Quarterlytics / Financial Services / Banks - Regional / Bridge Bancorp Inc.

Bridge Bancorp Inc.

bdge · NASDAQ Financial Services
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Sector Financial Services
Industry Banks - Regional
Employees 201-500
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FY2010 Annual Report · Bridge Bancorp Inc.
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BRIDGE

BANCORP, INC.

2200 Montauk Highway

P.O. Box 3005

Bridgehampton, New York 11932

631.537.1000

www.bridgenb.com

BRIDGE
BANCORP, INC.

2010 Annual Report

BHBAnnualCover.indd   1

3/24/11   12:45 PM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bridge Bancorp, Inc., a New York corporation (NASDAQ:BDGE), 
is  a  one  bank  holding  company  engaged  in  commercial  banking
and  financial  services  through 
its  wholly  owned  subsidiary, 
Bridgehampton National Bank.  Established in 1910 by farmers and
merchants,  the  Bank  recently  celebrated  its  100th  anniversary  and 
renewed  its  commitment  to  the  tenants  of  community  banking: 
developing  long-term  relationships  with  local  customers,  offering 
knowledge and  an understanding of the local marketplace and taking 
an active role in making the towns and villages it serves better places
to live and work.

                Strength. 

Throughout  its  history,  Bridgehampton  National  Bank  has  estab-
lished a reputation for personal service, access to decision makers and 
engaged involvement in the community.  As it enters its next century, 
the Bank will continue to build on its mission, while taking advantage 
of market opportunities created by a changing economic environment. 

                                       Vision. 

Bridgehampton  National  Bank  operates  in  markets  throughout 
Suffolk County, Long Island. It continues to grow, opening branches 
in  Center  Moriches,  Deer  Park  and  Patchogue  in  2010,  bringing 
the total number of branches to 19. The Bank offers a full range of 
products  and  services  to  businesses,  consumers  and  municipalities. 

                   Growth.

lenders  and  branch  managers  offer 
Its  professional  teams  of 
flexible  banking  programs  designed  to  help  customers  meet  their 
financial needs. Products and services include effective technologies
like  online  banking,  online  bill  pay,  remote  deposit  capture,
merchant  services  and  lockbox  as  well  as  the  traditional  menu  of 
deposit  and  loan  products.  In  addition,  title  insurance  is  offered
through Bridge Abstract and investment council is provided by Bridge 
Investment Services. 

Bridge Bancorp, Inc.   •    2010 Annual Report

Corporate Information

Bridge Bancorp, Inc.

BOARD OF DIRECTORS  

AND AFFILIATIONS

Marcia Z. Hefter

Chairperson

Dennis A. Suskind

Vice Chairperson

Kevin M. O’Connor

Emanuel Arturi

R. Timothy Maran

Charles I. Massoud

Albert E. McCoy, Jr.

Howard H. Nolan

Rudolph J. Santoro

Thomas J. Tobin

COMPANY OFFICERS

Kevin M. O’Connor

President and 

Chief Executive Officer

Howard H. Nolan, CPA

Sr. Executive Vice President

Chief Financial Officer,

Corporate Secretary and Treasurer

Bridgehampton National Bank

EXECUTIVE OFFICERS

Kevin M. O’Connor

President and 

Chief Executive Officer

Howard H. Nolan, CPA

Sr. Executive Vice President,

Chief Administrative and 

Financial Officer 

James J. Manseau

Executive Vice President,

Chief Retail Banking Officer

Kevin L. Santacroce

Executive Vice President,

Chief Lending Officer

SENIOR VICE PRESIDENTS

Seamus J. Doyle

Deborah McGrory

Thomas H. Simson

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VICE PRESIDENTS

William Araneo

Steven Bodziner, Esq.

Kimberly Cioch

Michelle Dosch

Michael Fearon

Nancy Foster

Patricia F. Horan

John B. MacCulley

Theresa Mackey

Norma Marx

Marie McAlary

Margaret Meighan 

Nancy Messer

Maureen P. Mougios

Corrinne Newman

Claudia Pilato

Sarah Quinn, CPA

Stephanie Saggio

Raymond Sanchez

Susan G. Schaefer

Dawn Turnbull

Joseph Walsh

Donna Wetjen

Aidan Wood

ASSISTANT  

VICE PRESIDENTS

Sharon Abbondondelo

Sabrina Aucello

Lance Burke

Mary Beth Callaghan

Deborah Cosgrove

Robert Curtin

Joanne Dougherty

Jeffrey M. Greenwald

Emily Healy

STOCK TRANSFER AGENT  

AND REGISTRAR

Registrar and Transfer Co.

10 Commerce Drive

Cranford, NJ 07016

800.368.5948

www.rtco.com

Shareholders that would like to 

make changes to the name, address 

or ownership of their stock, consolidate

accounts, eliminate duplicate mailings,

or replace lost certificates or dividend

checks, should contact Registrar and 

Transfer Co.

SECURITIES COUNSEL

Luse Gorman Pomerenk  

& Schick, P.C.

5335 Wisconsin Avenue, NW  

Suite 780

Washington, DC 20015-2035

NOTICE OF ANNUAL MEETING

The Annual Meeting of Shareholders 

is scheduled for 11:00 a.m. on 

Friday, May 6, 2011 in the  

Community Room  

Bridgehampton National Bank 

2200 Montauk Highway

Bridgehampton, NY 11932.

ASSISTANT CASHIERS

Peter Hillick

Joseph Jones

Erin D. Kaelin

Caroline Kalish

Deborah Orlowski

Julia Pratt

Maria L. Press

Keith Robertson

Marion Stark

Lisa Babinski

Mimi Bristel

Linda Carlson

Theresa Ceriello

Laura Gorman

Tiana Grampus

Julia Hartmann

Christie G. Pfeil

Jill Ramundo

Gisella Recalde

INVESTOR RELATIONS

Exchange: NASDAQ®

Symbol: BDGE

Howard H. Nolan, CPA

Senior Executive Vice President  

and Corporate Secretary

2200 Montauk Highway  

P.O. Box 3005

Bridgehampton, NY 11932

631.537.1000

hnolan@bridgenb.com

Shareholders seeking information 

about the Company may access 

presentations, press releases and 

government filings through the 

Bank’s website: www.bridgenb.com

BHBAnnualCover.indd  2

3/24/11  12:45 PM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial Highlights

(in thousands, except per share data and financial ratios)

For the year ended December 31,

2010

2009

$

9,166

$

8,763

15.29

%

0.95

%

15.58

%

1.06

%

Earnings

Net income

Return on average equity

Return on average assets

Balance Sheet

Assets

Deposits

Loans

Stockholders’ equity

Per Share Data

Diluted earnings per share

Cash dividends declared per common share

Book value

$ 1,028,456

$ 916,993

$ 504,060

$

65,720

$

$

$

1.45

0.92

10.33

$1,200

$1,000

$800

$600

$400

$200

$0

$1,000

$1,028.5

$10

$917.0

$9.2

$800

$600

$400

$200

$0

$8

$6

$4

$2

$0

897,257

793,538

448,038

61,855

1.41

0.92

9.88

15.29%

$

$

$

$

$

$

$

20%

15%

10%

5%

0%

‘06 ‘07 ‘08 ‘09 ‘10

‘06 ‘07 ‘08 ‘09 ‘10

‘06 ‘07 ‘08 ‘09 ‘10

‘06 ‘07 ‘08 ‘09 ‘10

Total 
Assets

Total 
Deposits

(at December 31, in millions)

(at December 31, in millions)

Net 
Income

(in millions)

Return On 
Average Equity

(percentage)

page 1

BHBAnnual8Pgs.indd   1

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(cid:86)(cid:81)(cid:73)(cid:70)(cid:66)(cid:87)(cid:66)(cid:77)(cid:15)(cid:1) (cid:52)(cid:74)(cid:79)(cid:68)(cid:70)(cid:1) (cid:42)(cid:1) (cid:75)(cid:80)(cid:74)(cid:79)(cid:70)(cid:69)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:36)(cid:80)(cid:78)(cid:81)(cid:66)(cid:79)(cid:90)(cid:13)(cid:1) (cid:77)(cid:70)(cid:84)(cid:84)(cid:1) (cid:85)(cid:73)(cid:66)(cid:79)(cid:1) (cid:71)(cid:80)(cid:86)(cid:83)(cid:1) (cid:90)(cid:70)(cid:66)(cid:83)(cid:84)(cid:1) (cid:66)(cid:72)(cid:80)(cid:13)(cid:1) (cid:88)(cid:70)(cid:1) (cid:73)(cid:66)(cid:87)(cid:70)(cid:1) (cid:88)(cid:74)(cid:85)(cid:79)(cid:70)(cid:84)(cid:84)(cid:70)(cid:69)(cid:1)

(cid:66)(cid:1)(cid:84)(cid:70)(cid:66)(cid:1)(cid:68)(cid:73)(cid:66)(cid:79)(cid:72)(cid:70)(cid:1)(cid:74)(cid:79)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:273)(cid:79)(cid:66)(cid:79)(cid:68)(cid:74)(cid:66)(cid:77)(cid:1)(cid:84)(cid:70)(cid:83)(cid:87)(cid:74)(cid:68)(cid:70)(cid:84)(cid:1)(cid:77)(cid:66)(cid:79)(cid:69)(cid:84)(cid:68)(cid:66)(cid:81)(cid:70)(cid:13)(cid:1)(cid:66)(cid:84)(cid:1)(cid:77)(cid:80)(cid:79)(cid:72)(cid:85)(cid:74)(cid:78)(cid:70)(cid:1)(cid:71)(cid:83)(cid:66)(cid:79)(cid:68)(cid:73)(cid:74)(cid:84)(cid:70)(cid:84)

(cid:69)(cid:74)(cid:84)(cid:66)(cid:81)(cid:81)(cid:70)(cid:66)(cid:83)(cid:70)(cid:69)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:66)(cid:1)(cid:79)(cid:70)(cid:88)(cid:1)(cid:78)(cid:66)(cid:83)(cid:76)(cid:70)(cid:85)(cid:1)(cid:69)(cid:90)(cid:79)(cid:66)(cid:78)(cid:74)(cid:68)(cid:1)(cid:70)(cid:78)(cid:70)(cid:83)(cid:72)(cid:70)(cid:69)(cid:15)(cid:1)(cid:259)(cid:70)(cid:1)(cid:77)(cid:80)(cid:79)(cid:72)(cid:1)(cid:85)(cid:70)(cid:83)(cid:78)(cid:1)

(cid:74)(cid:78)(cid:81)(cid:66)(cid:68)(cid:85)(cid:1)(cid:80)(cid:71)(cid:1)(cid:85)(cid:73)(cid:70)(cid:84)(cid:70)(cid:1)(cid:69)(cid:74)(cid:84)(cid:77)(cid:80)(cid:68)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:84)(cid:1)(cid:74)(cid:84)(cid:1)(cid:79)(cid:80)(cid:85)(cid:1)(cid:90)(cid:70)(cid:85)(cid:1)(cid:86)(cid:79)(cid:69)(cid:70)(cid:83)(cid:84)(cid:85)(cid:80)(cid:80)(cid:69)(cid:13)(cid:1)(cid:79)(cid:80)(cid:83)(cid:1)(cid:73)(cid:66)(cid:87)(cid:70)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)

(cid:72)(cid:80)(cid:87)(cid:70)(cid:83)(cid:79)(cid:78)(cid:70)(cid:79)(cid:85)(cid:8)(cid:84)(cid:1)(cid:66)(cid:85)(cid:85)(cid:70)(cid:78)(cid:81)(cid:85)(cid:84)(cid:1)(cid:85)(cid:80)(cid:1)(cid:68)(cid:80)(cid:79)(cid:85)(cid:83)(cid:80)(cid:77)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:83)(cid:70)(cid:72)(cid:86)(cid:77)(cid:66)(cid:85)(cid:70)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:273)(cid:79)(cid:66)(cid:79)(cid:68)(cid:74)(cid:66)(cid:77)(cid:1)(cid:84)(cid:70)(cid:83)(cid:87)(cid:74)(cid:68)(cid:70)(cid:84)

(cid:84)(cid:70)(cid:68)(cid:85)(cid:80)(cid:83)(cid:1)(cid:67)(cid:70)(cid:70)(cid:79)(cid:1)(cid:71)(cid:86)(cid:77)(cid:77)(cid:90)(cid:1)(cid:71)(cid:80)(cid:83)(cid:78)(cid:86)(cid:77)(cid:66)(cid:85)(cid:70)(cid:69)(cid:1)(cid:80)(cid:83)(cid:1)(cid:74)(cid:78)(cid:81)(cid:77)(cid:70)(cid:78)(cid:70)(cid:79)(cid:85)(cid:70)(cid:69)(cid:15)(cid:1)

(cid:35)(cid:83)(cid:74)(cid:69)(cid:72)(cid:70)(cid:1)(cid:35)(cid:66)(cid:79)(cid:68)(cid:80)(cid:83)(cid:81)(cid:13)(cid:1)(cid:42)(cid:79)(cid:68)(cid:15)(cid:1)(cid:1)(cid:1)(cid:114)(cid:1)(cid:1)(cid:1)(cid:1)(cid:19)(cid:17)(cid:18)(cid:17)(cid:1)(cid:34)(cid:79)(cid:79)(cid:86)(cid:66)(cid:77)(cid:1)(cid:51)(cid:70)(cid:81)(cid:80)(cid:83)(cid:85)

BHBAnnual8Pgs.indd  2

3/24/11  9:31 AM

Total Loans by Type
(at December 31, 2010) 
(cid:34)(cid:87)(cid:70)(cid:83)(cid:66)(cid:72)(cid:70)(cid:1)(cid:58)(cid:74)(cid:70)(cid:77)(cid:69)(cid:1)(cid:23)(cid:15)(cid:22)(cid:22)(cid:6)

(cid:81)

(cid:81)

(cid:81)

(cid:81)

(cid:81)

(cid:81)

(cid:81)

(cid:18)(cid:20)(cid:6)
(cid:18)(cid:22)(cid:6)
(cid:21)(cid:26)(cid:6)
(cid:18)(cid:6)
(cid:18)(cid:6)
(cid:18)(cid:26)(cid:6)
(cid:19)(cid:6)

(cid:38)(cid:82)(cid:86)(cid:74)(cid:85)(cid:90)(cid:1)(cid:45)(cid:80)(cid:66)(cid:79)(cid:84)
(cid:51)(cid:70)(cid:84)(cid:74)(cid:69)(cid:70)(cid:79)(cid:85)(cid:74)(cid:66)(cid:77)(cid:1)(cid:46)(cid:80)(cid:83)(cid:85)(cid:72)(cid:66)(cid:72)(cid:70)(cid:84)
(cid:36)(cid:80)(cid:78)(cid:78)(cid:70)(cid:83)(cid:68)(cid:74)(cid:66)(cid:77)(cid:1)(cid:46)(cid:80)(cid:83)(cid:85)(cid:72)(cid:66)(cid:72)(cid:70)(cid:84)
(cid:36)(cid:80)(cid:79)(cid:84)(cid:85)(cid:83)(cid:86)(cid:68)(cid:85)(cid:74)(cid:80)(cid:79)(cid:1)(cid:45)(cid:80)(cid:66)(cid:79)(cid:84)
(cid:45)(cid:66)(cid:79)(cid:69)(cid:1)(cid:45)(cid:80)(cid:66)(cid:79)(cid:84)
(cid:36)(cid:80)(cid:78)(cid:78)(cid:70)(cid:83)(cid:68)(cid:74)(cid:66)(cid:77)(cid:1)(cid:45)(cid:80)(cid:66)(cid:79)(cid:84)
(cid:36)(cid:80)(cid:79)(cid:84)(cid:86)(cid:78)(cid:70)(cid:83)(cid:1)(cid:45)(cid:80)(cid:66)(cid:79)(cid:84)

(cid:56)(cid:70)(cid:1) (cid:66)(cid:83)(cid:70)(cid:1) (cid:84)(cid:85)(cid:74)(cid:77)(cid:77)(cid:1) (cid:74)(cid:69)(cid:70)(cid:79)(cid:85)(cid:74)(cid:71)(cid:90)(cid:74)(cid:79)(cid:72)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:68)(cid:66)(cid:86)(cid:84)(cid:70)(cid:84)(cid:1) (cid:80)(cid:71)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:86)(cid:81)(cid:73)(cid:70)(cid:66)(cid:87)(cid:66)(cid:77)(cid:13)(cid:1) (cid:66)(cid:84)(cid:84)(cid:74)(cid:72)(cid:79)(cid:74)(cid:79)(cid:72)(cid:1) (cid:67)(cid:77)(cid:66)(cid:78)(cid:70)(cid:1)

(cid:66)(cid:79)(cid:69)(cid:1)(cid:69)(cid:70)(cid:66)(cid:77)(cid:74)(cid:79)(cid:72)(cid:1)(cid:88)(cid:74)(cid:85)(cid:73)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:87)(cid:74)(cid:68)(cid:85)(cid:74)(cid:78)(cid:84)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:87)(cid:74)(cid:77)(cid:77)(cid:66)(cid:74)(cid:79)(cid:84)(cid:15)(cid:1)(cid:259)(cid:70)(cid:1)(cid:73)(cid:80)(cid:86)(cid:84)(cid:74)(cid:79)(cid:72)(cid:16)(cid:78)(cid:80)(cid:83)(cid:85)(cid:72)(cid:66)(cid:72)(cid:70)(cid:1)(cid:78)(cid:66)(cid:83)(cid:76)(cid:70)(cid:85)

(cid:74)(cid:84)(cid:1) (cid:84)(cid:85)(cid:74)(cid:77)(cid:77)(cid:1) (cid:68)(cid:80)(cid:79)(cid:85)(cid:83)(cid:80)(cid:77)(cid:77)(cid:70)(cid:69)(cid:1) (cid:67)(cid:90)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:54)(cid:52)(cid:1) (cid:72)(cid:80)(cid:87)(cid:70)(cid:83)(cid:79)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:83)(cid:70)(cid:68)(cid:70)(cid:79)(cid:85)(cid:77)(cid:90)(cid:1) (cid:81)(cid:66)(cid:84)(cid:84)(cid:70)(cid:69)(cid:1)

(cid:37)(cid:80)(cid:69)(cid:69)(cid:14)(cid:39)(cid:83)(cid:66)(cid:79)(cid:76)(cid:1)(cid:77)(cid:70)(cid:72)(cid:74)(cid:84)(cid:77)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:13)(cid:1)(cid:88)(cid:73)(cid:74)(cid:77)(cid:70)(cid:1)(cid:77)(cid:80)(cid:79)(cid:72)(cid:1)(cid:80)(cid:79)(cid:1)(cid:74)(cid:69)(cid:70)(cid:66)(cid:84)(cid:13)(cid:1)(cid:77)(cid:66)(cid:68)(cid:76)(cid:84)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:84)(cid:81)(cid:70)(cid:68)(cid:74)(cid:273)(cid:68)(cid:74)(cid:85)(cid:90)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)

(cid:74)(cid:79)(cid:69)(cid:86)(cid:84)(cid:85)(cid:83)(cid:90)(cid:1)(cid:79)(cid:70)(cid:70)(cid:69)(cid:84)(cid:1)(cid:85)(cid:80)(cid:1)(cid:78)(cid:66)(cid:79)(cid:66)(cid:72)(cid:70)(cid:1)(cid:74)(cid:79)(cid:1)(cid:85)(cid:73)(cid:74)(cid:84)(cid:1)(cid:79)(cid:70)(cid:88)(cid:1)(cid:88)(cid:80)(cid:83)(cid:77)(cid:69)(cid:15)

(cid:37)(cid:70)(cid:84)(cid:81)(cid:74)(cid:85)(cid:70)(cid:1) (cid:85)(cid:73)(cid:74)(cid:84)(cid:1) (cid:85)(cid:86)(cid:83)(cid:78)(cid:80)(cid:74)(cid:77)(cid:13)(cid:1) (cid:88)(cid:70)(cid:1) (cid:71)(cid:80)(cid:68)(cid:86)(cid:84)(cid:1) (cid:80)(cid:79)(cid:1) (cid:73)(cid:80)(cid:88)(cid:1) (cid:78)(cid:86)(cid:68)(cid:73)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:78)(cid:74)(cid:84)(cid:84)(cid:74)(cid:80)(cid:79)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1)

