BUSINESS COMBINATIONS

3 Months Ended

Mar. 31, 2014

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

14.  BUSINESS COMBINATIONS

On September 30, 2013, the Company announced a definitive agreement under which the Bank would acquire the First National Bank of New York (“FNBNY”).  The FNBNY transaction closed on February 14, 2014 resulting in the addition of total acquired assets on a fair value basis of $209.9 million, with loans of $87.4 million, investment securities of $103.2 million and deposits of $169.9 million.  The transaction expanded our geographic footprint into Nassau County, complements our existing branch network and enhances our asset generation capabilities. The expanded branch network allows us to serve a greater portion of the Long Island and metropolitan marketplace through a network of 26 branches.

Under the terms of the Agreement, the Company acquired FNBNY at a purchase price of $6.1 million and issued an aggregate of 240,598 Bridge Bancorp shares in exchange for all the issued and outstanding stock of FNBNY and recorded goodwill of $8.7 million which is not deductible for tax purposes.  The purchase price is subject to certain post-closing adjustments equal to 60 percent of the net recoveries of principal on $6.3 million of certain identified problem loans over a two-year period after the acquisition. Based on current assumptions, the Company has not recorded an estimated liability as of the acquisition date and March 31, 2014 associated with these post-closing adjustments.

The acquisition was accounted for under the acquisition method of accounting in accordance with FASB ASC 805, “Business Combinations.” Accordingly, the assets acquired and liabilities assumed were recorded at their respective acquisition date fair values, and identifiable intangible assets were recorded at fair value.  The operating results of the Company for the three month period ended March 31, 2014 include the operating results of FNBNY since the acquisition date of February 14, 2014.

The following summarizes the preliminary fair value of the assets acquired and liabilities assumed on February 14, 2014:

	February 14,
(In thousands)	2014
Cash and due from banks	$	1,883
Interest earning deposits with banks	1,044
Securities	103,192
Loans	87,390
Premises and equipment	1,787
Core deposit intangible	1,930
Other assets	12,682
Total Assets Acquired	$	209,908
Deposits	$	169,873
Federal Home Loan Bank term advances	39,282
Unsecured debt	1,450
Other liabilities and accrued expenses	1,825
Total Liabilities Assumed	$	212,430
Net Assets (Liabilities) Acquired	(2,522		)
Consideration Paid	6,140
Goodwill Recorded on Acquisition	$	8,662

Considering the closing date of the transaction, the above fair values are preliminary and subject to adjustment as the Company finalizes fair value assessments. In accordance with FASB ASC 805-10 (Subtopic 25-15), the Company has up to one year from date of acquisition to complete this assessment.