SAN JOSE, CA--(Marketwire - April 17, 2008) - Bridge Capital Holdings (
NASDAQ:
BBNK), whose
subsidiary is Bridge Bank, National Association, one of the best performing
full-service business banks in California and the Nation, announced today
its financial results for the first quarter ended March 31, 2008.
The Company reported net income of $1.5 million, or $0.22 per diluted
share, for the three months ended March 31, 2008. This represented a
decrease of $922,000, or 38%, compared to net income of $2.4 million, or
$0.35 per diluted share, in the same period one year ago.
First Quarter Highlights
-- Net income of $1.5 million for the first quarter of 2008 represented a
decrease of $922,000 or 38% compared to $2.4 million for the first quarter
of 2007.
-- Provision for credit losses of $2.4 million for the first quarter of
2008 represented an increase of $2.2 million compared to the first quarter
of 2007.
-- Growth in average earning assets produced an increase in net interest
income of $1.0 million, or 10%, compared to the same period one year
earlier.
-- Net interest margin for the first quarter of 2008 remained strong at
6.59% and compares with 6.96% in the first quarter of 2007.
-- Non-interest income increased $377,000, or 29%, to $1.7 million in the
first quarter of 2008 from $1.3 million in the first quarter of 2007
primarily due to increased international fee income.
-- The Company continues to be "well-capitalized" as total risk-based
capital increased to 11.72%.
"The results for the quarter ended March 31, 2008 are disappointing due to
a loss provision related to one specific real estate credit, which masks
some very positive achievements in other segments of our business," said
Daniel P. Myers, President and Chief Executive Officer of Bridge Capital
Holdings and Bridge Bank. "Our commercial and technology industries lines
continue to benefit from the relative health of the Silicon Valley economy.
We continue to believe that our primary focus on business banking, our
diversified business lines, and our determination to manage risk exposure
will produce relatively better results than the banking industry as a
whole."
Net Interest Income and Margin
Net interest income of $12.0 million for the quarter ended March 31, 2008
represented an increase of approximately $1.0 million, or 10%, over $11.0
million reported for the same quarter one year earlier and was primarily
attributed to growth in average earning assets of $96.2 million, or 15%,
compared to the same quarter in 2007. The Company's loan-to-deposit ratio,
a measure of leverage, averaged 97.63% during the quarter ended March 31,
2008, which represented an increase compared to an average of 89.23% for
the same quarter of 2007 as a result of faster loan growth relative to
deposit funding.
Changes in short-term interest rates also 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 6.23% in the quarter ended
March 31, 2008 compared to 8.25% in the same period one year earlier.
The Company's net interest margin for the quarter ended March 31, 2008 was
6.59% compared to 6.96% for the same period one year earlier primarily as a
result of the decrease in short term interest rates offset, in part, by an
increase in loan related fees and income from interest rate swaps. During
the quarter ended March 31, 2008, the Company recognized $400,000 as a
success fee resulting from the completion of a capital raising event of a
loan client. In addition, the net settlement from interest rate swaps
contributed $340,000 to support net interest income in the quarter ended
March 31, 2008 compared to a loss of $98,000 for the quarter ended March
31, 2007.
"The results for the quarter ended March 31, 2008 were achieved in the face
of significant headwinds caused by increased credit costs and a 200 basis
point decline in short-term interest rates," said Thomas A. Sa, Executive
Vice President and Chief Financial Officer of Bridge Capital Holdings and
Bridge Bank. "Hedging strategies put in place last year and increased
leverage from a higher loan to deposit ratio enabled us to maintain net
interest margin at 6.59%. As a result of this strong net interest margin
and a $25 million increase in earning assets compared to the preceding
quarter, total revenue was equal to the fourth quarter of 2007 and up 12%
compared to the same quarter last year. We believe these results reflect
continued progress in our core business."
Non-Interest Income
The Company's non-interest income for the quarter ended March 31, 2008 was
$1.7 million compared to $1.3 million for the same period one year ago.
