-- Net income of $3.0 million for the second quarter of 2007 represented an increase of $1.0 million compared to $2.0 million for the second quarter of 2006. -- Growth in average earning assets produced an increase in net interest income of 29%, or $2.7 million, compared to the same period one year earlier. -- Net interest margin for the second quarter of 2007 remained strong at 6.75%. -- Resolution of nonperforming loans resulted in a decrease in nonperforming assets of $5.0 million to $425,000 at June 30, 2007, compared to $5.4 million at March 31, 2007. -- Non-interest income increased $1.5 million to $2.6 million in the second quarter of 2007 from $1.1 million in the second quarter of 2006, driven, in part, by the sale of an $11.0 million portfolio of the un- guaranteed portion of SBA loans. -- Total assets increased $122.2 million to $763.8 million as of June 30, 2007 compared to $641.6 million on the same date one year earlier. -- Return on average assets and return on average equity of 1.57% and 22.09%, respectively, for the second quarter of 2007 increased from 1.42% and 18.76%, respectively, for the second quarter of 2006.Net Interest Income and Margin Earnings growth was driven primarily by growth in net interest income. Net interest income of $11.9 million for the quarter ended June 30, 2007 represented an increase of approximately $2.7 million, or 29%, over $9.2 million reported for the same quarter one year earlier and was primarily attributed to growth in average earning assets of $182.3 million, or 35%, compared to the same quarter in 2006. The Company's loan-to-deposit ratio, a measure of leverage, averaged 87.28% during the quarter ended June 30, 2007, which represented a decrease compared to an average of 91.74% for the same quarter of 2006. For the six months ended June 30, 2007, net interest income of $22.9 million represented growth of $5.1 million, or 29%, over $17.8 million for the first six months of 2006. For the six month period, growth in average earning assets was the primary driver of growth in net interest income. Average earning assets were $673.7 million compared to $511.1 million for the same period one year earlier. The Company's average loan-to-deposit ratio for the six months ended June 30, 2007 was 88.20% compared to 91.49% for the same period one year earlier reflecting slightly faster growth in deposit funding relative to loan growth. Increases in short-term interest rates have also contributed to growth in net interest income as the interest rate earned on a majority of the Company's loan portfolio adjusts with the prime rate. As such, the nature of the Company's balance sheet is that, over time as short-term interest rates change, income on interest earning assets has a greater impact on net interest income than interest paid on liabilities. The Company's prime rate averaged 8.25% and 8.25%, respectively, in the quarter and six months ended June 30, 2007 compared to 7.89% and 7.66%, respectively, in the same periods one year earlier. The Company's net interest margin for the quarter and six months ended June 30, 2007 was 6.75% and 6.85%, respectively, declining slightly from 7.05% and 7.02%, respectively, in the same periods one year earlier as a result of growth in the volume of average interest bearing liabilities and decreased balance sheet leverage. Non-Interest Income The Company's non-interest income for the quarter and six months ended June 30, 2007 was $2.6 million and $3.9 million, respectively, compared to $1.1 million and $2.2 million, respectively, for the same periods one year ago. Non-interest income is primarily comprised of gains realized on sales of SBA loans, and the increase in non-interest income primarily reflects a higher volume of SBA loan sales in 2007. During the quarter and six months ended June 30, 2007, the Company sold SBA loans totaling $31.2 million and $56.5 million, respectively, compared to $12.8 million and $27.3 million, respectively, for the same periods during 2006. The SBA loans sold during the second quarter of 2007 included $11.3 million of un-guaranteed loans. Net interest income and non-interest income comprise total revenue of $14.5 million for the three months ended June 30, 2007 compared to $10.3 million for the same period one year earlier, representing an increase of $4.2 million, or 41%. For the six months ended June 30, 2007, total revenue of $26.8 million represented an increase of $6.8, or 34%, over $20.0 million for the first six months of 2006. "Our performance continued to show strength in key operating measures for the first half of 2007," said Thomas