Form 10-Q First Quarter 2007
 
UNITED STATES
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 March 31, 2007

 

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)

Registrant’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 by check mark whether the registrant is a large accelerated filer, an accelerated filer, or non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X]

There were 6,088,501 shares of common stock outstanding as of May 2, 2007.



BRIDGE BANCORP, INC.

PART I -
FINANCIAL INFORMATION
   
Item 1.
   
 
   
 
   
 
   
 
   
 
   
Item 2.
   
Item 3.
   
Item 4.
   
PART II -
   
Item 1.
   
Item 1A.
   
Item 2.
   
Item 3.
   
Item 4.
   
Item 5.
   
Item 6.
   
Signatures
 
   
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1








Item 1. Financial Statements
BRIDGE BANCORP, INC. AND SUBSIDIARY
         
         
(In thousands, except share and per share amounts)
 
March 31,
 
December 31,
 
   
2007
 
2006
 
ASSETS
         
Cash and due from banks
 
$
20,753
 
$
13,231
 
Interest earning deposits with banks
   
34
   
32
 
Federal funds sold
   
11,000
   
-
 
   Total cash and cash equivalents
   
31,787
   
13,263
 
               
Securities available for sale, at fair value
   
188,968
   
202,590
 
Securities held to maturity (fair value of $9,986 and $9,442, respectively)
   
9,992
   
9,444
 
Total securities, net
   
198,960
   
212,034
 
               
Securities, restricted
   
716
   
878
 
               
Loans
   
336,263
   
325,997
 
Less: Allowance for loan losses
   
(2,571
)
 
(2,512
)
Loans, net
   
333,692
   
323,485
 
               
Banking premises and equipment, net
   
18,376
   
18,005
 
Accrued interest receivable
   
2,945
   
2,692
 
Other assets
   
3,595
   
3,287
 
Total Assets
 
$
590,071
 
$
573,644
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
             
Demand deposits
 
$
178,225
 
$
173,628
 
Savings, N.O.W. and money market deposits
   
299,693
   
269,966
 
Certificates of deposit of $100,000 or more
   
31,393
   
30,518
 
Other time deposits
   
30,553
   
30,300
 
Total deposits
   
539,864
   
504,412
 
               
Overnight borrowings
   
-
   
18,600
 
Accrued interest payable
   
617
   
855
 
Other liabilities and accrued expenses
   
3,265
   
4,238
 
Total Liabilities
   
543,746
   
528,105
 
               
Stockholders’ equity:
             
Common stock, par value $.01 per share:
             
Authorized: 20,000,000 shares; 6,386,306 issued; 6,088,035
             
and 6,078,565 shares outstanding at March 31, 2007 and December 31, 2006, respectively
   
64
   
64
 
Surplus
   
21,691
   
21,565
 
Undivided profits
   
34,698
   
34,347
 
Less: Treasury Stock at cost, 298,271 and 307,741 shares at March 31, 2007 and
             
December 31, 2006, respectively
   
(8,102
)
 
(8,176
)
     
48,351
   
47,800
 
    Accumulated other comprehensive loss:
             
Net unrealized loss on securities, net of taxes of $858 and $1,025 at March 31, 2007
             
and December 31, 2006, respectively
   
(1,290
)
 
(1,525
)
        Transition due to the adoption of SFAS 158, net of taxes of $490
   
(736
)
 
(736
)
Total Stockholders’ Equity
   
46,325
   
45,539
 
Total Liabilities and Stockholders’ Equity
 
$
590,071
 
$
573,644
 
See accompanying notes to the Unaudited Consolidated Financial Statements.

Page 1



BRIDGE BANCORP, INC. AND SUBSIDIARY
         
         
(In thousands, except per share amounts)
         
   
For the three months ended March 31,
 
   
2007
 
2006
 
Interest income:
         
Loans (including fee income)
 
$
6,204
 
$
5,571
 
Mortgage-backed securities
   
1,394
   
1,125
 
        Tax exempt interest income:
             
   State and municipal obligations
   
533
   
545
 
        Taxable interest income:
             
   U.S. Treasury and government agency securities
   
364
   
246
 
Federal funds sold
   
47
   
44
 
Other securities
   
12
   
23
 
Deposits with banks
   
2
   
1
 
  Total interest income
   
8,556
   
7,555
 
               
Interest expense:
             
Savings, N.O.W. and money market deposits
   
2,100
   
1,262
 
Certificates of deposit of $100,000 or more
   
335
   
98
 
Other time deposits
   
271
   
123
 
Federal funds purchased
   
51
   
46
 
Other borrowed money
   
12
   
47
 
Total interest expense
   
2,769
   
1,576
 
               
Net interest income
   
5,787
   
5,979
 
Provision for loan losses
   
45
   
-
 
               
Net interest income after provision for loan losses
   
5,742
   
5,979
 
 
             
Other income:
             
    Service charges on deposit accounts
   
561
   
504
 
Fees for other customer services
   
352
   
161
 
Title fee income
   
393
   
299
 
Net securities losses
   
(101
)
 
(257
)
Other operating income
   
29
   
32
 
Total other income
   
1,234
   
739
 
               
Other expenses:
             
    Salaries and employee benefits
   
2,681
   
2,209
 
Net occupancy expense
   
443
   
343
 
Furniture and fixture expense
   
216
   
190
 
Other operating expenses
   
1,140
   
1,027
 
Total other expenses
   
4,480
   
3,769
 
               
Income before provision for income taxes
   
2,496
   
2,949
 
Provision for income taxes
   
747
   
1,010
 
Net income
 
$
1,749
 
$
1,939
 
Basic earnings per share
 
$
0.29
 
$
0.31
 
Diluted earnings per share
 
$
0.29
 
$
0.31
 
Comprehensive income
 
$
1,984
 
$
1,663
 


See accompanying notes to the Unaudited Consolidated Financial Statements.

Page 2




BRIDGE BANCORP, INC. AND SUBSIDIARY
                             
                             
(In thousands, except share and per share amounts)
                     
Accumulated
     
                           
Other
     
   
Common
 
Stock
                 
Comprehensive
     
   
Shares
         
Comprehensive
 
Undivided
 
Treasury
 
(Loss)
     
   
Outstanding
 
Amount
 
Surplus
 
Income
 
Profits
 
Stock
 
Income
 
Total
 
Balance at December 31, 2006
   
6,078,565
 
$
64
 
$
21,565
       
$
34,347
 
$
(8,176
)
$
(2,261
)
$
45,539
 
Net income
                   
$
1,749
   
1,749
               
1,749
 
Stock awards vested
   
2,030
                                       
-
 
Stock awards forfeited
   
(307
)
       
4
               
(4
)
       
-
 
Exercise of stock options
   
7,747
         
56
               
78
         
134
 
Share based compensation expense
               
66
                           
66
 
Cash dividends declared, $0.23 per share
                           
(1,398
)
             
(1,398
)
Other comprehensive income, net of tax
                                                 
   Change in unrealized losses in securities available
   for sale, net of tax
                     
235
               
235
   
235
 
Comprehensive income
                   
$
1,984
                         
                                                   
Balance at March 31, 2007
   
6,088,035
 
$
64
 
$
21,691
       
$
34,698
 
$
(8,102
)
$
(2,026
)
$
46,325
 

See accompanying notes to the Unaudited Consolidated Financial Statements.

