10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended: March 31, 2015

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From                          to                        

001-34165

(Commission File Number)

Bridge Capital Holdings

(Exact name of registrant as specified in its charter)

California	80-0123855
(State or other jurisdiction of	(I.R.S. Employer Identification Number)
incorporation or organization)

55 Almaden Boulevard, San Jose, CA 95113

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code:  (408) 423-8500

Indicate by checkmark whether the registrant: (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o

Indicate by checkmark whether registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer o	Accelerated filer x	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller
		reporting company)

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes o  No x

The number of shares of Common Stock outstanding as of May 1, 2015:  15,947,284

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1	Financial Statements	3
	Interim Consolidated Balance Sheets	3
	Interim Consolidated Statements of Operations	4
	Interim Consolidated Statements of Comprehensive Income	5
	Interim Consolidated Statements of Cash Flows	6
	Notes to Interim Consolidated Financial Statements	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4	Controls and Procedures	52
PART II - OTHER INFORMATION
Item 1	Legal Proceedings	53
Item 1A	Risk Factors	53
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3	Defaults Upon Senior Securities	53
Item 4	Mine Safety Disclosures	53
Item 5	Other Information	53
Item 6	Exhibits	53
Signatures		54
Index to Exhibits		55

2

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY

Interim Consolidated Balance Sheets

(dollars in thousands)

	(unaudited)
	March 31,		December 31,
	2015		2014
ASSETS
Cash and due from banks	$	29,969	$	21,950
Federal funds sold	121,028		75,420
Total cash and equivalents	150,997		97,370
Interest bearing deposits in other banks	326		326
Investment securities:
Available for sale	320,024		352,243
Held to maturity	12,563		12,922
Total investment securities	332,587		365,165
Loans, net of allowance for credit losses of $22,565 at March 31, 2015 and $22,305 at December 31, 2014	1,329,888		1,283,364
Premises and equipment, net	2,362		2,504
Other real estate owned	22		23
Accrued interest receivable	5,178		4,989
Other assets	60,839		60,381
Total assets	$	1,882,199	$	1,814,122
LIABILITIES
Deposits:
Demand noninterest-bearing	$	1,132,231	$	1,051,357
Demand interest-bearing	14,362		15,492
Money market and savings	472,475		450,873
Time	36,777		31,823
Total deposits	1,655,845		1,549,545
Junior subordinated debt securities	17,527		17,527
Other borrowings	—		40,000
Accrued interest payable	9		8
Other liabilities	16,194		19,935
Total liabilities	1,689,575		1,627,015
SHAREHOLDERS’ EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares issued and outstanding at March 31, 2015 and December 31, 2014	—		—
Common stock, no par value; 30,000,000 shares authorized; 15,940,819 shares issued and outstanding at March 31, 2015; 15,970,506 shares issued and outstanding at December 31, 2014;	117,731		117,321
Retained earnings	73,461		69,547
Accumulated other comprehensive income (loss)	1,432		239
Total shareholders’ equity	192,624		187,107
Total liabilities and shareholders’ equity	$	1,882,199	$	1,814,122

The accompanying notes are an integral part of the financial statements.

3

BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY

Interim Consolidated Statements of Operations (unaudited)

(dollars in thousands, except per share data)

	Three months ended
	March 31,
	2015		2014
INTEREST INCOME:
Loans	$	19,596	$	17,047
Federal funds sold	73		78
Investment securities	1,792		1,502
Total interest income	21,461		18,627
INTEREST EXPENSE:
Deposits:
Interest-bearing demand	1		1
Money market and savings	208		277
Certificates of deposit	50		60
Other	255		269
Total interest expense	514		607
Net interest income	20,947		18,020
Provision for credit losses	—		500
Net interest income after provision for credit losses	20,947		17,520
NON-INTEREST INCOME:
Service charges on deposit accounts	995		916
International fee income	841		761
Gain on sale of SBA loans	195		213
Gain on sale of securities	306		5
Other non interest income	936		853
Total non-interest income	3,273		2,748
OPERATING EXPENSES:
Salaries and benefits	10,620		9,015
Premises and fixed assets	1,272		1,238
Merger related expenses	1,191		—
Other operating expenses	4,261		3,794
Total operating expenses	17,344		14,047
Income before income taxes	6,876		6,221
Income taxes	2,962		2,505
Net income	$	3,914	$	3,716
Basic income per share	$	0.26	$	0.25
Diluted income per share	$	0.25	$	0.24
Average common shares outstanding	14,900,669		14,646,573
Average common and equivalent shares outstanding	15,643,440		15,462,649

The accompanying notes are an integral part of the financial statements.

4

BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY

Interim Consolidated Statements of Comprehensive Income (unaudited)

(dollars in thousands)

	Three months ended
	March 31,
	2015			2014
NET INCOME	$	3,914		$	3,716
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains (losses) on securities available-for-sale	2,170			1,400
Related tax benefit (expense)	(897		)	(574		)
Reclassification adjustment for realized (gains) on securities (1)	(306		)	(5		)
Related tax expense	132			2
Unrealized gains on supplemental executive retirement plan	13			13
Related tax (expense)	(5		)	(5		)
Unrealized gains on cash flow hedges	143			160
Related tax (expense)	(57		)	(64		)
Other comprehensive income (loss), net of tax	$	1,193		$	927
COMPREHENSIVE INCOME	$	5,107		$	4,643

(1) Amounts are included in net gains on sale of securities on the Consolidated Statements of Operations in total non-interest income.

The accompanying notes are an integral part of the financial statements.

5

BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY

Interim Consolidated Statements of Cash Flows (unaudited)

(dollars in thousands)

	Three months ended March 31,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	3,914		$	3,716
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses	—			500
Depreciation and amortization	247			305
Write down of other real estate owned	1			8
Net (gain) on sale of loans	(195		)	(213		)
Deferred income tax (credit)	(827		)	(654		)
Stock based compensation	1,028			903
Loans originated for sale	(8,663		)	(10,080		)
Proceeds from loan sales	2,859			3,158
Net (gain) on sale of securities	(306		)	(5		)
(Increase) decrease in accrued interest receivable and other assets	(647		)	(2,782		)
Increase in accrued interest payable and other liabilities	(3,584		)	(2,376		)
Net cash provided by used in operating activities	(6,173		)	(7,520		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of securities available for sale	—			(8,794		)
Proceeds from sale of available for sale and trading securities	22,681			22,193
Proceeds from maturity of securities available for sale	12,067			13,852
Net increase in loans	(40,525		)	(59,799		)
Purchase of fixed assets	(105		)	(1,074		)
Net cash used in investing activities	(5,882		)	(33,622		)
CASH FLOW FROM FINANCING ACTIVITIES:
Net increase in deposits	106,300			9,864
Proceeds from issuance of common stock	99			626
Purchase of treasury stock	(717		)	(1,162		)
Increase (decrease) in other borrowings	(40,000		)	—
Net cash provided by financing activities	65,682			9,328
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS:	53,627			(31,814		)
Cash and equivalents at beginning of period	97,370			186,337
Cash and equivalents at end of period	$	150,996		$	154,523
OTHER CASH FLOW INFORMATION:
Cash paid for interest	$	534		$	615
Cash paid for income taxes	$	3,600		$	5,700

The accompanying notes are an integral part of the financial statements.

6

BRIDGE CAPITAL HOLDINGS AND SUBSIDIARY

Notes to Interim Consolidated Financial Statements (Unaudited)

1.             Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial statements of Bridge Capital Holdings and Bridge Bank, N.A. (the Company) have been prepared in accordance with generally accepted accounting principles and pursuant to the rules and regulations of the SEC.  The interim financial data as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 is unaudited; however, in the opinion of the Company, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.  Certain information and note disclosures normally included in annual financial statements have been omitted pursuant to SEC rules and regulations; however, the Company believes the disclosures made are adequate to ensure that the information presented is not misleading.  Results of operations for the quarters ended March 31, 2015 and 2014, respectively, are not necessarily indicative of full year results.

The comparative balance sheet information as of December 31, 2014 is derived from the audited financial statements; however, it does not include all disclosures required by accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities as of the dates and for the periods presented.  A significant estimate included in the accompanying financial statements is the allowance for loan losses.  Actual results could differ from those estimates.

Recent Accounting Pronouncements

Financial Accounting Standards Board Accounting Standards Update (FASB ASU) 2015-04, Compensation — Retirement Benefits (“Topic 715”), The amendments in this Update would provide a practical expedient for employers with fiscal year-ends that do not fall on a month-end by permitting those employers to measure defined benefit plan assets and obligations as of the month-end that is closest to the entity’s fiscal year-end. ASU No. 2015-04 is effective for the first interim or annual period beginning after December 15, 2015. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

Financial Accounting Standards Board Accounting Standards Update (FASB ASU) 2015-01, Income Statement — Extraordinary and Unusual Items (“Subtopic 225-20”)  — The objective of this Update is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. ASU No. 2015-01 is effective for the first interim or annual period beginning after December 15, 2015. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

Earnings Per Share

Basic net income per share is computed by dividing net income applicable to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted net income per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and vesting of restricted stock.  Common stock equivalents are included in the diluted net income per share calculation to the extent these shares are dilutive.  See Note 2 to the financial statements for additional information on earnings per share.

7

Stock-Based Compensation

The Company has adopted guidance issued by the FASB that clarifies the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.  The Company uses the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair-value of stock-based awards.  The Company recorded $1.0 million ($641,000 net of tax) of stock-based compensation expense during the three months ended March 31, 2015, and recorded $903,000 ($570,000 net of tax) of stock-based compensation expense during the three months ended March 31, 2014, as a result of the adoption of the guidance issued by the FASB.

No stock-based compensation costs were capitalized as part of the cost of an asset as of March 31, 2015 and December 31, 2014.  As of March 31, 2015, $10.8 million of total unrecognized compensation cost related to stock options and restricted stock units is expected to be recognized over a weighted-average period of 3.1 years.

Comprehensive Income

The Company has adopted accounting guidance issued by the FASB that requires all items recognized under accounting standards as components of comprehensive earnings be reported in an annual financial statement that is displayed with the same prominence as other annual financial statements. This Statement also requires that an entity classify items of other comprehensive earnings by their nature in an annual financial statement.  Other comprehensive earnings include an adjustment to fully recognize the liability associated with the supplemental executive retirement plan, unrealized gains and losses, net of tax, on cash flow hedges, and unrealized gains and losses, net of tax, on marketable securities classified as available-for-sale.  The Company had accumulated other comprehensive income totaling $1.4 million, net of tax, as of March 31, 2015 and accumulated other comprehensive income totaling $239,000, net of tax, as of December 31, 2014.

Fair Value Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Current accounting guidance establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There is a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable and the significance of those inputs in the fair value measurement. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data and views of market participants. The three levels for measuring fair value are based on the reliability of inputs.

See Note 8 to the financial statements for more information and disclosures relating to the Company’s fair value measurements.

Securities

The Company classifies its investment securities into three categories, available for sale, held to maturity, or trading securities, at the time of purchase. Securities available for sale are reported at fair value with unrealized holding gains and/or losses, net of tax, recorded as a separate component of shareholders’ equity.  Securities held to maturity are measured at amortized cost based on the Company’s positive intent and ability to hold the securities to maturity.

Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the effective interest method. Dividend and interest income is recognized when earned.  Gains and losses on sales of securities are computed on a specific identification basis.

8

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: OTTI related to credit loss, which must be recognized in the income statement and; OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of OTTI is recognized through earnings.

Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general reserves.  Specific reserves primarily relate to loans that are individually classified as impaired, but may also relate to loans that in management’s opinion exhibit negative credit characteristics or trends suggesting potential future loss exposure greater than historical loss experience would suggest. It is currently the Company’s practice to immediately charge-off any identified financial loss pertaining to impaired loans when management believes the uncollectibility of the loan is confirmed, therefore specific reserves are uncommon.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans, for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are generally considered troubled debt restructurings and classified as impaired.

Generally Accepted Accounting Principles specify that if a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.  However, it is currently the Company’s practice to immediately charge-off any identified financial loss pertaining to impaired loans when management believes the uncollectibility of the loans has been confirmed. See Note 4 to the financial statements for additional information on impaired loans.

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using an appropriate discount rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.  See Note 4 to the financial statements for additional information on troubled debt restructurings.

General reserves cover non-impaired loans and are based on historical loss rates for each portfolio segment, adjusted for the effects of qualitative or environmental factors that are likely to cause estimated credit losses as of the evaluation date to differ from the portfolio segment’s historical loss experience. Qualitative factors include consideration of the following: changes in lending policies and procedures; changes in economic conditions, changes in the nature and volume of the portfolio; changes in the experience, ability and depth of lending management and other relevant staff; changes in the volume and severity of past due, nonaccrual and other adversely graded loans; changes in the loan review system; changes in the value of the underlying collateral for collateral-dependent loans; concentrations of credit and the effect of other external factors such as competition and legal and regulatory requirements.

Portfolio segments identified by the Company include commercial, real estate construction, land, real estate other, factoring and asset-based lending, SBA, and consumer loans.  Relevant risk characteristics for these portfolio segments generally include debt service coverage, loan-to-value ratios and financial performance on non-consumer loans and credit scores, debt-to income, collateral type and loan-to-value ratios for consumer loans.

9

Segment Information

The Company has adopted accounting guidance issued by the FASB that requires certain information about the operating segments of the Company.  The objective of requiring disclosures about segments of an enterprise and related information is to provide information about the different types of business activities in which an enterprise engages and the different economic environment in which it operates to help users of financial statements better understand its performance, better assess its prospects for future cash flows and make more informed judgments about the enterprise as a whole.  The Company has determined that it has one segment, general commercial banking, and therefore, it is appropriate to aggregate the Company’s operations into a single operating segment.

Derivative Instruments and Hedging Activities

The Company has adopted guidance issued by the FASB that clarifies the disclosure requirements for derivative instruments and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. The guidance requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by the guidance, the Company records all derivatives on the balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualified as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and that qualify as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.  The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting under current accounting guidance.  See Note 9 to the financial statements for additional information on derivative instruments and hedging activities.

2.             Earnings Per Share

Basic net earnings per share is computed by dividing net earnings applicable to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted net earnings per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and vesting of restricted stock.  Common stock equivalents are included in the diluted net earnings per share calculation to the extent these shares are dilutive.  A reconciliation of the numerator and denominator used in the calculation of basic and diluted net earnings per share available to common shareholders is as follows:

10

	Three months ended
(dollars in thousands,	March 31,
except per share amounts)	2015		2014
Net income	$	3,914	$	3,716
Weighted average shares:
Basic common shares	14,900,669		14,646,573
Diluted potential common shares related to stock options and restricted stock	742,771		816,076
Total average common equivalent shares	15,643,440		15,462,649
Basic earnings per share	$	0.26	$	0.25
Diluted earnings per share	$	0.25	$	0.24

There were 199,000 and 240,446 options to acquire common stock (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share in the future that were not included           in the computation of diluted earnings per share for the three months ended March 31, 2015 and March 31, 2014, respectively, because to do so would have been anti-dilutive.

11

3.             Securities

As of March 31, 2015 and December 31, 2014, the Company had securities available for sale of $320.0 million and $352.2 million, respectively, and securities held to maturity of $12.6 million and $12.9 million, respectively.  The securities classified as held to maturity were being held for purposes of the Community Reinvestment Act.

The amortized cost and approximate fair values of securities as of March 31, 2015 and December 31, 2014 are as follows:

	As of March 31, 2015
			Gross Unrealized					Fair
(dollars in thousands)	Cost		Gains		Losses			Value
Securities available for sale
Debt securities:
U.S. government agencies	$	51,410	$	574	$	(133	)	$	51,851
Mortgage backed securities	235,216		3,642		(1,112		)	237,746
Corporate bonds	27,974		117		(9		)	28,082
Municipal bonds	2,434		—		(89		)	2,345
Total debt securities	317,034		4,333		(1,343		)	320,024
Total securities available for sale	$	317,034	$	4,333	$	(1,343	)	$	320,024
Securities held to maturity
Debt securities:
Mortgage backed securities	$	12,563	$	270	$	—		$	12,833
Total debt securities	12,563		270		—			12,833
Total securities held to maturity	$	12,563	$	270	$	—		$	12,833
Trading securities	$	—	$	—	$	—		$	—
Total investment securities	$	329,597	$	4,603	$	(1,343	)	$	332,857
	As of December 31, 2014
			Gross Unrealized					Fair
	Cost		Gains		Losses			Value
Securities available for sale
Debt securities:
U.S. government agencies	$	58,873	$	304	$	(589	)	$	58,588
Mortgage backed securities	261,931		3,375		(2,081		)	263,225
Corporate bonds	28,002		88		(13		)	28,077
Municipal bonds	2,435		—		(83		)	2,353
Total debt securities	351,241		3,767		(2,766		)	352,243
Total securities available for sale	$	351,241	$	3,767	$	(2,766	)	$	352,243
Securities held to maturity
Debt securities:
Mortgage backed securities	$	12,922	$	301	$	—		$	13,222
Total securities held to maturity	$	12,922	$	301	$	—		$	13,222
Total investment securities	$	364,163	$	4,068	$	(2,766	)	$	365,465

12

The scheduled maturities of investment securities at March 31, 2015 and December 31, 2014 were as follows:

Maturity of investment securities portfolio

	March 31, 2015
	Amortized		Fair
(dollars in thousands)	Cost		Value
Securities available for sale
Due in one year or less	$	4,865	$	4,858
Due after one year through five years	59,699		60,443
Due after five years through ten years	95,836		97,112
Due after ten years	156,634		157,611
Total securities available for sale	317,034		320,024
Securities held to maturity
Due in one year or less	$	6,623	$	6,632
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	5,940		6,201
Total securities held to maturity	12,563		12,833
Total investment securities	$	329,597	$	332,857

	December 31, 2014
	Amortized		Fair
(dollars in thousands)	Cost		Value
Securities available for sale	$	3,752	$	3,753
Due after one year through five years	71,779		72,591
Due after five years through ten years	110,893		110,894
Due after ten years	164,817		165,005
Total securities available for sale	351,241		352,243
Securities held to maturity
Due in one year or less	$	6,711	$	6,716
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	6,211		6,506
Total securities held to maturity	12,922		13,222
Total investment securities	$	364,163	$	365,465

As of March 31, 2015 and December 31, 2014, no investment securities were pledged as collateral.  As of March 31, 2015, $733,000 in unrealized losses was attributable to forty-four securities that had been in an unrealized loss position for less than 12 months.  As of December 31, 2014, $1.6 million in unrealized losses was attributable to sixty-four securities that had been in an unrealized loss position for less than 12 months. The unrealized losses were primarily due to the impact of long-term interest rates on the value of the mortgage-based investment securities. Because the Company had the ability to hold these investments and doesn’t intend to sell these investments until a recovery in fair value, which may be maturity, these investments were not considered to be other-than-temporarily impaired as of March 31, 2015 and December 31, 2014, respectively.

13

As of March 31, 2015, $610,000 in unrealized losses was attributable to twenty-one securities that had been in an unrealized loss position for greater than 12 months.  As of December 31, 2014, $1.2 million in unrealized losses was attributable to twenty-nine securities that had been in an unrealized loss position for greater than 12 months.  These unrealized losses, which had been in an unrealized loss position for one year or longer as of March 31, 2015 and December 31, 2014, were caused by market interest rate increases subsequent to the purchase of the securities or price fluctuations driven by volatility of the housing market conditions.  Because the Company had the ability to hold these investments and doesn’t intend to sell these investments until a recovery in fair value, which may be maturity, these investments were not considered to be other-than-temporarily impaired as of March 31, 2015 and December 31, 2014, respectively.

4.Loans

The balances in the various loan categories are as follows as of March 31, 2015 and December 31, 2014:

	March 31,			December 31,
(dollars in thousands)	2015			2014
Commercial	$	843,096		$	785,360
Real estate construction	65,380			71,673
Land loans	14,536			15,890
Real estate other	146,597			139,624
Factoring and asset based	156,806			167,513
SBA	125,075			124,180
Other	6,625			7,073
Total gross loans	1,358,115			1,311,313
Unearned fee income	(5,662		)	(5,644		)
Total loan portfolio	1,352,453			1,305,669
Less allowance for credit losses	(22,565		)	(22,305		)
Loans, net	$	1,329,888		$	1,283,364

The Company individually categorizes larger, non-homogenous loans into credit risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors.  This analysis is performed on an ongoing basis as new information is obtained.  The Company uses the following definitions for loan risk ratings:

Pass — Loans classified as pass include larger non-homogenous loans not meeting the risk rating definitions below and smaller, homogeneous loans not assessed on an individual basis.

Special Mention — Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard — Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt by the borrower. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Substandard loans for which payments have ceased and are 90 days or more past due, or for which the likelihood of full collection of interest and principal is doubtful, are placed on nonaccrual.  Loans that have been placed on nonaccrual status are also considered impaired.

14

The following table summarizes the credit quality of the loan portfolio, based upon internally assigned risk ratings, as of March 31, 2015 and December 31, 2014.

	March 31, 2015
			Special				Substandard
(dollars in thousands)	Pass		Mention		Substandard		(Nonaccrual)		Total
Commercial	$	828,034	$	9,204	$	2,861	$	2,997	$	843,096
Real estate construction	65,380		—		—		—		65,380
Land loans	14,536		—		—		—		14,536
Real estate other	139,170		2,848		1,985		2,594		146,597
Factoring and asset based	143,412		6,929		1,730		4,735		156,806
SBA	116,634		2,231		2,840		3,370		125,075
Other	6,625		—		—		—		6,625
Total gross loans	$	1,313,791	$	21,212	$	9,416	$	13,696	$	1,358,115
	As of December 31, 2014
			Special				Substandard
(dollars in thousands)	Pass		Mention		Substandard		(Nonaccrual)		Total
Commercial	$	774,162	$	3,844	$	6,087	$	1,267	$	785,360
Real estate construction	71,673		—		—		—		71,673
Land loans	15,890		—		—		—		15,890
Real estate other	125,087		1,693		10,044		2,800		139,624
Factoring and asset based	159,907		367		7,042		197		167,513
SBA	112,568		1,176		6,847		3,589		124,180
Other	7,073		—		—		—		7,073
Total gross loans	$	1,266,360	$	7,080	$	30,020	$	7,853	$	1,311,313

For all loan classes, past due loans are reviewed on a monthly basis to identify loans for nonaccrual status.  Loans are generally placed on non-accrual when payments have ceased and are 90 days or more past due, or when the likelihood of full collection of interest and principal is doubtful.  However, if a loan is fully secured and in the process of collection and resolution of collection (generally within 90 days), then the loan will generally not be placed on nonaccrual, regardless of its delinquency status.  Nonaccrual loans will not normally be returned to accrual status, although consideration will be given to situations where all past due principal and interest has been paid and the borrower has evidenced their ability to meet the contractual provisions of the note.  When interest accruals are discontinued, all unpaid interest is reversed against current year income.  The Company’s method of income recognition for loans classified as nonaccrual is to apply cash received to principal when the ultimate collectability of principal is in doubt or recognize interest income on a cash basis.

15

The following table summarizes the payment status of the loan portfolio as of March 31, 2015 and December 31, 2014.

	As of March 31, 2015
			Still Accruing
			30-59 Days		60-89 Days		Over 90 Days
(dollars in thousands)	Current		Past Due		Past Due		Past Due		Nonaccrual		Total
Commercial	$	840,099	$	—	$	—	$	—	$	2,997	$	843,096
Real estate construction	65,380		—		—		—		—		65,380
Land loans	14,536		—		—		—		—		14,536
Real estate other	144,003		—		—		—		2,594		146,597
Factoring and asset based	152,071		—		—		—		4,735		156,806
SBA	121,705		—		—		—		3,370		125,075
Other	6,608		15		2		—		—		6,625
Total gross loans	$	1,344,402	$	15	$	2	$	—	$	13,696	$	1,358,115
	As of December 31, 2014
			Still Accruing
			30-59 Days		60-89 Days		Over 90 Days
(dollars in thousands)	Current		Past Due		Past Due		Past Due		Nonaccrual		Total
Commercial	$	783,915	$	—	$	178	$	—	$	1,267	$	785,360
Real estate construction	71,673		—		—		—		—		71,673
Land loans	15,890		—		—		—		—		15,890
Real estate other	136,824		—		—		—		2,800		139,624
Factoring and asset based	161,854		5,462		—		—		197		167,513
SBA	120,591		—		—		—		3,589		124,180
Other	7,071		2		—		—		—		7,073
Total gross loans	$	1,297,818	$	5,464	$	178	$	—	$	7,853	$	1,311,313

A loan is categorized as a troubled debt restructuring if a significant concession is granted to provide for a reduction of either interest or principal due to deterioration in the financial condition of the borrower. Troubled debt restructurings can take the form of a reduction of the stated interest rate, splitting a loan into separate loans with market terms on one loan and concessionary terms on the other loan, receipts of assets from a debtor in partial or full satisfaction of a loan, the extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk, the reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement, the reduction of accrued interest, or any other concessionary type of renegotiated debt.  Depending on the payment history of the loan, a troubled debt restructuring can be considered performing and accruing interest or be placed on nonaccrual.  However, all troubled debt restructurings are considered impaired.

As of March 31, 2015, the Company had twelve loans totaling $5.6 million classified as troubled debt restructurings.  The twelve loans were comprised of ten other real estate loans and two SBA loans.  Troubled debt restructurings represented 0.4% of total gross loans as of March 31, 2015. As of December 31, 2014, the Company had fourteen loans totaling $10.8 million classified as troubled debt restructurings.  The fourteen loans were comprised of twelve other real estate loans and two SBA loans.  Troubled debt restructurings represented 1.2% of total gross loans as of December 31, 2014.

The Company did not have any commitments to lend additional funds for loans classified as troubled debt restructurings at March 31, 2015 and December 31, 2014.

During the three months ended March 31, 2015 and March 31, 2014, there were no additional loans modified and designated as troubled debt restructurings. However, during the period ended March 31, 2015, there was one loan previously designated as a performing troubled debt restructuring that has been upgraded and is no longer designated as a troubled debt restructured loan.

16

A loan is considered to be in payment default when it is 90 days contractually past due under the modified terms.  There were no loans modified within the last twelve months that defaulted during the three months ended March 31, 2015.

The following table summarizes the loans categorized as troubled debt restructurings at March 31, 2015 and December 31, 2014.  The troubled debt restructurings considered performing and nonaccrual are included in the “Substandard” and “Substandard (Nonaccrual)” categories, respectively, in the preceding credit quality table, and included in the “Current” and “Nonaccrual” categories, respectively, in the preceding payment status table.

	As of March 31, 2015
	Performing				Nonaccrual				Total
	Pre-		Post-		Pre-		Post-		Pre-		Post-
	Modification		Modification		Modification		Modification		Modification		Modification
(dollars in thousands)	Investment		Investment		Investment		Investment		Investment		Investment
Commercial	$	—	$	—	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—		—		—
Land loans	—		—						—		—
Real estate other	4,502		3,882		1,515		1,310		6,017		5,192
Factoring and asset based	—		—		—		—		—		—
SBA	442		429		—		—		442		429
Other	—		—		—		—		—		—
Total gross loans	$	4,944	$	4,311	$	1,515	$	1,310	$	6,459	$	5,621
	As of December 31, 2014
	Performing				Nonaccrual				Total
	Pre-		Post-		Pre-		Post-		Pre-		Post-
	Modification		Modification		Modification		Modification		Modification		Modification
	Investment		Investment		Investment		Investment		Investment		Investment
Commercial	$	—	$	—	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—		—		—
Land loans	—		—		—		—		—		—
Real estate other	9,479		8,803		1,715		1,516		11,194		10,319
Factoring and asset based	—		—		—		—		—		—
SBA	442		434		—		—		442		434
Other	—		—		—		—		—		—
Total gross loans	$	9,921	$	9,237	$	1,715	$	1,516	$	11,636	$	10,753

Loans are designated as impaired, when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  As of March 31, 2015 and December 31, 2014 loans designated as impaired consisted of nonaccrual loans and troubled debt restructurings.

