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Press Release

Bridge Bancorp, Inc. Reports Fourth Quarter and Year End 2018 Results

Company Release - 1/28/2019 4:15 PM ET

BRIDGEHAMPTON, N.Y., Jan. 28, 2019 (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 2018.

The Company's fourth quarter and full year 2018 financial results included:

  • Net income for the 2018 fourth quarter of $13.9 million, or $0.70 per diluted share.
  • Net income for the full year 2018 of $39.2 million, or $1.97 per diluted share, inclusive of:
    • Pre-tax charge of $8.9 million, or $0.35 per diluted share after tax, related to the fraudulent conduct of a business customer through its deposit accounts at BNB in the 2018 third quarter.
    • Pre-tax net securities losses of $7.9 million, or $0.31 per diluted share after tax, related to the Company’s balance sheet restructure in the 2018 second quarter.
    • Pre-tax charge of $0.8 million, or $0.03 per diluted share after tax, related to the Company’s office relocation costs in the 2018 fourth quarter.
  • Excluding the impact of the fraud loss, balance sheet restructure, and office relocation costs, net income for the full year 2018 was $52.9 million, or $2.66 per diluted share.
  • Net interest income for the 2018 fourth quarter increased $0.5 million over 2017 to $34.1 million, with a tax-equivalent net interest margin of 3.26%.
  • Adjusted net interest margin (excluding purchase accounting) declined from 3.24% in the 2018 third quarter to 3.21% in the 2018 fourth quarter due to excess liquidity in December 2018.
  • Total assets of $4.7 billion at December 31, 2018, 6% higher than September 30, 2018 and December 31, 2017.
  • 2018 loan growth of $173 million, or 6%, (7% excluding the 2018 second quarter loan sale) with 2018 fourth quarter growth of $78 million, or 10% annualized.
  • Deposit growth of $552 million, or 17%, compared to December 31, 2017, and $267 million, or 29% annualized, from September 30, 2018.
  • Non-public, non-brokered deposit growth of $431 million, or 17%, compared to December 31, 2017, and $111 million, or 16% annualized, from September 30, 2018.
  • Non-performing assets of $3.0 million at December 31, 2018, $4.0 million lower than December 31, 2017 and $0.9 million higher than September 30, 2018. With loan loss reserve coverage to total loans of 0.96%.
  • All capital ratios remain strong. Declared a dividend of $0.23 during the quarter.

Commenting on the fourth quarter results, Kevin O’Connor, President and CEO said, “Our focus continues to be on profitably growing our business, by adding and expanding relationships. This was evident in 2018 as loans and deposits both increased with the velocity of growth expanding in the fourth quarter as each experienced a double-digit annualized increase. Profitability was evident as adjusted net interest margin increased on a year-over-year basis and net interest income grew by $9.6 million, or 8%. These resulted in strong returns and in the fourth quarter we achieved a 1.22% return on average assets and a 16.38% return on tangible common equity. While the interest rate environment remains challenging and competition is intense, we believe our balance sheet structure, featuring strong liquidity and core funding, provides us an opportunity to continue this momentum, and achieve targeted performance objectives.”

Net Earnings and Returns
Net income in the 2018 fourth quarter was $13.9 million, or $0.70 per diluted share, an increase of $20.8 million compared to the 2017 fourth quarter. Excluding the impact of the reduction to net deferred tax assets related to the Tax Cuts and Jobs Act (“Tax Act”) and restructuring costs, net income for the 2017 fourth quarter was $5.9 million, or $0.30 per share.

Net income for the full year 2018 was $39.2 million, or $1.97 per diluted share, compared to $20.5 million, or $1.04 per diluted share, in 2017. Excluding the impact of the fraud loss, office relocation costs and balance sheet restructure, net income for the full year 2018 was $52.9 million, or $2.66 per diluted share. Excluding the impact of the Tax Act and restructuring costs, net income for the full year 2017 was $33.3 million, or $1.68 per share.

Returns on average assets and equity in the 2018 fourth quarter were 1.22% and 12.32%, respectively.  Return on average tangible common equity was 16.38% for the 2018 fourth quarter.  

