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Bridge Capital Holdings Reports Financial Results For the Third Quarter Ended September 30, 2007
Third Quarter Net Income Increases 19% Year-over-Year
San Jose, CA – October 18, 2007 – Bridge Capital Holdings (NASDAQ: BBNK), whose subsidiary is Bridge Bank, National Association, one of the fastest-growing full-service business banks in California and the nation, today announced financial results for the third quarter and nine months ended September 30, 2007.

The Company reported net income of $2.8 million, or $0.40 per diluted share, for the three months ended September 30, 2007. This represented an increase of $444,000, or 19%, compared to net income of $2.3 million, or $0.34 per diluted share, in the same period one year ago. Net income for the nine months ended September 30, 2007 was $8.2 million, or $1.18 per diluted share, an increase of $1.9 million, or 31%, compared to $6.3 million, or $0.92 per diluted share, for the first nine months of 2006.

"We are pleased with our strong quarterly performance in light of the significant challenges being faced by the industry," said Daniel P. Myers, President and Chief Executive Officer of Bridge Capital Holdings and Bridge Bank. "The slowdown in national credit markets, particularly in the housing sector, continues to highlight the benefits of the diversity of our business. We have not diluted our focus by entering the residential mortgage markets and we have deliberately limited our exposure to the housing sector. We believe the economic environment in our primary market of Silicon Valley continues to be sound and it is reflected in our commercial and technology based business development."



Second Quarter Highlights

• Net income of $2.8 million for the third quarter of 2007 represented an increase of $444,000 compared to $2.3 million for the third quarter of 2006.
• Growth in average earning assets produced an increase in net interest income of 22%, or $2.2 million, compared to the same period one year earlier.
• Net interest margin for the third quarter of 2007 remained strong at 6.46%.
• Non-interest income increased $600,000 to $1.4 million in the third quarter of 2007 from $800,000 in the third quarter of 2006, in part, due to recognition of approximately $375,000 from the liquidation of a warrant position in one of the Bank's loan clients.
• Total assets increased $134.2 million to $789.9 million as of September 30, 2007 compared to $655.7 million on the same date one year earlier.
• Return on average assets and return on average equity were 1.36% and 19.02%, respectively, for the third quarter of 2007.

Net Interest Income and Margin
Earnings growth was driven primarily by growth in net interest income. Net interest income of $12.3 million for the quarter ended September 30, 2007 represented an increase of approximately $2.2 million, or 22%, over $10.1 million reported for the same quarter one year earlier and was primarily attributed to growth in average earning assets of $162.4 million, or 27%, compared to the same quarter in 2006. The Company's loan-to-deposit ratio, a measure of leverage, averaged 83.54% during the quarter ended September 30, 2007, which represented a slight decrease compared to an average of 83.61% for the same quarter of 2006.

For the nine months ended September 30, 2007, net interest income of $35.2 million represented growth of $7.3 million, or 26%, over $27.9 million for the first nine months of 2006. For the nine month period, growth in average earning assets was the primary driver of growth in net interest income. Average earning assets were $701.8 million compared to $539.3 million for the same period one year earlier. The Company's average loan-to-deposit ratio for the nine months ended September 30, 2007 was 86.52% compared to 88.56% for the same period one year earlier reflecting slightly faster growth in deposit funding relative to loan growth.

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 8.18% and 8.23%, respectively, in the quarter and nine months ended September 30, 2007 compared to 8.25% and 7.86%, respectively, in the same periods one year earlier.

The Company's net interest margin for the quarter and nine months ended September 30, 2007 was 6.46% and 6.71%, respectively, declining slightly from 6.73% and 6.91%, respectively, in the same periods one year earlier as a result of the decrease in the prime rate noted above, a decrease in loan fees as a percentage of loans, growth in the volume of average interest bearing liabilities and decreased balance sheet leverage.


