BRIDGEHAMPTON, N.Y., Oct. 27, 2020 (GLOBE NEWSWIRE) -- Bridge Bancorp, Inc. (NASDAQ: BDGE) (the “Company”), the parent company of BNB Bank (“BNB”), today announced third quarter results for 2020.

The Company's third quarter 2020 financial results included:

  • Net income for the 2020 third quarter of $13.1 million, or $0.66 per diluted share, inclusive of pre-tax merger expenses of $2.4 million, or $0.11 per diluted share after tax, related to the Company’s merger with Dime Community Bancshares, Inc. (“Dime”).
  • Excluding merger expenses, adjusted net income was $15.4 million, or $0.77 per diluted share.
  • Adjusted pre-tax pre-provision net revenue was $20.9 million for the 2020 third quarter, flat compared to the linked quarter, and a $2.2 million, or 12%, increase year-over-year.
  • Net interest income grew $0.3 million compared to the linked quarter, to $40.7 million, with a tax-equivalent net interest margin of 2.83%, or 3.22% on an adjusted basis.
  • Total assets increased to $6.3 billion at September 30, 2020, 3% higher than June 30, 2020.
  • Total deposits increased $288.7 million, and the cost of total deposits decreased 10 basis points, compared to the linked quarter.
  • Non-public, non-brokered deposit growth of $322.0 million, or 8%, compared to June 30, 2020, and $1.3 billion, or 56% annualized, from December 31, 2019.
  • Non-performing assets of $7.1 million at September 30, 2020, $0.7 million lower than June 30, 2020 and $2.7 million higher than December 31, 2019. Allowance for credit losses coverage to total loans of 0.94% at September 30, 2020.
  • Total remaining loan payment deferrals at October 25, 2020 were $44 million, or 1.0%, of total loans held for investment.
  • Provision for credit losses of $1.5 million, a decline of $3.0 million on a linked quarter basis.
  • All capital ratios remain strong. Declared a dividend of $0.24 during the quarter.

Reflecting on the third quarter results, Kevin O’Connor, President and CEO said, “Our strong quarterly results reflect the solid foundations of our balance sheet and business model. We continue to navigate this turbulent environment, supporting our employees who, in turn, support our customers. Additionally, we are working with our counterparts at Dime Community Bank to deliver a smooth transition for our customers. I want to thank all of the BNB employees-their ability to service our customers at the highest level while dealing with the pandemic, remote work, child-care issues, and a complicated integration, speaks volumes about their dedication and commitment. I could not be prouder to work with this group of professionals.”

Net Earnings and Returns
Net income in the 2020 third quarter was $13.1 million, or $0.66 per diluted share, which was $2.4 million, or $0.12 per diluted share higher than the 2020 second quarter, driven primarily by growth in non-interest income and net interest income, and lower provision for credit losses, partially offset by higher non-interest expense. Excluding the impact of merger expenses, net income for the 2020 third quarter was $15.4 million, or $0.77 per diluted share. Net income for the nine months ended September 30, 2020 was $33.1 million, or $1.66 per diluted share, compared to $37.5 million, or $1.88 per diluted share, in 2019.

Returns on average assets and equity in the 2020 third quarter were 0.83% and 10.15%, respectively. Return on average tangible common equity was 12.90% for the 2020 third quarter (see reconciliation of this non-GAAP financial measure provided elsewhere herein). The merger expenses incurred during the quarter reduced returns on average assets, equity and tangible common equity by approximately 15 basis points, 178 basis points, and 238 basis points, respectively.

Net Interest Income
Interest income was $46.3 million in the 2020 third quarter, an increase of $0.4 million compared to the 2020 second quarter, primarily due to loan portfolio growth from the Paycheck Protection Program (“PPP”), partially offset by lower average yields in loans, securities, and deposits with banks. Interest expense was $5.6 million in the 2020 third quarter, an increase of $0.2 million compared to the 2020 second quarter, primarily due to an increase in average deposits and average cost of borrowings, partially offset by a decrease in average cost of deposits.

The tax-equivalent net interest margin in the 2020 third quarter showed a decline of 17 basis points to 2.83% from 3.00% in the linked quarter. 2020 third quarter loan yields showed a decrease of 10 basis points to 3.72% from 3.82% in the linked quarter.

  Three Months Ended  Change Compared To 
  September 30,  June 30,  September 30,  June 30,  September 30,  
  2020 2020 2019 2020  2019  
Average yield on loans, tax-equivalent basis   3.72%  3.82%  4.73%  (10)bp  (101)bp
                 
Net interest margin - as reported (1)   2.82%  2.99%  3.39%  (17)bp  (57)bp
Net interest margin, tax-equivalent basis (2)   2.83   3.00   3.40   (17)   (57) 
Adjusted net interest margin (non-GAAP) (3)   3.22   3.24   3.42   (2)   (20) 

(1) Net interest margin represents net interest income divided by average interest-earning assets.
(2) Net interest margin, tax-equivalent basis represents net interest income on a tax-equivalent basis divided by average interest-earning assets.
(3) Adjusted net interest margin represents adjusted net interest income on a tax-equivalent basis, excluding deposits with banks and PPP loans, divided by adjusted average interest-earning assets, excluding deposits with banks and PPP loans.

