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Section 1: 10-Q (10-Q)

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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10‑Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2018

Commission file number 001‑34096


BRIDGE BANCORP, INC.

(Exact name of registrant as specified in its charter)


NEW YORK

11-2934195

(State or other jurisdiction of incorporation or organization)

(IRS Employer Identification Number)

 

 

2200 MONTAUK HIGHWAY, BRIDGEHAMPTON, NEW YORK

11932

(Address of principal executive offices)

(Zip Code)

 

Registrant's telephone number, including area code: (631) 537‑1000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [X] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.

 

 

Large accelerated filer [  ]

Accelerated filer [X]

Non-accelerated filer [  ]

Smaller reporting company [  ]

 

Emerging growth company [  ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes [  ] No [X]

There were 19,792,234 shares of common stock outstanding as of October 31, 2018.

 

 

 

 


 

Table of Contents

BRIDGE BANCORP, INC.

 

 

 

PART I

FINANCIAL INFORMATION

 

 

 

 

Item 1.  

Financial Statements (unaudited)

3

 

 

 

 

Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017

3

 

 

 

 

Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2018 and 2017

4

 

 

 

 

Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2018 and 2017

5

 

 

 

 

Consolidated Statements of Stockholders' Equity for the Nine Months Ended September 30, 2018 and 2017

6

 

 

 

 

Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017

7

 

 

 

 

Condensed Notes to the Consolidated Financial Statements

8

 

 

 

Item 2.  

Management's Discussion and Analysis of Financial Condition and Results of Operations

31

 

 

 

Item 3.  

Quantitative and Qualitative Disclosures About Market Risk

43

 

 

 

Item 4.  

Controls and Procedures

45

 

 

 

PART II  

OTHER INFORMATION

 

 

 

 

Item 1.  

Legal Proceedings

46

 

 

 

Item 1A. 

Risk Factors

46

 

 

 

Item 2.  

Unregistered Sales of Equity Securities and Use of Proceeds

46

 

 

 

Item 3.  

Defaults Upon Senior Securities

46

 

 

 

Item 4. 

Mine Safety Disclosures

46

 

 

 

Item 5.  

Other Information

46

 

 

 

Item 6.  

Exhibits

47

 

 

 

Signatures 

 

47

 

 

 

 

 

2


 

Table of Contents

Item 1. Financial Statements

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

September 30, 

 

December 31, 

 

     

2018

    

2017

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Cash and due from banks

 

$

63,687

 

$

76,614

Interest earning deposits with banks

 

 

61,414

 

 

18,133

Total cash and cash equivalents

 

 

125,101

 

 

94,747

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

661,862

 

 

759,916

Securities held to maturity (fair value of $159,244 and $179,885, respectively)

 

 

164,438

 

 

180,866

Total securities

 

 

826,300

 

 

940,782

 

 

 

 

 

 

 

Securities, restricted

 

 

25,162

 

 

35,349

 

 

 

 

 

 

 

Loans held for sale

 

 

1,619

 

 

 —

 

 

 

 

 

 

 

Loans held for investment

 

 

3,197,427

 

 

3,102,752

Allowance for loan losses

 

 

(31,869)

 

 

(31,707)

Loans, net

 

 

3,165,558

 

 

3,071,045

 

 

 

 

 

 

 

Premises and equipment, net

 

 

35,893

 

 

33,505

Accrued interest receivable

 

 

11,793

 

 

11,652

Goodwill

 

 

105,950

 

 

105,950

Other intangible assets

 

 

4,717

 

 

5,214

Prepaid pension

 

 

11,904

 

 

9,936

Bank owned life insurance

 

 

89,151

 

 

87,493

Other real estate owned

 

 

175

 

 

 —

Other assets

 

 

45,434

 

 

34,329

Total assets

 

$

4,448,757

 

$

4,430,002

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Demand deposits

 

$

1,332,792

 

$

1,338,701

Savings, NOW and money market deposits

 

 

1,958,258

 

 

1,773,478

Certificates of deposit of $100,000 or more

 

 

205,857

 

 

158,584

Other time deposits

 

 

