SAN JOSE, Calif.--(BUSINESS WIRE)--Bridge Capital Holdings (NASDAQ: BBNK), whose subsidiary is Bridge Bank, National Association, a full service professional business bank headquartered in Silicon Valley, announced today that it has received regulatory approval to repay $24.0 million in TARP Capital Purchase Program funds, plus accrued but unpaid dividends, to the U.S. Treasury. The company expects to redeem all of the shares of its Series C Preferred Stock that were originally issued to the U.S. Treasury under the program.
“The repayment of our TARP funds is a significant milestone for Bridge, which we believe reflects the strength of our balance sheet and our ability to continue actively meeting the financing needs of our growing Silicon Valley customer base,” said Daniel P. Myers, President and Chief Executive Officer of Bridge Capital Holdings and Bridge Bank. “The Treasury’s Capital Purchase Program was designed to provide supplemental temporary capital to healthy viable banks, like Bridge, so they could continue providing credit to the business community during a period of unprecedented economic uncertainty. Now that the economic recovery is beginning to emerge, it is time to redeem the Treasury’s investment, as originally planned.”
The company received the Treasury CPP investment in December 2008. In the twenty-five months since the company began participating in the Capital Purchase Program, Bridge Bank has made loans to more than 600 new business clients in the commercial & industrial and emerging business sectors of the Silicon Valley region. To date, the company has paid more than $2.4 million in dividends to the U.S. Treasury under the program.
“Of the 707 financial institutions to qualify and receive TARP funds, Bridge Capital Holdings was one of the earliest companies to obtain funding from the Treasury,” stated Tom Sa, Executive Vice President and Chief Financial Officer of Bridge Capital Holdings. “It is only fitting that Bridge will now be one of the earlier companies to redeem the Treasury’s investment in full.”
Repayment of the TARP funds will save Bridge Capital Holdings approximately $1.2 million in annual preferred dividends. As a result of the early repayment, the company will record an immaterial charge in the first quarter of 2011 to reflect the accelerated accretion of the remaining discount on the preferred stock.
Following the repayment, Bridge Capital Holdings will continue to be well in excess of the regulatory requirements to be considered a “well capitalized” financial institution. Following are the company’s pro forma capital ratios giving effect to the repayment of the TARP funds:
|As of December 31, 2010||Pro Forma Capital Ratios|
|Tier 1 Leverage Ratio||16.67||%||14.20||%|
|Tier 1 Capital Ratio||19.61||%||16.71||%|
|Total Risk-Based Capital Ratio||20.87||%||17.97||%|
|Tangible Common Equity Ratio||11.50||%||11.50||%|
Bridge Capital Holdings closed a $30.0 million equity offering in November 2010, part of which was intended to be used to repay the Treasury.
Under the Capital Purchase Program, Bridge Capital Holdings sold preferred shares in the amount of $24.0 million to the U.S. Treasury in December 2008. As part of the transaction, Bridge agreed to pay a five percent annual dividend and granted the Treasury a warrant for common shares in the company.
After the redemption has been completed, the company expects to repurchase the outstanding warrants issued under the Capital Purchase Program in 2011. The warrant was initially issued for 396,412 shares of common stock.
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 holds a Global Select listing on The NASDAQ Stock Market under the trading symbol BBNK. For additional information, visit the Bridge Capital Holdings website at www.bridgecapitalholdings.com.
About Bridge Bank, N.A.
Bridge Bank, N.A. is Silicon Valley's full-service professional business bank. The Bank is dedicated to meeting the financial needs of small, middle-market, and emerging technology businesses. Bridge Bank provides its clients with a comprehensive package of business banking solutions delivered through experienced, professional bankers. Visit Bridge Bank on the web at www.bridgebank.com.
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. 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 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.