The increase in non-interest income is primarily the result of increased
international fee income. For the quarter ended March 31, 2008
international fee income was $378,000 compared to $78,000 for the quarter
ended March 31, 2007. Additionally, included in non-interest income for
the quarter ended March 31, 2008 was a hedge accounting adjustment of
$279,000 pertaining to the Company's interest rate swap and $82,000 from
the sale of commercial real estate loans. The increase in non-interest
income for the first quarter of 2008 was offset, in part, by a lower volume
of SBA loan sales. During the quarter ended March 31, 2008, the Company
sold SBA loans totaling $8.6 million compared to $23.5 million for the same
period in 2007.
Net interest income and non-interest income comprised total revenue of
$13.7 million for the three months ended March 31, 2008 compared to $12.2
million for the same period one year earlier, representing an increase of
$1.5 million, or 12%.
Non-Interest Expense
Non-interest expense was $8.7 million for the quarter ended March 31, 2008
compared to $7.9 million for the same period in 2007. 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 March 31, 2008 was $5.7 million, an
increase of $650,000 over $5.0 million in the same period of 2007. As of
March 31, 2008 the Company employed 172 full-time equivalents (FTE)
compared to 142 FTE on the same date one year earlier.
The Company's efficiency ratio, the ratio of non-interest expense to
revenues, was 63.75% for the quarter ended March 31, 2008 compared to
64.14% for the same period one year earlier.
Balance Sheet
Bridge Capital Holdings reported total assets at March 31, 2008 of $785.0
million, compared to $731.1 million at March 31, 2007, representing growth
of $53.9 million, or 7%.
The Company reported total gross loans outstanding at March 31, 2008 of
$671.3 million, which represented an increase of $96.2 million, or 17%,
over $575.1 million as of March 31, 2007.
The Company's total deposits were $689.2 million as of March 31, 2008,
compared to total deposits of $653.4 million as of March 31, 2007. The
increase in deposits represented growth of $35.8 million, or 6%, compared
to March 31, 2007.
For the quarter ended March 31, 2008, the Company's return on average
assets and return on average equity were 0.79% and 9.07%, respectively, and
compared to 1.44% and 19.52%, respectively, for the same period in 2007.
Return on average equity for the first quarter of 2008 was reduced, in
part, by the impact of appreciation in the value of interest rate swaps of
approximately $6.7 million which increased average other comprehensive
income by approximately $2.7 million.
Credit Quality
The allowance for loan losses was $11.0 million, or 1.64% of total loans,
at March 31, 2008, compared to $8.6 million, or 1.32% of total loans, at
December 31, 2007. The provision for credit losses for the three months
ended March 31, 2008 was $2.4 million compared to $200,000 for the same
period in 2007.
At March 31, 2008 nonperforming assets totaled $15.9 million, or 2.03% of
total assets, compared to $5.3 million, or 0.69% of total assets, on
December 31, 2007. The nonperforming assets at March 31, 2008 consisted of
seven lending relationships totaling $15.6 million that were on non-accrual
status and determined to be impaired based upon the criteria set forth in
SFAS No. 114, and two commercial properties valued at $348,000 that were
categorized as "other real estate owned."
Included in the non-performing loans were two lending relationships
totaling $11.2 million at March 31, 2008 that were collateralized by
undeveloped land. The largest of the relationships, representing $7.5
million, represents two loans secured by lots for luxury single family
construction in Monterey County. The second relationship is a land
development loan for $3.7 million in Fresno County. These loans had an
indicated potential loss exposure of approximately $1.4 million and an
impairment reserve was included in the allowance for loan losses.
Also included in the non-performing loans was a construction loan totaling
$2.6 million as of March 31, 2008. The loan is secured by three completed
luxury homes in the hills of the East Bay region of the San Francisco Bay
area. This loan had an indicated potential loss exposure of approximately
$540,000 and an impairment reserve was included in the allowance for loan
losses. The two other significant non-performing loans were SBA loans
totaling $1.5 million at March 31, 2008. These loans had an indicated
potential loss exposure of approximately $73,000 and an impairment reserve
was included in the allowance for loan losses.