Page 3



BRIDGE BANCORP, INC. AND SUBSIDIARY
         
         
(In thousands)
         
           
Three months ended March 31,
 
2007
 
2006
 
Operating activities:
         
Net Income
 
$
1,749
 
$
1,939
 
Adjustments to reconcile net income to net cash
             
provided by operating activities:
             
Provision for loan losses
   
45
   
-
 
Depreciation and amortization
   
304
   
224
 
Amortization and accretion, net
   
(30
)
 
122
 
        Share based compensation expense
   
66
   
13
 
        Tax benefit from exercise of stock options
             
            issued pursuant to equity incentive plan
   
25
   
-
 
Net securities losses
   
101
   
257
 
Increase in accrued interest receivable
   
(253
)
 
(283
)
(Increase) decrease in other assets
   
(475
)
 
929
 
Decrease in accrued and other liabilities
   
(1,204
)
 
(1,277
)
Net cash provided by operating activities
   
328
   
1,924
 
               
Investing activities:
             
Purchases of securities available for sale
   
(3,250
)
 
(18,287
)
Purchases of securities, restricted
   
(1,931
)
 
(3,629
)
Purchases of securities held to maturity
   
(749
)
 
(201
)
Proceeds from sales of securities available for sale
   
8,484
   
17,288
 
Proceeds from redemption of securities, restricted
   
2,093
   
3,881
 
Proceeds from maturing securities available for sale
   
4,000
   
205
 
Proceeds from maturing securities held to maturity
   
201
   
82
 
Proceeds from principal payments on mortgage-backed securities
   
4,719
   
4,028
 
Net (increase) decrease in loans
   
(10,252
)
 
1,537
 
Purchases of banking premises and equipment, net of disposals
   
(675
)
 
(455
)
Net cash provided by investing activities
   
2,640
   
4,449
 
               
Financing activities:
             
Net increase (decrease) in deposits
   
35,452
   
(1,410
)
Decrease in other borrowings
   
(18,600
)
 
(5,600
)
Purchase of treasury stock
   
-
   
(391
)
Net proceeds from exercise of stock options
             
issued pursuant to equity incentive plan
   
109
   
-
 
Cash dividends paid
   
(1,405
)
 
(1,428
)
Net cash provided (used) by financing activities
   
15,556
   
(8,829
)
               
Increase (decrease) in cash and cash equivalents
   
18,524
   
(2,456
)
Cash and cash equivalents beginning of period
   
13,263
   
15,675
 
Cash and cash equivalents end of period
 
$
31,787
 
$
13,219
 
               
Supplemental Information-Cash Flows:
             
    Cash paid for:
             
      Interest
 
$
3,006
 
$
1,598
 
      Income taxes
 
$
1,235
 
$
1,413
 
Noncash investing and financing activities:
             
      Dividends declared and unpaid
 
$
1,398
 
$
1,425
 
See accompanying notes to the Unaudited Consolidated Financial Statements.

Page 4



BRIDGE BANCORP, INC. AND SUBSIDIARY
CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. Basis of Presentation

Bridge Bancorp, Inc. (the “Company”) is incorporated under the laws of the State of New York as a single bank holding company. The Company’s business currently consists of the operations of its wholly-owned subsidiary, The Bridgehampton National Bank (the “Bank”). The Bank’s operations include its real estate investment trust subsidiary, Bridgehampton Community, Inc. (“BCI”) and a title insurance subsidiary, Bridge Abstract LLC (“Bridge Abstract”). 

The accompanying Unaudited Consolidated Financial Statements, which include the accounts of the Company and its wholly-owned subsidiary, the Bank, have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The Unaudited Consolidated Financial Statements included herein reflect all normal recurring adjustments that 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 annualized results of operations for the three months ended March 31, 2007 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. Certain reclassifications have been made to prior year amounts, and the related discussion and analysis, to conform to the current year presentation. The Unaudited Consolidated Financial Statements should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

2. Earnings Per Share

Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share, which reflect the potential dilution that could occur if outstanding stock options were exercised and dilutive stock awards were fully vested 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 common stock equivalents.

Computation of Per Share Income
 
Three months ended
 
(in thousands, except per share data)
 
March 31,
 
March 31,
 
   
2007
 
2006
 
           
Net Income
 
$
1,749
 
$
1,939
 
               
Common Equivalent Shares:
             
               
Weighted Average Common Shares Outstanding
   
6,069
   
6,204
 
Weighted Average Common Equivalent Shares
   
12
   
28
 
Weighted Average Common and Common Equivalent Shares
   
6,081
   
6,232
 
Basic earnings per share
 
$
0.29
 
$
0.31
 
Diluted earnings per share
 
$
0.29
 
$
0.31
 

There are approximately 69,107 options outstanding and 17,513 shares of unvested restricted stock at March 31, 2007 that were not included in the computation of diluted earnings per share because the options’ exercise prices and the restricted stock grant prices were greater than the average market price of the common stock and were, therefore, antidilutive.


Page 5


3. Repurchased Stock

For the three months ended March 31, 2007, the Company did not repurchase any shares as compared to repurchases of 15,375 during the three-month period ended March 31, 2006. Repurchased shares are held in the Company’s treasury account and may be utilized for general corporate purposes.

Additionally on March 27, 2006, the Board of Directors approved a new stock repurchase program that brings the number of shares authorized for repurchase to 309,000 or approximately 5% of its total issued and outstanding common shares. These shares would be purchased from time to time in the open market or through private purchases, depending on market conditions, availability of stock, the trading price of the stock, alternative uses for capital, and the Company’s financial performance. The repurchased shares will be used for general corporate purposes.

4. Stock Based Compensation Plans

Statement of Financial Accounting Standards 123R (“SFAS 123R”), “Accounting for Stock-Based Compensation, Revised, requires all public companies to record compensation cost for stock options provided to employees in return for employee service. The cost is measured at the fair value of the options when granted, and this cost is expensed over the employee service period, which is normally the vesting period of the options. The Black-Scholes option pricing model is used to determine the grant date fair value of option grants. The Company adopted SFAS 123R beginning January 1, 2006 applying the modified prospective transition method. No new grants were awarded during the periods ended March 31, 2007 and March 31, 2006. Compensation expense attributable to stock options was $14,000 for the period ended March 31, 2007. Compensation expense attributable to restricted stock awards was $52,000 and $13,000 for the periods ended March 31, 2007 and 2006, respectively.

The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of our common stock as of the reporting date. The intrinsic value of options exercised during the first quarter of 2007 and 2006 was $81,000 and $14,000, respectively. The intrinsic value of options outstanding and exercisable at March 31, 2007 is $396,000. The effect of this pronouncement on future operations will depend on the fair value of future options issued and accordingly, cannot be determined at this time.



Page 6


A summary of the status of the Company’s stock options as of March 31, 2007 is as follows:

           
Weighted
     
       
Weighted
 
Average
     
   
Number
 
Average
 
Remaining
 
Aggregate
 
   
of
 
Exercise
 
Contractual
 
Intrinsic
 
   
Options
 
Price
 
Life
 
Value
 
                   
Outstanding, December 31, 2006
   
128,245
 
$
21.37
             
Granted
   
-
   
-
             
Exercised
   
(8,450
)
$
15.01
             
Forfeited
   
(984
)
$
25.25
             
Outstanding, March 31, 2007
   
118,811
 
$
21.80
   
7.37 years
 
$
408,592
 
Exercisable, March 31, 2007
   
66,359
 
$
19.02
   
5.76 years
 
$
408,592
 
                           
 
   
Number of 
                   
Range of Exercise Prices
   
Shares
   
Price
             
     
9,900
 
$
12.53
             
     
14,808
 
$
13.17-14.67
             
     
13,525
 
$
15.47
             
     
11,471
 
$
24.00
             
     
62,999
 
$
25.25
             
     
6,108
 
$
26.55-$30.60
             


A summary of the status of the Company’s unvested restricted stock shares as of March 31, 2007 is as follows:

       
Weighted
 
       
Average Grant-Date
 
   
Shares
 
Fair Value
 
           
Unvested, December 31, 2006
   
19,850
 
$
25.50
 
Granted
   
-
   
-
 
Vested
   
(2,030
)
$
25.70
 
Forfeited
   
(307
)
$
25.25
 
Unvested, March 31, 2007
   
17,513
 
$
25.46
 



Page 7


5. Securities

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

   
March 31, 2007
 
December 31, 2006
 
(In thousands)
     