(cid:84)(cid:85)(cid:83)(cid:66)(cid:85)(cid:70)(cid:72)(cid:90)(cid:1) (cid:71)(cid:80)(cid:83)(cid:1) (cid:80)(cid:86)(cid:83)(cid:1) (cid:36)(cid:80)(cid:78)(cid:81)(cid:66)(cid:79)(cid:90)(cid:1) (cid:83)(cid:70)(cid:78)(cid:66)(cid:74)(cid:79)(cid:84)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:84)(cid:66)(cid:78)(cid:70)(cid:15)(cid:1) (cid:56)(cid:70)(cid:1) (cid:66)(cid:83)(cid:70)(cid:1) (cid:67)(cid:70)(cid:72)(cid:74)(cid:79)(cid:79)(cid:74)(cid:79)(cid:72)

(cid:80)(cid:86)(cid:83)(cid:1) (cid:84)(cid:70)(cid:68)(cid:80)(cid:79)(cid:69)(cid:1) (cid:68)(cid:70)(cid:79)(cid:85)(cid:86)(cid:83)(cid:90)(cid:1) (cid:88)(cid:74)(cid:85)(cid:73)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:76)(cid:79)(cid:80)(cid:88)(cid:77)(cid:70)(cid:69)(cid:72)(cid:70)(cid:1) (cid:85)(cid:73)(cid:66)(cid:85)(cid:1) (cid:88)(cid:70)(cid:1) (cid:73)(cid:66)(cid:87)(cid:70)(cid:1) (cid:67)(cid:86)(cid:74)(cid:77)(cid:85)(cid:1) (cid:66)(cid:1)

(cid:71)(cid:80)(cid:86)(cid:79)(cid:69)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:1)(cid:67)(cid:66)(cid:84)(cid:70)(cid:69)(cid:1)(cid:80)(cid:79)(cid:1)(cid:66)(cid:1)(cid:84)(cid:74)(cid:79)(cid:72)(cid:86)(cid:77)(cid:66)(cid:83)(cid:1)(cid:71)(cid:80)(cid:68)(cid:86)(cid:84)(cid:1)(cid:109)(cid:1)(cid:85)(cid:80)(cid:1)(cid:67)(cid:70)(cid:1)(cid:66)(cid:1)(cid:85)(cid:83)(cid:86)(cid:70)(cid:1)(cid:68)(cid:80)(cid:78)(cid:78)(cid:86)(cid:79)(cid:74)(cid:85)(cid:90)(cid:1)(cid:67)(cid:66)(cid:79)(cid:76)(cid:13)(cid:1)

(cid:69)(cid:70)(cid:77)(cid:74)(cid:87)(cid:70)(cid:83)(cid:74)(cid:79)(cid:72)(cid:1)(cid:77)(cid:80)(cid:79)(cid:72)(cid:1)(cid:85)(cid:70)(cid:83)(cid:78)(cid:1)(cid:87)(cid:66)(cid:77)(cid:86)(cid:70)(cid:1)(cid:85)(cid:80)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)(cid:84)(cid:73)(cid:66)(cid:83)(cid:70)(cid:73)(cid:80)(cid:77)(cid:69)(cid:70)(cid:83)(cid:84)(cid:13)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)(cid:68)(cid:86)(cid:84)(cid:85)(cid:80)(cid:78)(cid:70)(cid:83)(cid:84)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)

(cid:68)(cid:80)(cid:78)(cid:78)(cid:86)(cid:79)(cid:74)(cid:85)(cid:74)(cid:70)(cid:84)(cid:1)(cid:88)(cid:70)(cid:1)(cid:84)(cid:70)(cid:83)(cid:87)(cid:70)(cid:15)(cid:1)(cid:259)(cid:74)(cid:84)(cid:1)(cid:74)(cid:69)(cid:70)(cid:79)(cid:85)(cid:74)(cid:85)(cid:90)(cid:1)(cid:74)(cid:84)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:84)(cid:80)(cid:86)(cid:83)(cid:68)(cid:70)(cid:1)(cid:80)(cid:71)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)(cid:84)(cid:85)(cid:83)(cid:70)(cid:79)(cid:72)(cid:85)(cid:73)(cid:13)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)

(cid:85)(cid:73)(cid:70)(cid:1)(cid:77)(cid:70)(cid:72)(cid:66)(cid:68)(cid:90)(cid:1)(cid:80)(cid:79)(cid:1)(cid:88)(cid:73)(cid:74)(cid:68)(cid:73)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)(cid:83)(cid:70)(cid:68)(cid:70)(cid:79)(cid:85)(cid:1)(cid:84)(cid:86)(cid:68)(cid:68)(cid:70)(cid:84)(cid:84)(cid:70)(cid:84)(cid:1)(cid:73)(cid:66)(cid:87)(cid:70)(cid:1)(cid:67)(cid:70)(cid:70)(cid:79)(cid:1)(cid:67)(cid:86)(cid:74)(cid:77)(cid:85)(cid:15)(cid:1)

(cid:52)(cid:85)(cid:83)(cid:70)(cid:79)(cid:72)(cid:85)(cid:73)(cid:15)

(cid:48)(cid:86)(cid:83)(cid:1) (cid:84)(cid:86)(cid:68)(cid:68)(cid:70)(cid:84)(cid:84)(cid:1) (cid:68)(cid:66)(cid:79)(cid:1) (cid:67)(cid:70)(cid:1) (cid:87)(cid:74)(cid:70)(cid:88)(cid:70)(cid:69)(cid:1) (cid:74)(cid:79)(cid:1) (cid:78)(cid:66)(cid:79)(cid:90)(cid:1) (cid:88)(cid:66)(cid:90)(cid:84)(cid:15)(cid:1) (cid:40)(cid:83)(cid:80)(cid:88)(cid:85)(cid:73)(cid:1) (cid:74)(cid:79)(cid:1) (cid:66)(cid:84)(cid:84)(cid:70)(cid:85)(cid:84)(cid:13)(cid:1)

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BHBAnnual8Pgs.indd   4

3/24/11   1:09 PM

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Vision.

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(cid:78)(cid:70)(cid:83)(cid:72)(cid:70)(cid:83)(cid:1)(cid:81)(cid:66)(cid:83)(cid:85)(cid:79)(cid:70)(cid:83)(cid:1)(cid:85)(cid:80)(cid:1)(cid:68)(cid:80)(cid:79)(cid:85)(cid:74)(cid:79)(cid:86)(cid:70)(cid:1)(cid:69)(cid:70)(cid:77)(cid:74)(cid:87)(cid:70)(cid:83)(cid:74)(cid:79)(cid:72)(cid:1)(cid:80)(cid:79)(cid:1)(cid:85)(cid:73)(cid:70)(cid:74)(cid:83)(cid:1)(cid:68)(cid:80)(cid:78)(cid:78)(cid:86)(cid:79)(cid:74)(cid:85)(cid:90)(cid:1)(cid:67)(cid:66)(cid:79)(cid:76)(cid:74)(cid:79)(cid:72)(cid:1)

(cid:81)(cid:77)(cid:70)(cid:69)(cid:72)(cid:70)(cid:15)(cid:1)(cid:1)(cid:56)(cid:70)(cid:1)(cid:77)(cid:80)(cid:80)(cid:76)(cid:1)(cid:71)(cid:80)(cid:83)(cid:88)(cid:66)(cid:83)(cid:69)(cid:1)(cid:85)(cid:80)(cid:1)(cid:74)(cid:79)(cid:85)(cid:70)(cid:72)(cid:83)(cid:66)(cid:85)(cid:74)(cid:79)(cid:72)(cid:1)(cid:85)(cid:73)(cid:74)(cid:84)(cid:1)(cid:80)(cid:83)(cid:72)(cid:66)(cid:79)(cid:74)(cid:91)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:1)(cid:74)(cid:79)(cid:85)(cid:80)(cid:1)(cid:80)(cid:86)(cid:83)(cid:84)(cid:13)(cid:1)

(cid:84)(cid:70)(cid:83)(cid:87)(cid:74)(cid:79)(cid:72)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:70)(cid:89)(cid:81)(cid:66)(cid:79)(cid:69)(cid:74)(cid:79)(cid:72)(cid:1) (cid:85)(cid:73)(cid:70)(cid:74)(cid:83)(cid:1) (cid:68)(cid:86)(cid:84)(cid:85)(cid:80)(cid:78)(cid:70)(cid:83)(cid:1) (cid:83)(cid:70)(cid:77)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:84)(cid:73)(cid:74)(cid:81)(cid:84)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:70)(cid:79)(cid:73)(cid:66)(cid:79)(cid:68)(cid:74)(cid:79)(cid:72)(cid:1)

(cid:85)(cid:73)(cid:70)(cid:1)(cid:83)(cid:70)(cid:84)(cid:86)(cid:77)(cid:85)(cid:84)(cid:1)(cid:71)(cid:80)(cid:83)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)(cid:36)(cid:80)(cid:78)(cid:81)(cid:66)(cid:79)(cid:90)(cid:15)(cid:1)

(cid:40)(cid:83)(cid:80)(cid:88)(cid:85)(cid:73)(cid:15)

(cid:48)(cid:79)(cid:1) (cid:66)(cid:1) (cid:81)(cid:70)(cid:83)(cid:84)(cid:80)(cid:79)(cid:66)(cid:77)(cid:1) (cid:79)(cid:80)(cid:85)(cid:70)(cid:13)(cid:1) (cid:42)(cid:1) (cid:66)(cid:78)(cid:1) (cid:71)(cid:80)(cid:83)(cid:85)(cid:86)(cid:79)(cid:66)(cid:85)(cid:70)(cid:1) (cid:85)(cid:80)(cid:1) (cid:73)(cid:66)(cid:87)(cid:70)(cid:1) (cid:75)(cid:80)(cid:74)(cid:79)(cid:70)(cid:69)(cid:1) (cid:66)(cid:79)(cid:1) (cid:80)(cid:83)(cid:72)(cid:66)(cid:79)(cid:74)(cid:91)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:1)

(cid:71)(cid:80)(cid:86)(cid:79)(cid:69)(cid:70)(cid:69)(cid:1)(cid:80)(cid:79)(cid:1)(cid:67)(cid:70)(cid:69)(cid:83)(cid:80)(cid:68)(cid:76)(cid:1)(cid:81)(cid:83)(cid:74)(cid:79)(cid:68)(cid:74)(cid:81)(cid:77)(cid:70)(cid:84)(cid:27)(cid:1)(cid:66)(cid:79)(cid:1)(cid:74)(cid:78)(cid:81)(cid:70)(cid:68)(cid:68)(cid:66)(cid:67)(cid:77)(cid:70)(cid:1)(cid:68)(cid:83)(cid:70)(cid:69)(cid:74)(cid:85)(cid:1)(cid:68)(cid:86)(cid:77)(cid:85)(cid:86)(cid:83)(cid:70)(cid:13)(cid:1)(cid:66)(cid:1)(cid:77)(cid:80)(cid:79)(cid:72)(cid:1)

(cid:84)(cid:85)(cid:66)(cid:79)(cid:69)(cid:74)(cid:79)(cid:72)(cid:1) (cid:68)(cid:80)(cid:83)(cid:70)(cid:1) (cid:68)(cid:86)(cid:84)(cid:85)(cid:80)(cid:78)(cid:70)(cid:83)(cid:1) (cid:67)(cid:66)(cid:84)(cid:70)(cid:13)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:78)(cid:80)(cid:84)(cid:85)(cid:1) (cid:74)(cid:78)(cid:81)(cid:80)(cid:83)(cid:85)(cid:66)(cid:79)(cid:85)(cid:77)(cid:90)(cid:1) (cid:66)(cid:1) (cid:35)(cid:80)(cid:66)(cid:83)(cid:69)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1)

(cid:78)(cid:66)(cid:79)(cid:66)(cid:72)(cid:70)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1)(cid:85)(cid:70)(cid:66)(cid:78)(cid:1)(cid:84)(cid:85)(cid:70)(cid:70)(cid:81)(cid:70)(cid:69)(cid:1)(cid:74)(cid:79)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:81)(cid:83)(cid:74)(cid:79)(cid:68)(cid:74)(cid:81)(cid:77)(cid:70)(cid:84)(cid:1)(cid:80)(cid:71)(cid:1)(cid:68)(cid:80)(cid:78)(cid:78)(cid:86)(cid:79)(cid:74)(cid:85)(cid:90)(cid:1)(cid:67)(cid:66)(cid:79)(cid:76)(cid:74)(cid:79)(cid:72)(cid:15)(cid:1)

(cid:56)(cid:70)(cid:1) (cid:73)(cid:66)(cid:87)(cid:70)(cid:1) (cid:67)(cid:86)(cid:74)(cid:77)(cid:85)(cid:1) (cid:80)(cid:79)(cid:1) (cid:85)(cid:73)(cid:74)(cid:84)(cid:1) (cid:71)(cid:80)(cid:86)(cid:79)(cid:69)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:13)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:74)(cid:79)(cid:68)(cid:77)(cid:86)(cid:69)(cid:74)(cid:79)(cid:72)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:66)(cid:68)(cid:82)(cid:86)(cid:74)(cid:84)(cid:74)(cid:85)(cid:74)(cid:80)(cid:79)(cid:1) (cid:80)(cid:71)(cid:1)

(cid:41)(cid:52)(cid:35)(cid:13)(cid:1)(cid:88)(cid:74)(cid:77)(cid:77)(cid:1)(cid:73)(cid:66)(cid:87)(cid:70)(cid:1)(cid:69)(cid:80)(cid:86)(cid:67)(cid:77)(cid:70)(cid:69)(cid:1)(cid:74)(cid:79)(cid:1)(cid:66)(cid:84)(cid:84)(cid:70)(cid:85)(cid:1)(cid:84)(cid:74)(cid:91)(cid:70)(cid:1)(cid:71)(cid:83)(cid:80)(cid:78)(cid:1)(cid:5)(cid:22)(cid:24)(cid:22)(cid:1)(cid:78)(cid:74)(cid:77)(cid:77)(cid:74)(cid:80)(cid:79)(cid:1)(cid:85)(cid:80)(cid:1)(cid:66)(cid:1)(cid:77)(cid:74)(cid:85)(cid:85)(cid:77)(cid:70)(cid:1)(cid:80)(cid:87)(cid:70)(cid:83)(cid:1)

(cid:5)(cid:18)(cid:15)(cid:18)(cid:1)(cid:67)(cid:74)(cid:77)(cid:77)(cid:74)(cid:80)(cid:79)(cid:15)(cid:1)(cid:1)

Total Deposits by Type
(at December 31, 2010)
(cid:34)(cid:87)(cid:70)(cid:83)(cid:66)(cid:72)(cid:70)(cid:1)(cid:36)(cid:80)(cid:84)(cid:85)(cid:1)(cid:80)(cid:71)(cid:1)(cid:42)(cid:79)(cid:85)(cid:70)(cid:83)(cid:70)(cid:84)(cid:85)(cid:1)(cid:35)(cid:70)(cid:66)(cid:83)(cid:74)(cid:79)(cid:72)(cid:1)(cid:37)(cid:70)(cid:81)(cid:80)(cid:84)(cid:74)(cid:85)(cid:84)(cid:1)(cid:17)(cid:15)(cid:26)(cid:20)(cid:6)

(cid:81)(cid:3)(cid:18)(cid:22)(cid:6)(cid:1)(cid:36)(cid:70)(cid:83)(cid:85)(cid:74)(cid:273)(cid:68)(cid:66)(cid:85)(cid:70)(cid:84)(cid:1)(cid:80)(cid:71)(cid:1)(cid:37)(cid:70)(cid:81)(cid:80)(cid:84)(cid:74)(cid:85)

(cid:81)(cid:3)(cid:18)(cid:20)(cid:6)(cid:1)(cid:52)(cid:66)(cid:87)(cid:74)(cid:79)(cid:72)(cid:84)(cid:1)(cid:7)(cid:1)(cid:47)(cid:48)(cid:56)

(cid:81)(cid:3)(cid:19)(cid:23)(cid:6)(cid:1)(cid:37)(cid:70)(cid:78)(cid:66)(cid:79)(cid:69)(cid:1)(cid:37)(cid:70)(cid:81)(cid:80)(cid:84)(cid:74)(cid:85)(cid:84)

(cid:81)(cid:3)(cid:21)(cid:23)(cid:6)(cid:1)(cid:46)(cid:80)(cid:79)(cid:70)(cid:90)(cid:1)(cid:46)(cid:66)(cid:83)(cid:76)(cid:70)(cid:85)

(cid:35)(cid:83)(cid:74)(cid:69)(cid:72)(cid:70)(cid:1)(cid:35)(cid:66)(cid:79)(cid:68)(cid:80)(cid:83)(cid:81)(cid:13)(cid:1)(cid:42)(cid:79)(cid:68)(cid:15)(cid:1)(cid:1)(cid:1)(cid:114)(cid:1)(cid:1)(cid:1)(cid:1)(cid:19)(cid:17)(cid:18)(cid:17)(cid:1)(cid:34)(cid:79)(cid:79)(cid:86)(cid:66)(cid:77)(cid:1)(cid:51)(cid:70)(cid:81)(cid:80)(cid:83)(cid:85)

BHBAnnual8Pgs.indd  6

3/24/11  1:09 PM

(cid:48)(cid:86)(cid:83)(cid:1)(cid:80)(cid:83)(cid:72)(cid:66)(cid:79)(cid:74)(cid:91)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:1)(cid:79)(cid:80)(cid:88)(cid:1)(cid:73)(cid:66)(cid:84)(cid:1)(cid:80)(cid:87)(cid:70)(cid:83)(cid:1)(cid:19)(cid:17)(cid:17)(cid:1)(cid:69)(cid:70)(cid:69)(cid:74)(cid:68)(cid:66)(cid:85)(cid:70)(cid:69)

(cid:67)(cid:66)(cid:79)(cid:76)(cid:70)(cid:83)(cid:84)(cid:13)(cid:1) (cid:70)(cid:66)(cid:68)(cid:73)(cid:1) (cid:71)(cid:80)(cid:68)(cid:86)(cid:84)(cid:70)(cid:69)(cid:1) (cid:80)(cid:79)(cid:1) (cid:69)(cid:70)(cid:77)(cid:74)(cid:87)(cid:70)(cid:83)(cid:74)(cid:79)(cid:72)(cid:1) (cid:80)(cid:86)(cid:83)(cid:1)

(cid:81)(cid:83)(cid:80)(cid:78)(cid:74)(cid:84)(cid:70)(cid:1)(cid:80)(cid:71)(cid:1)(cid:84)(cid:86)(cid:81)(cid:70)(cid:83)(cid:74)(cid:80)(cid:83)(cid:1)(cid:84)(cid:70)(cid:83)(cid:87)(cid:74)(cid:68)(cid:70)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:77)(cid:80)(cid:68)(cid:66)(cid:77)(cid:1)(cid:69)(cid:70)(cid:68)(cid:74)(cid:84)(cid:74)(cid:80)(cid:79)

(cid:78)(cid:66)(cid:76)(cid:74)(cid:79)(cid:72)(cid:15)(cid:1)(cid:259)(cid:74)(cid:84)(cid:1)(cid:68)(cid:80)(cid:78)(cid:78)(cid:74)(cid:85)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1)(cid:74)(cid:84)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)(cid:73)(cid:74)(cid:84)(cid:85)(cid:80)(cid:83)(cid:90)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)

(cid:80)(cid:86)(cid:83)(cid:1)(cid:71)(cid:86)(cid:85)(cid:86)(cid:83)(cid:70)(cid:15)(cid:1)

(cid:42)(cid:1)(cid:66)(cid:77)(cid:84)(cid:80)(cid:1)(cid:88)(cid:66)(cid:79)(cid:85)(cid:1)(cid:85)(cid:80)(cid:1)(cid:66)(cid:68)(cid:76)(cid:79)(cid:80)(cid:88)(cid:77)(cid:70)(cid:69)(cid:72)(cid:70)(cid:1)(cid:80)(cid:79)(cid:70)(cid:1)(cid:80)(cid:71)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)(cid:77)(cid:80)(cid:79)(cid:72)(cid:70)(cid:84)(cid:85)

(cid:84)(cid:70)(cid:83)(cid:87)(cid:74)(cid:79)(cid:72)(cid:1)(cid:69)(cid:74)(cid:83)(cid:70)(cid:68)(cid:85)(cid:80)(cid:83)(cid:84)(cid:13)(cid:1)(cid:51)(cid:15)(cid:1)(cid:53)(cid:74)(cid:78)(cid:80)(cid:85)(cid:73)(cid:90)(cid:1)(cid:46)(cid:66)(cid:83)(cid:66)(cid:79)(cid:15)(cid:1)(cid:53)(cid:74)(cid:78)(cid:1)(cid:74)(cid:84)(cid:1)

