-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ME3HuY602JDzk2skYSpzTlAhIH4pLeQFgflmL/9GySKTE9UOV8O7kJQgRBFbVgac hbrnqlhr7BeoGr2f2yILjQ== 0000846617-98-000036.txt : 19981116 0000846617-98-000036.hdr.sgml : 19981116 ACCESSION NUMBER: 0000846617-98-000036 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRIDGE BANCORP INC CENTRAL INDEX KEY: 0000846617 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 112934195 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-18546 FILM NUMBER: 98747727 BUSINESS ADDRESS: STREET 1: 2488 MONTAUK HIGHWAY CITY: BRIDGEHAMPTON STATE: NY ZIP: 11932 BUSINESS PHONE: 5165371000 MAIL ADDRESS: STREET 1: P O BOX 3005 CITY: BRIDGEHAMPTON STATE: NY ZIP: 11932 10-Q 1 QUARTERLY REPORT U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 10-QSX (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended September 30, 1998 OR [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from to ------------------------- COMMISSION FILE NUMBER: 000-18546 ------------------------- BRIDGE BANCORP, INC. (Exact name of small business issuer as specified in its charter) NEW YORK (State or other jurisdiction of incorporation or organization) 2200 MONTAUK HIGHWAY BRIDGEHAMPTON, NEW YORK (Address of principal executive offices) 11932 (Zip Code) 11-2934195 (IRS Employer Identification Number) (516) 537-1000 (Issuer's telephone number) NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report.) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]* No [ ] * As a small business issuer State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 4,234,797 shares of common stock as of November 10, 1998. BRIDGE BANCORP, INC. INDEX Part 1. FINANCIAL INFORMATION - ----------------------------- Item 1. Financial Statements Unaudited Consolidated Statements of Condition as of September 30, 1998 and December 31, 1997 Unaudited Consolidated Statements of Income for the three months and nine months ended September 30, 1998 and 1997 Unaudited Consolidated Statements of Stockholders' Equity for the nine months Ended September 30, 1998 Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 1998 and 1997 Notes to Unaudited Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION - -------------------------- Item 6. Exhibits and Reports on Form 8K No reports on Form 8K have been filed during the quarter ended September 30, 1998. The exhibits filed as part of this report are listed below. Exhibit Index - ------------- 11.0 Statement re: Computation of Per Share Earnings 27.0 Financial Data Schedule SIGNATURES
Part 1. Financial Information Item 1. Financial Statements BRIDGE BANCORP, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF CONDITION (In thousands, except share and per share amounts) September 30, December 31, 1998 1997 - -------------------------------------------------------------------------------------------- ASSETS Cash and due from banks .................................. $ 13,137 $ 12,740 Interest earning deposits with banks ..................... 234 89 Federal funds sold ....................................... 7,000 -- --------- --------- Total cash and cash equivalents ................... 20,371 12,829 Investment in debt and equity securities, net: Securities available for sale, at fair value .......... 71,980 60,190 Securities held to maturity (fair value of $5,049 and $11,823 respectively) ............................. 5,045 11,812 --------- --------- Total investment in debt and equity securities, net 77,025 72,002 Loans .................................................... 160,222 138,636 Less: Allowance for possible loan losses ..................... 1,687 1,393 --------- --------- Loans, net ........................................ 158,535 137,243 Banking premises and equipment, net ...................... 8,725 8,728 Accrued interest receivable .............................. 1,711 1,460 Other assets ............................................. 2,394 850 --------- --------- TOTAL ASSETS ............................................. $ 268,761 $ 233,112 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits .......................................... $ 74,004 $ 63,629 Savings, NOW, and money market deposits .................. 96,442 76,740 Certificates of deposit of $100,000 or more .............. 29,867 20,872 Other time deposits ...................................... 43,657 42,456 --------- --------- Total deposits ................................... 243,970 203,697 Overnight borrowings ..................................... -- 6,500 Accrued interest on depositors' accounts ................. 1,432 1,244 Deferred income taxes .................................... 340 94 Other liabilities and accrued expenses ................... 675 2,126 --------- --------- Total Liabilities ................................ 246,417 213,661 --------- --------- Stockholders' equity: Common stock, par value $5.00 per share: Authorized: 6,500,000 shares; issued and outstanding 4,234,797 shares at 9/30/98 and 4,223,997 at 12/31/97 ... 21,659 7,202 Surplus ................................................ -- 607 Undivided profits ...................................... 192 11,509 Less: Treasury Stock at cost, 97,200 shares ............ (621) (621) --------- --------- 21,230 18,697 Accumulated other comprehensive income, net of taxes ... 1,114 754 --------- --------- Total Stockholders' Equity ....................... 22,344 19,451 Commitments and contingencies --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............... $ 268,761 $ 233,112 ========= ========= See accompanying notes to the unaudited consolidated financial statements.