Estimated
     
Estimated
 
   
Amortized
 
Fair
 
Amortized
 
Fair
 
   
Cost
 
Value
 
Cost
 
Value
 
Available for sale:
                 
U.S. Treasury and government agency securities
 
$
30,204
 
$
29,933
 
$
34,123
 
$
33,777
 
State and municipal obligations
   
48,971
   
48,748
   
49,008
   
48,843
 
Mortgage-backed securities
   
111,941
   
110,287
   
122,009
   
119,970
 
Total available for sale
   
191,116
   
188,968
   
205,140
   
202,590
 
Held to maturity:
                         
    State and municipal obligations
   
9,992
   
9,986
   
9,444
   
9,442
 
Total held to maturity
   
9,992
   
9.986
   
9,444
   
9,442
 
Total debt and equity securities
 
$
201,108
 
$
198,954
 
$
214,584
 
$
212,032
 

Securities having a fair value of approximately $183,826,000 and $198,967,000 at March 31, 2007 and December 31, 2006, respectively, were pledged to secure public deposits and Federal Home Loan Bank and Federal Reserve Bank overnight borrowings. The Bank did not hold any trading securities during the three months ended March 31, 2007 or the year ended December 31, 2006.

6. Loans

The following table sets forth the major classifications of loans:

   
March 31, 2007
 
December 31, 2006
 
(In thousands)
         
Real estate mortgage loans
 
$
271,119
 
$
265,824
 
Commercial, financial, and agricultural loans
   
40,355
   
36,498
 
Installment/consumer loans
   
8,590
   
8,848
 
Real estate construction loans
   
16,062
   
14,767
 
Total loans
   
336,126
   
325,937
 
Net deferred loan cost
   
137
   
60
 
     
336,263
   
325,997
 
Allowance for loan losses
   
(2,571
)
 
(2,512
)
Net loans
 
$
333,692
 
$
323,485
 

The principal business of the Bank is lending, primarily in commercial real estate loans, construction loans, home equity loans, land loans, consumer loans, residential mortgages and commercial loans. The Bank considers its primary lending area to be eastern Long Island in Suffolk County, New York, and a substantial portion of the Bank’s loans are secured by real estate in this area. Accordingly, the ultimate collectibility of such a loan portfolio is susceptible to changes in market and economic conditions in this region.

Nonaccrual loans at March 31, 2007 and December 31, 2006 were $307,000 and $423,000, respectively. There were no loans 90 days or more past due that were still accruing at March 31, 2007 and December 31, 2006.

As of March 31, 2007 and December 31, 2006, there were no impaired loans as defined by SFAS No. 114, “Accounting by Creditors for Impairment of a Loan - An Amendment of FASB Statement No. 5 and 15” (SFAS 114”). For a loan to be considered impaired, management determines after review whether it is probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan agreement. Additionally management applies its normal loan review procedures in making these judgments. As of March 31, 2007 and December 31, 2006, there was one loan considered to be a troubled debt restructuring, totaling $118,000, as defined by SFAS No. 114. After review of the estimated fair value of the underlying collateral less the costs to sell, management believes it will be able to collect all amounts due without a shortfall according to the modified terms of the loan agreement.
 
Page 8

7. Allowance for Loan Losses

Management monitors its entire loan portfolio on a regular basis, with consideration given to detailed analyses of classified loans, repayment patterns, current delinquencies, probable incurred losses, past loss experience, current economic conditions, and various types of concentrations of credit. Additions to the allowance are charged to expense and realized losses, net of recoveries, are charged to the allowance. Based on the determination of management and the Classification Committee, the overall level of reserves is periodically adjusted to account for the inherent and specific risks within the entire portfolio. Based on the Classification Committee’s review of the classified loans and the overall reserve levels as they relate to the entire loan portfolio at March 31, 2007, management determined the allowance for loan losses to be adequate. The following table sets forth changes in the allowance for loan losses.

(In thousands)
 
For the Three Months Ended
 
For the Year Ended
 
   
March 31, 2007
 
March 31, 2006
 
December 31, 2006
 
Beginning balance
 
$
2,512
 
$
2,383
 
$
2,383
 
Provision for loan loss
   
45
   
-
   
85
 
Net recoveries (charge-offs)
   
14
   
(4
)
 
44
 
Ending balance
 
$
2,571
 
$
2,379
 
$
2,512
 

8. Income Taxes

The Company adopted FASB Interpretation 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), as of January 1, 2007. A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. The adoption had no affect on the Company’s financial statements.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the state of New York. The Company is no longer subject to examination by taxing authorities for years before 2003. The Company does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company did not have any amounts accrued for interest and penalties at January 1, 2007.

9. Employee Benefits

The Bank maintains a noncontributory pension plan through the New York State Bankers Association Retirement System covering all eligible employees.

The Bridgehampton National Bank Supplemental Executive Retirement Plan (“SERP”) provides benefits to certain employees, as recommended by the Compensation Committee of the Board of Directors and approved by the full Board of Directors, whose benefits under the Pension Plan are limited by the applicable provisions of the Internal Revenue Code. The benefit under the SERP is equal to the additional amount the employee would be entitled to under the Pension Plan and the 401(k) Plan in the absence of such Internal Revenue Code limitations. The assets of the SERP are held in a rabbi trust to maintain the tax-deferred status for the individuals in the plan. As a result, the assets of the trust are reflected on the Consolidated Statements of Condition of the Company. The effective date of the SERP was January 1, 2001.

Contributions to the pension plan were $500,000 while no contributions were made to the SERP for the three months ended March 31, 2007. The Company does not anticipate making any additional contributions to the pension plan through the end of the year.  Subsequent to March 31, 2007, payouts totaling approximately $100,000 will be made pursuant to the SERP to certain former executive officers.
 
Page 9


The Company’s funding policy with respect to its benefit plans is to contribute at least the minimum amounts required by applicable laws and regulations. The following table sets forth the components of net periodic benefit cost and other amounts recognized in Other Comprehensive Income.

(In thousands)
 
At March 31,
 
   
Pension Benefits
 
SERP Benefits
 
   
2007
 
2006
 
2007
 
2006
 
Service cost
 
$
111
 
$
105
 
$
15
 
$
16
 
Interest cost
   
69
   
62
   
13
   
14
 
Expected return on plan assets
   
(96
)
 
(81
)
 
-
   
-
 
Amortization of net loss
   
3
   
10
   
-
   
-
 
Amortization of unrecognized prior service cost
   
2
   
2
   
-
   
-
 
Amortization of unrecognized transition (asset) obligation
   
-
   
(1
)
 
7
   
7
 
Net periodic benefit cost
 
$
89
 
$
97
 
$
35
 
$
37
 


Page 10


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

Private Securities Litigation Reform Act Safe Harbor Statement

This report may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). Such forward-looking statements, in addition to historical information, which involve risk and uncertainties, are based on the beliefs, assumptions and expectations of management of the Company. Words such as “expects,” “believes,” “should,” “plans,” “anticipates,” “will,” “potential,” “could,” “intend,” “may,” “outlook,” “predict,” “project,” “would,” “estimates,” “assumes,” “likely,” and variations of such similar expressions are intended to identify such forward-looking statements. Examples of forward-looking statements include, but are not limited to, possible or assumed estimates with respect to the financial condition, expected or anticipated revenue, and results of operations and business of the Company, including earnings growth; revenue growth in retail banking, lending and other areas; origination volume in the Company’s consumer, commercial and other lending businesses; current and future capital management programs; non-interest income levels, including fees from the abstract subsidiary and banking services as well as product sales; tangible capital generation; market share; expense levels; and other business operations and strategies. For this presentation, the Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.

