BDGE - Bridge Bancorp Inc. Reports Third Quarter 2020 Results With Diluted Earnings Per Common Share of $0.66 (as Reported) and $0.77 (as Adjusted)

BRIDGEHAMPTON, N.Y., Oct. 27, 2020 (GLOBE NEWSWIRE) -- Bridge Bancorp, Inc. (NASDAQ: BDGE) (the “Company”), the parent company of BNB Bank (“BNB”), today announced third quarter results for 2020.

The Company's third quarter 2020 financial results included:

• Net income for the 2020 third quarter of $13.1 million, or $0.66 per diluted share, inclusive of pre-tax merger expenses of $2.4 million, or $0.11 per diluted share after tax, related to the Company’s merger with Dime Community Bancshares, Inc. (“Dime”).
• Excluding merger expenses, adjusted net income was $15.4 million, or $0.77 per diluted share.
• Adjusted pre-tax pre-provision net revenue was $20.9 million for the 2020 third quarter, flat compared to the linked quarter, and a $2.2 million, or 12%, increase year-over-year.
• Net interest income grew $0.3 million compared to the linked quarter, to $40.7 million, with a tax-equivalent net interest margin of 2.83%, or 3.22% on an adjusted basis.
• Total assets increased to $6.3 billion at September 30, 2020, 3% higher than June 30, 2020.
• Total deposits increased $288.7 million, and the cost of total deposits decreased 10 basis points, compared to the linked quarter.
• Non-public, non-brokered deposit growth of $322.0 million, or 8%, compared to June 30, 2020, and $1.3 billion, or 56% annualized, from December 31, 2019.
• Non-performing assets of $7.1 million at September 30, 2020, $0.7 million lower than June 30, 2020 and $2.7 million higher than December 31, 2019. Allowance for credit losses coverage to total loans of 0.94% at September 30, 2020.
• Total remaining loan payment deferrals at October 25, 2020 were $44 million, or 1.0%, of total loans held for investment.
• Provision for credit losses of $1.5 million, a decline of $3.0 million on a linked quarter basis.
• All capital ratios remain strong. Declared a dividend of $0.24 during the quarter.

Reflecting on the third quarter results, Kevin O’Connor, President and CEO said, “Our strong quarterly results reflect the solid foundations of our balance sheet and business model. We continue to navigate this turbulent environment, supporting our employees who, in turn, support our customers. Additionally, we are working with our counterparts at Dime Community Bank to deliver a smooth transition for our customers. I want to thank all of the BNB employees-their ability to service our customers at the highest level while dealing with the pandemic, remote work, child-care issues, and a complicated integration, speaks volumes about their dedication and commitment. I could not be prouder to work with this group of professionals.”

Net Earnings and Returns
Net income in the 2020 third quarter was $13.1 million, or $0.66 per diluted share, which was $2.4 million, or $0.12 per diluted share higher than the 2020 second quarter, driven primarily by growth in non-interest income and net interest income, and lower provision for credit losses, partially offset by higher non-interest expense. Excluding the impact of merger expenses, net income for the 2020 third quarter was $15.4 million, or $0.77 per diluted share. Net income for the nine months ended September 30, 2020 was $33.1 million, or $1.66 per diluted share, compared to $37.5 million, or $1.88 per diluted share, in 2019.

Returns on average assets and equity in the 2020 third quarter were 0.83% and 10.15%, respectively. Return on average tangible common equity was 12.90% for the 2020 third quarter (see reconciliation of this non-GAAP financial measure provided elsewhere herein). The merger expenses incurred during the quarter reduced returns on average assets, equity and tangible common equity by approximately 15 basis points, 178 basis points, and 238 basis points, respectively.

Net Interest Income
Interest income was $46.3 million in the 2020 third quarter, an increase of $0.4 million compared to the 2020 second quarter, primarily due to loan portfolio growth from the Paycheck Protection Program (“PPP”), partially offset by lower average yields in loans, securities, and deposits with banks. Interest expense was $5.6 million in the 2020 third quarter, an increase of $0.2 million compared to the 2020 second quarter, primarily due to an increase in average deposits and average cost of borrowings, partially offset by a decrease in average cost of deposits.

The tax-equivalent net interest margin in the 2020 third quarter showed a decline of 17 basis points to 2.83% from 3.00% in the linked quarter. 2020 third quarter loan yields showed a decrease of 10 basis points to 3.72% from 3.82% in the linked quarter.

(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, excluding deposits with banks and PPP loans, divided by adjusted average interest-earning assets, excluding deposits with banks and PPP loans.

Commenting on the net interest margin Mr. O’Connor said, “The effects of the pandemic, and the economic and fiscal response continue to weigh on our net interest margin. The PPP forgiveness process has just started, and we are helping our customers navigate the SBA procedures. As of September 30, 2020, all PPP loans were still outstanding. Additionally, customers continue to conserve their liquidity as evidenced by the continued growth in deposits. Non-public customer deposits were up over $300 million quarter-over-quarter, which resulted in an outsized amount of overnight funds earning about 10 basis points. Without this excess liquidity and the PPP loans, the margin would have been 3.22% for the quarter. We continue to lower our already low deposit costs dropping them by 10 basis points quarter-over-quarter. This quarter we restructured our wholesale balance sheet, offsetting securities gains with swap termination losses for a $136 thousand net gain, which should positively impact the margin in the fourth quarter.”

Provision for Credit Losses
The provision for credit loss expense was $1.5 million for the 2020 third quarter, $3.0 million lower than the 2020 second quarter. The Company recorded additional expected credit losses in the 2020 second quarter related to its estimate of the economic impact of the COVID-19 pandemic. The Company recognized net charge-offs of $1.4 million in the 2020 third quarter, compared to net charge-offs of $0.3 million in the 2020 second quarter.

