Bridge Bancorp, Inc. Reports Second Quarter 2017 Results

BRIDGEHAMPTON, N.Y., July 26, 2017 -- Bridge Bancorp, Inc. (NASDAQ:BDGE), the parent company of The Bridgehampton National Bank (“BNB”), today announced second quarter results for 2017. Highlights of the Company's financial results for the quarter include:

Net income of $8.8 million, compared to $8.9 million in 2016, and $.45 per diluted share for the quarter.
Returns on average assets and equity for the 2017 second quarter were .85% and 8.07%, respectively.
Net interest income for the 2017 second quarter increased $.2 million over 2016 to $30.8 million, with a net interest margin of 3.28%.
Total assets of $4.2 billion at June 2017, 13% higher than June 2016.
Loan growth of $271 million or 11% compared to June 2016 and $196 million or 15% annualized from December 2016.
Deposit growth of $134 million or 9% annualized from December 2016 to $3.1 billion at June 2017, including non-public deposit growth of $212 million or 18% annualized, with 43% of non-public deposits in non-interest bearing demand deposits.
Continued solid asset quality metrics and reserve coverage.
All capital ratios exceed the fully phased in requirements of Basel III rules.
Declared a dividend of $.23 during the quarter.

“During the second quarter we continued to target market place opportunities presented by recently completed and announced bank acquisitions. Deploying the capital we raised in November, we invested in people and brand awareness across the footprint, and are seeing tangible results. Loan and deposit growth in the first half of 2017, along with anecdotal evidence, confirm Long Island businesses and consumers want to bank with a local institution and deal with local decision makers. Our newest branches in East Moriches and Riverhead have been well received, and across the east end of Long Island we are seeing above trend growth and activity,” noted Kevin M. O’Connor, President and CEO.

Net Earnings and Returns
Net income for the quarter was $8.8 million or $.45 per diluted share, compared to $8.9 million or $.50 per diluted share for the second quarter of 2016. Net income for the six months ended June 2017 was $18.0 million or $.91 per diluted share, compared to $17.5 million or $.99 per diluted share in 2016. Returns on average assets and equity for the second quarter of 2017 were .85% and 8.07%, respectively, compared to .91% and 10.07% in 2016, respectively. Return on average tangible common equity for the second quarter of 2017 was 10.81% compared to 14.83% in 2016. The decreases in the equity related returns are the result of the increase in average stockholders’ equity due in part to the $50 million common stock offering in November 2016.

Interest income increased $1.5 million for the second quarter of 2017 over the same period in 2016 as average earning assets increased by $234.4 million or 7%, due primarily to organic growth in loans and securities. The net interest margin decreased to 3.28% from 3.48%. The decrease in the net interest margin reflects higher overall funding costs due in part to the Fed Funds rate increases in December 2016, March 2017 and June 2017, partially offset by the decrease in costs associated with the junior subordinated debentures, which were redeemed in January 2017.

The provision for loan losses was $1.0 million for the 2017 second quarter, $.1 million higher than the second quarter of 2016. Contributing to the higher provision was an increase in loan growth and net charge-offs in the 2017 second quarter compared to the 2016 second quarter. The Company recognized net charge-offs of $24 thousand in the second quarter of 2017, compared to net recoveries of $9 thousand for the same period in 2016.

Total non-interest income was $4.5 million for the second quarter of 2017, $.2 million higher than 2016, resulting from an increase in gain on sale of SBA loans, BOLI income, service charges and other fees and title fee income, partially offset by net securities gains recorded in the second quarter 2016 and a decrease in other operating income.

Non-interest expense for the second quarter of 2017 increased to $21.0 million from $20.4 million in 2016. The increase reflects growth in salaries and benefits expense, marketing and advertising, occupancy and equipment, technology and communications, other operating expenses, offset by decreases in amortization of intangibles, professional services, and FDIC assessment. The Company’s ratio of operating expenses to average assets was 2.03% in the second quarter of 2017 compared to 2.10% in the second quarter of 2016.

Balance Sheet and Asset Quality
Total assets were $4.2 billion at June 30, 2017, $478.2 million higher than June 2016. Total loans at June 2017 of $2.8 billion reflect growth of $271.4 million or 11% over June 2016. This growth was net of a bulk loan sale and the exit of two loan participations in the 2016 fourth quarter totaling approximately $47 million. Deposits totaled $3.1 billion at June 2017, an increase of $206.0 million over 2016. Demand deposits totaled $1.2 billion at June 2017, representing 38% of total deposits.