122,235

 

 

63,780

Total deposits

 

 

3,619,142

 

 

3,334,543

 

 

 

 

 

 

 

Federal funds purchased

 

 

 —

 

 

50,000

Repurchase agreements

 

 

816

 

 

877

Federal Home Loan Bank advances

 

 

265,648

 

 

501,374

Subordinated debentures, net

 

 

78,746

 

 

78,641

Other liabilities and accrued expenses

 

 

44,420

 

 

35,367

Total liabilities

 

 

4,008,772

 

 

4,000,802

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred stock, par value $.01 per share (2,000,000 shares authorized; none issued)

 

 

 

 

Common stock, par value $.01 per share (40,000,000 shares authorized; 19,804,685 and 19,719,575 shares issued, respectively; and 19,789,073 and 19,709,360 shares outstanding, respectively)

 

 

198

 

 

197

Surplus

 

 

350,739

 

 

347,691

Retained earnings

 

 

108,161

 

 

96,547

Treasury stock at cost, 15,612 and 10,215 shares, respectively

 

 

(520)

 

 

(296)

 

 

 

458,578

 

 

444,139

Accumulated other comprehensive loss, net of income taxes

 

 

(18,593)

 

 

(14,939)

Total stockholders’ equity

 

 

439,985

 

 

429,200

Total liabilities and stockholders’ equity

 

$

4,448,757

 

$

4,430,002

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

3


 

Table of Contents

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income (unaudited)

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 

 

September 30, 

 

    

2018

    

2017

    

2018

    

2017

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Loans (including fee income)

 

$

36,197

 

$

32,571

 

$

107,580

 

$

92,206

Mortgage-backed securities, CMOs and other asset-backed securities

 

 

4,370

 

 

3,777

 

 

11,919

 

 

11,492

U.S. GSE securities

 

 

158

 

 

300

 

 

680

 

 

901

State and municipal obligations

 

 

614

 

 

963

 

 

2,173

 

 

2,968

Corporate bonds

 

 

356

 

 

295

 

 

1,069

 

 

878

Deposits with banks

 

 

437

 

 

91

 

 

633

 

 

208

Other interest and dividend income

 

 

457

 

 

441

 

 

1,450

 

 

1,236

Total interest income

 

 

42,589

 

 

38,438

 

 

125,504

 

 

109,889

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Savings, NOW and money market deposits

 

 

4,584

 

 

2,161

 

 

10,536

 

 

5,524

Certificates of deposit of $100,000 or more

 

 

927

 

 

496

 

 

2,026

 

 

1,306

Other time deposits

 

 

536

 

 

195

 

 

1,224

 

 

552

Federal funds purchased and repurchase agreements

 

 

13

 

 

402

 

 

1,185

 

 

1,073

Federal Home Loan Bank advances

 

 

1,181

 

 

1,704

 

 

4,447

 

 

4,382

Subordinated debentures

 

 

1,134

 

 

1,135

 

 

3,404

 

 

3,405

Junior subordinated debentures

 

 

 —

 

 

 —

 

 

 —

 

 

48

Total interest expense

 

 

8,375

 

 

6,093

 

 

22,822

 

 

16,290

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

 

34,214

 

 

32,345

 

 

102,682

 

 

93,599

Provision for loan losses

 

 

200

 

 

1,900

 

 

1,400

 

 

3,650

Net interest income after provision for loan losses

 

 

34,014

 

 

30,445

 

 

101,282

 

 

89,949

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges and other fees

 

 

2,549

 

 

2,392

 

 

7,274

 

 

6,662

Net securities gains (losses)

 

 

 —

 

 

260

 

 

(7,921)

 

 

260

Title fee income

 

 

384

 

 

757

 

 

1,339

 

 

1,848

Gain on sale of Small Business Administration loans

 

 

524

 

 

100

 

 

1,586

 

 

1,442

BOLI income

 

 

557

 

 

563

 

 

1,658

 

 

1,690

Other operating income

 

 

904

 

 

900

 

 

2,517

 

 

1,701

Total non-interest income

 

 

4,918

 

 