The Company had one loan totaling $1.1 million at March 31, 2008 that was
performing but determined to be impaired based upon the criteria set forth
in SFAS No. 114. This loan was adequately collateralized by commercial
real estate. As such, no specific reserve was required for this loan.
Although there has been an increase in impaired loans, the Company had no
loan charge-off activity for the three months ended March 31, 2008 and
2007. The Company recognized no loan recoveries for the three months ended
March 31, 2008 and $4,000 for the same period on year earlier.
Capital Adequacy
At March 31, 2008, shareholders' equity in the Company totaled $68.9
million, which included approximately $3.9 million in other comprehensive
income as the result of increased value of interest rate swaps and the
Bank's investment portfolio. Shareholder's equity at March 31, 2008
compared to $52.5 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 11.72%, 10.47%, and 10.52%, respectively, were all
substantially above the regulatory standards for "well-capitalized"
institutions.
Conference Call and Webcast
Management will host a conference call tomorrow, April 18, 2008 at 9:00
a.m. Eastern time/6:00 a.m. Pacific time to further discuss the Company's
financial results and answer questions.
Individuals interested in participating in the conference call may do so by
dialing 800.762.9441 from the U.S., or 480.629.9041 from outside the U.S.
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 for 48 hours following the conclusion
of the call by dialing 303.590.3030 from the U.S., or 800.406.7325 from
outside the U.S., and entering reservation code 3870952. A webcast replay
will be available for 90 days.
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
holds a Global Select listing 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 Silicon Valley's full-service professional business
bank. The Bank is dedicated to meeting the financial needs of small, middle
market, and emerging technology businesses. 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
-------------------------------
03/31/08 12/31/07 03/31/07
--------- --------- ---------
INTEREST INCOME
Loans $ 15,227 $ 15,806 $ 14,184
Federal funds sold 177 233 524
Investment securities available for sale 617 765 670
--------- --------- ---------
Total interest income 16,021 16,804 15,378
--------- --------- ---------
INTEREST EXPENSE
Deposits:
Interest-bearing demand 4 7 13
Money market and savings 2,581 3,174 2,997
Certificates of deposit 1,088 974 1,156
Other 315 274 260
--------- --------- ---------
Total interest expense 3,988 4,429 4,426
--------- --------- ---------
Net interest income 12,033 12,375 10,952
Provision for credit losses 2,370 600 200
--------- --------- ---------
Net interest income after provision
for credit losses 9,663 11,775 10,752
--------- --------- ---------
NON-INTEREST INCOME
Service charges on deposit accounts 229 173 152
Gain on sale of SBA loans 283 580 731
Other non-interest income 1,159 618 411
--------- --------- ---------
Total non-interest income 1,671 1,371 1,294
--------- --------- ---------
OPERATING EXPENSES
Salaries and benefits 5,650 5,194 5,001
Premises and fixed assets 1,105 1,189 949
Other 1,981 2,200 1,904
--------- --------- ---------
Total operating expenses 8,736 8,583 7,854
--------- --------- ---------
Income before income taxes 2,598 4,563 4,192
Income taxes 1,076 1,876 1,748
--------- --------- ---------
NET INCOME $ 1,522 $ 2,687 $ 2,444
========= ========= =========