Commenting on the net interest margin Mr. O’Connor said, “The effects of the pandemic, and the economic and fiscal response continue to weigh on our net interest margin. The PPP forgiveness process has just started, and we are helping our customers navigate the SBA procedures. As of September 30, 2020, all PPP loans were still outstanding. Additionally, customers continue to conserve their liquidity as evidenced by the continued growth in deposits. Non-public customer deposits were up over $300 million quarter-over-quarter, which resulted in an outsized amount of overnight funds earning about 10 basis points. Without this excess liquidity and the PPP loans, the margin would have been 3.22% for the quarter. We continue to lower our already low deposit costs dropping them by 10 basis points quarter-over-quarter. This quarter we restructured our wholesale balance sheet, offsetting securities gains with swap termination losses for a $136 thousand net gain, which should positively impact the margin in the fourth quarter.”

Provision for Credit Losses
The provision for credit loss expense was $1.5 million for the 2020 third quarter, $3.0 million lower than the 2020 second quarter. The Company recorded additional expected credit losses in the 2020 second quarter related to its estimate of the economic impact of the COVID-19 pandemic. The Company recognized net charge-offs of $1.4 million in the 2020 third quarter, compared to net charge-offs of $0.3 million in the 2020 second quarter.

Non-Interest Income
Non-interest income was $6.8 million for the 2020 third quarter, which was $4.5 million higher compared to the 2020 second quarter, primarily attributable to net securities gains, an increase in gain on sale of SBA loans in the 2020 third quarter, and a decrease in the fair value of one loan held for sale recorded in the 2020 second quarter, partially offset by a loss on termination of swaps and a decrease in loan swap fees. Additionally, there was an increase in title fees on a year-over-year and linked quarter basis as real estate activity increased in our eastern markets.

Non-Interest Expense
Non-interest expense for the 2020 third quarter of $28.9 million was $4.5 million higher than the 2020 second quarter. The increase in the third quarter was primarily due to higher salaries and benefits expense, related to an increase in incentive accruals, and merger expenses. Excluding the impact of merger expenses, total non-interest expense in the 2020 third quarter would have been $26.6 million.

Income Tax Expense
Income tax expense was $4.0 million in the 2020 third quarter, an increase of $0.9 million compared to the 2020 second quarter. The effective tax rate for the 2020 third quarter was 23.4%, compared to 22.7% for the 2020 second quarter, and 21.7% for the 2019 third quarter. The increase in the Company’s effective tax rate resulted primarily from non-deductible merger expenses in the 2020 third quarter.

Balance Sheet
Total assets were $6.3 billion at September 30, 2020, $171.7 million higher than June 30, 2020. The rise in total assets compared to the linked quarter was largely attributable to a $193.4 million increase in interest-earning deposits with banks.

Total loans held for investment increased $18.6 million (2% annualized) to $4.6 billion during the 2020 third quarter. Net deferred loan fees were $14.2 million at September 30, 2020, inclusive of $21.8 million remaining unamortized net loan fees related to PPP loans. The allowance for credit losses was $43.5 million at September 30, 2020, $0.1 million higher than June 30, 2020. The allowance as a percentage of loans was 0.94% at both September 30, 2020 and June 30, 2020.

Total deposits increased $288.7 million (23% annualized) to $5.4 billion during the 2020 third quarter. The growth in total deposits was primarily due to a $190.9 million increase in savings and NOW deposits. Demand deposits increased $82.1 million during the 2020 third quarter to $2.2 billion at September 30, 2020, representing 42% of total deposits.

Total stockholders’ equity was $512.2 million at September 30, 2020, $9.6 million higher than June 30, 2020. The growth reflects earnings, partially offset by shareholders’ dividends. During the 2020 first quarter, the Company purchased 179,620 shares of its common stock under the repurchase plan at a cost of $4.6 million. Book value per share was $25.94 at September 30, 2020, $0.47 higher than June 30, 2020. Tangible book value per share was $20.40 at September 30, 2020, $0.47 higher than June 30, 2020 (see reconciliation of this non-GAAP financial measure provided elsewhere herein).

Balance Sheet Highlights (unaudited)

           Change Compared To 
  September 30,  June 30,  December 31,  June 30,  December 31,  
(Dollars in thousands) 2020  2020  2019 2020  2019  
Total assets $ 6,322,377  $ 6,150,664  $ 4,921,520 $ 171,713  $ 1,400,857  
Total stockholders' equity   512,221    502,621    497,154   9,600    15,067  
                 
Loans held for investment                
Investor commercial real estate ("CRE") $ 1,097,290  $ 1,064,623  $ 1,034,599 $ 32,667  $ 62,691  
Owner-occupied CRE   532,597    528,118    531,088   4,479    1,509  
Construction and land   66,826    81,516    97,311   (14,690)   (30,485) 
Commercial and industrial   670,796    675,989    679,444   (5,193)   (8,648) 
Paycheck Protection Program ("PPP")   960,371    949,662    -   10,709    960,371  
Total commercial   3,327,880    3,299,908    2,342,442   27,972    985,438  
                 