(cid:83)(cid:70)(cid:85)(cid:74)(cid:83)(cid:74)(cid:79)(cid:72)(cid:1) (cid:85)(cid:73)(cid:74)(cid:84)(cid:1) (cid:90)(cid:70)(cid:66)(cid:83)(cid:13)(cid:1) (cid:73)(cid:66)(cid:87)(cid:74)(cid:79)(cid:72)(cid:1) (cid:84)(cid:70)(cid:83)(cid:87)(cid:70)(cid:69)(cid:1) (cid:78)(cid:66)(cid:79)(cid:90)(cid:1) (cid:83)(cid:80)(cid:77)(cid:70)(cid:84)(cid:1)

(cid:71)(cid:80)(cid:83)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:36)(cid:80)(cid:78)(cid:81)(cid:66)(cid:79)(cid:90)(cid:15)(cid:1)(cid:1)(cid:41)(cid:70)(cid:1)(cid:73)(cid:66)(cid:84)(cid:1)(cid:67)(cid:70)(cid:70)(cid:79)(cid:1)(cid:66)(cid:1)(cid:84)(cid:85)(cid:83)(cid:80)(cid:79)(cid:72)(cid:1)(cid:87)(cid:80)(cid:74)(cid:68)(cid:70)(cid:1)

(cid:71)(cid:80)(cid:83)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:84)(cid:73)(cid:66)(cid:83)(cid:70)(cid:73)(cid:80)(cid:77)(cid:69)(cid:70)(cid:83)(cid:84)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:68)(cid:80)(cid:78)(cid:78)(cid:86)(cid:79)(cid:74)(cid:85)(cid:90)(cid:13)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)

(cid:73)(cid:66)(cid:84)(cid:1)(cid:67)(cid:70)(cid:70)(cid:79)(cid:1)(cid:74)(cid:79)(cid:85)(cid:70)(cid:72)(cid:83)(cid:66)(cid:77)(cid:1)(cid:85)(cid:80)(cid:1)(cid:80)(cid:86)(cid:83)(cid:1)(cid:84)(cid:86)(cid:68)(cid:68)(cid:70)(cid:84)(cid:84)(cid:15)(cid:1)(cid:41)(cid:74)(cid:84)(cid:1)(cid:81)(cid:66)(cid:84)(cid:84)(cid:74)(cid:80)(cid:79)(cid:1)

(cid:66)(cid:79)(cid:69)(cid:1)(cid:87)(cid:80)(cid:74)(cid:68)(cid:70)(cid:1)(cid:88)(cid:74)(cid:77)(cid:77)(cid:1)(cid:67)(cid:70)(cid:1)(cid:78)(cid:74)(cid:84)(cid:84)(cid:70)(cid:69)(cid:15)

(cid:45)(cid:80)(cid:80)(cid:76)(cid:74)(cid:79)(cid:72)(cid:1)(cid:71)(cid:80)(cid:83)(cid:88)(cid:66)(cid:83)(cid:69)(cid:13)(cid:1)(cid:42)(cid:1)(cid:67)(cid:70)(cid:77)(cid:74)(cid:70)(cid:87)(cid:70)(cid:1)(cid:88)(cid:70)(cid:1)(cid:73)(cid:66)(cid:87)(cid:70)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:83)(cid:74)(cid:72)(cid:73)(cid:85)

(cid:71)(cid:80)(cid:68)(cid:86)(cid:84)(cid:13)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:83)(cid:74)(cid:72)(cid:73)(cid:85)(cid:1) (cid:81)(cid:77)(cid:66)(cid:79)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:83)(cid:74)(cid:72)(cid:73)(cid:85)(cid:1) (cid:85)(cid:70)(cid:66)(cid:78)(cid:1) (cid:74)(cid:79)(cid:1)

(cid:81)(cid:77)(cid:66)(cid:68)(cid:70)(cid:15)(cid:1) (cid:259)(cid:70)(cid:1) (cid:70)(cid:79)(cid:87)(cid:74)(cid:83)(cid:80)(cid:79)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1) (cid:83)(cid:70)(cid:78)(cid:66)(cid:74)(cid:79)(cid:84)(cid:1) (cid:86)(cid:79)(cid:68)(cid:70)(cid:83)(cid:85)(cid:66)(cid:74)(cid:79)(cid:15)(cid:1)

(cid:56)(cid:70)(cid:1) (cid:78)(cid:86)(cid:84)(cid:85)(cid:1) (cid:83)(cid:70)(cid:78)(cid:66)(cid:74)(cid:79)(cid:1) (cid:68)(cid:66)(cid:86)(cid:85)(cid:74)(cid:80)(cid:86)(cid:84)(cid:13)(cid:1) (cid:67)(cid:86)(cid:85)(cid:1) (cid:79)(cid:74)(cid:78)(cid:67)(cid:77)(cid:70)(cid:13)

(cid:80)(cid:81)(cid:81)(cid:80)(cid:83)(cid:85)(cid:86)(cid:79)(cid:74)(cid:84)(cid:85)(cid:74)(cid:68) (cid:67)(cid:86)(cid:85)(cid:1) (cid:69)(cid:74)(cid:77)(cid:74)(cid:72)(cid:70)(cid:79)(cid:85)(cid:13)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:66)(cid:67)(cid:80)(cid:87)(cid:70)(cid:1) (cid:66)(cid:77)(cid:77)(cid:13)

(cid:71)(cid:66)(cid:74)(cid:85)(cid:73)(cid:71)(cid:86)(cid:77)(cid:1) (cid:85)(cid:80)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:74)(cid:69)(cid:70)(cid:66)(cid:77)(cid:84)(cid:1) (cid:86)(cid:79)(cid:69)(cid:70)(cid:83)(cid:77)(cid:90)(cid:74)(cid:79)(cid:72)(cid:1) (cid:80)(cid:86)(cid:83)(cid:1) (cid:77)(cid:80)(cid:79)(cid:72)(cid:1)

(cid:85)(cid:70)(cid:83)(cid:78)(cid:1)(cid:84)(cid:86)(cid:68)(cid:68)(cid:70)(cid:84)(cid:84)(cid:15)(cid:1)

(cid:48)(cid:86)(cid:83)(cid:1) (cid:85)(cid:70)(cid:66)(cid:78)(cid:1) (cid:86)(cid:79)(cid:69)(cid:70)(cid:83)(cid:84)(cid:85)(cid:66)(cid:79)(cid:69)(cid:84)(cid:1) (cid:85)(cid:73)(cid:74)(cid:84)(cid:13)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:74)(cid:84)(cid:1) (cid:71)(cid:86)(cid:77)(cid:77)(cid:90)

(cid:68)(cid:80)(cid:78)(cid:78)(cid:74)(cid:85)(cid:85)(cid:70)(cid:69)(cid:1)(cid:85)(cid:80)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:68)(cid:80)(cid:78)(cid:78)(cid:86)(cid:79)(cid:74)(cid:85)(cid:90)(cid:1)(cid:67)(cid:66)(cid:79)(cid:76)(cid:74)(cid:79)(cid:72)(cid:1)(cid:78)(cid:74)(cid:84)(cid:84)(cid:74)(cid:80)(cid:79)

(cid:80)(cid:71)(cid:1) (cid:83)(cid:70)(cid:77)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:84)(cid:73)(cid:74)(cid:81)(cid:1) (cid:67)(cid:66)(cid:79)(cid:76)(cid:74)(cid:79)(cid:72)(cid:15)(cid:1) (cid:48)(cid:86)(cid:83)(cid:1) (cid:84)(cid:85)(cid:83)(cid:70)(cid:79)(cid:72)(cid:85)(cid:73)(cid:1) (cid:83)(cid:70)(cid:78)(cid:66)(cid:74)(cid:79)(cid:84)

(cid:80)(cid:86)(cid:83)(cid:1) (cid:81)(cid:70)(cid:80)(cid:81)(cid:77)(cid:70)(cid:13)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:67)(cid:83)(cid:66)(cid:79)(cid:68)(cid:73)(cid:1) (cid:84)(cid:85)(cid:66)(cid:264)(cid:1) and  lenders

(cid:88)(cid:73)(cid:80)(cid:1) (cid:67)(cid:66)(cid:77)(cid:66)(cid:79)(cid:68)(cid:70)(cid:1) (cid:77)(cid:80)(cid:68)(cid:66)(cid:77)(cid:1) (cid:76)(cid:79)(cid:80)(cid:88)(cid:77)(cid:70)(cid:69)(cid:72)(cid:70)(cid:1) (cid:80)(cid:71)(cid:1) (cid:68)(cid:86)(cid:84)(cid:85)(cid:80)(cid:78)(cid:70)(cid:83)(cid:84)

(cid:66)(cid:79)(cid:69)(cid:1) (cid:78)(cid:66)(cid:83)(cid:76)(cid:70)(cid:85)(cid:84)(cid:1) (cid:88)(cid:74)(cid:85)(cid:73)(cid:1) (cid:84)(cid:85)(cid:83)(cid:80)(cid:79)(cid:72)(cid:1) (cid:68)(cid:83)(cid:70)(cid:69)(cid:74)(cid:85)(cid:1) (cid:84)(cid:76)(cid:74)(cid:77)(cid:77)(cid:84)(cid:1) (cid:66)(cid:79)(cid:69)

(cid:66)(cid:1) (cid:71)(cid:80)(cid:68)(cid:86)(cid:84)(cid:1) (cid:80)(cid:79)(cid:1) (cid:84)(cid:70)(cid:83)(cid:87)(cid:74)(cid:68)(cid:70)(cid:13)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:66)(cid:69)(cid:78)(cid:74)(cid:79)(cid:74)(cid:84)(cid:85)(cid:83)(cid:66)(cid:85)(cid:74)(cid:87)(cid:70)

(cid:84)(cid:85)(cid:66)(cid:264)(cid:1) (cid:88)(cid:73)(cid:80)(cid:1) (cid:84)(cid:86)(cid:81)(cid:81)(cid:80)(cid:83)(cid:85)(cid:1) (cid:85)(cid:73)(cid:70)(cid:84)(cid:70)(cid:1) (cid:70)(cid:264)(cid:80)(cid:83)(cid:85)(cid:84)(cid:15)(cid:1) (cid:48)(cid:86)(cid:83)(cid:1) (cid:66)(cid:68)(cid:85)(cid:74)(cid:87)(cid:70)

(cid:74)(cid:79)(cid:87)(cid:80)(cid:77)(cid:87)(cid:70)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1)(cid:88)(cid:74)(cid:85)(cid:73)(cid:1)(cid:77)(cid:80)(cid:68)(cid:66)(cid:77)(cid:1)(cid:79)(cid:80)(cid:79)(cid:14)(cid:81)(cid:83)(cid:80)(cid:273)(cid:85) (cid:80)(cid:83)(cid:72)(cid:66)(cid:79)(cid:74)(cid:91)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:84)

(cid:83)(cid:70)(cid:74)(cid:79)(cid:71)(cid:80)(cid:83)(cid:68)(cid:70)(cid:84)(cid:1) (cid:80)(cid:86)(cid:83)(cid:1) (cid:78)(cid:66)(cid:83)(cid:76)(cid:70)(cid:85)(cid:1) (cid:81)(cid:80)(cid:84)(cid:74)(cid:85)(cid:74)(cid:80)(cid:79)(cid:1) (cid:66)(cid:84)(cid:1) a  dedicated

(cid:68)(cid:80)(cid:78)(cid:78)(cid:86)(cid:79)(cid:74)(cid:85)(cid:90)(cid:1)(cid:77)(cid:70)(cid:66)(cid:69)(cid:70)(cid:83)(cid:15)(cid:1)(cid:1)(cid:48)(cid:86)(cid:83)(cid:1)(cid:1)(cid:81)(cid:73)(cid:74)(cid:77)(cid:80)(cid:84)(cid:80)(cid:81)(cid:73)(cid:90)(cid:1)(cid:80)(cid:71)(cid:1)(cid:66)(cid:84)(cid:84)(cid:74)(cid:84)(cid:85)(cid:74)(cid:79)(cid:72)

(cid:85)(cid:73)(cid:80)(cid:84)(cid:70)(cid:1) (cid:78)(cid:80)(cid:84)(cid:85)(cid:1) (cid:74)(cid:79)(cid:1) (cid:79)(cid:70)(cid:70)(cid:69)(cid:13)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:80)(cid:86)(cid:83)(cid:1) hands  on

(cid:74)(cid:79)(cid:87)(cid:80)(cid:77)(cid:87)(cid:70)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1) (cid:85)(cid:73)(cid:83)(cid:80)(cid:86)(cid:72)(cid:73)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:85)(cid:73)(cid:80)(cid:86)(cid:84)(cid:66)(cid:79)(cid:69)(cid:84)(cid:1) (cid:80)(cid:71)(cid:1) (cid:73)(cid:80)(cid:86)(cid:83)(cid:84)

(cid:80)(cid:71)(cid:1)(cid:87)(cid:80)(cid:77)(cid:86)(cid:79)(cid:85)(cid:70)(cid:70)(cid:83)(cid:1)(cid:85)(cid:74)(cid:78)(cid:70)(cid:1)(cid:69)(cid:80)(cid:79)(cid:66)(cid:85)(cid:70)(cid:69)(cid:1)(cid:85)(cid:80)(cid:1)(cid:77)(cid:80)(cid:68)(cid:66)(cid:77)(cid:1)(cid:80)(cid:83)(cid:72)(cid:66)(cid:79)(cid:74)(cid:91)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:84)(cid:13)

(cid:74)(cid:84)(cid:1)(cid:66)(cid:1)(cid:85)(cid:70)(cid:84)(cid:85)(cid:66)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1)(cid:85)(cid:80)(cid:1)(cid:85)(cid:73)(cid:66)(cid:85)(cid:1)(cid:68)(cid:80)(cid:78)(cid:78)(cid:74)(cid:85)(cid:78)(cid:70)(cid:79)(cid:85)(cid:15)

(cid:42)(cid:85)(cid:1) (cid:74)(cid:84)(cid:1) (cid:78)(cid:90)(cid:1) (cid:67)(cid:70)(cid:77)(cid:74)(cid:70)(cid:71)(cid:1) (cid:85)(cid:73)(cid:66)(cid:85)(cid:1) (cid:68)(cid:80)(cid:78)(cid:78)(cid:86)(cid:79)(cid:74)(cid:85)(cid:90)(cid:1) (cid:67)(cid:66)(cid:79)(cid:76)(cid:74)(cid:79)(cid:72)(cid:13)

(cid:88)(cid:74)(cid:85)(cid:73)(cid:1) (cid:77)(cid:80)(cid:68)(cid:66)(cid:77)(cid:1) (cid:69)(cid:70)(cid:68)(cid:74)(cid:84)(cid:74)(cid:80)(cid:79)(cid:1) (cid:78)(cid:66)(cid:76)(cid:70)(cid:83)(cid:84)(cid:1) (cid:88)(cid:73)(cid:80)(cid:1) (cid:86)(cid:79)(cid:69)(cid:70)(cid:83)(cid:84)(cid:85)(cid:66)(cid:79)(cid:69)

(cid:85)(cid:73)(cid:70)(cid:74)(cid:83)(cid:1) (cid:78)(cid:66)(cid:83)(cid:76)(cid:70)(cid:85)(cid:84)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:68)(cid:86)(cid:84)(cid:85)(cid:80)(cid:78)(cid:70)(cid:83)(cid:84)(cid:13)(cid:1) (cid:73)(cid:66)(cid:84)(cid:1) (cid:86)(cid:79)(cid:69)(cid:70)(cid:83)(cid:72)(cid:80)(cid:79)(cid:70)

(cid:66)(cid:1) (cid:83)(cid:70)(cid:79)(cid:66)(cid:74)(cid:84)(cid:84)(cid:66)(cid:79)(cid:68)(cid:70)(cid:15)(cid:1) (cid:56)(cid:70)(cid:1) (cid:66)(cid:83)(cid:70)(cid:1) (cid:66)(cid:72)(cid:66)(cid:74)(cid:79)(cid:1) (cid:83)(cid:70)(cid:77)(cid:70)(cid:87)(cid:66)(cid:79)(cid:85)(cid:1) (cid:66)(cid:79)(cid:69)

(cid:66)(cid:79)(cid:1)

(cid:74)(cid:78)(cid:81)(cid:80)(cid:83)(cid:85)(cid:66)(cid:79)(cid:85)(cid:1) (cid:70)(cid:77)(cid:70)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1)

(cid:74)(cid:79)(cid:1)

(cid:71)(cid:80)(cid:83)(cid:72)(cid:74)(cid:79)(cid:72)(cid:1)

(cid:85)(cid:73)(cid:70)

(cid:70)(cid:68)(cid:80)(cid:79)(cid:80)(cid:78)(cid:74)(cid:68)(cid:1) (cid:72)(cid:83)(cid:80)(cid:88)(cid:85)(cid:73)(cid:1) (cid:80)(cid:71)(cid:1) (cid:80)(cid:86)(cid:83)(cid:1) (cid:68)(cid:80)(cid:86)(cid:79)(cid:85)(cid:83)(cid:90)(cid:15)(cid:1) (cid:259)(cid:74)(cid:84)

(cid:70)(cid:79)(cid:87)(cid:74)(cid:83)(cid:80)(cid:79)(cid:78)(cid:70)(cid:79)(cid:85)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:80)(cid:81)(cid:81)(cid:80)(cid:83)(cid:85)(cid:86)(cid:79)(cid:74)(cid:85)(cid:74)(cid:70)(cid:84)(cid:1) (cid:68)(cid:83)(cid:70)(cid:66)(cid:85)(cid:70)(cid:69)

(cid:78)(cid:66)(cid:90)(cid:1) (cid:67)(cid:70)(cid:1) (cid:84)(cid:73)(cid:80)(cid:83)(cid:85)(cid:14)(cid:77)(cid:74)(cid:87)(cid:70)(cid:69)(cid:13)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1) (cid:74)(cid:85)(cid:1) (cid:74)(cid:84)(cid:1) (cid:80)(cid:86)(cid:83)(cid:1) (cid:68)(cid:73)(cid:66)(cid:77)(cid:77)(cid:70)(cid:79)(cid:72)(cid:70)

(cid:85)(cid:80)(cid:1) (cid:85)(cid:66)(cid:76)(cid:70)(cid:1) (cid:66)(cid:69)(cid:87)(cid:66)(cid:79)(cid:85)(cid:66)(cid:72)(cid:70)(cid:1) (cid:80)(cid:71)(cid:1) (cid:74)(cid:85)(cid:1) (cid:79)(cid:80)(cid:88)(cid:13)(cid:1) (cid:68)(cid:80)(cid:79)(cid:85)(cid:74)(cid:79)(cid:86)(cid:74)(cid:79)(cid:72)

(cid:85)(cid:80)(cid:1) (cid:78)(cid:80)(cid:87)(cid:70)(cid:1) (cid:85)(cid:73)(cid:74)(cid:84)(cid:1) (cid:80)(cid:83)(cid:72)(cid:66)(cid:79)(cid:74)(cid:91)(cid:66)(cid:85)(cid:74)(cid:80)(cid:79)(cid:1) (cid:71)(cid:80)(cid:83)(cid:88)(cid:66)(cid:83)(cid:69)(cid:1) (cid:74)(cid:79)(cid:85)(cid:80)

(cid:74)(cid:85)(cid:84)(cid:1)(cid:84)(cid:70)(cid:68)(cid:80)(cid:79)(cid:69)(cid:1)(cid:68)(cid:70)(cid:79)(cid:85)(cid:86)(cid:83)(cid:90)(cid:15)

(cid:259)(cid:66)(cid:79)(cid:76)(cid:1)(cid:90)(cid:80)(cid:86)(cid:1)(cid:71)(cid:80)(cid:83)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:80)(cid:81)(cid:81)(cid:80)(cid:83)(cid:85)(cid:86)(cid:79)(cid:74)(cid:85)(cid:90)(cid:1)(cid:85)(cid:80)(cid:1)(cid:84)(cid:70)(cid:83)(cid:87)(cid:70)(cid:1)(cid:90)(cid:80)(cid:86)(cid:15)(cid:1)(cid:1)

(cid:42)(cid:1) (cid:77)(cid:80)(cid:80)(cid:76)(cid:1) (cid:71)(cid:80)(cid:83)(cid:88)(cid:66)(cid:83)(cid:69)(cid:1) (cid:85)(cid:80)(cid:1) (cid:66)(cid:77)(cid:77)(cid:1) (cid:85)(cid:73)(cid:70)(cid:1) (cid:68)(cid:73)(cid:66)(cid:77)(cid:77)(cid:70)(cid:79)(cid:72)(cid:70)(cid:84)(cid:1) (cid:66)(cid:79)(cid:69)(cid:1)