BRIDGE BANCORP, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------ Interest income: Loans (including fee income) ..................................... $ 3,742 $ 3,029 $10,757 $ 8,949 Mortgage-backed securities ....................................... 559 529 1,443 1476 Obligations of NY State & political subdivisions ................. 250 265 894 783 U.S. Treasury and government agency securities ................... 230 343 688 935 Other securities ................................................. 18 18 58 52 Federal funds sold ............................................... 232 168 316 332 Deposits with banks .............................................. 2 1 4 4 ------ ------ ------ ------ Total interest income .......................................... 5,033 4,353 14,160 12,531 Interest expense: Savings, N.O.W. and money market deposits ........................ 606 412 1,534 1212 Certificates of deposit of $100,000 or more ...................... 456 434 1,255 1203 Other time deposits .............................................. 571 573 1,677 1657 Other borrowed money ............................................. -- -- 64 55 ------ ------ ------ ------ Total interest expense ......................................... 1,633 1,419 4,530 4,127 ------ ------ ------ ------ Net interest income ................................................ 3,400 2,934 9,630 8,404 Provision for possible loan losses ................................. 160 60 350 180 ------ ------ ------ ------ Net interest income after provision for possible loan losses ............................................. 3,240 2,874 9,280 8,224 ------ ------ ------ ------ Other income: Mortgage banking activities ...................................... 338 390 1,082 888 Service charges on deposit accounts .............................. 208 218 632 598 Gain on sale of building ......................................... -- -- -- 1405 Net securities gains ............................................. -- 4 -- 4 Other operating income ........................................... 264 271 602 580 ------ ------ ------ ------ Total other income ............................................. 810 883 2,316 3,475 ------ ------ ------ ------ Other expenses: Salaries and employee benefits ................................... $ 1,164 1,181 3,671 3,407 Net occupancy expense ............................................ $ 184 195 561 517 Furniture and fixture expense .................................... $ 176 151 513 418 Other operating expenses ......................................... 823 872 2,496 2,298 ------ ------ ------ ------ Total other expenses ........................................... 2,347 2,399 7,241 6,640 ------ ------ ------ ------ Income before provision for income taxes ........................... 1,703 1,358 4,355 5,059 Provision for income taxes ......................................... 620 498 1,507 1,832 ------ ------ ------ ------ Net income ......................................................... $ 1,083 $ 860 $ 2,848 $ 3,227 ====== ====== ====== ====== Basic earnings per share ........................................... $ 0.26 $ 0.20 $ 0.67 $ 0.76 ====== ====== ====== ====== Diluted earnings per share ......................................... $ 0.26 $ 0.20 $ 0.67 $ 0.76 ====== ====== ====== ====== See accompanying notes to the unaudited consolidated financial statements. All per share amounts have been adjusted to reflect the effects of the stock split.
Bridge Bancorp, Inc. and Subsidiary Unaudited Consolidated Statements of Stockholders' Equity (In thousands, except per share amounts) Accumulated Other Common Stock Comprehensive Undivided Treasury Comprehensive Shares Amount Surplus Income profits Stock Income Total ------------------------------------------------------------------------------------------- ================================== ============================================= Balance at December 31, 1997 .......... 1,407,999 $ 7,202 $ 607 $ 0 $ 11,509 ($ 621) $ 754 $19,451 Net income ............................ -- -- -- 2,848 2,848 -- -- 2,848 Exercise of stock options ............. 3,600 17 91 108 Effect of stock split (in the form of a stock dividend) ...................... 2,823,198 14,440 (698) (13,742) 0 Cash dividends declared, $.10 per share (423) (423) Net change in unrealized appreciation in securities available for sale, net of tax ....... -- -- -- 360 -- -- 360 360 -------- Comprehensive Income .................. -- -- -- $ 3,208 -- -- -- ----------------------------------========------------------------------------------------- Balance at September 30, 1998 ......... 4,234,797 $21,659 $ 0 $ 192 ($ 621) $ 1,114 $22,344 ================================== =================================================
BRIDGE BANCORP, INC. AND SUBSIDIARY UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Nine months ended September 30, 1998 1997 - ------------------------------------------------------------------------------------------------ Operating activities: Net Income ................................................... $ 2,848 $ 3,227 Adjustments to reconcile net income to net cash provided by operating activities: Provision for possible loan losses ....................... 350 180 Depreciation and amortization ............................ 514 393 Accretion of discounts ................................... (56) (49) Amortization of premiums ................................. 103 92 Gain on the sale of building ............................. -- (1,404) Net securities gains ..................................... -- (4) Gain on sale of assets ................................... (1) -- (Increase) in accrued interest receivable ................ (251) (420) (Increase) in other assets ............................... (1,544) (304) Increase (Decrease) in accrued and other liabilities ..... 357 (264) -------- -------- Net cash provided by operating activites ....................... 2,320 1,447 -------- -------- Investing activities: Purchases of securities available for sale ................... (19,225) (32,157) Purchases of securities held to maturity ..................... (3,420) (9,667) Proceeds from sales of securities available for sale ......... -- 3,560 Proceeds from maturing securities available for sale ......... 2,745 1,925 Proceeds from maturing securities held to maturity ........... 10,187 4,375 Proceeds from principal payments on mortgage-backed securities 5,250 2,948 Proceeds from sale of building ............................... -- 1,554 Net increase in loans ........................................ (21,642) (10,983) Purchases of banking premises and equipment, net of deletions (511) (2,310) -------- -------- Net cash used by investing activities .......................... (26,616) (40,755) -------- -------- Financing activities: Net increase in deposits ..................................... 40,273 37,501 (Decrease) in other borrowings ............................... (6,500) -- Net proceeds from issuance of restricted common stock issued pursuant to equity incentive plan .............. -- 8 Net proceeds from excercise of stock options issued pursuant to equity incentive plan .............. 108 -- Cash dividends paid .......................................... (2,043) (1,032) -------- -------- Net cash provided by financing activities ...................... 31,838 36,477 -------- -------- Increase (Decrease) in cash and cash equivalents ............... 7,542 (2,831) Cash and cash equivalents beginning of period .................. 12,829 13,565 -------- -------- Cash and cash equivalents end of period ........................ $ 20,371 $ 10,734 ======== ======== Supplemental information-Cash Flows: Cash paid for: Interest ................................................... $ 4,342 $ 4,338 Income taxes ............................................... $ 1,372 $ 1,848 Noncash investing and financing activities: None See accompanying notes to the unaudited consolidated financial statements.