Non-Interest Income
The Company's non-interest income for the quarter and nine months ended September 30, 2007 was $1.4 million and $5.3 million, respectively, compared to $800,000 and $3.0 million, respectively, for the same periods one year ago. Non-interest income is primarily comprised of gains realized on sales of SBA loans, and the increase in non-interest income primarily reflects a higher volume of SBA loan sales in 2007. During the quarter and nine months ended September 30, 2007, the Company sold SBA loans totaling $20.3 million and $76.8 million, respectively, compared to $8.1 million and $51.4 million, respectively, for the same periods during 2006. In addition, non-interest income for the quarter included approximately $375,000 resulting from the liquidation of a warrant position in one of the Bank's loan clients.

Net interest income and non-interest income comprise total revenue of $13.8 million for the three months ended September 30, 2007 compared to $10.9 million for the same period one year earlier, representing an increase of $2.9 million, or 26%. For the nine months ended September 30, 2007, total revenue of $40.6 million represented an increase of $9.7, or 34%, over $30.9 million for the first nine months of 2006.

"Key operating measures remained strong in the third quarter of 2007," said Thomas A. Sa, Executive Vice President and Chief Financial Officer of Bridge Capital Holdings and Bridge Bank. "However, during the third quarter, deposit growth outpaced loan growth which reduced balance sheet leverage. As a result, our ROAA decreased slightly to 1.36%, and the net interest margin declined slightly to 6.46%. While these remain strong measures, maintaining or exceeding these levels will depend on our ability to increase and sustain the loan-todeposit ratio. In addition, for the first time we saw a meaningful contribution from a successful liquidation of a warrant position in our technology division. We believe this demonstrates the benefit of diversity in our mix of business lines."


Non-Interest Expense
Non-interest expense was $8.7 million and $25.0 million for the quarter and nine months ended September 30, 2007, respectively, compared to $7.1 million and $20.0 million, respectively, for the same periods in 2006. The increase in non-interest expense was primarily due to an increase in salary and benefits expense associated with the Company's expansion. Salary and benefits expense for the quarter ended September 30, 2007 was $5.5 million, an increase of $900,000 over $4.6 million in the same period of 2006. Salary and benefits expense for the nine months ended September 30, 2007 was $15.8 million, an increase of $3.1 million over $12.7 million in the same period of 2006. As of September 30, 2007 the Company employed 164 full-time equivalents (FTE) compared to 132 FTE on the same date one year earlier.

The Company's efficiency ratio, the ratio of non-interest expense to revenues, was 63.30% and 61.63% for the quarter and nine months ended September 30, 2007 compared to 64.89% and 64.94%, respectively, in the same periods one year earlier.


Balance Sheet
Bridge Capital Holdings reported total assets at September 30, 2007 of $789.9 million, compared to $655.7 million on the same date one year ago. The increase in total assets represented growth of $134.2 million, or 21%, compared to September 30, 2006. Total assets at September 30, 2007 represented growth of $67.9 million, or 9%, compared to $722.0 million at December 31, 2006.

The Company reported total gross loans outstanding at September 30, 2007 of $611.2 million, which represented an increase of $125.6 million, or 26%, over $485.6 million for the same date one year earlier. Total loans at September 30, 2007 represented growth of $70.4 million, or 13%, compared to $540.8 million at December 31, 2006.

The Company's total deposits were $702.9 million as of September 30, 2007, compared to total deposits of $585.8 million as of September 30, 2006. The increase in deposits represented growth of $117.1 million, or 20%, compared to September 30, 2006. Total deposits at September 30, 2007 represented growth of $57.9 million, or 9%, compared to $645.0 million at December 31, 2006.

For the quarter ended September 30, 2007, the Company's return on average assets and return on average equity were 1.36% and 19.02%, respectively, and compared to 1.44% and 19.99%, respectively, for the same period in 2006. Return on average assets and return on average equity for the nine months ended September 30, 2007 were 1.46% and 20.20%, respectively, up from 1.44% and 19.31%, respectively, for the same period one year earlier.


Credit Quality
The allowance for loan losses was $8.0 million, or 1.31% of total loans, at September 30, 2007, compared to $6.7 million, or 1.39% of total loans, at September 30, 2006. The provision for credit losses for the three and nine months ended September 30, 2007 was $475,000 and $1.7 million, respectively, compared to $100,000 and $772,000, respectively, for the same periods in 2006. During the three and nine months ended September 30, 2007, the Company charged-off balances totaling $312,000 and $1.3 million, respectively, which compared to no loan charge-off activity during the same periods of 2006. During the third quarter of 2007, the Company recognized $250,000 in loan recoveries. The loan recoveries in the third quarter represented all of the activity for the first nine months of 2007 and compared to no loan recoveries during the same periods of 2006.