4,972

 

 

6,453

 

 

13,603

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

12,134

 

 

11,962

 

 

38,001

 

 

35,054

Occupancy and equipment

 

 

3,325

 

 

3,514

 

 

9,773

 

 

10,351

Technology and communications

 

 

1,596

 

 

1,469

 

 

4,807

 

 

4,194

Marketing and advertising

 

 

1,274

 

 

1,254

 

 

3,476

 

 

3,742

Professional services

 

 

1,023

 

 

678

 

 

3,116

 

 

2,101

FDIC assessments

 

 

386

 

 

341

 

 

1,286

 

 

984

Fraud loss

 

 

9,500

 

 

 —

 

 

9,500

 

 

 —

Amortization of other intangible assets

 

 

215

 

 

247

 

 

703

 

 

800

Other operating expenses

 

 

1,551

 

 

1,806

 

 

5,447

 

 

5,347

Total non-interest expense

 

 

31,004

 

 

21,271

 

 

76,109

 

 

62,573

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

7,928

 

 

14,146

 

 

31,626

 

 

40,979

Income tax expense

 

 

1,381

 

 

4,703

 

 

6,263

 

 

13,524

Net income

 

$

6,547

 

$

9,443

 

$

25,363

 

$

27,455

Basic earnings per share

 

$

0.33

 

$

0.48

 

$

1.28

 

$

1.39

Diluted earnings per share

 

$

0.33

 

$

0.48

 

$

1.28

 

$

1.39

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

4


 

Table of Contents

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 

 

September 30, 

 

    

2018

    

2017

    

2018

    

2017

Net income

 

$

6,547

 

$

9,443

 

$

25,363

 

$

27,455

Other comprehensive (loss) income:

 

 

  

 

 

  

  

 

  

  

 

  

Change in unrealized net (losses) gains on securities available for sale, net of reclassifications and deferred income taxes

 

 

(3,063)

 

 

152

 

 

(6,535)

 

 

2,695

Adjustment to pension liability, net of reclassifications and deferred income taxes

 

 

67

 

 

67

 

 

202

 

 

230

Unrealized gains (losses) on cash flow hedges, net of reclassifications and deferred income taxes

 

 

149

 

 

303

  

 

2,679

  

 

(70)

Total other comprehensive (loss) income

 

 

(2,847)

 

 

522

 

 

(3,654)

 

 

2,855

Comprehensive income

 

$

3,700

 

$

9,965

  

$

21,709

  

$

30,310

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

5


 

Table of Contents

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity (unaudited)

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common 

 

 

 

 

Retained

 

Treasury

 

Comprehensive

 

 

 

 

   

Stock

   

Surplus

   

 Earnings

   

Stock

   

Loss

   

Total

Balance at January 1, 2018

 

$

197

 

$

347,691

 

$

96,547

 

$

(296)

 

$

(14,939)

 

$

429,200

Net income

 

 

 

  

 

 

 

 

25,363

  

 

 

 

 

 

  

 

25,363

Shares issued under the dividend reinvestment plan

 

 

 

  

 

705

 

 

 

  

 

 

 

 

 

  

 

705

Stock awards granted and distributed

 

 

 1

  

 

(529)

 

 

 

  

 

528

 

 

 

  

 

 —

Stock awards forfeited

 

 

 

  

 

183

 

 

 

  

 

(183)

 

 

 

  

 

 —

Repurchase of surrendered stock from vesting of restricted stock awards

 

 

 

  

 

 

 

 

 

  

 

(569)

 

 

 

  

 

(569)

Share based compensation expense

 

 

 

  

 

2,689

 

 

 

  

 

 

 

 

 

  

 

2,689

Cash dividend declared, $0.69 per share

 

 

 

  

 

 

 

 

(13,749)

  

 

 

 

 

 

  

 

(13,749)

Other comprehensive loss, net of deferred income taxes

 

 

 

  

 

 

 

 

 

  

 

 

 

 

(3,654)

  

 

(3,654)

Balance at September 30, 2018

 

$

198

 

$

350,739

 

$

108,161

 