17

The following table summarizes the loans categorized as impaired at March 31, 2015 and December 31, 2014.

	March 31,		December 31,
(dollars in thousands)	2015		2014
Nonaccrual loans (1)	$	13,696	$	7,853
Trouble debt restructurings - performing	4,311		9,237
Loans past due 90 days or more and accruing interest	—		—
Loans current or past due less than 90 days and accruing interest	—		—
Total impaired loans	$	18,007	$	17,090

(1)  Nonaccrual loans include troubled debt restructurings of $1.3 million and $1.5 million at March 31, 2015 and December 31, 2014, respectively.

Impaired loans at March 31, 2015 were comprised of loans with legal contractual balances totaling approximately $20.6 million reduced by approximately $422,000 received in non-accrual interest and impairment charges of $2.2 million which have been charged against the allowance for loan losses. As of March 31, 2015, there was an additional 21 loans with legal contractual balances totaling $15.0 million that have been fully charged off, for which the Company continues to pursue collection remedies.

Impaired loans at December 31, 2014 were comprised of loans with legal contractual balances totaling approximately $20.9 million reduced by $404,000 received in non-accrual interest and impairment charges of $3.4 million which have been charged against the allowance for loan losses.

The following summarizes the breakdown of impaired loans by category as of March 31, 2015 and December 31, 2014:

	As of March 31, 2015				As of December 31, 2014
	Unpaid				Unpaid
	Principal		Recorded		Principal		Recorded
(dollars in thousands)	Balance		Investment		Balance		Investment
Commercial	$	4,463	$	2,997	$	2,640	$	1,267
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	6,632		6,476		11,752		11,603
Factoring and asset based	4,735		4,735		1,469		197
SBA	4,815		3,799		5,028		4,023
Other	—		—		—		—
Total gross loans	$	20,645	$	18,007	$	20,889	$	17,090

Consistent with the Company’s method of income recognition for loans, interest on impaired loans, except those classified as nonaccrual, is recognized using the accrual method.  The Company did not record income from the receipt of cash payments related to nonaccrual loans during the three months and ended March 31, 2015 and 2014.  Interest income recognized on impaired loans represents interest the Company recognized on performing troubled debt restructurings and loans greater than 90 days past due and still accruing interest.

18

The following table summarizes the average recorded investment in impaired loans and related interest income recognized for the three months ended March 31, 2015 and 2014:

	Three months ended March 31,
	2015				2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(dollars in thousands)	Investment		Recognized		Investment		Recognized
Commercial	$	2,865	$	—	$	256	$	2
Real estate construction	—		—		—		—
Land loans	—		—		2		—
Real estate other	9,118		24		12,298		122
Factoring and asset based	2,467		—		4,251		87
SBA	4,419		10		2,221		17
Other	—		—		—		—
Total gross loans	$	18,868	$	34	$	19,027	$	228

The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  The entire allowance is available for any loan that, in management’s judgment should be charged-off.

The allowance consists of specific and general reserves.  Specific reserves relate to loans that are individually classified as impaired or are otherwise exhibiting negative credit characteristics suggesting potential loss exposure greater than historical loss experience would suggest.  Specific reserves are calculated by evaluating the present value of expected future cash flows pertaining to the loan, the fair value of the collateral supporting the loan, less selling costs, or the loan’s observable market price.  It is currently the Company’s practice to immediately charge-off any identified financial loss pertaining to impaired loans when management believes the uncollectibility of the loan is confirmed; therefore, as seen in the table below, there are typically only a small number of individual loans for which a specific reserve exists.  General reserves are based on historical loss rates for each portfolio segment, adjusted for the effects of qualitative or environmental factors that are likely to cause estimated credit losses as of the evaluation date to differ from the portfolio segment’s historical loss experience. Qualitative factors include consideration of the following: changes in lending policies and procedures; changes in economic conditions, changes in the nature and volume of the portfolio; changes in the experience, ability and depth of lending management and other relevant staff; changes in the volume and severity of past due, nonaccrual and other adversely graded loans; changes in the loan review system; concentrations of credit and the effect of other external factors such as competition and legal and regulatory requirements.

19

The allowance for loan losses totaled $22.6 million and $22.3 million as of March 31, 2015 and December 31, 2014, respectively.  The following table summarizes the loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses as of March 31, 2015 and December 31, 2014.

	As of March 31, 2015
	Individually Evaluated				Collectively Evaluated				Total Evaluated
	For Impairment				For Impairment				For Impairment
(dollars in thousands)	Loans		Allowance		Loans		Allowance		Loans		Allowance
Commercial	$	2,997	$	306	$	840,099	$	10,950	$	843,096	$	11,256
Real estate construction	—		—		65,380		1,258		65,380		1,258
Land loans	—		—		14,536		376		14,536		376
Real estate other	6,476		268		140,121		1,943		146,597		2,211
Factoring and asset based	4,735		863		152,071		4,629		156,806		5,492
SBA	3,799		—		121,276		1,848		125,075		1,848
Other	—		—		6,625		124		6,625		124
Total	$	18,007	$	1,437	$	1,340,108	$	21,128	$	1,358,115	$	22,565

	As of December 31, 2014
	Individually Evaluated				Collectively Evaluated				Total Evaluated
	For Impairment				For Impairment				For Impairment
(dollars in thousands)	Loans		Allowance		Loans		Allowance		Loans		Allowance
Commercial	$	1,267	$	350	$	784,093	$	10,450	$	785,360	$	10,800
Real estate construction	—		—		71,673		1,423		71,673		1,423
Land loans	—		—		15,890		412		15,890		412
Real estate other	11,603		126		128,021		2,005		139,624		2,131
Factoring and asset based	197		—		167,316		5,185		167,513		5,185
SBA	4,023		—		120,157		2,209		124,180		2,209
Other	—		—		7,073		145		7,073		145
Total	$	17,090	$	476	$	1,294,223	$	21,829	$	1,311,313	$	22,305

Of the loans individually evaluated for impairment, ten real estate other loans, with an aggregate balance of $5.2 million, and three commercial loans, with an aggregate balance of $1.2 million, had an associated allowance for the period ending March 31, 2015.  For the period ended December 31, 2014, of the loans individually evaluated for impairment, there were ten real estate other loans, with an aggregate balance of $3.5 million, and one commercial loan, with a current balance of $422,000, that had an associated allowance.

The following table summarizes the activity in the allowance for loan losses for the quarters ended March 31, 2015 and 2014.

	Three months ended March 31, 2015
				Real						Real		Factoring
				estate			Land			estate		and asset
(dollars in thousands)	Commercial			construction			loans			other		based		SBA			Other			Total
As of December 31, 2014	$	10,800		$	1,423		$	412		$	2,131	$	5,185	$	2,209		$	145		$	22,305
Provision charged to expense	518			(165		)	(36		)	60		42		(398		)	(21		)	—
Charge-offs	(93		)	—			—			—		—		—			—			(93		)
Recoveries	31			—			—			20		265		37			—			353
As of March 31, 2015	$	11,256		$	1,258		$	376		$	2,211	$	5,492	$	1,848		$	124		$	22,565

20

	Three months ended March 31, 2014
				Real					Real			Factoring
				estate		Land			estate			and asset
(dollars in thousands)	Commercial			construction		loans			other			based			SBA			Other		Total
As of December 31, 2013	$	9,066		$	1,013	$	377		$	2,857		$	6,136		$	2,363		$	132	$	21,944
Provision charged
to expense	(203		)	432		(43		)	(162		)	477			(6		)	5		500
Charge-offs	—			—		—			—			(430		)	(35		)	—		(465		)
Recoveries	458			—		20			—			152			56			—		686
As of March 31, 2014	$	9,321		$	1,445	$	354		$	2,695		$	6,335		$	2,378		$	137	$	22,665

5.Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization.  Depreciation and amortization are computed on a straight-line basis over the shorter of the lease term, generally three to fifteen years, or the estimated useful lives of the assets, generally three to five years.

Premises and equipment at March 31, 2015 and December 31, 2014 were comprised of the following:

	March 31, 2015
			Accumulated			Net Book
(dollars in thousands)	Cost		Depreciation			Value
Leasehold improvements	$	7,116	$	(5,833	)	$	1,283
Furniture and fixtures	1,356		(1,114		)	242
Capitalized software	4,638		(4,282		)	356
Equipment	3,606		(3,125		)	481
Total premises and equipment	$	16,716	$	(14,354	)	$	2,362

	December 31, 2014
			Accumulated			Net book
(dollars in thousands)	Cost		Depreciation			Value
Leasehold improvements	$	7,103	$	(5,753	)	$	1,350
Furniture and fixtures	1,331		(1,097		)	234
Capitalized software	4,628		(4,219		)	409
Equipment	3,549		(3,038		)	511
Total premises and equipment	$	16,611	$	(14,107	)	$	2,504

Depreciation and amortization amounted to $247,000 and $305,000 for the three months ended March 31, 2015 and March 31, 2014, respectively, and has been included in occupancy and/or furniture and equipment expense, depending on the nature of the expense, in the accompanying statements of operations.

6.Junior Subordinated Debt Securities and Other Borrowings

Junior Subordinated Debt Securities

On December 21, 2004, the Company issued $12,372,000 of junior subordinated debt securities (the “debt securities”) to Bridge Capital Trust I, a statutory trust created under the laws of the State of Delaware.  These debt securities are subordinated to effectively all borrowings of the Company and are due and payable in March 2035.  Interest was payable quarterly on these debt securities at a fixed rate of 5.90% for the first five years, and thereafter interest accrues at LIBOR plus 1.98%. In April of 2008, the Company entered into an interest rate swap agreement to fix the variable cash outflows associated with the debt securities to Bridge Capital Trust I for an additional five years at 6.11%.  See “Footnote 9 - Derivatives and Hedging Activities” for further discussion. The debt securities can be redeemed at par at the Company’s option beginning in March 2010; they can also be redeemed at par if certain events occur that impact the tax treatment or the capital treatment of the issuance.

21

The Company also purchased a 3% minority interest in the Trust.  The balance of the equity of the Trust is comprised of mandatorily redeemable preferred securities.

On March 30, 2006 the Company issued $5,155,000 of junior subordinated debt securities (the “debt securities”) to Bridge Capital Trust II, a statutory trust created under the laws of the State of Delaware.  These debt securities are subordinated to effectively all borrowings of the Company and are due and payable in March 2037.  Interest was payable quarterly on these debt securities at a fixed rate of 6.60% for the first five years, and thereafter interest accrues at LIBOR plus 1.38%. In September of 2008, the Company entered into an interest rate swap agreement to fix the variable cash outflows associated with the debt securities to Bridge Capital Trust II for an additional five years at 6.09%. See “Footnote 9 - Derivatives and Hedging Activities” for further discussion.   The debt securities can be redeemed at par at the Company’s option beginning in April 2011; they can also be redeemed at par if certain events occur that impact the tax treatment or the capital treatment of the issuance.

The Company also purchased a 3% minority interest in the Trust.  The balance of the equity of the Trust is comprised of mandatorily redeemable preferred securities.

Based upon accounting guidance, these Trusts are not consolidated into the company’s financial statements.  The Federal Reserve Board has ruled that subordinated notes payable to unconsolidated special purpose entities (“SPE’s”) such as these Trusts, net of the bank holding company’s investment in the SPE, qualify as Tier 1 Capital, subject to certain limits.

Other Borrowings

There were no other borrowings at March 31, 2015. At December 31, 2014, the Company had $40.0 million in other borrowings.

As of March 31, 2015, the Company had a total borrowing capacity with the Federal Home Loan Bank of San Francisco of approximately $443.0 million for which the Company had collateral in place to borrow $136.0 million.  As of March 31, 2015, $10.0 million of this borrowing capacity was pledged to secure a letter of credit.

The Company also has unsecured borrowing lines with correspondent banks totaling $47.0 million.  At March 31, 2015, there were no balances outstanding on these lines.

7.Stock-Based Compensation

The Company has elected to use the BSM option-pricing model, which incorporates various assumptions including volatility, expected life, and interest rates.  The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options, adjusted for the impact of unusual fluctuations not reasonably expected to recur and other relevant factors including implied volatility in market traded options on the Company’s common stock. The expected life of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees.

22

The weighted average assumptions used for the three month periods ended March 31, 2015 and 2014 and the resulting estimates of weighted-average fair value per share of stock options granted during those periods are as follows:

	Three months ended March 31,
	2015			2014
Expected life	75 months			75 months
Stock volatility	35.00		%	35.00		%
Risk free interest rate	1.96		%	2.00		%
Dividend yield	0.00		%	0.00		%
Fair value per share	$	8.78		$	9.17

8.Fair Value of Financial Instruments

In accordance with accounting guidance, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.  These levels are:

Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange.  Level 1 also includes U.S. Treasury, other U.S. government and agency mortgage-backed securities that are traded by dealers or brokers in active markets.  Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 — Valuations for assets and liabilities traded in less active dealer or broker markets.  Valuations are obtained from third party pricing services for identical or comparable assets or liabilities.

Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions.  Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments and other factors.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.  Changes in assumptions could significantly affect the fair values presented.  The following methods and assumptions were used by the Company to estimate the fair values of its financial instruments at March 31, 2015 and December 31, 2014:

Cash and Cash Equivalents, Fed Funds Sold and Interest bearing deposits in other banks

The carrying amounts of these instruments approximate the fair value and are classified as Level 1 in the fair value hierarchy.

Investment Securities

For investment securities, fair values are estimated using quoted market prices for similar securities and indications of value provided by brokers and are classified as Level 2.

Loans

The fair value of variable rate loans that reprice frequently and with no significant change in credit risk is based on the carrying value and results in a classification of Level 3 within the fair value hierarchy.  Fair value for other loans are estimated using discounted cash flow analysis using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification in the fair value hierarchy.  The methods used to estimate the fair value of loans do not necessarily represent an exit price.

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Warrant Portfolio

Warrants are recorded at fair value on a recurring basis using a Black-Scholes valuation model. The Black-Scholes valuation model utilizes five inputs: exercise price, expected life, volatility, risk free rate and dividends. The Corporation holds a portfolio of warrants for generally nonmarketable equity securities. These warrants are primarily from non-public technology and life science companies obtained as part of the loan origination process. The Company classifies warrants as Level 3 of the valuation hierarchy.

Deposits

The fair value of demand deposits (e.g. interest and non-interest bearing, savings and certain types of money market accounts) are, by definition, equal to the amount payable in demand at the reporting date (i.e. carrying value) resulting in a Level 1 classification in the fair value hierarchy.  The carrying amounts of variable rate, fixed-term money market accounts and certificate of deposits approximates their fair value at the reporting date in a Level 2 classification in the fair value hierarchy. Fair values for fixed rate certificate of deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Junior Subordinated Debt Securities

Represents the fair value of the trust preferred securities, and approximates the pricing of a preferred security at current market prices and are classified as Level 3.

Cash Flow Hedge

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs — model-derived credit spreads.  The level in the fair value hierarchy within which the fair value measurement in their entirety fall shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety.  Because the inputs used to measure the fair value of the Company’s derivatives fall into different levels of the fair value hierarchy, as of March 31, 2015 and December 31, 2014, the Company has assessed the significance of the impact of the credit valuations adjustment on the overall valuation of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall valuation of its derivative portfolios.  As a result, the Company classifies its derivative valuations in Level 2 of the fair value hierarchy.

24

	As of March 31, 2015
	Carrying								Fair
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and due from banks	$	29,969	$	29,969	$	—	$	—	$	29,969
Federal funds sold	121,028		121,028		—		—		121,028
Interest bearing deposits in other banks	326		326		—		—		326
Investments securities	332,587		—		332,857		—		332,857
Loans and leases, net of unearned fees	1,352,453		—		—		1,349,880		1,349,880
Warrant portfolio	377		—		—		377		377
Financial liabilities:
Deposits	1,655,845		1,150,911		501,449		—		1,652,360
Junior subordinated debt securities	17,527		—		—		17,430		17,430
Cash flow hedge	272		—		272		—		272

	As of December 31, 2014
	Carrying								Fair
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and due from banks	$	21,950	$	21,950	$	—	$	—	$	21,950
Federal funds sold	75,420		75,420		—		—		75,420
Interest bearing deposits in other banks	326		326		—		—		326
Investments securities	365,165		—		365,465		—		365,465
Loans and leases, net of unearned fees	1,305,669		—		—		1,303,629		1,303,629
Warrant portfolio	375		—		—		375		375
Financial liabilities:
Deposits	1,549,545		1,070,293		476,078		—		1,546,371
Trust preferred securities	17,527		—		—		17,431		17,431
Other borrowings	40,000		40,000		—		—		40,000
Cash flow hedge	416		—		416		—		416

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The balances of assets and liabilities measured at fair value on a recurring basis are as follows:

	As of March 31, 2015
(dollars in thousands)	Total			Level 1		Level 2			Level 3
Securities available for sale
U.S. government agencies	$	51,851		$	—	$	51,851		$	—
Mortgage backed securities	237,746			—		237,746			—
Corporate bonds	28,082			—		28,082			—
Municipal bonds	2,345			—		2,345			—
Warrant portfolio	377			—		—			377
Cash flow hedge	(272		)	—		(272		)	—
Total	$	320,129		$	—	$	319,752		$	377

	As of December 31, 2014
	Total			Level 1		Level 2			Level 3
Securities available for sale
U.S. government agencies	$	58,588		$	—	$	58,588		$	—
Mortgage backed securities	263,225					263,225			—
Corporate bonds	28,077					28,077			—
Municipal bonds	2,352					2,352			—
Warrant portfolio	375			—		—			375
Cash flow hedge	(416		)	—		(416		)	—
Total	$	352,201		$	—	$	351,826		$	375

There were no transfers between Level 1 and Level 2 during the period for assets measured at fair value on a recurring basis.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were not material for the quarter ended March 31, 2015.

The Company may be required, from time to time, to measure certain other financial assets at fair value on a non-recurring basis in accordance with GAAP.  These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets.

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Assets measured at fair value on a non-recurring basis for the quarters ended March 31, 2015 and December 31, 2014, included impaired loans and other real estate owned as follows:

	As of March 31, 2015
	Quoted Prices In		Significant		Significant
	Active Markets		Observable		Unobservable
	for Identical Assets		Inputs		Inputs
(dollar in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Impaired loans:
Commercial	$	—	$	—	$	2,997	$	2,997
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	—		—		6,476		6,476
Factoring and asset based	—		—		4,735		4,735
SBA	—		—		3,799		3,799
Other	—		—		—		—
Total impaired loans	$	—	$	—	$	18,007	$	18,007
Other real estate owned:
Commercial	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—
Land loans	—		14		—		14
Real estate other	—		—		—		—
Factoring and asset based	—		—		—		—
SBA	—		8		—		8
Other	—		—		—		—
Total other real estate owned	$	—	$	22	$	—	$	22

	As of December 31, 2014
	Quoted Prices In		Significant		Significant
	Active Markets		Observable		Unobservable
	for Identical Assets		Inputs		Inputs
(dollar in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Impaired loans:
Commercial	$	—	$	—	$	1,267	$	1,267
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	—		—		11,603		11,603
Factoring and asset based	—		—		198		198
SBA	—		—		4,022		4,022
Other	—		—		—		—
Total impaired loans	$	—	$	—	$	17,090	$	17,090
Other real estate owned:
Commercial	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—
Land loans	—		14		—		14
Real estate other	—		—		—		—
Factoring and asset based	—		—		—		—
SBA	—		9		—		9
Other	—		—		—		—
Total other real estate owned	$	—	$	23	$	—	$	23

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The fair value of impaired loans was determined using Level 3 assumptions, and represents impaired loan balances for which a specific reserve has been established or on which a write down has been taken. The Company charged-off $93,000 and $465,000 during the quarters ended March 31, 2015 and 2014, respectively, as a result of impaired loans.

Generally, the Company obtains third party appraisals (or property evaluations) and/or collateral audits in conjunction with internal analyses based on historical experience on its impaired loans and other real estate owned to determine fair value.  In determining the net realizable value of the underlying collateral for impaired loans, the Company will then discount the valuation (with additional discounts depending on the age of the appraisal) to cover both market price fluctuations and selling costs the Company expected would be incurred in the event of foreclosure.  In addition to the discounts taken, the Company’s calculation of net realizable value considered any other senior liens in place on the underlying collateral.  Information on the Company’s total impaired loan balances, and specific loss reserves associated with those balances, is included in Note 4, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the “Allowance for Loan Losses” section.

The fair value of OREO was determined using Level 2 assumptions. The Company charged off $1,000 and $7,000 during the quarters ended March 31, 2015 and March 31, 2014, respectively, as a result of declines in the OREO property values.

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The following table presents quantitative information about fair value measurements for assets measured at fair value on a non-recurring basis:

	As of March 31, 2015
					Range
	Fair		Valuation	Unobservable	(Weighted
	Value		Techniques	Inputs	Average)
Impaired loans:
Commercial	$	2,997	Collateral valuation	Management adjustment to reflect current conditions and selling costs	25-70%
Real estate other	6,476		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	10-20%
Factoring and asset based	4,735		Collateral valuation	Management adjustment to reflect current conditions and selling costs	30%
SBA	3,799		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	15-70%
Total impaired loans	$	18,007
Other real estate owned:
Commercial	$	—
Real estate construction	—
Land loans	14		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Real estate other	—
Factoring and asset based	—
SBA	8		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Other	—
Total other real esate owned	$	22

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	As of December 31, 2014
					Range
	Fair		Valuation	Unobservable	(Weighted-
	Value		Techniques	Inputs	Average)
Impaired loans:
Commercial	$	1,267	Discounted cash flow analysis	Management adjustment to reflect current conditions and selling costs	25%
Real estate other	11,603		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	10-25%
Factoring and asset based	198		Collateral valuation	Management adjustment to reflect current conditions and selling costs	50%
SBA	4,022		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	15-35%
Total impaired loans	$	17,090
Other real estate owned:
Land loans	$	14	Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
SBA	9		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Total other real estate owned	$	23

The unobservable inputs are based on management’s best estimates of appropriate discounts in arriving at fair market value.  Increases or decreases in any of those inputs could result in a significantly lower or higher fair value measurement. For example, a change in either direction of actual loss rates would have directionally opposite change in the calculation of the fair value of impaired loans.

9.             Derivatives and Hedging Activities

The Company is exposed to certain risks arising from both its business operations and economic conditions.  The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments.  Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.  The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain variable rate loan assets and variable rate borrowings.  The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated in qualifying hedging relationships.

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Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company’s derivative instruments that were liabilities, as well as their classification on the balance sheet, as of March 31, 2015 and December 31, 2014.  The Company did not have any derivative instruments that were assets as of March 31, 2015 and December 31, 2014.

		Fair Value
Derivatives Designated as	Balance Sheet	March 31,		December 31,
Hedging Instruments	Location	2015		2014
Interest rate contracts	Other assets	$	—	$	—
Interest rate contracts	Other liabilities	272		415
Total hedged derivatives		$	272	$	415

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.  For hedges of the Company’s variable-rate loan assets, interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount.  For hedges of the Company’s variable-rate borrowings, interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments. As of March 31, 2015, the Company had one interest rate swap with an aggregate notional amount of $5.2 million that was designated as a cash flow hedge of interest rate risk associated with the Company’s variable-rate borrowings.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.  No hedge ineffectiveness was recognized during the three months ended March 31, 2015 and 2014.

During the three months ended March 31, 2015 and 2014, such derivatives were used to hedge the forecasted variable cash outflows associated with subordinated debt related to trust preferred securities.  During the three months ended March 31, 2015 and March 31, 2014, the amount of pre-tax gain/(loss) recorded in AOCI due to the effective portion of changes in fair value of derivatives designated as cash flow hedges was ($13,000) and $(17,000), respectively.

Amounts reported in AOCI related to derivatives will be reclassified to interest income or expense, as applicable, as interest payments are received / made on the Company’s variable-rate assets/liabilities. During the next twelve months, the Company estimates that ($223,000) will be reclassified into net interest income as an increase to interest expense.

The table below summarizes the impact of the Company’s derivative financial instruments (interest rate contracts) on earnings for the three months ended March 31, 2015 and 2014.  All derivative income or expense recognized during these periods was a result of the effective portion of cash flow hedges.  There was no ineffective portion of cash flow hedges during the three months ended March 31, 2015 and 2014, respectively, and as such there were no amounts included in derivative income or expense during these periods.

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		Fair Value
Derivatives Designated as	Balance Sheet	March 31,		December 31,
Hedging Instruments	Location	2015		2014
Interest rate contracts	Other assets	$	—	$	—
Interest rate contracts	Other liabilities	272		416
Total hedged derivatives		$	272	$	416

Credit Risk Related Contingent Features

The Company has an agreement with one of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well / adequate capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

As of March 31, 2015 the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $274,000.  As of March 31, 2015, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral of $1.2 million against its obligations under these agreements. If the Company had breached any of these provisions at March 31, 2015, it would have been required to settle its obligations under the agreements at the termination value.

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ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)

In addition to the historical information, this quarterly report contains certain forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and which are subject to the “Safe Harbor” created by those sections.   The reader of this quarterly report should understand that all such forward-looking statements are subject to various uncertainties and risks that could affect their outcome.  The Company’s actual results could differ materially from those suggested by such forward-looking statements.     Such risks and uncertainties include, among others, (1) competitive pressure in the banking industry; (2) changes in the interest rate environment; (3) unfavorable economic conditions, both nationally and regionally, continuing or worsening, resulting in, among other things, continued or increased deterioration in credit quality; (4) changes in the regulatory environment, including those resulting from the Dodd-Frank legislation; (5) changes in business conditions and inflation; (6) costs and expenses of complying with the internal control provisions of the Sarbanes-Oxley Act and our degree of success in achieving compliance; (7) changes in securities markets; (8) future credit loss experience; (9) civil disturbances of terrorist threats or acts, or apprehension about possible future occurrences of acts of this type; (10) the involvement of the United States in war or other hostilities; and (11) governmental action or inaction in response to economic and political conditions, would have unpredictable consequences for the economy and the banking industry.  The reader is directed to the Company’s annual report on Form 10-K for the year ended December 31, 2014, for further discussion of factors which could affect the Company’s business and cause actual results to differ materially from those expressed in any forward-looking statement made in this report. The Company undertakes no obligation to update any forward-looking statements in this report. Therefore, the information in this quarterly report should be carefully considered when evaluating the business prospects of the Company.

General

Bridge Capital Holdings (the “Company”) serves as the holding company for Bridge Bank, National Association (the “Bank”). The Bank is a national banking association that is supervised by the Office of the Comptroller of the Currency. As a bank holding company, the Company is supervised by the Board of Governors of the Federal Reserve System (the “FRB”).

The Bank maintains one branch office in the Silicon Valley region, and seven loan production offices located throughout the United States.  The Bank’s lending solutions include working capital lines of credit, structured finance (asset-based lending and factoring), 7(a) and 504 Small Business Administration (SBA) loans, commercial real estate loans, sustainable energy project financing, growth capital loans, equipment financing, letters of credit, and corporate credit cards. The Bank’s depository and corporate banking services include cash and treasury management solutions, interest-bearing term deposit accounts, checking accounts, ACH payment and wire solutions, fraud protection, remote deposit capture through its Smart Deposit Express, courier services, and online banking. Additionally, the Bank’s International Banking Division serves clients operating in the global marketplace through services including foreign exchange (FX payments and hedging), letters of credit, and import/export financing.