A. Sa, Executive Vice President and Chief Financial Officer of Bridge Capital Holdings and Bridge Bank. "Net interest margin, though down from the first quarter of 2007, remains strong at 6.75% and is positioned to benefit from increasing leverage. The loan-to-deposit ratio was down slightly in the second quarter as core deposit growth outpaced loan growth. In addition, for the first time we sold a portion of the un-guaranteed SBA loan portfolio accomplishing the dual goals of supporting second quarter performance and rebalancing credit risk. The results again highlight the benefit of diversity in our mix of business lines as we execute our model." Non-Interest Expense Non-interest expense was $8.4 million and $16.3 million for the quarter and six months ended June 30, 2007, respectively, compared to $6.6 million and $13.0 million, respectively, for the same periods in 2006. The increase in non-interest expense was primarily due to an increase in salary and benefits expense associated with the Company's expansion. Salary and benefits expense for the quarter ended June 30, 2007 was $5.3 million, an increase of $1.1 million over $4.2 million in the same period of 2006. Salary and benefits expense for the six months ended June 30, 2007 was $10.3 million, an increase of $2.2 million over $8.1 million in the same period of 2006. As of June 30, 2007 the Company employed 161 full-time equivalents (FTE) compared to 123 FTE on the same date one year earlier. The Company's efficiency ratio, the ratio of non-interest expense to revenues, was 57.93% and 60.77% for the quarter and six months ended June 30, 2007 compared to 64.14% and 64.97%, respectively, in the same periods one year earlier. Balance Sheet Bridge Capital Holdings reported total assets at June 30, 2007 of $763.8 million, compared to $641.6 million on the same date one year ago. The increase in total assets represented growth of $122.2 million, or 19%, compared to June 30, 2006. Total assets at June 30, 2007 represented growth of $41.8 million, or 6%, compared to $722.0 million at December 31, 2006. The Company reported total loans outstanding at June 30, 2007 of $606.1 million, which represented an increase of $128.8 million, or 27%, over $477.3 million for the same date one year earlier. Total loans at June 30, 2007 represented growth of $65.3 million, or 12%, compared to $540.8 million at December 31, 2006. The Company's total deposits were $681.1 million as of June 30, 2007, compared to total deposits of $573.8 million as of June 30, 2006. The increase in deposits represented growth of $107.3 million, or 19%, compared to June 30, 2006. Total deposits at June 30, 2007 represented growth of $36.1 million, or 6%, compared to $645.0 million at December 31, 2006. For the quarter ended June 30, 2007, the Company's return on average assets and return on average equity were 1.57% and 22.09%, respectively, and compared to 1.42% and 18.76%, respectively, for the same period in 2006. Return on average assets and return on average equity for the six months ended June 30, 2007 were 1.51% and 20.85%, respectively, up from 1.44% and 18.94%, respectively, for the same period one year earlier. Credit Quality The allowance for loan losses was $7.6 million, or 1.25% of total loans, at June 30, 2007, compared to $6.6 million, or 1.39% of total loans, at June 30, 2006. The provision for credit losses for the three and six months ended June 30, 2007 was $1.0 million and $1.2 million, respectively, compared to $450,000 and $672,000, respectively, for the same periods in 2006. During the second quarter of 2007, the Company charged-off balances totaling $943,000 from the resolution of loans reported as nonperforming at March 31, 2007. Charge-off activity in the second quarter represented all of the activity for the first half of 2007 and compared to no loan charge-off activity during the same periods of 2006. There were no loan recoveries during the six months ending June 30, 2007 and June 30, 2006, respectively. At June 30, 2007 nonperforming assets totaled $425,000, or 0.06% of total assets, compared to $2.3 million, or 0.36% of total assets, on the same date one year earlier. The single nonperforming asset at June 30, 2007 was a commercial property categorized as "other real estate owned". Capital Adequacy At June 30, 2007, shareholders' equity in the Company totaled $55.0 million, up from $44.3 million on the same date one year earlier. As a result, the Company's total risk-based capital ratio, tier one capital ratio, and leverage ratio of 11.56%, 10.48%, and 10.13%, respectively, were all substantially