Factors that could cause future results to vary from current management expectations include, but are not limited to, changing 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 management’s business strategies; changes in accounting principles, policies or guidelines; changes in real estate values and other factors discussed elsewhere in this report, factors set forth under Item 1A., Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2006 and in other reports filed by the Company with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this report, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

Overview

Who We Are and How We Generate Income

Bridge Bancorp, Inc. (“the Company”), a New York corporation, is a single bank holding company formed in 1989. On a parent-only basis, the Company has had 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 in this report 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 is mainly the difference between interest income on loans and investments and interest expense on deposits and borrowings. The Bank also generates other income, such as fee income on deposit accounts and merchant credit and debit card processing programs, income from its title abstract subsidiary, and net gains on sales of securities and loans. The level of its other expenses, such as salaries and benefits, occupancy and equipment costs, other general and administrative expenses, expenses from its title insurance subsidiary, and income tax expense, further affects the Bank’s net income.

Quarterly Highlights

- net income of $1,749,000, or $0.29 per diluted share for the first quarter of 2007 as compared to net income of $1,939,000 or $0.31 per diluted share for the first quarter of 2006;

- total assets of $590,071,000 at March 31, 2007, a 12.4% increase over the same date last year;

- total loans of $336,263,000 at March 31, 2007, an 11.8% increase over March 31, 2006;

- continued strong credit quality;
 
Page 11

- total deposits of $539,864,000 at March 31, 2007, a 15.7% increase over March 31, 2006;

- management of the net interest margin to 4.5% for the quarter;

- the opening of two new branches, Southampton Village and Cutchogue; and

- the declaration of a cash dividend of $0.23 for the first quarter 2007.

Principal Products and Services and Locations of Operations

The Bank operates thirteen branches on eastern Long Island. Federally chartered in 1910, the Bank was founded by local farmers and merchants. For nearly a century, the Bank has maintained its focus on building customer relationships on eastern Long Island. The Bank engages in full service commercial and consumer banking business, including accepting time and demand deposits from the consumers, businesses and local municipalities surrounding its branch offices. These deposits, together with funds generated from operations and borrowings, are invested primarily in (1) commercial real estate loans; (2) home equity loans; (3) construction loans; (4) residential mortgages; (5) secured and unsecured commercial and consumer loans; (6) FHLB, FNMA, and FHLMC mortgage-backed securities; (7) New York State and local municipal obligations; and (8) U.S. Treasury and government agency securities. In addition, the Bank offers merchant credit and debit card processing, automated teller machines, cash management services, online banking services, safe deposit boxes and individual retirement accounts. Through its title insurance abstract subsidiary, the Bank acts as a broker for title insurance services. The Bank’s customer base is comprised principally of small businesses and consumers.

Opportunities and Challenges

Growing profits in the current flat or inverted yield curve environment presents significant challenges to the Bank since, as a community bank, its income historically relies heavily on the interest rate spread between short term and long term rates. The ability for the Bank to borrow on a short term basis at a lower cost and invest on a long term basis at a higher yield is diminished. Pressure on net interest income persisted during the first quarter as the deposit base continued to shift to more interest bearing deposits resulting in higher funding costs. The growth in deposits assists in mitigating the increase in funding rates. The yield curve remained flat or slightly inverted during the quarter, and it remains less than certain that it will revert to the steepness of the past in the near future.

The net interest margin was 4.5% for the quarter ended March 31, 2007 as compared to 5.1% for the quarter ended March 31, 2006. Net interest income declined $192,000 in 2007 versus 2006 principally from increased funding costs of relationship-based promotional deposit products and rate-sensitive municipal deposit products. Non interest income grew 34.0% during the first quarter 2007 over the first quarter of 2006, primarily the result of an increase in title insurance services and deposit account fee income.

Non interest expense increased 18.9% for the first quarter 2007 over the same period last year, largely due to increased salary and benefits expense as well as increased facilities and marketing, primarily related to the new branches. Slowing the growth of non interest expense relative to revenues remains a top priority.

Net income of $1.7 million for the quarter represents a 9.8% decrease from net income of $1.9 million during the first quarter 2006. Diluted earnings per share for the quarter decreased 6.5% to $0.29 from $0.31 per diluted share for the same period last year.

The pace of loan originations continued to be strong during the first quarter, as total loans grew 11.8% or $35.5 million over the period ended March 31, 2006 to $336.3 million. The Company remains optimistic regarding continued loan growth during 2007. Additionally, total investment securities, excluding restricted securities, increased $10.1 million or 5.3% to $199.0 million at March 31, 2007 compared to the prior year.

During the quarter ended March 31, 2007, $45,000 was added to the allowance for loan losses, due primarily to growth in the loan portfolio during the quarter. The loan loss reserve remains healthy relative to existing nonperforming assets. Management continues to carefully monitor the loan portfolio as well as real estate trends on eastern Long Island. While effects of sub prime lending can be seen in the marketplace in the form of impaired loans at other lending institutions, the Company has not seen evidence of a softening real estate market. The consistent and rigorous underwriting standards of the Bank preclude sub prime lending, and as such, management does not anticipate negative effects on the Bank’s loan portfolio.
 
Page 12

Asset growth was funded by an increase in total deposits of 15.7% over March 31, 2006, including core deposit growth of 7.7%. Demand deposits at March 31, 2007 totaled $178.2 million, comprising 33.0% of total deposits at that date. Strategies to grow deposits were successful, as the Bank continued to offer relationship-based promotional deposit products.

Industry wide challenges are inherent in the current operating environment, most significant of which is persistent pressure on the net interest margin. Growth strategies have potential to offset the tighter net interest margin with volume as the customer base grows through expanding the Bank’s footprint, while maintaining and developing existing relationships. The Bank is in the process of building out its 14th branch office which will be located in Wading River, NY. For the first time in our Company’s history, in 2007 three new branches will be opened in one year. Recognizing that a de novo branching strategy affects earnings in the short term on the expense side, it should position the Bank well for greater profitability in the long term. The Company remains dedicated to the continued return of long term value to shareholders.

Critical Accounting Policies

Allowance for Loan Losses

Management considers the accounting policy on loans and the related allowance for loan losses to be the most critical and requires complex management judgment as discussed below. The judgments made regarding the allowance for loan losses can have a material effect on the results of operations of the Company.

The allowance for loan losses is established and maintained through a provision for loan losses based on probable incurred losses inherent in the Bank’s loan portfolio. Management evaluates the adequacy of the allowance on a quarterly basis. The allowance is comprised of both individual valuation allowances and loan pool valuation allowances. If the allowance for loan losses is not sufficient to cover actual loan losses, the Company’s earnings could decrease.

The Bank monitors its entire loan portfolio on a regular basis, with consideration given to detailed analysis of classified loans, repayment patterns, probable incurred losses, past loss experience, current economic conditions, and various types of concentrations of credit. Additions to the allowance are charged to expense and realized losses, net of recoveries, are charged to the allowance.

Individual valuation allowances are established in connection with specific loan reviews and the asset classification process including the procedures for impairment testing under Statement of Accounting Standard (“SFAS”) No. 114, “Accounting by Creditors for Impairment of a Loan, an Amendment of FASB Statements No. 5 and 15,” and SFAS No. 118, “Accounting by Creditors for Impairment of a Loan - Income Recognition and Disclosures, an Amendment of SFAS No. 114.” Such valuation, which includes a review of loans for which full collectibility in accordance with contractual terms is not reasonably assured, considers the estimated fair value of the underlying collateral less the costs to sell, if any, or the present value of expected future cash flows, or the loan’s observable market value. Any shortfall that exists from this analysis results in a specific allowance for the loan. Pursuant to our policy, loan losses must be charged-off in the period the loans, or portions thereof, are deemed uncollectible. Assumptions and judgments by management, in conjunction with outside sources, are used to determine whether full collectibility of a loan is not reasonably assured. These assumptions and judgments also are used to determine the estimates of the fair value of the underlying collateral or the present value of expected future cash flows or the loan’s observable market value. Individual valuation allowances could differ materially as a result of changes in these assumptions and judgments. Individual loan analyses are periodically performed on specific loans considered impaired. The results of the individual valuation allowances are aggregated and included in the overall allowance for loan losses.

Loan pool valuation allowances represent loss allowances that have been established to recognize the inherent risks associated with our lending activities, but which, unlike individual allowances, have not been allocated to particular problem assets. Pool evaluations are broken down as follows: first, loans with homogenous characteristics are pooled by loan type and include home equity loans, residential mortgages, land loans and consumer loans. Then all remaining loans are segregated into pools based upon the risk rating of each credit. Key factors in determining a credit’s risk rating include management’s evaluation of: cash flow, collateral, guarantor support, financial disclosures, industry trends and management. The determination of the adequacy of the valuation allowance is a process that takes into consideration a variety of factors. The Bank has developed a range of valuation allowances necessary to adequately provide for probable incurred losses inherent in each pool of loans. We consider our own charge-off history along with the growth in the portfolio as well as the Bank’s credit administration and asset management philosophies and procedures when determining the allowances for each pool. In addition, we evaluate and consider the impact that existing and projected economic and market conditions may have on the portfolio as well as known and inherent risks in the portfolio. Finally, we evaluate and consider the allowance ratios and coverage percentages of both peer group and regulatory agency data. These evaluations are inherently subjective because, even though they are based on objective data, it is management’s interpretation of that data that determines the amount of the appropriate allowance. If the evaluations prove to be incorrect, the allowance for loan losses may not be sufficient to cover losses inherent in the loan portfolio, resulting in additions to the allowance for loan losses.
 
Page 13

The Classification Committee is comprised of both members of management and the Board of Directors. The adequacy of the reserves is analyzed quarterly, with any adjustment to a level deemed appropriate by the Classification Committee, based on its risk assessment of the entire portfolio. Based on the Classification Committee’s review of the classified loans and the overall reserve levels as they relate to the entire loan portfolio at March 31, 2007, management believes the allowance for loan losses has been established at levels sufficient to cover the probable incurred losses in the Bank’s loan portfolio. Future additions or reductions to the allowance may be necessary based on changes in economic, market or other conditions. Changes in estimates could result in a material change in the allowance. 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 adjustments to the allowance based on their judgments of the information available to them at the time of their examination.

Net Income

Net income for the three-month period ended March 31, 2007 totaled $1,749,000 or $0.29 per diluted share as compared to $1,939,000 or $0.31 per diluted share for the same period in 2006. Changes for the three months ended March 31, 2007 compared to March 31, 2006 include: (i) $192,000 or 3.2% decrease in net interest income; (ii) $339,000 or 34.0% increase in total other income as a result of higher fee income for customer services and higher title fee income and (iii) $711,000 or 18.9% increase in total other expenses, primarily due to increased salaries and employee benefits and increased operational and marketing costs related to expanding the Company’s infrastructure and the opening of new branch offices. In addition, a net loss of $101,000 was realized due to the repositioning of the available for sale investment portfolio during the first quarter of 2007 as compared to a net loss of $257,000 realized during the first quarter of 2006. The effective income tax rate decreased to 29.9% from 34.3% for the same period last year.

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. Net interest income depends upon the volume of interest earning assets and interest bearing liabilities and the interest rates earned or paid on them.

The following table sets forth certain information relating to the Company’s average consolidated statements of financial condition and its consolidated statements of income for the periods indicated and reflect the average yield on assets and average cost of liabilities for the periods indicated. 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 and include non-performing accrual loans. The yields and costs include fees, which are considered adjustments to yields. Interest on nonaccrual loans has been included only to the extent reflected in the consolidated statements of income. For purposes of this table, the average balances for investments in debt and equity securities exclude unrealized appreciation/depreciation due to the application of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.”

Page 14


 
Three months ended March 31,
 
2007
 
2006
 
(In thousands)
         
Average
         
Average
 
   
Average
     
Yield/
 
Average
     
Yield/
 
   
Balance
 
Interest
 
Cost
 
Balance
 
Interest
 
Cost
 
                           
Interest earning assets:
                         
Loans, net (including loan fee income)
 
$
328,234
 
$
6,204
   
7.7
%
$
297,824
 
$
5,571
   
7.6
%
Mortgage-backed securities
   
120,904
   
1,394
   
4.6
   
104,762
   
1,125
   
4.3
 
Tax exempt securities (1)
   
58,825
   
760
   
5.2
   
61,410
   
829
   
5.4
 
Taxable securities
   
33,975
   
364
   
4.3
   
28,095
   
246
   
3.5
 
Federal funds sold
   
3,603
   
47
   
5.2
   
3,950
   
44
   
4.5
 
Securities, restricted
   
755
   
12
   
6.5
   
901
   
23
   
10.4
 
Deposits with banks
   
39
   
2
   
20.8
   
82
   
1
   
5.0
 
Total interest earning assets
   
546,335
   
8,783
   
6.5
   
497,024
   
7,839
   
6.4
 
Non interest earning assets:
                                     
Cash and due from banks
   
15,039
               
15,024
             
Other assets
   
21,490
               
17,937
             
Total assets
 
$
582,864
             
$
529,985
             
                                       
Interest bearing liabilities:
                                     
Savings, N.O.W. and
                                     
money market deposits
 
$
294,640
 
$
2,100
   
2.9
%
$
254,752
 
$
1,262
   
2.0
%
    Certificates of deposit of $100,000
                                     
or more
   
31,366
   
335
   
4.3
   
17,750
   
98
   
2.2
 
Other time deposits
   
29,068
   
271
   
3.8
   
23,870
   
123
   
2.1
 
Federal funds purchased
   
3,733
   
51
   
5.5
   
4,000
   
46
   
4.7
 
Other borrowed money
   
863
   
12
   
5.6
   
3,908
   
47
   
4.9
 
Total interest bearing liabilities
   
359,670
   
2,769
   
3.1
   
304,280
   
1,576
   
2.1
 
Non interest bearing liabilities:
                                     
Demand deposits
   
173,174
               
176,691
             
Other liabilities
   
3,818
               
1,324
             
Total liabilities
   
536,662
               
482,295
             
Stockholders’ equity
   
46,202
               
47,690
             
Total liabilities and stockholders’ equity
 
$
582,864
             
$
529,985
             
                                       
Net interest income/interest rate spread (2)
         
6,014
   
3.4
%
       
6,263
   
4.3
%
                                       
Net interest earning assets/net interest margin (3)
 
$
186,665
         
4.5
%
$
192,744
         
5.1
%
                                       
Ratio of interest earning assets to
                                     
interest bearing liabilities
               
151.9
%
             
163.3
%
                                       
Less: Tax equivalent adjustment
         
(227
)
             
(284
)
     
                                       
Net interest income
       
$
5,787
             
$
5,979
       

(1)
The above table is presented on a tax equivalent basis.
(2)
Net interest rate spread represents the difference between the yield on average interest earning assets and the cost of average interest bearing liabilities.
(3)
Net interest margin represents net interest income divided by average interest earning assets.


Page 15


Rate/Volume Analysis

Net interest income can be analyzed in terms of the impact of changes in rates and volumes. The following table illustrates the extent to which changes in interest rates and in the volume of average 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 or rate changes have been allocated to these categories based on the respective percentage changes in average volume and rate. Due to the numerous simultaneous volume and rate changes during the periods analyzed, it is not possible to precisely allocate changes between volume and rates. In addition, average earning assets include nonaccrual loans.

   
Three months ended March 31
 
   
2007 Over 2006
 
(In thousands)
 
Changes Due To
 
   
Volume
 
Rate
 
Net Change
 
Interest income on interest earning assets:
             
Loans (including loan fee income)
 
$
574
 
$
59
 
$
633
 
Mortgage-backed securities
   
183
   
86
   
269
 
Tax exempt securities (1)
   
(35
)
 
(34
)
 
(69
)
Taxable securities
   
57
   
61
   
118
 
Federal funds sold
   
(19
)
 
22
   
3
 
Securities, restricted
   
(3
)
 
(8
)
 
(11
)
Deposits with banks
   
(12
)
 
13
   
1
 
Total interest earning assets
   
745
   
199
   
944
 
                     
Interest expense on interest bearing liabilities:
                   
                     
Savings, N.O.W. and money market deposits
   
221
   
617
   
838
 
Certificates of deposit of $100,000 or more
   
107
   
130
   
237
 
Other time deposits
   
32
   
116
   
148
 
Federal funds purchased
   
(17
)
 
22
   
5
 
Other borrowed money
   
(79
)
 
44
   
(35
)
Total interest bearing liabilities
   
264
   
929
   
1,193
 
Net interest income
 
$
481
 
$
(730
)
$
(249
)

        (1) The above table is presented on a tax equivalent basis.


The net interest margin compression continued in the first quarter 2007. The net interest margin decreased to 4.5% from 5.1% from the same three-month period in 2006. Net interest income was $5,787,000 for the three months ended March 31, 2007 compared to $5,979,000 from the same period last year. The decrease in net interest income of $192,000 or 3.2% primarily resulted from the effect of the increase in rates for the average total interest bearing liabilities being greater than the effect of the increase in the rate of average total interest earning assets. Yields on interest bearing liabilities increased 102 basis points during the period ended March 31, 2007 compared to the prior year, which were partly offset by increased yields of 13 basis points on interest earning assets. Relationship-based promotional deposit products were used during the second half of 2006 and in the first quarter of 2007 to retain and develop the existing customer base while attracting new customers to the Bank. Competition for both core and municipal deposits continued to result in the increased cost of interest bearing liabilities at 3.1% for the period ended March 31, 2007 as opposed to a cost of 2.1% during the same period in 2006.

Average total interest earning assets increased to $546,335,000 from $497,024,000 or 9.9% and there was an increase in the yield on average interest earning assets to 6.5% from 6.4% for the quarter ended March 31, 2007 compared to the same period last year. Average interest bearing liabilities increased 18.2% to $359,670,000 from $304,280,000 and the cost of average interest bearing liabilities increased to 3.1% from 2.1% for the three-month period ended March 31, 2007 compared to the same period last year. In addition, part of the increase in the cost of certificates of deposit greater than $100,000 is driven by the balance of $4,000,000 in brokered certificates of deposit. Because the Company’s interest bearing liabilities generally reprice or mature more quickly than its interest earning assets, an increase in short term interest rates would initially result in a decrease in net interest income. Additionally, the large percentages of deposits in money market accounts reprice at short term market rates making the balance sheet more liability sensitive.
 
Page 16

Average loans grew by $30,410,000 or 10.2% when compared to the same three-month period in 2006. Real estate mortgage loans contributed to the growth as well as increases in commercial, financial, and agricultural loans and real estate construction loans. The Bank is committed to growing loans with prudent underwriting, sensible pricing and limited credit and extension risk.

Total average investments increased $19,291,000 or 9.9% in the first quarter of 2007 compared to the same three-month period in 2006. Average mortgage-backed securities increased 15.4% to $120,904,000 and taxable securities increased $5,880,000 or 20.9% when compared to the same three-month period in 2006. To position the balance sheet for the future and better manage liquidity and interest rate risk, a portion of the available for sale investment securities portfolio was sold during the first quarter resulting in a net loss of $101,000. Average tax exempt securities decreased 4.2% to $58,825,000 from $61,410,000. Average federal funds sold also decreased $347,000 or 8.8% over the same period in the prior year.

Average deposits increased by $55,185,000, or 11.7% for the quarter ended March 31, 2007 over the same three-month period last year. Components of this increase include increases in average balances for certificates of deposit of $100,000 or more, savings, N.O.W. and money market deposits and other time deposits. This increase was offset by a slight decrease in average demand deposits of $3,517,000 or 2.0%. Average federal funds purchased and other borrowings decreased to $4,596,000 for the first quarter of 2007 from $7,908,000 for the same three-month period in 2006. Average public fund deposits increased $44,433,000 from the prior year comprising 26.8% of total average deposits at March 31, 2007 and 20.5% of total average deposits at March 31, 2006.

Provision and Allowance for Loan Losses

The Bank’s loan portfolio consists primarily of real estate loans secured by commercial and residential real estate properties located in the Bank’s principal lending area on eastern Long Island. The interest rates charged by the Bank on loans are affected primarily by the demand for such loans, the supply of money available for lending purposes, the rates offered by its competitors, the Bank’s relationship with the customer and the related credit risks of the transaction. These factors are affected by general and economic conditions including, but not limited to, monetary policies of the federal government, including the Federal Reserve Board, legislative policies and governmental budgetary matters.

The credit quality of the loan portfolio remained strong for the quarter ended March 31, 2007. Since December 31, 2006, nonaccrual loans decreased to $307,000 from $423,000, representing 0.1% of net loans at March 31, 2007 and December 31, 2006. As of March 31, 2007 and December 31, 2006 the Company had one loan considered to be a troubled debt restructuring, as defined by SFAS No. 114, totaling $118,000. After review of the estimated fair value of the underlying collateral less the costs to sell, management believes it will be able to collect all amounts due without a shortfall according to the modified terms of the loan agreements. The Bank had no foreclosed real estate at March 31, 2007 and December 31, 2006. The Bank recognized net recoveries in the amount of $14,000 for the three months ended March 31, 2007 as compared to net charge-offs of $4,000 for the same period in 2006.

Loans of approximately $3,292,000 or 1.0% of total loans at March 31, 2007 were classified as potential problem loans. This was a decrease of $864,000 from $4,156,000 or 1.3% of total loans at December 31, 2006. These are loans for which management has information that indicates the borrower may not be able to comply with the present repayment terms. These loans are subject to increased management attention and their classification is reviewed on at least a quarterly basis. Due to the structure and nature of the credits, management currently believes that the likelihood of sustaining a loss on these relationships is remote.

Based on our continuing review of the overall loan portfolio, the current asset quality of the portfolio, and the growth in our loan portfolio, a provision for loan losses of $45,000 was recorded during the first three months of 2007 and no provision for loan loss was recorded during the first three months of 2006. Net recoveries were $14,000 for the three months ended March 31, 2007 and net charge-offs were $4,000 for the three months ended March 31, 2006. The allowance for loan losses increased to $2,571,000 at March 31, 2007, as compared to $2,512,000 at December 31, 2006 and $2,379,000 at March 31, 2006. As a percentage of total loans, the allowance remained at 0.77% at March 31, 2007 from December 31, 2006. The allowance for loan losses as a percentage of total loans was 0.79% as of March 31, 2006.

Page 17

Non Interest Income

Total other income increased during the three-month period ended March 31, 2007 by $495,000 or 67.0% from the same period last year. Net losses on sales of securities during the three months ended March 31, 2007 totaled $101,000, compared to $257,000 for the three-month period ended March 31, 2006. Excluding net securities losses, total other income increased $339,000 or 34.0% for the three months ended March 31, 2007. Fees for other customer services totaled $352,000 and service charges on deposit accounts totaled $561,000 for the three-month period ended March 31, 2007, reflecting increases of $191,000 and $57,000, respectively, from the same three-month period in 2006.
For the three-month periods ended March 31, 2007 and 2006, Bridge Abstract generated title fee income of $393,000 and $299,000, respectively.

Non Interest Expense

Total other expenses increased during the three-month period ended March 31, 2007 by $711,000 or 18.9% over the same period last year. The primary components of this increase were salary and benefit expense increasing $472,000 or 21.4% for the three-month period ended March 31, 2007 over the same period last year. Total other operating expenses for the three-month period ended March 31, 2007 totaled $1,140,000, an increase of $113,000 or 11.0% over the same period last year. Increases in salaries and employee benefit costs and other operating expenses were due to base salary increases as well as filling open and new positions, including filling the Chief Operating Officer position, and increased facilities and marketing costs primarily related to the new branches.

Income Taxes

The provision for income taxes decreased during the three-month period ended March 31, 2007 by $263,000 or 26.0% from the same period last year due to the reduction in income before provision for income taxes and a lower effective rate. The reduction in tax rate primarily resulted from a greater percentage of interest income from tax exempt securities in 2007. The effective tax rate for the three-month period ended March 31, 2007 decreased to 29.9% as compared to 34.3% for the same period last year.

Financial Condition

Assets totaled $590,071,000 at March 31, 2007, an increase of $16,427,000 or 2.9% from December 31, 2006. This change is primarily a result of increases in total loans of $10,266,000 or 3.2% and cash and cash equivalents of $18,524,000 or 139.7% offset by decreases in the investment portfolio of $13,236,000 or 6.2%. Savings, N.O.W. and money market deposits increased $29,727,000 as of March 31, 2007 from December 31, 2006. Demand deposits, certificates of deposit of $100,000 or more and other time deposits also increased $5,725,000 or 2.44%. Overnight borrowings decreased $18,600,000 as of March 31, 2007 from December 31, 2006.

Total stockholders’ equity was $46,325,000 at March 31, 2007, an increase of 1.7% from December 31, 2006 primarily due to net income of $1,749,000 and a decrease in net unrealized loss on securities of $235,000 , partially offset by the declaration of dividends totaling $1,398,000.

In March 2007, the Company declared a quarterly dividend of $0.23 per share. The Company continues its long term trend of uninterrupted dividends.

Liquidity

The objective of liquidity management is to ensure the sufficiency of funds available to respond to the needs of depositors and borrowers, and to take advantage of unanticipated earnings enhancement opportunities for Company growth. Liquidity management addresses the ability of the Company to meet financial obligations that arise in the normal course of business. Liquidity is primarily needed to meet customer borrowing commitments, deposit withdrawals either on demand or contractual maturity, to repay other borrowings as they mature, to fund current and planned expenditures and to make new loans and investments as opportunities arise.
 
Page 18

The Company’s principal source of liquidity is dividends from the Bank. Due to regulatory restrictions, dividends from the Bank to the Company at March 31, 2007 were limited to $1,774,000, which represents the Bank’s 2007 retained net income and the net undivided profits from the previous two years. The dividends received from the Bank are used primarily for dividends to the shareholders and stock repurchases. In the event that the Company subsequently expands its current operations, in addition to dividends from the Bank, it will need to rely on its own earnings, additional capital raised and other borrowings to meet liquidity needs.

The Bank’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 Bank’s operating, financing, lending and investing activities during any given period. Other sources of liquidity include loan and investment securities principal repayments and maturities, lines of credit with other financial institutions including the Federal Home Loan Bank, growth in core deposits and sources of wholesale funding such as brokered certificates of deposits. While scheduled loan amortization, maturing securities and short term investments are a relatively predictable source of funds, deposit flows and loan and mortgage-backed securities 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 seasonal deposit outflows, loans, and asset and liability management objectives. Historically, the Bank has relied on its deposit base, drawn through its full-service branches that serve its market area and local municipal deposits, as its principal source of funding. The Bank seeks to retain existing deposits and loans and maintain customer relationships by offering quality service and competitive interest rates to its customers, while managing the overall cost of funds needed to finance its strategies. The Bank’s Asset/Liability and Funds Management Policy allows for wholesale borrowings of up to 25% of total assets. At March 31, 2007, the Bank had aggregate lines of credit of $67,000,000 with unaffiliated correspondent banks to provide short term credit for liquidity requirements. Of these aggregate lines of credit, $47,000,000 is available on an unsecured basis. The Bank 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. The Bank also has a master repurchase agreement with the FHLB, which increases its borrowing capacity. In addition, the Bank has an approved broker relationship for the purpose of issuing brokered certificates of deposit. As of March 31, 2007, the
Bank had issued $4,000,000 of brokered certificates of deposits. As of March 31, 2007, the Bank had no overnight borrowings.

Management continually monitors the liquidity position and believes that sufficient liquidity exists to meet all of our operating requirements. Based on the objectives determined by the Asset and Liability Committee, the Bank’s liquidity levels may be affected by the use of short term and wholesale borrowings, and the amount of public funds in the deposit mix. The Asset and Liability Committee is comprised of members of senior management and the Board. Excess short term liquidity is invested in overnight federal funds sold. As of March 31, 2007, the amount of overnight federal funds sold was $11,000,000.

Capital Resources

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Bank’s assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The Company’s and the Bank’s capital amounts and classification also are 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 Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) 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 March 31, 2007, that the Company and the Bank meet all capital adequacy requirements with which it must comply.

Page 19


The Company’s only activity is the ownership of the Bank, and therefore, its capital, capital ratios, and minimum required levels of capital are substantially the same as the Bank’s. At March 31, 2007 and December 31, 2006, actual capital levels and minimum required levels for the Bank were as follows:

               
 
 
To Be Well
 
           
For Capital
 
Capitalized Under
 
 
         
Adequacy
 
Prompt Corrective
 
(Dollars in thousands)
 
Actual
 
Purposes
 
Action Provisions
 
   
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
 
                           
As of March 31, 2007
                         
Total Capital (to risk weighted assets)
 
$
50,063
   
12.1
%
$
33,097
   
>8.0
%
$
41,372
   
>10.0
%
Tier 1 Capital (to risk weighted assets)
   
47,492
   
11.5
%
 
16,549
   
>4.0
%
 
24,823
   
>6.0
%
Tier 1 Capital (to average assets)
   
47,492
   
8.2
%
 
23,309
   
>4.0
%
 
29,136
   
>5.0
%

As of December 31, 2006
 
Total Capital (to risk weighted assets)
 
$
50,152
   
12.5
%
$
32,019
   
>8.0
%
$
40,024
   
>10.0
%
Tier 1 Capital (to risk weighted assets)
   
47,640
   
11.9
%
 
16,010
   
>4.0
%
 
24,015
   
> 6.0
%
Tier 1 Capital (to average assets)
   
47,640
   
8.3
%
 
23,073
   
>4.0
%
 
28,841
   
> 5.0
%


Impact of Inflation and Changing Prices

The Unaudited Consolidated Financial Statements and notes thereto presented herein have been prepared in accordance with U.S. generally accepted accounting principles, which require the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. The primary effect of inflation on the operations of the Company is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, changes in interest rates have a more significant effect on the performance of a financial institution than do the effects of changes in the general rate of inflation and changes in prices. Changes in interest rates could aversely affect our results of operations and financial condition. Interest rates do not necessarily move in the same direction, or in the same magnitude, as the prices of goods and services. Interest rates are highly sensitive to many factors, which are beyond the control of the Company, including the influence of domestic and foreign economic conditions and the monetary and fiscal policies of the United States government and federal agencies, particularly the Federal Reserve Bank.

Recent Regulatory and Accounting Developments

SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments." SFAS 155 amends SFAS 133, "Accounting for Derivative Instruments and Hedging Activities" and SFAS 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities." SFAS 155 (i) permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, (ii) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133, (iii) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, (iv) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and (v) amends SFAS 140 to eliminate the prohibition on a qualifying special purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. Adoption of SFAS 155 on January 1, 2007 did not have a significant impact on the Company's financial statements.

FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement 109." The Company adopted Interpretation No. 48 on January 1, 2007. See Note 8 - Income Taxes for additional information.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This statement does not require any new fair value measurements. It is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of the adoption of SFAS 157, with respect to its current practice of measuring fair value and disclosure in its financial statements.

Page 20

SFAS No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)." The recognition and disclosure provisions of SFAS 158 were adopted by the Company for its financial statements for the year ended December 31, 2006. See Note 9 - Employee Benefits for additional information.
 
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. It is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of SFAS 157. The Company has decided not to early adopt SFAS 159 and is currently evaluating the impact of the adoption with respect to its current practice of measuring fair value and disclosure in its financial statements.


Item 3. Quantitative and Qualitative Disclosures about Market Risk

Asset/Liability Management

Management considers interest rate risk to be the most significant market risk for the Company. Market risk is the risk of loss from adverse changes in market prices and rates. Interest rate risk is the exposure to adverse changes in the net income of the Company as a result of changes in interest rates.

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 liabilities, and the credit quality of earning assets. The Company’s objectives in its asset and liability management are to maintain a strong, stable net interest margin, to utilize its capital effectively without taking undue risks, to maintain adequate liquidity, and to reduce vulnerability of its operations to changes in interest rates.

The Company’s Asset and Liability Committee evaluates periodically, but at least four times a year, 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 at least annually. The economic environment continually presents uncertainties as to future interest rate trends. The Asset and Liability Committee regularly utilizes a model that projects net interest income based on increasing or decreasing interest rates, in order to be better able to respond to changes in interest rates.

At March 31, 2007, $192,395,000 or 96.4% of the Company’s securities had fixed interest rates. Changes in interest rates affect the value of the Company’s interest earning assets and in particular its securities portfolio. Generally, the value of securities fluctuates inversely with changes in interest rates. Decreases in the fair value of securities available for sale, therefore, could have an adverse effect on stockholder’s equity. Increases in interest rates could result in decreases in the market value of interest earning assets, which could adversely affect the Company’s results of operations if sold. The Company is also subject to reinvestment risk associated with changes in interest rates. Increases in market interest rates also could affect the type (fixed-rate or adjustable-rate) and amount of loans originated by the Company and the average life of loans and securities, which can impact the yields earned on the Company’s loans and securities. Changes in interest rates may affect the average life of loans and mortgage related securities. In periods of decreasing interest rates, the average life of loans and securities held by the Company may be shortened to the extent increased prepayment activity occurs during such periods which, in turn, may result in the investment of funds from such prepayments in lower yielding assets. Under these circumstances the Company is subject to reinvestment risk to the extent that it is unable to reinvest the cash received from such prepayments at rates that are comparable to the rates on existing loans and securities. Additionally, increases in interest rates may result in decreasing loan prepayments with respect to fixed rate loans, and therefore an increase in the average life of such loans, may result in a decrease in loan demand, and make it more difficult for borrowers to repay adjustable rate loans.
 
Page 21

The Company utilizes the results of a detailed and dynamic simulation model to quantify the estimated exposure to net interest income to sustained interest rate changes. Management routinely monitors simulated net interest income sensitivity over a rolling two-year horizon. The simulation model captures the impact of changing interest rates on the interest income received and the interest expense paid on all assets and liabilities reflected on the Company’s Statement of Condition. This sensitivity analysis is compared to the asset and liability policy limits that specify a maximum tolerance level for net interest income exposure over a one-year horizon given both a 200 basis point upward and downward shift in interest rates. A parallel and pro rata shift in rates over a twelve-month period is assumed. The following reflects the Company’s net interest income sensitivity analysis at March 31, 2007:

   
March 31, 2007
 
December 31, 2006
 
Change in Interest
 
Potential Change
 
Potential Change
 
Rates in Basis Points
 
in Net
 
in Net
 
(RATE SHOCK)
 
Interest Income
 
Interest Income
 
(In thousands)
                 
   
$ Change
 
% Change
 
$ Change
 
% Change
 
200
 
$
(1,625
)
 
(6.62
)%
$
(1,501
)
 
(5.87
)%
Static
   
-
   
-
   
-
   
-
 
(200)
 
$
38
   
0.16
%
$
(27
)
 
(0.11
)%

The preceding sensitivity analysis does not represent a Company forecast and should not be relied upon as being indicative of expected operating results. These hypothetical estimates are based upon numerous assumptions including, but not limited to, the nature and timing of interest rate levels and yield curve shapes, prepayments on loans and securities, deposit decay rates, pricing decisions on loans and deposits, and reinvestment and replacement of asset and liability cash flows. While assumptions are developed based upon perceived current economic and local market conditions, the Company cannot make any assurances as to the predictive nature of these assumptions including how customer preferences or competitor influences may change.

Also, as market conditions vary from those assumed in the sensitivity analysis, actual results will also differ due to prepayment and refinancing levels likely deviating from those assumed, the varying impact of interest rate change caps or floors on adjustable rate assets, the potential effect of changing debt service levels on customers with adjustable rate loans, depositor early withdrawals, prepayment penalties and product preference changes and other internal and external variables. Furthermore, the sensitivity analysis does not reflect actions that management might take in responding to, or anticipating changes in interest rates and market conditions.

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2007. Based on that evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this quarterly report. There has been no change in the Company’s internal control over financial reporting during the quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


Page 22


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There have been no material changes to the factors disclosed in Item 1A., Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2006.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)  
Not applicable.
(b)  
Not applicable.
(c)  
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


31.1 Certification of Principal Executive Officer pursuant to Rule 13a-14(a)
31.2 Certification of Principal Financial Officer pursuant to Rule 13a-14(a)
32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and  18 U.S.C. Section 1350


Page 23



SIGNATURES

In accordance with the requirement of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 
BRIDGE BANCORP, INC.
 
Registrant
   
   
May 7, 2007
/s/ Thomas J. Tobin
 
Thomas J. Tobin
 
President and Chief Executive Officer
   
May 7, 2007
/s/ Howard H. Nolan
 
Howard H. Nolan
 
Senior Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer
   



Page 24



EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a)

I, Thomas J. Tobin, certify that:

1)  
I have reviewed this quarterly report on Form 10-Q of Bridge Bancorp, Inc.;

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 15(d)-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 quarterly 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 registrant’s most recent fiscal quarter 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 registrant’s board of directors:

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 7, 2007

/s/ Thomas J. Tobin
Thomas J. Tobin
President and Chief Executive Officer

Page 25


EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a)

I, Howard H. Nolan, certify that:

1.  
I have reviewed this quarterly report on Form 10-Q of Bridge Bancorp, Inc.;

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 15(d)-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 quarterly 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 registrant’s most recent fiscal quarter 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 registrant’s board of directors:

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 7, 2007

/s/ Howard H. Nolan
Howard H. Nolan
Senior Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer

Page 26


This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.


EXHIBIT 32.1
 
CERTIFICATION PURSUANT TO RULE 13a-14(b) 18 U.S.C. SECTION 1350,
 
As adopted pursuant to
 
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of Bridge Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2007 as filed with the Securities and Exchange Commission, (the “Report”), we, Thomas J. Tobin, President and Chief Executive Officer of the Company and, Howard H. Nolan, Senior Executive Vice President, Chief Operating Officer and Interim Chief Financial Officer of the Company , 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)
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and

 
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: May 7, 2007
/s/ Thomas J. Tobin
 
Thomas J. Tobin
 
President and Chief Executive Officer
   
 
/s/ Howard H. Nolan
 
Howard H. Nolan
 
Senior Executive Vice President, Chief Operating Officer and Interim Chief Executive Officer

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