Multi-family   853,263    844,066    812,174   9,197    41,089  
Residential real estate   449,984    469,183    493,144   (19,199)   (43,160) 
Installment and consumer   22,520    24,953    24,836   (2,433)   (2,316) 
Net deferred loan (fees) costs   (14,174)   (17,282)   7,689   3,108    (21,863) 
Total loans held for investment $ 4,639,473  $ 4,620,828  $ 3,680,285 $ 18,645  $ 959,188  
                 
Deposits                
Total IPC deposits $ 4,318,594  $ 3,996,590  $ 3,042,171 $ 322,004  $ 1,276,423  
Brokered deposits   122,543    194,019    164,034   (71,476)   (41,491) 
Public deposits   927,932    889,810    608,442   38,122    319,490  
Total public and brokered deposits   1,050,475    1,083,829    772,476   (33,354)   277,999  
Total deposits $ 5,369,069  $ 5,080,419  $ 3,814,647 $ 288,650  $ 1,554,422  
                 
Loan-to-deposit ratio  86.41 %   90.95 %   96.48%   (4.54)%   (10.07)%  

Loan and Line of Credit Origination Information (unaudited)

  Three Months Ended  Nine Months Ended
  September 30,  June 30,  September 30,  September 30,  September 30, 
(Dollars in thousands) 2020 2020 2019 2020 2019
Investor CRE $ 68,597 $ 46,060 $ 100,120 $ 156,395 $ 174,950
Owner-occupied CRE   23,937   23,287   12,973   80,944   98,065
Commercial and industrial   97,209   65,620   57,119   238,625   252,763
PPP   10,666   949,729   —   960,395   —
Multi-family   19,773   48,330   48,160   107,018   121,954
Residential real estate   1,683   3,654   8,764   14,306   26,289
Other   28,010   9,198   23,901   58,219   75,719
Total loan and line of credit originations $ 249,875 $ 1,145,878 $ 251,037 $ 1,615,902 $ 749,740

Asset Quality
Asset quality measures remained solid, as non-performing assets were $7.1 million, or 0.11% of total assets, at September 30, 2020, compared to $7.7 million, or 0.13% of total assets, at June 30, 2020. Non-performing loans were $7.1 million, or 0.15% of total loans at September 30, 2020, compared to $7.7 million, or 0.17% of total loans at June 30, 2020. Loans 30 to 89 days past due increased $5.6 million to $10.7 million at September 30, 2020, compared to $5.1 million at June 30, 2020. The increase in 30 to 89 days past due loans compared to prior quarter is primarily comprised of several residential loans.

Regarding asset quality and the current environment, Mr. O’Connor stated, “As of October 25, 2020, there were $44 million in loans that had not reached the end of their forbearance agreements, which is about 1.0% of all loans as of the end of the quarter. This will continue to be a focus of management as we work closely with these customers to monitor their financial health.”

Conference Call
The Company will host a conference call on Wednesday, October 28, 2020 at 10:00 AM (ET) to discuss the 2020 third quarter results. 

Investors who would like to join the conference call are encouraged to pre-register using the following link: https://dpregister.com/sreg/10148363/d9dd3cf1e4. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. Telephonic replay will be available through the Company’s website beginning approximately one hour after the conclusion of the call through Wednesday, November 11, 2020.

Call and replay information are as follows:

Call Date: Wednesday, October 28, 2020
Call Time: 10:00 AM (ET)
Domestic Call Dial In: 1-844-746-0738
International Call Dial In: 1-412-317-5271

Replay Domestic Dial In: 1-877-344-7529
Replay International Dial In: 1-412-317-0088
Access Code: 10148363

About Bridge Bancorp, Inc.
Bridge Bancorp, Inc. is a bank holding company engaged in commercial banking and financial services through its wholly-owned subsidiary, BNB Bank. Established in 1910, BNB, with assets of approximately $6.3 billion, operates 39 branch locations serving Long Island and the greater New York metropolitan area. Through its branch network and its electronic delivery channels, BNB provides deposit and loan products and financial services to local businesses, consumers and municipalities. Title insurance services are offered through BNB's wholly-owned subsidiary, Bridge Abstract. Bridge Financial Services, Inc., a wholly-owned subsidiary of BNB, offers financial planning and investment consultation. For more information visit 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.

Forward Looking Statements
This release may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). Such forward-looking statements, in addition to historical information, involve risk and uncertainties, and are based on the beliefs, assumptions and expectations of management of the Company. Words such as “expects,” “believes,” “should,” “plans,” “anticipates,” “will,” “potential,” “could,” “intends,” “may,” “outlook,” “predicts,” “projects,” “would,” “estimates,” “assumes,” “likely,” and variation of such similar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements include, but are not limited to, possible or assumed estimates with respect to the financial condition, expected or anticipated revenue, tax rates, and results of operations and business of the Company, including earnings growth; revenue growth in retail banking, lending and other areas; origination volume in the consumer, commercial and other lending businesses; current and future capital management programs; non-interest income levels, including fees from the title abstract subsidiary and banking services as well as product sales; tangible capital generation; market share; expense levels; and other business operations and strategies. The Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.

