.annotation.Autowired;
import org.springframework.boot.CommandLineRunner;
import org.springframework.boot.SpringApplication;
import org.springframework.boot.autoconfigure.EnableAutoConfiguration;
import org.springframework.context.annotation.ComponentScan;
import org.springframework.context.annotation.Configuration;
import org.springframework.security.crypto.bcrypt.BCryptPasswordEncoder;
import org.springframework.security.crypto.password.PasswordEncoder;

import vertyze.platform.data.constants.VZUserRoles;


@Configuration
@ComponentScan("it.vertyze.platform")
@EnableAutoConfiguration
public class Application implements CommandLineRunner {

    @Autowired
    VZUserRepository userRepository;

    public static void main(String[] args) {
        SpringApplication.run(Application.class, args);
    }


    @Override
    public void run(String... args) throws Exception {
        userRepository.deleteAll();
        PasswordEncoder encoder = new BCryptPasswordEncoder();

        List<VZUserRoles> siteAdmin = new ArrayList<VZUserRoles>();
        siteAdmin.add(VZUserRoles.SITE_ADMIN);

        List<VZUserRoles> siteUser = new ArrayList<VZUserRoles>();
        siteUser.add(VZUserRoles.SITE_VIEWER);

        VZUser user1 = new VZUser();
        VZUser user2 = new VZUser();

        user1.setUsername("user1");
        user1.setPassword(encoder.encode("password1"));
        user1.setRoles(siteAdmin);

        user2.setUsername("user2");
        user2.setPassword(encoder.encode("password2"));
        user2.setRoles(siteUser);

        userRepository.save(user1);
        userRepository.save(user2);

    }

}

Can anyone help me out here? Thanks!