===================== BRIDGE BANCORP, INC. AND SUBSIDIARY NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements include the accounts of Bridge Bancorp, Inc. (the Registrant or Company) and its wholly-owned subsidiary, The Bridgehampton National Bank (the Bank). The unaudited consolidated financial statements included herein reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. In preparing the interim financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities and the revenue and expense for the reported periods. Actual future results could differ significantly from these estimates. The results of operations for the nine months ended September 30, 1998 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain information and note disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's 1997 Annual Report on Form 10-KSB. 2. Earnings Per Share Earnings per share is computed by dividing net income by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding. For the three months ended September 30, 1998 and 1997, diluted weighted average common stock and common stock equivalent shares outstanding for the diluted earnings per share were 4,271,772 and 4,238,613, respectively. For the three months ended September 30, 1998 and 1997, the total weighted average number of shares of common stock outstanding for the basic earnings per share calculation were 4,233,558 and 4,223,997, respectively. For the nine months ended September 30, 1998 and 1997, diluted weighted average common stock and common stock equivalent shares outstanding for the diluted earnings per share were 4,269,283 and 4,231,644, respectively. For the nine months ended September 30, 1998 and 1997, the total weighted average number of shares of common stock outstanding for the basic earnings per share calculation were 4,227,429 and 4,223,997 respectively. 3. Stock Split On July 20, 1998, the Board of Directors declared a three-for-one stock split in the form of a stock dividend payable August 31, 1998 to stockholders of record as of August 19, 1998. The stock split increased outstanding common shares from 1,411,599 to 4,234,797. Stockholders' equity has been restated to give retroactive recognition to the stock split for all periods presented by reclassifying from undivided profits and capital surplus to common stock the par value of additional shares resulting from the stock split. In addition, all references in the Consolidated Financial Statements and Notes thereto to number of shares, per share amounts, and market prices of the common stock have been restated giving retroactive recognition to the stock split. 4. Comprehensive Income The Company adopted Statement of Accounting Standards No. 130 "Reporting Comprehensive Income" in the first quarter of 1998. All comparative financial statements provided for earlier periods have been reclassified to reflect application of the provisions of this Statement. Comprehensive income includes net income and all other changes in equity during a period except those resulting from investments by owners and distributions to owners. Other comprehensive income includes revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income but excluded from net income. Comprehensive income and accumulated other comprehensive income are reported net of related income taxes. Accumulated other comprehensive income for the Company consists solely of unrealized holding gains or losses on available for sale securities. Such gains or losses are net of reclassification adjustments for realized gains (losses) on sales of available for sale securities. 5. Investment in Debt and Equity Securities A summary of the amortized cost and estimated fair value of investment securities is as follows:
09/30/98 12/31/97 - --------------------------------------------------------------------------------------------------- (In thousands) Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value - --------------------------------------------------------------------------------------------------- Available for sale: U.S. Treasury securities ....................... $14,074 $14,634 $14,084 $14,409 Obligations of NY State & political subdivisions 20,804 21,469 18,636 19,063 Mortgage-backed securities ..................... 35,216 35,877 26,190 26,718 --------------------------------------------- Total available for sale ..................... $70,094 $71,980 $58,910 $60,190 --------------------------------------------- Held to maturity: Oblig. of NY State & pol.subs .................. $ 3,962 $ 3,965 $10,729 $10,740 Non marketable Equity securities: Federal Reserve Bank Stock ..................... $ 36 $ 36 $ 36 $ 36 Federal Home Loan Bank Stock ................... 1,047 1,047 1,047 1,047 --------------------------------------------- Total held to maturity ....................... $ 5,045 $ 5,048 $11,812 $11,823 --------------------------------------------- Total debt and equity securities ................. $75,139 $77,028 $70,722 $72,013 =============================================
6. Loans Loans are summarized as follows: Types of Loans
The following table shows the Registrant's loan distribution in each of the periods ended, 09/30/98 12/31/97 Percent of Percent of Balance Total Loans Balance Total Loans - ------------------------------------------------------------------------------------------------ (in thousands) Mortgage Loans: Single-family residential ............ $ 20,316 12.68% $ 20,322 14.66% Multi-family residential ............. 254 0.16% 76 0.05% Commercial real estate ............... 65,539 40.91% 57,853 41.73% Construction and Land ................ 32,300 20.16% 22,166 15.99% Home Equity .......................... 17,112 10.68% 13,940 10.06% --------------------------------------------------- Total mortage loans ...................... $135,521 84.58% $114,357 82.49% Other loans: Unsecured business and personal loans..... 21,125 13.18% 17,638 12.72% Secured business and personal loans ...... 3,016 1.88% 725 0.52% Installment/consumer loans ............... 560 0.35% 5,916 4.27% --------------------------------------------------- Total loans .............................. $160,222 100% $138,636 100% ===================================================
7. Allowance for Possible Loan Loss Management uses criteria set forth by the OCC in its classification and review of the loan portfolio which includes a general allocation reserve with a high and low range for each loan type. The ranges are reviewed on a quarterly basis to determine if any adjustments are necessary. The information reviewed includes past due trends, economic conditions and concentrations of credit. Based on the loan classification committee's review of the classified loans and the general allocation reserve as it relates to the entire loan portfolio, management believes the allowance for possible loan losses is adequate. However, future additions to the allowance may be necessary based on changes in conditions. Changes in the allowance for possible loan losses are summarized as follows: SUMMARY OF LOAN LOSS EXPERIENCE - -------------------------------
Period ended, 09/30/98 12/31/97 09/30/97 - -------------------------------------------------------------------------------- (In thousands) Allowance for possible loan losses balance at beginning of period ........... $1,393 $1,238 $1,238 Charge-offs: Real estate loans .......................... -- -- -- Unsecured business & personal loans ........ 9 87 17 Secured business & personal loans .......... -- -- -- Installment/consumer loans ................. 111 229 138 ------------------------------- Total ................................... 120 316 155 Recoveries: Real estate loans .......................... -- -- -- Unsecured business & personal loans ........ 19 6 -- Secured business & personal loans .......... -- -- -- Installment/consumer loans ................. 45 55 50 ------------------------------- Total ................................... 64 61 50 ------------------------------- Net charge-offs ............................ 56 255 105 Provision for possible loan losses ......... 350 410 180 ------------------------------- Balance at end of period ................... $1,687 $1,393 $1,313 =============================== Ratio of net charge-offs during period to average loans outstanding ............. 0.04% 0.20% 0.09% ===============================