Factors that could cause future results to vary from current management expectations include, but are not limited to, changing economic conditions; legislative and regulatory changes, including increases in FDIC insurance rates; monetary and fiscal policies of the federal government; changes in tax policies; rates and regulations of federal, state and local tax authorities; changes in interest rates; deposit flows; the cost of funds; demands for loan products; demand for financial services; competition; changes in the quality and composition of BNB’s loan and investment portfolios; changes in management’s business strategies; changes in accounting principles, policies or guidelines; changes in real estate values; an unexpected increase in operating costs; expanded regulatory requirements; expenses related to our proposed merger with Dime Community Bancshares, Inc., unexpected delays related to the merger, or our inability to obtain regulatory approvals or satisfy other closing conditions required to complete the merger; and other risk factors discussed elsewhere, and in our reports filed with the Securities and Exchange Commission. In addition, the COVID-19 pandemic is having an adverse impact on the Company, its customers and the communities it serves. The adverse effect of the COVID-19 pandemic on the Company, its customers and the communities where it operates may adversely affect the Company’s business, results of operations and financial condition for an indefinite period of time. 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)

  September 30,  June 30,  December 31, 
  2020  2020  2019 
Assets         
Cash and due from banks $ 94,892  $ 67,633  $ 77,693 
Interest-earning deposits with banks   615,575    422,148    39,501 
Total cash and cash equivalents   710,467    489,781    117,194 
Securities available for sale, at fair value   466,081    537,746    638,291 
Securities held to maturity   100,934    111,307    133,638 
Total securities   567,015    649,053    771,929 
Securities, restricted   23,362    28,987    32,879 
Loans held for sale   10,000    10,000    12,643 
Loans held for investment   4,639,473    4,620,828    3,680,285 
Allowance for credit losses   (43,474)   (43,401)   (32,786)
Loans held for investment, net   4,595,999    4,577,427    3,647,499 
Premises and equipment, net   34,341    34,495    34,062 
Operating lease right-of-use assets   44,642    40,434    43,450 
Goodwill and other intangible assets   109,398    109,248    109,627 
Accrued interest receivable and other assets   227,153    211,239    152,237 
Total assets $ 6,322,377  $ 6,150,664  $ 4,921,520 
          
Liabilities and stockholders' equity         
Demand deposits $ 2,176,391  $ 2,101,950  $ 1,386,037 
Savings and negotiable order of withdrawal ("NOW") deposits   686,310    495,421    438,902 
Money market deposit accounts ("MMDA")   1,265,136    1,202,125    1,012,322 
Certificates of deposit of less than $100,000   52,797    54,643    58,640 
Certificates of deposit of $100,000 or more   137,960    142,451    146,270 
Total individual, partnership and corporate ("IPC") deposits   4,318,594    3,996,590    3,042,171 
Brokered deposits   122,543    194,019    164,034 
Public funds - demand deposits   69,914    62,244    132,921 
Public funds - other deposits   858,018    827,566    475,521 
Total public and brokered deposits   1,050,475    1,083,829    772,476 
Total deposits   5,369,069    5,080,419    3,814,647 
Federal funds purchased and repurchase agreements   1,353    1,670    999 
Federal Home Loan Bank ("FHLB") advances   215,000    340,000    435,000 
Subordinated debentures, net   79,024    78,990    78,920 
Operating lease liabilities   47,383    43,131    45,977 
Other liabilities and accrued expenses   98,327    103,833    48,823 
Total liabilities   5,810,156    5,648,043    4,424,366 
Total stockholders' equity   512,221    502,621    497,154 
Total liabilities and stockholders' equity $ 6,322,377  $ 6,150,664  $ 4,921,520 


BRIDGE BANCORP, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (unaudited)
(In thousands)

  Three Months Ended  Nine Months Ended
  September 30,  June 30, September 30, September 30,  September 30,
  2020  2020  2019  2020  2019 
Interest income $ 46,296  $45,850  $46,354  $ 136,748  $137,221 
Interest expense   5,589   5,418   9,639    18,959   30,666 
Net interest income   40,707   40,432   36,715    117,789   106,555 
Provision for credit losses   1,500   4,500   1,000    11,000   5,100 
Net interest income after provision for credit losses   39,207   35,932   35,715    106,789   101,455 
                
Non-interest income:               
Service charges and other fees   2,215   1,889   2,588    6,604   7,572 
Title fees   695   385   508    1,409   1,149 
Net securities gains   3,540   —   —    3,525   201 
Loss on termination of swaps   (3,403)  —   —    (3,403)  — 
Change in fair value of loans held for sale   —   (2,643)  —    (2,643)  — 
Gain on sale of SBA loans   2,191   469   601    3,031   1,662 
Bank owned life insurance   543   547   561    1,638   1,670 
Loan swap fees   554   1,320   1,557    3,105   3,200 
Other   455   285   429    993   1,507 
Total non-interest income   6,790   2,252   6,244    14,259   16,961 
                
Non-interest expense:               
Salaries and employee benefits   16,406   13,919   14,294    45,874   41,233 
Occupancy and equipment   3,599   3,520   3,490    10,618   10,581 
Merger expenses   2,352   —   —    2,352   — 
Amortization of other intangible assets   149   177   182    507   605 
Other   6,431   6,783   6,238    18,828   18,388 
Total non-interest expense   28,937   24,399   24,204    78,179   70,807 
                