Interest income was $43.5 million in the 2018 fourth quarter, an increase of $0.9 million compared to the 2018 third quarter, driven primarily by loan portfolio growth and higher investment portfolio yields. Interest expense was $9.4 million in the 2018 fourth quarter, an increase of $1.0 million compared to the 2018 third quarter, primarily due to deposit growth and an increase in average cost of interest-bearing liabilities. Proceeds from a large deposit made in December 2018 were not readily deployed into investments or loans. This caused margin compression of 3 basis points in the 2018 fourth quarter.

The impact of purchase accounting on the margin continues to decrease.  The reported margin for the 2018 fourth quarter showed a year-over-year decline of 10 basis points from 3.36% in 2017 to 3.26% in 2018. However, the adjusted margin, excluding purchase accounting, is up 7 basis points from 3.14% in 2017 to 3.21% in 2018.  The decreased impact of purchase accounting can also be observed regarding loan yields.  Reported 2018 fourth quarter loan yields were flat year-over year at 4.56%, while yields ex-purchase accounting were up 24 basis points, increasing from 4.26% in 2017 to 4.50% in 2018.

“Although assets only expanded by 6% year-over-year, our deposit base increased by 17%, enabling us to reduce wholesale borrowings. By improving our funding mix, our adjusted margin increased over the same quarter last year,” stated Mr. O’Connor.

The provision for loan losses was $0.4 million for the 2018 fourth quarter, $10.0 million lower than the 2017 fourth quarter, and $1.8 million for the full year 2018, $12.3 million lower than the full year 2017.  Contributing to the lower provision were decreases in net charge-offs in the fourth quarter and full year 2018 compared to the same periods in 2017. The Company recognized net charge-offs of $0.9 million in the 2018 fourth quarter, compared to net charge-offs of $8.0 million in the 2017 fourth quarter. The Company recognized net charge-offs of $2.1 million in the full year 2018, compared to net charge-offs of $8.2 million in the 2017 full year.

During the 2018 fourth quarter, the Company negotiated the payoff of $11 million in Taxi Medallion loans. The parties agreed to settle the outstanding notes at $450 thousand per medallion, which resulted in $1.1 million in charge-offs. This did not result in an increase in the 2018 fourth quarter provision. As of December 31, 2018, $4 million had been paid off, with the remaining loans paid down in January 2019.  After this transaction the Company’s exposure to Taxi Medallion loans has declined to $10 million.  All remaining loans are performing.

Non-interest income was $5.1 million for the 2018 fourth quarter, $0.6 million higher than the 2017 fourth quarter, attributable to higher gain on sale of Small Business Administration (“SBA”) loans, higher service charges and other fees, and net securities losses in the 2017 fourth quarter, partially offset by lower title fee income and other operating income. Non-interest income was $11.6 million for the full year 2018, $6.5 million lower than the 2017 full year, driven primarily by net securities losses related to the balance sheet restructure in 2018 and lower title fee income, partially offset by higher gain on sale of SBA loans, service charges and other fees, and other operating income. Excluding the impact of the balance sheet restructure, total non-interest income in the full year 2018 would have been $19.5 million.

Non-interest expense for the 2018 fourth quarter decreased to $22.1 million from $29.2 million in the 2017 fourth quarter.  Non-interest expense for the full year 2018 increased to $98.2 million from $91.7 million in full year 2017. The decrease in the fourth quarter is primarily due to restructuring costs related to branch restructuring and charter conversion in 2017, and a recovery of fraud loss in the 2018 fourth quarter, partially offset by growth in salaries and benefits expense and office relocation costs in 2018. The increase in the full year non-interest expense is primarily due to growth in salaries and benefits expense, and a fraud loss and office relocation costs in 2018, partially offset by restructuring costs related to branch restructuring and charter conversion in 2017. Excluding the impact of the fraud recovery and office relocation costs, total non-interest expense in the fourth quarter 2018 would have been $21.9 million. Excluding the impact of the restructuring costs, total non-interest expense in the fourth quarter 2017 would have been $21.1 million.  Excluding the impact of the fraud loss and office relocation costs, total non-interest expense in the full year 2018 would have been $88.5 million. Excluding the impact of the restructuring costs, total non-interest expense in the full year 2017 would have been $83.7 million. 

Non-recurring items in the 2018 fourth quarter included $0.8 million related to the consolidation of back office operations and a $0.6 million net recovery related to the 2018 third quarter fraud loss resulting from a final settlement with another financial institution.

