10-Q 1 0001.htm QUARTERLY REPORT Bridge Bancorp, Inc. 10Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2000

OR

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

Commission file number 000-18546

BRIDGE BANCORP, INC
(Exact name of registrant as specified in its charter)

NEW YORK 11-2934195
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification Number)

2200 MONTAUK HIGHWAY BRIDGEHAMPTON, NEW YORK 11932
(Address of principal executive offices) (Zip Code)

Issuer's telephone number, including area code (631) 537-1000

Indicate by check mark 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 (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

There were 4,237,597 shares of common stock outstanding as of August 11, 2000.

BRIDGE BANCORP, INC.

PART I – FINANCIAL INFORMATION

      Item 1. Financial Statements

              Unaudited Consolidated Statements of Condition as of June 30, 2000
              and  December 31, 1999

              Unaudited  Consolidated  Statements  of Income for the Three Months
              and Six Months Ended June 30, 2000 and 1999

              Unaudited Consolidated Statements of Stockholders' Equity for the Six Months
              Ended June 30, 2000

              Unaudited Consolidated Statements of Cash Flows for the Six Months
              Ended June 30, 2000 and 1999

              Notes to Unaudited Consolidated Financial Statements

      Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

PART II – OTHER INFORMATION


      Item 1. Legal Proceedings
      Item 2. Changes in Securities
      Item 3. Defaults Upon Senior Securities
      Item 4. Submission of Matters to a Vote of Security Holders
      Item 5. Other Information
      Item 6. Exhibits and Reports on Form 8K
              11.0 Statement re: Computation of Per Share Earning
              27.0 Financial Data Schedule
      Signatures

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

BRIDGE BANCORP, INC. AND SUBSIDIARY
Unaudited Consolidated Statements of Condition
(In thousands, except share and per share amounts)

June 30, December 31, 2000 1999 -------------------------------------------------------------------------------------- ASSETS Cash and due from banks $ 15,657 $ 11,604 Interest earning deposits with banks 235 417 Federal funds sold 22,350 8,000 --------- --------- Total cash and cash equivalents 38,242 20,021 Investment in debt and equity securities, net: Securities available for sale, at fair value 105,974 84,596 Securities held to maturity (fair value of $5,370 and $13,361 respectively) 5,371 13,373 --------- --------- Total investment in debt and equity securities, net 111,345 97,969 Loans 188,467 170,870 Less: Allowance for loan losses (2,087) (1,971) --------- --------- Loans, net 186,380 168,899 Banking premises and equipment, net 9,321 8,466 Accrued interest receivable 2,013 1,857 Other assets 3,721 2,832 --------- --------- Total Assets $ 351,022 $ 300,044 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Demand deposits $ 104,922 $ 84,392 Savings, N.O.W. and money market deposits 159,357 128,917 Certificates of deposit of $100,000 or more 26,391 26,204 Other time deposits 33,964 34,809 --------- --------- Total deposits 324,634 274,322 Accrued interest on depositors' accounts 683 761 Other liabilities and accrued expenses 874 1,289 --------- --------- Total Liabilities 326,191 276,372 --------- --------- Stockholders' equity: Common stock, par value $.01 per share: Authorized: 20,000,000 shares; issued and outstanding 4,237,597 at 6/30/00 and 4,257,597 shares at 12/31/99 43 43 Surplus 21,261 21,261 Undivided profits 4,675 3,233 Less: Treasury Stock at cost, 20,000 shares (320) -- --------- --------- 25,659 24,537 Accumulated other comprehensive (loss)income, net of taxes (828) (865) --------- --------- Total Stockholders' Equity 24,831 23,672 Commitments and contingencies --------- --------- Total Liabilities and Stockholders' Equity $ 351,022 $ 300,044 ========= =========

See accompanying notes to the Unaudited Consolidated Financial Statements.

BRIDGE BANCORP, INC. AND SUBSIDIARY
Unaudited Consolidated Statements of Income
(In thousands, except per share amounts)

                                                       Six months ended June 30,     Three months ended June 30,
                                                            2000            1999            2000            1999
----------------------------------------------------------------------------------------------------------------
Interest income:
  Loans (including fee income)                           $ 8,115         $ 7,487         $ 4,203         $ 3,845
  Mortgage-backed securities                               1,794           1,104             982             548
  State and municipal obligations                            882             593             444             297
  U.S. Treasury and government agency securities             516             407             266             213
  Federal funds sold                                         361             341             175             194
  Other securities                                            36              36              18              19
  Deposits with banks                                         26              45              21              41
                                                         -------         -------         -------         -------
    Total interest income                                 11,730          10,013           6,109           5,157

