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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 Second Quarter and Six Months Ended June 30, 2009 The Company reported a net loss available to common shareholders of $(2.6) million, or $(0.39) per diluted common share, for the six months ended June 30, 2009 representing a decrease of $2.8 million, or 1,425%, compared to net income of $195,000, or $0.03 per diluted common share, for the same period one year ago. The net loss available to common shareholders was reduced by preferred dividends of $2.1 million during the first six months of 2009. There were no preferred dividends during the first six months of 2008. "During the second quarter, we made solid progress in significantly reducing our CRE exposure while improving capital ratios and liquidity," said Daniel P. Myers, President and Chief Executive Officer of Bridge Capital Holdings and Bridge Bank. "While we are seeing some "green shoots" of improvement in our business, the operating environment remains uncertain. We believe our strong capital position and our reserve levels combined with our continued progress in reducing problem loans position us well for the present environment and the road ahead." Second Quarter Highlights
For the quarter ended June 30, 2009, the Company's return on average assets and return on average equity were (0.39)% and (3.04)%, respectively, compared to (0.66)% and (7.70)%, respectively, for the same period in 2008. Return on average assets and return on average equity for the six months ended June 30, 2009 were (0.12)% and (0.92)%, respectively, compared to 0.05% and 0.57%, respectively, for the same period one year earlier. Net Interest Income and Margin For the six months ended June 30, 2009, net interest income of $19.3 million represented a decline of $4.4 million, or 19%, from $23.8 million for the six months ended 2008 and was primarily attributed to the decrease in short-term interest rates, lower balance sheet leverage and increased levels of nonperforming loans. Average earning assets of $841.5 million for the six months ended June 30, 2009 increased $93.2 million, or 12%, compared to $748.4 million for the same period one year ago. The Company's loan-to-deposit ratio, a measure of leverage, averaged 89.67% during the six months ended June 30, 2009, which represented a decrease compared to an average of 97.59% for the same period of 2008. The Company's net interest margin for the quarter ended June 30, 2009 was 4.76% compared to 6.18% for the same period one year earlier, primarily due to lower short-term interest rates and lower balance sheet leverage. In addition, an increased level of nonperforming assets resulted in a negative impact of approximately 23 basis points in the second quarter of 2009 from reversed or foregone interest. The net interest margin for the six months ended June 30, 2009 was 4.64% compared to 6.38% for the six months ended June 30, 2008 which was also primarily the result of lower short-term interest rates and lower balance sheet leverage. Nonperforming loans had a negative impact on net interest margin of approximately 21 basis points in 2009. Non-Interest Income The Company's non-interest income for the quarter and six months ended June 30, 2009 was $2.3 million and $6.3 million, respectively, compared to $1.7 million and $3.4 million, respectively, for the same periods one year ago. The increase in non-interest income for the second quarter of 2009 compared to the same period one year ago was primarily due to a gain of $675,000 recognized on the sale of "other real estate owned". The increase in non-interest income for the six months ended June 30, 2009 compared to the same period one year ago was primarily attributable to the recognition of $3.0 million from the acceleration of the deferred gain on interest rate swaps terminated during the fourth quarter of 2008. Excluding the impact of the gain recognized on "other real estate owned" and the impact of accounting related to hedging strategies, non-interest income is primarily comprised of foreign exchange fee income, deposit service charges, and gains on the sale of SBA loans. Net interest income and non-interest income comprised total revenue of $12.0 million for the three months ended June 30, 2009 compared to $13.4 million for the same period one year earlier, representing a decrease of $1.4 million, or 11%. For the six months ended June 30, 2009, total revenue of $25.7 million represented a decrease of $1.5 million, or 5%, from $27.1 million for the six months ended June 30, 2008. Non-Interest Expense Non-interest expense was $9.3 million and $18.8 million for the quarter and six months ended June 30, 2009, respectively, compared to $9.5 million and $18.2 million, respectively, for the same periods in 2008. Salary and benefits expense for the quarter ended June 30, 2009 was $5.1 million, representing a decrease of $811,000 from $5.9 million in the same period of 2008. Salary and benefits expense for the six months ended June 30, 2009 was $10.7 million, a decrease of $894,000 from $11.6 million in the same period of 2008. As of June 30, 2009 the Company employed 162 full-time equivalents (FTE) compared to 178 FTE on the same date one year earlier. During the second quarter of 2009, the Company paid $365,000 for the FDIC special assessment levied on all banks that hold insured deposits. The Company's efficiency ratio, the ratio of non-interest expense to revenues, was 77.74% and 73.25% for the quarter and six months ended June 30, 2009 compared to 70.77% and 67.23%, respectively, in the same periods one year earlier. Balance Sheet Bridge Capital Holdings reported total assets at June 30, 2009 