8. Asset Quality The following table summarizes non-performing loans: NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS - -------------------------------------------
09/30/98 12/31/97 - -------------------------------------------------------------------------------- (In thousands) Loans 90 days or more past due and still accruing: Other ........................................ $ 8 $ 1 Nonaccrual loans: Mortgage loans: Single-family residential .................. 53 134 Commercial real estate ..................... -- 674 Construction and Land ...................... 595 -- Other ...................................... 404 167 ---------------------- Total nonaccrual loans ......................... 1052 975 Restructured loans ............................. -- -- Other real estate owned, net ................... -- -- ====================== Total .......................................... $1,060 $ 976 ======================
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Bridge Bancorp, Inc. (the Company), a New York corporation, is a one-bank holding company formed effective March 31, 1989, and on a parent only basis, has minimal results of operations. In the event the Company subsequently expands its current operations, it will be dependent on dividends from its wholly owned subsidiary, The Bridgehampton National Bank (the Bank), its own earnings, additional capital raised and borrowings as sources of funds. The information below reflects principally the financial condition and results of operations of the Bank. The Bank's results of operations are primarily dependent on its net interest income, which is mainly the difference between interest income on loans and investments and interest expense on deposits. Interest income on loans and investments is a function of the average balances outstanding and the average rates earned during a period. Interest expense is a function of the average amount of interest-bearing deposits and the average rates paid on such deposits during a period. The Bank also generates other income, such as fee income on deposit accounts and income from mortgage banking operations and merchant credit card processing programs. The Bank's net income is further affected by the level of its other expenses, such as employees' salaries and benefits and occupancy costs. This discussion and analysis should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's 1997 Annual Report on Form 10-KSB. Financial Condition - ------------------- The assets of the Registrant totaled $268,761,000 at September 30, 1998, an increase of $35,649,000 or 15.3% from the year end. This increase mainly results from the increase in net loans of $21,292,000 or 15.5% and an increase in cash and cash equivalents of $7,542,000 or 58.8%. Other assets increased approximately $1,544,000 or 181.7% primarily as a result of increased receivables relative to the clearing of merchant processing deposits. The source of funds for the increase in assets was derived from increased deposits of $40,273,000 or 19.8%, offset by a decrease in other borrowings of $6,500,000. Demand deposits increased $10,375,000 or 16.3%, and all other deposits increased $29,898,000 or 21.3% over December 31, 1997. This increase is mainly attributed to efforts to increase market share and the introduction of a new money market product targeted to high balance accounts. Other liabilities decreased approximately $1,451,000 or 68.3% primarily as a result of a decrease in the reserve for dividends payable at September 30, 1998. Total stockholders' equity was $22,344,000 at September 30, 1998, an increase of 14.9% over December 31, 1997. The increase of $2,893,000 was the result of net income for the nine month period ended September 30, 1998, of $2,848,000; plus the proceeds of $108,000 from the exercise of stock options pursuant to the equity incentive plan; less cash dividends declared of $423,000; and plus the net increase in unrealized appreciation in securities available for sale, net of tax, of $360,000. The net increase in securities available for sale is attributable to appreciation due to changes in market conditions. Analysis of Net Interest Income - ------------------------------- Net interest income, the primary contributor to earnings, represents the difference between income on interest earning assets and expenses on interest bearing liabilities. The following table sets forth certain information relating to the Company's average consolidated statements of financial condition and reflects the average yields on assets and average costs of liabilities for the three month and nine month periods ended September 30, 1998 and 1997, respectively. Average balances are derived from daily average balances. Interest on nonaccruing loans has been included only to the extent reflected in the consolidated statements of income. However, the loan balances are included in the average amounts outstanding.
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY: INTEREST RATES AND INTEREST DIFFERENTIAL Nine months ended September 30, 1998 1997 - ------------------------------------------------------------------------------------------------------------ (Dollars in thousands) Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost - ------------------------------------------------------------------------------------------------------------ Interest earning assets: Loans (including fee income) . $153,764 $ 10,757 9.4% $122,855 $ 8,949 9.7% Deposits with banks ............... 114 4 4.7% 77 4 6.9% Federal funds sold ................ 7,713 316 5.5% 8,048 332 5.5% Taxable investment securities ..... 14,079 688 6.5% 19,041 935 6.6% Tax exempt investment securities .. 26,289 894 4.5% 21,932 783 4.8% Other securities .................. 1,083 58 7.2% 1,083 52 6.4% Mortgage backed securities ........ 28,024 1,443 6.9% 27,952 1,476 7.1% -------------------------------------------------------------------- Total interest earning assets ....... $231,066 $ 14,160 8.2% $200,988 $ 12,531 8.3% Interest bearing liabilities: Savings, N.O.W. and money market deposits ........... $ 87,842 $ 1,534 2.3% $ 70,330 $ 1,212 2.3% Certificates of deposit of $100,000 or more ........................ 31,076 1,255 5.4% 29,731 1,203 5.4% Other time deposits ............... 43,236 1,677 5.2% 43,047 1,657 5.1% Other borrowings .................. 1,575 64 5.4% 1,287 55 5.7% -------------------------------------------------------------------- Total interest bearing liabilities .. $163,729 $ 4,530 3.7% $144,395 $ 4,127 3.8% -------------------------------------------------------------------- Net interest income/interest rate spread ....................... $ 9,630 4.5% $ 8,404 4.5% -------- ---- -------- ---- Net earning assets/net yield on average interest earning assets ... $ 67,337 5.6% $ 56,593 5.6% -------- ---- -------- ---- Ratio of interest earning assets to interest bearing liabilities ...... 141.1% 139.2% ------ ------ Interest on nonaccruing loans has been included only to the extent reflected in the consolidated statements of income. However, the loan balances are included in average amounts outstanding. For purposes of this table the average balances for investment in debt and equity securities exclude unrealized appreciation\depreciation due to the application of SFAS No. 115.