Income tax expense was $2.9 million in the 2018 fourth quarter, and $9.1 million in full year 2018. Income tax expense was $5.4 million in the 2017 fourth quarter and $18.9 million in full year 2017, which included a $7.6 million charge to write-down the Company’s deferred tax assets due to the enactment of the Tax Act in the 2017 fourth quarter.    

Balance Sheet and Asset Quality
Total assets were $4.7 billion at December 31, 2018, $252.0 million higher than September 30, 2018, and $270.7 million higher than December 31, 2017. Total loans at December 31, 2018 of $3.3 billion reflect growth of $173.1 million, or 6%, over December 31, 2017. Deposits totaled $3.9 billion at December 31, 2018, an increase of $551.9 million, or 17%, over December 31, 2017. Demand deposits increased $109.9 million year-over-year to $1.4 billion at December 31, 2018, representing 37% of total deposits.

Asset quality measures improved as non-performing assets were $3.0 million, or 0.06% of total assets, at December 31, 2018, compared to $7.0 million, or 0.16% of total assets, at December 31, 2017. Non-performing assets at December 31, 2018 included $0.2 million of other real estate owned. Non-performing loans were $2.8 million, or 0.09% of total loans at December 31, 2018, compared to $7.0 million, or 0.22% of total loans at December 31, 2017.  Loans 30 to 89 days past due increased $0.8 million to $4.4 million at December 31, 2018, compared to $3.6 million at December 31, 2017. Loans past due 90 days and accruing at December 31, 2018 and 2017 were comprised of acquired loans of $0.3 million and $1.8 million, respectively.

The allowance for loan losses was $31.4 million at December 31, 2018, $0.3 million lower than December 31, 2017. The allowance as a percentage of loans was 0.96% at December 31, 2018, compared to 1.02% at December 31, 2017.

Stockholders’ equity was $453.8 million at December 31, 2018, $24.6 million higher than December 31, 2017. The growth reflects earnings, partially offset by shareholders’ dividends. Tangible book value per share was $17.36 at December 31, 2018, $1.22 higher than December 31, 2017.

Conference Call
The Company will host a conference call on Tuesday, January 29, 2019 at 10:00 AM (ET). Investors who would like to join the conference call are encouraged to pre-register using the following link: http://dpregister.com/10128294. 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 approximately one hour after the conclusion of the call through Tuesday, February 12, 2019.

Call and replay information are as follows:

Call Date: Tuesday, January 29, 2019
Call Time: 10:00 AM (ET)
Domestic Call Dial In:  1-888-317-6016
International Call Dial In:  1-412-317-6016

Replay Domestic Dial In:  1-877-344-7529
Replay International Dial In:  1-412-317-0088
Access Code: 10128294

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, formerly known as The Bridgehampton National Bank. Established in 1910, BNB, with assets of approximately $4.7 billion, operates 39 branch locations serving Long Island and the greater New York metropolitan area. In addition, BNB 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., a wholly owned subsidiary of BNB, offers financial planning and investment consultation.  For more information visit www.bnbbank.com.

BNB also has a rich tradition of involvement in the community, supporting programs and initiatives that promote local business, the environment, education, healthcare, social services and the arts.

Please see the attached tables for selected financial information.

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; 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 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)
         
 December 31, September 30, December 31,
 2018 2018 2017
Assets        
Cash and due from banks$ 142,145  $ 63,687  $ 76,614 
Interest earning deposits with banks  153,223    61,414    18,133 
Total cash and cash equivalents  295,368    125,101    94,747 
Securities available for sale, at fair value  680,886    661,862    759,916 
Securities held to maturity  160,163    164,438    180,866 
Total securities  841,049    826,300    940,782 
Securities, restricted  24,028    25,162    35,349 
Loans held for sale  —    1,619    — 
Loans held for investment  3,275,811    3,197,427    3,102,752 
Allowance for loan losses  (31,418)   (31,869)   (31,707)
Loans held for investment, net  3,244,393    3,165,558    3,071,045 
Premises and equipment, net  35,008    35,893    33,505 
Goodwill and other intangible assets  110,324    110,667    111,164 
Other real estate owned  175    175    — 
Accrued interest receivable and other assets  150,399    158,282    143,410 
Total assets$ 4,700,744  $ 4,448,757  $ 4,430,002 
         
