Bridge Bancorp 1st Q numbers: Bullish, but still cautious

Bridge Bancorp, which is opening a branch on Shelter Island, is boasting of first quarter results that outstrip results for the same time last year.

“The banking environment remains challenging due to a still uncertain economy, onerous regulatory climate and continued low rate environment,” said president and Bridgehampton National Bank CEO Kevin O’Connor. While employment and housing trends improved during the first quarter and the stock market reached record highs, questions remain about whether such positive steps are sustainable, he said. That new regulations continue to be issued and market interest rates remain low are challenging to the business model of banking, Mr. O’Connor said.

Still Bridge Bancorp continues to provide opportunities for growth. The company remains vigilant about what he said is the “eventuality” of higher interest rates, while at the same time investing in infrastructure and technology “to take advantage of market opportunities and prepare for the evolving competitive landscape,” Mr. O’Connor said.

He acknowledged that while the company is bullish about its future numbers, there are factors that could change current expectations, such as a changing economy; legislative and regulatory mandates; increases in FDIC insurance rates; monetary and fiscal policies of the Federal Reserve; tax policy changes; interest rate fluctuations; deposit flows; the cost of funds; and demands for loan products and financial services.

Competition also remains a factor, Mr. O’Connor said.

Figures show net income of $3.1 million  representing a 6 percent hike over 2012 when net income was $2.9 million. The increase resulted  from growth in earning assets as the company experienced higher levels of net interest income and other income and lower credit costs, offsetting increases in operating expenses, according to a press release from Bridge Bancorp. Average earnings assets increased by 18 percent to $233.5 million as compared with 2012 first quarter results.

“We continue to expand and develop customer relationships, generating core deposit growth in our loan portfolio, driving increases in revenues and offsetting the impact of lower rates and higher operating costs,” Mr. O’Connor said.
At the same time, he said total assets were down from December 2012 because of a strategy decision.
“We repositioned the balance sheet by reducing our investment portfolio,” Mr. O’Connor said. The result was to provide liquidity to fund “significant” loan growth that reduced borrowing, he said.

Stockholder equity grew $11.4 million to $121.4 million at March 2013 as compared with $110 million at the same time last year. The growth reflects earnings net of dividends as well as capital raised in connection with the dividend reinvestment plan, Mr. O’Connor said.