(cid:81)(cid:80)(cid:84)(cid:84)(cid:74)(cid:67)(cid:74)(cid:77)(cid:74)(cid:85)(cid:74)(cid:70)(cid:84)(cid:1)(cid:85)(cid:73)(cid:66)(cid:85)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:68)(cid:80)(cid:78)(cid:74)(cid:79)(cid:72)(cid:1)(cid:90)(cid:70)(cid:66)(cid:83)(cid:84)(cid:1)(cid:81)(cid:83)(cid:70)(cid:84)(cid:70)(cid:79)(cid:85)(cid:15)

Kevin M. O’Connor
(cid:49)(cid:83)(cid:70)(cid:84)(cid:74)(cid:69)(cid:70)(cid:79)(cid:85)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:36)(cid:73)(cid:74)(cid:70)(cid:71)(cid:1)(cid:38)(cid:89)(cid:70)(cid:68)(cid:86)(cid:85)(cid:74)(cid:87)(cid:70)(cid:1)(cid:48)(cid:267)(cid:68)(cid:70)(cid:83)

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BHBAnnual8Pgs.indd   7

3/24/11   1:09 PM

A Sincere Thank You
R. Timothy Maran (cid:74)(cid:84)(cid:1)(cid:66)(cid:1)(cid:81)(cid:70)(cid:83)(cid:84)(cid:80)(cid:79)(cid:1)(cid:88)(cid:73)(cid:80)(cid:1)(cid:68)(cid:66)(cid:83)(cid:70)(cid:84)(cid:1)(cid:69)(cid:70)(cid:70)(cid:81)(cid:77)(cid:90)(cid:1)(cid:66)(cid:67)(cid:80)(cid:86)(cid:85)(cid:1)(cid:85)(cid:73)(cid:70)(cid:1)(cid:85)(cid:80)(cid:88)(cid:79)(cid:84)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:87)(cid:74)(cid:77)(cid:77)(cid:66)(cid:72)(cid:70)(cid:84)(cid:1)(cid:88)(cid:73)(cid:70)(cid:83)(cid:70)(cid:1)(cid:73)(cid:70)(cid:1)(cid:88)(cid:66)(cid:84)(cid:1)(cid:83)(cid:66)(cid:74)(cid:84)(cid:70)(cid:69)(cid:1)(cid:66)(cid:79)(cid:69)(cid:1)(cid:68)(cid:80)(cid:79)(cid:85)(cid:74)(cid:79)(cid:86)(cid:70)(cid:84)(cid:1)
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2

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       HEADQUARTERS - 631.537.1000
       BRANCH - 631.537.8834

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Bridge Abstract LLC
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(cid:95)(cid:95)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)

(cid:3)(cid:3)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

Commission File No. 001-34096

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

NEW YORK
(State or other jurisdiction of incorporation or organization)

11-2934195
(IRS Employer Identification Number)

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

11932
(Zip Code)

Registrant’s telephone number, including area code: (631) 537-1000

Securities registered under Section 12 (b) of the Exchange Act:

Title of each class
Common Stock, Par Value of $0.01 Per Share

Name of each exchange on which registered
The Nasdaq Stock Market, LLC

Securities registered under Section 12 (g) of the Exchange Act:

(Title of Class)
None

Indicate  by  check  mark  if  the  registrant  is  a  well-known  seasoned  issuer,  as  defined  in  Rule  405  of  the  Securities  Act.
Yes (cid:134)(cid:3)No (cid:95)

Indicate  by  check  mark  if  the  registrant  is  not  required  to  file  reports  pursuant  to  Section  13  or  Section  15(d)  of  the  Act.
Yes (cid:134)(cid:3)No (cid:95)(cid:3)

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 (cid:95)(cid:3)No (cid:134)

Indicate  by  check  mark  whether  the  registrant  has  submitted electronically  and  posted  on  its  corporate  Web  site,  if  any,  every 
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the 
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 
Yes [ ] No [ ]

Indicate  by  check  mark  if  disclosure  of  delinquent  filers  pursuant  to  Item  405  of  Regulation  S-K  (§229.405)  of  this  chapter  is  not 
contained  herein,  and  will  not  be  contained,  to  the  best  of  registrant’s  knowledge,  in  definitive  proxy  or  information  statements 
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:95)

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 (cid:134)(cid:3)Accelerated filer (cid:95)(cid:3)Non-accelerated filer (cid:134)(cid:3)Smaller reporting company (cid:134)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:134)(cid:3)No (cid:95)

The approximate aggregate market value of the voting stock held by non-affiliates of the Registrant, based upon the closing price of 
the Common Stock on June 30, 2010, was $142,035,848.

The number of shares of the Registrant’s common stock outstanding on March 3, 2011 was 6,411,490.

Portions of the following documents are incorporated into the Parts of this Report on Form 10-K indicated below:

The Registrant’s definitive Proxy Statement for the 2010 Annual Meeting to be filed pursuant to Regulation 14A on or before April 
30, 2011 (Part III).

TABLE OF CONTENTS

PART I

Item 1

Business

Item 1A

Risk Factors

Item 1B

Unresolved Staff Comments

Item 2

Item 3

Item 4

Properties

Legal Proceedings

[Removed and Reserved]

PART II

Item 5

Item 6

Item 7

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities

Selected Financial Data

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A

Quantitative and Qualitative Disclosures About Market Risk

Item 8

Item 9

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A

Controls and Procedures

Item 9B

Other Information

PART III

Item 10

Directors, Executive Officers and Corporate Governance

Item 11

Executive Compensation

Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13

Certain Relationships and Related Transactions, and Director Independence

Item 14

Principal Accountant Fees and Services

PART IV

Item 15

Exhibits and Financial Statement Schedules

SIGNATURES

EXHIBIT INDEX

2

8

11

11

11

11

12

14

15

33

35

68

68

68

68

68

69

69

69

69

70

71

PART I

Item 1. Business

Bridge Bancorp, Inc. (the “Registrant” or “Company”) is a registered bank holding company for The Bridgehampton National Bank
(the “Bank”). The Bank was established in 1910 as a national banking association and is headquartered in Bridgehampton, New York. 
The Registrant was incorporated under the laws of the State of New York in 1988, at the direction of the Board of Directors of the 
Bank for the purpose of becoming a bank holding company pursuant to a plan of reorganization; under which the former shareholders 
of  the  Bank  became  the  shareholders  of  the  Company.  Since  commencing  business  in  March  1989,  after  the  reorganization,  the 
Registrant has functioned primarily as the holder of all of the Bank’s common stock. In May 1999, the Bank established a real estate 
investment  trust  subsidiary,  Bridgehampton  Community,  Inc.  (“BCI”)  as  an  operating  subsidiary.  The  assets  transferred  to BCI  are 
viewed by the bank regulators as part of the Bank’s assets in consolidation. The operations of the Bank also include Bridge Abstract 
LLC (“Bridge Abstract”), a wholly owned subsidiary of the Bank which is a broker of title insurance services. In October 2009, the 
Company  formed  Bridge  Statutory  Capital  Trust  II  (the  “Trust”)  as  a  subsidiary,  which  sold  $16.0  million  of  8.5%  cumulative 
convertible Trust Preferred Securities (the “Trust Preferred Securities”) in a private placement to accredited investors. 

The Bank operates nineteen branches on eastern Long Island. Federally chartered in 1910, the Bank was founded by local farmers and 
merchants. For a century, the Bank has maintained its focus on building customer relationships in this market area. The mission of the 
Company is to grow through the provision of exceptional service to its customers, its employees, and the community. The Company 
strives  to  achieve  excellence  in  financial  performance  and  build  long  term  shareholder  value.  The  Bank  engages  in  full  service
commercial and consumer banking business, including accepting time, savings 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  mortgage 
loans;  (5)  secured  and  unsecured  commercial  and  consumer  loans;  (6)  FHLB,  FNMA,  GNMA  and  FHLMC  mortgage-backed 
securities  and  collateralized  mortgage  obligations;  (7)  New  York  State  and  local  municipal  obligations;  and  (8)  U.S  government 
sponsored entity (“U.S. GSE”) securities. The Bank also offers the CDARS program, providing up to $50.0 million of FDIC insurance 
to its customers. In addition, the Bank offers merchant credit and debit card processing, automated teller machines, cash management 
services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, individual retirement accounts and 
investment  services  through  Bridge  Investment  Services,  offering  a  full  range  of  investment  products  and  services  through  a  third 
party broker dealer. 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, municipal relationships and consumer relationships.

The Bank employs 206 people on a full-time and part-time basis. The Bank provides a variety of employment benefits and considers 
its  relationship  with  its  employees  to  be  positive.  In  addition,  the  Company  has  an  equity  incentive  plan  under  which  it  may  issue 
shares of the common stock of the Company.

All phases of the Bank’s business are highly competitive. The Bank faces direct competition from a significant number of financial 
institutions operating in its market area, many with a statewide or regional presence, and in some cases, a national presence. There is 
also competition for banking business from competitors outside of its market areas. Most of these competitors are significantly larger 
than the Bank, and therefore have greater financial and marketing resources and lending limits than those of the Bank. The fixed cost 
of  regulatory  compliance  remains  high  for  community  banks  as  compared  to  their  larger  competitors  that  are  able  to  achieve 
economies of scale. The Bank considers its major competition to be local commercial banks as well as other commercial banks with 
branches  in  the  Bank’s  market  area.  Other  competitors  include  mortgage  brokers  and  financial  services  firms  other  than  financial 
institutions such as investment and insurance companies. Increased competition within the Bank’s market areas may limit growth and 
profitability.    Additionally,  as  the  Bank’s  market  area  expands  westward,  competitive  pressure  in  new  markets  is  expected  to  be 
strong. The title insurance abstract subsidiary also  faces competition  from other title insurance brokers as  well as directly  from the 
companies that underwrite title insurance. In New York State, title insurance is obtained on most transfers of real estate and mortgage 
transactions.

The Bank’s principal market area is located in Suffolk County, New York. Suffolk County is located on the eastern portion of Long 
Island and has a population of approximately 1.5 million. Eastern Long Island is semi-rural. Surrounded by water and including the 
Hamptons and North Fork, the region is a recreational destination for the New York metropolitan area, and a highly regarded resort 
locale  world-wide.  While  the  local  economy  flourishes  in  the  summer  months  as  a  result  of  the  influx  of  tourists  and  second 
homeowners, the year-round population has grown considerably in recent years, resulting in a reduction of the seasonal fluctuations in 
the  economy.  Industries  represented  in  the  marketplace  include  retail  establishments;  construction  and  trades;  restaurants and  bars; 
lodging  and  recreation;  professional  entities;  real  estate;  health  services;  passenger  transportation  and  agricultural  and  related 
businesses. During the last decade, the Long Island wine industry has grown with an increasing number of new wineries and vineyards 
locating in the region each year. The vast majority of businesses are considered small businesses employing fewer than ten full-time 
employees.  In  recent  years,  more  national  chains  have  opened  retail  stores  within  the  villages  on  the  north  and  south  forks  of  the 
island. Major employers in the region include the municipalities, school districts, hospitals, and financial institutions.

Page -2-

Since  2007,  the  Bank  has  opened  eight new  branches.  In  2007,  the  Bank  opened  three new  branches  located  in the  Village  of 
Southampton; Cutchogue; and Wading River. In April 2009, the Bank opened a new branch in Shirley, New York, and in December 
2009, the Bank opened a new full service branch facility in the Village of East Hampton. During 2010, the Bank opened three new 
branches;  Center  Moriches in  May, Patchogue in  September and  Deer  Park in  October. In  November  2010,  the  Bank  relocated  its 
branch at 26 Park Place, East Hampton, New York to 55 Main Street, East Hampton, New York. The recent branch openings move the 
Bank geographically westward and demonstrate its commitment to traditional growth through branch expansion. Controlling funding 
costs yet protecting the deposit base along with focusing on profitable growth, presents a unique set of challenges in this operating 
environment. 

On  February  8,  2011,  the  Company  announced  a  definitive  merger  agreement  under  which  the  Bank  will  acquire  Hamptons  State 
Bank. The transaction augments the Bank’s franchise in eastern Long Island and the combined entity will serve customers through a 
network of 20 branches and have total assets of approximately $1.1 billion and deposits of $1.0 billion.

The Bank routinely adds to its menu of products and services, continually meeting the needs of consumers and businesses. We believe 
positive  outcomes  in  the  future  will  result  from  the  expansion  of  our  geographic  footprint,  investments  in  infrastructure  and
technology,  such  as  BridgeNEXUS,  our  remote  deposit  capture  product,  lockbox  processing,  and  continued  focus  on  placing  our 
customers  first.  In  January  2009,  the  Bank  launched  Bridge  Investment  Services,  offering  a  full  range  of  investment  products  and 
services through a third party broker dealer. The Bank rolled out its new commercial online bill paying service during the first quarter 
of 2010, and continues to explore mobile banking products to offer customers. 

The Company, the Bank and its subsidiaries with the exception of the real estate investment trust, which files its own federal and state 
tax return,  report  their  income  on  a  consolidated  basis  using  the  accrual  method  of  accounting  and  are  subject  to  federal  and  state 
income taxation. In general, banks are subject to federal income tax in the same manner as other corporations. However, gains and 
losses realized by banks from the sale of available for sale securities are generally treated as ordinary income, rather than capital gains 
or losses. The Bank is subject to the New York State Franchise Tax on Banking Corporations based on certain criteria. The taxation of 
net income is similar to federal taxable income subject to certain modifications.

REGULATION AND SUPERVISION

The Bridgehampton National Bank

The Bank is a national bank organized under the laws of the United States of America. The lending, investment, and other business 
operations of the Bank are governed by federal law and regulations and the Bank is prohibited from engaging in any operations not 
specifically authorized by such laws and regulations. The Bank is subject to extensive regulation by the Office of the Comptroller of 
the Currency (“OCC”) and to a lesser extent by the Federal Deposit Insurance Corporation (“FDIC”), as its deposit insurer as well as 
by  the  Board  of  Governors  of  the  Federal  Reserve  System. The  Bank’s  deposit  accounts  are  insured  up  to  applicable  limits  by  the 
FDIC under its Deposit Insurance Fund (“DIF”). A  summary of the primary laws and regulations that  govern the operations of the
Bank are set forth below.

Loans and Investments

There are no restrictions on the type of loans a national bank can originate and/or purchase. However, OCC regulations govern the 
Bank’s investment authority. Generally, a national bank is prohibited from investing in corporate equity securities for its own account. 
Under OCC regulations, a national bank may invest in investment securities, which is generally defined as securities in the form of a 
note, bond or debenture. The OCC classifies investment securities into five different types and, depending on its type, a national bank 
may  have  the  authority  to  deal  in  and  underwrite  the  security.  The  OCC  has  also  permitted  national  banks  to  purchase  certain 
noninvestment grade securities that can be reclassified and underwritten as loans.

Lending Standards

The federal banking agencies adopted uniform regulations prescribing standards for extensions of credit that are secured by liens on 
interests in real estate or made for the purpose of financing the construction of a building or other improvements to real estate. Under 
these  regulations,  all  insured  depository  institutions,  such  as  the  Bank,  must  adopt  and  maintain  written  policies  that  establish 
appropriate limits and standards for extensions of credit that are secured by liens or interests in real estate or are made for the purpose 
of  financing  permanent  improvements  to  real  estate.  These  policies  must  establish  loan  portfolio  diversification  standards,  prudent 
underwriting  standards  (including  loan-to-value  limits)  that  are  clear  and  measurable,  loan  administration  procedures,  and 
documentation,  approval  and  reporting  requirements.  The  real  estate  lending  policies  must  reflect  consideration  of  the  Interagency 
Guidelines for Real Estate Lending Policies that have been adopted by the federal bank regulators. 

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Federal Deposit Insurance

The  Bank  is  a  member  of  the  DIF,  which  is  administered  by  the  FDIC.  Deposit  accounts  at  the  Bank  are  insured  by  the  FDIC, 
generally  up  to  a  maximum  of  $100,000  for  each  separately  insured  depositor  and  up  to  a  maximum  of  $250,000  for  self-directed 
retirement  accounts.  However,  on  July  21,  2010,  the  Dodd-Frank  Wall  Street  Reform  and  Consumer  Protection  Act  permanently 
raises the deposit insurance available on all deposit accounts to $250,000. In addition, certain non-interest bearing transaction accounts 
have unlimited deposit insurance through December 31, 2012. Refer to Item 1A. Risk Factors for more detailed information related to 
this new regulation.

Under the FDIC’s risk-based assessment system, insured institutions are assigned to one of four risk categories based on supervisory 
evaluations, regulatory capital levels and certain other factors, with less risky institutions paying lower assessments. An institution’s 
rate depends upon the category to which it is assigned, and certain adjustments specified by FDIC regulations. Assessment rates, as 
adjusted, currently range from seven to 77.5 basis points of assessable deposits. The FDIC may adjust the scale uniformly, except that 
no  adjustment  can  deviate  more  than  their  basis  points  from  the  base  scale  without  notice  and  comment.  No  institution  may  pay a
dividend if in default of the federal deposit insurance assessment.  In May 2009, the FDIC issued a final rule to impose an emergency 
special  assessment  of  5  basis  points  on  all  banks  based  on  their  total  assets  less  tier  one  capital  as  of  June  30,  2009.    The special 
assessment was payable on September 30, 2009. During the second quarter of 2009, the Company recorded an expense of $0.4 million
related  to  the  FDIC  special  assessment.  On  November  12,  2009,  the  FDIC  issued  a  final  rule  that  required  insured  institutions to 
prepay their estimated quarterly risk-based assessments for the fourth quarter of 2009 and for all of 2010, 2011 and 2012. The FDIC 
also adopted a uniform 3 basis point increase in assessment rates effective on January 1, 2011. The Company’s prepayment of FDIC 
assessments for 2010, 2011 and 2012 was $3.8 million which will be amortized to expense over three years. On July 21, 2010, the 
Dodd-Frank Wall Street Reform and Consumer Protection Act was signed by the President. Section 331(b) of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act requires the FDIC to change the definition of the assessment base which assessment fees 
are determined. The new definition for the assessment base is the average consolidated total assets of the insured depository institution 
less  the  average  tangible  equity  of  the  insured  depository  institution.  A  reduction  in  the  assessment  rate  is  anticipated  since  the 
assessment  base  will  increase  for  most  institutions.  The  new  methodology  becomes  effective  on  April  1,  2011  and  the  Company 
anticipates  a  reduction  in  its  FDIC  assessment  fees.  The  new  financial  reform  legislation  will,  among  other  things,  create  a  new 
Consumer Financial Protection Bureau, tighten capital standards and result in new laws and regulations that are expected to increase 
the cost of operations. Refer to Item 1A. Risk Factors for more detailed information related to this new regulation.

Insurance of deposits may be terminated by the FDIC upon a finding that an institution has engaged in unsafe or unsound practices, is 
in  an  unsafe  or  unsound  condition  to  continue  operations  or  has  violated any  applicable  law,  regulation,  rule,  order  or  condition 
imposed by the FDIC. We do not know of any practice, condition or violation that might lead to termination of deposit insurance.

In addition to the FDIC assessments, the Financing Corporation (FICO) is authorized to impose and collect, with the approval of the 
FDIC,  assessments  for  anticipated  payments,  issuance  costs  and  custodial  fees  on  bonds  issued  by  the  FICO  in  the  1980s  to 
recapitalize the former Federal Savings and Loan Insurance Corporation. The bonds issued by the FICO are due to mature in 2017 
through  2019.  For  the  quarter  ended  December  31,  2010,  the  annualized  FICO  assessment  was  equal  to  1.02 basis  points  for  each 
$100 in domestic deposits maintained at an institution.

Temporary Liquidity Guarantee Program

On  October  14,  2008,  the  FDIC  announced  a  new  program  – the  Temporary  Liquidity  Guarantee  Program.  This  program  has  two 
components.  One,  the  Debt  Guarantee  Program  (“DGP”),  guarantees  newly  issued  senior  unsecured  debt  of  the  participating 
organizations, up to certain limits established for each institution, issued between October 14, 2008 and October 31, 2009. The FDIC 
will pay the unpaid principal and interest on an FDIC-guaranteed debt instrument upon the uncured failure of the participating entity 
to make a timely payment of principal or interest in accordance with the terms of the instrument. The guarantee will remain in effect 
until December 31, 2012. In return for the FDIC’s guarantee, participating institutions will pay the FDIC a fee based on the amount 
and maturity of the debt. The Bank has opted to participate in the DGP component of the Temporary Liquidity Guarantee Program
however, there is no guaranteed debt issued to date. In order to ensure a smooth phase out of the DGP, the FDIC established a limited 
emergency guarantee facility. If an institution is unable to issue non-guaranteed debt to replace the maturing senior unsecured debt as 
of  October  31,  2009,  the  institution  can  apply  for  an  emergency  guarantee  facility.  If  the  application  is  approved,  the  FDIC  will 
guarantee the senior unsecured debt issued on or before April 30, 2010. Participating institutions will pay the FDIC a fee equal to an 
annualized assessment rate of a minimum of 300 basis points. 

