BDGE - Bridge Bancorp Inc. Reports Third Quarter 2019 Results With Earnings Per Share of $0.70 and Record Net Income of $13.9 Million

BRIDGEHAMPTON, N.Y., Oct. 24, 2019 (GLOBE NEWSWIRE) -- Bridge Bancorp, Inc. (NASDAQ: BDGE) (the “Company”), the parent company of BNB Bank (“BNB”), today announced third quarter results for 2019.

The Company's third quarter 2019 financial results included:

• Net income for the 2019 third quarter of $13.9 million, or $0.70 per diluted share, compared to $6.5 million, or $0.33 per diluted share for the 2018 third quarter, inclusive of pre-tax charge of $9.5 million, or $0.37 per diluted share after tax, related to the fraudulent conduct of a business customer through its deposit accounts at BNB in the 2018 period.
• Net interest income for the 2019 third quarter increased $1.2 million over the 2019 second quarter to $36.7 million.
• Tax-equivalent net interest margin for the 2019 third quarter increased 10 basis points over the 2019 second quarter to 3.40%.
• Total assets of $4.7 billion at September 30, 2019, 6% higher than September 30, 2018.
• Loan growth of $311 million, or 10%, compared to September 30, 2018, and $233 million, or 9% annualized, from December 31, 2018.
• Non-public, non-brokered deposit growth of $306 million, or 11%, compared to September 30, 2018, and $195 million, or 9% annualized, from December 31, 2018.
• Non-performing assets of $4.2 million at September 30, 2019, $2.1 million higher than September 30, 2018 and $1.2 million higher than December 31, 2018. Loan loss reserve coverage to total loans of 0.92% at September 30, 2019.
• All capital ratios remain strong. Declared a dividend of $0.23 during the quarter.

Commenting on the third quarter results, Kevin O’Connor, President and CEO said, “This quarter’s results illustrate that our core community banking model delivers returns despite a challenging rate environment- producing record net income, an expanded margin, and strong non-interest income. Our model focuses on relationship banking and delivering customized products to our customers and returns to our shareholders.”

Net Earnings and Returns
Net income in the 2019 third quarter was $13.9 million, or $0.70 per diluted share, an increase of $7.4 million compared to the 2018 third quarter, driven primarily by lower non-interest expense and a rise in net interest income and non-interest income, partially offset by higher provision for loan losses. Excluding the impact of the fraud loss, net income in the 2018 third quarter was $14.0 million, or $0.70 per diluted share. Net income for the nine months ended September 30, 2019 was $37.5 million, or $1.88 per diluted share, compared to $25.4 million, or $1.28 per diluted share, in 2018.

Returns on average assets and equity in the 2019 third quarter were 1.17% and 11.44%, respectively.  Return on average tangible common equity was 14.81% for the 2019 third quarter. Adjusted return on average tangible common equity, excluding the impact of amortization of other intangible assets, was 14.97% for the 2019 third quarter.

“We reported record net interest income as well as record non-interest income this quarter. Highlights included our title and our loan swap program. This loan swap program allows us to deliver fixed rate exposure to our customers while we retain a floating rate asset and generate income. This activity continues to grow so it is now separately reported on our income statement,” noted Mr. O’Connor.

Net Interest Income
Interest income was $46.4 million in the 2019 third quarter, flat compared to the 2019 second quarter, driven primarily by loan portfolio growth offset by lower yields in the loan and securities portfolios, and a decrease in average securities. Interest expense was $9.6 million in the 2019 third quarter, a decrease of $1.2 million compared to the 2019 second quarter, primarily due to a decrease in average cost of interest-bearing liabilities coupled with a decrease in average public and brokered deposits.

The tax-equivalent net interest margin for the 2019 third quarter showed a year-over-year increase of 8 basis points to 3.40% in 2019 from 3.32% in 2018.

“Although the third quarter saw one of the most challenging interest rate environments in years, we were able to expand our net interest margin by 10 basis points compared to the second quarter.  This is a result of our DDA concentration and controlling interest-bearing deposit costs.  Our asset yields only dropped 1 basis point. We also decreased our reliance on high-cost brokered deposits by 44% compared to the second quarter,” stated Mr. O’Connor.

