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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 March 31, 2019

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]

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

 

Title of each class

Trading Symbol

Name of each exchange on which registered

 Common Stock

 BDGE

 NASDAQ STOCK MARKET, LLC

 

There were 19,853,386 shares of common stock outstanding as of April 30, 2019.

 

 

 

 


 

Table of Contents

BRIDGE BANCORP, INC.

 

 

 

PART I

FINANCIAL INFORMATION

 

 

 

 

Item 1.  

Financial Statements (unaudited)

3

 

 

 

 

Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018

3

 

 

 

 

Consolidated Statements of Income for the Three Months Ended March 31, 2019 and 2018

4

 

 

 

 

Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2019 and 2018

5

 

 

 

 

Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2019 and 2018

6

 

 

 

 

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2019 and 2018

7

 

 

 

 

Condensed Notes to the Consolidated Financial Statements

8

 

 

 

Item 2.  

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

34

 

 

 

Item 3.  

Quantitative and Qualitative Disclosures About Market Risk

47

 

 

 

Item 4.  

Controls and Procedures

48

 

 

 

PART II  

OTHER INFORMATION

 

 

 

 

Item 1.  

Legal Proceedings

50

 

 

 

Item 1A. 

Risk Factors

50

 

 

 

Item 2.  

Unregistered Sales of Equity Securities and Use of Proceeds

50

 

 

 

Item 3.  

Defaults Upon Senior Securities

50

 

 

 

Item 4. 

Mine Safety Disclosures

50

 

 

 

Item 5.  

Other Information

50

 

 

 

Item 6.  

Exhibits

51

 

 

 

Signatures 

 

51

 

 

 

 

 

2


 

Table of Contents

Item 1. Financial Statements

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

March 31, 

 

December 31, 

 

 

     

2019

    

2018

     

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Cash and due from banks

 

$

68,773

 

$

142,145

 

Interest-bearing deposits with banks

 

 

31,684

 

 

153,223

 

Total cash and cash equivalents

 

 

100,457

 

 

295,368

 

 

 

 

 

 

 

 

 

Securities available for sale, at fair value

 

 

707,451

 

 

680,886

 

Securities held to maturity (fair value of $147,633 and $156,792, respectively)

 

 

149,512

 

 

160,163

 

Total securities

 

 

856,963

 

 

841,049

 

 

 

 

 

 

 

 

 

Securities, restricted

 

 

28,068

 

 

24,028

 

 

 

 

 

 

 

 

 

Loans held for investment

 

 

3,391,104

 

 

3,275,811

 

Allowance for loan losses

 

 

(31,784)

 

 

(31,418)

 

Loans, net

 

 

3,359,320

 

 

3,244,393

 

 

 

 

 

 

 

 

 

Premises and equipment, net

 

 

34,478

 

 

35,008

 

Operating lease right-of-use assets

 

 

37,621

 

 

 —

 

Accrued interest receivable

 

 

13,057

 

 

11,236

 

Goodwill

 

 

105,950

 

 

105,950

 

Other intangible assets

 

 

4,150

 

 

4,374

 

Prepaid pension

 

 

10,373

 

 

10,263

 

Bank owned life insurance

 

 

90,265

 

 

89,712

 

Other real estate owned

 

 

175

 

 

175

 

Other assets

 

 

34,332

 

 

39,188

 

Total assets

 

$

4,675,209

 

$

4,700,744

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Demand deposits

 

$

1,313,947

 

$

1,448,605

 

Savings, NOW and money market deposits

 

 

2,130,808

 

 

2,108,297

 

Certificates of deposit of $100,000 or more

 

 

218,682

 

 

207,087

 

Other time deposits

 

 

62,027

 

 

122,404

 

Total deposits

 

 

3,725,464

 

 

3,886,393

 

 

 

 

 

 

 

 

 

Repurchase agreements

 

 

721

 

 

539

 

Federal Home Loan Bank ("FHLB") advances

 

 

330,217

 

 

240,433

 

Subordinated debentures, net

 

 

78,815

 

 

78,781

 

Operating lease liabilities

 

 

40,454

 

 