Income before income taxes   17,060   13,785   17,755    42,869   47,609 
Income tax expense   3,999   3,129   3,852    9,804   10,126 
Net income $ 13,061  $10,656  $13,903  $ 33,065  $37,483 
                
Earnings Per Share (unaudited)               
(In thousands, except per share data) Three Months Ended  Nine Months Ended
  September 30,  June 30, September 30, September 30,  September 30,
  2020  2020  2019  2020  2019 
Net income $ 13,061  $10,656  $13,903  $ 33,065  $37,483 
Dividends paid on and earnings allocated to participating securities   (276)  (218)  (294)   (689)  (797)
Income attributable to common stock $ 12,785  $10,438  $13,609  $ 32,376  $36,686 
                
Weighted average common shares outstanding, including participating securities   19,896   19,861   19,958    19,901   19,950 
Weighted average participating securities   (423)  (409)  (422)   (415)  (425)
Weighted average common shares outstanding   19,473   19,452   19,536    19,486   19,525 
Basic earnings per common share $ 0.66  $0.54  $0.70  $ 1.66  $1.88 
                
Weighted average common shares outstanding   19,473   19,452   19,536    19,486   19,525 
Incremental shares from assumed conversions of options and restricted stock units   41   36   32    36   27 
Weighted average common and equivalent shares outstanding   19,514   19,488   19,568    19,522   19,552 
Diluted earnings per common share $ 0.66  $0.54  $0.70  $ 1.66  $1.88 


BRIDGE BANCORP, INC. AND SUBSIDIARIES
Consolidated Financial Highlights (unaudited)
(In thousands, except per share amounts and financial ratios)

  Three Months Ended  Nine Months Ended  
  September 30,  June 30, September 30, September 30,  September 30, 
  2020 2020 2019 2020 2019 
Selected Financial Data:           
Return on average total assets  0.83%0.72%1.17% 0.77%1.07%
Adjusted return on average total assets (1)  0.98 0.72 1.17  0.83 1.07 
Return on average stockholders' equity  10.15 8.56 11.44  8.75 10.64 
Adjusted return on average stockholders' equity (1)  11.93 8.56 11.44  9.36 10.64 
Return on average tangible common equity (1) (2)  12.90 10.95 14.81  11.17 13.88 
Adjusted return on average tangible common equity (1) (2)  15.28 11.10 14.97  12.08 14.06 
Net interest rate spread, tax-equivalent basis  2.55 2.72 2.88  2.69 2.81 
Net interest margin, tax-equivalent basis  2.83 3.00 3.40  3.01 3.33 
Average interest-earning assets to average interest-bearing liabilities  169.28 169.70 157.94  165.63 154.96 
Efficiency ratio  60.92 57.16 56.34  59.20 57.33 
Adjusted efficiency ratio (1)  55.71 53.32 55.79  55.85 56.74 
Operating expense/average assets  1.84 1.66 2.04  1.83 2.02 
Adjusted operating expense/average assets (1)  1.68 1.65 2.03  1.76 2.00 

(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.

  September 30,  June 30, December 31, 
  2020 2020 2019 
Selected Financial Data:          
Book value per share $ 25.94 $25.47 $25.06 
Tangible book value per share (1) $ 20.40 $19.93 $19.54 
Common shares outstanding   19,749  19,734  19,837 
           
Capital Ratios:          
Total capital to risk-weighted assets   13.3%  13.2% 13.1%
Tier 1 capital to risk-weighted assets   10.3  10.2  10.2 
Common equity Tier 1 capital to risk-weighted assets   10.3  10.2  10.2 
Tier 1 capital to average assets   6.8  7.0  8.5 
Tangible common equity to tangible assets (1) (2)   6.5  6.5  8.1 
           
Capital Ratios - Bank Only:          
Total capital to risk-weighted assets   13.2%  13.1% 13.0%
Tier 1 capital to risk-weighted assets   12.2  12.1  12.1 
Common equity Tier 1 capital to risk-weighted assets   12.2  12.1  12.1 
Tier 1 capital to average assets   8.1  8.4  10.1 
           
Asset Quality:          
Loans 30-89 days past due $ 10,682 $5,080 $6,366 
Loans 90 days past due and accruing $ — $— $343 
Non-performing loans/ Non-performing assets $ 7,064 $7,731 $4,369 
Non-performing loans/total loans   0.15% 0.17% 0.12%
Non-performing assets/total assets   0.11  0.13  0.09 
Allowance/non-performing loans   615.43  561.39  750.42 
Allowance/total loans   0.94  0.94  0.89 

(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.