The Company’s common stock is listed on the NASDAQ Global Select Market and is a component of the Russell 2000 Index.

Critical Accounting Policies

The accompanying management’s discussion and analysis of results of operations and financial condition is based upon our unaudited interim consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. Management evaluates estimates and assumptions on an ongoing basis. Management bases its estimates on historical experiences and various other factors and assumptions that are believed to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.

There have been no significant changes during the three months ended March 31, 2015 to the items that we disclosed as our critical accounting policies and estimates in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under Part II, Item 7 of our 2014 Form 10-K.

33

Executive Summary

The Company reported net operating income of $3.9 million for the three months ended March 31, 2015 representing an increase of $198,000 or 5.3% compared to net operating income of $3.7 million for the same period one year ago. The Company reported earnings per diluted share of $0.25 and $0.24 for the quarters ended March 31, 2015 and 2014, respectively.

For the quarter ended March 31, 2015, the Company’s return on average assets and return on average equity were 0.86% and 8.28%, respectively, and compared to 0.97% and 9.09%, respectively, for the same period in 2014.

Additionally, an overview of the financial results for the quarter ended March 31, 2015 discussed in the MD&A include the following:

·Net interest income and non-interest income comprised total revenue of $24.2 million for the three months ended March 31, 2015, compared to $21.8 million for the three months ended December 31, 2014 and $20.8 million for the same period one year earlier.

·Net interest margin was 4.79% for the quarter ended March 31, 2015 compared to 4.39% for the fourth quarter of 2014 and 4.91% for the quarter ended March 31, 2014.

·Total assets grew to $1.89 billion at March 31, 2015, with loans comprising 74.9% of the average earning asset mix, compared to 71.7% in the prior quarter.  Total deposits were $1.65 billion at March 31, 2015, which included demand deposits of $1.15 billion.  At December 31, 2014, total assets and total deposits were $1.81 billion and $1.55 billion, respectively.

·Gross loans were $1.36 billion at March 31, 2015, representing an increase of $46.8 million, or 3.6%, compared to gross loans of $1.31 billion at December 31, 2014, and an increase of $213.4 million, or 18.6% compared to gross loans of $1.14 billion at March 31, 2014.  Average loan balances increased by $105.7 million, or 8.6%, to $1.33 billion for the quarter ended March 31, 2015, compared to $1.22 billion for the quarter ended December 31, 2014, and increased $246.9 million, or 22.8% compared to gross loans of $1.08 billion at March 31, 2014.

·There was no provision for credit losses during the first quarter of 2015 and the fourth quarter of 2014, compared to $500,000 for the quarter ended March 31, 2014. Net recoveries were $260,000 for the quarter ended March 31, 2015, compared to net charge-offs of $134,000 for the quarter ended December 31, 2014 and net recoveries of $221,000 for the quarter ended March 31, 2014.

·Allowance for credit losses represented 1.66% of total gross loans and 164.76% of nonperforming loans at March 31, 2015, compared to 1.70% of total gross loans and 284.03% of nonperforming loans at December 31, 2014 and 1.98% of total gross loans and 191.51% of nonperforming loans at March 31, 2014.

·Nonperforming assets increased by $5.8 million to $13.7 million, or 0.73% of total assets, compared to $7.9 million or 0.43% of total assets at December 31, 2014. Nonperforming assets increased by $1.9 million compared to $11.9 million or 0.73% of total assets at March 31, 2014.

·Capital ratios remained significantly above the minimum required for the Company to be considered “well-capitalized” under the current Basel III regulatory framework, and continued to support the Company’s growth.  Total Risk-Based Capital Ratio was 13.02%, Tier I Capital Ratio was 11.81%, and Tier I Leverage Ratio was 11.14% at March 31, 2015.

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Selected Financial Data

The following table reflects selected financial data and ratios as of and for the quarters ended March 31, 2015 and 2014 (dollars in thousands, except per share data):

	Three months ended
	March 31,
(dollars in thousands, except per share data)	2015			2014
Statement of Operations Data:
Interest income	$	21,461		$	18,627
Interest expense	514			607
Net interest income	20,947			18,020
Provision for credit losses	—			500
Net interest income after provision for credit losses	20,947			17,520
Other income	3,273			2,748
Other expenses	17,344			14,047
Income before income taxes	6,876			6,221
Income taxes	2,962			2,505
Net income	$	3,914		$	3,716
Per Share Data:
Basic earnings per share	$	0.26		$	0.25
Diluted earnings per share	0.25			0.24
Shareholders’ equity per share	12.08			10.58
Balance Sheet Data:
Balance sheet totals:
Assets	$	1,882,199		$	1,616,438
Loans, net	1,329,888			1,117,394
Deposits	1,655,845			1,415,956
Shareholders’ equity	192,624			167,757
Average balance sheet amounts:
Assets	$	1,841,110		$	1,547,028
Loans, net	1,301,657			1,055,698
Deposits	1,590,896			1,335,973
Shareholders’ equity	191,673			165,812
Selected Ratios:
Return on average assets	0.86		%	0.97		%
Return on average equity	8.28		%	9.09		%
Efficiency ratio	71.61		%	67.64		%
Risk based capital ratio	12.78		%	13.76		%
Net chargeoffs (recoveries) to average gross loans	-0.02		%	-0.02		%
Allowance for loan losses to total loans	1.66		%	1.98		%
Average equity to average assets	10.41		%	10.72		%

35

Results of Operations:

Net Interest Income and Margin

Net interest income, the difference between interest earned on loans and investments and interest paid on deposits is the principal component of the Company’s earnings.  Net interest income is affected by changes in the nature and volume of earning assets held during the quarter, the rates earned on such assets and the rates paid on interest bearing liabilities.

Net interest income for the quarter ended March 31, 2015 was $20.9 million, which was comprised of $21.5 million in interest income and $514,000 in interest expense. Net interest income for the quarter ended March 31, 2014 was $18.0 million, which was comprised of $18.6 million in interest income and $607,000 in interest expense.  Net interest income for the quarter ended March 31, 2015 represented an increase of $2.9 million, or 16.2% from the same period one year earlier. The increase in net interest income from the same period in the prior year was primarily attributable to an increase in average earning assets as a result of loan growth,  partially offset by a slightly lower level of loan related fees. Loan fee amortization for the quarter ended March 31, 2015 was $2.7 million, compared to $2.8 million for the quarter ended March 31, 2014.

Total loan yields for the quarters ended March 31, 2015 and March 31, 2014 were 5.98% and 6.38%, respectively.  The weighted average contractual rate on loans, excluding fees, was 5.15% for the first quarter of 2015 compared to 5.34% for the same period one year ago.  Loan fees comprised 83 basis points of the total loan yield for the first quarter of 2015, compared to 104 basis points for the first quarter of 2014.

The composition of the average balance sheet impacts growth in net interest income.  For the quarter ended March 31, 2015 average earning assets of $1.77 billion represented an increase of $285.8 million, or 19.2%, compared to $1.49 billion, for the same period in 2014.  The Company’s loan-to-deposit ratio, a measure of leverage, averaged 83.59% during the quarter ended March 31, 2015, which represented an increase compared to an average of 78.96% for the same quarter of 2014 as a result of higher loan funding relative to deposit growth.

The Company’s net interest margin (net interest income divided by average earning assets) for the quarter ended March 31, 2015 was 4.79% compared to 4.91% in the same period one year earlier.  The decrease in net interest margin compared to the quarter ended March 31, 2014 was primarily due to a lower level of loan related fees, offset in part by an increase in average earning assets.

The negative impact on the net interest margin from decreased loan fees for the three months ended March 31, 2015 compared to the same period one year earlier was 14 basis points. The negative impact on the net interest margin from compression of contractual rates experienced in the loan portfolio for the three months ended March 31, 2015 compared to the same period one year earlier was 3 basis points.

The following tables show the composition of average earning assets and average funding sources, average yields and rates, and the net interest margin for the quarters ended March 31, 2015 and 2014.

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	Three months ended March 31,
	2015						2014
			Yields		Interest				Yields		Interest
	Average		or		Income/		Average		or		Income/
(dollars in thousands)	Balance		Rates		Expense		Balance		Rates		Expense
ASSETS
Interest earning assets (2):
Loans (1)	$	1,329,896	5.98	%	$	19,596	$	1,082,993	6.38	%	$	17,047
Federal funds sold	86,095		0.34	%	73		113,062		0.28	%	78
Investment securities	358,411		2.03	%	1,792		292,594		2.08	%	1,502
Other	325		0.00	%	—		326		0.00	%	—
Total interest earning assets	1,774,727		4.90	%	21,461		1,488,975		5.07	%	18,627
Noninterest-earning assets:
Cash and due from banks	27,394						26,549
All other assets (3)	38,989						31,504
TOTAL	$	1,841,110					$	1,547,028
LIABILITIES AND SHAREHOLDERS’ EQUITY
Interest bearing liabilities:
Deposits:
Demand	$	16,110	0.03	%	1		$	8,568	0.05	%	$	1
Savings	456,899		0.18	%	208		388,723		0.29	%	278
Time	35,279		0.57	%	50		43,416		0.56	%	60
Other	40,082		2.58	%	255		27,805		3.91	%	268
Total interest bearing liabilities	548,370		0.38	%	514		468,512		0.53	%	607
Noninterest-bearing liabilities:
Demand deposits	1,082,608						895,265
Accrued expenses and other liabilities	18,459						17,439
Shareholders’ equity	191,673						165,812
TOTAL	$	1,841,110					$	1,547,028
Net interest income and margin			4.79	%	$	20,947			4.91	%	$	18,020

(1)Loan fee amortization of $2.7 million and $2.8 million, respectively, is included in interest income.  Nonperforming loans have been included in average loan balances.

(2)Interest income is reflected on an actual basis, not a fully taxable equivalent basis.  Yields are based on amortized cost.

(3)Net of average allowance for loan losses of $22.4 million and $22.5 million, respectively.

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The following tables show the effect of the interest differential of volume and rate changes for the quarters ended March 31, 2015 and 2014.  The change in interest due to both rate and volume has been allocated in proportion to the relationship of absolute dollar amounts of change in each.

	Three months ended March 31,
	2015 vs. 2014
	Increase (decrease)
	due to change in
	Average			Average			Total
(dollars in thousands)	Volume			Rate			Change
Interest income:
Loans	$	3,638		$	(1,089	)	$	2,549
Federal funds sold	(23		)	18			(5		)
Investment securities	329			(39		)	290
Other	—			—			—
Total interest income	3,944			(1,110		)	2,834
Interest expense:
Demand	$	—		$	—		$	—
Savings	31			(101		)	(70		)
Time	(12		)	2			(10		)
Other	78			(91		)	(13		)
Total interest expense	98			(191		)	(93		)
Change in net interest income	$	3,846		$	(921	)	$	2,927

Significant factors affecting net interest income are: rates, volumes and mix of the loan, investment and deposit portfolios.   Due to the nature of the Company’s lending markets, in which the majority of loans are generally tied to prime rate, it is believed that an increase in interest rates should positively affect the Company’s future earnings, while a decline should have a negative impact.  However, it is not feasible to provide an accurate measure of such a change because of the many factors (many of them uncontrollable) influencing the result.

Interest Income

Interest income of $21.5 million in the quarter ended March 31, 2015 represented an increase of $2.8 million, or 15.2%, from $18.6 million in the same quarter one year earlier.  The average yield on earning assets was 4.90% for the quarter ended March 31, 2015 compared to 5.07% for the quarter ended March 31, 2014.  The decrease in the average yield on interest earning assets was primarily due to lower yields on loans and investments and a lower level of loan related fees.

Average gross loans were $1.33 billion for three months ended March 31, 2015, an increase of $246.9 million or 22.8% from $1.08 billion for the same period one year earlier.  Average loans comprised 74.9% of average earning assets in the three months ended March 31, 2015 compared to 72.7% in the first quarter of 2014.

Other earning assets, consisting of investment securities, federal funds sold and interest-bearing deposits, averaged $444.8 million for the quarter ended March 31, 2015, an increase of $38.8 million or 9.6% from $406.0 million for the three months ended March 31, 2014.

Interest Expense

Interest expense was $514,000 for the quarter ended March 31, 2015, which represented a decrease of $93,000, or 15.3% from $607,000 for the comparable period of 2014.  Average interest-bearing liabilities were $548.4 million for the three months ended March 31, 2015, an increase of $79.9 million, or 17.0%, from $468.5 million for the same period one year earlier.  The decrease in interest expense was primarily due to a lower rate paid on savings deposits.

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Average interest bearing deposits were $508.3 million for the quarter ended March 31, 2015, which represented 31.2% of total average deposits and was an increase of $67.6 million, or 15.3%, from $440.7 million representing 32.3% of total average deposits in the first quarter of 2014.

Other (non-deposit) interest bearing liabilities are primarily comprised of junior subordinated debt securities issued by the Company and other borrowings.  The junior subordinated debt is intended to supplement capital requirements of the Company at a rate of interest that is fixed for five years.  Other interest bearing liabilities averaged $40.1 million in the three months ended March 31, 2015 and $27.8 million for the comparable period of 2014.

The average rate paid on interest-bearing liabilities was 0.38% and 0.53% for the quarters ended March 31, 2015 and 2014, respectively.

Credit Risk and Provision for Credit Losses

The Company maintains an allowance for loan losses which is based, in part, on the Company’s loss experience, the impact of economic conditions within the Company’s market area and, as applicable, the State of California and/or national macroeconomic conditions, the value of underlying collateral, loan performance, and inherent risks in the loan portfolio. The allowance is reduced by charge-offs and increased by provisions for credit losses charged to operating expense and recoveries of previously charged-off loans.

The Company charged-off $93,000 during the three months ended March 31, 2015 compared to $465,000 during the three months ended March 31, 2014. Loan recoveries of $353,000 were recognized during the first quarter of 2015 compared to $686,000 for the three months ended March 31, 2014.

The following schedule provides an analysis of the allowance for loan losses for the quarters ended March 31, 2015 and 2014, respectively:

	Three months ended
	March 31,
(dollars in thousands)	2015			2014
Balance, beginning of period	$	22,305		$	21,944
Provision for credit losses	—			500
Charge-offs	(93		)	(465		)
Recoveries	353			686
Balance, end of period	$	22,565		$	22,665

The allowance for loan losses was $22.6 million, or 1.66% of total loans, at March 31, 2015, compared to $22.7 million, or 1.98% of total loans, at March 31, 2014. The increase in the allowance for loan losses from March 31, 2014 to March 31, 2015 was primarily attributable to the growth of the loan portfolio.

The Company did not record a provision for credit losses for the three months ended March 31, 2015, compared to $500,000 in provision for credit losses recorded for the quarter ending March 31, 2014.

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Based on an evaluation of individual credits, historical credit loss experience by loan type, economic conditions, and the Company’s reassessment of risks noted above, management has allocated the allowance for loan losses as follows for the periods ending March 31, 2015 and December 31, 2014:

	March 31, 2015				December 31, 2014
			Percent of				Percent of
			ALLL in each				ALLL in each
			category to				category to
(dollars in thousands)	Amount		gross loans		Amount		gross loans
Commercial	$	11,256	0.8	%	$	10,800	0.8	%
Real estate construction	1,258		0.1	%	1,423		0.1	%
Land loans	376		0.0	%	412		0.0	%
Real estate other	2,211		0.2	%	2,131		0.2	%
Factoring and asset based	5,492		0.4	%	5,185		0.4	%
SBA	1,848		0.1	%	2,209		0.2	%
Other	124		0.0	%	145		0.0	%
	$	22,565	1.6	%	$	22,305	1.7	%

At March 31, 2015 nonperforming assets of $13.7 million, or 0.73% of total assets, compared to $7.9 million, or 0.43% of total assets, on December 31, 2014.  The increase in nonperforming assets from December 31, 2014 was primarily due to additions of $10.0 million. The additions were comprised of one relationship consisting of two commercial credits and one asset based credit for a total of $6.7 million. The following summarizes nonperforming assets at March 31, 2015 and December 31, 2014.

	March 31,		December 31,
(dollars in thousands)	2015		2014
Loans accounted for on a non-accrual basis	$	13,696	$	7,853
Other loans with principal or interest contractually past due 90 days or more and still accruing	—		—
Nonperforming loans	13,696		7,853
Other real estate owned	22		23
Nonperforming assets	$	13,718	$	7,876
Loans restructured and in compliance with modified terms	4,311		9,237
Nonperforming assets and restructured loans	$	18,029	$	17,113

The nonperforming assets at March 31, 2015 consisted of loans on nonaccrual or 90 days or more past due and still accruing totaling $13.7 million, and other real estate owned valued at $22,000.  Nonperforming loans at March 31, 2015 were comprised of loans with legal contractual balances totaling approximately $16.3 million reduced by $422,000 received in nonaccrual interest and impairment charges of $2.2 million which have been charged against the allowance for loan losses. In addition, as of March 31, 2015, there was an additional 21 loans with legal contractual balances totaling $15.0 million that have been fully charged off, for which the Company continues to pursue collection remedies.

The accrual of interest on loans is discontinued and any accrued and unpaid interest is reversed when, in the opinion of Management, there is significant doubt as to the collectability of interest or principal or when the payment of principal or interest is ninety days past due, unless the amount is well-secured and in the process of collection.

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The following table sets forth the components of nonperforming loans as of March 31, 2015 (dollars in thousands).

(dollars in thousands)

March 31, 2015

Category / Collateral	Amount
SBA:
Single family residence in San Francisco County	$	2,027
Single family residences in Riverside County	380
Commercial building in Santa Barbara County	287
Mixed used building in Santa Clara County	270
Special purpose facilities in Orange County	178
Special purpose facilities in San Diego County	113
Lot for single family homes in Contra Costa County	46
Single family residences in Orange County & Riverside County	43
Commercial building in San Diego County	20
Single family residences in Los Angeles County	4
Light industrial warehouse space in Stanislaus County	2
	3,370
Commercial:
Business assets	2,997
	2,997
Real estate other:
Single family residences in Sacramento County	1,310
Single family residences in Santa Clara County	1,284
	2,594
Factoring/asset based lending:
Business assets	4,735
	4,735
Total nonperforming loans	$	13,696

Included in nonperforming loans at March 31, 2015 are loans totaling $1.3 million that have been modified in trouble debt restructurings, where concessions have been granted to borrowers experiencing financial difficulties.  These concessions could include a reduction in the interest rate on a loan, payment extensions, forgiveness of principal, or other actions intended to maximize collection.  In order for these loans to return to accrual status, the borrower must demonstrate a sustained period of timely payments.  As of March 31, 2015, previously modified loans totaling $4.3 million were considered performing due to a sustained period of timely payments and therefore were accounted for on an accrual basis. There were no downgrades of trouble debt restructurings during the quarter ended March 31, 2015.

Management undertakes significant processes in order to identify potential problem loans in a timely manner.  In addition to regular interaction with the Company’s borrowers, the relationship managers review the credit ratings for each loan on a monthly basis and identify any potential downgrades.  For commercial and factoring/asset-based loans, the Company receives quarterly financial statements and other pertinent reporting, such as borrowing bases for asset-based facilities, so as to identify any deteriorating financial trends.  Covenant compliance for these loans is also monitored on a quarterly basis.  For real estate construction and land loans, the development, construction and lease up or sell out status of each project is monitored on a monthly basis.  For SBA loans and loans secured by standing commercial or residential property, the Company receives updated rent rolls, operating statements, and/or tax returns on an annual basis.  In addition, home equity loans are reviewed annually for deterioration in either the underlying property value or the borrower’s payment history.  Management also engages a third party loan review firm that reviews the loan portfolio periodically to further identify potential problem loans.  The loan review includes assessment of underwriting, quality of legal documents, management of the loan relationship, and adherence to the credit policy along with acceptable risk mitigation and rationale for exceptions to the policy.

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As part of the loan approval process, management identifies the nature and type of underlying collateral supporting individual loans.  Prior to or at the time of initial advances, any required lien positions are verified using UCC lien searches for personal property collateral, or title insurance for real property collateral.  The Company engages a third party loan review firm to conduct an annual review of its loan documentation and the related policies and procedures regarding the loan documentation process.

The Company primarily relies on fair market appraisals to determine the value of underlying real estate collateral.  Appraisals are required for real property secured loans of $250,000 or more, including increases to existing loans of $250,000 or more.  In the event there is evidence of deterioration in values, an evaluation of the collateral value and/or a full new appraisal is required for an extension of the loan maturity.  Potential problem loans are typically reappraised every 12 months depending size, nature, current economic conditions and the borrower’s current financial performance and repayment history. The appraisals are performed by Board approved appraisers that have appropriate licensing and experience.  Generally, when a prospective loan amount exceeds $3.0 million, the completed appraisal is further reviewed by a qualified third party review appraiser.  To determine the value of underlying collateral for formula lines of credit that are predicated on a borrowing base of eligible assets, the Company typically requires a pre loan funding field audit of the borrower’s financial records to verify the accounts receivable, their eligibility for inclusion in the borrowing base, performance of the collateral and any asset concentrations.

On a monthly basis, relationship managers assess the collateral position of individual loans and identify any potential collateral shortfalls which, if left uncorrected, could result in deterioration of the repayment prospects for the loan at some future date.  Any potential collateral shortfalls are incorporated into a written corrective action plan.  The status of the corrective action plans are reviewed by executive management.  Review of ability to acquire additional collateral and the related timeframes are addressed on an individual loan basis.

At the time a loan is classified as substandard (which includes any loan on non-accrual), the Company performs an impairment analysis of the collateral based on appraisals, field audits, other market value indicators, and Management’s judgment.  Any shortfall between the collateral’s realization value and the loan balance is charged-off at that time when management believes the uncollectibility of the loan is confirmed.  Impairment analyses are updated on a monthly basis.  Additionally, as underlying collateral is reappraised the value of the collateral is reassessed and any additional charge-off is taken at that time.  A similar practice is followed for downward adjustments to the Company’s OREO carrying value.

Management is of the opinion that the allowance for loan losses is maintained at a level adequate for known and unidentified losses inherent in the portfolio.  However, although the Company is seeing a lower rate of inflow into problem assets generally, as well as a consistent reduction of carrying values through continued payments by borrowers on loans that have been placed on non-accrual, should circumstances change and management determines that the collectability of any of these credits becomes unlikely, there could be an adverse effect on the level of the allowance for loan losses and the Company’s future profitability.

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Non-interest Income

The following tables set forth the components of other income and the percentage distribution of such income for the three months ended March 31, 2015 and 2014:

	Three months ended March 31,
	2015				2014
(dollars in thousands)	Amount		Percent		Amount		Percent
Depositor service charges	$	995	30.4	%	$	916	33.3	%
International fee income	841		25.7	%	761		27.7	%
Visa fee income	401		12.3	%	299		10.9	%
Net gain (loss) on sale of securities	306		9.3	%	5		0.2	%
Gain on sale of SBA loans	195		6.0	%	213		7.8	%
SBA loan servicing income	189		5.8	%	142		5.2	%
Increase in value of life insurance	144		4.4	%	144		5.2	%
Warrant income	—		0.0	%	121		4.4	%
Other operating income	202		6.1	%	147		5.3	%
	$	3,273	100.0	%	$	2,748	100.0	%

Non-interest income totaled $3.3 million in the first quarter of 2015, an increase of $525,000 or 19.1% from $2.7 million in the first quarter of 2014. The increase in non-interest income during the quarter ended March 31, 2015 compared to the same period in the prior year was primarily attributable to an increase in gains on sale of securities and visa fee income, partially offset by a decrease in warrant income.

For the quarter ended March 31, 2015, service charge income on deposit accounts was $995,000, representing an increase of $79,000, or 8.6%, compared to $916,000 for the same period one year ago.  The increases are primarily attributable to an increase in the deposit portfolio and deposit related analysis charges.

The Company generates international fee income on spot contracts (binding agreements for the purchase or sale of currency for immediate delivery and settlement) and forward contracts (a contractual commitment for a fixed amount of foreign currency on a future date at an agreed upon exchange rate) in connection with client’s cross-border activities. The transactions incurred are during the ordinary course of business and are not speculative in nature.  The Company recognizes income on a cash basis at the time of contract settlement in an amount equal to the spread created by the exchange rate charged to the client versus the actual exchange rate negotiated by the Company in the open market.  During the first quarter of 2015, the Company recognized $841,000 in international fee income, representing an increase of $80,000, or 10.5%, compared to $761,000 for the same period one year ago. The increase in international fee income was primarily caused by an increase in client demand for international services.

The Visa card program contributed $401,000 and $299,000 in non-interest income during the three months ended March 31, 2015 and 2014, respectively. Visa income represents both interchange and annual fees.

The Company recognized net gains on sale of securities of $306,000 during the three months ended March 31, 2015, representing an increase of $301,000,compared to $5,000 for the same period one year ago, which resulted from sales the Company made to support the strong loan funding and to adjust the risk profile of the investment portfolio.

Revenue from sales of SBA loans is dependent on consistent origination and funding of new loan volumes, the timing of which may be impacted, from time to time, by (1) increased competition from other lenders; (2) the relative attractiveness of SBA borrowing to other financing options; (3) adjustments to programs by the SBA; (4) changes in activities of secondary market participants and; (5) other factors.  The company recognized $195,000 in gains on the sale of SBA loans sold during the three months ended March 31, 2015 compared to $213,000 in gains on the sale of SBA loans sold during the three months ended March 31, 2014 representing a decrease of $18,000 or 8.5%. During the quarter ended March 31, 2015, the Company’s SBA group funded $8.7 million in new loans and sold $2.7 million, which included $323,000 in loans funded in the previous year.  This compares to $10.1 million funded and $2.9 million sold in the quarter ended March 31, 2014, which included $2.5 million in loans funded in the previous year.

During the first quarter of 2015, the Company did not recognize any warrant income compared to $121,000 recognized during the first quarter of 2014. Income from warrants is inherently event-driven and the contributions from warrants largely reflect the economic environment of IPOs and M&A activity.

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Net interest income and non-interest income comprised total revenue of $24.2 million for the three months ended March 31, 2015, compared to $20.8 million for the same period one year earlier.

Non-interest Expense

The components of other expense as a percentage of average earnings assets are set forth in the following tables for the three months ended March 31, 2015 and 2014.

	Three months ended March 31,
	2015				2014
(dollars in thousands)	Amount		Percent		Amount		Percent
Salaries and benefits	$	10,620	2.4	%	$	9,015	2.4	%
Data processing	1,294		0.3	%	1,019		0.3	%
Merger related expense	1,191		0.3	%	—		0.0	%
Occupancy	1,105		0.2	%	1,059		0.3	%
Marketing/Advertising	567		0.1	%	619		0.2	%
Legal and professional	488		0.1	%	482		0.1	%
Assessments	333		0.1	%	351		0.1	%
Loan/OREO	384		0.1	%	194		0.1	%
Deposit services	283		0.1	%	261		0.1	%
Furniture and equipment	167		0.0	%	179		0.0	%
Other	912		0.2	%	868		0.2	%
	$	17,344	3.9	%	$	14,047	3.8	%

Operating expenses were $17.3 million for the three months ended March 31, 2015, an increase of $3.3 million or 23.5% from $14.0 million at March 31, 2014. As a percentage of average earning assets, other expenses for the three months ended March 31, 2015 and 2014 were 3.9% and 3.8%, on an annualized basis. Overall, the trend in non-interest expense (excluding merger related costs) continues to reflect the Company’s investments in new initiatives and personnel to support growth.

