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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 |
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Bridge Capital Holdings Reports Financial Results
For the First Quarter Ended March 31, 2010 The Company reported net operating income of $365,000 for the three months ended March 31, 2010 representing an increase of $32,000, or 10%, compared to net operating income of $333,000 for the same period one year ago. Net income available to common shareholders was reduced by preferred dividends of $1.1 million and $1.0 million during the first quarter of 2010 and 2009, respectively, resulting in a loss per diluted share of $(0.11) and $(0.10), respectively. For the quarter ended March 31, 2010, the Company's return on average assets and return on average equity were 0.19% and 1.35%, respectively, and compared to 0.15% and 1.20%, respectively, for the same period in 2009. First Quarter Highlights
"We are seeing positive trends in virtually all areas of our operations," said Daniel P. Myers, President and Chief Executive Officer of Bridge Capital Holdings and Bridge Bank. "Our net interest margin is expanding, our base of core deposits is growing, our asset quality is improving, and our capital ratios are increasing. We are also seeing encouraging signs of loan demand in some of our target markets, which is allowing us to generate modest balance sheet growth. We are actively engaging our markets and using our balance sheet strength and industry expertise to effectively attract new deposit and lending relationships. We are very pleased that the steps we have taken over the past two years to help us manage through the recession have now put us in a good position to capture market share and drive improved profitability as economic conditions become more favorable." Net Interest Income and Margin Changes in short-term interest rates impact growth in net interest income as the interest rate earned on a majority of the Company's assets, specifically the loan portfolio, adjust with changes in short-term market rates. 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 3.25% in the quarters ended March 31, 2010, December 31, 2009 and March 31, 2009. The Company's net interest margin for the quarter ended March 31, 2010 was 5.05%, compared to 4.68% for the quarter ended December 31, 2009 and 4.52% for the same period one year earlier. The sequential quarter increase in net interest margin was primarily due to the decreased levels of nonperforming assets, a lower cost of funds, and increased balance sheet leverage. The Company's loan-to-deposit ratio, a measure of leverage, averaged 81.27% during the quarter ended March 31, 2010, compared to an average of 78.78% for the quarter ended December 31, 2009. In addition, the negative impact of reversal or foregone interest due to nonperforming assets was only 13 basis points in the first quarter of 2010 compared to 23 basis points in the fourth quarter of 2009. Non-Interest Income The Company's non-interest income for the quarter ended March
31, 2010 was $1.6 million compared to $2.3 million for the quarter ended
December 31, 2009 and $4.0 million for the same period one year ago.
Non-interest income for the quarter ending March 31, 2009 included $2.8
million as the result of acceleration of the deferred gain on interest
rate swaps terminated during the fourth quarter of 2008. Non-Interest Expense Non-interest expense was $9.7 million for the quarter ended March 31, 2010 compared to $10.1 million for the quarter ended December 31, 2009, and $9.5 million for the same period in 2009. Salary and benefits expense for the quarter ended March 31, 2010 was $5.3 million compared to $4.5 million for the quarter ended December 31, 2009 and $5.6 million in the quarter ended March 31, 2009. As of March 31, 2010, the Company employed 162 full-time equivalents (FTE) compared to 164 FTE at December 31, 2009 and 168 FTE on the same date one year earlier. The Company's efficiency ratio, the ratio of non-interest expense to revenues, was 83.93% for the quarter ended March 31, 2010 compared to 85.52% for the quarter ended December 31, 2009 and 69.31% in the same period one year earlier. Balance Sheet Bridge Capital Holdings reported total assets at March 31, 2010 of $858.8 million, compared to $881.6 million on the same date one year ago. The decrease in total assets represented a decline of $22.8 million, or 3%, compared to March 31, 2009 and was primarily the result of lower balances of Federal funds sold as liquidity from lower loan balances was used to pay off short-term borrowings and reduce high cost deposits. Total assets at March 31, 2010 compared to $844.1 million at December 31, 2009 representing an increase of $14.7 million, or 2%. The increase in total assets compared to December 31, 2009 was primarily due to an increase in the loan portfolio. The Company reported total gross loans outstanding at March 31, 2010 of $585.8 million, which represented a decrease of $70.4 million, or 11%, from $656.1 million for the same date one year earlier. The decrease in gross loans was primarily attributable to the intentional reduction of the construction and land development portfolios, which declined by $62.8 million, or 57%, over the past twelve months. In addition, reduced utilization of lines of credit by commercial borrowers resulted in a decrease in commercial and industrial loan balances of $39.1 million, or 14%. Gross loans outstanding at March 31, 2010 represented a $9.3 million increase over $576.4 million at December 31, 2009. The increase was primarily attributable to growth in the factoring and asset-based lending portfolio. The Company's total deposits were $718.6 million as of March 31, 2010, which