Interest expense:
  Savings, N.O.W. and money market deposits                1,999           1,319           1,104             675
  Certificates of deposit of $100,000 or more                932             691             471             366
  Other time deposits                                        765             982             386             462
  Federal funds purchased                                     16            --                16            --
                                                         -------         -------         -------         -------
    Total interest expense                                 3,712           2,992           1,977           1,503
                                                         -------         -------         -------         -------
Net interest income                                        8,018           7,021           4,132           3,654
Provision for loan losses                                    105             210            --               105
                                                         -------         -------         -------         -------
Net interest income after provision for loan losses        7,913           6,811           4,132           3,549
                                                         -------         -------         -------         -------
Other income:
  Service charges on deposit accounts                        516             501             271             281
  Net securities gains                                      --               116            --               116
  Fees for other customer services                           433             412             251             231
  Other operating income                                     209             381             106             181
                                                         -------         -------         -------         -------
    Total other income                                     1,158           1,410             628             809
                                                         -------         -------         -------         -------
Other expenses:
  Salaries and employee benefits                           2,598           2,379           1,292           1,161
  Net occupancy expense                                      424             379             222             185
  Furniture and fixture expense                              378             392             203             200
  Net securities losses                                      266            --               266            --
  Other operating expenses                                 1,928           1,816           1,006           1,017
                                                         -------         -------         -------         -------
    Total other expenses                                   5,594           4,966           2,989           2,563
                                                         -------         -------         -------         -------
Income before provision for income taxes                   3,477           3,255           1,771           1,795
Provision for income taxes                                 1,017           1,135             521             628
                                                         -------         -------         -------         -------
Net income                                               $ 2,460         $ 2,120         $ 1,250         $ 1,167
                                                         =======         =======         =======         =======
Basic earnings per share                                 $  0.58         $  0.50         $  0.29         $  0.28
                                                         =======         =======         =======         =======
Diluted earnings per share                               $  0.57         $  0.49         $  0.29         $  0.27
                                                         =======         =======         =======         =======

See accompanying notes to the Unaudited Consolidated Financial Statements.

BRIDGE BANCORP, INC. AND SUBSIDIARY
Unaudited Consolidated Statements of Stockholders' Equity
(In thousands, except share and per share amounts)

                                                                                                              Accumulated
                                                                                                                    Other
                                                 Common Stock          Comprehensive  Undivided   Treasury  Comprehensive
                                              Shares   Amount  Surplus        Income    Profits      Stock         Income     Total
                                           -----------------------------------------------------------------------------------------

                                           ===========================              ================================================

Balance at December 31, 1999               4,257,597      $43  $21,261                   $3,233      $   0          ($865)  $23,672
Net income                                      --        --      --          $2,460      2,460       --             --       2,460
Purchase of  Treasury Stock                  (20,000)     --      --                                  (320)                    (320)
Cash dividends declared, $.24 per share                                                  (1,018)                             (1,018)
Net change in  unrealized (depreciation)/
  appreciation in securities available for      --        --      --              37       --         --               37        37
   sale, net of tax
                                                                      --------------
Comprehensive Income                            --        --      --          $2,497       --         --             --        --
                                           ---------------------------==============------------------------------------------------
Balance at June 30, 2000                   4,237,597      $43  $21,261                  $ 4,675      ($320)         ($828)  $24,831
                                           =========================================================================================

See accompanying notes to the Unaudited Consolidated Financial Statements.

BRIDGE BANCORP, INC. AND SUBSIDIARY
Unaudited Consolidated Statements of Cash Flows
(In thousands)

Six months ended June 30, 2000 1999 ----------------------------------------------------------------------------------------------------- Operating activities: Net Income $ 2,460 $ 2,120 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 105 210 Depreciation and amortization 382 375 Accretion of discounts (53) (184) Amortization of premiums 73 288 Net securities losses (gains) 266 (166) (Increase) in accrued interest receivable (156) (121) Deferred income taxes 43 -- (Increase) in other assets (958) (537) (Decrease) in accrued and other liabilities (534) (926) -------- -------- Net cash provided by operating activities 1,628 1,109 -------- -------- Investing activities: Purchases of securities available for sale (29,355) (21,601) Purchases of securities held to maturity (3,181) (2,363) Proceeds from sales of securities available for sale 4,386 6,836 Proceeds from maturing securities available for sale 785 125 Proceeds from maturing securities held to maturity 11,183 3,119 Proceeds from principal payments on mortgage-backed securities 2,584 6,001 Net (increase) in loans (17,587) (1,994) Purchases of banking premises and equipment, net of deletions (1,237) (144) -------- -------- Net cash used by investing activities (32,422) (10,021) -------- -------- Financing activities: Net increase in deposits 50,312 31,297 Purchase of treasury stock (320) -- Net proceeds from exercise of stock options issued pursuant to equity incentive plan -- 156 Cash dividends paid (977) (1,484) -------- -------- Net cash provided by financing activities 49,015 29,969 -------- -------- Increase in cash and cash equivalents 18,221 21,057 Cash and cash equivalents beginning of period 20,021 14,282 -------- -------- Cash and cash equivalents end of period $ 38,242 $ 35,339 ======== ======== Supplemental information-Cash Flows: Cash paid for: Interest $ 3,790 $ 3,655 Income taxes $ 1,225 $ 1,224 Noncash investing and financing activities: Dividends declared and unpaid $ 509 $ 425

See accompanying notes to the Unaudited Consolidated Financial Statements.