The  other  component  of  the  program  provides  full  federal  deposit  insurance  coverage  for  non-interest  bearing  transaction  deposit 
accounts, regardless of dollar amount, until June 30, 2010, later extended to December 31, 2010. Recent legislation provides for full 
deposit insurance coverage  for certain non-interest bearing  transaction accounts from January 1, 2011 through December 31, 2012. 
The cost of that coverage is included  within the  normal assessment and there is no opt out available.  An annualized 10 basis point 
assessment on balances in non interest-bearing transaction accounts that exceed the existing deposit insurance limit of $250,000 will 
be  assessed  on  a  quarterly  basis  to  insured  depository  institutions  that  have  not opted  out  of  this  component  of  the  Temporary 
Liquidity Guarantee Program. The Bank has opted to participate in this component of the Temporary Liquidity Guarantee Program.

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On  April  13,  2010,  the  FDIC  approved  an  interim  rule  that  extends  the  Transaction  Account  Guarantee  Program  which  offers 
unlimited deposit insurance on non-interest bearing accounts until December 31, 2012. On July 21, 2010, the Dodd-Frank Wall Street 
Reform  and  Consumer  Protection  Act  permanently  raised the  deposit  insurance  available  on  all  deposit  accounts  to  $250,000.  In 
addition, certain non-interest bearing transaction accounts have unlimited deposit insurance through December 31, 2012.

Capitalization

Under OCC regulations, all national banks are required to comply with minimum capital requirements. For an institution determined 
by  the  OCC  to  not  be  anticipating  or  experiencing  significant  growth  and  to  be,  in  general,  a  strong  banking  organization,  rated 
composite 1 under the Uniform Financial Institutions Ranking System established by the Federal Financial Institutions Examination 
Council,  the  minimum  capital  leverage  requirement  is  a  ratio  of  Tier  I  capital  to  total  assets  of  3%.  For  all  other  institutions,  the 
minimum  leverage  capital  ratio  is  not  less  than  4%.  Tier  I  capital  is  the  sum  of  common  shareholders’  equity,  non-cumulative 
perpetual preferred stock (including any related surplus) and minority investments in certain subsidiaries, less intangible assets (except 
for certain servicing rights and credit card relationships) and certain other specified items.

The  OCC  regulations  require  national  banks  to  maintain  certain  levels  of  regulatory  capital  in  relation  to  regulatory  risk-weighted 
assets. The ratio of regulatory capital to regulatory risk-weighted assets is referred to as a bank’s “risk-based capital ratio.” Risk-based 
capital ratios are determined by allocating assets and specified off-balance sheet items (including recourse obligations, direct credit 
substitutes  and  residual  interests)  to  four  risk-weighted  categories  ranging  from  0%  to  100%,  with  higher  levels  of  capital  being 
required  for  the  categories  perceived  as  representing  greater  risk.  For  example,  under  the  OCC’s  risk-weighting  system,  cash  and 
securities backed by the full faith and credit of the U.S. government are given a 0% risk weight, loans secured by one-to-four family 
residential properties generally have a 50% risk weight, and commercial loans have a risk weighting of 100%.

National banks, such as the Bank, must maintain a minimum ratio of total capital to risk-weighted assets of at least 8%, of which at
least one-half must be Tier I capital. Total capital consists of Tier I capital plus Tier 2 or supplementary capital items, which include 
allowances for loan losses in an amount of up to 1.25% of risk-weighted assets, cumulative preferred stock and certain other capital 
instruments, and a portion of the net unrealized gain on equity securities. The includable amount of Tier 2 capital cannot exceed the 
amount of the institution’s Tier I capital. Banks that engage in specified levels of trading activities are subject to adjustments in their 
risk based capital calculation to ensure the maintenance of sufficient capital to support market risk.

The OCC, along with the other federal banking agencies, has adopted a regulation providing that the agencies will take into account 
the exposure of a bank’s capital and economic value to changes in interest rate risk in assessing a bank’s capital adequacy. The OCC 
also has authority to establish individual minimum capital requirements in appropriate cases upon a determination that an institution’s 
capital level is, or is likely to become, inadequate in light of the particular circumstances.

Safety and Soundness Standards

Each federal banking agency, including the OCC, has adopted guidelines establishing general standards relating to internal controls, 
information  and  internal  audit  systems,  loan  documentation,  credit  underwriting,  interest  rate  exposure,  asset  growth,  asset  quality, 
earnings and compensation, fees and benefits. In general, the guidelines require, among other things, appropriate systems and practices 
to  identify  and  manage  the  risks  and  exposures  specified  in  the  guidelines.  The  guidelines  prohibit  excessive  compensation  as an 
unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to 
the services performed by an executive officer, employee, director, or principal shareholder.

On  February  7,  2011,  the  FDIC  approved  a  rulemaking  to  implement  Section  956  of  the  Dodd-Frank  Wall  Street  Reform  and 
Consumer Protection Act that prohibits incentive-based compensation that encourages inappropriate risk taking. 

Prompt Corrective Regulatory Action

Federal  law  requires,  among  other  things,  that  federal  bank  regulatory  authorities  take  “prompt  corrective  action”  with  respect  to 
institutions  that  do  not  meet  minimum  capital  requirements.  For  these  purposes,  the  statute  establishes  five  capital  tiers:  well 
capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized.

The  OCC  may  order  national  banks  which  have  insufficient  capital  to  take  corrective  actions.  For  example,  a  bank  which  is 
categorized as “undercapitalized” would be subject to growth limitations and would be required to submit a capital restoration plan, 
and a holding company that controls such a bank would be required to guarantee that the bank complies with the restoration plan. A 
“significantly undercapitalized” bank would be subject to additional restrictions. National banks deemed by the OCC to be “critically 
undercapitalized” would be subject to the appointment of a receiver or conservator.

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Dividends

Under federal law and applicable regulations, a national bank may generally declare a dividend, without approval from the OCC, in an 
amount equal to its year-to-date net income plus the prior two years’ net income that is still available for dividend.

Transactions with Affiliates and Insiders

Sections 23A and 23B of the Federal Reserve Act govern transactions between a national bank and its affiliates, which includes the 
Company. The  Federal Reserve Board has adopted Regulation W,  which comprehensively implements and interprets Sections 23A 
and 23B, in part by codifying prior Federal Reserve Board interpretations under Sections 23A and 23B.

An affiliate of a bank is any company or entity that controls, is controlled by or is under common control with the bank. A subsidiary 
of a bank that is not also a depository institution or a “financial subsidiary” under federal law is not treated as an affiliate of the bank 
for the purposes of Sections 23A and 23B; however, the OCC has the discretion to treat subsidiaries of a bank as affiliates on a case-
by-case basis. Sections 23A and 23B limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with 
any one affiliate to an amount equal to 10% of such bank’s capital stock and surplus, and limit all such transactions with all affiliates 
to an amount equal to 20% of such capital stock and surplus. The statutory sections also require that all such transactions be on terms 
that are consistent with safe and sound banking practices. The term “covered transaction” includes the making of loans, purchase of 
assets, issuance of  guarantees and other similar types of transactions. Further,  most loans by a bank  to any of its affiliates  must be 
secured  by  collateral  in  amounts  ranging  from  100  to  130 percent  of  the  loan  amounts.  In  addition,  any  covered  transaction  by  an 
association  with  an  affiliate  and  any  purchase  of  assets  or  services  by  an  association  from  an  affiliate  must  be  on  terms  that  are 
substantially the same, or at least as favorable, to the bank as those that would be provided to a non-affiliate.

A  bank’s  loans  to  its  executive  officers,  directors,  any  owner  of  more  than  10%  of  its  stock  (each,  an  insider)  and  any  of  certain 
entities affiliated with any such person (an insider’s related interest) are subject to the conditions and limitations imposed by Section 
22(h) of the Federal Reserve Act and the FRB’s Regulation O thereunder. Under these restrictions, the aggregate amount of the loans 
to any insider and the insider’s related interests may not exceed the loans-to-one-borrower limit applicable to national banks. All loans 
by a bank to all insiders and insiders’ related interests in the aggregate may not exceed the bank’s unimpaired capital and unimpaired 
surplus. With certain exceptions, loans to an executive officer, other than loans for the education of the officer’s children and certain 
loans  secured  by  the  officer’s  residence,  may  not  exceed  the  greater  of  $25,000  or  2.5%  of  the  bank’s  unimpaired  capital  and 
unimpaired surplus, but in no event more than $100,000. Regulation O also requires that any proposed loan to an insider or a related 
interest of that insider be approved in advance by a  majority of the board of directors of the bank,  with any interested director not
participating  in  the  voting,  if  such  loan,  when  aggregated  with  any  existing  loans  to  that  insider  and  the  insider’s  related  interests, 
would exceed either $500,000 or the greater of $25,000 or 5% of the bank’s  unimpaired capital and surplus. Generally, such loans 
must be made on substantially the same terms as, and follow credit underwriting procedures that are no less stringent than, those that 
are prevailing at the time for comparable transactions with other persons and must not present more than a normal risk of collectibility.
An exception is made for extensions of credit made pursuant to a benefit or compensation plan of a bank that is widely available to 
employees of the bank and that does not give any preference to insiders of the bank over other employees of the bank.

Examinations and Assessments

The Bank is required to file periodic reports with and is subject to periodic examination by the OCC. Federal regulations generally 
require annual on-site examinations for all depository institutions and annual audits by independent public accountants for all insured 
institutions. The Bank is required to pay an annual assessment to the OCC to fund its supervision.

Community Reinvestment Act

Under the Community Reinvestment Act (“CRA”), the Bank has a continuing and affirmative obligation consistent with its safe and 
sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods. The CRA 
does not establish  specific  lending requirements or programs  for financial institutions  nor does it limit an institution’s discretion to 
develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. The 
CRA  requires  the  OCC  in  connection  with  its  examination  of  the  Bank,  to  assess  its  record  of  meeting  the  credit  needs  of  its 
community  and  to  take  that  record  into  account  in  its  evaluation  of  certain  applications  by  the  Bank.  For  example,  the  regulations 
specify  that  a  bank’s  CRA  performance  will  be  considered  in  its  expansion  (e.g.,  branching)  proposals  and  may  be  the  basis  for 
approving, denying or conditioning the approval of an application. As of the date of its most recent regulatory examination, the Bank 
was rated “satisfactory” with respect to its CRA compliance.

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USA PATRIOT Act

The  USA  PATRIOT  Act  of  2001  gave  the  federal  government  new  powers  to  address  terrorist  threats  through  enhanced  domestic 
security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements. 
The USA PATRIOT Act also required the federal banking agencies to take into consideration the effectiveness of controls designed to 
combat  money  laundering  activities  in  determining  whether  to  approve  a  merger  or  other  acquisition  application  of  a  member 
institution.  Accordingly,  if  the  Bank  engages  in  a  merger  or  other  acquisition,  our  controls  designed  to  combat  money  laundering 
would be considered as part of the application process. The Bank has established policies, procedures and systems designed to comply 
with these regulations. 

Bridge Bancorp, Inc.

The Company, as a bank holding company controlling the Bank, is subject to the Bank Holding Company Act of 1956, as amended 
(“BHCA”), and the rules and regulations of the Federal Reserve Board under the BHCA applicable to bank holding companies. The 
Company is required to file reports with, and otherwise comply with the rules and regulations of the Federal Reserve Board.

The Federal Reserve Board has adopted consolidated capital adequacy guidelines for bank holding structured similarly to those of the 
OCC for the Bank. As of December 31, 2010, the Company’s total capital and Tier 1 capital ratios exceeded these minimum capital 
requirements. The Dodd-Frank Act requires the Federal Reserve Board to promulgate consolidated capital requirements for depository 
institution  holding  companies  that  are  no  less  stringent,  both  quantitatively  and  in  terms  of  components  of  capital,  than  those 
applicable  to  institutions  themselves.  That  will  eliminate  the  inclusion  of  certain  instruments  from  Tier  1  capital,  such  as  trust 
preferred securities, that are currently includable for bank holding companies with consolidated assets of less than $15 billion as of 
December 31, 2009 are grandfathered.

The policy of the Federal Reserve Board is that a bank holding company must serve as a source of strength to its subsidiary banks by 
providing capital and other support in times of distress. The Dodd-Frank Act codified the source of strength policy and requires the 
issuance of implementing regulations.

Under the prompt corrective action provisions of federal law, a bank holding company parent of an undercapitalized subsidiary bank is 
required  to  guarantee,  within  specified  limits,  the  capital  restoration  plan  that  is  required  of  an  undercapitalized  bank.  If  an 
undercapitalized bank fails to file an acceptable capital restoration plan or fails to implement an accepted plan, the Federal Reserve 
Board may prohibit the bank holding company parent of the undercapitalized bank from paying dividends or making any other capital 
distribution.

As a bank holding company, the Company is required to obtain the prior approval of the Federal Reserve Board to acquire more than 
5% of a class of voting securities of any additional bank or bank holding company or to acquire all, or substantially all, the assets of 
any additional bank or bank holding company. In addition, the bank holding companies may generally only engage in activities that 
are closely related to banking as determined by the Federal Reserve Board. Bank holding companies that meet certain criteria may opt 
to become a financial holding company and thereby engage in a broader array of financial activities.

Federal Reserve Board policy is that a bank  holding company should pay cash dividends only to the extent that the company’s net 
income for the past two years is sufficient to fund the dividends and the prospective rate of earnings retention is consistent with the 
company’s capital needs, asset quality and overall financial condition.

A  bank  holding  company  is  required  to  receive  prior  Federal  Reserve  Board  approval  of  the  redemption  of  its  outstanding  equity
securities  if  the  gross  consideration  for  the  purchase  or  redemption,  when  combined  with  the  net  consideration  paid  for  all  such 
purchases or redemptions during the preceding 12 months,  will be equal to 10% or more of the company’s consolidated net  worth.
Such approval is not required for a bank holding company that meets certain qualitative criteria.

These  regulatory  authorities  have  extensive  enforcement  authority  over  the  institutions  that  they  regulate  to  prohibit  or  correct 
activities  that  violate  law,  regulation  or  a  regulatory  agreement  or  which  are  deemed  to  be  unsafe  or  unsound  banking  practices. 
Enforcement  actions  may  include  the  appointment  of  a  conservator  or  receiver,  the  issuance  of  a  cease  and  desist  order,  the 
termination  of  deposit  insurance,  the  imposition  of  civil  money  penalties  on  the  institution,  its  directors,  officers,  employees  and 
institution-affiliated parties, the issuance of directives to increase capital, the issuance of formal and informal agreements, the removal 
of  or  restrictions  on  directors,  officers,  employees  and  institution-affiliated  parties,  and  the  enforcement  of  any  such  mechanisms 
through restraining orders or other court actions.  Any change in  laws and regulations,  whether by  the OCC,  the FDIC, the Federal 
Reserve Board or through legislation, could have a material adverse impact on the Bank and the Company and their operations and 
stockholders. Additional information on regulatory requirements is set forth in Note 14 to the Consolidated Financial Statements.

Page -7-

The Company had nominal results of operations for 2010, 2009, and 2008 on a parent-only basis.  In 2009, the Company completed 
the private placement of $16.0 million in aggregate liquidation amount of 8.50% cumulative convertible trust preferred securities (the 
"TPS”), through its subsidiary, Bridge Statutory Capital Trust II. The TPS have a liquidation amount of $1,000 per security and the 
TPS shares are convertible into our common stock, at an effective conversion price of $31 per share.  The TPS mature in 30 years but 
are  callable  by  the  company  at  par  any  time  after  September  30,  2014.  During  2008,  the  Company  received  approval  and  began 
trading on the NASDAQ Global Select Market under the symbol “BDGE”. Equity incentive plan grants of stock options and stock 
awards are recorded directly to the holding company. The Company’s sources of funds are dependent on dividends from the Bank, its 
own earnings, additional capital raised and borrowings. 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. The Bank also 
generates  non  interest  income,  such  as  fee  income  on  deposit  accounts  and  merchant  credit  and  debit  card  processing  programs, 
investment services, income from its title insurance abstract subsidiary, and net gains on sales of securities and loans. The level of its 
non  interest  expenses,  such  as  salaries  and  benefits,  occupancy  and  equipment  costs,  other  general  and  administrative  expenses, 
expenses from its title insurance abstract subsidiary, and income tax expense, further affects the Bank’s net income. 

The  Company  files  certain  reports  with  the  Securities  and  Exchange  Commission  (“SEC”)  under  the  federal  securities  laws.  The 
Company’s  operations  are  also  subject  to  extensive  regulation  by  other  federal,  state  and  local  governmental  authorities  and  it  is 
subject to various laws and judicial and administrative decisions imposing requirements and restrictions on part or all of its operations. 
Management believes that the Company is in substantial compliance, in all material respects, with applicable federal, state and local 
laws, rules and regulations. Because the Company’s business is highly regulated, the laws, rules and regulations applicable to it are 
subject to regular modification and change. There can be no assurance that these proposed laws, rules and regulations, or any other 
laws, rules or regulations, will not be adopted in the future, which could make compliance more difficult or expensive or otherwise 
adversely affect the Company’s business, financial condition or prospects.

OTHER INFORMATION

Through  a  link  on  the  Investor  Relations  section  of  the  Bank’s  website  of  www.bridgenb.com,  copies  of  the  Company’s  Annual 
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to those reports filed or 
furnished  pursuant  to  Section  13(a)  for  15(d)  of  the  Exchange  Act,  are  made  available,  free  of  charge,  as  soon  as  reasonably 
practicable after electronically filing such material with, or furnishing it to, the SEC. Copies of such reports and other information also 
are available at no charge to any person who requests them or at www.sec.gov. Such requests may be directed to Bridge Bancorp, Inc., 
Investor Relations, 2200 Montauk Highway, PO Box 3005, Bridgehampton, NY 11932, (631) 537-1000.

Item 1A. Risk Factors

Concentration of Loan Portfolio

The  Bank  generally  invests  a  significant  portion  of  its  assets  in  loans  secured  by  commercial  and  residential  real  estate  properties 
located  in  eastern  Long  Island.  A  downturn  in  real  estate  values  and  economic  conditions  on  eastern  Long  Island could  have  a 
significant  impact  on  the  value  of  collateral  securing  the  loans  as  well  as  the  ability  for  the  repayment  of  loans.  See  a  further 
discussion in “Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Condition 
– Loans.”

Changes in Interest Rates Could Affect Profitability

The ability to earn a profit, like most financial institutions, depends on the net interest income, which is the difference between the 
interest income that the Bank earns on its interest-bearing assets, such as loans and investments, and the interest expense that the Bank 
pays  on  its  interest-bearing  liabilities,  such  as  deposits.  The  Bank’s  profitability  depends  on  its  ability  to  manage  its  assets  and 
liabilities during periods of changing market interest rates.

A sustained decrease in market interest rates could adversely affect the Bank’s earnings. When interest rates decline, borrowers tend to 
refinance  higher-rate,  fixed-rate  loans  at  lower  rates.  Under  those  circumstances,  the  Bank  would  not  be  able  to  reinvest  those 
prepayments  in  assets  earning  interest  rates  as  high  as  the  rates  on  those  prepaid  loans  or  in  investment  securities.  In  addition,  the 
majority of the Bank’s loans are at variable interest rates, which would adjust to lower rates.

In a period of rising interest rates, the interest income earned on the Bank’s assets may not increase as rapidly as the interest paid on 
its liabilities. In an increasing interest rate environment, the Bank’s cost of  funds is expected to increase  more rapidly  than interest 
earned on its loan and investment portfolio as the primary source of funds is deposits with generally shorter maturities than those on 
its loans and investments. This makes the balance sheet more liability sensitive in the short term.