$

(520)

 

$

(18,593)

 

$

439,985

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common 

 

 

 

 

Retained

 

Treasury

 

Comprehensive

 

 

 

 

   

Stock

   

Surplus

   

Earnings

   

Stock

   

Loss

   

Total

Balance at January 1, 2017

 

$

191

 

$

329,427

 

$

91,594

 

$

(161)

 

$

(13,064)

 

$

407,987

Net income

 

 

 

  

 

 

 

 

27,455

  

 

 

 

 

 

  

 

27,455

Shares issued under the dividend reinvestment plan

 

 

 

  

 

721

 

 

 

  

 

 

 

 

 

  

 

721

Shares issued for trust preferred securities conversions (529,292 shares)

 

 

 5

  

 

14,944

 

 

 

  

 

 

 

 

 

  

 

14,949

Stock awards granted and distributed

 

 

 1

  

 

(417)

 

 

 

  

 

416

 

 

 

  

 

 —

Stock awards forfeited

 

 

 

  

 

131

 

 

 

  

 

(131)

 

 

 

  

 

 —

Repurchase of surrendered stock from vesting of restricted stock awards

 

 

 

  

 

 

 

 

 

  

 

(330)

 

 

 

  

 

(330)

Share based compensation expense

 

 

 

  

 

1,972

 

 

 

  

 

 

 

 

 

  

 

1,972

Cash dividend declared, $0.69 per share

 

 

 

  

 

 

 

 

(13,670)

  

 

 

 

 

 

  

 

(13,670)

Other comprehensive income, net of deferred income taxes

 

 

 

  

 

 

 

 

 

  

 

 

 

 

2,855

  

 

2,855

Balance at September 30, 2017

 

$

197

 

$

346,778

 

$

105,379

 

$

(206)

 

$

(10,209)

 

$

441,939

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

6


 

Table of Contents

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

September 30, 

 

    

2018

    

2017

Cash flows from operating activities:

 

 

    

 

 

  

Net income

 

$

25,363

 

$

27,455

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

  

 

 

Provision for loan losses

 

 

1,400

  

 

3,650

Depreciation and amortization of premises and equipment

 

 

2,871

  

 

2,858

Net (accretion) and other amortization

 

 

(1,803)

 

 

(5,771)

Net amortization on securities

 

 

3,278

  

 

4,865

Increase in cash surrender value of bank owned life insurance

 

 

(1,658)

  

 

(1,690)

Amortization of intangible assets

 

 

703

  

 

800

Share based compensation expense

 

 

2,689

  

 

1,972

Net securities losses (gains)

 

 

7,921

  

 

(260)

Increase in accrued interest receivable

 

 

(141)

  

 

(772)

Small Business Administration (“SBA”) loans originated for sale

 

 

(22,126)

  

 

(15,523)

Proceeds from sale of the guaranteed portion of SBA loans

 

 

22,453

  

 

17,290

Gain on sale of the guaranteed portion of SBA loans

 

 

(1,586)

  

 

(1,442)

(Gain) loss on sale of loans

 

 

(411)

  

 

33

Increase in other assets

 

 

(3,816)

  

 

(664)

Increase in accrued expenses and other liabilities

 

 

5,581

  

 

3,824

Net cash provided by operating activities

 

 

40,718

  

 

36,625

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

  

 

  

Purchases of securities available for sale

 

 

(224,600)

  

 

(87,916)

Purchases of securities, restricted

 

 

(493,347)

  

 

(404,267)

Purchases of securities held to maturity

 

 

(1,000)

  

 

(3,628)

Proceeds from sales of securities available for sale

 

 

230,372

  

 

26,685

Redemption of securities, restricted

 

 

503,534

  

 

404,776

Maturities, calls and principal payments of securities available for sale

 

 

72,535

  

 

89,630

Maturities, calls and principal payments of securities held to maturity

 

 

16,760

  

 

36,390

Net increase in loans

 

 

(134,808)

  

 

(319,312)

Proceeds from loan sale

 

 

40,133

  

 

2,574

Purchase of premises and equipment

 

 

(5,259)