of $829.3 million, compared to $805.4 million on the same date one year ago. The increase in total assets represented growth of $24.0 million, or 3%, compared to June 30, 2008. Total assets at June 30, 2009 compared to $947.6 million at December 31, 2008 representing a decrease of $118.3 million, or 13%. The decrease in total assets compared to December 31, 2008 was primarily due to decreases in wholesale borrowings and deposits in response to improved liquidity. The Company's total deposits were $689.1 million as of June 30, 2009, compared to total deposits of $716.8 million as of June 30, 2008. The decrease in deposits was $27.7 million, or 4%, compared to June 30, 2008. Demand deposits represented 40.5% of total deposits at June 30, 2009, up from 32.6% at June 30, 2008. The Company reported total gross loans outstanding at June 30, 2009 of $606.5 million, which represented a decrease of $100.6 million, or 14%, from $707.1 million for the same date one year earlier. The decrease in gross loans included a decrease of $64.6 million, or 41%, in construction and land development loans. In addition, de-leveraging by commercial borrowers resulted in a decrease in commercial and industrial loan balances of $30.8 million, or 11%. "In the past year we have weathered the severe economic downturn with a focused and equally urgent response," noted Thomas A. Sa, Executive Vice President and Chief Financial Officer of Bridge Capital Holdings and Bridge Bank. "We have significantly improved the risk profile of the Company, in part, by reducing our exposures in the most impacted portions of the loan portfolio, which is reflected in loan totals and the size of the balance sheet. This has not only reduced credit risk but has also served to support liquidity and capital for opportunities ahead." Credit Quality At June 30, 2009, nonperforming assets totaled $29.4 million, or 3.55% of total assets, compared to $28.3 million, or 3.21% of total assets as of March 31, 2009, and $28.9 million, or 3.58% of total assets, on the same date one year earlier. The nonperforming assets at June 30, 2009 consisted of loans on nonaccrual or 90 days or more past due totaling $27.1 million, and other real estate owned valued at $2.3 million. Nonperforming loans at June 30, 2009 were comprised of loans with legal contractual balances totaling approximately $39.8 million reduced by impairment charges of $12.7 million which have been charged against the allowance for credit losses. The Company charged-off $4.2 million during the three months ended June 30, 2009 compared to $2.6 million charged-off during the three months ended June 30, 2008. During the six months ended June 30, 2009, the Company charged-off balances totaling $8.5 million which compared to $2.6 million charged-off during the same period of 2008. During the three and six months ended June 30, 2009 the Company recognized $23,000 and $308,000, respectively, in loan recoveries compared to $1,000 and $1,000, respectively, in loan recoveries during the same periods of 2008. Construction and land development loans together totaled approximately $94.0 million as of June 30, 2009, compared to $158.6 million one year earlier, representing a decrease of $64.6 million or 41%. Land development loans decreased by $44.6 million, or 76%, from $58.9 million at June 30, 2008 to $14.2 million on June 30, 2009. During the same period, unfunded commitments on construction and land development loans decreased by $64.9 million. The allowance for loan losses was $18.0 million, or 2.96% of total loans, at June 30, 2009, compared to $14.6 million, or 2.07% of total loans, at June 30, 2008. The provision for credit losses for the three and six months ended June 30, 2009 was $4.0 million and $7.7 million, respectively, compared to $6.2 million and $8.6 million, respectively, for the same periods in 2008. Capital Adequacy At June 30, 2009, shareholders' equity in the Company totaled $109.2 million, which included approximately $53.9 million in preferred stock and $(255,000) in other comprehensive income. Shareholders' equity at June 30, 2009 compared to $66.2 million on the same date one year earlier. The increase was the result of capital raised in the fourth quarter of 2008 in the form of $30.0 million of mandatorily convertible preferred stock and $23.8 million of preferred stock issued under the US Treasury's Capital Purchase Program. The Company's tangible common equity ratio was 6.68% at June 30, 2009 compared to 6.19% at December 31, 2008. The Company's Total Risk-Based Capital Ratio, Tier I Capital Ratio, and Tier I Leverage Ratio of 19.27%, 15.08%, and 12.28%, respectively, were all substantially above the regulatory standards for "well-capitalized" institutions. Conference Call and Webcast Management will host a conference call tomorrow, July 28, 2009 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 800.891.6020 from the United States, or 702.696.4830 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 August 11, 2009 by dialing 800.642.1687 from the United States, or 706.645.9291 from outside the United States, and entering the conference ID 20657799. 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 describe future plans, strategies and expectations, such as, for example, the Company's plans to divest itself of non-performing assets, to sell convertible preferred shares and expectations regarding capital ratios. 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 reach definitive agreements regarding and to subsequently complete the sales of nonperforming assets and convertible preferred shares, 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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