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

  Three Months Ended September 30,  Three Months Ended June 30, Three Months Ended September 30, 
  2020  2020  2019  
      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) $ 4,612,125 $ 43,108   3.72 %  $4,429,423 $42,044  3.82 %$3,442,462 $41,053  4.73 %
Securities (1)   596,981   3,144   2.10   647,218  3,796  2.36   787,387  5,060  2.55  
Deposits with banks   531,205   135   0.10   365,770  112  0.12   61,853  342  2.19  
Total interest-earning assets (1)   5,740,311   46,387   3.21   5,442,411  45,952  3.40   4,291,702  46,455  4.29  
Non-interest-earning assets:                           
Other assets   509,574       471,232       412,300      
Total assets $ 6,249,885      $5,913,643      $4,704,002      
                          
Interest-bearing liabilities:                            
Savings $ 353,624 $ 72   0.08 %  $317,346 $95  0.12 %$433,086 $1,083  0.99 %
NOW   219,275   29   0.05   131,650  26  0.08   125,056  51  0.16  
MMDA   1,247,455   1,016   0.32   1,151,830  1,135  0.40   1,034,002  3,452  1.32  
Savings, NOW and MMDA   1,820,354   1,117   0.24   1,600,826  1,256  0.32   1,592,144  4,586  1.14  
Certificates of deposit of less than $100,000   53,813   155   1.15   56,603  214  1.52   60,144  299  1.97  
Certificates of deposit of $100,000 or more   140,982   387   1.09   147,706  575  1.57   152,093  844  2.20  
Total IPC deposits   2,015,149   1,659   0.33   1,805,135  2,045  0.46   1,804,381  5,729  1.26  
Brokered deposits   139,760   339   0.96   210,393  454  0.87   75,410  387  2.04  
Public funds   825,734   1,049   0.51   769,815  1,060  0.55   500,440  1,139  0.90  
Total public and brokered deposits   965,494   1,388   0.57   980,208  1,514  0.62   575,850  1,526  1.05  
Total deposits   2,980,643   3,047   0.41   2,785,343  3,559  0.51   2,380,231  7,255  1.21  
Federal funds purchased and repurchase agreements   1,793   —   —   1,659  1  0.24   14,160  70  1.96  
FHLB advances   329,674   1,407   1.70   341,099  723  0.85   244,011  1,179  1.92  
Subordinated debentures   79,003   1,135   5.72   78,968  1,135  5.78   78,862  1,135  5.71  
Total borrowings   410,470   2,542   2.46   421,726  1,859  1.77   337,033  2,384  2.81  
Total interest-bearing liabilities   3,391,113   5,589   0.66   3,207,069  5,418  0.68   2,717,264  9,639  1.41  
Non-interest-bearing liabilities:                            
Demand deposits   2,193,615       2,061,371       1,417,159      
Other liabilities   153,102       144,541       87,313      
Total liabilities   5,737,830       5,412,981       4,221,736      
Stockholders' equity   512,055       500,662       482,266      
Total liabilities and stockholders' equity $ 6,249,885      $5,913,643      $4,704,002      
                          
Net interest rate spread        2.55 %        2.72 %      2.88 %
Net interest-earning assets $ 2,349,198      $2,235,342      $1,574,438      
Net interest margin - tax-equivalent      40,798   2.83 %      40,534  3.00 %    36,816  3.40 %
Less: Tax-equivalent adjustment      (91)  (0.01)     (102) (0.01)     (101) (0.01) 
Net interest income    $ 40,707       $40,432       $36,715    
Net interest margin        2.82 %        2.99 %      3.39 %
                          

(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)

  Nine Months Ended September 30,  
  2020  2019  
      Average     Average 
  Average   Yield/ Average   Yield/ 
   Balance  Interest   Cost Balance Interest  Cost 
Interest-earning assets:                 
Loans, net (including loan fee income) (1) $ 4,240,881 $ 124,962   3.94 %  $ 3,364,574 $ 118,712   4.72 %
Securities (1)   669,100   11,568   2.31    844,057   17,442   2.76  
Deposits with banks   330,355   514   0.21    85,241   1,485   2.33  
Total interest-earning assets (1)   5,240,336   137,044   3.49    4,293,872   137,639   4.29  
Non-interest-earning assets:                      
Other assets   475,813         402,174        
Total assets $ 5,716,149       $ 4,696,046        
                  
Interest-bearing liabilities:                       
   Savings $ 325,039 $ 355   0.15 %  $ 425,265 $ 3,219   1.01 %  
   NOW   161,165   101   0.08    118,530   140   0.16  
   MMDA   1,150,020   4,560   0.53    1,010,304   10,878   1.44  
   Savings, NOW and MMDA   1,636,224   5,016   0.41    1,554,099   14,237   1.22  
   Certificates of deposit of less than $100,000   56,324   635   1.51    60,796   845   1.86  
   Certificates of deposit of $100,000 or more   144,630   1,676   1.55    151,675   2,382   2.10  
Total IPC deposits   1,837,178   7,327   0.53    1,766,570   17,464   1.32  
   Brokered deposits   172,107   1,485   1.15    139,356   2,368   2.27  
   Public funds   756,514   3,500   0.62    527,022   3,701   0.94  
Total public and brokered deposits   928,621   4,985   0.72    666,378   6,069   1.22  
Total deposits   2,765,799   12,312   0.59    2,432,948   23,533   1.29  
Federal funds purchased and repurchase agreements   10,975   79   0.96    15,722   273   2.32  
FHLB advances   308,128   3,163   1.37    243,544   3,455   1.90  
Subordinated debentures   78,968   3,405   5.76    78,828   3,405   5.78  
Total borrowings   398,071   6,647   2.23    338,094   7,133   2.82  
Total interest-bearing liabilities   3,163,870   18,959   0.80    2,771,042   30,666   1.48  
Non-interest-bearing liabilities:                     
Demand deposits   1,910,686          1,372,285        
Other liabilities   136,802          81,588        
Total liabilities   5,211,358          4,224,915        
Stockholders' equity   504,791          471,131        
Total liabilities and stockholders' equity $ 5,716,149        $ 4,696,046        
                   