Asset quality measures remained strong, as non-performing assets, comprised exclusively of non-performing loans, were $2.7 million or .06% of total assets and .10% of total loans at June 2017 compared to $2.1 million or .05% of total assets and .08% of total loans at June 2016. Loans 30 to 89 days past due increased $2.5 million to $6.2 million at June 2017, with $3.4 million representing acquired loans. Loans past due 90 days and still accruing at June 30, 2017 and 2016 were comprised of acquired loans of $1.0 million and $1.9 million, respectively.

The allowance for loan losses increased $4.8 million to $27.5 million at June 2017 from $22.7 million as of June 2016. The allowance as a percentage of loans was .99% at June 30, 2017 compared to .90% at June 30, 2016. The allowance as a percentage of BNB originated loans was 1.17%, based on BNB originated loans totaling $2.3 billion, at June 2017, compared to 1.20%, based on BNB originated loans totaling $1.9 billion, at June 2016. The increase in the allowance for loan losses is due to portfolio growth as well as certain acquired loans being refinanced by BNB. Acquired loans are recorded at fair value at acquisition, effectively netting estimated future losses against the loan balances, whereas loans originated and refinanced by BNB have recorded allowances for loan losses.

Stockholders’ equity grew $77.6 million to $435.7 million at June 2017, compared to $358.1 million at June 2016. The growth reflects earnings, the $47.5 million in net capital raised in connection with the November 2016 common stock offering, conversions of trust preferred securities and the dividend reinvestment plan, partially offset by shareholders' dividends and a decrease in the fair value of available for sale investment securities. The Company's capital ratios exceed all fully phased in capital requirements under the Basel III rules and the Bank remains classified as well capitalized.

“On June 14^th the Federal Reserve raised rates another 25 basis points. Market expectations for more increases this year are somewhat mixed. Since the end of the first quarter longer-term interest rates have declined, resulting in a flatter yield curve. This is a very challenging environment for banks, unlike BNB, that are more reliant on wholesale funding. Our relatively low loan to deposit ratio provides a bulwark against this effect. We continue to believe that our deposits are our greatest ‘asset’ and will follow strategies that will maintain and strengthen our funding,” noted Mr. O’Connor.

“Recently, the Bank announced that it has applied to New York State’s Department of Financial Services (NYSDFS) to become a New York chartered commercial bank, and expects to remain a member bank of the Federal Reserve System following the charter conversion. We believe that the focus of NYSDFS on local community banking aligns with our business model. We expect the conversion to be complete before the end of 2017. We look forward to working with the NYSDFS and the Federal Reserve,” stated Mr. O’Connor.

About Bridge Bancorp, Inc.
Bridge Bancorp, Inc. is a bank holding company engaged in commercial banking and financial services through its wholly owned subsidiary, The Bridgehampton National Bank. Established in 1910, BNB, with assets of approximately $4.2 billion, operates 43 retail branch locations serving Long Island and the greater New York metropolitan area. In addition, the Bank 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. offers financial planning and investment consultation. For more information visit www.bridgenb.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 report 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; our expectation that the application filed with NYSDFS will not be delayed or denied; 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 the Bank’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, except per share amounts and financial ratios)

	June 30,			December 31,			June 30,
		2017			2016			2016
ASSETS
Cash and Due from Banks	$	62,195		$	102,280		$	50,581
Interest Earning Deposits with Banks		22,957			11,558			29,015
Total Cash and Cash Equivalents		85,152			113,838			79,596
Securities Available for Sale, at Fair Value		835,992			819,722			627,083
Securities Held to Maturity		203,907			223,237			222,058
Total Securities		1,039,899			1,042,959			849,141
Securities, Restricted		38,819			34,743			20,894
Loans Held for Investment		2,796,309			2,600,440			2,524,926
Allowance for Loan Losses		(27,544	)		(25,904	)		(22,708	)
Loans, net		2,768,765			2,574,536			2,502,218
Premises and Equipment, net		35,048			35,263			34,712
Goodwill and Other Intangible Assets		111,460			111,774			113,038
Accrued Interest Receivable and Other Assets		142,310			141,457			143,686
Total Assets	$	4,221,453		$	4,054,570		$	3,743,285

LIABILITIES AND STOCKHOLDERS' EQUITY
Demand Deposits	$	1,159,320		$	1,151,268		$	1,111,993
Savings, NOW and Money Market Deposits		1,674,680			1,568,009			1,551,191
Certificates of Deposit of $100,000 or more		152,380			126,198			101,542
Other Time Deposits		73,238			80,534			88,937
Total Deposits		3,059,618			2,926,009			2,853,663
Federal Funds Purchased and Repurchase Agreements		50,731			100,674			200,895
Federal Home Loan Bank Advances		563,974			496,684			198,842
Subordinated Debentures		78,571			78,502			78,432
Junior Subordinated Debentures		-			15,244			15,525
Other Liabilities and Accrued Expenses		32,852			29,470			37,847
Total Liabilities		3,785,746			3,646,583			3,385,204
Total Stockholders' Equity		435,707			407,987			358,081
Total Liabilities and Stockholders' Equity	$	4,221,453		$	4,054,570		$	3,743,285