Liabilities and stockholders' equity        
Demand deposits$ 1,275,664  $ 1,286,673  $ 1,188,535 
Savings and negotiable order of withdrawal ("NOW") deposits  496,881    468,242    419,513 
Money market deposit accounts ("MMDA")  975,531    883,386    755,483 
Certificates of deposit of less than $100,000  61,827    61,548    59,019 
Certificates of deposit of $100,000 or more  155,104    154,181    111,691 
Total individual, partnership and corporate ("IPC") deposits  2,965,007    2,854,030    2,534,241 
Brokered deposits  255,408    281,241    212,593 
Public funds - demand deposits  172,941    46,119    150,166 
Public funds - other deposits  493,037    437,752    437,543 
Total public and brokered deposits  921,386    765,112    800,302 
Total deposits  3,886,393    3,619,142    3,334,543 
Federal funds purchased and repurchase agreements  539    816    50,877 
Federal Home Loan Bank ("FHLB") advances  240,433    265,648    501,374 
Subordinated debentures, net  78,781    78,746    78,641 
Other liabilities and accrued expenses  40,768    44,420    35,367 
Total liabilities  4,246,914    4,008,772    4,000,802 
Total stockholders' equity  453,830    439,985    429,200 
Total liabilities and stockholders' equity$ 4,700,744  $ 4,448,757  $ 4,430,002 
            


BRIDGE BANCORP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (unaudited)
(In thousands, except per share amounts)
                 
 Three Months Ended  Year Ended
 December 31, September 30, December 31, December 31, December 31,
 2018 2018 2017 2018 2017
Interest income$ 43,480  $ 42,589  $ 39,960  $ 168,984  $ 149,849 
Interest expense  9,382    8,375    6,399    32,204    22,689 
Net interest income  34,098    34,214    33,561    136,780    127,160 
Provision for loan losses  400    200    10,400    1,800    14,050 
Net interest income after provision for loan losses  33,698    34,014    23,161    134,980    113,110 
                 
Non-interest income:                
Service charges and other fees  2,579    2,549    2,334    9,853    8,996 
Title fee income  458    384    546    1,797    2,394 
Net securities (losses) gains  —    —    (222)   (7,921)   38 
Gain on sale of SBA loans  492    524    247    2,078    1,689 
BOLI income  561    557    560    2,219    2,250 
Other operating income  1,025    904    1,034    3,542    2,735 
Total non-interest income  5,115    4,918    4,499    11,568    18,102 
                 
Non-interest expense:                
Salaries and employee benefits  12,457    12,134    11,506    50,458    46,560 
Occupancy and equipment  3,472    3,325    3,647    13,245    13,998 
Net fraud (recovery) loss  (600)   9,500    —    8,900    — 
Office relocation costs  750    —    —    750    — 
Restructuring costs  —    —    8,020    —    8,020 
Amortization of other intangible assets  214    215    247    917    1,047 
Other operating expenses  5,778    5,830    5,734    23,910    22,102 
Total non-interest expense  22,071    31,004    29,154    98,180    91,727 
                 
Income (loss) before income taxes  16,742    7,928    (1,494)   48,368    39,485 
Income tax expense  2,878    1,381    5,422    9,141    18,946 
Net income (loss)$ 13,864  $ 6,547  $ (6,916) $ 39,227  $ 20,539 
Basic earnings (loss) per share$ 0.70  $ 0.33  $ (0.35) $ 1.97  $ 1.04 
Diluted earnings (loss) per share$ 0.70  $ 0.33  $ (0.35) $ 1.97  $ 1.04 
Weighted average common and equivalent shares  19,492    19,485    19,419    19,468    19,379 
                    


BRIDGE BANCORP, INC. AND SUBSIDIARIES
Consolidated Financial Highlights (unaudited)
(In thousands, except per share amounts and financial ratios)
               