Salaries and benefits expense of $10.6 million for the quarter ended March 31, 2015, compared to $9.0 million for the quarter ended March 31, 2014.  The increase in salary and benefits expense for the current periods compared to the same periods in the prior year is primarily related to an increase in headcount to support growth and new initiatives, combined with annual salary increases necessary to remain competitive in the Company’s core markets and increased stock-based compensation due to long-term retention awards.  As of March 31, 2015, the Company employed 262 full-time equivalents (FTE) compared to 235 FTE at March 31, 2014.

Occupancy and equipment expense is comprised primarily of rent, leasehold improvements and depreciation expense for furniture, fixtures and equipment. For the current quarter, the Company recognized $1.3 million in occupancy and equipment expense compared to $1.2 million for the same period in 2014.

The Company contracts with third-party vendors for most data processing needs and to support technical infrastructure.  Data processing expense for the first quarter of 2015 was $1.3 million which represented an increase of approximately $275,000 over $1.0 million for the same period one year earlier. The increase in data processing was primarily due to an increase in deposit transaction volumes.

Marketing expense of $567,000 for the period ended March 31, 2015 represented a decrease of $52,000 compared to $619,000 during the same period one year earlier. Over the past several years, the Company increased marketing investments to raise the level of its brand visibility, and the rising trend of these expenses has leveled off in the current quarter. To leverage the increased brand visibility, the Company will continue to fund marketing and sales initiatives to accelerate demand for its customized banking solutions.

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Legal and professional charges were $488,000 for the quarter ended March 31, 2015 compared to $482,000 for the quarter ended March 31, 2014.

Regulatory assessments related to FDIC insurance pertaining to deposit balances, totaled $333,000 for the quarter ended March 31, 2015, compared to $351,000 for the quarter ended March 31, 2014. Regulatory assessments fluctuate depending on asset size and other factors, including credit quality.

Other real estate owned (OREO) and loan related charges were $384,000 for the quarter ended March 31, 2015 compared to $194,000 for the quarter ended March 31, 2014. The increase in charges from prior quarter and prior year is primarily related to the ongoing resolution of the increased non-performing credit portfolio during the current quarter.

The Company’s efficiency ratio, the ratio of non-interest expense to revenues, was 71.61% and 67.64% for the quarters ended March 31, 2015 and March 31, 2014, respectively.

Balance Sheet

Total assets of the Company at March 31, 2015 were $1.88 billion compared to $1.81 billion at December 31, 2014. The increase was driven by an increase in both the loan portfolio and fed funds sold.  Gross loans increased to 74.9% of the earning asset mix from 74.8% at December 31, 2014.

Gross loan balances were $1.36 billion at March 31, 2015, which represented an increase of $46.8 million, or 3.6%, as compared to $1.31 billion at December 31, 2014. The increase in total gross loans from December 31, 2014 was primarily in the commercial loan portfolio, slightly offset by reductions in factoring and asset-based loans.

The following table shows the Company’s loans by type and their percentage distribution as of March 31, 2015 and December 31, 2014.

	March 31,			December 31,
(dollars in thousands)	2015			2014
Commercial	$	843,096		$	785,360
Real estate construction	65,380			71,673
Land loans	14,536			15,890
Real estate other	146,597			139,624
Factoring and asset based lending	156,806			167,513
SBA	125,075			124,180
Other	6,625			7,073
Total gross loans	1,358,115			1,311,313
Unearned fee income	(5,662		)	(5,644		)
Total loans	1,352,453			1,305,669
Less allowance for credit losses	(22,565		)	(22,305		)
Total loans, net	$	1,329,888		$	1,283,364
Commercial	62.1		%	59.9		%
Real estate construction	4.8		%	5.5		%
Land loans	1.1		%	1.2		%
Real estate other	10.8		%	10.6		%
Factoring and asset based lending	11.5		%	12.8		%
SBA	9.2		%	9.5		%
Other	0.5		%	0.5		%
Total gross loans	100.0		%	100.0		%

The Company’s commercial loan portfolio represents loans to small and middle-market businesses in the Santa Clara County region.  Commercial loans were $843.1 million at March 31, 2015, which represented an increase of $57.7 million, or 7.4%, compared to $785.4 million at December 31, 2014.  At March 31, 2015, commercial loans comprised 62.1% of total loans outstanding compared to 59.9% at December 31, 2014.

45

Approximately 86% of the Company’s construction loan portfolio consists of loans to finance individual single-family residential homes in markets in the Peninsula and South Bay region of Silicon Valley.  The remainder is comprised of commercial development projects.  The Company’s land loan portfolio consists of land and land development loans related to future construction credits. The Company’s construction and land loan portfolio together totaled approximately $79.9 million as of March 31, 2015 compared to $87.6 million as of December 31, 2014, representing a decrease of $7.6 million or 8.7%.  Construction and land loan balances at March 31, 2015 and December 31, 2014 comprised 5.9% and 6.7% of total loans, respectively.

Other real estate loans consist of commercial real estate and home equity lines of credit.  Other real estate loans increased $7.0 million or 5.0% to $146.6 million at March 31, 2015 from $139.6 million at December 31, 2014.  The increase in other real estate loans was primarily in owner occupied real estate loans.  Other real estate loans represented 10.8% of total loans at March 31, 2015, and 10.6% at December 31, 2014.

Factoring and asset-based lending represents purchased accounts receivable (factoring) and a structured accounts receivable lending program where the Company receives client specific payment for client invoices.  Under the factoring program, the Company purchases accounts receivable invoices from its clients and then receives payment directly from the party obligated for the receivable.   In most cases the Company purchases the receivables subject to recourse from the Company’s factoring client.  The asset-based lending program requires a security interest in all of a client’s accounts receivable.  At March 31, 2015, factoring/asset-based loans totaled $156.8 million or 11.5% of total loans, representing a decrease of $10.7 million or 6.4%, as compared to $167.5 million or 12.8% of total loans at December 31, 2014.

The SBA line of business operates primarily in Santa Clara County. The Company, as a Preferred Lender, originates SBA loans and participates in the SBA 7A and 504 SBA lending programs.  Under the 7A program, a loan is made for commercial or real estate purposes.  The SBA guarantees these loans and the guarantee may range from 75% to 90% of the total loan. In addition, the loan could be collateralized by a deed of trust on real estate.  Under the 504 program, the Company lends directly to the borrower and takes a first deed of trust to the subject property.  In addition the SBA, through a Certified Development Corporation, makes an additional loan to the borrower and takes a deed of trust subject to the Company’s position. At March 31, 2015, SBA loans comprised $125.1 million, or 9.2%, of total loans, an increase of $895,000, or 0.7%, from $124.2 million or 9.5% of total loans at December 31, 2014. The Company has the ability and the intent to sell all or a portion of the SBA loans and, as such, carries the saleable portion of SBA loans at the lower of aggregate cost or fair value.  At March 31, 2015 and December 31, 2014, the fair value of SBA loans exceeded aggregate cost and therefore, SBA loans were carried at aggregate cost.

Other loans consist primarily of loans to individuals for personal uses, such as installment purchases, overdraft protection loans and a variety of other consumer purposes.  At March 31, 2015, other loans totaled $6.6 million as compared to $7.1 million at December 31, 2014.

Deposits represent the Company’s principal source of funds.  Most of the Company’s deposits are obtained from professionals, small-to-medium sized businesses, and individuals within the Company’s market area.  The Company’s deposit base consists of non-interest and interest-bearing demand deposits, savings and money market accounts and certificates of deposit.

46

The following table summarizes the composition of deposits as of March 31, 2015 and December 31, 2014:

	As of March 31,				As of December 31,
	2015				2014
	Total		Percent		Total		Percent
(dollars in thousands)	Amount		of Total		Amount		of Total
Noninterest-bearing demand	$	1,132,231	68.38	%	$	1,051,357	67.85	%
Interest-bearing demand	14,362		0.87	%	15,492		1.00	%
Money market and savings	472,475		28.53	%	450,873		29.10	%
Certificates of deposit:
Less than $100K	2,033		0.12	%	2,193		0.14	%
$100K and more	34,744		2.10	%	29,630		1.91	%
Total deposits	$	1,655,845	100.00	%	$	1,549,545	100.00	%

Deposits increased $106.3 million or 6.9% from $1.55 billion at December 31, 2014 to $1.65 billion at March 31, 2015, as a result of an increase in generally all deposit categories. As of March 31, 2015, demand deposits and core deposits represented 69.3% and 97.8% of total deposits, compared to 68.9% and 97.9% at December 31, 2014.

Leverage

Total gross loan balances at March 31, 2015 were $1.36 billion.  The resulting loan to deposit ratio was 82.0%.  Other earning assets at March 31, 2015 were primarily comprised of investment securities, federal funds sold and interest-bearing deposits of $453.9 million. To date, the Company has deployed other earning assets primarily in short term fixed rate investments to mitigate interest rate risk associated with the Company’s asset-sensitive balance sheet, and in federal funds sold to address the potential volatility of deposit balances and to accommodate projected loan funding.  When deploying other earning assets, the Company implements strategic decisions that may have a beneficial or adverse impact on net interest income and on the net interest margin to manage the business through a variety of economic cycles.

Capital Resources

The Company and the Bank are subject to the capital guidelines and regulations governing capital adequacy for bank holding companies and national banks.  Additional capital requirements may be imposed on banks based on market risk.

The Company’s capital resources consist of shareholders’ equity, trust preferred securities and (for regulatory purposes) the allowance for loan losses (subject to limitations).  At March 31, 2015, the Company’s capital resources increased $7.9 million to $225.9 million from $218.0 million at December 31, 2014.  Tier 1 capital increased $7.3 million to $204.8 million at March 31, 2015.  The Company’s Tier 1 capital at March 31, 2015 was comprised of $117.7 million of capital stock and surplus, $73.5 million in retained earnings and trust preferred securities up to the allowable limit of $17.0 million, offset by $3.4 million in disallowed deferred tax assets.

The Company is subject to capital adequacy guidelines issued by the Board of Governors and the OCC, which have established new rules effective January 1, 2015. The Company is required to maintain total capital equal to at least 8.0% of assets and commitments to extend credit, weighted by risk, of which at least 6.0% must consist primarily of common equity including retained earnings (Tier 1 capital) and qualified preferred stock, and the remainder may consist of subordinated debt and a limited amount of allowance for loan losses. The new rule also introduced a new Common Equity Tier 1 capital requirement of 4.5%. Preferred stocks are excluded from the Common Equity Tier 1 capital. Certain assets and commitments to extend credit present less risk than others and will be assigned to lower risk-weighted categories requiring less capital allocation than the 8.0% total ratio. For example, cash and government securities are assigned to a 0.0% risk-weighted category, most home mortgage loans are assigned to a 50.0% risk-weighted category requiring a 4.0% capital allocation and commercial loans are assigned to a 100.0% risk-weighted category requiring an 8.0% capital allocation. As of March 31, 2015, the Company's and the Bank's total risk-based capital ratios were 13.02% and 11.76%, respectively (13.91% for the Company and 12.38% for the Bank at December 31,2014).

47

Regulatory Capital Ratios

The following table shows the Company’s capital ratios at March 31, 2015 and December 31, 2014 as well as the minimum capital ratios required to be deemed “well capitalized” under the regulatory framework.

	As of March 31,				As of December 31,
	2015				2014
(dollars in thousands)	Amount		Ratio		Amount		Ratio
Company Capital Ratios
Tier 1 Capital	$	204,803	11.81	%	$	199,037	12.66	%
(to Risk Weighted Assets)
Tier 1 capital minimum requirement	$	138,785	8.00	%	$	94,356	6.00	%
Total Capital	$	225,941	13.02	%	$	218,727	13.91	%
(to Risk Weighted Assets)
Total capital minimum requirement	$	173,482	10.00	%	$	157,260	10.00	%
Company Leverage
Tier 1 Capital	$	204,803	11.14	%	$	199,037	11.24	%
(to Average Assets)
Tier 1 capital minimum requirement	$	91,886	5.00	%	$	88,523	5.00	%
Common Equity Tier 1	$	187,640	10.82	%	$	182,037	11.58	%
(to Risk Weighted Assets)
Common Equity Tier 1 well capitalized requirement	$	112,763	6.50	%	$	102,219	6.50	%
Bank Capital Ratios
Tier 1 Capital	$	181,871	10.53	%	$	174,493	11.13	%
(to Risk Weighted Assets)
Tier 1 capital minimum requirement	$	138,148	8.00	%	$	94,072	6.00	%
Total Capital	$	203,009	11.78	%	$	194,125	12.38	%
(to Risk Weighted Assets)
Total capital minimum requirement	$	172,685	10.00	%	$	156,787	10.00	%
Bank Leverage
Tier 1 Capital	$	181,871	9.94	%	$	174,493	9.89	%
(to Average Assets)
Tier 1 capital minimum requirement	$	91,520	5.00	%	$	88,176	5.00	%
Common Equity Tier 1	$	181,871	10.53	%	$	174,493	11.13	%
(to Risk Weighted Assets)
Common Equity Tier 1 well capitalized requirement	$	112,245	6.50	%	$	101,911	6.50	%

The Company and the Bank were considered well capitalized at March 31, 2015 and December 31, 2014.

48

ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Liquidity/Interest Rate Sensitivity

The Company manages its liquidity to provide adequate funds at an acceptable cost to support borrowing requirements and deposit flows of its customers. Liquidity requirements are evaluated by taking into consideration factors such as deposit concentrations, seasonality and maturities, loan and lease demand, capital expenditures and prevailing and anticipated economic conditions.  The Company’s business is generated primarily through customer referrals and employee business development efforts.  The Company is primarily a business and professional bank and, as such, its deposit base is more susceptible to economic fluctuations.  The Company strives to maintain a balanced position of liquid assets to volatile and cyclical deposits.  At March 31, 2015 and December 31, 2014, liquid assets as a percentage of deposits were 28.5% and 29.0%, respectively.  In addition to cash and due from banks, liquid assets include interest-bearing deposits in other banks, Federal funds sold, securities available for sale and trading securities.  The Company has $47.0 million in unsecured lines of credit available with correspondent banks to meet liquidity needs.  At March 31, 2015, there were no balances outstanding on these lines. Additionally, as of March 31, 2015, the Company had a total borrowing capacity with the Federal Home Loan Bank of San Francisco of approximately $443.0 million for which the Company had collateral in place to borrow $136.0 million.  As of March 31, 2015, $10.0 million of this borrowing capacity was pledged to secure a letter of credit.

The Company’s balance sheet position is asset-sensitive (based upon the significant amount of variable rate loans and the repricing characteristics of its deposit accounts).   This balance sheet position generally provides a hedge against rising interest rates, but has a detrimental effect during times of interest rate decreases.  Net interest income is generally negatively impacted in the short term by a decline in interest rates.  Conversely, an increase in interest rates should have a short-term positive impact on net interest income.

Management regularly reviews general economic and financial conditions, both external and internal, and determines whether the positions taken with respect to liquidity and interest rate sensitivity continue to be appropriate.  The Company utilizes a monthly “Gap” report as well as a quarterly simulation model to identify interest rate sensitivity over the short- and long-term.  Management considers the results of these analyses when implementing its interest rate risk management activities, including the utilization of certain interest rate hedges.

The following table sets forth the distribution of repricing opportunities, based on contractual terms of the Company’s earning assets and interest-bearing liabilities at March 31, 2015, the interest rate sensitivity gap (i.e. interest rate sensitive assets less interest rate sensitive liabilities), the cumulative interest rate sensitivity gap, the interest rate sensitivity gap ratio (i.e. interest rate sensitive assets divided by interest rate sensitive liabilities) and the cumulative interest rate sensitivity gap ratio.

49

	As of March 31, 2015
			After three		After six		After one
	Within		months but		months but		year but		After
	three		within six		within one		within		five
(dollars in thousands)	months		months		year		five years		years		Total
Federal funds sold	$	121,028	$	—	$	—	$	—	$	—	$	121,028
Interest bearing deposits in other banks	326		—		—		—		—		326
Investment securities	11,420		589		16,817		122,883		180,878		332,587
Loans	409,931		84,008		183,644		479,202		201,330		1,358,115
Total earning assets	$	542,705	$	84,597	$	200,461	$	602,085	$	382,208	$	1,812,056
Interest checking, money market and savings	486,837		—		—		—		—		486,837
Certificates of deposit:
Less than $100,000	1,161		325		337		210		—		2,033
$100,000 or more	10,497		6,425		8,263		9,559		—		34,744
Total interest-bearing liabilities	$	498,495	$	6,750	$	8,600	$	9,769	$	—	$	523,614
Interest rate gap	$	44,210	$	77,847	$	191,861	$	592,316	$	382,208	$	1,288,442
Cumulative interest rate gap	$	44,210	$	122,057	$	313,918	$	906,234	$	1,288,442
Interest rate gap ratio	0.08		0.92		0.96		0.98		1.00
Cumulative interest rate gap ratio	0.08		0.19		0.38		0.63		0.71

Based on the contractual terms of its assets and liabilities, the Company’s balance sheet at March 31, 2015 was asset sensitive in terms of its short-term exposure to interest rates.  That is, at March 31, 2015 the volume of assets that might reprice within the next year exceeded the volume of liabilities that might reprice.  This position provides a hedge against rising interest rates, but has a detrimental effect during times of rate decreases. Net interest income is negatively impacted by a decline in interest rates and positively impacted by an increase in interest rates.  To partially mitigate the adverse impact of declining rates, a significant portion of variable rate loans made by the Company have been written with a minimum “floor” rate.

50

The following table shows the scheduled maturities of the loan portfolio at March 31, 2015 and December 31, 2014. Approximately 78.6% and 81.2% of the loan portfolio was priced with floating interest rates which limit the exposure to interest rate risk on long-term loans, as of March 31, 2015 and 2014, respectively.

	As of March 31, 2015
					Due after one
			Due one year		year through		Due after
(dollars in thousands)	Amount		or less		five years		five years
Commercial	$	843,096	$	368,029	$	391,434	$	83,632
Real estate construction	65,380		48,966		11,271		5,143
Real estate land	14,536		12,670		1,867		—
Real estate other	146,597		10,277		37,687		98,632
Factoring and asset based lending	156,806		99,488		57,318		—
SBA	125,075		1,003		1,657		122,415
Other	6,625		6,180		445		—
Total loans	$	1,358,115	$	546,613	$	501,679	$	309,822

	As of December 31, 2014
						Due after one
			Due one year			year through		Due after
	Amount		or less			five years		five years
Commercial	$	785,360	$	301,574		$	413,675	$	70,111
Real estate construction	71,673		32,713			19,486		19,474
Real estate land	15,890		14,011			1,879		—
Real estate other	139,624		12,124			47,051		80,449
Factoring and asset based lending	167,513		119,874			47,639		—
SBA	124,180		(174		)	1,931		122,423
Other	7,073		6,307			766		—
Total loans	$	1,311,313	$	486,429		$	532,427	$	292,457

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

The definition of “off-balance sheet arrangements” includes any transaction, agreement or other contractual arrangement to which an entity is a party under which we have:

·Any obligation under a guarantee contract that has the characteristics as defined in accounting guidance related to Guarantor’s Accounting and Disclosure Requirements for Guarantee including Indirect Guarantees of Indebtedness to Others;

·A retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets, such as a subordinated retained interest in a pool of receivables transferred to an unconsolidated entity;

·Any obligation, including a contingent obligation, under a contract that would be accounted for as a derivative instrument, except that it is both indexed to the registrant’s own stock and classified in stockholders’ equity; or

·Any obligation, including contingent obligations, arising out of a material variable interest, as defined in accounting guidance, in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or research and development services with the registrant.

51

In the ordinary course of business, we have issued certain guarantees which qualify as off-balance sheet arrangements, as of March 31, 2015 those guarantees include the following:

·Standby Letters of Credit in the amount of $21.5 million.

The table below summarizes the Company’s off-balance sheet contractual obligations:

	As of March 31, 2015
	Payments due by period
			Less than		1 - 3		3 - 5		More than
(dollars in thousands)	Total		1 year		years		years		5 years
Long-term contracts	$	1,160	$	696	$	464	$	—	$	—
Operating leases	24,266		4,352		6,100		4,892		8,922
Total	$	25,426	$	5,048	$	6,564	$	4,892	$	8,922

ITEM 4 — CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by SEC rules, the Company’s management evaluated the effectiveness, as of March 31, 2015, of the Company’s disclosure controls and procedures.  The Company’s chief executive officer and chief financial officer participated in the evaluation.  Based on this evaluation, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2015.

Internal Control over Financial Reporting

Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the company; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use of disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  No change occurred during the first quarter of 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

52

PART II — OTHER INFORMATION

ITEM 1 — LEGAL PROCEEDINGS

The Company is not a defendant in any pending material legal proceedings and no such proceedings are known to be contemplated. No director, officer, affiliate, more than 5% shareholder of the Company, or any associate of these persons is a party adverse to the Company or has a material interest adverse to the Company in any material legal proceeding.

ITEM 1A — RISK FACTORS

There were no material changes in the risk factors that were disclosed in Item 1A, under the caption “Risk Factors” in Part I of our Annual Report on Form 10-K for our fiscal year ended December 31, 2014.

ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable

ITEM 3 — DEFAULTS UPON SENIOR SECURITIES

Not applicable

ITEM 4 — MINE SAFETY DISCLOSURES

Not applicable

ITEM 5 — OTHER INFORMATION

Not applicable

ITEM 6 — EXHIBITS

(a) Exhibits

See Index to Exhibits at page 55 of this Quarterly Report on Form 10-Q.

53

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		BRIDGE CAPITAL HOLDINGS
Dated: May 11, 2015	By:	/s/ Daniel P. Myers
		Daniel P. Myers
		President and Chief Executive Officer
		(Principal Executive Officer)
Dated: May 11, 2015	By:	/s/ Thomas A. Sa
		Thomas A. Sa
		Executive Vice President
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

54

INDEX TO EXHIBITS

Exhibit
Number	Description of Exhibit
(31.1)	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(31.2)	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(32.1)	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350
(32.2)	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350
(101)	The following financial information from Bridge Capital Holdings Quarterly Report on Form 10-Q for the period ended March 31, 2015, filed with the SEC on May 11, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheet at March 31, 2015 and December 31, 2014, (ii)  the Consolidated Statement of Income for the three and nine month periods ended March 31, 2015 and 2014, (iii) the Consolidated Statement of Comprehensive Income for the three and nine month periods ended March 31, 2015 and 2014, (iv) the Consolidated Statement of Cash Flows for the three and nine month periods ended March 31, 2015 and 2014, and (v) Notes to Consolidated Financial Statements.

55

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO Rule 13a-14(a)/15(d)-14(a)

I, Daniel P. Myers, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bridge Capital Holdings for the quarter ended March 31, 2015;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,  fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the first quarter of 2015 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2015	/s/ Daniel P. Myers
	Daniel P. Myers
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO Rule 13a-14(a)/15(d)-14(a)

I, Thomas A. Sa, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Bridge Capital Holdings for the quarter ended March 31, 2015;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the first quarter of 2015 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2015	/s/ Thomas A. Sa
	Thomas A. Sa
	Executive Vice President
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying quarterly report on Form 10-Q of Bridge Capital Holdings for the quarter ended March 31, 2015, I, Daniel P. Myers, President and Chief Executive Officer of Bridge Capital Holdings, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1)such Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of Bridge Capital Holdings.

Date: May 11, 2015	/s/ Daniel P. Myers
	Daniel P. Myers
	President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the accompanying quarterly report on Form 10-Q of Bridge Capital Holdings for the quarter ended March 31, 2015, I, Thomas A. Sa, Executive Vice President and Chief Financial Officer of Bridge Capital Holdings, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1)such Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2)the information contained in such Report fairly presents, in all material respects, the financial condition and results of operations of Bridge Capital Holdings.

Date: May 11, 2015	/s/ Thomas A. Sa
	Thomas A. Sa
	Executive Vice President
	Chief Financial Officer
	(Principal Financial Officer)

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Stock-Based Compensation (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Weighted average assumptions
Expected life	75 months	75 months
Stock volatility (as a percent)	35.00%	35.00%
Risk free interest rate (as a percent)	1.96%	2.00%
Dividend yield (as a percent)	0.00%	0.00%
Fair value per share (in dollars per share)	$ 8.78	$ 9.17

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Loans (Details 5) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015 loan	Dec. 31, 2014
Impaired loans
Nonaccrual loans	$ 13,696,000	$ 7,853,000
Total impaired loans	18,007,000	17,090,000
Impaired loans, total legal contractual balances	20,600,000	20,900,000
Amount received in non-accrual interest	422,000	404,000
Impairment charges	2,200,000	3,400,000
Number of additional loans with legal contractual balances	21
Impaired loans, legal contractual balances of additional loans	15,000,000
Performing
Impaired loans
Trouble debt restructurings - performing	4,311,000	9,237,000
Nonaccrual | Loans categorized as impaired
Impaired loans
Trouble debt restructurings - performing	$ 1,300,000	$ 1,500,000

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Summary of Significant Accounting Policies (Details 2)	3 Months Ended
	Mar. 31, 2015 item
Securities
Number of categories in which investment securities are classified	3

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Fair Value of Financial Instruments (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Fair Value of Financial Instruments
Impaired loans	18,007	17,090
Other real estate owned	22	23
Commercial
Fair Value of Financial Instruments
Impaired loans	2,997	1,267
Real estate other
Fair Value of Financial Instruments
Impaired loans	6,476	11,603
Factoring and asset based lending
Fair Value of Financial Instruments
Impaired loans	4,735	197
SBA
Fair Value of Financial Instruments
Impaired loans	3,799	4,023
Other real estate property | SBA | Third party appraisal
Fair Value of Financial Instruments
Other real estate owned		9
Non-recurring | Commercial | Collateral valuation
Fair Value of Financial Instruments
Impaired loans	2,997
Non-recurring | Land loans | Third party appraisal
Fair Value of Financial Instruments
Other real estate owned	14
Non-recurring | Real estate other | Third party appraisal / property evaluation
Fair Value of Financial Instruments
Impaired loans	6,476
Non-recurring | Factoring and asset based lending | Collateral valuation
Fair Value of Financial Instruments
Impaired loans	4,735
Non-recurring | SBA | Third party appraisal
Fair Value of Financial Instruments
Other real estate owned	8
Non-recurring | SBA | Third party appraisal / property evaluation
Fair Value of Financial Instruments
Impaired loans	3,799
Non-recurring | Impaired loans
Fair Value of Financial Instruments
Impaired loans	18,007	17,090
Non-recurring | Impaired loans | Commercial
Fair Value of Financial Instruments
Impaired loans	2,997	1,267
Non-recurring | Impaired loans | Commercial | Discounted cash flow analysis
Fair Value of Financial Instruments
Impaired loans		1,267
Non-recurring | Impaired loans | Commercial | Discounted cash flow analysis | Maximum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)		25.00%
Non-recurring | Impaired loans | Commercial | Collateral valuation | Minimum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	25.00%
Non-recurring | Impaired loans | Commercial | Collateral valuation | Maximum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	70.00%
Non-recurring | Impaired loans | Real estate other
Fair Value of Financial Instruments
Impaired loans	6,476	11,603
Non-recurring | Impaired loans | Real estate other | Third party appraisal | Minimum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)		10.00%
Non-recurring | Impaired loans | Real estate other | Third party appraisal | Maximum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)		25.00%
Non-recurring | Impaired loans | Real estate other | Third party appraisal / property evaluation
Fair Value of Financial Instruments
Impaired loans		11,603
Non-recurring | Impaired loans | Real estate other | Third party appraisal / property evaluation | Minimum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	10.00%
Non-recurring | Impaired loans | Real estate other | Third party appraisal / property evaluation | Maximum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	20.00%
Non-recurring | Impaired loans | Factoring and asset based lending
Fair Value of Financial Instruments
Impaired loans	4,735	198
Non-recurring | Impaired loans | Factoring and asset based lending | Collateral valuation
Fair Value of Financial Instruments
Impaired loans		198
Non-recurring | Impaired loans | Factoring and asset based lending | Collateral valuation | Weighted-Average
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	30.00%	50.00%
Non-recurring | Impaired loans | SBA
Fair Value of Financial Instruments
Impaired loans	3,799	4,022
Non-recurring | Impaired loans | SBA | Third party appraisal / property evaluation
Fair Value of Financial Instruments
Impaired loans		4,022
Non-recurring | Impaired loans | SBA | Third party appraisal / property evaluation | Minimum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	15.00%	15.00%
Non-recurring | Impaired loans | SBA | Third party appraisal / property evaluation | Maximum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	70.00%	35.00%
Non-recurring | Other real estate property
Fair Value of Financial Instruments
Other real estate owned	22	23
Non-recurring | Other real estate property | Land loans
Fair Value of Financial Instruments
Other real estate owned	14	14
Non-recurring | Other real estate property | Land loans | Third party appraisal
Fair Value of Financial Instruments
Other real estate owned		14
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	25.00%
Non-recurring | Other real estate property | Land loans | Third party appraisal | Minimum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	15.00%	15.00%
Non-recurring | Other real estate property | Land loans | Third party appraisal | Maximum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)		25.00%
Non-recurring | Other real estate property | SBA
Fair Value of Financial Instruments
Other real estate owned	8	9
Non-recurring | Other real estate property | SBA | Third party appraisal | Minimum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	15.00%	15.00%
Non-recurring | Other real estate property | SBA | Third party appraisal | Maximum
Unobservable Inputs
Management adjustment to reflect current conditions and selling costs (as a percent)	25.00%	25.00%
Non-recurring | Level 2 | Other real estate property
Fair Value of Financial Instruments
Other real estate owned	22	23
Non-recurring | Level 2 | Other real estate property | Land loans
Fair Value of Financial Instruments
Other real estate owned	14	14
Non-recurring | Level 2 | Other real estate property | SBA
Fair Value of Financial Instruments
Other real estate owned	8	9
Non-recurring | Level 3 | Impaired loans
Fair Value of Financial Instruments
Impaired loans	18,007	17,090
Non-recurring | Level 3 | Impaired loans | Commercial
Fair Value of Financial Instruments
Impaired loans	2,997	1,267
Non-recurring | Level 3 | Impaired loans | Real estate other
Fair Value of Financial Instruments
Impaired loans	6,476	11,603
Non-recurring | Level 3 | Impaired loans | Factoring and asset based lending
Fair Value of Financial Instruments
Impaired loans	4,735	198
Non-recurring | Level 3 | Impaired loans | SBA
Fair Value of Financial Instruments
Impaired loans	3,799	4,022

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Premises and Equipment (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Premises and equipment
Cost	$ 16,716,000		$ 16,611,000
Accumulated Depreciation	(14,354,000)		(14,107,000)
Net Book Value	2,362,000		2,504,000
Depreciation and amortization	247,000	305,000
Minimum
Premises and equipment
Lease term	3 years
Estimated useful life	3 years
Maximum
Premises and equipment
Lease term	15 years
Estimated useful life	5 years
Leasehold improvements
Premises and equipment
Cost	7,116,000		7,103,000
Accumulated Depreciation	(5,833,000)		(5,753,000)
Net Book Value	1,283,000		1,350,000
Furniture and fixtures
Premises and equipment
Cost	1,356,000		1,331,000
Accumulated Depreciation	(1,114,000)		(1,097,000)
Net Book Value	242,000		234,000
Capitalized software
Premises and equipment
Cost	4,638,000		4,628,000
Accumulated Depreciation	(4,282,000)		(4,219,000)
Net Book Value	356,000		409,000
Equipment
Premises and equipment
Cost	3,606,000		3,549,000
Accumulated Depreciation	(3,125,000)		(3,038,000)
Net Book Value	$ 481,000		$ 511,000

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Securities

3 Months Ended

Mar. 31, 2015

Securities

Securities

3.Securities

As of March 31, 2015 and December 31, 2014, the Company had securities available for sale of $320.0 million and $352.2 million, respectively, and securities held to maturity of $12.6 million and $12.9 million, respectively.  The securities classified as held to maturity were being held for purposes of the Community Reinvestment Act.