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Geographic Location and Competition

The Bank’s market area is located in Suffolk County on eastern Long Island and its customer base is mainly located in the towns of 
East Hampton, Southampton, Southold and Riverhead. In 2009, the Bank expanded its market areas to include a branch in Shirley, 
New York located in the town of Brookhaven. In 2010, the Bank continued to expand westward to Center Moriches and Patchogue, 
New  York  located  in  the  Town  of  Brookhaven  and  Deer  Park, New  York  located  within  the  town  of  Babylon.  Competition  in  the 
banking and financial services industry remains intense. The profitability of the Bank depends on the continued ability to successfully 
compete.  The  Bank  competes  with  commercial  banks,  savings  banks,  insurance  companies,  and  brokerage  and  investment  banking 
firms. Many of our competitors have substantially greater resources and lending limits than the Bank and may offer certain services 
that  the  Bank  does  not  provide.  In  addition,  competitors may  offer deposits  at  higher  rates  and  loans  with  lower  fixed  rates,  more 
attractive terms and less stringent credit structures than the Bank has been willing to offer. Furthermore, the high cost of living on the 
twin forks of eastern Long Island creates staff recruitment and retention challenges.

The Company’s Future Depends on Successful Growth of its Subsidiary

The Company’s primary business activity for the foreseeable future will be to act as the holding company of the Bank. Therefore, the 
Company’s future profitability will depend on the success and growth of this subsidiary. 

The Loss of Key Personnel Could Impair our Future Success

Our future success depends in part on the continued service of our executive officers, other key management, as well as our staff, and 
on our ability to continue to attract, motivate, and retain additional highly qualified employees. The loss of services of one or more of 
our  key  personnel  or  our  inability  to  timely  recruit  replacements  for  such  personnel,  or  to  otherwise  attract,  motivate,  or  retain 
qualified personnel could have an adverse effect on our business, operating results, and financial condition. 

Highly Regulated Environment

The  Bank  and  Company  are  subject  to  extensive  regulation,  supervision  and  examination  by  the  OCC,  FDIC,  the  Federal  Reserve 
Board and the SEC. Such regulation and supervision govern the activities in which a financial institution and its holding company may
engage  and  are  intended  primarily  for  the  protection  of  the  consumer.  Recently  regulators  have  intensified  their  focus  on  the USA 
PATRIOT  Act’s  anti-money  laundering  and  Bank  Secrecy  Act  compliance  requirements.  In  order  to  comply  with  regulations, 
guidelines and examination procedures in this area as well as other areas of the Bank, we have been required to adopt new policies and 
procedures and to install new systems. We cannot be certain that the policies, procedures, and systems we have in place are flawless 
and  there  is  no  assurance  that  in  every  instance  we  are  in  full  compliance  with  these  requirements.  Regulatory  authorities  have 
extensive  discretion  in  connection  with  their  supervisory  and  enforcement  activities,  including  the  imposition  of  restrictions  on  the 
operation  of  an  institution.  Any  change  in  such  regulation  and  oversight,  whether  in  the  form  of  regulatory  policy,  regulations,  or 
legislation, may have a material impact on our operations. 

We May Be Adversely Affected By Current Economic and Market Conditions

The  national  and  global  economic  downturn  that  began  in  2007  has  resulted  in  unprecedented  levels  of  financial  market  volatility 
which depressed the market value of financial institutions, limited access to capital or had a material adverse effect on the financial 
condition or results of operations of banking companies. Since 2008 significant declines in the values of mortgage-backed securities 
and derivative securities by financial institutions, government sponsored entities, and major commercial and investment banks has led 
to decreased confidence in financial markets among borrowers, lenders, and depositors, as well as disruption and extreme volatility in 
the  capital  and  credit  markets  and  the  failure  of  some  entities  in  the  financial  sector.  As  a  result,  many  lenders  and  institutional 
investors have reduced or ceased to provide funding to borrowers. While financial markets appear to be stabilizing and there are a few 
positive signs of economic recovery including increased local real estate activity, economic uncertainty remains. Unemployment rates 
are  high  and  consumer  confidence  is  low.  While  the  timing  of  an  economic  recovery  remains  unknown  this  may  have  an  adverse 
affect on the Company. Turbulence in the capital and credit markets may adversely affect our liquidity and financial condition and the 
willingness of certain counterparties and customers to do business with us. 

Increases to the Allowance for Credit Losses May Cause Our Earnings to Decrease

Our customers may not repay their loans according to the original terms, and the collateral securing the payment of those loans may be 
insufficient to pay any remaining loan balance. Hence, we may experience significant loan losses, which could have a material adverse 
effect on our operating results. We make various assumptions and judgments about the collectibility of our loan portfolio, including 
the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of loans. 
In determining the amount of the allowance for credit losses, we rely on loan quality reviews, past loss experience, and an evaluation 
of  economic  conditions,  among  other  factors.  If  our  assumptions  prove  to  be  incorrect,  our  allowance  for  credit  losses  may  not be 
sufficient to cover losses inherent in our loan portfolio, resulting in additions to the allowance. Material additions to  the allowance 
would materially decrease our net income.

Page -9-

Bank regulators periodically review our allowance for credit losses and may require us to increase our provision for credit losses or 
loan charge-offs. Any increase in our allowance for credit losses or loan charge-offs as required by these regulatory authorities could 
have a material adverse effect on our results of operations and/or financial condition.

Increases in FDIC Insurance Premiums May Cause Our Earnings to Decrease

On February 27, 2009, the FDIC issued a final rule, effective  April 1, 2009, to change the  way that the FDIC’s assessment system 
differentiates for risk and to set new assessment rates beginning with the second quarter of 2009. In May 2009, the FDIC issued a final 
rule to impose an emergency special assessment of 5 basis points on all banks based on their total assets less tier one capital as of June 
30, 2009.  The special assessment was payable on September 30, 2009. During the second quarter of 2009, the Company recorded an 
expense of $0.4 million related to the FDIC special assessment. In November 2009, the FDIC issued a final rule that required insured 
institutions  to  prepay  their  estimated  quarterly  risk-based  assessments  for  the  fourth  quarter  of  2009  and  for  all  of  2010,  2011  and 
2012.  The  FDIC  also  adopted  a  uniform  3  basis  point  increase  in  assessment  rates  effective  on  January  1,  2011.  The  Company’s 
prepayment of FDIC assessments on December 31, 2009 was $3.8 million which will be amortized to expense over three years. This, 
along with the full utilization or our assessment credit in early 2008 and the increase in FDIC insurance rates, caused the premiums 
assessed by the FDIC to increase. These actions significantly increased the Bank’s expense in 2009. On July 21, 2010, the Dodd-
Frank Wall Street Reform and Consumer Protection Act was signed by the President. Section 331(b) of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act requires the FDIC to change the definition of the assessment base from which assessment fees 
are determined. The new definition for the assessment base is the average consolidated total assets of the insured depository institution 
less  the  average  tangible  equity  of  the  insured  depository  institution.  A  reduction  in  the  assessment  rate  is  anticipated  since  the 
assessment  base  will  increase  for  most  institutions.  The  new  methodology  becomes  effective  on  April  1,  2011  and  the  Company 
anticipates a reduction of approximately $0.3 million in its FDIC assessment fees for 2011. While the Bank anticipates lower fees than 
2010,  the  expense  has  increased  compared  to  2008 and will  continue  to  affect earnings  in  future  years  as  long  as  the  increased 
premiums are in place.

Financial Reform Legislation

Financial reform legislation recently enacted  will, among  other things, create a new Consumer Financial Protection Bureau, tighten 
capital standards and result in new laws and regulations that are expected to increase our costs of operations. 

On  July  21,  2010  the  President  signed  the  Dodd-Frank  Wall  Street  Reform  and  Consumer  Protection  Act  (the  “Dodd-Frank  Act”). 
This new law will significantly change the current bank regulatory structure and affect the lending, deposit, investment, trading and 
operating  activities  of  financial  institutions  and  their  holding  companies.  The  Dodd-Frank  Act  requires  various  federal  agencies  to 
adopt a broad range of new implementing rules and regulations, and to prepare numerous studies and reports for Congress. The federal 
agencies are given significant discretion in drafting the implementing rules and regulations, and consequently, many of the details and 
much of the impacts of the Dodd-Frank Act may not be known for many months or years. 

The  Dodd-Frank  Act  creates  a  new  Consumer  Financial  Protection  Bureau  with  broad  powers  to  supervise  and  enforce  consumer 
protection laws. The Consumer Financial Protection Bureau has broad rule-making authority for a wide range of consumer protection 
laws  that  apply  to  all  banks  and  savings  institutions,  including  the  authority  to  prohibit  “unfair,  deceptive  or  abusive”  acts  and 
practices. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks with more than $10 
billion in assets. Banks with $10 billion or less in assets will continue to be examined for compliance with the consumer laws by their 
primary bank regulators. The Dodd-Frank Act also weakens the federal preemption rules that have been applicable for national banks 
and federal savings associations, and gives state attorneys general the ability to enforce federal consumer protection laws. 

The Dodd-Frank Act requires minimum leverage (Tier 1) and risk based capital requirements for bank and savings and loan holding 
companies that are no less than those applicable to banks, which will exclude certain instruments that previously have been eligible for 
inclusion by bank holding companies as Tier 1 capital, such as trust preferred securities (“TPS”).  TPS issued before May 19, 2010 by 
a bank holding company that had total assets of less than $15 billion as of December 31, 2009 are permanently grandfathered.

The new law provides that the Office of Thrift Supervision will cease to exist one year from the date of the new law’s enactment. The 
Office  of  the  Comptroller  of  the  Currency,  which  is  currently  the  primary  federal  regulator  for  national  banks,  will  become  the 
primary  federal regulator  for federal thrifts. The Board of Governors of the Federal Reserve System  will  supervise and regulate all 
savings and loan holding companies that were formerly regulated by the Office of Thrift Supervision. 

Effective one year after the date of enactment is a provision of the Dodd-Frank Act that eliminates the federal prohibitions on paying 
interest  on  demand  deposits,  thus  allowing  businesses  to  have  interest  bearing  checking  accounts.  Depending  on  competitive 
responses, this significant change to existing law could have an adverse impact on our interest expense. 

The Dodd-Frank Act also broadens the base for Federal Deposit Insurance Corporation deposit insurance assessments. Assessments 
will now be based on the average consolidated total assets less tangible equity capital of a financial institution, rather than deposits. 
The Dodd-Frank Act also permanently increases the maximum amount of deposit insurance for banks, savings institutions and credit 
unions to $250,000 per depositor, retroactive to January 1, 2009, and non-interest bearing transaction accounts have unlimited deposit 
insurance through December 31, 2012.  The legislation also increases the required minimum reserve ratio for the Deposit Insurance 
Fund,  from  1.15%  to  1.35%  of  insured  deposits,  and directs  the  FDIC  to  offset  the  effects  of  increased  assessments  on  depository 
institutions with less than $10 billion in assets.

Page -10-

The Dodd-Frank Act will require publicly traded companies to give stockholders a non-binding vote on executive compensation and
so-called  “golden  parachute”  payments,  and  authorizes  the  Securities  and  Exchange  Commission  to  promulgate  rules  that  allow 
stockholders to  nominate  their own candidates  using a company’s proxy  materials. It also provides that  the listing standards of  the
national securities exchanges shall require listed companies to implement and disclose “clawback” policies mandating the recovery of 
incentive compensation paid to executive officers in connection with accounting restatements. The legislation also directs the Federal 
Reserve Board to promulgate rules prohibiting excessive compensation paid to bank holding company executives. 

It  is  difficult  to  predict  at  this  time  what  specific  impact  the  Dodd-Frank  Act  and  the  yet  to  be  written  implementing  rules  and 
regulations will have on community banks. However, it is expected that at a minimum they will increase our operating and compliance 
costs and could increase our interest expense. 

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

At present, the Registrant does not own or lease any property. The Registrant uses the Bank’s space and employees without separate 
payment.  Headquarters  are  located  at  2200  Montauk  Highway,  Bridgehampton,  New  York  11932.  The  Bank’s  internet  address  is 
www.bridgenb.com.

All of the Bank’s properties are located in Suffolk County, New York. The Bank’s Main Office in Bridgehampton is owned. The Bank 
also owns buildings that house its Montauk Branch located at 1 The Plaza, Montauk; its Southold Branch located at 54790 Main Road, 
Southold;  its  Westhampton  Beach  Office  at  194  Mill  Road,  Westhampton  Beach;  its  Southampton  Village  Branch  located  at  150 
Hampton  Road,  Southampton;  and  its  East  Hampton  Village  Branch  located  at  8  Gingerbread  Lane,  East  Hampton.  The  Bank 
currently  leases  out  a  portion  of  the  Montauk  building  and  the Westhampton  Beach  building.  The  Bank  leases  twelve  additional 
properties in Suffolk County on Long Island as branch locations at 15 Frowein Road, Center Moriches; 32845 Main Road, Cutchogue; 
410 Commack Road, Deer Park; 55 Main Street, East Hampton; 218 Front Street, Greenport; 48 East Montauk Highway, Hampton 
Bays;  Mattituck  Plaza,  Main  Road,  Mattituck;  41  East  Main  Street,  Patchogue;  2  Bay  Street,  Sag  Harbor;  425  County  Road  39A, 
Southampton; 6324 Route 25A, Wading River and 630 Montauk Highway, Shirley. Additionally, the Bank utilizes space for a branch 
in  the  retirement  community,  Peconic  Landing  at  1500  Brecknock  Road,  Greenport.  The  Bank  currently  subleases  a  portion  of  the 
leased property located in Patchogue. The Bank has contractual rights to purchase real estate in the Town of Southold which will also 
be considered as a site for a future branch facility.

Item 3. Legal Proceedings

The  Registrant  and  its  subsidiary  are  subject  to  certain  pending  and  threatened  legal  actions  that  arise  out  of  the  normal  course  of 
business.  In  the  opinion  of  management  at  the  present  time,  the  resolution  of  any  pending  or  threatened  litigation  will  not  have  a 
material adverse effect on its consolidated financial statements.

Item 4. Removed and Reserved

Page -11-

PART II

Item  5.  Market for  Registrant’s  Common  Equity,  Related  Stockholder  Matters  and  Issuer  Purchases  of 
Equity Securities

COMMON STOCK INFORMATION 

The Company’s common stock trades on the NASDAQ Global Select Market under the symbol, “BDGE”. The following table details 
the quarterly high and low sale prices of the Company’s common stock and the dividends declared for such periods.

At December 31, 2010 the Company had approximately 652 shareholders of record, not including the number of persons or entities 
holding stock in nominee or the street name through various banks and brokers.

COMMON STOCK INFORMATION

By Quarter 2010
First
Second
Third
Fourth

By Quarter 2009
First
Second
Third
Fourth

Stock Prices

High

Low

Dividends
Declared

26.05
27.11
26.50
26.19

$
$
$
$

21.30
20.33
21.57
23.25

$
$
$
$

0.23
0.23
0.23
0.23

Stock Prices

High

Low

Dividends
Declared

20.97
27.48
29.25
25.59

$
$
$
$

17.50
19.25
24.33
20.05

$
$
$
$

0.23
0.23
0.23
0.23

$
$
$
$

$
$
$
$

Stockholders received cash dividends totaling $5.8 million in 2010 and $5.7 million in 2009. The ratio of dividends per share to net 
income  per  share  was  63.42%  in  2010 compared  to  65.43%  in  2009. In  April  2009,  the  Company  announced  that  its  Board  of 
Directors approved and adopted a Dividend Reinvestment Plan (“DRP Plan”) and filed a registration statement on Form S-3 to register 
600,000 shares of common stock with the Securities and Exchange Commission (“SEC”) pursuant to the DRP Plan. In April 2010, the 
Company increased the discount from 3% to 5%, and raised the quarterly optional cash purchase amount to $50,000 under the DRP
Plan. Proceeds from the issuance of common stock related to the DRP Plan for the twelve months ended December 31, 2010, was $1.4 
million. Since the inception of the  DRP Plan in  April 2009 through December 31, 2010, the Company has issued 70,436 shares of 
common stock and raised $1.7 million in capital. 

Page -12-

PERFORMANCE GRAPH

Pursuant to the regulations of the SEC, the graph below compares the performance of the Company with that of the total return for the 
NASDAQ® stock market and for certain bank stocks of financial institutions with an asset size $500 million to $1 billion, as reported 
by SNL  Financial  L.C.  from December 31, 2005 through December 31, 2010. The graph assumes the reinvestment  of dividends in 
additional shares of the same class of equity securities as those listed below.

Bridge Bancorp, Inc.

Total Return Performance

150

125

100

75

50

25

e
u
l
a
V
x
e
d
n

I

Bridge Bancorp, Inc.

NASDAQ Composite

SNL Bank $500M-$1B

12/31/05

12/31/06

12/31/07

12/31/08

12/31/09

12/31/10

Index
Bridge Bancorp, Inc.
NASDAQ Composite
SNL Bank $500M-$1B

Period Ended

12/31/05
100.00
100.00
100.00

12/31/06
100.79
110.39
113.73

12/31/07
105.97
122.15
91.14

12/31/08
84.47
73.32
58.40

12/31/09
114.14
106.57
55.62

12/31/10
121.48
125.91
60.72

ISSUER PURCHASES OF EQUITY SECURITIES

The Board of Directors approved a stock repurchase program on March 27, 2006 which approved the repurchase of 309,000 shares.
No  shares  have  been  purchased  during  the  year  ended  December  31,  2010.  The  total  number  of  shares  purchased  as  part  of  the 
publicly announced plan totaled 141,959 as of December 31, 2010. The maximum number of shares that may be purchased under the 
plan totals 167,041 as of December 31, 2010. There is no expiration date for the stock repurchase plan. There is no stock repurchase 
plan that has expired or that has been terminated during the period ended December 31, 2010.

Page -13-

 
Item 6. Selected Financial Data

Five-Year Summary of Operations 
(In thousands, except per share data and financial ratios)

Set forth below are selected consolidated financial and other data of the Company. The Company’s business is primarily the business 
of the Bank. This financial data is derived in part from, and should be read in conjunction with, the Consolidated Financial Statements 
of the Company.

December 31,
Selected Financial Data:

Securities available for sale
Securities, restricted
Securities held to maturity
Total loans
Total assets
Total deposits
Total stockholders’ equity

Years Ended December 31,
Selected Operating Data:

Total interest income
Total interest expense
Net interest income
Provision for loan losses

Net interest income after provision for loan losses
Total non  interest income
Total non  interest expense

Income before income taxes
Income tax expense
Net income

December 31,
Selected Financial Ratios and Other Data:

Return on average equity
Return on average assets
Average equity to average assets
Dividend payout ratio
Diluted earnings per share
Basic earnings per share
Cash dividends declared per common share

2010

2009

2008

2007

2006

323,539
1,284
147,965
504,060
1,028,456
916,993
65,720

$ 306,112
1,205
77,424
448,038
897,257
793,538
61,855

$ 310,695
3,800
43,444
429,683
839,059
659,085
56,139

$ 187,384
2,387
5,836
375,236
607,424
508,909
51,109

$ 202,590
878
9,444
325,997
573,644
504,412
45,539

44,899
7,740
37,159
3,500

33,659
7,433
27,879

13,213
4,047
9,166

15.29%
0.95%
6.18%
63.42%
1.45
1.45
0.92

$

$

$
$
$

43,368
7,815
35,553
4,150

31,403
6,174
24,765

12,812
4,049
8,763

15.58%
1.06%
6.80%
65.43%
1.41
1.41
0.92

$

$

$
$
$

39,620
9,489
30,131
2,000

28,131
6,064
21,157

13,038
4,288
8,750

16.29%
1.24%
7.62%
64.74%
1.42
1.42
0.92

$

$

$
$
$

35,864
10,437
25,427
600

24,827
5,678
18,168

12,337
4,043
8,294

17.47%
1.38%
7.91%
67.67%
1.36
1.36
0.92

$

$

$
$
$

32,030
8,337
23,693
85

23,608
4,413
16,002

12,019
3,851
8,168

17.68%
1.49%
8.41%
68.98%
1.33
1.33
0.92

$

$

$

$
$
$

Page -14-

Item 7. 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: continuing stress 
in the regional and national economies which could affect the value of real estate collateral and the ability for borrowers to repay their 
loans;  legislative  and  regulatory  changes,  including  increases  in  FDIC  insurance  rates;  monetary  and  fiscal  policies  of  the  federal 
government, including monetary policies that may result in inflation and increases in interest rates; changes in tax policies, rates and 
regulations of federal, state and local tax authorities; increases in interest rates, which could reduce net interest and net income and the 
market  value  of  securities;  deposit  flows;  the  cost  of  funds;  decreased  demand  for  loan  products  and  other  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,  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.,  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.  The  Company  is  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 non interest income, such as  fee income on 
deposit  accounts  and  merchant  credit  and  debit  card  processing  programs,  investment  services,  income  from  its  title  abstract 
subsidiary,  and  net  gains  on  sales  of  securities  and  loans.  The  level  of  its  non  interest  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.  Certain  reclassifications  have  been  made  to  prior  year  amounts  and  the  related 
discussion and analysis to conform to the current year presentation.

