JULIE LANE PHOTO | Work continues on the new Shelter Island Bridgehampton National Bank branch that should open in March or April.

As Bridgehampton National Bank readies its latest branch on North Ferry Road on Shelter Island, its parent company, Bridge Bancorp released fourth quarter and year-end results demonstrating what officials called continued positive growth.

The new local branch in the Boltax building is expected to open in early spring.

Net income for the quarter, ended December 31, 2012, was at $3.4 million, a 16 percent increase over the same quarter in 2011 and at $12.8 million  for the year, 23 percent higher than 2011 yearly figures.

At the same time, the bank was reporting its net income for the quarter, it announced that earnings per share were down to 39 cents from 42 cents for the same quarter in 2011.

The lower earnings per share resulted from a higher share count associated with $24 million in capital raised in the fourth quarter of 2011.

Net interest income increased $4.1 million and total assets were at $1.62 billion at the end of 2012, 21 percent higher than they were at the end of 2011.

Loan growth was up 30 percent.

“Our record achievements in 2012 of substantial organic loan, deposit and revenue growth, coupled with strong asset quality and capitalization levels combined to deliver industry leading returns,” said Kevin O’Connor, president and CEO of Bridge Bancorp, Inc. “The key to delivering on our mission is combining our expanding branch network improving technology and experienced professionals with the critical element of local decision making,” he said.

The expansion of the franchise’s geographic reach resulted in increasing core deposits and loans and generating record levels of revenue and income, according to the Mr. O’Connor. The revenue offset what has been higher credit and compliance costs, he said.
Five years after the financial crisis hit in 2008, the banking environment continues to be uncertain, Mr. O’Connor said. There are higher costs associated with compliance and greater capitalization required that affect shareholder expectations, he said. While lower market interest rates have created opportunities for borrowers, there are challenges for banks, he said.

“The eventuality of rising rates is arguably our industry’s greatest challenge and threat,” Mr. O’Connor said. It creates margin pressures and affects credit as businesses adjust to potentially higher borrowing costs, he said.