BRIDGE BANCORP, INC. AND SUBSIDIARY
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Financial Statement Presentation

The accompanying Unaudited Consolidated Financial Statements include the accounts of Bridge Bancorp, Inc. (the Registrant or Company) and its wholly-owned subsidiary, The Bridgehampton National Bank (the Bank). The Bank has one subsidiary that was formed on May 14, 1999, Bridgehampton Community Inc., a passive Real Estate Investment Trust (REIT). The Unaudited Consolidated Financial Statements included herein reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. In preparing the interim financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported periods. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified. Actual future results could differ significantly from those estimates. The results of operations for the six months ended June 30, 2000 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain reclassifications have been made to prior year amounts to conform to current year presentations. Certain information and note disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The Unaudited Consolidated Financial Statements should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company's 1999 Annual Report on Form 10-K.

2. Earnings Per Share

For the six months ended June 30, 2000 and 1999, diluted weighted average common stock and common stock equivalent shares outstanding for the diluted earnings per share were 4,266,107 and 4,275,843, respectively. For the six months ended June 30, 2000 and 1999, the total weighted average number of shares of common stock outstanding for the basic earnings per share calculation were 4,244,081 and 4,246,931, respectively. For the three months ended June 30, 2000 and 1999, diluted weighted average common stock and common stock equivalent shares outstanding for the diluted earnings per share were 4,258,370 and 4,276,683 respectively. For the three months ended June 30, 2000 and 1999, the total weighted average number of shares of common stock outstanding for the basic earnings per share calculation were 4,237,597 and 4,249,047, respectively. Diluted earnings per share, which reflects the potential dilution that could occur if outstanding stock options were exercised and resulted in the issuance of common stock that then shared in the earnings of the Company, is computed by dividing net income by the weighted average number of common shares and dilutive stock options.

3. Repurchased Stock

On February 16, 2000 the Company announced that its Board of Directors approved a stock repurchase. The Company purchased 20,000 shares in an open market transaction. The repurchased shares are being held as Treasury Stock.

4. Investment in Debt and Equity Securities

A summary of the amortized cost and estimated fair value of investment securities is as follows:

06/30/00 12/31/99 -------------------------------------------------------------------------------------------------------- (In thousands) Estimated Estimated Amortized Fair Amortized Fair Cost Value Cost Value ================================================================= Available for sale: U.S. Treasury securities $ 7,058 $ 7,053 $ 8,078 $ 8,111 Oblig. of U.S. Government agencies 8,916 8,805 4,984 4,912 Oblig. of NY State & pol.subs. 31,615 31,204 28,489 28,114 Mortgage-backed securities 59,788 58,912 44,511 43,459 ----------------------------------------------------------------- Total available for sale $107,377 $105,974 $86,062 $84,596 ----------------------------------------------------------------- Held to maturity: Oblig. of NY State & pol.subs. $ 4,288 $ 4,287 $12,290 $12,278 Non marketable Equity securities: Federal Reserve Bank Stock $ 36 $ 36 $ 36 $ 36 Federal Home Loan Bank Stock 1,047 1,047 1,047 1,047 ----------------------------------------------------------------- Total held to maturity $ 5,371 $ 5,370 $13,373 $13,361 ----------------------------------------------------------------- Total debt and equity securities $112,748 $111,344 $99,435 $97,957 =================================================================

5. Loans

Loans are summarized as follows:

06/30/00 12/31/99 ---------------------------------------------------------------------- (In thousands) Real Estate Loans $154,588 $141,479 Unsecured business and personal loans 32,049 27,869 Secured business and personal loans 1,153 1,086 Installment/consumer loans 892 675 --------------------------- Total loans $188,682 $171,109 Unearned income (215) (239) --------------------------- $188,467 $170,870 Allowance for loan losses (2,087) (1,971) --------------------------- Net loans $186,380 $168,899 ===========================

The principal business of the Bank is lending, primarily in commercial real estate loans, construction loan mortgages, home equity loans, land loans, consumer loans, home advantage loans, residential mortgages and commercial loans. The Bank considers its primary lending area as the five East End towns of Suffolk County, New York. Since the primary lending area of the Bank is the two forks of the eastern end of Long Island, the loan portfolio as a whole is dependent on the economic conditions of the geographic market served by the Bank.

6. Allowance for Loan Losses

The Bank monitors its portfolio on a regular basis, with consideration given to detailed analysis of classified loans, delinquency trends, probable losses, past loss experience, current economic conditions, concentrations of credit and other pertinent factors. Weight is also given to input from the Bank's outside loan review consultants. Additions to the allowance are charged to expense and realized losses, net of recoveries, are charged to the allowance. Based on management's and the loan classification committee's determination of the condition of the portfolio, the overall level of reserves is periodically adjusted to account for the inherent and specific risks within the entire portfolio. At a minimum, the adequacy of these reserves are adjusted quarterly, to a level deemed appropriate by management based on their risk assessment of the entire portfolio. Based on the loan classification committee's review of the classified loans and the overall reserve levels as they relate to the entire loan portfolio at the quarter ended June 30, 2000, management believes the allowance for possible loan losses is adequate.