 Three Months Ended  Year Ended  
 December 31,
 September 30, December 31, December 31,
 December 31, 
 2018
 2018 2017 2018
 2017 
Selected Financial Data:              
Return on average total assets 1.22  0.58  (0.63) 0.87  0.49 %
Adjusted return on average total assets (1) 1.23   1.24   0.53   1.18   0.79  
Return on average stockholders' equity 12.32   5.64   (6.07)  8.66   4.64  
Adjusted return on average stockholders' equity (1) 12.43   12.03   5.15   11.69   7.53  
Return on average tangible common equity (1) (2) 16.38   7.43   (8.04)  11.47   6.21  
Adjusted return on average tangible common equity (1) (2) 16.72   16.03   7.01   15.69   10.28  
Net interest margin, tax-equivalent basis 3.26   3.32   3.36   3.33   3.34  
Adjusted net interest margin (1) 3.21   3.24   3.14   3.23   3.13  
Efficiency ratio 56.28   79.23   76.60   66.18   63.15  
Adjusted efficiency ratio (1) 55.16   54.22   54.08   55.85   56.39  
Operating expense/average assets 1.94   2.75   2.65   2.19   2.18  
Adjusted operating expense/average assets (1) 1.90   1.89   1.90   1.95   1.97  
                


(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.
   


 December 31,  September 30,  December 31,  
 2018 2018 2017 
Selected Financial Data:            
Book value per share$ 22.93  $ 22.23  $ 21.78  
Tangible book value per share (1)$ 17.36  $ 16.64  $ 16.14  
Common shares outstanding  19,791    19,789    19,709  
             
Capital Ratios:            
Total capital to risk-weighted assets  13.6   13.6   13.3 %
Tier 1 capital to risk-weighted assets  10.4    10.3    10.0  
Common equity Tier 1 capital to risk-weighted assets  10.4    10.3    10.0  
Tier 1 capital to average assets  8.1    8.0    7.9  
Tangible common equity to tangible assets (1) (2)  7.5    7.6    7.4  
Tier 1 capital to average assets (Bank)  9.9    9.7    9.6  
             
Asset Quality:            
Loans 30-89 days past due$ 4,400  $ 5,801  $ 3,614  
Loans 90 days past due and accruing (3)$ 308  $ 299  $ 1,834  
Non-performing loans$ 2,808  $ 1,944  $ 6,955  
Other real estate owned  175    175    —  
Non-performing assets$ 2,983  $ 2,119  $ 6,955  
Non-performing loans/total loans  0.09   0.06   0.22 %
Non-performing assets/total assets  0.06    0.05    0.16  
Allowance/non-performing loans 1118.87   1639.35   455.89  
Allowance/total loans  0.96    1.00    1.02  
             


(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 loans acquired in connection with the Community National Bank, FNBNY Bancorp, Inc., and Hamptons State Bank acquisitions.
   


BRIDGE BANCORP, INC. AND SUBSIDIARIES
Supplemental Financial Information
Condensed Consolidated Average Balance Sheets and Average Rate Data (unaudited)
(Dollars in thousands)
                            
 Three Months Ended December 31, Three Months Ended September 30, Three Months Ended December 31, 
 2018 2018 2017 
     Average     Average     Average 
 Average   Yield/ Average   Yield/ Average   Yield/ 
 Balance Interest Cost Balance Interest Cost Balance Interest Cost 
Interest-earning assets:                           
Loans, net (including loan fee income) (1)$ 3,206,033  $ 36,848   4.56 $ 3,157,422  $ 36,243   4.55 $ 2,984,476  $ 34,309   4.56 %
Securities (1)  882,886    6,328   2.84    867,174    6,044   2.77    997,762    5,918   2.35  
Deposits with banks  74,348    443   2.36    84,986    437   2.04    21,638    70   1.28  
Total interest-earning assets (1)  4,163,267    43,619   4.16    4,109,582    42,724   4.12    4,003,876    40,297   3.99  
Non-interest-earning assets:                           
Other assets  359,740         369,305         359,460       
Total assets$ 4,523,007       $ 4,478,887       $ 4,363,336       
                            