above the regulatory standards for "well-capitalized" institutions. About Bridge Capital Holdings Bridge Capital Holdings is the holding company for Bridge Bank, National Association. Bridge Capital Holdings was formed on October 1, 2004 and is listed on The NASDAQ Stock Market under the trading symbol BBNK. For additional information, visit the Bridge Capital Holdings website at http://www.bridgecapitalholdings.com. About Bridge Bank, N.A. Bridge Bank, N.A. is Santa Clara County's full-service professional business bank. The bank is dedicated to meeting the financial needs of small and middle market, and emerging technology businesses, in the Silicon Valley, Palo Alto, Redwood City, San Ramon-Pleasanton, Sacramento, San Diego, Bakersfield, Fresno, Orange County, Dallas, TX, and Reston, VA business communities. Bridge Bank provides its clients with a comprehensive package of business banking solutions delivered through experienced, professional bankers. For additional information, visit the Bridge Bank website at http://www.bridgebank.com.
Forward Looking Statements Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by that Act. Forward-looking statements describe future plans, strategies, and expectations, and are based on currently available information, expectations, assumptions, projections, and management's judgment about the Bank, the banking industry and general economic conditions. These forward looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward looking statements. These risks and uncertainties include, but are not limited to: (1) competitive pressures in the banking industry; (2) changes in interest rate environment; (3) general economic conditions, nationally, regionally, and in operating markets; (4) changes in the regulatory environment; (5) changes in business conditions and inflation; (6) changes in securities markets; (7) future credit loss experience; (8) the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulation on internal control; (9) civil disturbances or terrorist threats or acts, or apprehension about the possible future occurrences of acts of this type; and (10) the involvement of the United States in war or other hostilities. The reader should refer to the more complete discussion of such risks in Bridge Capital Holdings' annual reports on Forms 10-K and quarterly reports on Forms 10-Q on file with the Securities Exchange Commission.
-Financial Tables Follow- BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Dollars in Thousands) Three months ended Six months ended ------------------------------- -------------------- 06/30/07 03/31/07 06/30/06 06/30/07 06/30/06 --------- --------- --------- --------- --------- INTEREST INCOME Loans $ 15,433 $ 14,184 $ 11,682 $ 29,617 $ 21,934 Federal funds sold 753 524 692 1,277 1,270 Investment securities available for sale 750 670 105 1,420 203 --------- --------- --------- --------- --------- Total interest income 16,936 15,378 12,479 32,314 23,407 --------- --------- --------- --------- --------- INTEREST EXPENSE Deposits: Interest-bearing demand 10 13 7 23 14 Money market and savings 3,628 2,997 1,913 6,625 3,340 Certificates of deposit 1,112 1,156 1,020 2,268 1,685 Other 260 260 281 520 568 --------- --------- --------- --------- --------- Total interest expense 5,010 4,426 3,221 9,436 5,607 --------- --------- --------- --------- --------- Net interest income 11,926 10,952 9,258 22,878 17,800 Provision for credit losses 1,000 200 450 1,200 672 --------- --------- --------- --------- --------- Net interest income after provision for credit losses 10,926 10,752 8,808 21,678 17,128 --------- --------- --------- --------- --------- NON-INTEREST INCOME Service charges on deposit accounts 181 152 127 332 239 Gain on sale of SBA loans 1,890 731 388 2,622 839 Other non interest income 542 411 563 953 1,083 --------- --------- --------- --------- --------- Total non-interest income 2,613 1,294 1,078 3,907 2,161 --------- --------- --------- --------- --------- OPERATING EXPENSES Salaries and benefits 5,265 5,001 4,160 10,267 8,079 Premises and fixed assets 1,026 949 700 1,975 1,314 Other 2,131 1,904 1,770 4,034 3,575 --------- --------- --------- --------- --------- Total operating expenses 8,422 7,854 6,630 16,276 12,968 --------- --------- --------- --------- --------- Income before income taxes 5,117 4,192 3,256 9,309 6,321 Income taxes 2,134 1,748 1,237 3,882 2,371 --------- --------- --------- --------- --------- NET INCOME $ 2,983 $ 2,444 $ 2,019 $ 5,427 $ 3,950 ========= ========= ========= ========= ========= EARNINGS PER SHARE Basic earnings per share $ 0.47 $ 