The amortized cost and approximate fair values of securities as of March 31, 2015 and December 31, 2014 are as follows:

	As of March 31, 2015
			Gross Unrealized					Fair
(dollars in thousands)	Cost		Gains		Losses			Value
Securities available for sale
Debt securities:
U.S. government agencies	$	51,410	$	574	$	(133	)	$	51,851
Mortgage backed securities	235,216		3,642		(1,112		)	237,746
Corporate bonds	27,974		117		(9		)	28,082
Municipal bonds	2,434		—		(89		)	2,345
Total debt securities	317,034		4,333		(1,343		)	320,024
Total securities available for sale	$	317,034	$	4,333	$	(1,343	)	$	320,024
Securities held to maturity
Debt securities:
Mortgage backed securities	$	12,563	$	270	$	—		$	12,833
Total debt securities	12,563		270		—			12,833
Total securities held to maturity	$	12,563	$	270	$	—		$	12,833
Trading securities	$	—	$	—	$	—		$	—
Total investment securities	$	329,597	$	4,603	$	(1,343	)	$	332,857
	As of December 31, 2014
			Gross Unrealized					Fair
	Cost		Gains		Losses			Value
Securities available for sale
Debt securities:
U.S. government agencies	$	58,873	$	304	$	(589	)	$	58,588
Mortgage backed securities	261,931		3,375		(2,081		)	263,225
Corporate bonds	28,002		88		(13		)	28,077
Municipal bonds	2,435		—		(83		)	2,353
Total debt securities	351,241		3,767		(2,766		)	352,243
Total securities available for sale	$	351,241	$	3,767	$	(2,766	)	$	352,243
Securities held to maturity
Debt securities:
Mortgage backed securities	$	12,922	$	301	$	—		$	13,222
Total securities held to maturity	$	12,922	$	301	$	—		$	13,222
Total investment securities	$	364,163	$	4,068	$	(2,766	)	$	365,465

The scheduled maturities of investment securities at March 31, 2015 and December 31, 2014 were as follows:

Maturity of investment securities portfolio

	March 31, 2015
	Amortized		Fair
(dollars in thousands)	Cost		Value
Securities available for sale
Due in one year or less	$	4,865	$	4,858
Due after one year through five years	59,699		60,443
Due after five years through ten years	95,836		97,112
Due after ten years	156,634		157,611
Total securities available for sale	317,034		320,024
Securities held to maturity
Due in one year or less	$	6,623	$	6,632
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	5,940		6,201
Total securities held to maturity	12,563		12,833
Total investment securities	$	329,597	$	332,857

	December 31, 2014
	Amortized		Fair
(dollars in thousands)	Cost		Value
Securities available for sale	$	3,752	$	3,753
Due after one year through five years	71,779		72,591
Due after five years through ten years	110,893		110,894
Due after ten years	164,817		165,005
Total securities available for sale	351,241		352,243
Securities held to maturity
Due in one year or less	$	6,711	$	6,716
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	6,211		6,506
Total securities held to maturity	12,922		13,222
Total investment securities	$	364,163	$	365,465

As of March 31, 2015 and December 31, 2014, no investment securities were pledged as collateral.  As of March 31, 2015, $733,000 in unrealized losses was attributable to forty-four securities that had been in an unrealized loss position for less than 12 months.  As of December 31, 2014, $1.6 million in unrealized losses was attributable to sixty-four securities that had been in an unrealized loss position for less than 12 months. The unrealized losses were primarily due to the impact of long-term interest rates on the value of the mortgage-based investment securities. Because the Company had the ability to hold these investments and doesn’t intend to sell these investments until a recovery in fair value, which may be maturity, these investments were not considered to be other-than-temporarily impaired as of March 31, 2015 and December 31, 2014, respectively.

As of March 31, 2015, $610,000 in unrealized losses was attributable to twenty-one securities that had been in an unrealized loss position for greater than 12 months.  As of December 31, 2014, $1.2 million in unrealized losses was attributable to twenty-nine securities that had been in an unrealized loss position for greater than 12 months.  These unrealized losses, which had been in an unrealized loss position for one year or longer as of March 31, 2015 and December 31, 2014, were caused by market interest rate increases subsequent to the purchase of the securities or price fluctuations driven by volatility of the housing market conditions.  Because the Company had the ability to hold these investments and doesn’t intend to sell these investments until a recovery in fair value, which may be maturity, these investments were not considered to be other-than-temporarily impaired as of March 31, 2015 and December 31, 2014, respectively.

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Derivatives and Hedging Activities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Derivatives and Hedging Activities
Total hedged derivatives at fair value	$ 272	$ 416	$ 416
Derivatives Designated as Hedging Instruments | Interest rate contracts
Derivatives and Hedging Activities
Hedged derivatives at fair value, Other liabilities	$ 272	$ 416	$ 416

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Loans (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
Financing receivables
Total gross loans	$ 1,358,115	$ 1,311,313
Unearned fee income	(5,662)	(5,644)
Total loan portfolio	1,352,453	1,305,669
Less allowance for credit losses	(22,565)	(22,305)	(22,665)	(21,944)
Loans, net	1,329,888	1,283,364
Commercial
Financing receivables
Total gross loans	843,096	785,360
Less allowance for credit losses	(11,256)	(10,800)	(9,321)	(9,066)
Real estate construction
Financing receivables
Total gross loans	65,380	71,673
Less allowance for credit losses	(1,258)	(1,423)	(1,445)	(1,013)
Land loans
Financing receivables
Total gross loans	14,536	15,890
Less allowance for credit losses	(376)	(412)	(354)	(377)
Real estate other
Financing receivables
Total gross loans	146,597	139,624
Less allowance for credit losses	(2,211)	(2,131)	(2,695)	(2,857)
Factoring and asset based lending
Financing receivables
Total gross loans	156,806	167,513
Less allowance for credit losses	(5,492)	(5,185)	(6,335)	(6,136)
SBA
Financing receivables
Total gross loans	125,075	124,180
Less allowance for credit losses	(1,848)	(2,209)	(2,378)	(2,363)
Other
Financing receivables
Total gross loans	6,625	7,073
Less allowance for credit losses	$ (124)	$ (145)	$ (137)	$ (132)

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Securities (Details 2) (USD $)	Mar. 31, 2015 security	Dec. 31, 2014 security
Securities available for sale, Amortized Cost
Due in one year or less	$ 4,865,000	$ 3,752,000
Due after one year through five years	59,699,000	71,779,000
Due after five years through ten years	95,836,000	110,893,000
Due after ten years	156,634,000	164,817,000
Amortized Cost	317,034,000	351,241,000
Securities available for sale, Fair Value
Due in one year or less	4,858,000	3,753,000
Due after one year through five years	60,443,000	72,591,000
Due after five years through ten years	97,112,000	110,894,000
Due after ten years	157,611,000	165,005,000
Fair Value	320,024,000	352,243,000
Securities Held to Maturity, Amortized Cost
Due in one year or less	6,623,000	6,711,000
Due after ten years	5,940,000	6,211,000
Amortized Cost	12,563,000	12,922,000
Securities held to maturity, Fair Value
Due in one year or less	6,632,000	6,716,000
Due after ten years	6,201,000	6,506,000
Fair Value	12,833,000	13,222,000
Investment Securities
Fair Value	332,587,000	365,165,000
Held to Maturity and Available-for-sale
Held to maturity and available-for-sale securities, Amortized Cost	329,597,000	364,163,000
Held to maturity and available-for-sale securities, Fair Value	332,857,000	365,465,000
Unrealized loss positions
Unrealized losses attributable to securities that had been in an unrealized loss position for less than 12 months	733,000	1,600,000
Number of securities at unrealized loss position for less than 12 months	44	64
Unrealized losses attributable to securities that had been in an unrealized loss position for greater than 12 months	610,000	1,200,000
Number of securities at unrealized loss position for greater than 12 months	21	29
Trading Securities
Investment securities pledged as collateral	$ 0	$ 0

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Derivatives and Hedging Activities (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Credit Risk Related Contingent Features
Number of derivative counterparties that the company has an agreement with that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations	1
Aggregate fair value of derivatives with credit-risk-related contingent features, net liability position	$ 274,000
Collateral posted	1,200,000
Interest expense
Cash Flow Hedges of Interest Rate Risk
Estimated amount of interest rate cash flow hedge gain (loss) to be reclassified in the next 12 months	(223,000)
Cash flow hedges
Cash Flow Hedges of Interest Rate Risk
Hedge ineffectiveness recognized	0	0
Cash flow hedges | Interest rate swaps
Cash Flow Hedges of Interest Rate Risk
Number of derivative instruments held	1
Notional amount	5,200,000
Pre-tax gain/(loss) recorded in AOCI due to the effective portion of changes in fair value	$ (13,000)	$ (17,000)

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Loans (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Minimum period past due for the loans to be placed on nonaccrual status	90 days
Total gross loans	$ 1,358,115	$ 1,311,313
Commercial
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	843,096	785,360
Real estate construction
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	65,380	71,673
Land loans
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	14,536	15,890
Real estate other
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	146,597	139,624
Factoring and asset based lending
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	156,806	167,513
SBA
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	125,075	124,180
Other
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	6,625	7,073
Pass
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	1,313,791	1,266,360
Pass | Commercial
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	828,034	774,162
Pass | Real estate construction
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	65,380	71,673
Pass | Land loans
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	14,536	15,890
Pass | Real estate other
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	139,170	125,087
Pass | Factoring and asset based lending
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	143,412	159,907
Pass | SBA
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	116,634	112,568
Pass | Other
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	6,625	7,073
Special Mention
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	21,212	7,080
Special Mention | Commercial
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	9,204	3,844
Special Mention | Real estate other
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	2,848	1,693
Special Mention | Factoring and asset based lending
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	6,929	367
Special Mention | SBA
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	2,231	1,176
Substandard
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Minimum period past due for the loans to be placed on nonaccrual status	90 days
Total gross loans	9,416	30,020
Substandard | Commercial
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	2,861	6,087
Substandard | Real estate other
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	1,985	10,044
Substandard | Factoring and asset based lending
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	1,730	7,042
Substandard | SBA
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	2,840	6,847
Substandard (Nonaccrual)
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	13,696	7,853
Substandard (Nonaccrual) | Commercial
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	2,997	1,267
Substandard (Nonaccrual) | Real estate other
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	2,594	2,800
Substandard (Nonaccrual) | Factoring and asset based lending
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	4,735	197
Substandard (Nonaccrual) | SBA
Credit quality of the loan portfolio, based upon internally assigned risk ratings
Total gross loans	$ 3,370	$ 3,589

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Loans (Details 3) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Payment status of the loan portfolio
Maximum period for resolution of collection of past due secured loans for the loans to not be placed on nonaccrual status	90 days
Current	$ 1,344,402	$ 1,297,818
30-59 Days Past Due, Still Accruing	15	5,464
60-89 Days Past Due, Still Accruing	2	178
Nonaccrual	13,696	7,853
Total gross loans	1,358,115	1,311,313
Commercial
Payment status of the loan portfolio
Current	840,099	783,915
60-89 Days Past Due, Still Accruing		178
Nonaccrual	2,997	1,267
Total gross loans	843,096	785,360
Real estate construction
Payment status of the loan portfolio
Current	65,380	71,673
Total gross loans	65,380	71,673
Land loans
Payment status of the loan portfolio
Current	14,536	15,890
Total gross loans	14,536	15,890
Real estate other
Payment status of the loan portfolio
Current	144,003	136,824
Nonaccrual	2,594	2,800
Total gross loans	146,597	139,624
Factoring and asset based lending
Payment status of the loan portfolio
Current	152,071	161,854
30-59 Days Past Due, Still Accruing		5,462
Nonaccrual	4,735	197
Total gross loans	156,806	167,513
SBA
Payment status of the loan portfolio
Current	121,705	120,591
Nonaccrual	3,370	3,589
Total gross loans	125,075	124,180
Other
Payment status of the loan portfolio
Current	6,608	7,071
30-59 Days Past Due, Still Accruing	15	2
60-89 Days Past Due, Still Accruing	2
Total gross loans	$ 6,625	$ 7,073

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Earnings Per Share

3 Months Ended

Mar. 31, 2015

Earnings Per Share

Earnings Per Share

2.Earnings Per Share

Basic net earnings per share is computed by dividing net earnings applicable to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted net earnings per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and vesting of restricted stock.  Common stock equivalents are included in the diluted net earnings per share calculation to the extent these shares are dilutive.  A reconciliation of the numerator and denominator used in the calculation of basic and diluted net earnings per share available to common shareholders is as follows:

	Three months ended
(dollars in thousands,	March 31,
except per share amounts)	2015		2014
Net income	$	3,914	$	3,716
Weighted average shares:
Basic common shares	14,900,669		14,646,573
Diluted potential common shares related to stock options and restricted stock	742,771		816,076
Total average common equivalent shares	15,643,440		15,462,649
Basic earnings per share	$	0.26	$	0.25
Diluted earnings per share	$	0.25	$	0.24

There were 199,000 and 240,446 options to acquire common stock (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share for the three months ended March 31, 2015 and March 31, 2014, respectively, because to do so would have been anti-dilutive.

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Loans (Details 4) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015 loan	Mar. 31, 2014 loan	Dec. 31, 2014 loan
Loans categorized as a troubled debt restructurings
Number of loans classified as being split into separate loans with market terms and concessionary terms	1
Number of loans classified as troubled debt restructuring	12		14
Loans classified as troubled debt restructuring	$ 5,600,000		$ 10,800,000
Percentage of total gross loans representing troubled debt restructurings	0.40%		1.20%
Additional loans modified and designated as troubled debt restructurings	0	0
Represents the period in which a loan is considered to be in payment default under modified terms	90 days
Number of loans classified as a performing troubled debt restructuring	1
Loans modified within the last twelve months that defaulted	0
Pre-Modification Investment	6,459,000		11,636,000
Post-Modification Investment	5,621,000		10,753,000
Performing
Loans categorized as a troubled debt restructurings
Pre-Modification Investment	4,944,000		9,921,000
Post-Modification Investment	4,311,000		9,237,000
Nonaccrual
Loans categorized as a troubled debt restructurings
Pre-Modification Investment	1,515,000		1,715,000
Post-Modification Investment	1,310,000		1,516,000
Real estate other
Loans categorized as a troubled debt restructurings
Number of loans classified as troubled debt restructuring	10		12
Pre-Modification Investment	6,017,000		11,194,000
Post-Modification Investment	5,192,000		10,319,000
Real estate other | Performing
Loans categorized as a troubled debt restructurings
Pre-Modification Investment	4,502,000		9,479,000
Post-Modification Investment	3,882,000		8,803,000
Real estate other | Nonaccrual
Loans categorized as a troubled debt restructurings
Pre-Modification Investment	1,515,000		1,715,000
Post-Modification Investment	1,310,000		1,516,000
SBA
Loans categorized as a troubled debt restructurings
Number of loans classified as troubled debt restructuring	2		2
Pre-Modification Investment	442,000		442,000
Post-Modification Investment	429,000		434,000
SBA | Performing
Loans categorized as a troubled debt restructurings
Pre-Modification Investment	442,000		442,000
Post-Modification Investment	$ 429,000		$ 434,000

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Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Financial assets:
Cash and due from banks	$ 29,969	$ 21,950
Federal funds sold	121,028	75,420
Interest bearing deposits in other banks	326	326
Investments securities	332,587	365,165
Financial liabilities:
Trust preferred securities	17,527	17,527
Other Borrowings	0	40,000
Level 1
Financial assets:
Cash and due from banks	29,969	21,950
Federal funds sold	121,028	75,420
Interest bearing deposits in other banks	326	326
Financial liabilities:
Deposits	1,150,911	1,070,293
Other Borrowings		40
Level 2
Financial assets:
Investments securities	332,857	365,465
Financial liabilities:
Deposits	501,449	476,078
Cash flow hedge	272	416
Level 3
Financial assets:
Loans and leases, net of unearned fees	1,349,880	1,303,629
Warrant portfolio	377	375
Financial liabilities:
Trust preferred securities	17,430	17,431
Carrying Value
Financial assets:
Cash and due from banks	29,969	21,950
Federal funds sold	121,028	75,420
Interest bearing deposits in other banks	326	326
Investments securities	332,587	365,165
Loans and leases, net of unearned fees	1,352,453	1,305,669
Warrant portfolio	377	375
Financial liabilities:
Deposits	1,655,845	1,549,545
Trust preferred securities	17,527	17,527
Other Borrowings		40
Cash flow hedge	272	416
Total
Financial assets:
Cash and due from banks	29,969	21,950
Federal funds sold	121,028	75,420
Interest bearing deposits in other banks	326	326
Investments securities	332,857	365,465
Loans and leases, net of unearned fees	1,349,880	1,303,629
Warrant portfolio	377	375
Financial liabilities:
Deposits	1,652,360	1,546,371
Trust preferred securities	17,430	17,431
Other Borrowings		40
Cash flow hedge	$ 272	$ 416

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets
Cash and due from banks	$ 29,969	$ 21,950
Federal funds sold	121,028	75,420
Total cash and equivalents	150,997	97,370
Interest bearing deposits in other banks	326	326
Investment securities:
Available for sale	320,024	352,243
Held to maturity	12,563	12,922
Total investment securities	332,587	365,165
Loans, net of allowance for credit losses of $22,565 at March 31, 2015 and $22,305 at December 31, 2014	1,329,888	1,283,364
Premises and equipment, net	2,362	2,504
Other real estate owned	22	23
Accrued interest receivable	5,178	4,989
Other assets	60,839	60,381
Total assets	1,882,199	1,814,122
Deposits:
Demand noninterest-bearing	1,132,231	1,051,357
Demand interest-bearing	14,362	15,492
Money Market and savings	472,475	450,873
Time	36,777	31,823
Total deposits	1,655,845	1,549,545
Junior subordinated debt securities	17,527	17,527
Other borrowings	0	40,000
Accrued interest payable	9	8
Other liabilities	16,194	19,935
Total liabilities	1,689,575	1,627,015
SHAREHOLDERS? EQUITY
Preferred stock, no par value; 10,000,000 shares authorized; no shares outstanding at March 31, 2015 and December 31, 2014
Common stock, no par value; 30,000,000 shares authorized; 15,940,819 shares issued and outstanding at March 31, 2015; 15,970,506 shares issued and outstanding at December 31, 2013;	117,731	117,321
Retained earnings	73,461	69,547
Accumulated other comprehensive income (loss)	1,432	239
Total shareholders' equity	192,624	187,107
Total liabilities and shareholders' equity	$ 1,882,199	$ 1,814,122

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,914	$ 3,716
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provision for credit losses		500
Depreciation and amortization	247	305
Write down of other real estate owned	1	8
Net (gain) on sale of loans	(195)	(213)
Deferred income tax (credit)	(827)	(654)
Stock based compensation	1,028	903
Loans originated for sale	(8,663)	(10,080)
Proceeds from loan sales	2,859	3,158
Net (gain) on sale of securities	(306)	(5)
(Increase) decrease in accrued interest receivable and other assets	(647)	(2,782)
Increase in accrued interest payable and other liabilities	(3,584)	(2,376)
Net cash provided by used in operating activities	(6,173)	(7,520)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of securities available for sale		(8,794)
Proceeds from sale of available for sale and trading securities	22,681	22,193
Proceeds from maturity of securities available for sale	12,067	13,852
Net increase in loans	(40,525)	(59,799)
Purchase of fixed assets	(105)	(1,074)
Net cash used in investing activities	(5,882)	(33,622)
CASH FLOW FROM FINANCING ACTIVITIES:
Net increase in deposits	106,300	9,864
Proceeds from issuance of common stock	99	626
Purchase of treasury stock	(717)	(1,162)
Net cash provided by financing activities	65,682	9,328
Increase (decrease) in other borrowings	(40,000)
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS:	53,627	(31,814)
Cash and equivalents at beginning of period	97,370	186,337
Cash and equivalents at end of period	150,996	154,523
OTHER CASH FLOW INFORMATION:
Cash paid for interest	534	615
Cash paid for income taxes	$ 3,600	$ 5,700

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Loans (Details 7) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015 loan	Dec. 31, 2014 loan	Mar. 31, 2014	Dec. 31, 2013
Loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses
Individually Evaluated For Impairment, Loans	$ 18,007,000	$ 17,090,000
Individually Evaluated For Impairment, Allowance	1,437,000	476,000
Collectively Evaluated For Impairment, Loans	1,340,108,000	1,294,223,000
Collectively Evaluated For Impairment, Allowance	21,128,000	21,829,000
Total Evaluated For Impairment, Loans	1,358,115,000	1,311,313,000
Total Evaluated For Impairment, Allowance	22,565,000	22,305,000	22,665,000	21,944,000
Commercial
Loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses
Individually Evaluated For Impairment, Loans	2,997,000	1,267,000
Individually Evaluated For Impairment, Allowance	306,000	350,000
Collectively Evaluated For Impairment, Loans	840,099,000	784,093,000
Collectively Evaluated For Impairment, Allowance	10,950,000	10,450,000
Total Evaluated For Impairment, Loans	843,096,000	785,360,000
Total Evaluated For Impairment, Allowance	11,256,000	10,800,000	9,321,000	9,066,000
Number of real estate loans individually evaluated for impairment	3	1
Individually evaluated for impairment, associated allowance	1,200,000	422,000
Real estate construction
Loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses
Collectively Evaluated For Impairment, Loans	65,380,000	71,673,000
Collectively Evaluated For Impairment, Allowance	1,258,000	1,423,000
Total Evaluated For Impairment, Loans	65,380,000	71,673,000
Total Evaluated For Impairment, Allowance	1,258,000	1,423,000	1,445,000	1,013,000
Land loans
Loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses
Collectively Evaluated For Impairment, Loans	14,536,000	15,890,000
Collectively Evaluated For Impairment, Allowance	376,000	412,000
Total Evaluated For Impairment, Loans	14,536,000	15,890,000
Total Evaluated For Impairment, Allowance	376,000	412,000	354,000	377,000
Real estate other
Loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses
Individually Evaluated For Impairment, Loans	6,476,000	11,603,000
Individually Evaluated For Impairment, Allowance	268,000	126,000
Collectively Evaluated For Impairment, Loans	140,121,000	128,021,000
Collectively Evaluated For Impairment, Allowance	1,943,000	2,005,000
Total Evaluated For Impairment, Loans	146,597,000	139,624,000
Total Evaluated For Impairment, Allowance	2,211,000	2,131,000	2,695,000	2,857,000
Number of real estate loans individually evaluated for impairment	10	10
Individually evaluated for impairment, associated allowance	5,200,000	3,500,000
Factoring and asset based lending
Loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses
Individually Evaluated For Impairment, Loans	4,735,000	197,000
Individually Evaluated For Impairment, Allowance	863,000
Collectively Evaluated For Impairment, Loans	152,071,000	167,316,000
Collectively Evaluated For Impairment, Allowance	4,629,000	5,185,000
Total Evaluated For Impairment, Loans	156,806,000	167,513,000
Total Evaluated For Impairment, Allowance	5,492,000	5,185,000	6,335,000	6,136,000
SBA
Loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses
Individually Evaluated For Impairment, Loans	3,799,000	4,023,000
Collectively Evaluated For Impairment, Loans	121,276,000	120,157,000
Collectively Evaluated For Impairment, Allowance	1,848,000	2,209,000
Total Evaluated For Impairment, Loans	125,075,000	124,180,000
Total Evaluated For Impairment, Allowance	1,848,000	2,209,000	2,378,000	2,363,000
Other
Loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses
Collectively Evaluated For Impairment, Loans	6,625,000	7,073,000
Collectively Evaluated For Impairment, Allowance	124,000	145,000
Total Evaluated For Impairment, Loans	6,625,000	7,073,000
Total Evaluated For Impairment, Allowance	$ 124,000	$ 145,000	$ 137,000	$ 132,000