Selected Financial Data:
Book Value Per Share	$	22.11		$	21.36		$	20.51
Tangible Book Value Per Share ⁽¹⁾	$	16.45		$	15.51		$	14.04
Common Shares Outstanding		19,706			19,100			17,459

Capital Ratios:
Total Capital to Risk Weighted Assets		14.3	%		15.0	%		13.3	%
Tier 1 Capital to Risk Weighted Assets		10.9	%		11.3	%		9.6	%
Common Equity Tier 1 Capital to Risk Weighted Assets		10.9	%		10.8	%		9.1	%
Tier 1 Capital to Average Assets		8.3	%		8.6	%		7.0	%
Tangible Common Equity to Tangible Assets ^{(1) (2)}		8.0	%		7.5	%		6.8	%
Tier 1 Capital to Average Assets (Bank)		9.8	%		9.9	%		9.1	%

Asset Quality:
Loans 30-89 Days Past Due	$	6,248		$	2,156		$	3,764
Loans 90 Days Past Due and Accruing ⁽³⁾	$	1,026		$	1,027		$	1,894

Non-performing Loans/Non-performing Assets	$	2,676		$	1,241		$	2,050

Non-performing Loans/Total Loans		0.10	%		0.05	%		0.08	%
Non-performing Assets/Total Assets		0.06	%		0.03	%		0.05	%
Allowance/Non-performing Loans		1029.30	%		2087.35	%		1107.71	%
Allowance/Total Loans		0.99	%		1.00	%		0.90	%
Allowance/Originated Loans		1.17	%		1.23	%		1.20	%

(1) Tangible stockholder's equity totaled $324.2 million, $296.2 million and $245.0 million at June 30, 2017, December 31, 2016 and June 30, 2016, respectively, and represents total stockholder's equity less goodwill and other intangible assets.
(2) Tangible assets totaled $4.11 billion, $3.94 billion and $3.63 billion at June 30, 2017, December 31, 2016 and June 30, 2016, respectively, and represents total assets less goodwill and other intangible assets.
(3) Represents loans acquired in connection with the Community National Bank, FNBNY Bancorp, Inc., and Hamptons State Bank acquisitions.

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

	Three months ended						Six months ended
	June 30,						June 30,
		2017			2016			2017			2016

Interest income	$	36,234		$	34,733		$	71,451		$	68,340
Interest expense		5,441			4,143			10,197			8,318
Net interest income		30,793			30,590			61,254			60,022
Provision for loan losses		950			900			1,750			2,150
Net interest income after provision for loan losses		29,843			29,690			59,504			57,872

Non-interest Income:
Service charges and other fees		2,220			2,091			4,270			4,083
Title fee income		541			437			1,091			914
Net securities gains		-			383			-			449
Gain on sale of Small Business Administration loans		799			343			1,342			457
BOLI income		567			431			1,127			802
Other operating income		382			584			801			1,559
Total non-interest income		4,509			4,269			8,631			8,264

Non-interest expense:
Salaries and employee benefits		11,397			10,616			22,701			21,153
Occupancy and equipment		3,439			3,259			6,837			6,183
Acquisition costs		-			-			-			(270	)
Amortization of other intangible assets		274			672			553			1,348
Other operating expenses		5,896			5,894			11,211			10,934
Total non-interest expense		21,006			20,441			41,302			39,348

Income before income taxes		13,346			13,518			26,833			26,788
Income tax expense		4,505			4,664			8,821			9,308
Net income	$	8,841		$	8,854		$	18,012		$	17,480
Basic earnings per share	$	0.45		$	0.51		$	0.91		$	1.00
Diluted earnings per share	$	0.45		$	0.50		$	0.91		$	0.99
Weighted average common and equivalent shares		19,394			17,693			19,379			17,669

Selected Financial Data:
Return on Average Total Assets		0.85	%		0.91	%		0.89	%		0.91	%
Return on Average Stockholders' Equity		8.07	%		10.07	%		8.34	%		10.03	%
Return on Average Tangible Stockholders' Equity ⁽¹⁾		10.81	%		14.83	%		11.21	%		14.63	%
Net Interest Margin		3.28	%		3.48	%		3.34	%		3.46	%
Efficiency		58.92	%		58.09	%		58.52	%		57.08	%
Operating Expense as a % of Average Assets		2.03	%		2.10	%		2.03	%		2.05	%

(1) Average tangible stockholder's equity totaled $328.0 million and $240.2 million for the three months ended June 30, 2017 and 2016, respectively, and $324.0 million and $240.3 million for the six months ended June 30, 2017 and 2016, respectively, and represents average total stockholder's equity less average goodwill and other intangible assets.

