Bridge Bancorp, Inc. Reports Second Quarter 2019 Results

BRIDGEHAMPTON, N.Y., July 23, 2019 (GLOBE NEWSWIRE) -- Bridge Bancorp, Inc. BDGE (the "Company"), the parent company of BNB Bank ("BNB"), today announced second quarter results for 2019.

The Company's second quarter 2019 financial results included:

• Net income for the 2019 second quarter of $10.7 million, or $0.53 per diluted share, compared to $6.7 million, or $0.34 per diluted share for the 2018 second quarter, inclusive of pre-tax net securities losses of $7.9 million, or $0.31 per diluted share after tax, related to the Company's balance sheet restructure in the 2018 period.
• Net interest income for the 2019 second quarter increased $1.2 million over the 2019 first quarter to $35.5 million, with a tax-equivalent net interest margin of 3.30%.
• Total assets of $4.7 billion at June 30, 2019, 7% higher than June 30, 2018.
• Loan growth of $249 million, or 8%, compared to June 30, 2018, and $154 million, or 9% annualized, from December 31, 2018.
• Non-public, non-brokered deposit growth of $431 million, or 16%, compared to June 30, 2018, and $190 million, or 13% annualized, from December 31, 2018.
• Non-performing assets of $5.5 million at June 30, 2019, $3.7 million higher than June 30, 2018 and $2.5 million higher than December 31, 2018. Loan loss reserve coverage to total loans of 0.91% at June 30, 2019.
• All capital ratios remain strong. Declared a dividend of $0.23 during the quarter.

Commenting on the second quarter results, Kevin O'Connor, President and CEO said, "Our continued growth as measured by an expanded customer base, and higher loan and deposit balance reflects the strength in our markets and our ability to attract clients to BNB Bank. The quarterly results show record revenue, a stabilizing margin, and continued prudent liquidity management, notwithstanding an increased loan loss provision related to one specific credit. Our SBA business bolstered our non-interest income.  Expenses grew as we capitalized on branch closures by our competitors with targeted advertising campaigns and hired more bankers.  BNB Bank remains a strong, core funded community bank making loans funded by deposits supporting our customers and our marketplace."

Net Earnings and Returns
Net income in the 2019 second quarter was $10.7 million, or $0.53 per diluted share, an increase of $3.9 million compared to the 2018 second quarter, driven primarily by a rise in non-interest income and net interest income, partially offset by higher provision for loan losses and non-interest expense. Excluding the impact of the balance sheet restructure, net income in the 2018 second quarter was $12.9 million, or $0.65 per diluted share. Net income for the six months ended June 30, 2019 was $23.6 million, or $1.18 per diluted share, compared to $18.8 million, or $0.95 per diluted share, in 2018.

Returns on average assets and equity in the 2019 second quarter were 0.90% and 9.06%, respectively.  Return on average tangible common equity was 11.82% for the 2019 second quarter.  

"Our reported net income of $0.53 per diluted share was impacted by a higher provision for loan losses related to one credit, which reduced earnings per share by approximately $0.12, and reduced returns on average assets, equity and tangible common equity by approximately 19 basis points, 188 basis points and 245 basis points, respectively," noted Mr. O'Connor.

Net Interest Income
Interest income was $46.4 million in the 2019 second quarter, an increase of $1.8 million compared to the 2019 first quarter, driven primarily by loan portfolio growth and higher loan portfolio yields. Interest expense was $10.8 million in the 2019 second quarter, an increase of $0.6 million compared to the 2019 first quarter, primarily due to deposit growth and an increase in average cost of interest-bearing liabilities.

The tax-equivalent net interest margin for the 2019 second quarter showed a year-over-year decline of 1 basis point to 3.30% in 2019 from 3.31% in 2018. The adjusted net interest margin, excluding purchase accounting, is down 1 basis point to 3.23% from 3.24% in 2018.  Reported 2019 second quarter loan yields showed a year-over-year increase of 24 basis points from 4.52% in 2018 to 4.76% in 2019, while yields excluding purchase accounting increased 23 basis points to 4.66% in 2019 from 4.43% in 2018.

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(1) Net interest margin represents net interest income divided by average interest-earning assets.
(2) Net interest margin, tax-equivalent basis represents net interest income on a tax-equivalent basis divided by average interest-earning assets.
(3) Adjusted net interest margin represents adjusted net interest income on a tax-equivalent basis divided by adjusted average interest-earning assets.

"Despite a flattening yield curve, we maintained our margin by focusing on our core relationship businesses.  We also sold lower yielding bonds and reduced our brokered deposits, while keeping our loan-to-deposit ratio below 90%.   Our proven strategy is to actively manage the balance sheet based on the changing environment," stated Mr. O'Connor.

Provision for Loan Losses
The provision for loan losses was $3.5 million for the 2019 second quarter, $3.1 million higher than the 2018 second quarter.  Contributing to the higher provision was a $3.7 million charge-off for one loan in the 2019 second quarter. The Company recognized net charge-offs of $4.1 million in the 2019 second quarter, compared to net charge-offs of $1.6 million in the 2018 second quarter.

Non-Interest Income
Non-interest income was $5.5 million for the 2019 second quarter, $8.1 million higher than the 2018 second quarter, primarily attributable to the impact of the balance sheet restructure in the 2018 second quarter, and higher gain on sale of Small Business Administration ("SBA") loans in the 2019 second quarter.  

Non-Interest Expense
Non-interest expense for the 2019 second quarter of $24.0 million was $1.5 million higher than the 2018 second quarter. The increase in 2019 was due to higher salaries and benefits expense, occupancy and equipment costs and other operating expenses.

Income Tax Expense
Income tax expense was $2.9 million in the 2019 second quarter, an increase of $1.2 million compared to the 2018 second quarter. The Company estimates it will record income tax at an effective tax rate of approximately 22% for the remainder of 2019. 

Balance Sheet
Total assets were $4.7 billion at June 30, 2019, $13.8 million higher than December 31, 2018, and $299.8 million higher than June 30, 2018. Total loans held for investment at June 30, 2019 of $3.4 billion reflects growth of $249.3 million, or 8%, over June 30, 2018. Deposits totaled $3.8 billion at June 30, 2019, an increase of $283.4 million, or 8%, over June 30, 2018. Demand deposits increased $78.4 million year-over-year to $1.4 billion at June 30, 2019, representing 36% of total deposits.

The allowance for loan losses was $31.2 million at June 30, 2019, $0.5 million lower than June 30, 2018. The allowance as a percentage of loans was 0.91% at June 30, 2019, compared to 1.00% at June 30, 2018.

Stockholders' equity was $475.2 million at June 30, 2019, $35.5 million higher than June 30, 2018. The growth reflects earnings, partially offset by shareholders' dividends. Book value per share was $23.96 at June 30, 2019, $1.73 higher than June 30, 2018. Tangible book value per share was $18.41 at June 30, 2019, $1.79 higher than June 30, 2018.

"The first half of 2019 shows our continued ability to generate new business in our marketplace.  We grew loans at 9%. Year to date we closed nearly $500 million in new credits. IPC deposit growth was 13% for the same period.  Equally important, our western markets- where we have lower market share and thus more opportunity- are showing accelerated growth. We are committed to providing capital as well as a comprehensive product suite to the businesses in our footprint," Mr. O'Connor said.

Asset Quality
Asset quality measures remained solid, as non-performing assets were $5.5 million, or 0.12% of total assets, at June 30, 2019, compared to $1.8 million, or 0.04% of total assets, at June 30, 2018. Non-performing assets at June 30, 2018 included $175 thousand of other real estate owned. Non-performing loans were $5.5 million, or 0.16% of total loans at June 30, 2019, compared to $1.6 million, or 0.05% of total loans at June 30, 2018.  Loans 30 to 89 days past due decreased $1.0 million to $3.4 million at June 30, 2019, compared to $4.4 million at June 30, 2018. Loans past due 90 days and accruing at June 30, 2019 and 2018 were comprised of acquired loans of $0.3 million and $0.9 million, respectively.

Conference Call
The Company will host a conference call on Wednesday, July 24, 2019 at 9:00 AM (ET) to discuss the 2019 second quarter results. Investors who would like to join the conference call are encouraged to pre-register using the following link: http://dpregister.com/10132796. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. Telephonic replay will be available through the Company's website approximately one hour after the conclusion of the call through Wednesday, August 7, 2019.

Call and replay information are as follows:

Call Date: Wednesday, July 24, 2019
Call Time: 9:00 AM (ET)
Domestic Call Dial In:  1-844-746-0738
International Call Dial In:  1-412-317-6016

Replay Domestic Dial In:  1-877-344-7529
Replay International Dial In:  1-412-317-0088
Access Code: 10132796

About Bridge Bancorp, Inc.
Bridge Bancorp, Inc. is a bank holding company engaged in commercial banking and financial services through its wholly-owned subsidiary, BNB Bank. Established in 1910, BNB, with assets of approximately $4.7 billion, operates 39 branch locations serving Long Island and the greater New York metropolitan area. In addition, BNB operates one loan production office in Manhattan. Through its branch network and its electronic delivery channels, BNB provides deposit and loan products and financial services to local businesses, consumers and municipalities. Title insurance services are offered through BNB's wholly-owned subsidiary, Bridge Abstract. Bridge Financial Services, Inc., a wholly-owned subsidiary of BNB, offers financial planning and investment consultation.  For more information visit www.bnbbank.com. 

BNB also has a rich tradition of involvement in the community, supporting programs and initiatives that promote local business, the environment, education, healthcare, social services and the arts.

Please see the attached tables for selected financial information.

This release may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 (the "PSLRA").  Such forward-looking statements, in addition to historical information, involve risk and uncertainties, and are based on the beliefs, assumptions and expectations of management of the Company.  Words such as "expects," "believes," "should," "plans," "anticipates," "will," "potential," "could," "intends," "may," "outlook," "predicts," "projects," "would," "estimates," "assumes," "likely," and variation of such similar expressions are intended to identify such forward-looking statements.  Examples of forward-looking statements include, but are not limited to, possible or assumed estimates with respect to the financial condition, expected or anticipated revenue, and results of operations and business of the Company, including earnings growth; revenue growth in retail banking lending and other areas; origination volume in the  consumer, commercial and other lending businesses; current and future capital management programs; non-interest income levels, including fees from the title abstract subsidiary and banking services as well as product sales; tangible capital generation; market share; expense levels; and other business operations and strategies.  The Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.

Factors that could cause future results to vary from current management expectations include, but are not limited to, changing economic  conditions; legislative and regulatory changes, including increases in FDIC insurance rates; monetary and fiscal policies of the federal government; changes in tax policies; rates and regulations of federal, state and local tax authorities; changes in interest rates; deposit flows; the cost of funds; demands for loan products; demand for financial services; competition; changes in the quality and composition of BNB's loan and investment portfolios; changes in management's business strategies; changes in accounting principles, policies or guidelines; changes in real estate values; an unexpected increase in operating costs; expanded regulatory requirements as a result of the Dodd-Frank Act; and other risk factors discussed elsewhere, and in our reports filed with the Securities and Exchange Commission.   The forward-looking statements are made as of the date of this report, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

BRIDGE BANCORP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Condition (unaudited)
(In thousands)

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(1) The Company adopted ASU 2016-02, Leases (Topic 842) using the transition approach at the beginning of the period of adoption on January 1, 2019 and did not restate comparative prior periods.

BRIDGE BANCORP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (unaudited)
(In thousands, except per share amounts)

BRIDGE BANCORP, INC. AND SUBSIDIARIES
Consolidated Financial Highlights (unaudited)
(In thousands, except per share amounts and financial ratios)

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(1) See reconciliation of this non-GAAP financial measure provided elsewhere herein.
(2) Average tangible common equity represents a non-GAAP financial measure calculated as average total stockholders' equity less average goodwill and intangible assets.

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(1) Tangible common equity represents a non-GAAP financial measure calculated as total stockholders' equity less goodwill and intangible assets.
(2) Tangible assets represent a non-GAAP financial measure calculated as total assets less goodwill and intangible assets.
(3) Represents loans acquired in connection with the Community National Bank and FNBNY Bancorp, Inc. acquisitions.

BRIDGE BANCORP, INC. AND SUBSIDIARIES
Supplemental Financial Information
Condensed Consolidated Average Balance Sheets and Average Rate Data (unaudited)
(Dollars in thousands)

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(1) Presented on a tax-equivalent basis.

BRIDGE BANCORP, INC. AND SUBSIDIARIES
Supplemental Financial Information
Condensed Consolidated Average Balance Sheets and Average Rate Data (unaudited)
(Dollars in thousands)

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(1) Presented on a tax-equivalent basis.

BRIDGE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures (unaudited)
Reconciliation of as reported (GAAP) and non-GAAP financial measures

The following tables below provide a reconciliation of certain financial measures calculated under generally accepted accounting principles ("GAAP") (as reported) and non-GAAP. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company's management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company's operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company's performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.

The following non-GAAP financial measures exclude certain net securities losses associated with the Company's strategic plan to restructure its balance sheet during the second quarter of 2018.