Provision for Loan Losses
The provision for loan losses was $1.0 million for the 2019 third quarter, $0.8 million higher than the 2018 third quarter.  The Company recognized net recoveries of $2 thousand in the 2019 third quarter, compared to net recoveries of $17 thousand in the 2018 third quarter.

Non-Interest Income
Non-interest income was $6.2 million for the 2019 third quarter, $1.3 million higher than the 2018 third quarter, primarily attributable to higher loan swap fees in the 2019 third quarter.  

Non-Interest Expense
Non-interest expense for the 2019 third quarter of $24.2 million was $6.8 million lower than the 2018 third quarter. The decrease in 2019 was primarily due to the impact of the fraud loss in the 2018 third quarter, partially offset by higher salaries and benefits expense, occupancy and equipment costs and other operating expenses in the 2019 period. Excluding the fraud loss in 2018, non-interest expenses were up $2.7 million, or 13%, in the third quarter of 2019.

Income Tax Expense
Income tax expense was $3.9 million in the 2019 third quarter, an increase of $2.5 million compared to the 2018 third 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 September 30, 2019, $35.3 million higher than December 31, 2018, and $287.3 million higher than September 30, 2018. Total loans held for investment at September 30, 2019 of $3.5 billion reflects growth of $310.9 million, or 10%, over September 30, 2018. Deposits totaled $3.7 billion at September 30, 2019, an increase of $124.1 million, or 3%, over September 30, 2018. Demand deposits increased $92.0 million year-over-year to $1.4 billion at September 30, 2019, representing 38% of total deposits.

The allowance for loan losses was $32.2 million at September 30, 2019, $0.3 million higher than September 30, 2018. The allowance as a percentage of loans was 0.92% at September 30, 2019, compared to 1.00% at September 30, 2018.

Stockholders’ equity was $486.4 million at September 30, 2019, $46.4 million higher than September 30, 2018. The growth reflects earnings, partially offset by shareholders’ dividends. Book value per share was $24.53 at September 30, 2019, $2.30 higher than September 30, 2018. Tangible book value per share was $18.99 at September 30, 2019, $2.35 higher than September 30, 2018.

Loan and Line of Credit Origination Information (unaudited)

“Robust loan originations during the quarter and year-to-date were partially offset by several large loan paydowns. We continue to maintain pricing discipline on all loan products.  IPC deposit growth kept pace with our loan-to-deposit ratio ending the quarter at 94%.  Our IPC deposits are comprised of 44% non-interest bearing DDA, which helps bolster our margin,” Mr. O’Connor said.

Asset Quality
Asset quality measures remained solid, as non-performing assets were $4.2 million, or 0.09% of total assets, at September 30, 2019, compared to $2.1 million, or 0.05% of total assets, at September 30, 2018. Non-performing assets at September 30, 2018 included $175 thousand of other real estate owned. Non-performing loans were $4.2 million, or 0.12% of total loans at September 30, 2019, compared to $1.9 million, or 0.06% of total loans at September 30, 2018.  Loans 30 to 89 days past due increased $0.2 million to $6.0 million at September 30, 2019, compared to $5.8 million at September 30, 2018. Loans past due 90 days and accruing at September 30, 2019 and 2018 were comprised of $0.3 million of acquired loans.

Conference Call
The Company will host a conference call on Friday, October 25, 2019 at 10:00 AM (ET) to discuss the 2019 third quarter results. Investors who would like to join the conference call are encouraged to pre-register using the following link: http://dpregister.com/10134567. 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 beginning approximately one hour after the conclusion of the call through Friday, November 8, 2019.

Call and replay information are as follows:

Call Date: Friday, October 25, 2019
Call Time: 10:00 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: 10134567

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 40 branch locations serving Long Island and the greater New York metropolitan area. 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, tax rates, 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; 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)

______________________________
(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)

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

_________________________
(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.

____________________________
(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 purchased credit impaired loans.

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