While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in conditions. In addition, various regulatory agencies, as an integral part of the examination process, periodically review the Bank's allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

Changes in the allowance for possible loan losses are summarized as follows:

Period ended, 06/30/00 12/31/99 06/30/99 ---------------------------------------------------------------------------------------- (In thousands) Allowance for loan losses balance at beginning of period $ 1,971 $ 1,713 $ 1,713 Charge-offs: Real estate loans 9 170 -- Unsecured business & personal loans 62 39 16 Secured business & personal loans -- -- -- Installment/consumer loans 21 62 31 -------------------------------------- Total 92 271 47 Recoveries: Real estate loans 55 -- -- Unsecured business & personal loans 1 4 1 Secured business & personal loans -- -- -- Installment/consumer loans 47 105 73 -------------------------------------- Total 103 109 74 -------------------------------------- Net recoveries (charge-offs) 11 (162) 27 Provision for loan losses charged to operations 105 420 210 -------------------------------------- Balance at end of period $ 2,087 $ 1,971 $ 1,950 ====================================== Ratio of net recoveries (charge-offs) during period to average loans outstanding 0.01% -0.10% 0.02% ======================================

7. Asset Quality

The following table summarizes non-performing loans:

06/30/00 12/31/99 ------------------------------------------------------------------ (In thousands) Loans 90 days or more past due and still accruing: Other $ 11 $ 1 Nonaccrual loans: Mortgage loans: Single-family residential 418 -- Commercial real estate -- 300 Construction and Land -- -- Other 18 189 --------------------- Total nonaccrual loans 736 189 Restructured loans -- 776 Other real estate owned, net -- -- --------------------- Total $747 $966 =====================

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Bridge Bancorp, Inc. (the Company), a New York corporation, is a one-bank holding company formed effective March 31, 1989, and on a parent only basis, has minimal results of operations. In the event the Company subsequently expands its current operations, it will be dependent on dividends from its wholly owned subsidiary, The Bridgehampton National Bank (the Bank), its own earnings, additional capital raised and borrowings as sources of funds. The information below reflects principally the financial condition and results of operations of the Bank. The Bank's results of operations are primarily dependent on its net interest income, which represents the difference between income on interest earning assets and expenses on interest bearing liabilities. Interest income on loans and investments is a function of the average balances outstanding and the average rates earned during a period. Interest expense is a function of the average amount of interest bearing deposits and the average rates paid on such deposits during a period. The Bank also generates other income, such as service charges on deposit accounts and income from fees for other customer services and merchant credit card processing programs. The level of its other expenses, such as employees' salaries and benefits and occupancy costs, further affects the Bank's net income. This discussion and analysis should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company's 1999 Form 10-K.

Financial Condition

The assets of the Registrant totaled $351,022,000 at June 30, 2000, an increase of $50,978,000 or 17.0% from the year-end. This increase mainly results from an increase in cash and cash equivalents of $18,221,000 or 91.0%, an increase in available-for-sale securities of $21,378,000 or 25.3%, and an increase in net loans of $17,481,000 or 10.4%. These increases were slightly offset by a decrease in held-to-maturity securities of $8,002,000 or 59.8%. The primary source of funds for the increase in assets was derived from increased deposits of $50,312,000 or 18.3%. Demand deposits increased $20,530,000 or 24.3% over December 31, 1999. Savings, N.O.W. and money market deposits increased $30,440,000 or 23.6%. Certificates of deposit of $100,000 or more remained relatively stable with a slight increase of $187,000 or .7% over December 31, 1999. Other time deposits decreased $845,000 or 2.4% over year end. The increase in deposits is primarily attributed to continued business development efforts targeting high balance relationships.

Total stockholders' equity was $24,831,000 at June 30, 2000, an increase of 4.9% over December 31, 1999. The increase of $1,159,000 was the result of net income for the six month period ended June 30, 2000, of $2,460,000; less $320,000 for the purchase of 20,000 shares of treasury stock; less cash dividends declared of $1,018,000; and plus the net decrease in unrealized depreciation in securities available for sale, net of tax, of $37,000. Total capital before unrealized losses on available-for-sale securities increased by $1,122,000 or 4.6%. Securities held as available-for-sale may be sold in response to , or in anticipation of, changes in interest rates and resulting prepayment risk, or other factors. During the second quarter of 2000, management sold a portion of the lowest yielding securities in the available for sale investment portfolio and reinvested these funds in securities earning current market rates of return. This partial repositioning of the available for sale securities portfolio and changes in market conditions are the primary reason for the net decrease in unrealized depreciation in securities available for sale.

Analysis of Net Interest Income

Net interest income, the primary contributor to earnings, represents the difference between income on interest earning assets and expenses on interest bearing liabilities.