Interest-bearing liabilities:                           
  Savings$ 375,792  $ 656   0.69 $ 341,056  $ 395   0.46 $ 298,766  $ 81   0.11 
  NOW  113,116    40   0.14    108,271    27   0.10    126,275    27   0.08  
  MMDA  906,565    2,950   1.29    866,631    2,386   1.09    797,552    1,406   0.70  
  Savings, NOW and MMDA  1,395,473    3,646   1.04    1,315,958    2,808   0.85    1,222,593    1,514   0.49  
  Certificates of deposit of less than $100,000  61,803    250   1.60    59,681    209   1.39    58,655    157   1.06  
  Certificates of deposit of $100,000 or more  156,806    739   1.87    148,339    674   1.80    113,011    348   1.22  
Total IPC deposits  1,614,082    4,635   1.14    1,523,978    3,691   0.96    1,394,259    2,019   0.57  
  Brokered deposits  263,580    1,528   2.30    307,651    1,593   2.05    233,202    804   1.37  
  Public funds  433,845    787   0.72    448,191    763   0.68    369,123    221   0.24  
Total public and brokered deposits  697,425    2,315   1.32    755,842    2,356   1.24    602,325    1,025   0.68  
Total deposits  2,311,507    6,950   1.19    2,279,820    6,047   1.05    1,996,584    3,044   0.60  
Federal funds purchased and repurchase agreements  3,180    15   1.87    3,487    12   1.37    142,923    498   1.38  
FHLB advances  265,235    1,282   1.92    269,909    1,182   1.74    401,155    1,723   1.70  
Subordinated debentures  78,758    1,135   5.72    78,723    1,134   5.72    78,618    1,134   5.72  
Total borrowings  347,173    2,432   2.78    352,119    2,328   2.62    622,696    3,355   2.14  
Total interest-bearing liabilities  2,658,680    9,382   1.40    2,631,939    8,375   1.26    2,619,280    6,399   0.97  
Non-interest-bearing liabilities:                           
Demand deposits  1,370,428         1,343,107         1,255,110       
Other liabilities  47,547         43,432         36,689       
Total liabilities  4,076,655         4,018,478         3,911,079       
Stockholders' equity  446,352         460,409         452,257       
Total liabilities and stockholders' equity$ 4,523,007       $ 4,478,887       $ 4,363,336       
                            
Net interest rate spread        2.76         2.86         3.02 %
Net interest-earning assets$ 1,504,587       $ 1,477,643       $ 1,384,596       
Net interest margin - tax-equivalent      34,237   3.26       34,349   3.32       33,898   3.36 %
Less: Tax-equivalent adjustment      (139)  (0.01)       (135)  (0.02)       (337)  (0.03) 
Net interest income    $ 34,098        $ 34,214        $ 33,561    
Net interest margin        3.25         3.30         3.33 
                            


(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)
                   
 Year Ended December 31,  
 2018 2017 
     Average     Average 
 Average   Yield/ Average   Yield/ 
 Balance Interest Cost Balance Interest Cost 
Interest-earning assets:                  
Loans, net (including loan fee income) (1)$ 3,167,933  $ 144,568   4.56 $ 2,774,422  $ 126,802   4.57 %
Securities (1)  910,726    23,936   2.63    1,048,033    24,140   2.30  
Deposits with banks  52,143    1,076   2.06    24,554    278   1.13  
Total interest-earning assets (1)  4,130,802    169,580   4.11    3,847,009    151,220   3.93  
Non-interest-earning assets:                  
Other assets  362,276         354,019       
Total assets$ 4,493,078       $ 4,201,028       
                   
Interest-bearing liabilities:                  
  Savings$ 326,576  $ 1,261   0.39 $ 283,624  $ 291   0.10 
  NOW  121,818    123   0.10    114,226    86   0.08  
  MMDA  838,481    8,570   1.02    710,989    4,583   0.64  
  Savings, NOW and MMDA  1,286,875    9,954   0.77    1,108,839    4,960   0.45  
  Certificates of deposit of less than $100,000  59,516    790   1.33    58,982    556   0.94  
  Certificates of deposit of $100,000 or more  122,621    2,129   1.74    98,157    1,097   1.12  
Total IPC deposits  1,469,012    12,873   0.88    1,265,978    6,613   0.52  
  Brokered deposits  273,127    5,205   1.91    237,432    2,868   1.21  
  Public funds  471,967    2,658   0.56    434,035    945   0.22  
Total public and brokered deposits  745,094    7,863   1.06    671,467    3,813   0.57  
Total deposits  2,214,106    20,736   0.94    1,937,445    10,426   0.54  
Federal funds purchased and repurchase agreements  69,604    1,200   1.72    132,514    1,571   1.19  
FHLB advances  324,653    5,729   1.76    401,258    6,105   1.52  
Subordinated debentures  78,706    4,539   5.77    78,566    4,539   5.78  
Junior subordinated debentures  —    —   —    668    48   7.19  
Total borrowings  472,963    11,468   2.42    613,006    12,263   2.00  
Total interest-bearing liabilities  2,687,069    32,204   1.20    2,550,451    22,689   0.89  
Non-interest-bearing liabilities:                  
Demand deposits  1,310,857         1,174,840       
Other liabilities  42,392         33,465       
Total liabilities  4,040,318         3,758,756       
Stockholders' equity  452,760         442,272       
Total liabilities and stockholders' equity$ 4,493,078       $ 4,201,028       
                   
