-- 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%