The following table sets forth certain information relating to the Company's average consolidated statements of financial condition and reflects the average yields on assets and average costs of liabilities for the three month and six month periods ended June 30, 2000 and 1999, respectively. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, for the periods shown. Average balances are derived from daily average balances. Interest on nonaccruing loans has been included only to the extent reflected in the consolidated statements of income. However, the loan balances are included in the average amounts outstanding. Loan fee income for the three months ended June 30, 2000 and 1999 totaled $47,000 and $49,000, respectively. For the six months ended June 30, 2000 and 1999 loan fee income totaled $81,000 and $91,000, respectively. For purposes of this table the average balances for investment in debt and equity securities exclude unrealized appreciation/depreciation due to the application of SFAS No. 115.

Six months ended June 30, 2000 1999 ================================================================================================================================ (In thousands) Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ================================================================================================================================ Interest earning assets: Loans (including fee income) $178,801 $8,115 9.1% $168,961 $7,487 8.9% Mortgage backed securities 50,723 1,794 7.1% 33,407 1,104 6.7% Tax exempt investment securities 41,013 1,246 6.1% 27,084 910 6.8% Taxable investment securities 16,007 516 6.5% 12,610 407 6.5% Federal funds sold 11,661 361 6.2% 14,383 341 4.8% Other securities 1,083 36 6.7% 1,083 36 6.7% Deposits with banks 1,156 26 4.5% 1,885 45 4.8% ======================================================================= Total interest earning assets $300,444 $12,094 8.1% $259,413 $10,330 8.0% Interest bearing liabilities: Savings, N.O.W. and money market deposits $138,484 $1,999 2.9% $114,433 $1,319 2.3% Certificates of deposit of $100,000 or more 34,284 932 5.5% 28,957 691 4.8% Other time deposits 34,318 765 4.5% 41,358 982 4.9% Federal funds purchased 431 16 7.5% - - - ======================================================================= Total interest bearing liabilities $207,517 $3,712 3.6% $184,748 $2,992 3.3% ======================================================================= Net interest income/interest rate spread (1) $8,382 4.5% $7,338 4.8% ================= ================= Net interest earning assets/net interest margin $ 92,927 5.6% $ 74,665 5.7% ======== ==== ========= ==== Ratio of interest earning assets to interest bearing liabilities 144.8% 140.4% ====== ====== Less: Tax equivalent adjustment $(364) $(317) ====== ====== Net interest income $8,018 $7,021 ====== ====== Three months ended June 30, 2000 1999 ================================================================================================================================ (In thousands) Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ================================================================================================================================ Interest earning assets: Loans (including fee income) $183,426 $4,203 9.2% $169,184 $3,845 9.2% Mortgage backed securities 54,876 982 7.2% 33,362 548 6.7% Tax exempt investment securities 41,179 627 6.1% 27,282 457 6.8% Taxable investment securities 16,458 266 6.5% 13,040 213 6.6% Federal funds sold 10,458 175 6.7% 15,774 194 5.0% Other securities 1,083 18 6.7% 1,083 19 7.1% Deposits with banks 1,894 21 4.5% 3,410 41 4.9% ======================================================================= Total interest earning assets $309,374 $6,292 8.2% $263,135 $5,317 8.2% Interest bearing liabilities: Savings, N.O.W. and money market deposits $143,486 $1,104 3.1% $116,432 $ 675 2.4% Certificates of deposit of $100,000 or more 33,483 471 5.7% 30,641 366 4.8% Other time deposits 34,155 386 4.5% 39,830 462 4.7% Federal funds purchased 862 16 7.5% - - - ======================================================================= Total interest bearing liabilities $211,986 $1,977 3.8% $186,903 $1,503 3.3% ======================================================================= Net interest income/interest rate spread (1) $4,315 4.4% $3,814 4.9% ================= ================= Net interest earning assets/net interest margin $ 97,388 5.6% $ 76,232 5.9% ======== ==== ========= ==== Ratio of interest earning assets to interest bearing liabilities 145.9% 140.8% ====== ====== Less: Tax equivalent adjustment $(183) $(160) ====== ====== Net interest income $4,132 $3,654 ====== ====== (1) The above table is presented on a tax equivalent basis.

Rate/Volume Analysis

Net interest income can also be analyzed in terms of the impact of changing rates and changing volumes. The following table describes the extent to which changes in interest rates and changes in the volume of interest earning assets and interest bearing liabilities have affected the Bank's interest income and interest expense during the periods indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rates (changes in rates multiplied by prior volume), and (iii) the net changes. For purposes of this table, changes which are not due solely to volume changes or rate changes have been allocated to these categories based on the respective percentage changes in average volume and average rate as they compare to each other. Due to the numerous simultaneous volume and rate changes during the period analyzed, it is not possible to precisely allocate changes between volume and rates. In addition, average earning assets include nonaccrual loans.