At September 30, 2007 nonperforming assets totaled $425,000, or 0.05% of total assets, compared to $2.6 million, or 0.39% of total assets, on the same date one year earlier. The single nonperforming asset at September 30, 2007 was a commercial property categorized as "other real estate owned".  


Capital Adequacy
At September 30, 2007, shareholders' equity in the Company totaled $60.0 million, up from $47.0 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 11.80%, 10.68%, and 10.20%, respectively, were all substantially above the regulatory standards for "well-capitalized" institutions.


About Bridge Capital Holdings
Bridge Capital Holdings is the holding company for Bridge Bank, National Association. Bridge Capital Holdings was formed on October 1, 2004 and is listed on The NASDAQ Stock Market under the trading symbol BBNK. For additional information, visit the Bridge Capital Holdings website at http://www.bridgecapitalholdings.com.


About Bridge Bank, N.A.
Bridge Bank, N.A. is Santa Clara County s full-service professional business bank. The bank is dedicated to meeting the financial needs of small and middle market, and emerging technology businesses, in the Silicon Valley, Palo Alto, Redwood City, San Ramon-Pleasanton, Sacramento, San Diego, Bakersfield, Fresno, Orange County, Dallas, TX, and Reston, VA business communities. Bridge Bank provides its clients with a comprehensive package of business banking solutions delivered through experienced, professional bankers. For additional information, visit the Bridge Bank website at http://www.bridgebank.com.


Contacts

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.

BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Dollars in Thousands)
	Three months ended			Nine months ended
	09/30/07	06/30/07	09/30/06	09/30/07	09/30/06
INTEREST INCOME
Loans	$15,585	$15.433	$12,762	$45,202	$34,696
Federal funds sold	1,138	753	1,453	2,415	2,723
Investment securities available for sale	904	750	113	2,324	316
Total interest income	17,627	16,936	14,328	49,941	37,735
INTEREST EXPENSE
Deposits:
Interest-bearing demand	10	10	9	33	23
Money market and savings	3,984	3,628	2,733	10,609	6,073
Certificates of deposit	1,039	1,112	1,239	3,307	2,924
Other	262	260	257	782	825
Total interest expense	5,295	5,010	4,238	14,731	9,845
Net interest income	12,332	11,926	10,090	35,210	27,890
Provision for credit losses	475	1,000	100	1,675	772
Net interest income after provision for credit losses	11,857	10,926	9,990	33,535	27,118
NON-INTEREST INCOME
Service charges on deposit accounts	166	181	131	497	370
Gain on sale of SBA loans	363	1,890	225	2,986	1,064
Other non interest income	906	542	443	1,859	1,526
Total non-interest income	1,435	2,613	799	5,342	2,960
OPERATING EXPENSES
Salaries and benefits	5,530	5,265	4,627	15,796	12,706
Premises and fixed assets	1,173	1,026	808	3,149	2,122
Other	2,012	2,131	1,631	6,046	5,206
Total operating expenses	8,715	8,422	7,066	24,991	20,034
Income before income taxes	4,577	5,117	3,723	13,886	10,044
Income taxes	1,825	2,134	1,415	5,707	3,786
NET INCOME	$2,752	$2,983	$2,308	$8,179	$6,258
EARNINGS PER SHARE
Basic earnings per share	$0.43	$0.47	$0.37	$1.28	$1.00
Diluted earnings per share	$0.40	$0.43	$0.34	$1.18	$0.92
Average common shares outstanding	6,397,140	6,381,493	6,283,125	6,369,991	6,262,169
Average common and equivalent shares outstanding	6,947,833	6,933,273	6,819,049	6,923,726	6,795,493
PERFORMANCE MEASURES
Return on average assets	1.36%	1.57%	1.44%	1.46%	1.44%
Return on average equity	19.02%	22.09%	19.99%	20.20%	19.31%
Efficiency ratio	63.30%	57.93%	64.89%	61.63%	64.94%

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