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

	Three months ended June 30,
		2017							2016
						Average							Average
	Average					Yield/		Average					Yield/
	Balance		Interest			Cost		Balance		Interest			Cost
Interest Earning Assets:
Loans, net (including loan fee income) ⁽¹⁾	$	2,702,605	$	30,348		4.50	%	$	2,497,858	$	29,327		4.72	%
Securities⁽¹⁾		1,072,807		6,163		2.30			1,043,113		5,703		2.20
Deposits with Banks		28,904		71		0.99			28,916		35		0.49
Total Interest Earning Assets ⁽¹⁾		3,804,316		36,582		3.86			3,569,887		35,065		3.95
Non Interest Earning Assets:
Other Assets		355,434							353,336
Total Assets	$	4,159,750						$	3,923,223

Interest Bearing Liabilities:
Deposits	$	1,931,942	$	2,422		0.50	%	$	1,819,083	$	1,528		0.34	%
Federal Funds Purchased and Repurchase Agreements		125,231		355		1.14			182,240		293		0.65
Federal Home Loan Bank Advances		401,458		1,529		1.53			335,696		844		1.01
Subordinated Debentures		78,549		1,135		5.80			78,409		1,135		5.82
Junior Subordinated Debentures		-		-		-			15,876		343		8.69
Total Interest Bearing Liabilities		2,537,180		5,441		0.86			2,431,304		4,143		0.69
Non Interest Bearing Liabilities:
Demand Deposits		1,151,288							1,101,229
Other Liabilities		31,745							37,066
Total Liabilities		3,720,213							3,569,599
Stockholders' Equity		439,537							353,624
Total Liabilities and Stockholders' Equity	$	4,159,750						$	3,923,223

Net Interest Income/Interest Rate Spread ⁽¹⁾				31,141		3.00	%				30,922		3.26	%

Net Interest Earning Assets/Net Interest Margin ⁽¹⁾	$	1,267,136				3.28	%	$	1,138,583				3.48	%

Tax Equivalent Adjustment				(348	)						(332	)

Net Interest Income			$	30,793						$	30,590


(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)

	Six months ended June 30,
		2017							2016
						Average							Average
	Average					Yield/		Average					Yield/
	Balance		Interest			Cost		Balance		Interest			Cost
Interest Earning Assets:
Loans, net (including loan fee income) ⁽¹⁾	$	2,645,618	$	59,826		4.56	%	$	2,460,678	$	57,374		4.69	%
Securities⁽¹⁾		1,072,172		12,203		2.30			1,035,794		11,544		2.24
Deposits with Banks		25,178		117		0.94			30,413		72		0.48
Total Interest Earning Assets ⁽¹⁾		3,742,968		72,146		3.89			3,526,885		68,990		3.93
Non Interest Earning Assets:
Other Assets		351,155							331,953
Total Assets	$	4,094,123						$	3,858,838

Interest Bearing Liabilities:
Deposits	$	1,887,221	$	4,530		0.48	%	$	1,835,724	$	3,215		0.35	%
Federal Funds Purchased and Repurchase Agreements		134,347		671		1.01			144,498		478		0.67
Federal Home Loan Bank Advances		402,847		2,678		1.34			311,671		1,671		1.08
Subordinated Debentures		78,531		2,270		5.83			78,392		2,270		5.82
Junior Subordinated Debentures		1,348		48		7.18			15,877		684		8.66
Total Interest Bearing Liabilities		2,504,294		10,197		0.82			2,386,162		8,318		0.70
Non Interest Bearing Liabilities:
Demand Deposits		1,123,193							1,085,086
Other Liabilities		31,109							37,128
Total Liabilities		3,658,596							3,508,376
Stockholders' Equity		435,527							350,462
Total Liabilities and Stockholders' Equity	$	4,094,123						$	3,858,838

Net Interest Income/Interest Rate Spread ⁽¹⁾				61,949		3.07	%				60,672		3.23	%

Net Interest Earning Assets/Net Interest Margin ⁽¹⁾	$	1,238,674				3.34	%	$	1,140,723				3.46	%

Tax Equivalent Adjustment				(695	)						(650	)

Net Interest Income			$	61,254						$	60,022


(1) Presented on a tax equivalent basis.

Contact:

John M. McCaffery
Executive Vice President
Chief Financial Officer
(631) 537-1001, ext. 7290

Bridge Bancorp, Inc. Reports Second Quarter 2017 Results

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