Bridge Bancorp, Inc. Reports Fourth Quarter and Year End 2019 Results With Record Earnings Per Share of $0.71 and Record Net Income of $14.2 Million

BRIDGEHAMPTON, N.Y., Jan. 29, 2020 (GLOBE NEWSWIRE) -- Bridge Bancorp, Inc. (NASDAQ: BDGE) (the “Company”), the parent company of BNB Bank (“BNB”), today announced fourth quarter and year end results for 2019.

The Company's fourth quarter and full year 2019 financial results included:

• Net income for the 2019 fourth quarter of $14.2 million, or $0.71 per diluted share.
  
  
• Net income for the full year 2019 of $51.7 million, or $2.59 per diluted share, compared to $39.2 million, or $1.97 per diluted share, for the full year 2018.
  
  
• Net interest income for the 2019 fourth quarter increased $1.6 million over the 2018 fourth quarter to $35.6 million.
  
  
• Tax-equivalent net interest margin was 3.26% in the 2019 fourth quarter, flat compared to the 2018 fourth quarter.
  
  
• Total assets of $4.9 billion at December 31, 2019, 4% higher than September 30, 2019, and 5% higher than December 31, 2018.
  
  
• 2019 loan growth of $404 million, or 12%, with 2019 fourth quarter growth of $172 million, or 19% annualized.
  
  
• Loan and line of credit originations of $1.1 billion for the full year 2019.
• Non-public, non-brokered deposit growth of $77 million, or 3%, compared to December 31, 2018.
  
  
• Non-performing assets of $4.4 million at December 31, 2019, $1.4 million higher than December 31, 2018 and $0.2 million higher than September 30, 2019. Loan loss reserve coverage to total loans of 0.89% at December 31, 2019.
  
  
• All capital ratios remain strong. Declared a dividend of $0.24 during the quarter, an increase of 4% over the previous dividend.

Commenting on the fourth quarter results, Kevin O’Connor, President and CEO said, “The results for the quarter were strong, reflecting record levels of income and earnings per share, and the fourth quarter provides the opportunity to reflect on the totality of 2019 and the continued expansion and evolution of our company. We had strong increases in net loans and core deposit growth, with much of this activity occurring in our western markets. This allowed us to aggressively manage the funding mix and deposit costs, offsetting, in large part, the repricing of our larger floating rate loan portfolio. We believe the greater geographic diversity and increased product offerings we have been developing allowed us to adjust to the varied market conditions and specific opportunities of 2019.” 

Net Earnings and Returns

Net income in the 2019 fourth quarter was $14.2 million, or $0.71 per diluted share, an increase of $0.3 million compared to the 2018 fourth quarter, driven primarily by higher net interest income and non-interest income, partially offset by higher provision for loan losses and non-interest expense. Net income for the full year 2019 was $51.7 million, or $2.59 per diluted share, compared to $39.2 million, or $1.97 per diluted share, in 2018.

Returns on average assets and equity in the 2019 fourth quarter were 1.18% and 11.40%, respectively.  Return on average tangible common equity was 14.66% for the 2019 fourth quarter.  

Net Interest Income

Interest income was $44.3 million in the 2019 fourth quarter, a decrease of $2.0 million compared to the 2019 third quarter, primarily due to lower yields in the loan and securities portfolios, and a decrease in average securities, partially offset by loan portfolio growth. Interest expense was $8.7 million in the 2019 fourth quarter, a decrease of $1.0 million compared to the 2019 third quarter, primarily due to a decrease in average cost of interest-bearing liabilities coupled with a decrease in average deposits, partially offset by an increase in average borrowings.

The tax-equivalent net interest margin was 3.26% in the 2019 fourth quarter, which was unchanged year-over-year compared to the 2018 fourth quarter and down 14 basis points compared to the 2019 third quarter.

Commenting on the margin Mr. O’Connor said, “The lower margin, despite our continued aggressive move to manage deposit costs, is the result of the full quarter impact of resets on our growing floating rate loan portfolio, the third quarter effect of line of credit fees and finally, the substantial decline in the yield of our investment portfolio as higher prepayments on the underlying MBS instruments negatively pushed yields lower.”

“This has been an interesting year as we moved from expecting further rate hikes to managing through three rate cuts. The long-term strategy has been to become more neutral to interest rates, restructuring both assets and funding to offset the inherent risks in the core community bank. This can at times create short-term volatility as we saw during this year. Our deposit costs are down 15 basis points and 18 basis points in the third and fourth quarter, respectively, for a total of 33 basis points since the inception of this rate cut cycle.  The asset repricings have been as dramatic, down 26 basis points over this same time frame, but they occurred primarily in the fourth quarter. We continue to believe it’s prudent to maintain a strong core funded balance sheet,” stated Mr. O’Connor. 

Provision for Loan Losses

The provision for loan losses was $0.6 million for the 2019 fourth quarter, $0.2 million higher than the 2018 fourth quarter, and $5.7 million for the full year 2019, $3.9 million higher than the full year 2018. The Company recognized net recoveries of $13 thousand in the 2019 fourth quarter, compared to net charge-offs of $0.9 million in the 2018 fourth quarter. The Company recognized net charge-offs of $4.3 million in the full year 2019, compared to net charge-offs of $2.1 million in the full year 2018.