EARNINGS PER SHARE
Basic earnings per share $ 0.24 $ 0.42 $ 0.38
========= ========= =========
Diluted earnings per share $ 0.22 $ 0.39 $ 0.35
========= ========= =========
Average common shares outstanding 6,434,900 6,410,099 6,330,610
========= ========= =========
Average common and equivalent
shares outstanding 6,954,014 6,945,475 6,882,435
========= ========= =========
PERFORMANCE MEASURES
Return on average assets 0.79% 1.42% 1.44%
Return on average equity 9.07% 17.12% 19.52%
Efficiency ratio 63.75% 62.44% 64.14%
BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY
INTERIM CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)
03/31/08 12/31/07 09/30/07 06/30/07 03/31/07
--------- --------- --------- --------- ---------
ASSETS
Cash and due from
banks $ 25,138 $ 27,440 $ 19,076 $ 21,274 $ 21,673
Federal funds sold 16,880 13,395 70,155 39,790 60,620
Investment securities
available for sale 46,823 55,482 66,071 73,362 53,920
Loans:
Commercial 271,390 272,660 264,360 258,978 213,436
SBA 61,472 56,945 63,205 56,176 60,871
Real estate
construction 85,522 85,378 83,030 104,652 116,282
Real estate other 188,917 171,042 144,438 134,299 123,853
Factoring and asset-
based lending 53,108 57,662 43,942 42,683 51,904
Other 10,898 9,042 12,231 9,341 8,794
--------- --------- --------- --------- ---------
Loans, gross 671,307 652,729 611,206 606,129 575,140
Unearned fee income (1,664) (1,856) (1,616) (1,483) (1,586)
Allowance for
credit losses (10,978) (8,608) (8,003) (7,590) (7,533)
--------- --------- --------- --------- ---------
Loans, net 658,665 642,265 601,587 597,056 566,021
Premises and
equipment, net 5,045 5,005 4,618 4,966 4,050
Accrued interest
receivable 4,074 4,400 4,748 4,608 4,212
Other assets 28,381 26,845 23,622 22,741 20,626
--------- --------- --------- --------- ---------
Total assets $ 785,006 $ 774,832 $ 789,877 $ 763,797 $ 731,122
========= ========= ========= ========= =========
LIABILITIES
Deposits:
Demand
noninterest-
bearing $ 200,567 $ 198,641 $ 201,133 $ 218,651 $ 195,965
Demand interest-
bearing 4,587 5,350 4,271 4,563 9,611
Money market and
savings 386,369 372,923 418,503 372,470 352,975
Time 97,719 94,442 78,943 85,442 94,847
--------- --------- --------- --------- ---------
Total deposits 689,242 671,356 702,850 681,126 653,398
--------- --------- --------- --------- ---------
Junior subordinated
debt securities 17,527 17,527 17,527 17,527 17,527
Other borrowings - 10,000 - - -
Accrued interest payable 190 210 298 276 289
Other liabilities 9,176 10,655 9,187 9,882 7,449
--------- --------- --------- --------- ---------
Total liabilities 716,135 709,748 729,862 708,811 678,663
--------- --------- --------- --------- ---------
SHAREHOLDERS' EQUITY
Common stock 38,040 37,697 36,888 36,466 35,954
Retained earnings 26,931 25,409 22,722 19,970 16,987
Accumulated other
comprehensive (loss) 3,900 1,978 405 (1,450) (482)
--------- --------- --------- --------- ---------
Total
shareholders'
equity 68,871 65,084 60,015 54,986 52,459
--------- --------- --------- --------- ---------
Total liabilities
and shareholders'
equity $ 785,006 $ 774,832 $ 789,877 $ 763,797 $ 731,122
========= ========= ========= ========= =========
CAPITAL ADEQUACY
Tier I leverage ratio 10.52% 10.66% 10.20% 10.13% 10.15%
Tier I risk-based
capital ratio 10.47% 10.54% 10.68% 10.48% 10.55%
Total risk-based
capital ratio 11.72% 11.67% 11.80% 11.56% 11.69%
Total equity / total
assets 8.77% 8.40% 7.60% 7.20% 7.18%
Book value per share $ 10.58 $ 10.04 $ 9.32 $ 8.61 $ 8.21
BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY
INTERIM CONSOLIDATED AVERAGE BALANCE SHEET AND YIELD DATA (UNAUDITED)
(Dollars in Thousands)
Three Months Ended March 31,
---------------------------------------------------
2008 2007
------------------------ --------------------------
Yields Interest Yields Interest
Average or Income/ Average or Income/
Balance Rates Expense Balance Rates Expense
-------- ----- -------- --------- ----- ---------
ASSETS
Interest earning
assets (2):
Loans (1) $660,083 9.28% $ 15,227 $ 544,357 10.57% $ 14,184
Federal funds sold 24,181 2.94% 177 40,536 5.24% 524
Investment securities 49,908 4.97% 617 53,122 5.12% 670
-------- ----- -------- --------- ----- ---------
Total interest earning
assets 734,172 8.78% 16,021 638,015 9.78% 15,378
-------- ----- -------- --------- ----- ---------
Noninterest-earning
assets:
Cash and due from
banks 18,496 30,872
All other assets (3) 25,653 19,228
-------- ---------
TOTAL $778,320 $ 688,115
======== =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing
liabilities:
Deposits:
Demand $ 4,954 0.32% $ 4 $ 5,517 0.96% $ 13
Money market and
savings 367,923 2.82% 2,581 316,481 3.84% 2,997
Time 98,019 4.46% 1,088 98,033 4.78% 1,156
Other 23,341 5.43% 315 17,527 6.02% 260
-------- ----- -------- --------- ----- ---------
Total interest-bearing
liabilities 494,237 3.25% 3,988 437,558 4.01% 4,426
-------- ----- -------- --------- ----- ---------
Noninterest-bearing
liabilities:
Demand deposits 205,187 190,002
Accrued expenses and
other liabilities 11,428 9,770
Shareholders' equity 67,468 50,785
-------- ---------
TOTAL $778,320 $ 688,115
======== =========
----- -------- ----- ---------
Net interest income and
margin 6.59% $ 12,033 6.96% $ 10,952
===== ======== ===== =========
(1) Loan fee amortization of $1.7 million and $1.3 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 taxable
equivalent basis. Yields are based on amortized cost.
(3) Net of average allowance for credit losses of $8.9 million and $7.3
million, respectively.
BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY
INTERIM CONSOLIDATED CREDIT DATA (UNAUDITED)
(Dollars in Thousands)
03/31/08 12/31/07 09/30/07 06/30/07 03/31/07
-------- -------- -------- -------- --------
ALLOWANCE FOR CREDIT
LOSSES
Balance, beginning of
period $ 8,608 $ 8,003 $ 7,590 $ 7,533 $ 7,329
Provision for credit
losses, quarterly 2,370 600 475 1,000 200
Charge-offs, quarterly - - (312) (943) -
Recoveries, quarterly - 5 250 - 4
-------- -------- -------- -------- --------
Balance, end of period $ 10,978 $ 8,608 $ 8,003 $ 7,590 $ 7,533
======== ======== ======== ======== ========
NONPERFORMING ASSETS
Loans accounted for on a
non-accrual basis $ 15,578 $ 4,914 $ - $ - $ 5,450
Loans restructured and in
compliance with modified
terms - - - - -
Other loans with principal
or interest contractually
past due 90 days or more - - - - -
-------- -------- -------- -------- --------
Nonperforming loans 15,578 4,914 - - 5,450
Other real estate owned 348 425 425 425 -
-------- -------- -------- -------- --------
Nonperforming assets $ 15,926 $ 5,339 $ 425 $ 425 $ 5,450
======== ======== ======== ======== ========
ASSET QUALITY
Allowance for credit
losses / gross loans 1.64% 1.32% 1.31% 1.25% 1.31%
Allowance for credit
losses / nonperforming
loans 70.47% 175.17% 0.00% 0.00% 138.22%
Nonperforming assets /
total assets 2.03% 0.69% 0.05% 0.06% 0.75%
Nonperforming loans /
gross loans 2.32% 0.75% 0.00% 0.00% 0.95%
Net quarterly charge-offs
/ gross loans 0.00% 0.00% 0.01% 0.16% 0.00%