For the Periods Ended June 30, Six months ended Three months ended 2000 Over 1999 2000 Over 1999 (In thousands) Changes Due To Changes Due To ========================================================================================================================= Volume Rate Net Change Volume Rate Net Change Interest income on interest earning assets: Loans (including loan fee income) 453 175 628 $358 $ -- $358 Mortgage-backed securities 618 72 690 389 45 434 Tax exempt investment securities 596 (260) 336 459 (289) 170 Taxable investment securities 109 -- 109 75 (22) 53 Federal funds sold (151) 171 20 (276) 257 (19) Other securities -- -- -- -- (1) (1) Deposits with banks (16) (3) (19) (17) (3) (20) ---------------------------------------------------------------------- Total interest earning assets $1,609 $155 $1,764 $988 $ (13) $975 ---------------------------------------------------------------------- Interest expense on interest bearing liabilities Savings, N.O.W. and money market deposits 303 377 680 181 248 429 Certificates of deposit of $100,000 or more 134 107 241 36 69 105 Other time deposits (159) (58) (217) (58) (18) (76) Federal funds purchased 16 -- 16 16 -- 16 --------------------------------------------------------------------- Total interest bearing liabilities $294 $426 $720 $175 $ 299 $474 --------------------------------------------------------------------- Net interest income $1,315 $(271) $1,044 $813 $(312) $501 ===================================================================== (1) The above table is presented on a tax equivalent basis.

Capital

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). Management believes, as of June 30, 2000, that the Bank meets all capital adequacy requirements to which it is subject and is considered well capitalized.

The Bank's actual capital amounts and ratios are presented in the following table:

As of June 30, 2000 ========================================================================================================================== (In thousands) To Be Well For Capital Capitalized Under Adequacy Prompt Corrective Actual Purposes Action Provisions ========================================================================================================================== Amount Ratio Amount Ratio Amount Ratio ============================================================================== Total Capital (to risk weighted assets) 27,746 12.3% 17,989 >8.0% 22,486 >10.0% Tier 1 Capital (to risk weighted assets) 25,659 11.4% 8,994 >4.0% 13,492 > 6.0% Tier 1 Capital (to average assets) 25,659 7.9% 13,052 >4.0% 16,315 > 5.0% As of December 31, 1999 ========================================================================================================================== (In thousands) To Be Well For Capital Capitalized Under Adequacy Prompt Corrective Actual Purposes Action Provisions ========================================================================================================================== Amount Ratio Amount Ratio Amount Ratio ============================================================================== Total Capital (to risk weighted assets) 26,508 13.2% 16,090 >8.0% 20,113 >10.0% Tier 1 Capital (to risk weighted assets) 24,537 12.2% 8,045 >4.0% 12,068 > 6.0% Tier 1 Capital (to average assets) 24,537 8.2% 12,024 >4.0% 15,030 > 5.0%

Recent Accounting Developments

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities” (SFAS No. 133). This Statement established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measures those instruments at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of a derivative and the resulting designation.

In June 1999, the FASB issued SFAS No. 137 "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133." This pronouncement delayed the effective date of the provisions of SFAS No. 133 to all fiscal quarters of fiscal years beginning after June 15, 2000. Management is in the process of determining the impact, if any, the implementation of SFAS No. 133 and 137 will have on their statements of income and condition.

Comparison of Operating Results for the Three Months and Six Months Ended June 30, 2000 and 1999

During the six month period ended June 30, 2000, the Registrant earned net income of $2,460,000 or $ .57 per share as compared with $2,120,000 or $.49 per share for the same period in 1999. During the three month period ended June 30, 2000, the Registrant earned net income of $1,250,000 or $.29 per share as compared with $1,167,000 or $.27 per share for the same period in 1999. Highlights for the six months ended June 30, 2000 include: (i) a $997,000 or 14.2% increase in net interest income; (ii) a $252,000 or 17.9% decrease in total other income; and (iii) a $628,000 or 12.7% increase in total other expenses over the same period in 1999. The provision for income taxes decreased $118,000 or 10.4% over the same period last year. Highlights for the three months ended June 30, 2000 include: (i) a $478,000 or 13.1% increase in net interest income; (ii) a $181,000 or 22.4% decrease in total other income; and (iii) a $426,000 or 16.6% increase in total other expenses over the same period in 1999. The provision for income taxes decreased $107,000 or 17.0% over the same period last year.

Net income for the first six months of 2000 reflects annualized returns of 19.77% on average total stockholders' equity and 1.52% on average total assets as compared to the corresponding figures for the preceding calendar year of 21.00% on average total stockholders' equity and 1.59% on average total assets. For purposes of these calculations, average stockholders' equity excludes the effects of changes in the unrealized appreciation (depreciation) on securities available for sale, net of taxes.

Net interest income, the primary source of income, increased by $997,000 or 14.2% for the current six month period over the same period last year. The increase primarily resulted from an increase in average total interest earning assets from $259,413,000 in 1999 to $300,444,000 for the comparable period in 2000, a 15.8% increase. Average interest bearing liabilities increased 12.3% to $207,517,000 in 2000 from $184,748,000 for the same period last year. The yield on average interest earning assets at June 30, 2000 increased to 8.1% from 8.0% during the same period in 1999. The cost of average interest bearing liabilities increased to 3.6% from 3.3% during the same period in 1999. The net yield on average earning assets decreased to 5.6% from 5.7% during the same period last year.