Net interest rate spread         2.69 %          2.81 %
Net interest-earning assets $ 2,076,466       $ 1,522,830       
Net interest margin - tax-equivalent      118,085   3.01 %       106,973   3.33 %
Less: Tax-equivalent adjustment       (296)  (0.01)       (418)  (0.01) 
Net interest income    $ 117,789       $ 106,555    
Net interest margin        3.00 %         3.32 %  
                  

(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 merger expenses associated with the Company’s proposed merger with Dime. Tax deductible adjustments to net income are taxed at the Company’s statutory tax rate of approximately 29%.

  Three Months Ended  Nine Months Ended  
     September 30,  June 30, September 30,    September 30,  September 30, 
  2020  2020  2019  2020  2019  
Return on average total assets - as reported  0.83 %  0.72 %1.17 % 0.77 %  1.07 %
Merger expenses  0.15  —  —   0.06  —  
Income tax effect of adjustment above  —  —  —  —  —  
Adjusted return on average total assets (non-GAAP)  0.98  0.72  1.17   0.83  1.07  
            
Return on average stockholders' equity - as reported  10.15 %  8.56 %11.44 % 8.75 %  10.64 %
Merger expenses  1.83  —  —   0.62  —  
Income tax effect of adjustment above  (0.05) —  —   (0.01) —  
Adjusted return on average stockholders' equity (non-GAAP)  11.93  8.56  11.44   9.36  10.64  
            
Return on average tangible common equity - as reported  12.90 %  10.95 %14.81 % 11.17 %  13.88 %
Merger expenses  2.32  —  —   0.79  —  
Amortization of other intangible assets  0.15  0.18  0.19   0.17  0.23  
Income tax effect of adjustments above  (0.09) (0.03) (0.03)  (0.05) (0.05) 
Adjusted return on average tangible common equity (non-GAAP)  15.28  11.10  14.97   12.08  14.06  

The following table presents a reconciliation of net income and diluted earnings per share (as reported) to adjusted net income and adjusted diluted earnings per share excluding merger expenses:

  Three Months Ended  Nine Months Ended
  September 30,  June 30, September 30, September 30,  September 30,
(Dollars in thousands, except per share amounts) 2020  2020 2019 2020  2019
Net income - as reported $ 13,061  $10,656 $13,903 $ 33,065  $37,483
Adjustments:               
Merger expenses   2,352   —  —   2,352   —
Income tax effect of adjustment above   (58)  —  —   (58)  —
Adjusted net income (non-GAAP) $ 15,355  $10,656 $13,903 $ 35,359  $37,483
                
Diluted earnings per share - as reported $ 0.66  $0.54 $0.70 $ 1.66  $1.88
Adjustments:               
Merger expenses   0.11   —  —   0.11   —
Income tax effect of adjustment above   —   —  —   —   —
Adjusted diluted earnings per share (non-GAAP) $ 0.77  $0.54 $0.70 $ 1.77  $1.88


BRIDGE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures (unaudited)

The following table presents a reconciliation of net interest income, non-interest income and non-interest expense to pre-tax pre-provision net revenue (non-GAAP) and adjusted pre-tax pre-provision net revenue (non-GAAP):

  Three Months Ended  Nine Months Ended
  September 30,  June 30,  September 30,  September 30,  September 30, 
(Dollars in thousands) 2020 2020 2019 2020 2019
Net interest income $ 40,707 $ 40,432 $ 36,715 $ 117,789 $ 106,555
Non-interest income   6,790   2,252   6,244   14,259   16,961
Total revenues   47,497   42,684   42,959   132,048   123,516
Non-interest expense   28,937   24,399   24,204   78,179   70,807
Pre-tax pre-provision net revenue (non-GAAP) (1) $ 18,560 $ 18,285 $ 18,755 $ 53,869 $ 52,709
Adjustments:               
Change in fair value of loans held for sale   —   2,643   —   2,643   —
Merger expenses   2,352   —   —   2,352   —
Adjusted pre-tax pre-provision net revenue (non-GAAP) (2) $ 20,912 $ 20,928 $ 18,755 $ 58,864 $ 52,709

(1) The reported pre-tax pre-provision net revenue is a non-GAAP measure calculated by adding GAAP net interest income and GAAP non-interest income less GAAP non-interest expense.
(2) The adjusted pre-tax pre-provision net revenue is a non-GAAP measure calculated by adding pre-tax pre-provision net revenue less the change in fair value of loans held for sale and merger expenses.