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value of Financial Instruments

Schedule of carrying amount and estimated fair value of certain assets and liabilities

	As of March 31, 2015
	Carrying								Fair
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and due from banks	$	29,969	$	29,969	$	—	$	—	$	29,969
Federal funds sold	121,028		121,028		—		—		121,028
Interest bearing deposits in other banks	326		326		—		—		326
Investments securities	332,587		—		332,857		—		332,857
Loans and leases, net of unearned fees	1,352,453		—		—		1,349,880		1,349,880
Warrant portfolio	377		—		—		377		377
Financial liabilities:
Deposits	1,655,845		1,150,911		501,449		—		1,652,360
Junior subordinated debt securities	17,527		—		—		17,430		17,430
Cash flow hedge	272		—		272		—		272

	As of December 31, 2014
	Carrying								Fair
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and due from banks	$	21,950	$	21,950	$	—	$	—	$	21,950
Federal funds sold	75,420		75,420		—		—		75,420
Interest bearing deposits in other banks	326		326		—		—		326
Investments securities	365,165		—		365,465		—		365,465
Loans and leases, net of unearned fees	1,305,669		—		—		1,303,629		1,303,629
Warrant portfolio	375		—		—		375		375
Financial liabilities:
Deposits	1,549,545		1,070,293		476,078		—		1,546,371
Trust preferred securities	17,527		—		—		17,431		17,431
Other borrowings	40,000		40,000		—		—		40,000
Cash flow hedge	416		—		416		—		416

Schedule of assets and liabilities measured at fair value on a recurring basis

	As of March 31, 2015
(dollars in thousands)	Total			Level 1		Level 2			Level 3
Securities available for sale
U.S. government agencies	$	51,851		$	—	$	51,851		$	—
Mortgage backed securities	237,746			—		237,746			—
Corporate bonds	28,082			—		28,082			—
Municipal bonds	2,345			—		2,345			—
Warrant portfolio	377			—		—			377
Cash flow hedge	(272		)	—		(272		)	—
Total	$	320,129		$	—	$	319,752		$	377

	As of December 31, 2014
	Total			Level 1		Level 2			Level 3
Securities available for sale
U.S. government agencies	$	58,588		$	—	$	58,588		$	—
Mortgage backed securities	263,225					263,225			—
Corporate bonds	28,077					28,077			—
Municipal bonds	2,352					2,352			—
Warrant portfolio	375			—		—			375
Cash flow hedge	(416		)	—		(416		)	—
Total	$	352,201		$	—	$	351,826		$	375

Schedule of assets measured at fair value on a non-recurring basis

	As of March 31, 2015
	Quoted Prices In		Significant		Significant
	Active Markets		Observable		Unobservable
	for Identical Assets		Inputs		Inputs
(dollar in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Impaired loans:
Commercial	$	—	$	—	$	2,997	$	2,997
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	—		—		6,476		6,476
Factoring and asset based	—		—		4,735		4,735
SBA	—		—		3,799		3,799
Other	—		—		—		—
Total impaired loans	$	—	$	—	$	18,007	$	18,007
Other real estate owned:
Commercial	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—
Land loans	—		14		—		14
Real estate other	—		—		—		—
Factoring and asset based	—		—		—		—
SBA	—		8		—		8
Other	—		—		—		—
Total other real estate owned	$	—	$	22	$	—	$	22

	As of December 31, 2014
	Quoted Prices In		Significant		Significant
	Active Markets		Observable		Unobservable
	for Identical Assets		Inputs		Inputs
(dollar in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Impaired loans:
Commercial	$	—	$	—	$	1,267	$	1,267
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	—		—		11,603		11,603
Factoring and asset based	—		—		198		198
SBA	—		—		4,022		4,022
Other	—		—		—		—
Total impaired loans	$	—	$	—	$	17,090	$	17,090
Other real estate owned:
Commercial	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—
Land loans	—		14		—		14
Real estate other	—		—		—		—
Factoring and asset based	—		—		—		—
SBA	—		9		—		9
Other	—		—		—		—
Total other real estate owned	$	—	$	23	$	—	$	23

Schedule of quantitative information about level 3 of fair value measurements for financial instruments measured at fair value on a non-recurring basis

	As of March 31, 2015
					Range
	Fair		Valuation	Unobservable	(Weighted
	Value		Techniques	Inputs	Average)
Impaired loans:
Commercial	$	2,997	Collateral valuation	Management adjustment to reflect current conditions and selling costs	25-70%
Real estate other	6,476		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	10-20%
Factoring and asset based	4,735		Collateral valuation	Management adjustment to reflect current conditions and selling costs	30%
SBA	3,799		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	15-70%
Total impaired loans	$	18,007
Other real estate owned:
Commercial	$	—
Real estate construction	—
Land loans	14		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Real estate other	—
Factoring and asset based	—
SBA	8		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Other	—
Total other real esate owned	$	22

	As of December 31, 2014
					Range
	Fair		Valuation	Unobservable	(Weighted-
	Value		Techniques	Inputs	Average)
Impaired loans:
Commercial	$	1,267	Discounted cash flow analysis	Management adjustment to reflect current conditions and selling costs	25%
Real estate other	11,603		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	10-25%
Factoring and asset based	198		Collateral valuation	Management adjustment to reflect current conditions and selling costs	50%
SBA	4,022		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	15-35%
Total impaired loans	$	17,090
Other real estate owned:
Land loans	$	14	Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
SBA	9		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Total other real estate owned	$	23

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Loans (Details 8) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Change in allowance for loan losses during the period
Balance at the beginning of the period	$ 22,305	$ 21,944
Provision charged to expense		500
Charge-offs	(93)	(465)
Recoveries	353	686
Balance, end of period	22,565	22,665
Commercial
Change in allowance for loan losses during the period
Balance at the beginning of the period	10,800	9,066
Provision charged to expense	518	(203)
Charge-offs	(93)
Recoveries	31	458
Balance, end of period	11,256	9,321
Real estate construction
Change in allowance for loan losses during the period
Balance at the beginning of the period	1,423	1,013
Provision charged to expense	(165)	432
Balance, end of period	1,258	1,445
Land loans
Change in allowance for loan losses during the period
Balance at the beginning of the period	412	377
Provision charged to expense	(36)	(43)
Recoveries		20
Balance, end of period	376	354
Real estate other
Change in allowance for loan losses during the period
Balance at the beginning of the period	2,131	2,857
Provision charged to expense	60	(162)
Recoveries	20
Balance, end of period	2,211	2,695
Factoring and asset based lending
Change in allowance for loan losses during the period
Balance at the beginning of the period	5,185	6,136
Provision charged to expense	42	477
Charge-offs		(430)
Recoveries	265	152
Balance, end of period	5,492	6,335
SBA
Change in allowance for loan losses during the period
Balance at the beginning of the period	2,209	2,363
Provision charged to expense	(398)	(6)
Charge-offs		(35)
Recoveries	37	56
Balance, end of period	1,848	2,378
Other
Change in allowance for loan losses during the period
Balance at the beginning of the period	145	132
Provision charged to expense	(21)	5
Balance, end of period	$ 124	$ 137

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Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014	Dec. 31, 2014
Stock-Based Compensation
Stock-based compensation expense	$ 1,000,000	$ 903,000
Stock-based compensation expense, net of tax	641,000	570,000
Unrecognized compensation cost	10,800,000
Stock-based compensation costs capitalized as part of cost of asset	0		0
Unrecognized compensation cost, weighted-average period for recognition	3 years 3 months 18 days
Comprehensive Income
Cumulative other Comprehensive Income (loss), net of tax	$ 1,432,000		$ 239,000
Segments of an Enterprise and Related Information
Number of operating segments	1

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

1.Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited financial statements of Bridge Capital Holdings and Bridge Bank, N.A. (the Company) have been prepared in accordance with generally accepted accounting principles and pursuant to the rules and regulations of the SEC.  The interim financial data as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 is unaudited; however, in the opinion of the Company, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.  Certain information and note disclosures normally included in annual financial statements have been omitted pursuant to SEC rules and regulations; however, the Company believes the disclosures made are adequate to ensure that the information presented is not misleading.  Results of operations for the quarters ended March 31, 2015 and 2014, respectively, are not necessarily indicative of full year results.

The comparative balance sheet information as of December 31, 2014 is derived from the audited financial statements; however, it does not include all disclosures required by accounting principles generally accepted in the United States of America.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities as of the dates and for the periods presented.  A significant estimate included in the accompanying financial statements is the allowance for loan losses.  Actual results could differ from those estimates.

Recent Accounting Pronouncements

Financial Accounting Standards Board Accounting Standards Update (FASB ASU) 2015-04, Compensation — Retirement Benefits (“Topic 715”), The amendments in this Update would provide a practical expedient for employers with fiscal year-ends that do not fall on a month-end by permitting those employers to measure defined benefit plan assets and obligations as of the month-end that is closest to the entity’s fiscal year-end. ASU No. 2015-04 is effective for the first interim or annual period beginning after December 15, 2015. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

Financial Accounting Standards Board Accounting Standards Update (FASB ASU) 2015-01, Income Statement — Extraordinary and Unusual Items (“Subtopic 225-20”)  — The objective of this Update is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. ASU No. 2015-01 is effective for the first interim or annual period beginning after December 15, 2015. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

Earnings Per Share

Basic net income per share is computed by dividing net income applicable to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted net income per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and vesting of restricted stock.  Common stock equivalents are included in the diluted net income per share calculation to the extent these shares are dilutive.  See Note 2 to the financial statements for additional information on earnings per share.

Stock-Based Compensation

The Company has adopted guidance issued by the FASB that clarifies the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.  The Company uses the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair-value of stock-based awards.  The Company recorded $1.0 million ($641,000 net of tax) of stock-based compensation expense during the three months ended March 31, 2015, and recorded $903,000 ($570,000 net of tax) of stock-based compensation expense during the three months ended March 31, 2014, as a result of the adoption of the guidance issued by the FASB.

No stock-based compensation costs were capitalized as part of the cost of an asset as of March 31, 2015 and December 31, 2014.  As of March 31, 2015, $10.8 million of total unrecognized compensation cost related to stock options and restricted stock units is expected to be recognized over a weighted-average period of 3.1 years.

Comprehensive Income

The Company has adopted accounting guidance issued by the FASB that requires all items recognized under accounting standards as components of comprehensive earnings be reported in an annual financial statement that is displayed with the same prominence as other annual financial statements. This Statement also requires that an entity classify items of other comprehensive earnings by their nature in an annual financial statement.  Other comprehensive earnings include an adjustment to fully recognize the liability associated with the supplemental executive retirement plan, unrealized gains and losses, net of tax, on cash flow hedges, and unrealized gains and losses, net of tax, on marketable securities classified as available-for-sale.  The Company had accumulated other comprehensive income totaling $1.4 million, net of tax, as of March 31, 2015 and accumulated other comprehensive income totaling $239,000, net of tax, as of December 31, 2014.

Fair Value Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Current accounting guidance establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There is a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable and the significance of those inputs in the fair value measurement. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data and views of market participants. The three levels for measuring fair value are based on the reliability of inputs.

See Note 8 to the financial statements for more information and disclosures relating to the Company’s fair value measurements.

Securities

The Company classifies its investment securities into three categories, available for sale, held to maturity, or trading securities, at the time of purchase. Securities available for sale are reported at fair value with unrealized holding gains and/or losses, net of tax, recorded as a separate component of shareholders’ equity.  Securities held to maturity are measured at amortized cost based on the Company’s positive intent and ability to hold the securities to maturity.

Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the effective interest method. Dividend and interest income is recognized when earned.  Gains and losses on sales of securities are computed on a specific identification basis.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: OTTI related to credit loss, which must be recognized in the income statement and; OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of OTTI is recognized through earnings.

Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general reserves.  Specific reserves primarily relate to loans that are individually classified as impaired, but may also relate to loans that in management’s opinion exhibit negative credit characteristics or trends suggesting potential future loss exposure greater than historical loss experience would suggest. It is currently the Company’s practice to immediately charge-off any identified financial loss pertaining to impaired loans when management believes the uncollectibility of the loan is confirmed, therefore specific reserves are uncommon.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans, for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are generally considered troubled debt restructurings and classified as impaired.

Generally Accepted Accounting Principles specify that if a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.  However, it is currently the Company’s practice to immediately charge-off any identified financial loss pertaining to impaired loans when management believes the uncollectibility of the loans has been confirmed. See Note 4 to the financial statements for additional information on impaired loans.

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using an appropriate discount rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.  See Note 4 to the financial statements for additional information on troubled debt restructurings.

General reserves cover non-impaired loans and are based on historical loss rates for each portfolio segment, adjusted for the effects of qualitative or environmental factors that are likely to cause estimated credit losses as of the evaluation date to differ from the portfolio segment’s historical loss experience. Qualitative factors include consideration of the following: changes in lending policies and procedures; changes in economic conditions, changes in the nature and volume of the portfolio; changes in the experience, ability and depth of lending management and other relevant staff; changes in the volume and severity of past due, nonaccrual and other adversely graded loans; changes in the loan review system; changes in the value of the underlying collateral for collateral-dependent loans; concentrations of credit and the effect of other external factors such as competition and legal and regulatory requirements.

Portfolio segments identified by the Company include commercial, real estate construction, land, real estate other, factoring and asset-based lending, SBA, and consumer loans.  Relevant risk characteristics for these portfolio segments generally include debt service coverage, loan-to-value ratios and financial performance on non-consumer loans and credit scores, debt-to income, collateral type and loan-to-value ratios for consumer loans.

Segment Information

The Company has adopted accounting guidance issued by the FASB that requires certain information about the operating segments of the Company.  The objective of requiring disclosures about segments of an enterprise and related information is to provide information about the different types of business activities in which an enterprise engages and the different economic environment in which it operates to help users of financial statements better understand its performance, better assess its prospects for future cash flows and make more informed judgments about the enterprise as a whole.  The Company has determined that it has one segment, general commercial banking, and therefore, it is appropriate to aggregate the Company’s operations into a single operating segment.

Derivative Instruments and Hedging Activities

The Company has adopted guidance issued by the FASB that clarifies the disclosure requirements for derivative instruments and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. The guidance requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by the guidance, the Company records all derivatives on the balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualified as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and that qualify as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.  The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting under current accounting guidance.  See Note 9 to the financial statements for additional information on derivative instruments and hedging activities.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Consolidated Balance Sheets
Loans, allowance for credit losses (in dollars)	$ 22,565	$ 22,305
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	15,940,819	15,970,506
Common stock, shares outstanding	15,940,819	15,970,506

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2015

Earnings Per Share

Schedule of reconciliation of the numerator and denominator used in calculation of basic and diluted net earnings per share available to common shareholders

	Three months ended
(dollars in thousands,	March 31,
except per share amounts)	2015		2014
Net income	$	3,914	$	3,716
Weighted average shares:
Basic common shares	14,900,669		14,646,573
Diluted potential common shares related to stock options and restricted stock	742,771		816,076
Total average common equivalent shares	15,643,440		15,462,649
Basic earnings per share	$	0.26	$	0.25
Diluted earnings per share	$	0.25	$	0.24

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 01, 2015
Document and Entity Information
Entity Registrant Name	Bridge Capital Holdings
Entity Central Index Key	0001304740
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		15,947,284
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Securities (Tables)

3 Months Ended

Mar. 31, 2015

Securities

Schedule of amortized cost and estimated fair values of securities

	As of March 31, 2015
			Gross Unrealized					Fair
(dollars in thousands)	Cost		Gains		Losses			Value
Securities available for sale
Debt securities:
U.S. government agencies	$	51,410	$	574	$	(133	)	$	51,851
Mortgage backed securities	235,216		3,642		(1,112		)	237,746
Corporate bonds	27,974		117		(9		)	28,082
Municipal bonds	2,434		—		(89		)	2,345
Total debt securities	317,034		4,333		(1,343		)	320,024
Total securities available for sale	$	317,034	$	4,333	$	(1,343	)	$	320,024
Securities held to maturity
Debt securities:
Mortgage backed securities	$	12,563	$	270	$	—		$	12,833
Total debt securities	12,563		270		—			12,833
Total securities held to maturity	$	12,563	$	270	$	—		$	12,833
Trading securities	$	—	$	—	$	—		$	—
Total investment securities	$	329,597	$	4,603	$	(1,343	)	$	332,857
	As of December 31, 2014
			Gross Unrealized					Fair
	Cost		Gains		Losses			Value
Securities available for sale
Debt securities:
U.S. government agencies	$	58,873	$	304	$	(589	)	$	58,588
Mortgage backed securities	261,931		3,375		(2,081		)	263,225
Corporate bonds	28,002		88		(13		)	28,077
Municipal bonds	2,435		—		(83		)	2,353
Total debt securities	351,241		3,767		(2,766		)	352,243
Total securities available for sale	$	351,241	$	3,767	$	(2,766	)	$	352,243
Securities held to maturity
Debt securities:
Mortgage backed securities	$	12,922	$	301	$	—		$	13,222
Total securities held to maturity	$	12,922	$	301	$	—		$	13,222
Total investment securities	$	364,163	$	4,068	$	(2,766	)	$	365,465

Schedule maturities of investment securities available for sale

	March 31, 2015
	Amortized		Fair
(dollars in thousands)	Cost		Value
Securities available for sale
Due in one year or less	$	4,865	$	4,858
Due after one year through five years	59,699		60,443
Due after five years through ten years	95,836		97,112
Due after ten years	156,634		157,611
Total securities available for sale	317,034		320,024
Securities held to maturity
Due in one year or less	$	6,623	$	6,632
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	5,940		6,201
Total securities held to maturity	12,563		12,833
Total investment securities	$	329,597	$	332,857

	December 31, 2014
	Amortized		Fair
(dollars in thousands)	Cost		Value
Securities available for sale	$	3,752	$	3,753
Due after one year through five years	71,779		72,591
Due after five years through ten years	110,893		110,894
Due after ten years	164,817		165,005
Total securities available for sale	351,241		352,243
Securities held to maturity
Due in one year or less	$	6,711	$	6,716
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	6,211		6,506
Total securities held to maturity	12,922		13,222
Total investment securities	$	364,163	$	365,465

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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
INTEREST INCOME:
Loans	$ 19,596	$ 17,047
Federal funds sold	73	78
Investment securities	1,792	1,502
Total interest income	21,461	18,627
Deposits:
Interest-bearing demand	1	1
Money market and savings	208	277
Certificates of deposit	50	60
Other	255	269
Total interest expense	514	607
Net interest income	20,947	18,020
Provision for credit losses		500
Net interest income after provision for credit losses	20,947	17,520
NON-INTEREST INCOME:
Service charges on deposit accounts	995	916
International fee income	841	761
Gain on sale of SBA loans	195	213
Gain on sale of securities	306	5
Other non-interest income	936	853
Total non-interest income	3,273	2,748
OPERATING EXPENSES:
Salaries and benefits	10,620	9,015
Premises and fixed assets	1,272	1,238
Merger related expenses	1,191
Other operating expenses	4,261	3,794
Total operating expenses	17,344	14,047
Income before income taxes	6,876	6,221
Income taxes	2,962	2,505
Net income	$ 3,914	$ 3,716
Basic income per share (in dollars per share)	$ 0.26	$ 0.25
Diluted income per share (in dollars per share)	$ 0.25	$ 0.24
Average common shares outstanding (in shares)	14,900,669	14,646,573
Average common and equivalent shares outstanding (in shares)	15,643,440	15,462,649

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Junior Subordinated Debt Securities and Other Borrowings

3 Months Ended

Mar. 31, 2015

Junior Subordinated Debt Securities and Other Borrowings

Junior Subordinated Debt Securities and Other Borrowings

6.Junior Subordinated Debt Securities and Other Borrowings

Junior Subordinated Debt Securities

On December 21, 2004, the Company issued $12,372,000 of junior subordinated debt securities (the “debt securities”) to Bridge Capital Trust I, a statutory trust created under the laws of the State of Delaware.  These debt securities are subordinated to effectively all borrowings of the Company and are due and payable in March 2035.  Interest was payable quarterly on these debt securities at a fixed rate of 5.90% for the first five years, and thereafter interest accrues at LIBOR plus 1.98%. In April of 2008, the Company entered into an interest rate swap agreement to fix the variable cash outflows associated with the debt securities to Bridge Capital Trust I for an additional five years at 6.11%.  See “Footnote 9 - Derivatives and Hedging Activities” for further discussion. The debt securities can be redeemed at par at the Company’s option beginning in March 2010; they can also be redeemed at par if certain events occur that impact the tax treatment or the capital treatment of the issuance.

The Company also purchased a 3% minority interest in the Trust.  The balance of the equity of the Trust is comprised of mandatorily redeemable preferred securities.

On March 30, 2006 the Company issued $5,155,000 of junior subordinated debt securities (the “debt securities”) to Bridge Capital Trust II, a statutory trust created under the laws of the State of Delaware.  These debt securities are subordinated to effectively all borrowings of the Company and are due and payable in March 2037.  Interest was payable quarterly on these debt securities at a fixed rate of 6.60% for the first five years, and thereafter interest accrues at LIBOR plus 1.38%. In September of 2008, the Company entered into an interest rate swap agreement to fix the variable cash outflows associated with the debt securities to Bridge Capital Trust II for an additional five years at 6.09%. See “Footnote 9 - Derivatives and Hedging Activities” for further discussion.   The debt securities can be redeemed at par at the Company’s option beginning in April 2011; they can also be redeemed at par if certain events occur that impact the tax treatment or the capital treatment of the issuance.

The Company also purchased a 3% minority interest in the Trust.  The balance of the equity of the Trust is comprised of mandatorily redeemable preferred securities.

Based upon accounting guidance, these Trusts are not consolidated into the company’s financial statements.  The Federal Reserve Board has ruled that subordinated notes payable to unconsolidated special purpose entities (“SPE’s”) such as these Trusts, net of the bank holding company’s investment in the SPE, qualify as Tier 1 Capital, subject to certain limits.

Other Borrowings

There were no other borrowings at March 31, 2015. At December 31, 2014, the Company had $40.0 million in other borrowings.

As of March 31, 2015, the Company had a total borrowing capacity with the Federal Home Loan Bank of San Francisco of approximately $443.0 million for which the Company had collateral in place to borrow $136.0 million.  As of March 31, 2015, $10.0 million of this borrowing capacity was pledged to secure a letter of credit.

The Company also has unsecured borrowing lines with correspondent banks totaling $47.0 million.  At March 31, 2015, there were no balances outstanding on these lines.

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Premises and Equipment

3 Months Ended

Mar. 31, 2015

Premises and Equipment

Premises and Equipment

5.Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization.  Depreciation and amortization are computed on a straight-line basis over the shorter of the lease term, generally three to fifteen years, or the estimated useful lives of the assets, generally three to five years.

Premises and equipment at March 31, 2015 and December 31, 2014 were comprised of the following:

	March 31, 2015
			Accumulated			Net Book
(dollars in thousands)	Cost		Depreciation			Value
Leasehold improvements	$	7,116	$	(5,833	)	$	1,283
Furniture and fixtures	1,356		(1,114		)	242
Capitalized software	4,638		(4,282		)	356
Equipment	3,606		(3,125		)	481
Total premises and equipment	$	16,716	$	(14,354	)	$	2,362

	December 31, 2014
			Accumulated			Net book
(dollars in thousands)	Cost		Depreciation			Value
Leasehold improvements	$	7,103	$	(5,753	)	$	1,350
Furniture and fixtures	1,331		(1,097		)	234
Capitalized software	4,628		(4,219		)	409
Equipment	3,549		(3,038		)	511
Total premises and equipment	$	16,611	$	(14,107	)	$	2,504

Depreciation and amortization amounted to $247,000 and $305,000 for the three months ended March 31, 2015 and March 31, 2014, respectively, and has been included in occupancy and/or furniture and equipment expense, depending on the nature of the expense, in the accompanying statements of operations.

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Derivatives and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2015

Derivatives and Hedging Activities

Schedule of derivative instruments that were liabilities, as well as their classification on the balance sheet

		Fair Value
Derivatives Designated as	Balance Sheet	March 31,		December 31,
Hedging Instruments	Location	2015		2014
Interest rate contracts	Other assets	$	—	$	—
Interest rate contracts	Other liabilities	272		415
Total hedged derivatives		$	272	$	415

Schedule of impact of the Company's derivative financial instruments (interest rate contracts) on earnings

		Fair Value
Derivatives Designated as	Balance Sheet	March 31,		December 31,
Hedging Instruments	Location	2015		2014
Interest rate contracts	Other assets	$	—	$	—
Interest rate contracts	Other liabilities	272		416
Total hedged derivatives		$	272	$	416

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Loans (Tables)

3 Months Ended

Mar. 31, 2015

Loans

Schedule of balances in various loan categories

	March 31,			December 31,
(dollars in thousands)	2015			2014
Commercial	$	843,096		$	785,360
Real estate construction	65,380			71,673
Land loans	14,536			15,890
Real estate other	146,597			139,624
Factoring and asset based	156,806			167,513
SBA	125,075			124,180
Other	6,625			7,073
Total gross loans	1,358,115			1,311,313
Unearned fee income	(5,662		)	(5,644		)
Total loan portfolio	1,352,453			1,305,669
Less allowance for credit losses	(22,565		)	(22,305		)
Loans, net	$	1,329,888		$	1,283,364

Summary of credit quality of the loan portfolio, based upon internally assigned risk ratings

	March 31, 2015
			Special				Substandard
(dollars in thousands)	Pass		Mention		Substandard		(Nonaccrual)		Total
Commercial	$	828,034	$	9,204	$	2,861	$	2,997	$	843,096
Real estate construction	65,380		—		—		—		65,380
Land loans	14,536		—		—		—		14,536
Real estate other	139,170		2,848		1,985		2,594		146,597
Factoring and asset based	143,412		6,929		1,730		4,735		156,806
SBA	116,634		2,231		2,840		3,370		125,075
Other	6,625		—		—		—		6,625
Total gross loans	$	1,313,791	$	21,212	$	9,416	$	13,696	$	1,358,115
	As of December 31, 2014
			Special				Substandard
(dollars in thousands)	Pass		Mention		Substandard		(Nonaccrual)		Total
Commercial	$	774,162	$	3,844	$	6,087	$	1,267	$	785,360
Real estate construction	71,673		—		—		—		71,673
Land loans	15,890		—		—		—		15,890
Real estate other	125,087		1,693		10,044		2,800		139,624
Factoring and asset based	159,907		367		7,042		197		167,513
SBA	112,568		1,176		6,847		3,589		124,180
Other	7,073		—		—		—		7,073
Total gross loans	$	1,266,360	$	7,080	$	30,020	$	7,853	$	1,311,313

Summary of payment status of loan portfolio

	As of March 31, 2015
			Still Accruing
			30-59 Days		60-89 Days		Over 90 Days
(dollars in thousands)	Current		Past Due		Past Due		Past Due		Nonaccrual		Total
Commercial	$	840,099	$	—	$	—	$	—	$	2,997	$	843,096
Real estate construction	65,380		—		—		—		—		65,380
Land loans	14,536		—		—		—		—		14,536
Real estate other	144,003		—		—		—		2,594		146,597
Factoring and asset based	152,071		—		—		—		4,735		156,806
SBA	121,705		—		—		—		3,370		125,075
Other	6,608		15		2		—		—		6,625
Total gross loans	$	1,344,402	$	15	$	2	$	—	$	13,696	$	1,358,115
	As of December 31, 2014
			Still Accruing
			30-59 Days		60-89 Days		Over 90 Days
(dollars in thousands)	Current		Past Due		Past Due		Past Due		Nonaccrual		Total
Commercial	$	783,915	$	—	$	178	$	—	$	1,267	$	785,360
Real estate construction	71,673		—		—		—		—		71,673
Land loans	15,890		—		—		—		—		15,890
Real estate other	136,824		—		—		—		2,800		139,624
Factoring and asset based	161,854		5,462		—		—		197		167,513
SBA	120,591		—		—		—		3,589		124,180
Other	7,071		2		—		—		—		7,073
Total gross loans	$	1,297,818	$	5,464	$	178	$	—	$	7,853	$	1,311,313

Summary of loans categorized as a troubled debt restructurings

	As of March 31, 2015
	Performing				Nonaccrual				Total
	Pre-		Post-		Pre-		Post-		Pre-		Post-
	Modification		Modification		Modification		Modification		Modification		Modification
(dollars in thousands)	Investment		Investment		Investment		Investment		Investment		Investment
Commercial	$	—	$	—	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—		—		—
Land loans	—		—						—		—
Real estate other	4,502		3,882		1,515		1,310		6,017		5,192
Factoring and asset based	—		—		—		—		—		—
SBA	442		429		—		—		442		429
Other	—		—		—		—		—		—
Total gross loans	$	4,944	$	4,311	$	1,515	$	1,310	$	6,459	$	5,621
	As of December 31, 2014
	Performing				Nonaccrual				Total
	Pre-		Post-		Pre-		Post-		Pre-		Post-
	Modification		Modification		Modification		Modification		Modification		Modification
	Investment		Investment		Investment		Investment		Investment		Investment
Commercial	$	—	$	—	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—		—		—
Land loans	—		—		—		—		—		—
Real estate other	9,479		8,803		1,715		1,516		11,194		10,319
Factoring and asset based	—		—		—		—		—		—
SBA	442		434		—		—		442		434
Other	—		—		—		—		—		—
Total gross loans	$	9,921	$	9,237	$	1,715	$	1,516	$	11,636	$	10,753

Schedule of impaired loans

	March 31,		December 31,
(dollars in thousands)	2015		2014
Nonaccrual loans (1)	$	13,696	$	7,853
Trouble debt restructurings - performing	4,311		9,237
Loans past due 90 days or more and accruing interest	—		—
Loans current or past due less than 90 days and accruing interest	—		—
Total impaired loans	$	18,007	$	17,090

(1)  Nonaccrual loans include troubled debt restructurings of $1.3 million and $1.5 million at March 31, 2015 and December 31, 2014, respectively.