Non-Interest Income
Non-interest income was $6.8 million for the 2020 third quarter, which was $4.5 million higher compared to the 2020 second quarter, primarily attributable to net securities gains, an increase in gain on sale of SBA loans in the 2020 third quarter, and a decrease in the fair value of one loan held for sale recorded in the 2020 second quarter, partially offset by a loss on termination of swaps and a decrease in loan swap fees. Additionally, there was an increase in title fees on a year-over-year and linked quarter basis as real estate activity increased in our eastern markets.

Non-Interest Expense
Non-interest expense for the 2020 third quarter of $28.9 million was $4.5 million higher than the 2020 second quarter. The increase in the third quarter was primarily due to higher salaries and benefits expense, related to an increase in incentive accruals, and merger expenses. Excluding the impact of merger expenses, total non-interest expense in the 2020 third quarter would have been $26.6 million.

Income Tax Expense
Income tax expense was $4.0 million in the 2020 third quarter, an increase of $0.9 million compared to the 2020 second quarter. The effective tax rate for the 2020 third quarter was 23.4%, compared to 22.7% for the 2020 second quarter, and 21.7% for the 2019 third quarter. The increase in the Company’s effective tax rate resulted primarily from non-deductible merger expenses in the 2020 third quarter.

Balance Sheet
Total assets were $6.3 billion at September 30, 2020, $171.7 million higher than June 30, 2020. The rise in total assets compared to the linked quarter was largely attributable to a $193.4 million increase in interest-earning deposits with banks.

Total loans held for investment increased $18.6 million (2% annualized) to $4.6 billion during the 2020 third quarter. Net deferred loan fees were $14.2 million at September 30, 2020, inclusive of $21.8 million remaining unamortized net loan fees related to PPP loans. The allowance for credit losses was $43.5 million at September 30, 2020, $0.1 million higher than June 30, 2020. The allowance as a percentage of loans was 0.94% at both September 30, 2020 and June 30, 2020.

Total deposits increased $288.7 million (23% annualized) to $5.4 billion during the 2020 third quarter. The growth in total deposits was primarily due to a $190.9 million increase in savings and NOW deposits. Demand deposits increased $82.1 million during the 2020 third quarter to $2.2 billion at September 30, 2020, representing 42% of total deposits.

Total stockholders’ equity was $512.2 million at September 30, 2020, $9.6 million higher than June 30, 2020. The growth reflects earnings, partially offset by shareholders’ dividends. During the 2020 first quarter, the Company purchased 179,620 shares of its common stock under the repurchase plan at a cost of $4.6 million. Book value per share was $25.94 at September 30, 2020, $0.47 higher than June 30, 2020. Tangible book value per share was $20.40 at September 30, 2020, $0.47 higher than June 30, 2020 (see reconciliation of this non-GAAP financial measure provided elsewhere herein).

Balance Sheet Highlights (unaudited)

Loan and Line of Credit Origination Information (unaudited)

Asset Quality
Asset quality measures remained solid, as non-performing assets were $7.1 million, or 0.11% of total assets, at September 30, 2020, compared to $7.7 million, or 0.13% of total assets, at June 30, 2020. Non-performing loans were $7.1 million, or 0.15% of total loans at September 30, 2020, compared to $7.7 million, or 0.17% of total loans at June 30, 2020. Loans 30 to 89 days past due increased $5.6 million to $10.7 million at September 30, 2020, compared to $5.1 million at June 30, 2020. The increase in 30 to 89 days past due loans compared to prior quarter is primarily comprised of several residential loans.

Regarding asset quality and the current environment, Mr. O’Connor stated, “As of October 25, 2020, there were $44 million in loans that had not reached the end of their forbearance agreements, which is about 1.0% of all loans as of the end of the quarter. This will continue to be a focus of management as we work closely with these customers to monitor their financial health.”

Conference Call
The Company will host a conference call on Wednesday, October 28, 2020 at 10:00 AM (ET) to discuss the 2020 third quarter results.

Investors who would like to join the conference call are encouraged to pre-register using the following link: https://dpregister.com/sreg/101 48363/d9dd3cf1e4 . 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 Wednesday, November 11, 2020.

Call and replay information are as follows:

Call Date: Wednesday, October 28, 2020
Call Time: 10:00 AM (ET)
Domestic Call Dial In: 1-844-746-0738
International Call Dial In: 1-412-317-5271

Replay Domestic Dial In: 1-877-344-7529
Replay International Dial In: 1-412-317-0088
Access Code: 10148363

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 $6.3 billion, operates 39 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.

Forward Looking Statements
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; expenses related to our proposed merger with Dime Community Bancshares, Inc., unexpected delays related to the merger, or our inability to obtain regulatory approvals or satisfy other closing conditions required to complete the merger; and other risk factors discussed elsewhere, and in our reports filed with the Securities and Exchange Commission. In addition, the COVID-19 pandemic is having an adverse impact on the Company, its customers and the communities it serves. The adverse effect of the COVID-19 pandemic on the Company, its customers and the communities where it operates may adversely affect the Company’s business, results of operations and financial condition for an indefinite period of time. 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)
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BRIDGE BANCORP, INC. AND SUBSIDIARIES
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BRIDGE BANCORP, INC. AND SUBSIDIARIES
Consolidated Financial Highlights (unaudited)
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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.

(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.

BRIDGE BANCORP, INC. AND SUBSIDIARIES
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Condensed Consolidated Average Balance Sheets and Average Rate Data (unaudited)
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