Year and Quarterly Highlights

•

•

•

•

•

•

Returns on average equity and average assets of 15.29% and 0.95%, respectively for 2010;

Net  income  of  $2.4  million  or  $0.38  per  diluted  share  for  the  fourth  quarter  2010  and  $9.2  million or  $1.45  per 
diluted share for 2010 higher than $1.41 recorded for 2009;

Net interest income increased $1.6 million for the year with a net interest margin of 4.22% for 2010, and 4.69% for 
2009;

Total assets of $1.03 billion at December 31, 2010, an increase of 15% over the same date last year;

Total loans of $504.1 million at December 31, 2010, an increase of 13% from December 31, 2009;

Total investments of $472.8 million at December 31, 2010, an increase of 23% over December 31, 2009;

Page -15-

•

•

•

•

Significant Event

Total deposits of $917.0 million at December 31, 2010, an increase of $123.5 million or 16% over the same date last 
year;

The  Company’s  capital  levels  remain  strong  with  a  Tier  1  Capital  to  quarterly  average  assets  ratio  of  7.9%.  The 
Company is positioned well for future growth. Stockholders’ equity totaled $65.7 million at December 31, 2010 as 
compared $61.9 million at December 31, 2009;

Opened the Bank’s 19th branch, in Deer Park, New York;

Expanded the Dividend Reinvestment Plan and declared cash dividends totaling $0.92 for 2010.

On  February  8,  2011,  the  Company  announced  a  definitive  merger  agreement  under  which  the  Bank  will  acquire  Hamptons  State 
Bank. The transaction augments the Bank’s franchise in eastern Long Island and the combined entity will serve customers through a 
network of 20 branches and have total assets of approximately $1.1 billion and deposits of $1.0 billion.

Under  the  terms  of  the  Agreement,  each  share  of  Hamptons  State  Bank  will  be  converted  into 0.3434  shares  of  the  Company’s 
common  stock. The  Company  will  issue  approximately  274,000  shares,  which  will  represent  4.1%  of  the  total  shares  of  the 
Company’s  common  stock  to  be  outstanding.  Based  upon  the  Company’s closing  stock  price  on  February  7,  2011,  the  transaction 
value is approximately $6.3 million and represents 136% of Hamptons State Bank’s tangible book value as of December 31, 2010, and 
a 4.4% premium on core deposits.

The  acquisition,  which  has  been  unanimously  approved  by  the  boards  of  directors  of the  Company  and  Hamptons State  Bank,  is 
subject  to  the  approval  of  Hamptons  State  Bank  shareholders  and  the  approval  of  bank  regulatory  authorities,  as  well  as  other 
customary conditions.  The transaction is expected to close in the third quarter of 2011.

Current Environment 

The economic events of the past three years have been unprecedented. During 2008, the failure of several large financial institutions 
along with the conservatorship of Fannie Mae and Freddie Mac driven by the diminution in housing values and sub-prime mortgage 
lending has resulted in multiple actions by the United States government. Congress passed the Emergency Economic Stabilization Act 
of  2008  (“EESA”)  which  provided up  to  $700  billion  and  granted new  authorities  to  the  United  States  Treasury  Department 
(“Treasury”), the Federal Reserve Board (“FRB”) and the Federal Deposit Insurance Corporation (“FDIC”) for initiatives to restore 
stability  and  liquidity  to  U.S.  markets.  Many  European  nations  have  also  taken  actions  to  inject  liquidity  and  capital  into  critical 
financial institutions in order to stabilize world markets.

The Treasury, FRB and FDIC jointly announced a sweeping plan to invest in banks and thrifts to help restore confidence in the U.S. 
banking  system.  Some  of  the  actions  taken  by  these  governmental  agencies  included:  (i)  temporarily  increasing  FDIC  insurance 
coverage  to  $250,000  from  $100,000  ;  (ii)  reducing  the  targeted  federal  funds  rate  to  between  0  and    0.25%  from  2.00%  and  the
discount rate to 0.25% from 2.25%, respectively; (iii) temporarily guaranteeing Money Market mutual funds (iv) introducing a capital 
purchase program whereby the Treasury can purchase up to $250 billion in senior preferred shares from healthy qualifying financial 
institutions;  and  (v)  introducing  a  Temporary  Liquidity  Guarantee  Program  (“TLGP”)  whereby  the  FDIC  guaranteed newly  issued 
senior  unsecured  debt  on  or  before  June  30,  2009  and  provided unlimited  FDIC  insurance  coverage  for  non-interest  bearing 
transaction accounts for thirty days without charge followed by an annualized 10 basis point assessment for the insurance coverage 
above $250,000 on such accounts effective until December 31, 2009. In November 2008, the Bank opted to participate in the TLGP.  
In 2009, the FDIC’s guarantee of unsecured debt was extended to October 31, 2009 and the FDIC insurance coverage for non-interest 
bearing transaction accounts to $250,000 was extended to June 30, 2010. 

Another provision  resulting  from  the  EESA  was  the  Treasury’s  Capital  Purchase  Program  (“CPP”),  which  provided  direct  equity 
investment of perpetual preferred stock by the Treasury in qualified financial institutions. The program was voluntary and required an 
institution to comply with a number of restrictions and provisions, including limits on executive compensation, stock redemptions and 
declaration of dividends. In November 2008, the Company filed an application to participate in this program. In order to be eligible to 
participate in this program, the Company requested shareholder approval to amend its certificate of incorporation and authorize  the 
issuance of preferred stock. On December 12, 2008, the shareholders approved the proposal and on January 7, 2009 the Company’s 
application  to  participate  in  this  program  was  approved  by  the  Treasury  Department.  On  January  27,  2009,  management  and  the 
Board, after careful deliberation and thoughtful review of the relevant issues, determined it was not in the shareholders’ best interest to 
participate, and declined the Treasury investment.

Page -16-

On February 27, 2009, the FDIC issued a final rule, effective  April 1, 2009, to change the  way that the FDIC’s assessment system 
differentiates for risk and to set new assessment rates beginning with the second quarter of 2009. In May 2009, the FDIC issued a final 
rule to impose an emergency special assessment of 5 basis points on all banks based on their total assets less tier one capital as of June 
30, 2009.  The special assessment was payable on September 30, 2009. During the second quarter of 2009, the Company recorded an 
expense of $0.4 million related to the FDIC special assessment. In November 2009, the FDIC issued a final rule that required insured 
institutions  to  prepay  their  estimated  quarterly  risk-based  assessments  for  the  fourth  quarter  of  2009  and  for  all  of  2010,  2011  and 
2012.  The  FDIC  also  adopted  a  uniform  3  basis  point  increase  in  assessment  rates  effective  on  January  1,  2011.  The  Company’s 
prepayment  of  FDIC  assessments  for  2010,  2011  and  2012  was  made  on  December  31,  2009  totaling  $3.8  million  which  will  be 
amortized to expense over three years.  

On  April  13,  2010,  the  FDIC  approved  an  interim  rule  that  extends  the  Transaction  Account  Guarantee  Program  which  offers 
unlimited deposit insurance on non-interest bearing accounts until December 31, 2012. 

On  July  21,  2010,  the  Dodd-Frank  Wall  Street  Reform  and  Consumer  Protection  Act  was  signed  by  the  President.  The  Act 
permanently  raised the  current  standard  maximum  deposit  insurance  amount  to  $250,000.  Section  331(b)  of  the  Dodd-Frank  Wall 
Street Reform and Consumer Protection Act requires the FDIC to change the definition of the assessment base from which assessment 
fees  are  determined.  The  new  definition  for  the  assessment  base  is  the  average  consolidated  total  assets  of  the  insured  depository 
institution less the average tangible equity of the insured depository institution. A reduction in the assessment rate is anticipated since 
the assessment base will increase for many institutions. The new methodology becomes effective on April 1, 2011 and the Company 
anticipates a reduction in its FDIC assessment fees of approximately $0.3 million in 2011. The new financial reform legislation will, 
among  other  things,  create  a  new  Consumer  Financial  Protection  Bureau,  tighten  capital  standards  and  result  in  new  laws  and 
regulations that are expected to increase the cost of operations. Refer to Item 1A. Risk Factors for more detailed information related to 
this new regulation.

Opportunities and Challenges

Since the second half of 2007 and continuing through 2010, the financial markets experienced significant volatility resulting from the 
continued fallout of sub-prime lending and the global liquidity crises. A multitude of government initiatives along with eight rate cuts 
by  the  Federal  Reserve  totaling  500  basis  points  have  been  designed  to  improve  liquidity  for  the  distressed  financial  markets. The 
ultimate objective of these efforts has been to help the beleaguered consumer, and reduce the potential surge of residential mortgage 
loan foreclosures and stabilize the banking system. As a result the yield on loans and investment securities has declined. The squeeze 
between declining asset yields and more slowly declining liability pricing has impacted margins. Effective as of February 19, 2010, 
the  Federal  Reserve  increased  the  discount  rate  50  basis  points  to  0.75%.  The  Federal  Reserve  stated  that  this  rate  change  was
intended  to  normalize  their  lending  facility  and  to  step  away  from  emergency  lending  to  banks.  At  their  meetings  in  April, June,
September, October, November and December 2010, and in January 2011 the Federal Reserve decided to maintain the federal funds 
target rate between 0 and 25 basis points due to the continued high level of unemployment and tight credit markets.

Growth  and  service  strategies  have  the  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. Since 2007, the Bank has opened 
eight new branches. In 2007, the Bank opened three new  branches  located in the Village of Southampton, Cutchogue, and Wading 
River. In April 2009, the Bank opened a new branch in Shirley, New York, and in December 2009, the Bank opened a new full service 
branch  facility  in  the  Village  of  East  Hampton. During  2010,  the  Bank  has  opened  three  new  branches;  Center  Moriches in  May,
Patchogue in  September and  Deer  Park in  October. The  recent  branch  openings move  the  Bank  geographically  westward  and
demonstrate its commitment to traditional growth through branch expansion. Controlling funding costs yet protecting the deposit base 
along with focusing on profitable growth, presents a unique set of challenges in this operating environment. 

The Bank routinely adds to its menu of products and services, continually meeting the needs of consumers and businesses. We believe 
positive  outcomes  in  the  future  will  result  from  the  expansion  of  our  geographic  footprint, investments  in  infrastructure  and 
technology,  such  as  BridgeNEXUS,  our  remote  deposit  capture  product,  lockbox  processing,  and  continued  focus  on  placing  our 
customers  first.  In  January  2009,  the  Bank  launched  Bridge  Investment  Services,  offering  a  full  range  of  investment  products  and 
services through a third party broker dealer. The Bank rolled out its new commercial online bill paying service during the first quarter 
of 2010, and continues to explore mobile banking products to offer customers. 

The Company reached several significant milestones during 2010: celebrating its 100th anniversary, eclipsing $1.0 billion in assets and 
$500  million  in  loans,  and  opening  three  new  branches.  More  importantly,  the  Company  continues  to  deliver  on  its  community 
banking mission, serving new and existing customers, building relationships and supporting the local market. At the same time, the
financial results and related returns continue to be near the top of the industry in performance.

The  ability  to  produce  results while  simultaneously  expanding  the  franchise  and  enhancing  the  already  rigorous  risk  management 
culture, reflects the underlying strength and agility of the core franchise. While it appears that the economy is improving, management 
remains cautious about sustaining this positive momentum, and hopes for continued progress on the employment front.

Page -17-

The Company balances these global issues, with the realities of the local markets to identify strategic initiatives, provide guidance on 
capital deployment and determine investment decisions. However, the longer term mission, focusing on the customer and serving its
communities,  has  been successful  for  over  100  years and transcends  these  shorter  term  concerns.  This  has  allowed  management to 
manage through the uncertain, and at times, difficult environment and deliver strong financial results and returns to the shareholders.

Corporate objectives for 2011 include: leveraging our expanding branch network to build customer relationships and grow loans and 
deposits; successfully integrating the customers and operations of Hamptons State Bank; focusing on opportunities and processes that 
continue to enhance the customer experience at the Bank; improving operational efficiencies and prudent management of non-interest 
expense; and maximizing non-interest income through Bridge Abstract as well as other lines of business. The ability to attract, retain, 
train and cultivate employees at all levels of the Company remains significant to meeting these objectives. The Company has made 
great progress toward the achievement of these objectives, and avoided many of the problems facing other financial institutions as a 
result of maintaining discipline in its underwriting, expansion strategies, investing and general business practices. This strategy has not 
changed over the 100 years of our existence and will continue to be true. The Company has capitalized on opportunities presented by 
the market and diligently seeks opportunities for growth and to strengthen the franchise. The Company recognizes the potential risks 
of  the  current  economic  environment  and  will  monitor  the  impact  of  market  events  as  we  consider  growth  initiatives  and  evaluate 
loans and investments. Management and the Board have built a solid foundation for growth and the Company is positioned to adapt to 
anticipated changes in the industry resulting from new regulations and legislative initiatives.  

CRITICAL ACCOUNTING POLICIES

Note  1  to  our  Consolidated  Financial  Statements  for  the  year  ended  December  31,  2010  contains  a  summary  of  our  significant 
accounting  policies.  Various  elements  of  our  accounting  policies,  by  their  nature,  are  inherently  subject  to  estimation  techniques, 
valuation assumptions and other subjective assessments. Our policy with respect to the methodologies used to determine the allowance 
for loan losses is our most critical accounting policy. This policy is important to the presentation of our financial condition and results 
of  operations,  and  it  involves  a  higher  degree  of complexity  and  requires  management  to  make  difficult  and  subjective  judgments, 
which  often  require  assumptions  or  estimates  about  highly  uncertain  matters.  The  use  of  different  judgments,  assumptions  and 
estimates could result in material differences in our results of operations or financial condition.

The  following  is  a  description  of  our  critical  accounting  policy  and  an  explanation  of  the  methods  and  assumptions  underlying its 
application. 

ALLOWANCE FOR LOAN LOSSES

Management  considers  the  accounting  policy  on  the  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  FASB  Accounting  Standard  Codification  (“ASC”)  No.  310,  “Receivables”.  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  are  also  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.

Page -18-

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 into loans with homogenous characteristics by loan type and include commercial real estate mortgages, home equity 
loans,  residential  real  estate  mortgages,  commercial,  financial and  agricultural loans,  real  estate  construction  and  land  loans  and 
consumer loans. 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  credit’s  risk  rating  which  includes  management’s  evaluation  of:  cash  flow,  collateral,  guarantor  support, 
financial disclosures, industry trends and strength of borrowers’ management, the impact that 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.

The Credit Risk Committee is comprised of members of both management and the Board of Directors. The adequacy of the allowance
is analyzed quarterly, with any adjustment to a level deemed appropriate by the Credit Risk Committee, based on its risk assessment 
of the entire portfolio. Based on the Credit Risk Committee’s review of the classified loans and the overall allowance levels as they 
relate to the entire loan portfolio at December 31, 2010, 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 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.

For additional information regarding our allowance for loan losses, see Note 3 to the Consolidated Financial Statements.

NET INCOME

Net income for 2010 totaled $9.2 million or $1.45 per diluted share while net income for 2009 totaled $8.8 million or $1.41 per diluted 
share,  as  compared  to  net  income  of  $8.8  million,  or  $1.42  per  diluted  share  for  the  year  ended  December  31,  2008.  Net  income 
increased $0.4 million or 4.6% compared to 2009 and net income for 2009 increased $0.01 million or 0.15% as compared to 2008. 
Significant  trends  for  2010  include:  (i)  a  $1.6  million  or  4.5%  increase  in  net  interest  income;  (ii)  a  $0.7  million  decrease in  the 
provision for loan losses; (iii) a $1.3 million or 20.4% increase in total non interest income; and (iv) a $3.1 million or 12.6% increase 
in total non interest expenses.

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 balance sheets and its consolidated 
statements  of  income  for  the  years  indicated  and  reflect  the  average  yield  on  assets  and  average  cost  of  liabilities  for  the  years 
indicated. Such yields and costs are derived by dividing income or expense by the average balance of assets or liabilities, respectively, 
for the  years shown.  Average balances are derived from daily average balances and include nonaccrual 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 FASB ASC 320, “Investments - Debt and Equity Securities.”

Page -19-

Years Ended December 31,
(In thousands)

Interest earning assets:

Loans, net (including loan 

2010

Average
Balance

Interest

Average
Yield/
Cost

Average
Balance

2009

Interest

Average
Yield/
Cost

Average
Balance

2008

Interest

Average
Yield/
Cost

fee income)

$

461,289

$

30,223

6.55% $ 435,694

$ 29,167

6.69% $

397,560

$ 28,040

7.05%

Mortgage-backed securities
Tax exempt securities (1)

Taxable securities

Federal funds sold

Deposits with banks

242,997

104,824

82,678

1,750

20,804

9,585

4,153

2,328

5

54

Total interest earning assets

914,342

46,348

3.94

3.96

2.82

0.29

0.26

5.07

227,471

11,074

76,746

27,298

11,466

5,171

3,381

880

33

13

783,846

44,548

4.87

4.41

3.22

0.29

0.25

5.68

170,592

58,065

27,298

8,575

1,235

8,404

2,930

1,081

183

5

663,325

40,643

4.93

5.05

3.96

2.13

0.40

6.13

Non interest earning assets:

Cash and due from banks

Other assets

Total assets

15,857

39,707

$

969,906

Interest bearing liabilities:

Savings, NOW and money 

13,574

29,397

$ 826,817

15,408

26,206

$

704,939

market deposits

$

480,642

$

3,594

0.75% $ 376,429

$

3,698

0.98% $

315,481

$

5,681

1.80%

Certificates of deposit of 
$100,000 or more

Other time deposits

Federal funds purchased and 
repurchase agreements

Federal Home Loan Bank 

term advances

Junior subordinated 

debentures

Total interest bearing liabilities

Non interest bearing liabilities:

Demand deposits

Other liabilities

Total liabilities

Stockholders’ equity
Total liabilities and 

stockholders’ equity

Net interest income/interest 

rate spread (2)

100,775

45,630

22,128

19

16,002

665,196

238,740

6,028

909,964

59,942

1,489

762

530

—

1,365

7,740

1.48

1.67

2.40

0.00

8.53

1.16

94,691

55,436

29,607

82

2,263

558,508

205,984

6,086

770,578

56,239

2,154

1,371

401

1

190

7,815

2.27

2.47

1.35

1.22

8.40

1.40

66,578

37,413

2,125

1,148

24,595

478

4,552

—

57

—

448,619

9,489

3.19

3.07

1.94

1.25

—

2.12

197,179

5,428

651,226

53,713

$

969,906

$ 826,817

$

704,939

38,608

3.91%

36,733

4.28%

31,154

4.01%

Net interest earning assets/net 

interest margin (3)

$

249,146

4.22% $ 225,338

4.69% $

214,706

4.70%

Ratio of interest earning assets 
to interest bearing liabilities

Less: Tax equivalent 

adjustment

(1,449)

Net interest income

$

37,159

137.45%

140.35%

147.86%

(1,180)

$ 35,553

(1,023)

$ 30,131

(1)
(2)
(3)

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

Page -20-

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 that 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.

Years Ended December 31,
(In thousands)

Interest income on interest earning assets:
Loans (including loan fee income)
Mortgage-backed securities
Tax exempt securities (1)
Taxable securities
Federal funds sold
Deposits with banks

Total interest earning assets

Interest expense on interest bearing liabilities:
Savings, NOW and money market deposits
Certificates of deposit of $100,000 or more
Other time deposits
Federal funds purchased and repurchase 

agreements

Federal Home Loan Bank Advances
Junior subordinated debentures

Total interest bearing liabilities

Net interest income

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

2010 Over 2009
Changes Due To

2009 Over 2008
Changes Due To

Volume

Rate

Net 
Change

Volume

Rate

Net 
Change

$ 1,678
722
1,144
1,570
(28)
40
5,126

$

(622)
(2,211)
(372)
(122)
—
1
(3,326)

881
115
(215)

(985)
(780)
(394)

(121)
(1)
1,172
1,831
$ 3,295

250
—
3
(1,906)
$ (1,420)

$

$

1,056
(1,489)
772
1,448
(28)
41
1,800

$ 2,603
2,773
857
—
46
10
6,289

(104)
(665)
(609)

129
(1)
1,175
(75)
1,875

950
745
478

86
(55)
190
2,394
$ 3,895

$(1,476)
(103)
(406)
(201)
(196)
(2)
(2,384)

(2,933)
(716)
(255)

(163)
(1)
—
(4,068)
$ 1,684

$

$

1,127
2,670
451
(201)
(150)
8
3,905

(1,983)
29
223

(77)
(56)
190
(1,674)
5,579

The net interest margin declined to 4.22% in 2010 compared to 4.69% for the year ended December 31, 2009 and 4.70% in 2008. The
decrease in 2010 compared to 2009 was primarily the result of the decrease in the yield on average total interest earning assets which 
was partly offset by the decrease in the cost of the average total interest bearing liabilities. The yield on average total interest earning 
assets  decreased  approximately  61  basis  points  during  2010  compared  to  the  prior  year  and the  cost  of  interest bearing  liabilities 
decreased approximately 24 basis points. The  net  interest  margin during 2010  was also impacted by a  full  year of interest expense 
related to the issuance of $16.0 million in junior subordinated debentures during the fourth quarter of 2009.