0.38 $ 0.32 $ 0.85 $ 0.63 ========= ========= ========= ========= ========= Diluted earnings per share $ 0.43 $ 0.35 $ 0.29 $ 0.78 $ 0.58 ========= ========= ========= ========= ========= Average common shares outstanding 6,381,493 6,330,610 6,260,576 6,356,192 6,251,518 ========= ========= ========= ========= ========= Average common and equivalent shares outstanding 6,933,273 6,882,435 6,798,840 6,908,338 6,782,783 ========= ========= ========= ========= ========= PERFORMANCE MEASURES Return on average assets 1.57% 1.44% 1.42% 1.51% 1.44% Return on average equity 22.09% 19.52% 18.76% 20.85% 18.94% Efficiency ratio 57.93% 64.14% 64.14% 60.77% 64.97% BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in Thousands) 06/30/07 03/31/07 12/31/06 09/30/06 06/30/06 -------- -------- -------- -------- -------- ASSETS Cash and due from banks $ 21,274 $ 21,673 $ 24,360 $ 18,987 $ 22,471 Federal funds sold 39,790 60,620 93,845 116,165 114,955 Investment securities available for sale 73,362 53,920 43,933 18,971 11,004 Loans: Commercial 258,978 213,436 197,174 185,789 189,520 SBA 56,176 60,871 59,888 51,894 52,857 Real estate construction 104,652 116,282 103,710 99,427 91,687 Real estate other 134,299 123,853 115,313 105,395 98,324 Factoring and asset based lending 42,683 51,904 56,924 36,658 38,091 Other 9,341 8,794 7,771 6,469 6,812 -------- -------- -------- -------- -------- Loans, gross 606,129 575,140 540,780 485,632 477,291 Unearned fee income (1,483) (1,586) (1,495) (1,601) (1,443) Allowance for credit losses (7,590) (7,533) (7,329) (6,728) (6,620) -------- -------- -------- -------- -------- Loans, net 597,056 566,021 531,956 477,303 469,228 Premises and equipment, net 4,966 4,050 3,479 2,935 3,022 Accrued interest receivable 4,608 4,212 4,292 3,041 2,813 Other assets 22,741 20,626 20,114 18,304 18,085 -------- -------- -------- -------- -------- Total assets $763,797 $731,122 $721,979 $655,706 $641,578 ======== ======== ======== ======== ======== LIABILITIES Deposits: Demand noninterest-bearing $218,651 $195,965 $198,639 $164,483 $177,445 Demand interest-bearing 4,563 9,611 3,901 4,005 2,987 Money market and savings 372,470 352,975 333,838 294,698 286,321 Time 85,442 94,847 108,609 122,638 107,039 -------- -------- -------- -------- -------- Total deposits 681,126 653,398 644,987 585,824 573,792 -------- -------- -------- -------- -------- Junior subordinated debt securities 17,527 17,527 17,527 17,527 17,527 Accrued interest payable 276 289 318 355 265 Other liabilities 9,882 7,449 10,053 5,044 5,693 -------- -------- -------- -------- -------- Total liabilities 708,811 678,663 672,885 608,750 597,277 -------- -------- -------- -------- -------- SHAREHOLDERS' EQUITY Common stock 36,466 35,954 35,427 34,824 34,523 Retained earnings 19,970 16,987 14,543 12,167 9,858 Accumulated other comprehensive (loss) (1,450) (482) (876) (35) (80) -------- -------- -------- -------- -------- Total shareholders' equity 54,986 52,459 49,094 46,956 44,301 -------- -------- -------- -------- -------- Total liabilities and shareholders' equity $763,797 $731,122 $721,979 $655,706 $641,578 ======== ======== ======== ======== ======== CAPITAL ADEQUACY Tier I leverage ratio 10.13% 10.15% 10.97% 10.75% 10.67% Tier I risk-based capital ratio 10.48% 10.55% 10.52% 11.03% 10.76% Total risk-based capital ratio 11.56% 11.69% 11.74% 12.46% 12.36% Total equity/ total assets 7.20% 7.18% 6.80% 7.16% 6.91% Book value per share $ 8.61 $ 8.21 $ 7.77 $ 7.46 $ 7.06 BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED) (Dollars in Thousands) Three months ended June 30, ----------------------------------------------------- 2007 2006 -------------------------- -------------------------- Yields Interest Yields Interest Average or Income/ Average or Income/ Balance Rates Expense Balance Rates Expense -------- ------- -------- -------- ------- -------- ASSETS Interest earning assets (2): Loans (1) $592,461 10.45% $ 15,433 $459,081 10.21% $ 11,681 Federal funds sold 57,851 5.22% 753 56,129 4.95% 693 Investment securities 58,615 5.13% 750 11,446 3.68% 105 Other - 0.00% - - 0.00% - -------- ------- -------- -------- ------- -------- Total interest earning assets 708,927 9.58% 16,936 526,656 9.50% 12,479 -------- ------- -------- -------- ------- -------- Noninterest-earning assets: Cash and due from banks 29,985 26,473 All other assets (3) 20,993 15,730 -------- -------- TOTAL $759,905 $568,859 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Interest bearing liabilities: Deposits: Demand $ 5,408 0.74% $ 10 $ 3,511 0.91% $ 8 Money market and savings 376,293 3.87% 3,629 233,173 3.29% 