 —

 

Other liabilities and accrued expenses

 

 

34,535

 

 

40,768

 

Total liabilities

 

 

4,210,206

 

 

4,246,914

 

 

 

 

 

 

 

 

 

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; 19,871,469 and 19,815,680 shares issued, respectively; and 19,847,705 and 19,790,884 shares outstanding, respectively)

 

 

199

 

 

198

 

Surplus

 

 

352,454

 

 

352,093

 

Retained earnings

 

 

125,765

 

 

117,432

 

Treasury stock at cost, 23,764 and 24,796 shares, respectively

 

 

(786)

 

 

(781)

 

 

 

 

477,632

 

 

468,942

 

Accumulated other comprehensive loss, net of income taxes

 

 

(12,629)

 

 

(15,112)

 

Total stockholders’ equity

 

 

465,003

 

 

453,830

 

Total liabilities and stockholders’ equity

 

$

4,675,209

 

$

4,700,744

 

 

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

 

 

 

March 31, 

 

 

    

2019

    

2018

    

Interest income:

 

 

 

 

 

 

 

Loans (including fee income)

 

$

37,612

 

$

35,613

 

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

 

 

4,789

 

 

3,724

 

U.S. GSE securities

 

 

192

 

 

279

 

State and municipal obligations

 

 

627

 

 

812

 

Corporate bonds

 

 

336

 

 

355

 

Deposits with banks

 

 

544

 

 

90

 

Other interest and dividend income

 

 

415

 

 

491

 

Total interest income

 

 

44,515

 

 

41,364

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

Savings, NOW and money market deposits

 

 

6,369

 

 

2,514

 

Certificates of deposit of $100,000 or more

 

 

983

 

 

517

 

Other time deposits

 

 

562

 

 

195

 

Federal funds purchased and repurchase agreements

 

 

45

 

 

606

 

FHLB advances

 

 

1,098

 

 

1,858

 

Subordinated debentures

 

 

1,135

 

 

1,135

 

Total interest expense

 

 

10,192

 

 

6,825

 

 

 

 

 

 

 

 

 

Net interest income

 

 

34,323

 

 

34,539

 

Provision for loan losses

 

 

600

 

 

800

 

Net interest income after provision for loan losses

 

 

33,723

 

 

33,739

 

 

 

 

 

 

 

 

 

Non-interest income:

 

 

 

 

 

 

 

Service charges and other fees

 

 

2,428

 

 

2,163

 

Title fee income

 

 

306

 

 

505

 

Gain on sale of Small Business Administration ("SBA") loans

 

 

217

 

 

371

 

BOLI income

 

 

553

 

 

546

 

Other operating income

 

 

1,714

 

 

528

 

Total non-interest income

 

 

5,218

 

 

4,113

 

 

 

 

 

 

 

 

 

Non-interest expense:

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

13,280

 

 

12,812

 

Occupancy and equipment

 

 

3,531

 

 

3,243

 

Technology and communications

 

 

1,789

 

 

1,643

 

Marketing and advertising

 

 

1,023

 

 

962

 

Professional services

 

 

757

 

 

1,212

 

FDIC assessments

 

 

238

 

 

464

 

Amortization of other intangible assets

 

 

213

 

 

246

 

Other operating expenses

 

 

1,768

 

 

2,016

 

Total non-interest expense

 

 

22,599

 

 

22,598

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

16,342

 

 

15,254

 

Income tax expense

 

 

3,415

 

 

3,181

 

Net income

 

$

12,927

 

$

12,073

 

Basic earnings per share

 

$

0.65

 

$

0.61

 

Diluted earnings per share

 

$

0.65

 

$

0.61

 

 

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

 

 

 

March 31, 

 

 

    

2019

    

2018

    

Net income

 

$

12,927

 

$

12,073

 

Other comprehensive income (loss):

  

 

  

  

 

  

 

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

 

 

3,918

 

 

(6,088)

 

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

 

 

90

 

 

67

 

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

  

 

(1,525)

  

 

2,051

 

Total other comprehensive income (loss)

 

 

2,483

 

 

(3,970)