Summary of breakdown of impaired loans by category

	As of March 31, 2015				As of December 31, 2014
	Unpaid				Unpaid
	Principal		Recorded		Principal		Recorded
(dollars in thousands)	Balance		Investment		Balance		Investment
Commercial	$	4,463	$	2,997	$	2,640	$	1,267
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	6,632		6,476		11,752		11,603
Factoring and asset based	4,735		4,735		1,469		197
SBA	4,815		3,799		5,028		4,023
Other	—		—		—		—
Total gross loans	$	20,645	$	18,007	$	20,889	$	17,090

Summary of the average recorded investment in impaired loans and related interest income recognized

	Three months ended March 31,
	2015				2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(dollars in thousands)	Investment		Recognized		Investment		Recognized
Commercial	$	2,865	$	—	$	256	$	2
Real estate construction	—		—		—		—
Land loans	—		—		2		—
Real estate other	9,118		24		12,298		122
Factoring and asset based	2,467		—		4,251		87
SBA	4,419		10		2,221		17
Other	—		—		—		—
Total gross loans	$	18,868	$	34	$	19,027	$	228

Summary of loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses

	As of March 31, 2015
	Individually Evaluated				Collectively Evaluated				Total Evaluated
	For Impairment				For Impairment				For Impairment
(dollars in thousands)	Loans		Allowance		Loans		Allowance		Loans		Allowance
Commercial	$	2,997	$	306	$	840,099	$	10,950	$	843,096	$	11,256
Real estate construction	—		—		65,380		1,258		65,380		1,258
Land loans	—		—		14,536		376		14,536		376
Real estate other	6,476		268		140,121		1,943		146,597		2,211
Factoring and asset based	4,735		863		152,071		4,629		156,806		5,492
SBA	3,799		—		121,276		1,848		125,075		1,848
Other	—		—		6,625		124		6,625		124
Total	$	18,007	$	1,437	$	1,340,108	$	21,128	$	1,358,115	$	22,565

	As of December 31, 2014
	Individually Evaluated				Collectively Evaluated				Total Evaluated
	For Impairment				For Impairment				For Impairment
(dollars in thousands)	Loans		Allowance		Loans		Allowance		Loans		Allowance
Commercial	$	1,267	$	350	$	784,093	$	10,450	$	785,360	$	10,800
Real estate construction	—		—		71,673		1,423		71,673		1,423
Land loans	—		—		15,890		412		15,890		412
Real estate other	11,603		126		128,021		2,005		139,624		2,131
Factoring and asset based	197		—		167,316		5,185		167,513		5,185
SBA	4,023		—		120,157		2,209		124,180		2,209
Other	—		—		7,073		145		7,073		145
Total	$	17,090	$	476	$	1,294,223	$	21,829	$	1,311,313	$	22,305

Summary of the activity in the allowance for loan losses

	Three months ended March 31, 2015
				Real						Real		Factoring
				estate			Land			estate		and asset
(dollars in thousands)	Commercial			construction			loans			other		based		SBA			Other			Total
As of December 31, 2014	$	10,800		$	1,423		$	412		$	2,131	$	5,185	$	2,209		$	145		$	22,305
Provision charged to expense	518			(165		)	(36		)	60		42		(398		)	(21		)	—
Charge-offs	(93		)	—			—			—		—		—			—			(93		)
Recoveries	31			—			—			20		265		37			—			353
As of March 31, 2015	$	11,256		$	1,258		$	376		$	2,211	$	5,492	$	1,848		$	124		$	22,565

	Three months ended March 31, 2014
				Real					Real			Factoring
				estate		Land			estate			and asset
(dollars in thousands)	Commercial			construction		loans			other			based			SBA			Other		Total
As of December 31, 2013	$	9,066		$	1,013	$	377		$	2,857		$	6,136		$	2,363		$	132	$	21,944
Provision charged
to expense	(203		)	432		(43		)	(162		)	477			(6		)	5		500
Charge-offs	—			—		—			—			(430		)	(35		)	—		(465		)
Recoveries	458			—		20			—			152			56			—		686
As of March 31, 2014	$	9,321		$	1,445	$	354		$	2,695		$	6,335		$	2,378		$	137	$	22,665

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Derivatives and Hedging Activities

3 Months Ended

Mar. 31, 2015

Derivatives and Hedging Activities

Derivatives and Hedging Activities

9.Derivatives and Hedging Activities

The Company is exposed to certain risks arising from both its business operations and economic conditions.  The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and through the use of derivative financial instruments.  Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.  The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to certain variable rate loan assets and variable rate borrowings.  The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated in qualifying hedging relationships.

Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company’s derivative instruments that were liabilities, as well as their classification on the balance sheet, as of March 31, 2015 and December 31, 2014.  The Company did not have any derivative instruments that were assets as of March 31, 2015 and December 31, 2014.

		Fair Value
Derivatives Designated as	Balance Sheet	March 31,		December 31,
Hedging Instruments	Location	2015		2014
Interest rate contracts	Other assets	$	—	$	—
Interest rate contracts	Other liabilities	272		415
Total hedged derivatives		$	272	$	415

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy.  For hedges of the Company’s variable-rate loan assets, interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount.  For hedges of the Company’s variable-rate borrowings, interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments. As of March 31, 2015, the Company had one interest rate swap with an aggregate notional amount of $5.2 million that was designated as a cash flow hedge of interest rate risk associated with the Company’s variable-rate borrowings.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive Income (“AOCI”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.  No hedge ineffectiveness was recognized during the three months ended March 31, 2015 and 2014.

During the three months ended March 31, 2015 and 2014, such derivatives were used to hedge the forecasted variable cash outflows associated with subordinated debt related to trust preferred securities.  During the three months ended March 31, 2015 and March 31, 2014, the amount of pre-tax gain/(loss) recorded in AOCI due to the effective portion of changes in fair value of derivatives designated as cash flow hedges was ($13,000) and $(17,000), respectively.

Amounts reported in AOCI related to derivatives will be reclassified to interest income or expense, as applicable, as interest payments are received / made on the Company’s variable-rate assets/liabilities. During the next twelve months, the Company estimates that ($223,000) will be reclassified into net interest income as an increase to interest expense.

The table below summarizes the impact of the Company’s derivative financial instruments (interest rate contracts) on earnings for the three months ended March 31, 2015 and 2014.  All derivative income or expense recognized during these periods was a result of the effective portion of cash flow hedges.  There was no ineffective portion of cash flow hedges during the three months ended March 31, 2015 and 2014, respectively, and as such there were no amounts included in derivative income or expense during these periods.

		Fair Value
Derivatives Designated as	Balance Sheet	March 31,		December 31,
Hedging Instruments	Location	2015		2014
Interest rate contracts	Other assets	$	—	$	—
Interest rate contracts	Other liabilities	272		416
Total hedged derivatives		$	272	$	416

Credit Risk Related Contingent Features

The Company has an agreement with one of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

The Company also has agreements with certain of its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well / adequate capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

As of March 31, 2015 the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $274,000.  As of March 31, 2015, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral of $1.2 million against its obligations under these agreements. If the Company had breached any of these provisions at March 31, 2015, it would have been required to settle its obligations under the agreements at the termination value.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Stock-Based Compensation

Stock-Based Compensation

7.Stock-Based Compensation

The Company has elected to use the BSM option-pricing model, which incorporates various assumptions including volatility, expected life, and interest rates.  The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected life of the Company’s stock options, adjusted for the impact of unusual fluctuations not reasonably expected to recur and other relevant factors including implied volatility in market traded options on the Company’s common stock. The expected life of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees.

The weighted average assumptions used for the three month periods ended March 31, 2015 and 2014 and the resulting estimates of weighted-average fair value per share of stock options granted during those periods are as follows:

	Three months ended March 31,
	2015			2014
Expected life	75 months			75 months
Stock volatility	35.00		%	35.00		%
Risk free interest rate	1.96		%	2.00		%
Dividend yield	0.00		%	0.00		%
Fair value per share	$	8.78		$	9.17

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2015

Fair Value of Financial Instruments

Fair Value of Financial Instruments

8.Fair Value of Financial Instruments

In accordance with accounting guidance, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.  These levels are:

Level 1 — Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange.  Level 1 also includes U.S. Treasury, other U.S. government and agency mortgage-backed securities that are traded by dealers or brokers in active markets.  Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 — Valuations for assets and liabilities traded in less active dealer or broker markets.  Valuations are obtained from third party pricing services for identical or comparable assets or liabilities.

Level 3 — Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions.  Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments and other factors.  These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.  Changes in assumptions could significantly affect the fair values presented.  The following methods and assumptions were used by the Company to estimate the fair values of its financial instruments at March 31, 2015 and December 31, 2014:

Cash and Cash Equivalents, Fed Funds Sold and Interest bearing deposits in other banks

The carrying amounts of these instruments approximate the fair value and are classified as Level 1 in the fair value hierarchy.

Investment Securities

For investment securities, fair values are estimated using quoted market prices for similar securities and indications of value provided by brokers and are classified as Level 2.

Loans

The fair value of variable rate loans that reprice frequently and with no significant change in credit risk is based on the carrying value and results in a classification of Level 3 within the fair value hierarchy.  Fair value for other loans are estimated using discounted cash flow analysis using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification in the fair value hierarchy.  The methods used to estimate the fair value of loans do not necessarily represent an exit price.

Warrant Portfolio

Warrants are recorded at fair value on a recurring basis using a Black-Scholes valuation model. The Black-Scholes valuation model utilizes five inputs: exercise price, expected life, volatility, risk free rate and dividends. The Corporation holds a portfolio of warrants for generally nonmarketable equity securities. These warrants are primarily from non-public technology and life science companies obtained as part of the loan origination process. The Company classifies warrants as Level 3 of the valuation hierarchy.

Deposits

The fair value of demand deposits (e.g. interest and non-interest bearing, savings and certain types of money market accounts) are, by definition, equal to the amount payable in demand at the reporting date (i.e. carrying value) resulting in a Level 1 classification in the fair value hierarchy.  The carrying amounts of variable rate, fixed-term money market accounts and certificate of deposits approximates their fair value at the reporting date in a Level 2 classification in the fair value hierarchy. Fair values for fixed rate certificate of deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Junior Subordinated Debt Securities

Represents the fair value of the trust preferred securities, and approximates the pricing of a preferred security at current market prices and are classified as Level 3.

Cash Flow Hedge

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs — model-derived credit spreads.  The level in the fair value hierarchy within which the fair value measurement in their entirety fall shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety.  Because the inputs used to measure the fair value of the Company’s derivatives fall into different levels of the fair value hierarchy, as of March 31, 2015 and December 31, 2014, the Company has assessed the significance of the impact of the credit valuations adjustment on the overall valuation of its derivative positions and has determined that the credit valuation adjustment is not significant to the overall valuation of its derivative portfolios.  As a result, the Company classifies its derivative valuations in Level 2 of the fair value hierarchy.

	As of March 31, 2015
	Carrying								Fair
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and due from banks	$	29,969	$	29,969	$	—	$	—	$	29,969
Federal funds sold	121,028		121,028		—		—		121,028
Interest bearing deposits in other banks	326		326		—		—		326
Investments securities	332,587		—		332,857		—		332,857
Loans and leases, net of unearned fees	1,352,453		—		—		1,349,880		1,349,880
Warrant portfolio	377		—		—		377		377
Financial liabilities:
Deposits	1,655,845		1,150,911		501,449		—		1,652,360
Junior subordinated debt securities	17,527		—		—		17,430		17,430
Cash flow hedge	272		—		272		—		272

	As of December 31, 2014
	Carrying								Fair
(dollars in thousands)	Value		Level 1		Level 2		Level 3		Value
Financial assets:
Cash and due from banks	$	21,950	$	21,950	$	—	$	—	$	21,950
Federal funds sold	75,420		75,420		—		—		75,420
Interest bearing deposits in other banks	326		326		—		—		326
Investments securities	365,165		—		365,465		—		365,465
Loans and leases, net of unearned fees	1,305,669		—		—		1,303,629		1,303,629
Warrant portfolio	375		—		—		375		375
Financial liabilities:
Deposits	1,549,545		1,070,293		476,078		—		1,546,371
Trust preferred securities	17,527		—		—		17,431		17,431
Other borrowings	40,000		40,000		—		—		40,000
Cash flow hedge	416		—		416		—		416

The balances of assets and liabilities measured at fair value on a recurring basis are as follows:

	As of March 31, 2015
(dollars in thousands)	Total			Level 1		Level 2			Level 3
Securities available for sale
U.S. government agencies	$	51,851		$	—	$	51,851		$	—
Mortgage backed securities	237,746			—		237,746			—
Corporate bonds	28,082			—		28,082			—
Municipal bonds	2,345			—		2,345			—
Warrant portfolio	377			—		—			377
Cash flow hedge	(272		)	—		(272		)	—
Total	$	320,129		$	—	$	319,752		$	377

	As of December 31, 2014
	Total			Level 1		Level 2			Level 3
Securities available for sale
U.S. government agencies	$	58,588		$	—	$	58,588		$	—
Mortgage backed securities	263,225					263,225			—
Corporate bonds	28,077					28,077			—
Municipal bonds	2,352					2,352			—
Warrant portfolio	375			—		—			375
Cash flow hedge	(416		)	—		(416		)	—
Total	$	352,201		$	—	$	351,826		$	375

There were no transfers between Level 1 and Level 2 during the period for assets measured at fair value on a recurring basis.

The changes in Level 3 assets and liabilities measured at fair value on a recurring basis were not material for the quarter ended March 31, 2015.

The Company may be required, from time to time, to measure certain other financial assets at fair value on a non-recurring basis in accordance with GAAP.  These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets.

Assets measured at fair value on a non-recurring basis for the quarters ended March 31, 2015 and December 31, 2014, included impaired loans and other real estate owned as follows:

	As of March 31, 2015
	Quoted Prices In		Significant		Significant
	Active Markets		Observable		Unobservable
	for Identical Assets		Inputs		Inputs
(dollar in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Impaired loans:
Commercial	$	—	$	—	$	2,997	$	2,997
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	—		—		6,476		6,476
Factoring and asset based	—		—		4,735		4,735
SBA	—		—		3,799		3,799
Other	—		—		—		—
Total impaired loans	$	—	$	—	$	18,007	$	18,007
Other real estate owned:
Commercial	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—
Land loans	—		14		—		14
Real estate other	—		—		—		—
Factoring and asset based	—		—		—		—
SBA	—		8		—		8
Other	—		—		—		—
Total other real estate owned	$	—	$	22	$	—	$	22

	As of December 31, 2014
	Quoted Prices In		Significant		Significant
	Active Markets		Observable		Unobservable
	for Identical Assets		Inputs		Inputs
(dollar in thousands)	(Level 1)		(Level 2)		(Level 3)		Total
Impaired loans:
Commercial	$	—	$	—	$	1,267	$	1,267
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	—		—		11,603		11,603
Factoring and asset based	—		—		198		198
SBA	—		—		4,022		4,022
Other	—		—		—		—
Total impaired loans	$	—	$	—	$	17,090	$	17,090
Other real estate owned:
Commercial	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—
Land loans	—		14		—		14
Real estate other	—		—		—		—
Factoring and asset based	—		—		—		—
SBA	—		9		—		9
Other	—		—		—		—
Total other real estate owned	$	—	$	23	$	—	$	23

The fair value of impaired loans was determined using Level 3 assumptions, and represents impaired loan balances for which a specific reserve has been established or on which a write down has been taken. The Company charged-off $93,000 and $465,000 during the quarters ended March 31, 2015 and 2014, respectively, as a result of impaired loans.

Generally, the Company obtains third party appraisals (or property evaluations) and/or collateral audits in conjunction with internal analyses based on historical experience on its impaired loans and other real estate owned to determine fair value.  In determining the net realizable value of the underlying collateral for impaired loans, the Company will then discount the valuation (with additional discounts depending on the age of the appraisal) to cover both market price fluctuations and selling costs the Company expected would be incurred in the event of foreclosure.  In addition to the discounts taken, the Company’s calculation of net realizable value considered any other senior liens in place on the underlying collateral.  Information on the Company’s total impaired loan balances, and specific loss reserves associated with those balances, is included in Note 4, and in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the “Allowance for Loan Losses” section.

The fair value of OREO was determined using Level 2 assumptions. The Company charged off $1,000 and $7,000 during the quarters ended March 31, 2015 and March 31, 2014, respectively, as a result of declines in the OREO property values.

The following table presents quantitative information about fair value measurements for assets measured at fair value on a non-recurring basis:

	As of March 31, 2015
					Range
	Fair		Valuation	Unobservable	(Weighted
	Value		Techniques	Inputs	Average)
Impaired loans:
Commercial	$	2,997	Collateral valuation	Management adjustment to reflect current conditions and selling costs	25-70%
Real estate other	6,476		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	10-20%
Factoring and asset based	4,735		Collateral valuation	Management adjustment to reflect current conditions and selling costs	30%
SBA	3,799		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	15-70%
Total impaired loans	$	18,007
Other real estate owned:
Commercial	$	—
Real estate construction	—
Land loans	14		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Real estate other	—
Factoring and asset based	—
SBA	8		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Other	—
Total other real esate owned	$	22

	As of December 31, 2014
					Range
	Fair		Valuation	Unobservable	(Weighted-
	Value		Techniques	Inputs	Average)
Impaired loans:
Commercial	$	1,267	Discounted cash flow analysis	Management adjustment to reflect current conditions and selling costs	25%
Real estate other	11,603		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	10-25%
Factoring and asset based	198		Collateral valuation	Management adjustment to reflect current conditions and selling costs	50%
SBA	4,022		Third party appraisal / property evaluation	Management adjustment to reflect current conditions and selling costs	15-35%
Total impaired loans	$	17,090
Other real estate owned:
Land loans	$	14	Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
SBA	9		Third party appraisal	Management adjustment to reflect current conditions and selling costs	15-25%
Total other real estate owned	$	23

The unobservable inputs are based on management’s best estimates of appropriate discounts in arriving at fair market value.  Increases or decreases in any of those inputs could result in a significantly lower or higher fair value measurement. For example, a change in either direction of actual loss rates would have directionally opposite change in the calculation of the fair value of impaired loans.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2015

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited financial statements of Bridge Capital Holdings and Bridge Bank, N.A. (the Company) have been prepared in accordance with generally accepted accounting principles and pursuant to the rules and regulations of the SEC.  The interim financial data as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 is unaudited; however, in the opinion of the Company, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods.  Certain information and note disclosures normally included in annual financial statements have been omitted pursuant to SEC rules and regulations; however, the Company believes the disclosures made are adequate to ensure that the information presented is not misleading.  Results of operations for the quarters ended March 31, 2015 and 2014, respectively, are not necessarily indicative of full year results.

The comparative balance sheet information as of December 31, 2014 is derived from the audited financial statements; however, it does not include all disclosures required by accounting principles generally accepted in the United States of America.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities as of the dates and for the periods presented.  A significant estimate included in the accompanying financial statements is the allowance for loan losses.  Actual results could differ from those estimates.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Financial Accounting Standards Board Accounting Standards Update (FASB ASU) 2015-04, Compensation — Retirement Benefits (“Topic 715”), The amendments in this Update would provide a practical expedient for employers with fiscal year-ends that do not fall on a month-end by permitting those employers to measure defined benefit plan assets and obligations as of the month-end that is closest to the entity’s fiscal year-end. ASU No. 2015-04 is effective for the first interim or annual period beginning after December 15, 2015. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

Financial Accounting Standards Board Accounting Standards Update (FASB ASU) 2015-01, Income Statement — Extraordinary and Unusual Items (“Subtopic 225-20”)  — The objective of this Update is to simplify the income statement presentation requirements in Subtopic 225-20 by eliminating the concept of extraordinary items. Extraordinary items are events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence. Eliminating the extraordinary classification simplifies income statement presentation by altogether removing the concept of extraordinary items from consideration. ASU No. 2015-01 is effective for the first interim or annual period beginning after December 15, 2015. The adoption of this ASU is not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

Earnings Per Share

Earnings Per Share

Basic net income per share is computed by dividing net income applicable to common shareholders by the weighted average number of common shares outstanding during the period.  Diluted net income per share is determined using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and vesting of restricted stock.  Common stock equivalents are included in the diluted net income per share calculation to the extent these shares are dilutive.  See Note 2 to the financial statements for additional information on earnings per share.

Stock-Based Compensation

Stock-Based Compensation

The Company has adopted guidance issued by the FASB that clarifies the accounting for stock-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise’s equity instruments or that may be settled by the issuance of such equity instruments.  The Company uses the Black-Scholes-Merton (“BSM”) option-pricing model to determine the fair-value of stock-based awards.  The Company recorded $1.0 million ($641,000 net of tax) of stock-based compensation expense during the three months ended March 31, 2015, and recorded $903,000 ($570,000 net of tax) of stock-based compensation expense during the three months ended March 31, 2014, as a result of the adoption of the guidance issued by the FASB.

No stock-based compensation costs were capitalized as part of the cost of an asset as of March 31, 2015 and December 31, 2014.  As of March 31, 2015, $10.8 million of total unrecognized compensation cost related to stock options and restricted stock units is expected to be recognized over a weighted-average period of 3.1 years.

Comprehensive Income

Comprehensive Income

The Company has adopted accounting guidance issued by the FASB that requires all items recognized under accounting standards as components of comprehensive earnings be reported in an annual financial statement that is displayed with the same prominence as other annual financial statements. This Statement also requires that an entity classify items of other comprehensive earnings by their nature in an annual financial statement.  Other comprehensive earnings include an adjustment to fully recognize the liability associated with the supplemental executive retirement plan, unrealized gains and losses, net of tax, on cash flow hedges, and unrealized gains and losses, net of tax, on marketable securities classified as available-for-sale.  The Company had accumulated other comprehensive income totaling $1.4 million, net of tax, as of March 31, 2015 and accumulated other comprehensive income totaling $239,000, net of tax, as of December 31, 2014.

Fair Value Measurement

Fair Value Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Current accounting guidance establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There is a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable and the significance of those inputs in the fair value measurement. Observable inputs reflect market-derived or market-based information obtained from independent sources, while unobservable inputs reflect our estimates about market data and views of market participants. The three levels for measuring fair value are based on the reliability of inputs.

See Note 8 to the financial statements for more information and disclosures relating to the Company’s fair value measurements.

Securities

Securities

The Company classifies its investment securities into three categories, available for sale, held to maturity, or trading securities, at the time of purchase. Securities available for sale are reported at fair value with unrealized holding gains and/or losses, net of tax, recorded as a separate component of shareholders’ equity.  Securities held to maturity are measured at amortized cost based on the Company’s positive intent and ability to hold the securities to maturity.

Premiums and discounts are amortized or accreted over the life of the related security as an adjustment to yield using the effective interest method. Dividend and interest income is recognized when earned.  Gains and losses on sales of securities are computed on a specific identification basis.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: OTTI related to credit loss, which must be recognized in the income statement and; OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of OTTI is recognized through earnings.

Allowance for Loan Losses

Allowance for Loan Losses

The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general reserves.  Specific reserves primarily relate to loans that are individually classified as impaired, but may also relate to loans that in management’s opinion exhibit negative credit characteristics or trends suggesting potential future loss exposure greater than historical loss experience would suggest. It is currently the Company’s practice to immediately charge-off any identified financial loss pertaining to impaired loans when management believes the uncollectibility of the loan is confirmed, therefore specific reserves are uncommon.  A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans, for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are generally considered troubled debt restructurings and classified as impaired.

Generally Accepted Accounting Principles specify that if a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral.  Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.  However, it is currently the Company’s practice to immediately charge-off any identified financial loss pertaining to impaired loans when management believes the uncollectibility of the loans has been confirmed. See Note 4 to the financial statements for additional information on impaired loans.

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using an appropriate discount rate at inception.  If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral.  For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.  See Note 4 to the financial statements for additional information on troubled debt restructurings.

General reserves cover non-impaired loans and are based on historical loss rates for each portfolio segment, adjusted for the effects of qualitative or environmental factors that are likely to cause estimated credit losses as of the evaluation date to differ from the portfolio segment’s historical loss experience. Qualitative factors include consideration of the following: changes in lending policies and procedures; changes in economic conditions, changes in the nature and volume of the portfolio; changes in the experience, ability and depth of lending management and other relevant staff; changes in the volume and severity of past due, nonaccrual and other adversely graded loans; changes in the loan review system; changes in the value of the underlying collateral for collateral-dependent loans; concentrations of credit and the effect of other external factors such as competition and legal and regulatory requirements.

Portfolio segments identified by the Company include commercial, real estate construction, land, real estate other, factoring and asset-based lending, SBA, and consumer loans.  Relevant risk characteristics for these portfolio segments generally include debt service coverage, loan-to-value ratios and financial performance on non-consumer loans and credit scores, debt-to income, collateral type and loan-to-value ratios for consumer loans.

Segment Information

Segment Information

The Company has adopted accounting guidance issued by the FASB that requires certain information about the operating segments of the Company.  The objective of requiring disclosures about segments of an enterprise and related information is to provide information about the different types of business activities in which an enterprise engages and the different economic environment in which it operates to help users of financial statements better understand its performance, better assess its prospects for future cash flows and make more informed judgments about the enterprise as a whole.  The Company has determined that it has one segment, general commercial banking, and therefore, it is appropriate to aggregate the Company’s operations into a single operating segment.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company has adopted guidance issued by the FASB that clarifies the disclosure requirements for derivative instruments and hedging activities with the intent to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. The guidance requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by the guidance, the Company records all derivatives on the balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualified as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and that qualify as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge.  The Company may enter into derivative contracts that are intended to economically hedge certain of its risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting under current accounting guidance.  See Note 9 to the financial statements for additional information on derivative instruments and hedging activities.

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Loans (Details 6) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Breakdown of impaired loans
Unpaid Principal Balance	$ 20,645		$ 20,889
Recorded Investment	18,007		17,090
Average Recorded Investment	18,868	19,027
Interest Income Recognized	34	228
Commercial
Breakdown of impaired loans
Unpaid Principal Balance	4,463		2,640
Recorded Investment	2,997		1,267
Average Recorded Investment	2,865	256
Interest Income Recognized		2
Land loans
Breakdown of impaired loans
Average Recorded Investment		2
Real estate other
Breakdown of impaired loans
Unpaid Principal Balance	6,632		11,752
Recorded Investment	6,476		11,603
Average Recorded Investment	9,118	12,298
Interest Income Recognized	24	122
Factoring and asset based lending
Breakdown of impaired loans
Unpaid Principal Balance	4,735		1,469
Recorded Investment	4,735		197
Average Recorded Investment	2,467	4,251
Interest Income Recognized		87
SBA
Breakdown of impaired loans
Unpaid Principal Balance	4,815		5,028
Recorded Investment	3,799		4,023
Average Recorded Investment	4,419	2,221
Interest Income Recognized	$ 10	$ 17

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Stock-Based Compensation

Schedule of weighted average assumptions and the resulting estimates of weighted-average fair value per share of stock options granted

	Three months ended March 31,
	2015			2014
Expected life	75 months			75 months
Stock volatility	35.00		%	35.00		%
Risk free interest rate	1.96		%	2.00		%
Dividend yield	0.00		%	0.00		%
Fair value per share	$	8.78		$	9.17

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Earnings Per Share
Net income	$ 3,914	$ 3,716
Weighted average shares:
Basic common shares	14,900,669	14,646,573
Diluted potential common shares related to stock options and restricted stock	742,771	816,076
Total average common equivalent shares	15,643,440	15,462,649
Basic earnings per share (in dollars per share)	$ 0.26	$ 0.25
Diluted earnings per share (in dollars per share)	$ 0.25	$ 0.24
Common stock
Antidilutive Securities
Anti-dilutive securities (in shares)	199,000	240,446

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Fair Value of Financial Instruments (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Fair Value of Financial Instruments
Securities available for sale	$ 320,024,000		$ 352,243,000
Assets transferred between Level 1 and Level 2	0		0
Impaired loans	18,007,000		17,090,000
Other real estate owned	22,000		23,000
Commercial
Fair Value of Financial Instruments
Impaired loans	2,997,000		1,267,000
Real estate other
Fair Value of Financial Instruments
Impaired loans	6,476,000		11,603,000
Factoring and asset based lending
Fair Value of Financial Instruments
Impaired loans	4,735,000		197,000
SBA
Fair Value of Financial Instruments
Impaired loans	3,799,000		4,023,000
U.S. government agencies
Fair Value of Financial Instruments
Securities available for sale	51,851,000		58,588,000
Mortgage backed securities
Fair Value of Financial Instruments
Securities available for sale	237,746,000		263,225,000
Corporate bonds
Fair Value of Financial Instruments
Securities available for sale	28,082,000		28,077,000
Municipal bonds
Fair Value of Financial Instruments
Securities available for sale	2,345,000		2,353,000
Level 2
Fair Value of Financial Instruments
Cash flow hedge	(272,000)		(416,000)
Charge-offs as a result of declines in the OREO property values	1,000	7,000
Level 3
Fair Value of Financial Instruments
Warrant portfolio	377,000		375,000
Charge-off as a result of impaired loans	93,000	465,000
Recurring | Total
Fair Value of Financial Instruments
Warrant portfolio	377,000		375,000
Cash flow hedge	(272,000)		(416,000)
Total assets and liabilities at fair value	320,129,000		352,201,000
Recurring | Total | U.S. government agencies
Fair Value of Financial Instruments
Securities available for sale	51,851,000		58,588,000
Recurring | Total | Mortgage backed securities
Fair Value of Financial Instruments
Securities available for sale	237,746,000		263,225,000
Recurring | Total | Corporate bonds
Fair Value of Financial Instruments
Securities available for sale	28,082,000		28,077,000
Recurring | Total | Municipal bonds
Fair Value of Financial Instruments
Securities available for sale	2,345,000		2,352,000
Recurring | Level 2
Fair Value of Financial Instruments
Cash flow hedge	(272,000)		(416,000)
Total assets and liabilities at fair value	319,752,000		351,826,000
Recurring | Level 2 | U.S. government agencies
Fair Value of Financial Instruments
Securities available for sale	51,851,000		58,588,000
Recurring | Level 2 | Mortgage backed securities
Fair Value of Financial Instruments
Securities available for sale	237,746,000		263,225,000
Recurring | Level 2 | Corporate bonds
Fair Value of Financial Instruments
Securities available for sale	28,082,000		28,077,000
Recurring | Level 2 | Municipal bonds
Fair Value of Financial Instruments
Securities available for sale	2,345,000		2,352,000
Recurring | Level 3
Fair Value of Financial Instruments
Warrant portfolio	377,000		375,000
Total assets and liabilities at fair value	$ 377,000		$ 375,000

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Consolidated Statements of Comprehensive Income
NET INCOME	$ 3,914	$ 3,716
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized gains (losses) on securities available-for-sale	2,170	1,400
Related tax benefit (expense)	(897)	(574)
Reclassification adjustment for realized (gains) on securities	(306)	(5)
Related tax expense	132	2
Unrealized gains on supplemental executive retirement plan	13	13
Related tax (expense)	(5)	(5)
Unrealized gains on cash flow hedges	143	160
Related tax (expense)	(57)	(64)
Other comprehensive income (loss), net of tax	1,193	927
COMPREHENSIVE INCOME	$ 5,107	$ 4,643

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Loans

3 Months Ended

Mar. 31, 2015

Loans

LOANS

4.Loans

The balances in the various loan categories are as follows as of March 31, 2015 and December 31, 2014:

	March 31,			December 31,
(dollars in thousands)	2015			2014
Commercial	$	843,096		$	785,360
Real estate construction	65,380			71,673
Land loans	14,536			15,890
Real estate other	146,597			139,624
Factoring and asset based	156,806			167,513
SBA	125,075			124,180
Other	6,625			7,073
Total gross loans	1,358,115			1,311,313
Unearned fee income	(5,662		)	(5,644		)
Total loan portfolio	1,352,453			1,305,669
Less allowance for credit losses	(22,565		)	(22,305		)
Loans, net	$	1,329,888		$	1,283,364

The Company individually categorizes larger, non-homogenous loans into credit risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors.  This analysis is performed on an ongoing basis as new information is obtained.  The Company uses the following definitions for loan risk ratings:

Pass — Loans classified as pass include larger non-homogenous loans not meeting the risk rating definitions below and smaller, homogeneous loans not assessed on an individual basis.

Special Mention — Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard — Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt by the borrower. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Substandard loans for which payments have ceased and are 90 days or more past due, or for which the likelihood of full collection of interest and principal is doubtful, are placed on nonaccrual.  Loans that have been placed on nonaccrual status are also considered impaired.

The following table summarizes the credit quality of the loan portfolio, based upon internally assigned risk ratings, as of March 31, 2015 and December 31, 2014.

	March 31, 2015
			Special				Substandard
(dollars in thousands)	Pass		Mention		Substandard		(Nonaccrual)		Total
Commercial	$	828,034	$	9,204	$	2,861	$	2,997	$	843,096
Real estate construction	65,380		—		—		—		65,380
Land loans	14,536		—		—		—		14,536
Real estate other	139,170		2,848		1,985		2,594		146,597
Factoring and asset based	143,412		6,929		1,730		4,735		156,806
SBA	116,634		2,231		2,840		3,370		125,075
Other	6,625		—		—		—		6,625
Total gross loans	$	1,313,791	$	21,212	$	9,416	$	13,696	$	1,358,115
	As of December 31, 2014
			Special				Substandard
(dollars in thousands)	Pass		Mention		Substandard		(Nonaccrual)		Total
Commercial	$	774,162	$	3,844	$	6,087	$	1,267	$	785,360
Real estate construction	71,673		—		—		—		71,673
Land loans	15,890		—		—		—		15,890
Real estate other	125,087		1,693		10,044		2,800		139,624
Factoring and asset based	159,907		367		7,042		197		167,513
SBA	112,568		1,176		6,847		3,589		124,180
Other	7,073		—		—		—		7,073
Total gross loans	$	1,266,360	$	7,080	$	30,020	$	7,853	$	1,311,313

For all loan classes, past due loans are reviewed on a monthly basis to identify loans for nonaccrual status.  Loans are generally placed on non-accrual when payments have ceased and are 90 days or more past due, or when the likelihood of full collection of interest and principal is doubtful.  However, if a loan is fully secured and in the process of collection and resolution of collection (generally within 90 days), then the loan will generally not be placed on nonaccrual, regardless of its delinquency status.  Nonaccrual loans will not normally be returned to accrual status, although consideration will be given to situations where all past due principal and interest has been paid and the borrower has evidenced their ability to meet the contractual provisions of the note.  When interest accruals are discontinued, all unpaid interest is reversed against current year income.  The Company’s method of income recognition for loans classified as nonaccrual is to apply cash received to principal when the ultimate collectability of principal is in doubt or recognize interest income on a cash basis.

The following table summarizes the payment status of the loan portfolio as of March 31, 2015 and December 31, 2014.

	As of March 31, 2015
			Still Accruing
			30-59 Days		60-89 Days		Over 90 Days
(dollars in thousands)	Current		Past Due		Past Due		Past Due		Nonaccrual		Total
Commercial	$	840,099	$	—	$	—	$	—	$	2,997	$	843,096
Real estate construction	65,380		—		—		—		—		65,380
Land loans	14,536		—		—		—		—		14,536
Real estate other	144,003		—		—		—		2,594		146,597
Factoring and asset based	152,071		—		—		—		4,735		156,806
SBA	121,705		—		—		—		3,370		125,075
Other	6,608		15		2		—		—		6,625
Total gross loans	$	1,344,402	$	15	$	2	$	—	$	13,696	$	1,358,115
	As of December 31, 2014
			Still Accruing
			30-59 Days		60-89 Days		Over 90 Days
(dollars in thousands)	Current		Past Due		Past Due		Past Due		Nonaccrual		Total
Commercial	$	783,915	$	—	$	178	$	—	$	1,267	$	785,360
Real estate construction	71,673		—		—		—		—		71,673
Land loans	15,890		—		—		—		—		15,890
Real estate other	136,824		—		—		—		2,800		139,624
Factoring and asset based	161,854		5,462		—		—		197		167,513
SBA	120,591		—		—		—		3,589		124,180
Other	7,071		2		—		—		—		7,073
Total gross loans	$	1,297,818	$	5,464	$	178	$	—	$	7,853	$	1,311,313

A loan is categorized as a troubled debt restructuring if a significant concession is granted to provide for a reduction of either interest or principal due to deterioration in the financial condition of the borrower. Troubled debt restructurings can take the form of a reduction of the stated interest rate, splitting a loan into separate loans with market terms on one loan and concessionary terms on the other loan, receipts of assets from a debtor in partial or full satisfaction of a loan, the extension of the maturity date or dates at a stated interest rate lower than the current market rate for new debt with similar risk, the reduction of the face amount or maturity amount of the debt as stated in the instrument or other agreement, the reduction of accrued interest, or any other concessionary type of renegotiated debt.  Depending on the payment history of the loan, a troubled debt restructuring can be considered performing and accruing interest or be placed on nonaccrual.  However, all troubled debt restructurings are considered impaired.

As of March 31, 2015, the Company had twelve loans totaling $5.6 million classified as troubled debt restructurings.  The twelve loans were comprised of ten other real estate loans and two SBA loans.  Troubled debt restructurings represented 0.4% of total gross loans as of March 31, 2015. As of December 31, 2014, the Company had fourteen loans totaling $10.8 million classified as troubled debt restructurings.  The fourteen loans were comprised of twelve other real estate loans and two SBA loans.  Troubled debt restructurings represented 1.2% of total gross loans as of December 31, 2014.

The Company did not have any commitments to lend additional funds for loans classified as troubled debt restructurings at March 31, 2015 and December 31, 2014.

During the three months ended March 31, 2015 and March 31, 2014, there were no additional loans modified and designated as troubled debt restructurings. However, during the period ended March 31, 2015, there was one loan previously designated as a performing troubled debt restructuring that has been upgraded and is no longer designated as a troubled debt restructured loan.

A loan is considered to be in payment default when it is 90 days contractually past due under the modified terms.  There were no loans modified within the last twelve months that defaulted during the three months ended March 31, 2015.

The following table summarizes the loans categorized as troubled debt restructurings at March 31, 2015 and December 31, 2014.  The troubled debt restructurings considered performing and nonaccrual are included in the “Substandard” and “Substandard (Nonaccrual)” categories, respectively, in the preceding credit quality table, and included in the “Current” and “Nonaccrual” categories, respectively, in the preceding payment status table.

	As of March 31, 2015
	Performing				Nonaccrual				Total
	Pre-		Post-		Pre-		Post-		Pre-		Post-
	Modification		Modification		Modification		Modification		Modification		Modification
(dollars in thousands)	Investment		Investment		Investment		Investment		Investment		Investment
Commercial	$	—	$	—	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—		—		—
Land loans	—		—						—		—
Real estate other	4,502		3,882		1,515		1,310		6,017		5,192
Factoring and asset based	—		—		—		—		—		—
SBA	442		429		—		—		442		429
Other	—		—		—		—		—		—
Total gross loans	$	4,944	$	4,311	$	1,515	$	1,310	$	6,459	$	5,621
	As of December 31, 2014
	Performing				Nonaccrual				Total
	Pre-		Post-		Pre-		Post-		Pre-		Post-
	Modification		Modification		Modification		Modification		Modification		Modification
	Investment		Investment		Investment		Investment		Investment		Investment
Commercial	$	—	$	—	$	—	$	—	$	—	$	—
Real estate construction	—		—		—		—		—		—
Land loans	—		—		—		—		—		—
Real estate other	9,479		8,803		1,715		1,516		11,194		10,319
Factoring and asset based	—		—		—		—		—		—
SBA	442		434		—		—		442		434
Other	—		—		—		—		—		—
Total gross loans	$	9,921	$	9,237	$	1,715	$	1,516	$	11,636	$	10,753

Loans are designated as impaired, when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  As of March 31, 2015 and December 31, 2014 loans designated as impaired consisted of nonaccrual loans and troubled debt restructurings.

The following table summarizes the loans categorized as impaired at March 31, 2015 and December 31, 2014.

	March 31,		December 31,
(dollars in thousands)	2015		2014
Nonaccrual loans (1)	$	13,696	$	7,853
Trouble debt restructurings - performing	4,311		9,237
Loans past due 90 days or more and accruing interest	—		—
Loans current or past due less than 90 days and accruing interest	—		—
Total impaired loans	$	18,007	$	17,090

(1)  Nonaccrual loans include troubled debt restructurings of $1.3 million and $1.5 million at March 31, 2015 and December 31, 2014, respectively.

Impaired loans at March 31, 2015 were comprised of loans with legal contractual balances totaling approximately $20.6 million reduced by approximately $422,000 received in non-accrual interest and impairment charges of $2.2 million which have been charged against the allowance for loan losses. As of March 31, 2015, there was an additional 21 loans with legal contractual balances totaling $15.0 million that have been fully charged off, for which the Company continues to pursue collection remedies.

Impaired loans at December 31, 2014 were comprised of loans with legal contractual balances totaling approximately $20.9 million reduced by $404,000 received in non-accrual interest and impairment charges of $3.4 million which have been charged against the allowance for loan losses.

The following summarizes the breakdown of impaired loans by category as of March 31, 2015 and December 31, 2014:

	As of March 31, 2015				As of December 31, 2014
	Unpaid				Unpaid
	Principal		Recorded		Principal		Recorded
(dollars in thousands)	Balance		Investment		Balance		Investment
Commercial	$	4,463	$	2,997	$	2,640	$	1,267
Real estate construction	—		—		—		—
Land loans	—		—		—		—
Real estate other	6,632		6,476		11,752		11,603
Factoring and asset based	4,735		4,735		1,469		197
SBA	4,815		3,799		5,028		4,023
Other	—		—		—		—
Total gross loans	$	20,645	$	18,007	$	20,889	$	17,090

Consistent with the Company’s method of income recognition for loans, interest on impaired loans, except those classified as nonaccrual, is recognized using the accrual method.  The Company did not record income from the receipt of cash payments related to nonaccrual loans during the three months and ended March 31, 2015 and 2014.  Interest income recognized on impaired loans represents interest the Company recognized on performing troubled debt restructurings and loans greater than 90 days past due and still accruing interest.

The following table summarizes the average recorded investment in impaired loans and related interest income recognized for the three months ended March 31, 2015 and 2014:

	Three months ended March 31,
	2015				2014
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(dollars in thousands)	Investment		Recognized		Investment		Recognized
Commercial	$	2,865	$	—	$	256	$	2
Real estate construction	—		—		—		—
Land loans	—		—		2		—
Real estate other	9,118		24		12,298		122
Factoring and asset based	2,467		—		4,251		87
SBA	4,419		10		2,221		17
Other	—		—		—		—
Total gross loans	$	18,868	$	34	$	19,027	$	228

The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance.  The entire allowance is available for any loan that, in management’s judgment should be charged-off.

The allowance consists of specific and general reserves.  Specific reserves relate to loans that are individually classified as impaired or are otherwise exhibiting negative credit characteristics suggesting potential loss exposure greater than historical loss experience would suggest.  Specific reserves are calculated by evaluating the present value of expected future cash flows pertaining to the loan, the fair value of the collateral supporting the loan, less selling costs, or the loan’s observable market price.  It is currently the Company’s practice to immediately charge-off any identified financial loss pertaining to impaired loans when management believes the uncollectibility of the loan is confirmed; therefore, as seen in the table below, there are typically only a small number of individual loans for which a specific reserve exists.  General reserves are based on historical loss rates for each portfolio segment, adjusted for the effects of qualitative or environmental factors that are likely to cause estimated credit losses as of the evaluation date to differ from the portfolio segment’s historical loss experience. Qualitative factors include consideration of the following: changes in lending policies and procedures; changes in economic conditions, changes in the nature and volume of the portfolio; changes in the experience, ability and depth of lending management and other relevant staff; changes in the volume and severity of past due, nonaccrual and other adversely graded loans; changes in the loan review system; concentrations of credit and the effect of other external factors such as competition and legal and regulatory requirements.

The allowance for loan losses totaled $22.6 million and $22.3 million as of March 31, 2015 and December 31, 2014, respectively.  The following table summarizes the loans individually and collectively evaluated for impairment and the corresponding allowance for loan losses as of March 31, 2015 and December 31, 2014.

	As of March 31, 2015
	Individually Evaluated				Collectively Evaluated				Total Evaluated
	For Impairment				For Impairment				For Impairment
(dollars in thousands)	Loans		Allowance		Loans		Allowance		Loans		Allowance
Commercial	$	2,997	$	306	$	840,099	$	10,950	$	843,096	$	11,256
Real estate construction	—		—		65,380		1,258		65,380		1,258
Land loans	—		—		14,536		376		14,536		376
Real estate other	6,476		268		140,121		1,943		146,597		2,211
Factoring and asset based	4,735		863		152,071		4,629		156,806		5,492
SBA	3,799		—		121,276		1,848		125,075		1,848
Other	—		—		6,625		124		6,625		124
Total	$	18,007	$	1,437	$	1,340,108	$	21,128	$	1,358,115	$	22,565

	As of December 31, 2014
	Individually Evaluated				Collectively Evaluated				Total Evaluated
	For Impairment				For Impairment				For Impairment
(dollars in thousands)	Loans		Allowance		Loans		Allowance		Loans		Allowance
Commercial	$	1,267	$	350	$	784,093	$	10,450	$	785,360	$	10,800
Real estate construction	—		—		71,673		1,423		71,673		1,423
Land loans	—		—		15,890		412		15,890		412
Real estate other	11,603		126		128,021		2,005		139,624		2,131
Factoring and asset based	197		—		167,316		5,185		167,513		5,185
SBA	4,023		—		120,157		2,209		124,180		2,209
Other	—		—		7,073		145		7,073		145
Total	$	17,090	$	476	$	1,294,223	$	21,829	$	1,311,313	$	22,305

Of the loans individually evaluated for impairment, ten real estate other loans, with an aggregate balance of $5.2 million, and three commercial loans, with an aggregate balance of $1.2 million, had an associated allowance for the period ending March 31, 2015.  For the period ended December 31, 2014, of the loans individually evaluated for impairment, there were ten real estate other loans, with an aggregate balance of $3.5 million, and one commercial loan, with a current balance of $422,000, that had an associated allowance.

The following table summarizes the activity in the allowance for loan losses for the quarters ended March 31, 2015 and 2014.

	Three months ended March 31, 2015
				Real						Real		Factoring
				estate			Land			estate		and asset
(dollars in thousands)	Commercial			construction			loans			other		based		SBA			Other			Total
As of December 31, 2014	$	10,800		$	1,423		$	412		$	2,131	$	5,185	$	2,209		$	145		$	22,305
Provision charged to expense	518			(165		)	(36		)	60		42		(398		)	(21		)	—
Charge-offs	(93		)	—			—			—		—		—			—			(93		)
Recoveries	31			—			—			20		265		37			—			353
As of March 31, 2015	$	11,256		$	1,258		$	376		$	2,211	$	5,492	$	1,848		$	124		$	22,565

	Three months ended March 31, 2014
				Real					Real			Factoring
				estate		Land			estate			and asset
(dollars in thousands)	Commercial			construction		loans			other			based			SBA			Other		Total
As of December 31, 2013	$	9,066		$	1,013	$	377		$	2,857		$	6,136		$	2,363		$	132	$	21,944
Provision charged
to expense	(203		)	432		(43		)	(162		)	477			(6		)	5		500
Charge-offs	—			—		—			—			(430		)	(35		)	—		(465		)
Recoveries	458			—		20			—			152			56			—		686
As of March 31, 2014	$	9,321		$	1,445	$	354		$	2,695		$	6,335		$	2,378		$	137	$	22,665

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Securities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Securities available for sale
Amortized Cost	$ 317,034	$ 351,241
Gross Unrealized Gains	4,333	3,767
Gross Unrealized Losses	(1,343)	(2,766)
Fair Value	320,024	352,243
Securities held to maturity
Amortized Cost	12,563	12,922
Gross Unrealized Gains	270	301
Fair Value	12,833	13,222
Held to Maturity and Available-for-sale
Held to maturity and available-for-sale securities, Amortized Cost	329,597	364,163
Gross Unrealized Gains	4,603	4,068
Gross Unrealized Losses	(1,343)	(2,766)
Held to maturity and available-for-sale securities, Fair Value	332,857	365,465
Debt securities:
Securities available for sale
Amortized Cost	317,034	351,241
Gross Unrealized Gains	4,333	3,767
Gross Unrealized Losses	(1,343)	(2,766)
Fair Value	320,024	352,243
Securities held to maturity
Amortized Cost	12,563
Gross Unrealized Gains	270
Fair Value	12,833
U.S. government agencies
Securities available for sale
Amortized Cost	51,410	58,873
Gross Unrealized Gains	574	304
Gross Unrealized Losses	(133)	(589)
Fair Value	51,851	58,588
Mortgage backed securities
Securities available for sale
Amortized Cost	235,216	261,931
Gross Unrealized Gains	3,642	3,375
Gross Unrealized Losses	(1,112)	(2,081)
Fair Value	237,746	263,225
Securities held to maturity
Amortized Cost	12,563	12,922
Gross Unrealized Gains	270	301
Fair Value	12,833	13,222
Corporate bonds
Securities available for sale
Amortized Cost	27,974	28,002
Gross Unrealized Gains	117	88
Gross Unrealized Losses	(9)	(13)
Fair Value	28,082	28,077
Municipal bonds
Securities available for sale
Amortized Cost	2,434	2,435
Gross Unrealized Losses	(89)	(83)
Fair Value	$ 2,345	$ 2,353

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Junior Subordinated Debt Securities and Other Borrowings (Details) (USD $)	1 Months Ended				0 Months Ended
	Apr. 30, 2008	Sep. 30, 2008	Dec. 31, 2009	Dec. 31, 2004	Mar. 30, 2006	Mar. 31, 2015	Dec. 31, 2014
Junior Subordinated Debt Securities and Other Borrowings
Other borrowings						$ 0	$ 40,000,000
Outstanding amount of unsecured borrowing lines						0
Bridge Capital Trust I
Junior Subordinated Debt Securities and Other Borrowings
Minority interest purchased (as a percent)				3.00%
Bridge Capital Trust I | Interest rate swaps
Junior Subordinated Debt Securities and Other Borrowings
Period of derivative agreement	5 years
Percentage at which derivative contract is entered	6.11%
Bridge Capital Trust II
Junior Subordinated Debt Securities and Other Borrowings
Minority interest purchased (as a percent)					3.00%
Bridge Capital Trust II | Interest rate swaps
Junior Subordinated Debt Securities and Other Borrowings
Period of derivative agreement		5 years
Percentage at which derivative contract is entered		6.09%
Junior subordinated debt securities due March 2035 | Bridge Capital Trust I
Junior Subordinated Debt Securities and Other Borrowings
Debt securities issued				12,372,000
Fixed interest rate on debt securities (as a percent)				5.90%
Debt instrument period for which fixed interest rate is applicable				5 years
Basis of interest rate			LIBOR
Interest rate margin (as a percent)			1.98%
Junior subordinated debt securities due March 2037 | Bridge Capital Trust II
Junior Subordinated Debt Securities and Other Borrowings
Debt securities issued					5,155,000
Fixed interest rate on debt securities (as a percent)					6.60%
Debt instrument period for which fixed interest rate is applicable					5 years
Basis of interest rate					LIBOR
Interest rate margin (as a percent)					1.38%
Federal Home Loan Bank
Junior Subordinated Debt Securities and Other Borrowings
Total borrowing capacity						443,000,000
Amount of collateral in place to borrow						136,000,000
Borrowing capacity pledged to secure a letter of credit						10,000,000
Unsecured credit facilities
Junior Subordinated Debt Securities and Other Borrowings
Outstanding amount of unsecured borrowing lines						$ 47,000,000

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Premises and Equipment (Tables)

3 Months Ended

Mar. 31, 2015

Premises and Equipment

Schedule of premises and equipment

	March 31, 2015
			Accumulated			Net Book
(dollars in thousands)	Cost		Depreciation			Value
Leasehold improvements	$	7,116	$	(5,833	)	$	1,283
Furniture and fixtures	1,356		(1,114		)	242
Capitalized software	4,638		(4,282		)	356
Equipment	3,606		(3,125		)	481
Total premises and equipment	$	16,716	$	(14,354	)	$	2,362

	December 31, 2014
			Accumulated			Net book
(dollars in thousands)	Cost		Depreciation			Value
Leasehold improvements	$	7,103	$	(5,753	)	$	1,350
Furniture and fixtures	1,331		(1,097		)	234
Capitalized software	4,628		(4,219		)	409
Equipment	3,549		(3,038		)	511
Total premises and equipment	$	16,611	$	(14,107	)	$	2,504