Bridge Bancorp, Inc. Reports Fourth Quarter and Year End 2020 Results With Diluted Earnings Per Common Share of $0.45 (as Reported) and $0.75 (as Adjusted)

BRIDGEHAMPTON, N.Y., Jan. 28, 2021 (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 2020.

The Company's fourth quarter and full year 2020 financial results included:

• Net income for the 2020 fourth quarter of $9.0 million, or $0.45 per diluted share, inclusive of merger and stock acceleration expenses related to the Company’s merger with Dime Community Bancshares, Inc. (“Dime”).
• Excluding merger and stock acceleration expenses, and related tax adjustments, adjusted net income for the 2020 fourth quarter was $15.0 million, or $0.75 per diluted share.¹
• Net income for the full year 2020 of $42.0 million, or $2.11 per diluted share, compared to $51.7 million, or $2.59 per diluted share, for the full year 2019.
• Excluding merger and stock acceleration expenses, and related tax adjustments, adjusted net income for the full year 2020 was $50.4 million, or $2.52 per diluted share.¹
• Adjusted pre-tax pre-provision net revenue was $19.9 million for the 2020 fourth quarter, $1.0 million lower compared to the linked quarter, and a $1.1 million, or 6%, increase year-over-year.¹
• Net interest income grew $2.3 million compared to the linked quarter, to $43.0 million, with a tax-equivalent net interest margin of 2.94%, or 3.24% on an adjusted basis.
• Total assets increased to $6.4 billion at December 31, 2020, 2% higher than September 30, 2020.
• Total deposits increased $120.2 million, and the cost of total deposits decreased 6 basis points, compared to the linked quarter.
• Non-public, non-brokered deposit growth of $19.6 million, or 2% annualized, compared to September 30, 2020, and $1.3 billion, or 43%, from December 31, 2019.
• Non-performing assets of $12.2 million at December 31, 2020, $5.1 million higher than September 30, 2020 and $7.8 million higher than December 31, 2019. Allowance for credit losses coverage to total loans of 0.96% at December 31, 2020.
• Total remaining loan payment deferrals at January 22, 2021 were $76.1 million, or 1.7%, of total loans held for investment.
• Provision for credit losses of $0.5 million, a decline of $1.0 million on a linked quarter basis.
• All capital ratios remain strong. Declared a dividend of $0.24 during the quarter.
  ¹ See reconciliation of this non-GAAP financial measure provided elsewhere herein.

Commenting on the results, Kevin O’Connor, President and CEO said, “As we close the book on 2020, and look forward to opening as the new Dime Community Bank on February 1, 2021, we begin a new chapter in the story of Bridge Bancorp. I am amazed at the collective accomplishments of our team. Not just during the challenges of 2020, but in the past decade and over the last 110 years. Several years ago, we developed a mission statement, ‘To Be the Preeminent Community Bank in Our Markets, Providing Added Value and Superior Customer Service.’ Surveying our shared achievements, I’m proud to say, ‘Mission Accomplished!’”

Net Earnings and Returns
Net income in the 2020 fourth quarter was $9.0 million, or $0.45 per diluted share, which was $4.1 million, or $0.21 per diluted share, lower than the 2020 third quarter, primarily attributable to higher non-interest expense and lower non-interest income, partially offset by growth in net interest income, and lower provision for credit losses. Excluding the impact of merger and stock acceleration expenses, and related tax adjustments, net income for the 2020 fourth quarter was $15.0 million, or $0.75 per diluted share. Net income for the full year 2020 was $42.0 million, or $2.11 per diluted share, compared to $51.7 million, or $2.59 per diluted share, in 2019.

Returns on average assets and equity in the 2020 fourth quarter were 0.56% and 6.85%, respectively. Return on average tangible common equity was 8.67% for the 2020 fourth quarter (see reconciliation of this non-GAAP financial measure provided elsewhere herein). The merger and stock acceleration expenses, and related tax adjustments incurred during the quarter reduced returns on average assets, equity and tangible common equity by approximately 38 basis points, 462 basis points, and 596 basis points, respectively.

Net Interest Income
Interest income was $47.5 million in the 2020 fourth quarter, an increase of $1.2 million compared to the 2020 third quarter, primarily due to loan portfolio growth and higher average yields on loans, partially offset by a decline in the securities portfolio and lower average yields on securities. Interest expense was $4.5 million in the 2020 fourth quarter, a decrease of $1.1 million compared to the 2020 third quarter, primarily due to a decrease in the average cost of deposits and a decrease in average borrowings, partially offset by an increase in average deposits.

The tax-equivalent net interest margin in the 2020 fourth quarter showed an increase of 11 basis points to 2.94% from 2.83% in the linked quarter. 2020 fourth quarter loan yields showed an increase of 11 basis points to 3.83% from 3.72% in the linked quarter.