Net interest income increased by $478,000 or 13.1% for the current three month period over the same period last year. The increase primarily resulted from an increase in average total interest earning assets from $263,135,000 in 1999 to $309,374,000 for the comparable period in 2000, a 17.6% increase. Average interest bearing liabilities increased 13.4% to $211,986,000 in 2000 from $186,903,000 for the same period last year. The yield on average interest earning assets remained constant at 8.2% for the three month periods ended June 30, 1999 and 2000. The cost of average interest bearing liabilities increased to 3.8% from 3.3% during the same period in 1999. The net yield on average earning assets decreased to 5.6% from 5.9% during the same period last year.

Average loans grew by $9,840,000 or 5.8% when compared to the same period in 1999. Each component of the loan portfolio contributed to the growth; however, real estate loans increased $15,363,000 or 11.0% and unsecured business and personal loans increased $3,065,000 or 10.6%. Growth in real estate loans is partially attributed to a change in holding strategy whereby a portion of originated residential mortgages are held in portfolio instead of being sold on the secondary market. Unsecured business and personal loans increased as a result of business development efforts.

The performance of the loan portfolio continued to be strong through June 30, 2000 with net recoveries of $11,000. Since December 31, 1999 non-performing loans decreased 22.7% from $966,000 to $747,000, representing 0.40% of loans, net, at June 30, 2000. As the Company had no foreclosed real estate at quarter's end, total non-performing assets represented 0.21% of total assets at the corresponding date.

No provision for loan losses was recorded in the second quarter of 2000. The reasons for this action lie in the level of coverage provided by the current allowance for loan losses, and in the historic and current quality of the Company's loan portfolio. A $105,000 provision for loan losses was made during the same period in 1999. The provision for loan losses made during the six month period ended June 30, 2000 totaled $105,000 compared to a $210,000 provision for the same period in 1999. The allowance for loan losses increased to $2,087,000 at June 30, 2000, as compared to $1,971,000 at December 31, 1999. As a percentage of loans, the allowance was 1.11% at June 30, 2000 and 1.15% at December 31, 1999.

While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in conditions. In addition, various regulatory agencies, as an integral part of the examination process, periodically review the Bank's allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance based on their judgments from the information available to them at the time of their examination.

Total other income decreased during the three month period ended June 30, 2000 by $181,000 or 22.4% over the same period last year. For the six month period ended June 30, 2000 total other income decreased $252,000 or 17.9% over the same period last year. Service charges on deposit accounts for the three month period ended June 30, 2000 totaled $271,000, a decrease of $10,000 or 3.6% over the same period last year. Service charges on deposit accounts for the six month period ended June 30, 2000 totaled $516,000, an increase of $15,000 or 3.0% over the same period last year. Fees for other customer services for the three month period ended June 30, 2000 totaled $251,000, an increase of $20,000 or 8.7% over the same period last year. Fees for other customer services for the six month period ended June 30, 2000 totaled $433,000, an increase of $21,000 or 5.1% over the same period last year. Merchant processing income increased due to an increase in fees resulting from a change in the pricing structure made in the second quarter of 1999 and an increase in the volume of merchant sales during 2000. This increase was partially offset by a decrease in fees collected on residential mortgage loans due to a reduction in the number of residential mortgages originated over the same period. Decreases in other income were partially offset by fees received through the new debit card product introduced during the third quarter of 1999, and fee income recognized as a result of a referral relationship with another institution to provide wealth management services to the Bank's customers.

Other operating income for the three month period ended June 30, 2000 totaled $106,000, a decrease of $75,000 or 41.4% over the same period last year. Other operating income for the six month period ended June 30, 2000 totaled $209,000, a decrease of $172,000 or 45.1% over the same period last year. The decrease primarily resulted from a decrease in income from the gain on the sale of mortgages of $91,000 or 72.8% to $43,000 for the three month period ended June 30, 2000. For the six month period ended June 30, 2000 income from the gain on the sale of mortgages decreased $191,000 or 71.5% to $76,000. While revenue from mortgage banking operations was down, corresponding expense reductions partially offset such decline.

Total other expenses increased during the three month period ended June 30, 2000 by $426,000 or 16.6% over the same period last year. For the six month period ended June 30, 2000 total other expenses increased $628,000 or 12.7% over the same period last year. Salary and benefit expense increased $131,000 or 11.3% for the three month period ended June 30, 2000 over the same period last year. For the six month period ended June 30, 2000 salary and benefit expense increased $219,000 or 9.2% over the same period last year. The increase in salary expense is attributed to increased staffing, primarily in the item processing department that the Bank moved in house in the first quarter of 2000, and salary increases. Net occupancy expenses increased $37,000 or 20.0% during the three month period ended June 30, 2000, and these expenses increased $45,000 or 11.9% for the six month period ended June 30, 2000, over the same period last year. These increases result from the leasing of space for the new branch offices in Greenport, opened during the second quarter, and Sag Harbor which is scheduled to open in the third quarter. Furniture and fixture expense for the three month period ended June 30, 2000 increased $3,000 or 1.5% over the same period last year. For the six month period ended June 30, 2000 furniture and fixture expense decreased $14,000 or 3.6% over the same period last year. The increase in the three month period is primarily attributed to depreciation expense related to new branch opening in Greenport and the new item processing department in the Main Office. This decrease for the six month period is partially attributed to the reduction in depreciation expense due to a prior year computer conversion being fully depreciated by the fourth quarter of 1999.