1,913 Time 91,712 4.86% 1,111 97,294 4.20% 1,020 Other 17,527 5.95% 260 18,956 5.92% 280 -------- ------- -------- -------- ------- -------- Total interest bearing liabilities 490,940 4.09% 5,010 352,934 3.66% 3,221 -------- ------- -------- -------- ------- -------- Noninterest-bearing liabilities: Demand deposits 205,360 166,454 Accrued expenses and other liabilities 9,434 6,295 Shareholders' equity 54,171 43,176 -------- -------- TOTAL $759,905 $568,859 ======== ======== ------- -------- ------- -------- Net interest income and margin 6.75% $ 11,926 7.05% $ 9,258 ======= ======== ======= ======== (1) Loan fee amortization of $1.5 million and $920,000, respectively, is included in interest income. Nonperforming loans have been included in average loan balances. (2) Interest income is reflected on an actual basis, not a fully taxabel equivalent basis. Yields are based on amortized cost. (3) Net of average allowance for credit losses of $7.5 million and $6.3 million, respectively. BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED) (Dollars in Thousands) Six months ended June 30, ----------------------------------------------------- 2007 2006 -------------------------- -------------------------- Yields Interest Yields Interest Average or Income/ Average or Income/ Balance Rates Expense Balance Rates Expense -------- ------- -------- -------- ------- -------- ASSETS Interest earning assets (2): Loans (1) $568,542 10.50% $ 29,617 $444,021 9.96% $ 21,934 Federal funds sold 49,241 5.23% 1,277 54,349 4.71% 1,270 Investment securities 55,883 5.12% 1,420 12,733 3.21% 203 Other - 0.00% - - 0.00% - -------- ------- -------- -------- ------- -------- Total interest earning assets 673,666 9.67% 32,314 511,103 9.24% 23,407 -------- ------- -------- -------- ------- -------- Noninterest-earning assets: Cash and due from banks 30,426 28,301 All other assets (3) 20,116 15,419 -------- -------- TOTAL $724,208 $554,823 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Interest bearing liabilities: Deposits: Demand $ 5,462 0.85% $ 23 $ 3,441 0.88% $ 15 Money market and savings 346,552 3.86% 6,625 223,036 3.02% 3,340 Time 94,855 4.82% 2,268 85,215 3.99% 1,685 Other 17,527 5.98% 520 20,711 5.52% 567 -------- ------- -------- -------- ------- -------- Total interest bearing liabilities 464,396 4.10% 9,436 332,403 3.40% 5,607 -------- ------- -------- -------- ------- -------- Noninterest-bearing liabilities: Demand deposits 197,723 173,614 Accrued expenses and other liabilities 9,602 6,742 Shareholders' equity 52,487 42,064 -------- -------- TOTAL $724,208 $554,823 ======== ======== ------- -------- ------- -------- Net interest income and margin 6.85% $ 22,878 7.02% $ 17,800 ======= ======== ======= ======== (1) Loan fee amortization of $2.8 million and $1.8 million, respectively, is included in interest income. Nonperforming loans have been included in average loan balances. (2) Interest income is reflected on an actual basis, not a fully taxabel equivalent basis. Yields are based on amortized cost. (3) Net of average allowance for credit losses of $7.4 million and $6.1 million, respectively. BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY INTERIM CONSOLIDATED CREDIT DATA (UNAUDITED) (Dollars in Thousands) 06/30/07 03/31/07 12/31/06 09/30/06 06/30/06 -------- -------- -------- -------- -------- ALLOWANCE FOR CREDIT LOSSES Balance, beginning of period $ 7,533 $ 7,329 $ 6,728 $ 6,620 $ 6,169 Provision for credit losses, quarterly 1,000 200 600 100 450 Charge-offs, quarterly (943) - - - - Recoveries, quarterly - 4 1 8 1 -------- -------- -------- -------- -------- Balance, end of period $ 7,590 $ 7,533 $ 7,329 $ 6,728 $ 6,620 ======== ======== ======== ======== ======== NONPERFORMING ASSETS Loans accounted for on a non-accrual basis $ - $ 5,450 $ 437 $ 2,572 $ 2,283 Loans restructured and in compliance with modified terms - - - - - Other loans with principal or interest contractually past due 90 days or more - - - - - -------- -------- -------- -------- -------- Nonperforming loans - 5,450 437 2,572 2,283 Other real estate owned 425 - - - - -------- -------- -------- -------- -------- Nonperforming assets $ 425 $ 5,450 $ 437 $ 2,572 $ 2,283 ======== ======== ======== ======== ======== ASSET QUALITY Allowance for credit losses / gross loans 1.25% 1.31% 1.36% 1.39% 1.39% Allowance for credit losses / nonperforming loans 0.00% 138.22% 1677.12% 261.59% 289.97% Nonperforming assets / total assets 0.06% 0.75% 0.06% 0.39% 0.36% Nonperforming loans / gross loans 0.00% 0.95% 0.08% 0.53% 0.48% Net quarterly charge-offs / gross loans 0.16% 0.00% 0.00% 0.00% 0.00%