BUSINESS COMBINATIONS

12 Months Ended

Dec. 31, 2014

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS

19.  BUSINESS COMBINATIONS – (*denotes that amount is unaudited)

On February 14, 2014, the Company acquired FNBNY resulting in the addition of total acquired assets on a fair value basis of $211.9 million, with loans of $89.7 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 29 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 $7.4 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 December 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 year ended December 31, 2014 include the operating results of FNBNY since the acquisition date of February 14, 2014. The following table summarizes the finalized fair value of the assets acquired and liabilities assumed on February 14, 2014:

(In thousands)	As Initially Reported			Measurement Period Adjustments			As Adjusted
(In thousands, except per share amounts)
Cash and due from banks	$	1,883		$	—		$	1,883
Interest earning deposits with banks	1,044			—			1,044
Securities	103,192			—			103,192
Loans	87,390			2,324			89,714
Premises and equipment	1,787			—			1,787
Core deposit intangible	1,930			(979		)	951
Other assets	12,682			696			13,378
Total Assets Acquired	$	209,908		$	2,041		$	211,949
Deposits	$	169,873		—			169,873
Federal Home Loan Bank term advances	39,282			—			39,282
Unsecured debt	1,450			—			1,450
Other liabilities and accrued expenses	1,825			795			2,620
Total Liabilities Assumed	$	212,430		$	795		$	213,225
Net Assets Acquired/(Liabilities Assumed)	(2,522		)	1,246			(1,276		)
Consideration Paid	6,140			—			6,140
Goodwill Recorded on Acquisition	$	8,662		$	(1,246	)	$	7,416

On December 14, 2014, the Company, the Bank and Community National Bank (“CNB”) entered into an Agreement and Plan of Merger (the “merger agreement”) pursuant to which Bridge Bancorp will acquire, in an all stock merger, CNB through the merger of CNB with and into The Bridgehampton National Bank.  CNB currently operates 11* branches in Nassau, Suffolk, Queens and Manhattan Counties with total assets of $951* million, including $761* million in loans, funded by deposits of $829* million.  Under the terms of the merger agreement, each outstanding share of CNB common stock will be converted into the right to receive 0.79* of a share of the Company’s common stock.  Based on the Company’s closing stock price on December 12, 2014 of $25.35*, the transaction implies a per share value of $20.03* and an aggregate estimated value of $141* million. The proposed merger is subject to customary closing conditions, including the receipt of regulatory approvals and approval by the stockholders of the Company and CNB. The merger is currently expected to be completed in the second quarter of 2015.  The Company will file a Registration Statement on Form S-4 subsequent to the filing of the annual Report on Form 10-K that will include historical and pro forma information regarding CNB and the Company which is required in connection with the merger.