Non-Interest Income

Non-interest income was $8.4 million for the 2019 fourth quarter, $3.3 million higher than the 2018 fourth quarter, primarily attributable to higher loan swap fees in the 2019 fourth quarter. Non-interest income was $25.4 million for the full year 2019, $13.8 million higher than the 2018 full year, driven primarily by the net securities loss related to the balance sheet restructure in 2018 and higher loan swap fees in 2019.

“A confluence of factors transpired this quarter which impacted our results.  Many multi-family investors opted to lock in low rates for longer periods.  At the same time, the shape of the yield curve enabled us to provide fixed rate funding, while retaining floating rate exposure within 15 basis points of the customer’s fixed rate.  This strategy contributed to our loan growth, as well as non-interest income, while servicing our customers and increasing our asset sensitivity,” noted Mr. O’Connor.

Non-Interest Expense

Non-interest expense for the 2019 fourth quarter of $25.3 million was $3.3 million higher than the 2018 fourth quarter. Non-interest expense for the full year 2019 decreased to $96.1 million from $98.2 million in full year 2018. The increase in the fourth quarter was primarily due to higher salaries and benefits expense, occupancy and equipment costs and other operating expenses in the 2019 period, coupled with the impact of the fraud recovery in the 2018 fourth quarter, partially offset by office relocation costs in the 2018 fourth quarter. The decrease in full year non-interest expense was primarily due to the impact of the net fraud loss and office relocation costs during 2018, partially offset by higher salaries and benefits expense, occupancy and equipment costs and other operating expenses in the 2019 period.

Income Tax Expense

Income tax expense was $3.9 million in the 2019 fourth quarter, and $14.1 million in the full year 2019. Income tax expense was $2.9 million in the 2018 fourth quarter, and $9.1 million in the full year 2018.

Balance Sheet

Total assets were $4.9 billion at December 31, 2019, $185.5 million higher than September 30, 2019, and $220.8 million higher than December 31, 2018. Total loans held for investment at December 31, 2019 of $3.7 billion reflects growth of $404.5 million, or 12%, over year-end 2018. Deposits totaled $3.8 billion at December 31, 2019, a decrease of $71.7 million, or 2%, compared to December 31, 2018. Demand deposits increased $70.4 million year-over-year to $1.5 billion at December 31, 2019, representing 40% of total deposits.

The allowance for loan losses was $32.8 million at December 31, 2019, $1.4 million higher than December 31, 2018. The allowance as a percentage of loans was 0.89% at December 31, 2019, compared to 0.96% at year-end 2018.

Stockholders’ equity was $497.2 million at December 31, 2019, $43.3 million higher than December 31, 2018. The growth reflects earnings, partially offset by shareholders’ dividends. Book value per share was $25.06 at December 31, 2019, $2.13 higher than December 31, 2018. Tangible book value per share was $19.54 at December 31, 2019, $2.18 higher than prior year-end.

Loan and Line of Credit Origination Information (unaudited)

“In 2019 we planned to focus on our western markets where we had greater opportunity to grow market share. This year more than half of our over $1 billion in loan production came from the Nassau County and New York City markets, compared to 2018 when more than half of our loan production occurred in Suffolk County.  Our plan included hiring more bankers to cover our western markets, working in concert with our branch network; this cooperative effort resulted in a 19% increase in deposits in our western region.  Embedded in our IPC deposits are several relationships that decreased due to pricing expectations that we did not feel fit our strategy.  We constantly balance the use of alternative funding sources when evaluating whether to pay up for deposits,” Mr. O’Connor said.

Asset Quality

Asset quality measures remained solid, as non-performing assets were $4.4 million, or 0.09% of total assets, at December 31, 2019, compared to $3.0 million, or 0.06% of total assets, at December 31, 2018. Non-performing assets at December 31, 2018 included $0.2 million of other real estate owned. Non-performing loans were $4.4 million, or 0.12% of total loans at December 31, 2019, compared to $2.8 million, or 0.09% of total loans at December 31, 2018.  Loans 30 to 89 days past due increased $2.0 million to $6.4 million at December 31, 2019, compared to $4.4 million at December 31, 2018. Loans past due 90 days and accruing at December 31, 2019 and 2018 were comprised of $0.3 million of purchased credit impaired loans.

Conference Call

The Company will host a conference call on Thursday, January 30, 2020 at 10:00 AM (ET) to discuss the 2019 fourth quarter results. Investors who would like to join the conference call are encouraged to pre-register using the following link: . 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 Thursday, February 13, 2020.

Call and replay information are as follows:

Call Date: Thursday, January 30, 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: 10137586

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 $4.9 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

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)

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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)

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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.

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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 purchased credit impaired loans.

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Supplemental Financial Information

Condensed Consolidated Average Balance Sheets and Average Rate Data (unaudited)

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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