The following table presents a reconciliation of efficiency ratio (non-GAAP) and adjusted efficiency ratio (non-GAAP):

  Three Months Ended  Nine Months Ended  
  September 30,  June 30, September 30, September 30,  September 30, 
(Dollars in thousands, except per share amounts) 2020  2020  2019  2020  2019  
Efficiency ratio - as reported (non-GAAP) (1)   60.92 %  57.16 % 56.34 %  59.20 % 57.33 %
Non-interest expense - as reported $ 28,937  $24,399  $24,204  $ 78,179  $70,807  
Less: Merger expenses   (2,352)  —   —    (2,352)  —  
Less: Amortization of intangible assets   (149)  (177)  (182)   (507)  (605) 
Adjusted non-interest expense (non-GAAP) $ 26,436  $24,222  $24,022  $ 75,320  $70,202  
Net interest income - as reported $ 40,707  $40,432  $36,715  $ 117,789  $106,555  
Tax-equivalent adjustment   91   102   101    296   418  
Net interest income, tax-equivalent basis $ 40,798  $40,534  $36,816  $ 118,085  $106,973  
Non-interest income - as reported $ 6,790  $2,252  $6,244  $ 14,259  $16,961  
Less: Net securities gains   (3,540)  —   —    (3,525)  (201) 
Less: Loss on termination of swaps   3,403   —   —    3,403   —  
Less: Change in fair value of loans held for sale   —   2,643   —    2,643   —  
Adjusted non-interest income (non-GAAP) $ 6,653  $4,895  $6,244  $ 16,780  $16,760  
Adjusted total revenues for adjusted efficiency ratio (non-GAAP) $ 47,451  $45,429  $43,060  $ 134,865  $123,733  
Adjusted efficiency ratio (non-GAAP) (2)    55.71 %  53.32 % 55.79 %  55.85 % 56.74 %

(1) The reported efficiency ratio is a non-GAAP measure calculated by dividing GAAP non-interest expense by the sum of GAAP net interest income and GAAP non-interest income.
(2) The adjusted efficiency ratio is a non-GAAP measure calculated by dividing adjusted non-interest expense by the sum of net interest income on a tax-equivalent basis and adjusted non-interest income.


BRIDGE BANCORP, INC. AND SUBSIDIARIES
Non-GAAP Financial Measures (unaudited)

The following table reconciles net interest margin (as reported) to adjusted net interest margin on a tax-equivalent basis, excluding net
interest income and average adjustments on deposits with banks and PPP loans (non-GAAP):

  Three Months Ended  
  September 30,  June 30, September 30, 
(Dollars in thousands) 2020  2020  2019  
Net interest income - as reported $ 40,707  $40,432  $36,715  
Tax-equivalent adjustment   91   102   101  
Net interest income, tax-equivalent basis $ 40,798  $40,534  $36,816  
Adjustment:          
Less: Interest income on deposits with banks   (135)  (112)  (342) 
Less: Net interest income on PPP loans and swaps   (6,005)  (5,370)  —  
Adjusted net interest income, tax-equivalent basis (non-GAAP) $ 34,658  $35,052  $36,474  
           
Average interest-earning assets - as reported $ 5,740,311  $5,442,411  $4,291,702  
Adjustments:          
Average deposits with banks   (531,205)  (365,770)  (61,853) 
Average PPP loans   (933,345)  (729,394)  —  
Adjusted average interest-earning assets (non-GAAP) $ 4,275,761  $4,347,247  $4,229,849  
           
Net interest margin - as reported (1)   2.82 % 2.99 % 3.39 %
Net interest margin, tax-equivalent basis (2)   2.83   3.00   3.40  
Adjusted net interest margin (non-GAAP) (3)   3.22   3.24   3.42  

      (1) Net interest margin represents net interest income divided by average interest-earning assets.
      (2) Net interest margin, tax-equivalent basis represents net interest income on a tax-equivalent basis divided by average interest-earning assets.
      (3) Adjusted net interest margin represents adjusted net interest income on a tax-equivalent basis divided by adjusted average interest-earning assets.

The following table presents a reconciliation of operating expense as a percentage of average assets (as reported) and adjusted operating expense as a percentage of average assets (non-GAAP):

  Three Months Ended  Nine Months Ended  
  September 30,  June 30, September 30, September 30,  September 30, 
  2020  2020  2019  2020  2019  
Operating expense as a % of average assets - as reported  1.84 %1.66 %2.04 % 1.83 %2.02 %
Merger expenses  (0.15) —  —   (0.05) —  
Amortization of other intangible assets  (0.01) (0.01) (0.01)  (0.02) (0.02) 
Adjusted operating expense as a % of average assets (non-GAAP)  1.68  1.65  2.03   1.76  2.00  

The following table presents the tangible common equity to tangible assets calculation (non-GAAP):

  September 30,  June 30, December 31, 
(Dollars in thousands) 2020  2020  2019  
Total assets - as reported $ 6,322,377  $6,150,664  $4,921,520  
Less: Goodwill and other intangible assets - as reported   (109,398)  (109,248)  (109,627) 
Tangible assets (non-GAAP) $ 6,212,979  $6,041,416  $4,811,893  
           
Total stockholders' equity - as reported $ 512,221  $502,621  $497,154  
Less: Goodwill and other intangible assets - as reported   (109,398)  (109,248)  (109,627) 
Tangible common equity (non-GAAP) $ 402,823  $393,373  $387,527  
           
Tangible common equity to tangible assets (non-GAAP) (1)   6.5 % 6.5 % 8.1 %

(1) Calculated by dividing tangible common equity by tangible assets.

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

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Source: Bridge Bancorp, Inc.

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