  

 

(2,595)

Net cash provided by (used in) investing activities

 

 

4,320

  

 

(257,663)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

  

 

  

Net increase in deposits

 

 

284,631

  

 

277,345

Net decrease in federal funds purchased

 

 

(50,000)

  

 

(50,000)

Net decrease in Federal Home Loan Bank advances

 

 

(235,641)

  

 

(19,733)

Repayment of junior subordinated debentures

 

 

 —

  

 

(352)

Net (decrease) increase in repurchase agreements

 

 

(61)

  

 

172

Net proceeds from issuance of common stock

 

 

705

  

 

721

Repurchase of surrendered stock from vesting of restricted stock awards

 

 

(569)

  

 

(330)

Cash dividends paid

 

 

(13,749)

  

 

(13,670)

Net cash (used in) provided by financing activities

 

 

(14,684)

  

 

194,153

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

 

30,354

  

 

(26,885)

Cash and cash equivalents at beginning of period

 

 

94,747

  

 

113,838

Cash and cash equivalents at end of period

 

$

125,101

 

$

86,953

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

  

 

  

Cash paid for:

 

 

 

  

 

  

Interest

 

$

23,902

 

$

17,660

Income taxes

 

$

2,474

 

$

4,195

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

  

  

 

 

Conversion of junior subordinated debentures

 

$

 —

 

$

15,350

Transfers from portfolio loans to other real estate owned

 

$

175

 

$

 —

 

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

7


 

Table of Contents

BRIDGE BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. BASIS OF PRESENTATION

Bridge Bancorp, Inc. (the “Registrant” or “Company”), is a registered bank holding company for BNB Bank (the “Bank”), which was formerly known as The Bridgehampton National Bank prior to the Bank's conversion to a New York chartered commercial bank in December 2017. The Registrant was incorporated under the laws of the State of New York in 1988, at the direction of the Board of Directors of the Bank for the purpose of becoming a bank holding company pursuant to a plan of reorganization under which the former shareholders of the Bank became the shareholders of the Company. Since commencing business in March 1989, after the reorganization, the Registrant has functioned primarily as the holder of all of the Bank's common stock. In May 1999, the Bank established a real estate investment trust subsidiary, Bridgehampton Community, Inc. (“BCI”), as an operating subsidiary. The assets transferred to BCI are viewed by the bank regulators as part of the Bank's assets in consolidation. The operations of the Bank also include Bridge Abstract LLC (“Bridge Abstract”), a wholly owned subsidiary of the Bank, which is a broker of title insurance services and Bridge Financial Services LLC (“Bridge Financial Services”), an investment services subsidiary that was formed in March 2014. The Company formed Bridge Statutory Capital Trust II (the “Trust”) as a subsidiary in 2009, which sold $16.0 million of 8.5% cumulative convertible Trust Preferred Securities (the “Trust Preferred Securities”) in a private placement to accredited investors. The Trust Preferred Securities were redeemed effective January 18, 2017 and the Trust was cancelled effective April 24, 2017.

The accompanying Unaudited Consolidated Financial Statements, which include the accounts of the Company and its wholly-owned subsidiary, the Bank, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. The Unaudited Consolidated Financial Statements included herein reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. In preparing the interim financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported periods. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified. Actual future results could differ significantly from those estimates. The annualized results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain reclassifications have been made to prior year amounts, and the related discussion and analysis, to conform to the current year presentation. These reclassifications did not have an impact on net income or total stockholders' equity. The Unaudited Consolidated Financial Statements should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10‑K for the year ended December 31, 2017.

2. EARNINGS PER SHARE

Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) No. 260‑10‑45 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (“EPS”). The restricted stock awards and certain restricted stock units granted by the Company contain non-forfeitable rights to dividends and therefore are considered participating securities. The two-class method for calculating basic EPS excludes dividends paid to participating securities and any undistributed earnings attributable to participating securities.