 

Comprehensive income

  

$

15,410

  

$

8,103

 

 

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 per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Common 

 

 

 

 

Retained

 

Treasury

 

Comprehensive

 

 

 

 

   

Stock

   

Surplus

   

 Earnings

   

Stock

   

Loss

   

Total

Balance at January 1, 2019

 

$

198

 

$

352,093

 

$

117,432

 

$

(781)

 

$

(15,112)

 

$

453,830

Net income

 

 

 

  

 

 

 

 

12,927

  

 

 

 

 

 

  

 

12,927

Shares issued under the dividend reinvestment plan

 

 

 

  

 

198

 

 

 

  

 

 

 

 

 

  

 

198

Stock awards granted and distributed

 

 

 1

  

 

(791)

 

 

 

  

 

790

 

 

 

  

 

 —

Repurchase of surrendered stock from vesting of restricted stock awards

 

 

 

  

 

 

 

 

 

  

 

(795)

 

 

 

  

 

(795)

Share based compensation expense

 

 

 

  

 

954

 

 

 

  

 

 

 

 

 

  

 

954

Cash dividend declared, $0.23 per share

 

 

 

  

 

 

 

 

(4,594)

  

 

 

 

 

 

  

 

(4,594)

Other comprehensive income, net of deferred income taxes

 

 

 

  

 

 

 

 

 

  

 

 

 

 

2,483

  

 

2,483

Balance at March 31, 2019

 

$

199

 

$

352,454

 

$

125,765

 

$

(786)

 

$

(12,629)

 

$

465,003

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

  

 

 

 

 

12,073

  

 

 

 

 

 

  

 

12,073

Shares issued under the dividend reinvestment plan

 

 

 

  

 

232

 

 

 

  

 

 

 

 

 

  

 

232

Stock awards granted and distributed

 

 

 1

  

 

(307)

 

 

 

  

 

306

 

 

 

  

 

 —

Stock awards forfeited

 

 

 

  

 

20

 

 

 

  

 

(20)

 

 

 

  

 

 —

Repurchase of surrendered stock from vesting of restricted stock awards

 

 

 

  

 

 

 

 

 

  

 

(426)

 

 

 

  

 

(426)

Share based compensation expense

 

 

 

  

 

784

 

 

 

  

 

 

 

 

 

  

 

784

Cash dividend declared, $0.23 per share

 

 

 

  

 

 

 

 

(4,570)

  

 

 

 

 

 

  

 

(4,570)

Other comprehensive loss, net of deferred income taxes

 

 

 

  

 

 

 

 

 

  

 

 

 

 

(3,970)

  

 

(3,970)

Balance at March 31, 2018

 

$

198

 

$

348,420

 

$

104,050

 

$

(436)

 

$

(18,909)

 

$

433,323

 

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)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 

 

 

    

2019

    

2018

    

Cash flows from operating activities:

 

 

    

 

 

  

 

Net income

 

$

12,927

 

$

12,073

 

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

 

 

 

  

 

 

 

Provision for loan losses

 

 

600

  

 

800

 

Depreciation and amortization of premises and equipment

 

 

1,048

  

 

933

 

Net (accretion) and other amortization

 

 

(287)

 

 

(1,033)

 

Net amortization on securities

 

 

648

  

 

1,302

 

Increase in cash surrender value of bank owned life insurance

 

 

(553)

  

 

(546)

 

Amortization of intangible assets

 

 

213

  

 

246

 

Share based compensation expense

 

 

954

  

 

784

 

Increase in accrued interest receivable

 

 

(1,821)

  

 

(255)

 

SBA loans originated for sale

 

 

(3,188)

  

 

(4,281)

 

Proceeds from sale of the guaranteed portion of SBA loans

 

 

3,454

  

 

4,744

 

Gain on sale of the guaranteed portion of SBA loans

 

 

(217)

  

 

(371)

 

Decrease in other assets

 

 

4,006

  

 

1,253

 

Decrease in accrued expenses and other liabilities

 

 

(5,619)

  

 

(479)

 

Net cash provided by operating activities

 

 

12,165

  

 