Three months ended September 30, 1998 1997 - ------------------------------------------------------------------------------------------------------------ (Dollars in thousands) Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost - ------------------------------------------------------------------------------------------------------------ Interest earning assets: Loans (including fee income) . $160,822 $ 3,742 9.2% $125,066 $ 3,029 9.6% Deposits with banks ............... 149 2 5.3% 77 1 5.2% Federal funds sold ................ 12,851 232 7.2% 11,739 168 5.7% Taxable investment securities ..... 14,076 230 6.5% 20,964 343 6.5% Tax exempt investment securities .. 21,914 250 4.5% 22,924 265 4.6% Other securities .................. 1,083 18 6.6% 1,083 18 6.6% Mortgage backed securities ........ 33,272 559 6.7% 30,249 529 6.9% -------------------------------------------------------------------- Total interest earning assets ....... $244,167 $ 5,033 8.2% $212,102 $ 4,353 8.1% Interest bearing liabilities: Savings, N.O.W. and money market deposits ........... $ 95,804 $ 606 2.5% $ 72,353 $ 412 2.3% Certificates of deposit of $100,000 or more ........................ 33,586 456 5.4% 31,510 434 5.5% Other time deposits ............... 43,833 571 5.2% 44,038 573 5.2% -------------------------------------------------------------------- Total interest bearing liabilities .. $173,223 $ 1,633 3.7% $147,901 $ 1,419 3.8% -------------------------------------------------------------------- Net interest income/interest rate spread ....................... $ 3,400 4.5% $ 2,934 4.3% -------- ---- -------- ----- Net earning assets/net yield on average interest earning assets ... $ 70,944 5.5% $ 64,201 5.5% -------- ---- -------- ---- Ratio of interest earning assets to interest bearing liabilities ...... 141.0% 143.4% ------ ------ Interest on nonaccruing loans has been included only to the extent reflected in the consolidated statements of income. However, the loan balances are included in average amounts outstanding. For purposes of this table the average balances for investment in debt and equity securities exclude unrealized appreciation\depreciation due to the application of SFAS No. 115.
Rate/Volume Analysis - -------------------- The following table sets forth a summary analysis of the relative impact on net interest income of changes in the average volume of interest earning assets and interest bearing liabilities and changes in average rates on such assets and liabilities. Information is provided in each category with respect to changes attributable to changes in volume (changes in volume multiplied by prior rate), changes attributable to changes in rates (changes in rates multiplied by prior volume) and the net changes. Due to the numerous simultaneous volume and rate changes during the period analyzed, it is not possible to precisely allocate changes between volume and rates. For presentation purposes, changes which are not solely due to volume changes or rate changes have been allocated to these categories based on the respective percentage changes in average volume and average rates as they compare to each other. In addition, average earning assets include nonaccrual loans. VOLUME AND YIELD/RATE VARIANCES - -------------------------------
For the Periods Ended September 30, Three months ended Nine months ended 1998 Over 1997 1998 Over 1997 (In thousands) Changes Due To Changes Due To - -------------------------------------------------------------------------------------------------------------------- Volume Rate Net Change Volume Rate Net Change --------------------------------------------------------------------- INTEREST INCOME ON INTEREST EARNING ASSETS: Federal funds sold ......................... $ 17 $ 47 $ 64 ($ 14) ($ 2) ($ 16) Deposits with banks ........................ $ 4 (3) 1 $ 2 (2) 0 Taxable investment securities .............. (112) (1) (113) (243) (4) (247) Tax exempt investment securities ........... (11) (4) (15) 110 1 111 Other securities ........................... -- -- -- 0 6 6 Mortgage-backed securities ................. 140 (110) 30 6 (39) (33) Loans (including loan fee income) .......... 1,457 (744) 713 2,381 (573) 1,808 -------------------------------------------------------------------- Total interest earning assets ........... 1,494 (814) 680 2,243 (614) 1,629 -------------------------------------------------------------------- INTEREST EXPENSE ON INTEREST BEARING LIABILITIES: Savings, NOW and money market deposits ..... 145 49 194 305 17 322 Certificates of deposits of $100,000 or more 59 (37) 22 56 (4) 52 Other time deposits ........................ (6) 4 (2) 7 13 20 Federal funds purchased .................... -- -- -- -- -- -- Other borrowings ........................... -- -- -- 14 (5) 9 -------------------------------------------------------------------- Total interest bearing liabilities ...... 198 16 214 382 21 403 -------------------------------------------------------------------- Net interest income ........................ 1,296 (830) 466 1,861 (635) 1,226 --------------------------------------------------------------------
Capital - ------- The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). The Bank meets all capital adequacy requirements. as of September 30, 1998, to which it is subject. The Bank's actual capital amounts and ratios are presented in the following table:
As of September 30, 1998 - --------------------------------------------------------------------------------------------------------------- (In thousands) To Be Well For Capital Capitalized Under Adequacy Prompt Corrective Actual Purposes Action Provisions - --------------------------------------------------------------------------------------------------------------- Amount Ratio Amount Ratio Amount Ratio --------------------------------------------------------------- Total Capital (to risk weighted assets)..... 22,917 12.2% 15,066 >8.0% 18,832 >10.0% Tier 1 Capital (to risk weighted assets)..... 21,230 11.3% 7,533 >4.0 11,299 >6.0 Tier 1 Capital (to average assets) .......... 21,230 8.3% 10,204 >4.0 12,755 >5.0 As of December 31, 1997 - --------------------------------------------------------------------------------------------------------------- (In thousands) To Be Well For Capital Capitalized Under Adequacy Prompt Corrective Actual Purposes Action Provisions - --------------------------------------------------------------------------------------------------------------- Amount Ratio Amount Ratio Amount Ratio --------------------------------------------------------------- Total Capital (to risk weighted assets)..... 20,090 12.3% 13,104 >8.0% 16,381 >10.0% Tier 1 Capital (to risk weighted assets)..... 18,697 11.4% 6,552 >4.0 9,828 >6.0 Tier 1 Capital (to average assets) .......... 18,697 8.3% 9,037 >4.0 11,296 >5.0
Recent Accounting Developments - ------------------------------ In June 1998, The Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133 "Accounting for Derivative Instruments and Hedging Activities". This statement is effective for all fiscal quarters of all fiscal years beginning after June 15, 1999. The statement established accounting and reporting standards for derivative instruments and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. In management's opinion SFAS No. 133, when adopted, will not have a material effect on the Company's financial statements since at this time the Company owns no derivative instruments affected by this statement. Comparison of Operating Results for the Three Months and Nine Months Ended - -------------------------------------------------------------------------------- September 30, 1998 and 1997 - --------------------------- During the first nine months of 1998, the Registrant earned net income of $2,848,000 or $.67 per share as compared with $3,227,000 or $.76 per share for the same period in 1997. During the three month period ended September 30, 1998, the Registrant earned net income of $1,083,000 or $ .26 per share as compared with $860,000 or $.20 per share for the same period in 1997. Highlights for the three months ended September 30, 1998 include: (i) a $466,000 or 15.9% increase in net interest income; (ii) a $73,000 or 8.27% decrease in total other income; and (iii) a $52,000 or 2.2% decrease in total other expenses over the same period in 1997. Highlights for the nine months ended September 30, 1998 include: (i) a $1,226,000 or 14.6% increase in net interest income; (ii) a $1,159,000 or 33.4% decrease in total other income; and (iii) a $601,000 or 9.1% increase in total other expenses over the same period in 1997. Net income for the first nine months of 1998 reflects annualized returns of 19.10% on average total stockholders' equity and 1.49% on average total assets as compared to the corresponding figures for the preceding calendar year of 18.52% on average total stockholders' equity and 1.49% on average total assets excluding the gain on the sale of the building. Including the gain on the sale of the building, return on average equity was 23.08% and return on average assets was 1.86% for the preceding calendar year. For purposes of these calculations, average stockholders' equity excludes the effects of changes in the unrealized appreciation (depreciation) on securities available for sale, net of taxes. Net interest income, the primary source of income, increased by $466,000 or 15.9% for the current three month period over the same period last year. The increase primarily resulted from an increase in average total interest earning assets from $212,102,000 in 1997 to $244,167,000 for the comparable period in 1998, a 15.1% increase. Average interest bearing liabilities increased 17.1% to $173,223,000 in 1998 from $147,901,000 for the same period last year. The yield on average interest earning assets for the current three month period increased to 8.2% from 8.1% for the same period last year. The cost of average interest bearing liabilities decreased to 3.7% from 3.8% during the same period in 1997. The net yield on average earning assets of 5.5% for the three month period ended September 30, 1998 was consistent with the same period in 1997. Net interest income increased by $1,226,000 or 14.6% for the current nine month period over the same period last year. The increase primarily resulted from an increase in average total interest earning assets from $200,988,000 in 1997 to $231,066,000 for the comparable period in 1998, a 15.0% increase. Average interest bearing liabilities increased by 13.4% to $163,729,000 in 1998 from $144,395,000 for the same period last year. The yield on average interest earning assets at September 30, 1998 decreased to 8.2% from 8.3% during the same period in 1997. The cost of average interest bearing liabilities decreased to 3.7% from 3.8% during the same period in 1997. The net yield on average earning assets of 5.6% for the period ended September 30, 1998 was consistent with the same period in 1997. A $160,000 provision for possible loan losses was made during the three month period ended September 30, 1998, compared to a $60,000 provision for the same period in 1997. The provision for possible loan losses made during the nine month period ended September 30, 1998 totaled $350,000 compared to a $180,000 provision for the same period in 1997. A specific reserve was established this quarter primarily as a result of one loan relationship becoming nonperforming. Management is negotiating with the borrower to minimize any losses and does not expect such losses to materially effect the results of operations going forward. The allowance for possible loan losses increased to $1,687,000 at September 30, 1998, as compared to $1,393,000 at December 31, 1997. As a percentage of loans, the allowance was 1.05% at September 30, 1998 and 1.00% at December 31, 1997. The allowance as a percentage of nonperforming loans (including loans past due 90 days or more and still accruing) was 159.2% at September 30, 1998 compared to 142.6% at December 31, 1997. The allowance reflects management's evaluation of classified loans, charge-off trends, concentrations of credit and other pertinent factors. It also reflects input from the Bank's outside loan review consultants. While management uses available information in estimating possible loan losses, future additions to the allowance may be necessary based on future changes in economic conditions. Total other income decreased during the three month period ended September 30, 1998 by $73,000 or 8.3% over the same period last year. For the nine month period ended September 30, 1998 total other income decreased $1,159,000 or 33.6% over the same period last year. For the nine month period ended September 30, 1998 total other income increased $246,000 or 11.9% before the gain on the sale of the building over the same period last year. Income from mortgage banking activities for the three month period ended September 30, 1998 totaled $338,000, a decrease of $52,000 or 13.3% over the same period last year. Income from mortgage banking activities for the nine month period ended September 30, 1998 totaled $1,082,000, an increase of $194,000 or 21.9% over the same period last year. During the third quarter the Bank reorganized mortgage banking operations and reduced the number of loan originators resulting in decreased revenues. The Bank expects to continue to penetrate the mortgage market, taking advantage of the low interest rate environment fueling the refinance and construction loan market. Other operating income for the three month period ended September 30, 1998 totaled $264,000, a decrease of $7,000 or 2.6% over the same period last year. Other operating income for the nine month period ended September 30, 1998 totaled $602,000, an increase of $22,000 or 3.4% over the same period last year. This changes primarily result from a decrease in merchant processing fees resulting from increased interchange costs that took effect in Spring 1998 partially offset by increased fee income including new surcharges imposed on non-bank customers at automatic teller machines. Total other expenses decreased during the three month period ended September 30, 1998 by $52,000 or 2.2% over the same period last year. For the nine month period ended September 30, 1998 total other expenses increased $601,000 or 9.1% over the same period last year. Salary and benefit expense decreased $17,000 or 1.4% for the three month period ended September 30, 1998 over the same period in the prior year. For the nine month period ended September 30, 1998 salary and benefit expense increased $264,000 or 7.8%. Recent decreases in salaries and benefits expense are primarily attributed to reduction of staff in mortgage banking operations. The nine month increase in expense is attributed to increased staffing, primarily at the new Southampton Village branch opened in the fall of 1997, and salary increases. Furniture and fixture expense increased approximately $25,000 or 16.6% for the three month period ended September 30, 1998 over the same period last year. For the nine month period ended September 30, 1998, furniture and fixture expense increased approximately $95,000 or 22.7%. These increases primarily result from increased depreciation expenses relative to equipment upgrades in preparation for year 2000 readiness. For the three month period ended September 30, 1998 other operating expenses decreased $49,000 or 5.6% over the prior year. Decreased loan processing costs in mortgage banking operations and the return of the servicing of certain consumer loans in house, offset by increased personnel education costs from the development of training programs, account for this change. Other operating expenses increased $198,000 or 8.6% for the nine month period as compared to last year. This change primarily results from increased personnel education costs from the development of training programs; increased telephone costs relative to improved data communication lines between the Bank headquarters and the remote branches; increased outsourcing data and item processing expenses; and increased loan processing expense resulting from growth in loan volume. The provision for income taxes increased during the three month period ended September 30, 1998 by $122,000 or 24.5% over the same period last year. During the nine month period ended September 30, 1998 the provision for income taxes decreased $325,000 or 17.7% over the same period last year. After deducting the taxes applicable to the gain on the sale of the main office building from the prior year's provision, the provision increased $250,000 or 19.9% over the same nine month period last year. This increase is attributed to the growth in operating income. The effective tax rate for the nine month period ended September 30, 1998 was 34.6% as compared to the prior year rate of 35.7%. This reduction reflects increased benefits of tax exempt income in the current year. The prior year tax rate also reflected the taxes attributable to the gain on the sale of the main office building. Asset/Liability Management - -------------------------- The Company's primary earnings source is net interest income, which is affected by changes in the level of interest rates, the relationship between rates, the impact of interest rate fluctuations on asset prepayments, the level and composition of deposits, and the credit quality of the portfolio. Management's asset/liability objectives are to maintain a strong, stable net interest margin, to utilize its capital effectively without taking undue risks and to maintain adequate liquidity. The Company's Asset/ Liability Committee, comprised of members of senior management and the Board, meets periodically to evaluate the impact of changes in market interest rates on assets and liabilities, net interest margin, capital and liquidity. Risk assessments are governed by policies and limits established by senior management which are reviewed and approved by the full Board of Directors. Liquidity - --------- The objective of liquidity management is to ensure the availability of sufficient resources to meet all financial commitments. Liquidity management addresses the ability to meet deposit withdrawals either on demand or contractual maturity, to repay other borrowings as they mature and to make new loans and investments as opportunities arise. The Company's most liquid assets are cash and cash equivalents, securities available for sale, and securities held to maturity due within one year. The levels of these assets are dependent upon the Company's operating, financing, lending and investing activities during any given period. Other sources of liquidity include loan and security principal repayments and maturities, lines of credit with other financial institutions, the sale of securities from the available for sale portfolio, and growth in the core deposit base. At September 30, 1998, the Company had aggregate lines of credit of $3,000,000 with correspondent banks to provide short term credit for liquidity requirements. The Company also has the ability, as a member of the Federal Home Loan Bank ("FHLB") system, to borrow approximately $12,171,800. At September 30, 1998 the Company had no such borrowings outstanding. The Company's liquidity positions are monitored daily to ensure the maintenance of an optimum level and efficient use of available funds. Management believes the Company has sufficient liquidity to meet its operating requirements. Year 2000 - --------- The Bank is working diligently to assure a smooth transition into the new millennium. To accomplish Year 2000 compliance, the Company has implemented a project plan as established by the banking regulatory authorities. The established timetable breaks the plan into seven phases; the awareness phase, inventory phase, assessment phase, renovation