Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2002, for Bridge Bancorp, Inc. (Note: The input metadata referenced "Dime Commercial Bancshares," but the filing text explicitly identifies the registrant as Bridge Bancorp, Inc., a one-bank holding company for The Bridgehampton National Bank). The Company operates primarily in Suffolk County, New York, focusing on commercial real estate, residential mortgages, and consumer lending.
Key Financial Metrics
| Metric | Q1 2002 | Q1 2001 | Dec 31, 2001 |
|---|---|---|---|
| Net Income | $2,007,000 | $1,457,000 | - |
| Earnings Per Share (Diluted) | $0.48 | $0.34 | - |
| Total Assets | $413,449,000 | - | $393,523,000 |
| Total Loans (Net) | $219,857,000 | - | $213,113,000 |
| Total Deposits | $375,758,000 | - | $357,155,000 |
| Net Interest Income | $5,243,000 | $4,345,000 | - |
| Net Interest Margin | 5.5% | 5.5% | - |
| Cash & Equivalents | $18,399,000 | - | $24,363,000 |
| Stockholders' Equity | $32,940,000 | - | $32,861,000 |
Liquidity & Capital: The Bank maintains aggregate lines of credit of $37 million with correspondent banks. Regulatory capital ratios exceed "Well Capitalized" standards, with Total Capital to Risk-Weighted Assets at 12.9% and Tier 1 Capital to Risk-Weighted Assets at 12.0%.
Material Changes vs. Prior Period
- Profitability: Net income increased 37.8% year-over-year to $2.007 million, driven by a 20.7% increase in net interest income and a 17.3% rise in non-interest income.
- Asset Growth: Total assets grew 5.1% from year-end 2001, primarily due to a 13.4% increase in investment securities and a 3.2% increase in net loans.
- Deposit Expansion: Total deposits increased 5.2% from year-end, with Savings, N.O.W., and money market deposits surging 14.2% due to growth in public fund and corporate accounts.
- Rate Environment: While the yield on interest-earning assets decreased from 8.4% to 6.7%, the cost of interest-bearing liabilities dropped significantly from 4.1% to 1.7%, maintaining a stable net interest margin of 5.5%.
- Asset Quality: Non-performing loans decreased 17.5% to $439,000 (0.20% of net loans). Net charge-offs were minimal at $7,000 for the quarter.
Outlook, Risks, and Management Commentary
- Strategic Focus: Management continues to emphasize attracting individual, partnership, and corporate deposits while expanding public fund relationships. New branches in Greenport and Sag Harbor are supporting this growth.
- Loan Portfolio: Growth is driven by adjustable-rate residential mortgages held in portfolio and commercial mortgages. Approximately $8.965 million in loans are classified as "potential problem loans," though management deems the likelihood of loss remote due to strong collateral.
- Expense Management: Total expenses rose 3.6% year-over-year, largely due to increased staffing for a new branch in Hampton Bays and salary increases. Furniture and fixture expenses increased due to new branch openings and IT system upgrades for internet banking.
- Risks: The Company highlights standard banking risks including interest rate fluctuations, economic conditions in Suffolk County, and regulatory changes. Forward-looking statements are subject to the Private Securities Litigation Reform Act safe harbor.
- Capital Actions: The Company repurchased 52,000 shares of treasury stock during the quarter and declared cash dividends of $0.15 per share.
Investor Verification Checklist
- Deposit Concentration: Verify the stability of the 23.1% of deposits held in public fund accounts, as these can be volatile.
- Loan Quality: Monitor the $8.965 million in "potential problem loans" and the adequacy of the allowance for loan losses (1.03% of total loans).
- Interest Rate Sensitivity: Assess the impact of the widening gap between asset yields (6.7%) and liability costs (1.7%) if market rates rise significantly.
- Branch Expansion Costs: Track the return on investment for new branches in Hampton Bays, Sag Harbor, and Greenport against rising occupancy and staffing costs.
- Securities Portfolio: Review the composition of the $162.4 million investment portfolio, specifically the unrealized gains/losses on available-for-sale securities.