15,170

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

  

 

  

 

Purchases of securities available for sale

 

 

(40,771)

  

 

(525)

 

Purchases of securities, restricted

 

 

(14,850)

  

 

(342,405)

 

Redemption of securities, restricted

 

 

10,810

  

 

341,559

 

Maturities, calls and principal payments of securities available for sale

 

 

19,270

  

 

24,715

 

Maturities, calls and principal payments of securities held to maturity

 

 

10,470

  

 

4,558

 

Net increase in loans

 

 

(115,341)

  

 

(98,217)

 

Purchase of premises and equipment

 

 

(518)

  

 

(1,320)

 

Net cash used in investing activities

 

 

(130,930)

  

 

(71,635)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

  

 

  

 

Net (decrease) increase in deposits

 

 

(160,921)

  

 

96,712

 

Net decrease in federal funds purchased

 

 

 —

  

 

(50,000)

 

Net increase in FHLB advances

 

 

89,784

  

 

18,787

 

Net increase (decrease) in repurchase agreements

 

 

182

  

 

(5)

 

Net proceeds from issuance of common stock

 

 

198

  

 

232

 

Repurchase of surrendered stock from vesting of restricted stock awards

 

 

(795)

  

 

(426)

 

Cash dividends paid

 

 

(4,594)

  

 

(4,570)

 

Net cash (used in) provided by financing activities

 

 

(76,146)

  

 

60,730

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash and cash equivalents

 

 

(194,911)

  

 

4,265

 

Cash and cash equivalents at beginning of period

 

 

295,368

  

 

94,747

 

Cash and cash equivalents at end of period

 

$

100,457

 

$

99,012

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

  

 

  

 

Cash paid for:

 

 

 

  

 

  

 

Interest

 

$

11,126

 

$

7,963

 

Income taxes

 

$

49

 

$

261

 

 

 

 

 

 

 

 

 

Non-cash investing and financing activities:

 

 

  

  

 

 

 

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 “Holding Company”), is a bank holding company incorporated under the laws of the State of New York. The Holding Company’s business consists of the operations of its wholly-owned subsidiary, BNB Bank (the “Bank”). The Bank’s operations include its real estate investment trust subsidiary, Bridgehampton Community, Inc.; a financial title insurance subsidiary, Bridge Abstract LLC (“Bridge Abstract”); and an investment services subsidiary, Bridge Financial Services, Inc. (“Bridge Financial Services”).

The unaudited consolidated financial statements presented in this Quarterly Report on Form 10-Q include the collective results of the Holding Company and its wholly-owned subsidiary, the Bank, which are collectively herein referred to as “we”, “us”, “our” and the “Company.”

The accompanying unaudited consolidated financial statements 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 three months ended March 31, 2019 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, 2018.

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 (“RSAs”) and certain restricted stock units (“RSUs”) 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.

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The following table presents the computation of EPS for the three months ended March 31, 2019 and 2018:

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 

 

(In thousands, except per share data)

    

2019

    

2018

    

Net income

 

$

12,927

 

$

12,073

 

Dividends paid on and earnings allocated to participating securities

 

 

(277)

 

 

(253)

 

Income attributable to common stock

 

$

12,650

 

$

11,820

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, including participating securities

 

 

19,926

 

 

19,834

 

Weighted average participating securities

 

 

(426)

 

 

(421)

 

Weighted average common shares outstanding

 

 

19,500

 

 

19,413

 

Basic earnings per common share

 

$

0.65

 

$

0.61

 

 

 

 

 

 

 

 

 

Income attributable to common stock

 

$

12,650

 

$

11,820

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

19,500

 

 

19,413

 

Incremental shares from assumed conversions of options and restricted stock units

 

 

26

 

 

25

 

Weighted average common and equivalent shares outstanding

 

 

19,526

 

 

19,438

 

Diluted earnings per common share

 

$

0.65

 

$

0.61

 

 

There were 110,660 stock options outstanding at March 31, 2019 that were not included in the computation of diluted earnings per share for the three months ended March 31, 2019 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive. There were 47,393 stock options outstanding at March 31, 2018 that were not included in the computation of diluted earnings per share for the three months ended March 31, 2018 because the options' exercise prices were greater than the average market price of common stock and were, therefore, antidilutive.