The following table presents the computation of EPS for the three and nine months ended September 30, 2018 and 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30, 

 

September 30, 

(In thousands, except per share data)

    

2018

    

2017

    

2018

    

2017

Net income

 

$

6,547

 

$

9,443

 

$

25,363

 

$

27,455

Dividends paid on and earnings allocated to participating securities

 

 

(145)

  

 

(197)

 

 

(550)

 

 

(557)

Income attributable to common stock

 

$

6,402

 

$

9,246

 

$

24,813

 

$

26,898

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, including participating securities

 

 

19,890

  

 

19,793

 

 

19,869

 

 

19,748

Weighted average participating securities

 

 

(438)

  

 

(412)

 

 

(435)

 

 

(405)

Weighted average common shares outstanding

 

 

19,452

  

 

19,381

 

 

19,434

 

 

19,343

Basic earnings per common share

 

$

0.33

 

$

0.48

 

$

1.28

 

$

1.39

 

 

 

 

 

 

 

 

 

 

 

 

 

Income attributable to common stock

 

$

6,402

 

$

9,246

 

$

24,813

 

$

26,898

Impact of assumed conversions - interest on 8.5% trust preferred securities

 

 

 —

  

 

 —

 

 

 —

 

 

32

Income attributable to common stock including assumed conversions

 

$

6,402

 

$

9,246

 

$

24,813

 

$

26,930

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

19,452

  

 

19,381

 

 

19,434

 

 

19,343

Incremental shares from assumed conversions of options and restricted stock units

 

 

33

  

 

25

 

 

27

 

 

21

Incremental shares from assumed conversions of 8.5% trust preferred securities

 

 

 —

  

 

 —

 

 

 —

 

 

23

Weighted average common and equivalent shares outstanding

 

 

19,485

  

 

19,406

 

 

19,461

 

 

19,387

Diluted earnings per common share

 

$

0.33

 

$

0.48

 

$

1.28

 

$

1.39

 

8


 

Table of Contents

There were 47,393 stock options outstanding at September 30, 2018 that were not included in the computation of diluted earnings per share for the three and nine months ended September 30, 2018 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive. There were no stock options outstanding at September 30, 2017.

There were no restricted stock units that were antidilutive for the three months ended September 30, 2018 and 2017. There were 21,980 restricted stock units that were antidilutive for the nine months ended September 30, 2018 and no restricted stock units that were antidilutive for the nine months ended September 30, 2017.

The $15.7 million in trust preferred securities outstanding at December 31, 2016 were redeemed effective January 18, 2017 and therefore were not included in the computation of diluted earnings per share for the three months ended September 30, 2017, but were dilutive for the nine months ended September 30, 2017 and therefore were included in the computation of diluted earnings per share for that period.

3. STOCK BASED COMPENSATION PLANS

The Bridge Bancorp, Inc. 2012 Stock-Based Incentive Plan (“2012 SBIP”) provides for the grant of stock-based and other incentive awards to officers, employees and directors of the Company. The 2012 SBIP superseded the Bridge Bancorp, Inc. 2006 Equity Incentive Plan. The number of shares of common stock of Bridge Bancorp, Inc. available for stock-based awards under the 2012 SBIP is 525,000 plus 278,385 shares that were remaining under the 2006 Equity Incentive Plan. Of the total 803,385 shares of common stock approved for issuance under the 2012 SBIP, 274,950 shares remain available for issuance at September 30, 2018, including shares that may be granted in the form of stock options, restricted stock awards (“RSAs”), or restricted stock units (“RSUs”).

The Compensation Committee of the Board of Directors determines awards under the 2012 SBIP. The Company accounts for the 2012 SBIP under FASB ASC No. 718.

Stock Options

Stock options may be either incentive stock options, which bestow certain tax benefits on the optionee, or non-qualified stock options, not qualifying for such benefits. All options have an exercise price that is not less than the market value of the Company's common stock on the date of the grant.

The fair value of each option granted is estimated on the date of the grant using the Black-Scholes option-pricing model. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of the Company's common stock as of the exercise or reporting date.

During the nine months ended September 30, 2018, in accordance with the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”), the Company granted 47,393 stock options. All of the stock options granted vest ratably over three years. The estimated weighted-average grant-date fair value of a