Sept 30 - Bridge Bancorp Inc. (Nasdaq: BDGE), the parent company of Bridgehampton National Bank, has announced the signing of a definitive agreement to acquire FNBNY Bancorp and its wholly owned subsidiary, the First National Bank of New York. The transaction has been approved by the board of directors of each company and is expected to close in the first quarter of 2014. Completion of the transaction is subject to customary closing conditions, including the receipt of required regulatory approvals and the approval of FNBNY's shareholders.
Under the terms of the agreement, shareholders of FNBNY will receive an aggregate of 244,110 Bridge Bancorp shares in exchange for all the issued and outstanding stock of FNBNY, subject to certain adjustments. The purchase price will increase to the extent principal is recovered on $6.3 million of certain identified problem loans through closing and over a two-year period after the acquisition. The purchase price will decrease if recoveries of $0.4 million of certain insurance claims are not received by the closing. Excluding these potential adjustments and based on Bridge Bancorp's average closing stock price for the three days ended Sept. 10, 2013 of $21.51, the transaction has an aggregate estimated value of $5.3 million.
FNBNY currently operates 3 full-service banking centers in Nassau and Suffolk counties in New York with total assets of $276 million, including $100 million in loans, funded by deposits of $209 million. The combined institution will have $2 billion in assets, $1.7 billion in deposits and 26 branches serving Long Island with no branch consolidations expected.
"We are excited to announce the acquisition of FNBNY expanding our geographic footprint into Nassau County," said Kevin O'Conner, president and CEO of Bridge Bancorp. "This transaction complements our existing network and enhances our asset generation capabilities. Our expanded branch network will allow us to serve a greater portion of the Long Island and metropolitan marketplace."
John Stewart, CEO of FNBNY, commented, "We are delighted to join forces with Bridgehampton National Bank. The merger will allow us to expand and enhance services and products for our customers. In addition, the larger branch network will benefit the customers of both institutions."
Bridge Bancorp estimates additional Tier 1 capital of $20-$25 million will be needed to support the acquisition and expects to achieve this through balance sheet management, the issuance of new capital or a combination of both.
Bridge Bancorp expects the transaction, inclusive of additional capital, will be 2-3 percent accretive to tangible book value per share and accretive to earnings per share by approximately 6-8 percent, assuming estimated synergies are fully phased in and excluding estimated merger and conversion related costs of approximately $2.2 million on an after-tax basis. In connection with the transaction, Bridge Bancorp and a third-party firm separately reviewed substantially all of FNBNY's loans and estimate gross credit impairments of $14 million or 14 percent of FNBNY's loan portfolio.
RBC Capital Markets, LLC acted as financial advisor to Bridge Bancorp and Luse Gorman Pomerenk & Schick, P.C. acted as its legal advisor. Keefe, Bruyette & Woods acted as financial advisor to FNBNY Bancorp and Debevoise & Plimpton LLP acted as its legal advisor.
About Bridge Bancorp Inc.
Bridge Bancorp Inc. is a one-bank holding company engaged in commercial banking and financial services through its wholly owned subsidiary, The Bridgehampton National Bank. Established in 1910, the bank, with assets of approximately $1.7 billion, and a primary market area of Suffolk County, Long Island, operates 23 retail branch locations. Through this branch network and its electronic delivery channels, it provides deposit and loan products and financial services to local businesses, consumers and municipalities. Title insurance services are offered through the bank's wholly owned subsidiary, Bridge Abstract. Bridge Investment Services offers financial planning and investment consultation. For more information visit www.bridgenb.com.