During the second quarter of 2000, management sold a portion of the lowest yielding securities in the available for sale investment portfolio and reinvested these funds in securities earning current market rates of return. The net loss recognized on this sale was $266,000.

Total other operating expenses for the three month period ended June 30, 2000 totaled $1,006,000, a decrease of $11,000 or 1.1% over the same period last year. For the six month period ended June 30, 2000 total other operating expenses totaled $1,928,000 an increase of $112,000 or 6.2% over the same period last year. The increase is partially due to large one time expenses related to the implementation of in house item processing, statement rendering and check imaging. Decreased item processing expenses paid to a vendor partially offset these costs. Also attributable to this increase is a change in the processing of the merchant credit card program, as well as increased marketing and business development costs attributed to the opening of two new branches. During the first half of 1999, the Bank incurred non recurring expenses relative to the development of training programs. Additionally in the second quarter of 1999 the Bank began incurring one time expenses due to the formation of a subsidiary. Reduction of these expenses in the current year partially offset the other increases in other operating expenses.

Asset/Liability Management

The Company's primary earnings source is net interest income, which is affected by changes in the level of interest rates, the relationship between rates, the impact of interest rate fluctuations on asset prepayments, the level and composition of deposits, and the credit quality of the portfolio. Management's asset/liability objectives are to maintain a strong, stable net interest margin, to utilize its capital effectively without taking undue risks and to maintain adequate liquidity.

The Company's Asset/ Liability Committee, comprised of members of senior management and the Board, meets periodically to evaluate the impact of changes in market interest rates on assets and liabilities, net interest margin, capital and liquidity. Risk assessments are governed by policies and limits established by senior management which are reviewed and approved by the full Board of Directors.

Liquidity

The objective of liquidity management is to ensure the availability of sufficient resources to meet all financial commitments. Liquidity management addresses the ability to meet deposit withdrawals either on demand or contractual maturity, to repay other borrowings as they mature and to make new loans and investments as opportunities arise.

The Company's most liquid assets are cash and cash equivalents, securities available for sale and securities held to maturity due within one year. The levels of these assets are dependent upon the Company's operating, financing, lending and investing activities during any given period. Other sources of liquidity include loan and security principal repayments and maturities, lines of credit with other financial institutions, the sale of securities from the available for sale portfolio, and growth in the core deposit base. While scheduled loan amortization, maturing securities and short term investments are a relatively predictable source of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. The Bank adjusts its liquidity levels as appropriate to meet funding needs such as deposit outflows, loans, asset/liability objectives and suggested O.C.C. measurements such as loans to capital ratios. At June 30, 2000, the Company had aggregate lines of credit of $20,000,000 with correspondent banks to provide short term credit for liquidity requirements. The Company also has the ability, as a member of the Federal Home Loan Bank ("FHLB") system, to borrow against unencumbered residential mortgages owned by the Bank. At June 30, 2000, the Company had no such borrowings outstanding.

The Company's liquidity positions are monitored daily to ensure the maintenance of an optimum level and efficient use of available funds. Management believes the Company has sufficient liquidity to meet its operating requirements.

Private Securities Litigation Reform Act Safe Harbor Statement

In addition to historical information, this Management's discussion and analysis includes certain forward-looking statements, which involve risk and uncertainties, based on the beliefs, assumptions and expectations of management of the Company. Words such as "expects", "believes", "should", "plans", "will", "estimates", and variations of such similar expressions are intended to identify such forward-looking statements. The Bank's annual results could differ materially from those management expectations contemplated by the forward-looking statements. Factors that could cause future results to vary from current management expectations include, but are not limited to, general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities, changes in interest rates, deposit flows, the cost of funds, demand for loan products, demand for financial services, competition, changes in the quality and composition of the Bank's loan and investment portfolios, changes in accounting principles, policies or guidelines, and other economic, competitive, governmental and technological factors affecting the Bank's operations, markets, products, services and prices. In addition, the Bank assumes no duty to update forward-looking statements.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable

Item 2. Changes in Securities

Not applicable

Item 3. Defaults upon Senior Securities

Not applicable

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable

Item 5. Other Information

Not applicable

Item 6. Exhibits and Reports on Form 8-K

a. Exhibits

11.0 Statement re: Computation of Per Share Earnings

27.0 Financial Data Schedule

b. Reports on Form 8-K

None

SIGNATURES

In accordance with the requirement of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BRIDGE BANCORP, INC.



Date: August 11, 2000   /s/Thomas J. Tobin
                        _________________________________
                        Thomas J. Tobin
                        President and Chief Executive Officer

Date: August 11, 2000   /s/Christopher Becker
                        __________________________________
                        Christopher Becker
                        Executive Vice President and Treasurer

SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

BRIDGE BANCORP, INC.

PART I – FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

BRIDGE BANCORP, INC. AND SUBSIDIARY NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

PART II. OTHER INFORMATION

SIGNATURES

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

BRIDGE BANCORP, INC. AND SUBSIDIARY
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS