BDGE - Bridge Bancorp Inc. Reports First Quarter 2019 Results

BRIDGEHAMPTON, N.Y., April 23, 2019 (GLOBE NEWSWIRE) -- Bridge Bancorp, Inc. (NASDAQ: BDGE), (the “Company”), the parent company of BNB Bank (“BNB”), today announced first quarter results for 2019.

The Company's first quarter 2019 financial results included:

• Net income for the 2019 first quarter of $12.9 million, or $0.65 per diluted share, compared to $12.1 million, or $0.61 per diluted share for the 2018 first quarter.
• Net interest income for the 2019 first quarter increased $0.2 million over the 2018 fourth quarter to $34.3 million, with a tax-equivalent net interest margin of 3.29%.
• Adjusted net interest margin (excluding purchase accounting) increased from 3.21% in the 2018 fourth quarter to 3.24% in the 2019 first quarter.
• Total assets of $4.7 billion at March 31, 2019, 4% higher than March 31, 2018.
• Loan growth of $189 million, or 6%, compared to March 31, 2018, and $115 million, or 14% annualized, from December 31, 2018.
• Non-public, non-brokered deposit growth of $404 million, or 16%, compared to March 31, 2018.
• Non-performing assets of $3.2 million at March 31, 2019, $3.0 million lower than March 31, 2018 and $0.3 million higher than December 31, 2018. Loan loss reserve coverage to total loans of 0.94% at March 31, 2019.
• All capital ratios remain strong. Declared a dividend of $0.23 during the quarter.

Commenting on the first quarter results, Kevin O’Connor, President and CEO said, “We opened the year with another successful quarter: record revenue, strong loan growth, and an expanding margin.  Our community banking model, built on relationships and our core businesses, continues to deliver consistent results- even in this challenging interest rate environment.”

Net Earnings and Returns
Net income in the 2019 first quarter was $12.9 million, or $0.65 per diluted share, an increase of $0.8 million compared to the 2018 first quarter, driven primarily by a rise in non-interest income and lower provision for loan losses, partially offset by a decline in net interest income.

Returns on average assets and equity in the 2019 first quarter were 1.13% and 11.41%, respectively.  Return on average tangible common equity was 15.01% for the 2019 first quarter.

Net Interest Income
Interest income was $44.5 million in the 2019 first quarter, an increase of $1.0 million compared to the 2018 fourth quarter, driven primarily by loan portfolio growth and higher loan and investment portfolio yields. Interest expense was $10.2 million in the 2019 first quarter, an increase of $0.8 million compared to the 2018 fourth quarter, primarily due to deposit growth and an increase in average cost of interest-bearing liabilities.

The impact of purchase accounting on the net interest margin continues to decrease.  The tax-equivalent net interest margin for the 2019 first quarter showed a year-over-year decline of 13 basis points to 3.29% in 2019 from 3.42% in 2018. However, the adjusted net interest margin, excluding purchase accounting, is up 2 basis points to 3.24% from 3.22% in 2018.  The decreased impact of purchase accounting can also be observed regarding loan yields.  Reported 2019 first quarter loan yields showed a year-over-year increase of 4 basis points from 4.62% in 2018 to 4.66% in 2019, while yields excluding purchase accounting increased 25 basis points to 4.61% in 2019 from 4.36% 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.

“BNB’s focus on providing banking services to businesses in our footprint results in significant levels of floating rate loans and non-interest-bearing demand deposit balances. Both factors sustain and grow our net interest margin,” stated Mr. O’Connor.

Provision for Loan Losses
The provision for loan losses was $0.6 million for the 2019 first quarter, $0.2 million lower than the 2018 first quarter.  Contributing to the lower provision was continued improved overall credit metrics throughout 2018, partially offset by an increase in net charge-offs in the 2019 first quarter compared to the same period in 2018. The Company recognized net charge-offs of $0.2 million in the 2019 first quarter, compared to recoveries of $0.3 million in the 2018 first quarter.