Net interest rate spread        2.91         3.04 %
Net interest-earning assets$ 1,443,733       $ 1,296,558       
Net interest margin - tax-equivalent      137,376   3.33       128,531   3.34 %
Less: Tax-equivalent adjustment      (596)  (0.02)       (1,371)  (0.03) 
Net interest income    $ 136,780        $ 127,160    
Net interest margin        3.31         3.31 
                   


(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

The following tables below provide a reconciliation of certain financial measures calculated under generally accepted accounting principles ("GAAP") (as reported) and non-GAAP. A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed in the most directly comparable measure calculated and presented in accordance with GAAP in the United States. The Company’s management believes the presentation of non-GAAP financial measures provide investors with a greater understanding of the Company’s operating results in addition to the results measured in accordance with GAAP. While management uses these non-GAAP measures in its analysis of the Company’s performance, this information should not be viewed as a substitute for financial results determined in accordance with GAAP or considered to be more important than financial results determined in accordance with GAAP.

The following non-GAAP financial measures exclude certain net securities losses associated with the Company's strategic plan to restructure its balance sheet during the second quarter of 2018, a fraud loss during the third quarter of 2018, a fraud recovery and office relocation costs during the fourth quarter of 2018 and restructuring costs and deferred tax asset remeasurement related to the Tax Act during the fourth quarter of 2017.

            
  Three Months Ended  Year Ended  
  December 31,  September 30,  December 31,  December 31,  December 31,  
  2018 2018 2017 2018 2017 
Return on average total assets - as reported  1.22  0.58  (0.63) 0.87  0.49 %
Net securities losses  —   —   —   0.18   —  
Net fraud (recovery) loss  (0.05)  0.84   —   0.20   —  
Office relocation costs  0.07   —   —   0.02   —  
Restructuring costs  —   —   0.73   —   0.19  
Income tax effect of adjustments above  (0.01)  (0.18)  (0.26)  (0.09)  (0.07) 
Deferred tax asset remeasurement  —      0.69   —   0.18  
Adjusted return on average total assets (non-GAAP)  1.23   1.24   0.53   1.18   0.79  
            
Return on average stockholders' equity - as reported  12.32  5.64  (6.07) 8.66  4.64 %
Net securities losses  —   —   —   1.75   —  
Net fraud (recovery) loss  (0.53)  8.19   —   1.97   —  
Office relocation costs  0.67   —   —   0.17   —  
Restructuring costs  —   —   7.04   —   1.81  
Income tax effect of adjustments above  (0.03)  (1.80)  (2.46)  (0.86)  (0.63) 
Deferred tax asset remeasurement  —      6.64   —   1.71  
Adjusted return on average stockholders' equity (non-GAAP)  12.43   12.03   5.15   11.69   7.53  
            
Return on average tangible common equity - as reported  16.38  7.43  (8.04) 11.47  6.21 %
Net securities losses  —   —   —   2.32   —  
Net fraud (recovery) loss  (0.71)  10.78   —   2.60   —  
Office relocation costs  0.89   —   —   0.22   —  
Restructuring costs  —   —   9.32   —   2.42  
Amortization of other intangible assets  0.25   0.24   0.29   0.27   0.32  
Income tax effect of adjustments above  (0.09)  (2.42)  (3.36)  (1.19)  (0.96) 
Deferred tax asset remeasurement  —   —   8.80   —   2.29  
Adjusted return on average tangible common equity (non-GAAP)  16.72   16.03   7.01   15.69   10.28