represented a decrease of $14.5 million, or 2%, compared to $733.1 million at March 31, 2009. The decrease in deposits was primarily due to the intentional reduction in time deposits, which decreased by $79.5 million, offset by an increase of $70.0 million in non-interest bearing demand balances. Deposits at March 31, 2010 represented an increase of $13.6 million, or 2%, from $705.0 million at December 31, 2009. The increase from December 31, 2009 was primarily due to increases in non-interest bearing demand deposits and money market accounts. Demand deposits represented 50.5% of total deposits at March 31, 2010, up from 47.9% at December 31, 2009 and 39.7% at March 31, 2009. Core deposits represented 90.8% of total deposits at March 31, 2010, up from 87.1% at December 31, 2009 and 80.2% at March 31, 2009. Credit Quality At March 31, 2010, nonperforming assets totaled $19.8 million, or 2.31% of total assets, compared to $23.5 million, or 2.79% of total assets, at December 31, 2009, and $28.3 million, or 3.21% of total assets, on the same date one year earlier. The sequential quarter reduction in nonperforming assets is primarily due to the continued resolution of impaired residential construction loans. The nonperforming assets at March 31, 2010 consisted of loans on nonaccrual or 90 days or more past due totaling $13.2 million, and other real estate owned valued at $6.6 million. Nonperforming loans at March 31, 2010 were comprised of loans with legal contractual balances totaling approximately $19.4 million reduced by impairment charges of $6.2 million which have been charged against the allowance for credit losses. The Company charged-off $2.1 million during the three months ended March 31, 2010 compared to $2.5 million during the three months ended December 31, 2009 and $4.3 million during the three months ended March 31, 2009. During the three months ended March 31, 2010, the Company recognized $944,000 in loan recoveries compared to $734,000 during the three months ended December 31, 2009 and $285,000 during the three months ended March 31, 2009. The allowance for loan losses was $16.2 million, or 2.76% of total loans, at March 31, 2010, compared to $18.2 million, or 2.77% of total loans, at March 31, 2009. The provision for credit losses for the three months ended March 31, 2010 was $1.3 million compared to $3.7 million for the same period in 2009. The provision for credit losses in the first quarter of 2010 was primarily added to the general reserve to reflect growth in the loan portfolio. Capital Adequacy During the first quarter of 2010, the Company strengthened its capital position with the completion of an early conversion of the preferred stock held by Carpenter Community BancFund. The resulting capital ratios substantially exceed the regulatory definition for being "well capitalized" with a Total Risk-Based Capital Ratio of 19.23%, a Tier I Capital Ratio of 17.968%, and a Tier I Leverage Ratio of 15.17%. Additionally, the Company's tangible common equity ratio at March 31, 2010 was 10.09% and book value per common share was $8.00, representing an increase of $0.19, or 3%, from $7.81 at December 31, 2009. "The early conversion of the preferred stock held by Carpenter Community BancFund represents a significant milestone in the strategic plan we developed in 2008 to manage through the economic downturn," said Thomas A. Sa, Executive Vice President, Chief Financial Officer and Chief Strategy Officer of Bridge Capital Holdings. "The sale of the preferred stock in 2008 provided important capital to fortify our balance sheet during the depths of the recession, and now we have been able to convert the preferred stock to common equity in a manner that is accretive to book value and removes the dilutive burden of the preferred stock dividend carry." Conference Call and Webcast Management will host a conference call today at 5:00 p.m. Eastern time/2:00 p.m. Pacific time to discuss the Company's financial results and answer questions. Individuals interested in participating in the conference call may do so by dialing 877.477.1461 from the United States, or 973.409.9694 from outside the United States. Those interested in listening to the conference call live via the Internet may do so by visiting the Investor Relations section of the Company's Web site at www.bridgebank.com. A telephone replay will be available through May 4, 2010 by dialing
800.642.1687 from the United States, or 706.645.9291 from outside the
United States, and entering the conference ID 69553019. A webcast replay
will be available for 90 days.
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 can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements are based on currently available information, expectations, assumptions, projections, and management's judgment about the Company, the banking industry and general economic conditions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this press release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic, real estate and financial market conditions, either nationally or locally in areas in which the Company conducts its operations; changes in interest rates; new litigation or changes in existing litigation; future credit loss experience; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; loss of key personnel; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies; and the ability to satisfy requirements related to the Sarbanes-Oxley Act and other regulation on internal control. 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 and Exchange Commission. The Company undertakes no obligation
to publicly revise these forward-looking statements to reflect subsequent
events or circumstances.
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