There were 22,305 and 21,693 RSUs that were antidilutive for the three months ended March 31, 2019 and 2018, respectively.

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 Stock-Based 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 Stock-Based Incentive Plan. Of the total 803,385 shares of common stock approved for issuance under the 2012 SBIP, 163,472 shares remain available for issuance at March 31, 2019, including shares that may be granted in the form of stock options, RSAs, or 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 three months ended March 31, 2019 and 2018, in accordance with the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”), the Company granted 63,267 and 47,393 stock options, respectively, with an exercise price set to equal a 10.0% premium over the grant date stock price. All of the stock options granted vest ratably over three years. The estimated weighted-average grant-date fair value of all stock options granted in the three months

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ended March 31, 2019 and 2018 was $5.05 and $6.52 per stock option, respectively, using the Black-Scholes option-pricing model with assumptions as follows:

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

March 31, 

 

 

 

    

2019

    

2018

    

 

Dividend yield

 

 

2.86

%

 

2.80

%

 

Expected volatility

 

 

23.80

 

 

27.53

 

  

Risk-free interest rate

 

 

2.52

 

 

2.67

 

 

Expected option life

 

 

6.0

years

 

6.5

years

 

 

Compensation expense attributable to stock options was $39 thousand and $13 thousand for the three months ended March 31, 2019 and 2018, respectively. As of March 31, 2019, there was $499 thousand of total unrecognized compensation cost related to unvested stock options. The cost is expected to be recognized over a weighted-average period of 2.5 years.

The following table summarizes the status of the Company's stock options as of and for the three months ended March 31, 2019:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

Weighted

 

Average

 

 

 

 

 

Number

 

Average

 

Remaining

 

Aggregate

 

 

of

 

Exercise

 

Contractual

 

Intrinsic

(Dollars in thousands, except per share amounts)

     

Options

     

Price

     

Life

     

Value

Outstanding, January 1, 2019

 

47,393

 

$

36.19

 

 

 

 

 

 

Granted

 

63,267

 

 

35.35

 

 

 

 

 

 

Outstanding, March 31, 2019

 

110,660

 

 

35.71

 

 

9.4

years

$

 —

Vested and Exercisable, March 31, 2019

 

15,795

 

 

36.19

 

 

8.9

years

 

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

 

Exercise

Range of Exercise Prices

    

Options

    

Price

 

 

63,267

 

$

35.35

 

 

47,393

 

$

36.19

 

 

110,660

 

 

 

 

Restricted Stock Awards

The Company's RSAs are shares of the Company's common stock that are forfeitable and are subject to restrictions on transfer prior to the vesting date. RSAs are forfeited if the award holder departs the Company before vesting. RSAs carry dividend and voting rights from the date of grant. The vesting of time-vested RSAs depends upon the award holder continuing to render services to the Company. The Company's performance-based RSAs vest subject to the achievement of the Company's 2018 corporate goals.

The following table summarizes the unvested RSA activity for the three months ended March 31, 2019:

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

Average Grant-Date

 

    

Shares

    

Fair Value

Unvested, January 1, 2019

 

324,882

 

$

29.13

Granted

 

74,252

 

 

32.17

Vested

 

(83,184)

 

 

27.02

Forfeited

 

(1,185)

 

 

32.53

Unvested, March 31, 2019

 

314,765

 

 

30.39

 

During the three months ended March 31, 2019, the Company granted a total of 74,252 RSAs. Of the 74,252 RSAs granted, 49,925 time-vested RSAs vest ratably over five years and 24,327 time-vested RSAs vest ratably over three years. During the three months ended March 31, 2018, the Company granted a total of 77,682 RSAs. Of the 77,682 RSAs granted, 39,750 time-vested RSAs vest ratably over five years, 12,815 time-vested RSAs vest ratably over three years, and 25,117 performance-based RSAs vest ratably over two years, subject to the achievement of the Company's 2018 corporate goals.