Non-Interest Income
Non-interest income was $5.2 million for the 2019 first quarter, $1.1 million higher than the 2018 first quarter, primarily attributable to higher loan swap fee income reported in other operating income and higher service charges and other fees, partially offset by lower title fee income and gain on sale of Small Business Administration (“SBA”) loans.  

Non-Interest Expense
Non-interest expense for the 2019 first quarter of $22.6 million was flat compared to the 2018 first quarter. Growth in salaries and benefits expense, and occupancy and equipment costs were offset by lower professional services and other operating expenses. 

Income Tax Expense
Income tax expense was $3.4 million in the 2019 first quarter, an increase of $0.2 million compared to the 2018 first 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 March 31, 2019, $25.5 million lower than December 31, 2018, and $174.6 million higher than March 31, 2018. Total loans at March 31, 2019 of $3.4 billion reflect growth of $189.2 million, or 6%, over March 31, 2018. Deposits totaled $3.7 billion at March 31, 2019, an increase of $294.2 million, or 9%, over March 31, 2018. Demand deposits increased $89.9 million year-over-year to $1.3 billion at March 31, 2019, representing 35% of total deposits.

The allowance for loan losses was $31.8 million at March 31, 2019, $1.0 million lower than March 31, 2018. The allowance as a percentage of loans was 0.94% at March 31, 2019, compared to 1.02% at March 31, 2018. The March 31, 2018 allowance for loan losses included a $1.7 million specific reserve for a fully reserved impaired loan which was charged-off in the 2018 second quarter.

Stockholders’ equity was $465.0 million at March 31, 2019, $31.7 million higher than March 31, 2018. The growth reflects earnings, partially offset by shareholders’ dividends. Book value per share was $23.43 at March 31, 2019, $1.52 higher than March 31, 2018. Tangible book value per share was $17.88 at March 31, 2019, $1.58 higher than March 31, 2018.

“Our balance sheet management strategies over the past year and quarter exemplify our commitment to our Community Banking franchise.  We have channeled our efforts in supporting local businesses by providing capital through C&I loans and financing their facilities through owner-occupied CRE loans, growing this business at an annual rate of 26% this quarter.  The expansion of these loan types has outpaced investor CRE loans.  Additionally, we have decreased our reliance on wholesale brokered deposits, using the strong deposit growth in the fourth quarter 2018 to fund growth in this quarter,” Mr. O’Connor said.

Asset Quality
Asset quality measures improved, as non-performing assets were $3.2 million, or 0.07% of total assets, at March 31, 2019, compared to $6.3 million, or 0.14% of total assets, at March 31, 2018. Non-performing assets at March 31, 2019 and 2018 included $175 thousand of other real estate owned. Non-performing loans were $3.1 million, or 0.09% of total loans at March 31, 2019, compared to $6.1 million, or 0.19% of total loans at March 31, 2018.  Loans 30 to 89 days past due increased $13.4 million to $17.9 million at March 31, 2019, compared to $4.5 million at March 31, 2018. The increase in these past due loans is primarily due to one CRE relationship which has more than sufficient collateral protection. Loans past due 90 days and accruing at March 31, 2019 and 2018 were comprised of acquired loans of $0.3 million and $2.7 million, respectively.

Conference Call
The Company will host a conference call on Wednesday, April 24, 2019 at 10:00 AM (ET). Investors who would like to join the conference call are encouraged to pre-register using the following link: http://dpregister.com/10130336. 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, May 8, 2019.

Call and replay information are as follows:

Call Date: Wednesday, April 24, 2019
Call Time: 10:00 AM (ET)
Domestic Call Dial In:  1-888-317-6016
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: 10130336

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, formerly known as The Bridgehampton National 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,” “intend,” “may,” “outlook,” “predict,” “project,” “would,” “estimated,” “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)