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Provision for Credit Losses
The provision for credit loss expense was $0.5 million for the 2020 fourth quarter, $1.0 million lower than the 2020 third quarter, and $11.5 million for the full year 2020, $5.8 million higher than the full year 2019. The Company recorded additional expected credit losses in the 2020 first and second quarters related to its estimate of the economic impact of the COVID-19 pandemic. The Company recognized net recoveries of $0.2 million in the 2020 fourth quarter, compared to net charge-offs of $1.4 million in the 2020 third quarter. The Company recognized net charge-offs of $1.7 million in the full year 2020, compared to net charge-offs of $4.3 million in the full year 2019.

Non-Interest Income
Non-interest income was $5.4 million for the 2020 fourth quarter, which was $1.3 million lower compared to the 2020 third quarter, primarily attributable to net securities gains in the 2020 third quarter and a decrease in gain on sale of SBA loans during the 2020 fourth quarter, partially offset by a loss on termination of swaps in the 2020 third quarter. Non-interest income was $19.7 million for the full year 2020, $5.7 million lower than the full year 2019, driven primarily by a loss on termination of swaps in the 2020 third quarter, and decreases in loan swap fees, the fair value of loans held for sale, and service charges during 2020, partially offset by increases in net securities gains and gain on sale of SBA loans. 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 fourth quarter of $35.1 million was $6.1 million higher than the 2020 third quarter. Non-interest expense for the full year 2020 increased to $113.3 million from $96.1 million in full year 2019. The increase in the fourth quarter was primarily due to stock acceleration expense related to the Company’s merger with Dime. The increase in full year non-interest expense was primarily due to higher salaries and benefits expense, related to an increase in incentive accruals, in addition to merger and stock acceleration expenses. Excluding the impact of merger and stock acceleration expenses, total non-interest expense in the 2020 fourth quarter and full year 2020 would have been $28.8 million and $104.6 million, respectively.

Income Tax Expense
Income tax expense was $3.9 million in the 2020 fourth quarter, a decrease of $0.1 million compared to the 2020 third quarter. The effective tax rate for the 2020 fourth quarter was 30.2%, compared to 23.4% in the 2020 third quarter. Income tax expense was $13.7 million in the full year 2020, a decrease of $0.4 million compared to the full year 2019. The effective tax rate for the full year 2020 was 24.6%, compared to 21.4% for the full year 2019. The increase in the Company’s effective tax rate resulted primarily from non-deductible salaries and merger expenses related to the Company’s merger with Dime.

Balance Sheet
Total assets were $6.4 billion at December 31, 2020, $111.9 million higher than September 30, 2020. The rise in total assets compared to the linked quarter was largely attributable to a $153.5 million increase in interest-earning deposits with banks.

Total loans held for investment decreased $42.1 million to $4.6 billion during the 2020 fourth quarter, which includes the reclassification of a $43.0 million loan portfolio to held for sale as of December 31, 2020. Net deferred loan fees were $8.2 million at December 31, 2020, inclusive of $15.4 million remaining unamortized net loan fees related to PPP loans. The allowance for credit losses was $44.2 million at December 31, 2020, $0.7 million higher than September 30, 2020. The allowance as a percentage of loans was 0.96% and 0.94% at December 31, 2020 and September 30, 2020, respectively.

Total deposits increased $120.2 million (9% annualized) to $5.5 billion during the 2020 fourth quarter. Demand deposits increased $226.4 million during the 2020 fourth quarter to $2.5 billion at December 31, 2020, representing 45% of total deposits.

Total stockholders’ equity was $517.8 million at December 31, 2020, $5.6 million higher than September 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 $26.23 at December 31, 2020, $0.29 higher than September 30, 2020. Tangible book value per share was $20.69 at December 31, 2020, $0.29 higher than September 30, 2020 (see reconciliation of this non-GAAP financial measure provided elsewhere herein).

Balance Sheet Highlights (unaudited)

Loan and Line of Credit Origination Information (unaudited)

Asset Quality
Asset quality measures remained solid, as non-performing assets were $12.2 million, or 0.19% of total assets, at December 31, 2020, compared to $7.1 million, or 0.11% of total assets, at September 30, 2020. Non-performing loans were $12.2 million, or 0.26% of total loans, at December 31, 2020, compared to $7.1 million, or 0.15% of total loans at September 30, 2020. Loans 30 to 89 days past due increased $0.9 million to $11.6 million at December 31, 2020, compared to $10.7 million at September 30, 2020.

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 $6.4 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)

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

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

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

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(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)

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(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 and stock acceleration 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%.

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 and stock acceleration expenses:

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):

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

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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):