phase, validation phase, implementation phase, and post implementation phase. Completion of the plan is targeted for the spring of 1999. The Bank uses software purchased from third party vendors products for all processing applications; therefore, no significant internal program renovation by bank staff is necessary to prepare these systems to handle transactions in the year 2000. The majority of the Bank's efforts in preparation for year 2000 processing relate to replacing or upgrading noncompliant software and hardware as well as testing purchased and outsourced processing systems. The Bank has established formal processes for identifying, assessing, and managing the Year 2000 risks posed by internal bank activities, vendors, and customers. By the end of the first quarter 1999, the Bank expects to complete an initial assessment of the risks posed by its customers. The Bank has begun evaluating year 2000 readiness of commercial loan applicants as part of the underwriting process, and is calling upon significant existing borrowers to assess their readiness for year 2000. Seminars have been offered to the Bank's commercial and municipal customers, and the Bank is scheduled to present these seminars to different community groups to educate the local public about the year 2000 matter and the Bank's preparedness to address the issue. Testing of internal systems and testing with significant third party vendors is expected to be substantially completed by December 31, 1998 and March 31, 1999, respectively. During the next fifteen months the Bank will continue to monitor its own internal activities and the plans of its vendors and customers to address the Year 2000 issue. Any identified impact on the Bank will be evaluated. The Bank utilizes Fiserv, Inc. one of the largest data processing providers for banks and savings institutions to perform its core systems data processing. Fiserv runs software from Information Technology Inc. (ITI) to perform a significant portion of its data processing activities. This application, which handles processing of loans, deposits, general ledger, accounts payable, stockholder ledger, fixed assets, and other ancillary applications, is believed to be year 2000 compliant by the vendor. However, the Bank has embarked on a project to thoroughly test the system for year 2000 compliance. If year 2000 processing problems are uncovered during the testing phase, ITI is committed to correct those problems. The Bank is also in the process of considering contingency plans with respect all critical services and operations performed both internally and by external sources including outside vendors. The plan is expected to be a coordinated effort with the objectives of minimizing disruptions of service to the institution and its customers, minimizing financial losses, and ensuring a timely resumption of operations in the event of a disaster. The Bank is currently upgrading equipment in its branch and back office systems to better serve its customers and improve the efficiency of its operations. The timing of the upgrades was accelerated as a result of the Year 2000 issue. The total cost of the upgrades is expected to be approximately $242,000 of which approximately $43,000 remains to be placed in service by the early part of 1999. Based on current information, management does not expect these costs when taken together with other Year 2000 compliance costs to materially impact the Corporation's future results of operations, financial condition, or liquidity. Forward Looking Statements - -------------------------- "Management's Discussion and Analysis of Financial Condition and Results of Operations" contains various forward-looking statements with respect to financial performance and business matters. Such statements are contained in sentences including the words "expect" or "could" or "should". The Bank cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, and therefore actual results could differ materially from those contemplated by the forward-looking statements. In addition, the Bank assumes no duty to update forward-looking statements. Part II Other Information - ------------------------- Item 1. Legal Proceedings - ------------------------- Not applicable Item 2. Changes in Securities - ----------------------------- Not applicable Item 3. Defaults upon Senior Securities - --------------------------------------- Not applicable Item 4. Submission of Matters to a Vote of Security Holders - ----------------------------------------------------------- Not applicable Item 5. Other Information - ------------------------- Not applicable Item 6. Exhibits and Reports on Form 8-K - ---------------------------------------- (A) Exhibit Index ----------------- 11.0 Statement re: Computation of Per Share Earnings 27.0 Financial Data Schedule (B) Reports on Form 8-K ----------------------- Not applicable Submitted only with filing in electronic format. In accordance with the requirement of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BRIDGE BANCORP, INC. Date: November 12, 1998 /s/ Thomas J. Tobin ------------------------- Thomas J. Tobin President and Chief Executive Officer Date: November 12, 1998 /s/ Christopher Becker ------------------------- Christopher Becker Senior Vice President and Treasurer EX-11 2 COMPUTATION OF PER SHARE EARNINGS
Bridge Bancorp Inc. and Subsidiary Computation of Per Share Income September 30, 1998 (UNAUDITED) ----------------------------------------------------------- Three months ended Nine months ended September 30, September 30, September 30, September 30, 1998 1997 1998 1997 ----------------------------------------------------------- Net Income ......................................... $1,083,000 $ 860,000 $2,848,000 $3,227,000 Common Equivalent Shares: Weighted Average Common Shares Outstanding ......... 4,233,558 4,223,997 4,227,429 4,223,997 Weighted Average Common Equivalent Shares .......... 38,214 14,616 41,854 7,647 ---------------------------------------------------------- Weighted Average Common and Common Equivalent Shares 4,271,772 4,238,613 4,269,283 4,231,644 ---------------------------------------------------------- Net Income per Common Equivalent Share ............. $ 0.26 $ 0.20 $ 0.67 $ 0.76
EX-27 3 FDS - 9/30/98
9 0000846617 Bridge Bancorp, Inc. 1,000 9-MOS Dec-31-1998 Sep-30-1998 13,137 234 7,000 0 71,980 5,045 5,049 160,222 1,687 268,761 243,970 0 2,447 0 0 0 21,659 0 268,761 10,757 3,083 320 14,160 4,466 4,530 9,630 350 0 7,241 4,355 4,355 0 0 2,848 .67 .67 5.60 1,052 8 0 0 1,393 120 64 1,687 1,687 0 0
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