Net  interest  income  was  $37.2  million  in  2010  compared  to  $35.6  million  in  2009  and  $30.1  million  in  2008.  The  increase  in  net
interest income of $1.6 million or 4.5% as compared to 2009, and the increase in net interest income of $5.5 million or 18.0% in 2009 
as compared to 2008, primarily resulted from the effect of the increase in the volume of average total interest earning assets and the 
decrease in the cost of average total interest bearing liabilities being greater than the effect of the increase in volume of average total 
interest bearing liabilities and the decrease in yield on average total interest earning assets. 

Average total interest earning assets grew by $130.5 million or 16.6% to $914.3 million in 2010 compared to $783.8 million in 2009. 
During this period, the yield on average total interest earning assets decreased to 5.07% from 5.68%. Average total interest earning 
assets grew by $120.5 million or 18.2% in 2009 from $663.3 million in 2008. During this period, the yield on average total interest 
earning assets decreased to 5.68% from 6.13%.

For the year ended December 31, 2010, average loans grew by $25.6 million or 5.9% to $461.3 million as compared to $435.7 million 
in  2009  and  increased  $38.1  million  or  9.6%  in  2009  as  compared  to  $397.6  million  in  2008.  Real  estate  mortgage  loans  and 

Page -21-

commercial  loans  primarily  contributed  to  the  growth.  The  Bank  remains  committed  to  growing  loans  with  prudent  underwriting, 
sensible pricing and limited credit and extension risk.

For the year ended December 31, 2010, average total investments increased by $99.0 million or 29.9% to $430.5 million as compared 
to  $331.5  million  in  2009  and  increased  $75.6  million  or  29.5%  in  2009  as  compared to  $256.0  million  in  2008.  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 2010 resulting in a net gain of $1.3 million compared to a net gain of $0.5 million 2009. There were no sales 
of securities in 2008. Average federal funds sold decreased $9.7 million or 84.7% to $1.8 million in 2010 from $11.5 million in 2009 
and increased $2.9 million or 33.7% in 2009 as compared to $8.6 million in 2008. The decrease in the average federal funds sold in 
2010 was offset by the growth in average interest earning cash of $15.6 million from $5.2 million in 2009 to $20.8 million in 2010.

Average total interest bearing liabilities were $665.2 million in 2010 compared to $558.5 million in 2009 and $448.6 million in 2008.
The Bank grew deposits during 2010 as a result of a three new branches opening during the year, the maturing of two branches opened 
during 2009 and the building of new relationships in existing markets. During the fourth quarter of 2009, the Company completed the 
private  placement  of  $16.0  million  in  aggregate  liquidation  amount  of  8.50%  cumulative  convertible  trust  preferred  securities  (the 
"TPS”), through its subsidiary, Bridge Statutory Capital Trust II. The Company issued $16.0 million of junior subordinated debentures 
(the “Debentures”) to the trust in exchange for ownership of all of the common security of the trust and the proceeds of the preferred 
securities sold by the trust. The junior subordinated debentures bear interest at a fixed rate equal to 8.50% and mature on December 
31, 2039. Since the fourth quarter of 2009, the Bank reduced interest rates on deposit products through prudent management of deposit 
pricing.  The  reduction  in  deposit  rates,  which  was  partly  offset  by  increased  borrowing  costs,  resulted  in  a  decrease  in  the  cost  of 
interest bearing liabilities to 1.16% for 2010 as compared to a cost of 1.40% during 2009 and 2.12% in 2008. Since 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. 

For the year ended December 31, 2010, average total deposits increased by $133.3 million or 18.2% to $865.8 million as compared to 
average total deposits of $732.5 million for the year ended December 31, 2009. Components of this increase include an increase in 
average  demand  deposits  for  2010  of  $32.7 million  or  15.9%  to  $238.7  million  as  compared  to  $206.0  million  in  average  demand 
deposits for 2009. The average balances in savings, NOW and money market accounts increased $104.2 million or 27.7% to $480.6
million for the year ended December 31, 2010 compared to the same period last year. Average balances in certificates of deposit of 
$100,000 or more and other time deposits decreased $3.7 million or 2.5% to $146.4 million for 2010 as compared to 2009. Average 
public fund deposits comprised 18.8% of total average deposits during 2010 and 17.3% of total average deposits during 2009. Average 
federal  funds  purchased  and  repurchase  agreements  together  with  average  other  borrowed  money  and  average  Federal  Home  Loan 
Bank term advances decreased $7.5 million or 25.4% for the year ended December 31, 2010 as compared to average balances for the 
same period in the prior year.

Total interest income increased to $44.9 million in 2010 from $43.4 million in 2009 and $39.6 million in 2008, an increase of 3.5% 
between 2010 and 2009 and a 9.5% increase between 2009 and 2008. The ratio of interest earning assets to interest bearing liabilities 
decreased to 137.5% in 2010 as compared to 140.4% in 2009 and 147.9% in 2008. Interest income on loans increased $1.1 million in 
2010 over 2009 and in 2009 over 2008 primarily due to growth in the loan portfolio. The yield on average loans was 6.6% for 2010, 
6.7% for 2009 and 7.1% for 2008.

Interest income on investments in residential mortgage-backed, taxable and tax exempt securities increased $0.5 million or 3.3% in 
2010 to $14.6 million from $14.2 million in 2009 and increased $2.8 million or 24.3% in 2009 from $11.4 million in 2008. Interest 
income  on  securities  included  net  amortization  of  premiums  on  securities  of  $1.5 million in  2010  compared  to  net  amortization  of 
premiums on securities of $0.3 million in 2009 and net accretion of discounts of $0.1 million in 2008 as the rate environment changed 
and prepayments substantially increased on the mortgage-backed security portfolio. The tax adjusted average yield on total securities 
decreased to 3.7% in 2010 from 4.6% in 2009 and 4.9% in 2008.

Total interest expense decreased $0.1 million or 0.96% to $7.7 million in 2010 and decreased $1.7 million or 17.6% to $7.8 million in 
2009 from $9.5 million in 2008. The decrease in interest expense in 2010 and 2009 resulted from the Federal Reserve lowering the 
targeted federal funds rate and discount rate in previous years and the prudent management of deposit pricing. These reductions were 
partly offset by the interest paid of $1.4 million in 2010 and $0.2 million in 2009, related to the $16.0 million of junior subordinated 
debentures. The cost of average interest bearing liabilities was 1.2% in 2010, 1.4% in 2009, and 2.1% in 2008.

Provision 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 of Suffolk County which is located on the eastern portion of 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 

Page -22-

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.

Loans  of  approximately  $43.9 million  or  8.7%  of  total  loans  at  December  31,  2010 were  classified  as  potential  problem  loans 
compared to $31.7 million or 7.1% at December 31, 2009 and $9.8 million or 2.3% at December 31, 2008. Potential problem loans 
include loans  with credit quality indicators  with the internally assigned  grades of special  mention, substandard and doubtful. These 
loans are classified as potential problem loans as 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. The increase in the 2010 level of potential problem loans reflects the current economic environment as well as 
management’s decision during 2009 to enhance the asset and credit quality review process of the loan portfolio. This process includes 
the early identification of potential problem loans, a more stringent assessment of potential credit weaknesses and expanding the scope 
and depth of individual credit reviews. 

At  December  31,  2010,  approximately  $27.8  million  of  these  loans  were  commercial  real  estate  (“CRE”)  loans  which  were  well 
secured with real estate as collateral. Of the $27.8 million of CRE loans, $26.8 million were current and $1.0 million were past due. In 
addition,  all  but  $2.1  million  of  the  CRE  loans  have  personal  guarantees.    At  December  31,  2010,  approximately  $4.6  million  of 
classified  loans  were  residential  real  estate  loans  with  $3.2  million  current  and  $1.4  million  past  due.  Commercial,  financial,  and 
agricultural  loans  represented  $7.4  million  of  classified  loans  and  $7.3  million  was  current  and  $0.1  million  was  past  due. 
Approximately $3.9 million of classified loans represented real estate construction and land loans which were current and well secured 
with collateral. The remaining $0.2 million in classified loans are unsecured and current, have personal guarantees and demonstrate 
sufficient cash flow to pay the loans. Due to the structure and nature of the credits, we do not expect to sustain a material loss on these 
relationships. 

CRE loans represented $245.3 million or 48.7% of the total loan portfolio at December 31, 2010 compared to $204.2 million or 45.6%
at December 31, 2009 and $191.0 million or 44.5% at December 31, 2008. The Bank’s underwriting standards for CRE loans requires 
an evaluation of the cash flow of the property, the overall cash flow of the borrower and related guarantors as well as the value of the 
real estate securing the loan. In addition, the Bank’s underwriting standards for CRE loans are consistent with regulatory requirements
with original  loan to  value ratios less than or equal to 75%.  The Bank considers charge-off history, delinquency  trends, cash  flow 
analysis, and the impact of the local economy on commercial real estate values when evaluating the appropriate level of the allowance 
for loan losses.  Real estate values in our geographic markets increased significantly from 2000 through 2007. Commencing in 2008, 
following the financial crisis and significant downturn in the economy, real estate values began to decline. This decline continued into 
2009 and appears to have stabilized in 2010. The estimated decline in residential and commercial real estate values range from 15-
20% from the 2007 levels, depending on the nature and location of the real estate.

As  of  December  31,  2010 and  December 31,  2009,  the  Company  had  impaired  loans  as  defined  by  FASB  ASC  No. 310, 
“Receivables”  of  $9.9 million  and  $9.1 million,  respectively.  For  a  loan  to  be  considered  impaired,  management  determines  after 
review whether it is probable that the Bank 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. Impaired loans include
individually  classified  nonaccrual  loans  and  troubled  debt  restructured  (“TDR”)  loans.  For  impaired  and  TDR  loans,  the  Bank 
evaluates  the  fair  value  of  the  loan  in  accordance  with  FASB  ASC  310-10-35-22.    For  loans  that  are  collateral  dependent,  the  fair 
value of the collateral is used to determine the fair value of the loan. The fair value of the collateral is determined based upon recent 
appraised  values.  For  unsecured  loans,  the  fair  value  is  determined  based  on  the  present  value  of  expected  future  cash  flows 
discounted at the loan’s effective interest rate. The fair value of the loan is compared to the carrying value to determine if any write-
down or specific reserve is required. These methods of  fair value  measurement for impaired and TDR loans are considered level 3
within the fair value hierarchy described in FASB ASC 820-10-50-5. 

Nonaccrual loans increased $0.8 million to $6.7 million or 1.34% of total loans at December 31, 2010 from $5.9 million or 1.32% of 
total loans at December 31, 2009. Approximately $4.7 million of the nonaccrual loans at December 31, 2010 represent troubled debt 
restructured loans  where the  borrowers are complying  with the  modified terms of the  loans and are currently  making payments. In 
2009, nonaccrual  loans  increased  $2.8 million to  $5.9 million  from  $3.1 million  in  2008.  The  increase  in  nonaccrual  loans  at 
December 31, 2009 was due to the same troubled debt restructured loans outstanding at December 31, 2010. The balances totaled $4.9 
million as of December 31, 2009 and the borrowers were complying with the modified terms of the loans and were currently making 
payments.

In addition, the Company has one borrower with TDR loans of $3.2 million at December 31, 2010 and 2009 that are current and are 
secured with collateral that has a fair value of approximately $5.4 million as well as personal guarantors. Management believes that 
the  ultimate  collection  of  principal  and  interest  is  reasonably  assured  and  therefore  continues  to  recognize  interest  income  on  an 
accrual  basis.  In  addition,  the  Bank  has  no  commitment  to  lend  additional  funds  to  this  debtor.  The  loan  was  determined  to  be 
impaired during the third quarter of 2008 and since that determination $0.3 million of interest income has been recognized. 

The Bank had no foreclosed real estate at December 31, 2010, 2009 and 2008, respectively.

Page -23-

Net charge-offs were $1.0 million for the year ended December 31, 2010 compared to $2.1 for the year ended December 31, 2009 and 
$1.0 million for the year ended December 31, 2008. The ratio of allowance for loan losses to nonaccrual loans was 126%, 103% and 
129%, at December 31, 2010, 2009, and 2008, respectively.

Based on our continuing review of the overall loan portfolio, the current asset quality of the portfolio, the growth in the loan portfolio 
and the net charge-offs or recoveries, a provision for loan losses of $3.5 million was recorded in 2010 as compared to $4.2 million in 
2009 and $2.0 million in 2008. The allowance for loan losses increased to $8.5 million at December 31, 2010 as compared to $6.0 
million at December 31, 2009 and $4.0 million at December 31, 2008. As a percentage of total loans, the allowance was 1.69%, 1.35%
and 0.92% at December 31, 2010, 2009 and 2008, respectively. Management continues to carefully monitor the loan portfolio as well 
as real estate trends in Suffolk County and eastern Long Island. The Bank’s consistent and rigorous underwriting standards preclude 
sub-prime lending, and management remains cautious about the potential for an indirect impact on the local economy and real estate 
values in the future.

The following table sets forth changes in the allowance for loan losses:

December 31,
(Dollars in thousands)
Allowance for loan losses balance at beginning of period

2010

2009

2008

2007

2006

$

6,045 $

3,953 $

2,954 $

2,512 $

2,383

Charge-offs:
Commercial real estate mortgage loans
Residential real estate mortgage loans
Commercial, financial and agricultural loans
Installment/consumer loans
Real estate construction and land loans

Total

Recoveries:
Commercial real estate mortgage loans
Residential real estate mortgage loans
Commercial, financial and agricultural loans
Installment/consumer loans
Real estate construction and land loans

Total

Net (charge-offs) recoveries
Provision for loan losses charged to operations
Balance at end of period
Ratio of net (charge-offs) recoveries during period to average 

loans outstanding

Allocation of Allowance for Loan Losses

73
20
879
148
—
1,120

—
4
56
12
—
72

47
653
1,098
55
240
2,093

—
6
28
1
—
35

—
480
534
56
—
1,070

—
—
53
16
—
69

—
—
203
23
—
226

—
1
13
54
—
68

—
—
33
50
—
83

—
6
59
62
—
127

(1,048)
3,500
8,497 $

(2,058)
4,150
6,045 $

(1,001)
2,000
3,953 $

(158)
600
2,954 $

44
85
2,512

$

(0.23%)

(0.47%)

(0.25%)

(0.05%)

0.01%

The following table sets forth the allocation of the total allowance for loan losses by loan type:

Years Ended December 31,
(Dollars in thousands)

Commercial real estate 

mortgage loans
Residential real estate 
mortgage loans

Commercial, financial and 

agricultural loans

Installment/consumer loans.
Real estate construction 

and land loans
Total

$

Non Interest Income

2010

Percentage
of Loans
to Total
Loans

2009

Percentage
of Loans
to Total
Loans

2008

Percentage
of Loans
to Total
Loans

Amount

2007

Percentage
of Loans
to Total
Loans

2006

Percentage
of Loans
to Total
Loans

Amount

Amount

Amount

Amount

$

3,443

48.7% $

2,565

45.6% $ 1,778

44.5% $

1,344

45.5% $

1,204

48.0%

1,642

2,804
423

185
8,497

28.0

19.4
1.9

2.0

100.0% $

1,781

1,083
270

346
6,045

27.5

20.9
1.7

1,152

696
61

4.3

266
100.0% $ 3,953

29.3

17.7
1.7

6.8

100.0% $

864

458
58

230
2,954

29.2

15.5
2.0

7.8

100.0% $

800

325
59

124
2,512

31.9

12.9
2.3

4.9
100.0%

Total  non  interest income  increased  by  $1.2  million  or  20.4%  in  2010  to  $7.4  million  and  increased  $0.1  million  or  1.8%  to  $6.2 
million in 2009 as compared to $6.1 million in 2008. The increase in total non interest income in 2010 compared to 2009 was due to 
an increase of $0.5 million in fees for other customer services, an increase of $0.2 million in revenues from the title insurance abstract 

Page -24-

subsidiary, Bridge Abstract, an increase of $0.8 million in net securities gains, an increase of $0.04 million in other operating income, 
partially offset by a $0.2 million decrease in service charges on deposit accounts. The increase in total non interest income in 2009 
compared to 2008 was due to $0.5 million in net securities gains partially offset by a $0.2 million decrease in revenues from the title 
insurance abstract subsidiary, Bridge Abstract, a $0.07 million decrease in service charges on deposit accounts, a decrease of $0.08 
million in fees for other customer services and a decline of $0.05 million in other operating income. Excluding net securities gains and 
losses, total non interest income increased $0.5 million or 8.6% in 2010 and decreased $0.4 million or 6.9% in 2009.

Net  securities gains  of  $1.3  million  were  recognized  in  2010  compared  to  net  securities gains  of  $0.5  million  recognized in  2009. 
There were no securities gains or losses recognized in 2008. The sales of securities were due to repositioning of the available for sale 
investment  portfolio. Bridge  Abstract,  the  Bank’s  title  insurance  abstract  subsidiary,  generated  title  fee  income  of  $1.1  million  in 
2010, $0.9 million in 2009, and $1.1 million in 2008, respectively. The increase of $0.2 million or 22.2% in 2010 compared to 2009 
and the decrease of $0.2 million or 19.4% in 2009 compared to 2008, were directly dependent on the number and average value of 
transactions processed by the subsidiary. 

Fees from other customer services increased $0.5 million or 28.9% to $2.2 million in 2010 as compared to $1.7 million in 2009. The 
increase in 2010 was due primarily to higher electronic banking and investment services income and fees for paid-off loans. Fees from 
other customer services decreased $0.08 million or 4.6% to $1.7 million in 2009 as compared to $1.8 million in 2008. The decrease 
was  due  primarily  to  lower  sales  volume  in  our  merchant  and  debit  card  cash  management  services.  Service  charges  on  deposit 
accounts for the year ended December 31, 2010 totaled $2.8 million, a decrease of $0.2 million as compared to 2009. This decrease 
predominately represents lower overdraft fees. For the year ended December 31, 2009, service charges were $3.0 million, a decrease 
$0.07 million as compared to 2008.

Other operating income for the year ended December 31, 2010 totaled $0.1 million, an increase of $0.04 million or 61.2% from $0.07 
million for  the  year  ended  December  31,  2009 and is  related  to  increased  rental  income.  Other  operating  income  decreased  $0.05 
million or 43.2% in 2009 from the prior year.

Non Interest Expense

Non  interest expenses  increased  $3.1  million  or  12.6%  in  2010  to  $27.9  million  from  $24.8  million  in  2009,  and  increased  $3.6 
million or 17.1% in 2009 from $21.2 million in 2008. The primary components of these changes were higher salaries and employee 
benefits, net occupancy expense, furniture and fixture expense, data/item processing, advertising and other operating expenses partly 
offset by lower FDIC assessments. Salaries and benefits increased $1.9 million or 13.5% in 2010 as compared to 2009 and increased 
$1.4 million or 10.8% in 2009 as compared to 2008. The increases in salary and benefits reflect filling vacant positions, hiring new
employees  to  support  the  Company’s  expanding  infrastructure  and  new  branch  offices,  and  the  related  employee  benefit  costs,
particularly related to pension expense.

Net occupancy expense increased $0.5 million or 21.4% to $2.8 million in 2010 from $2.3 million in 2009 and increased $0.4 million 
or 25.0% in 2009 from $1.9 million in 2008. Higher net occupancy expenses in 2010 and 2009 were due to increases in maintenance 
and supplies, and rent expense related to the new branch offices as well as annual rent increases in other branch locations. Furniture 
and fixture expense increased $0.1 million or 13.0% to $1.1 million in 2010 from $1.0 million in 2009 and increased $0.2 million or 
18.5%  in  2009  from  $0.9 million  in  2008.  The  increase  in  furniture  and  fixture  expense  relates  primarily  to  the  opening  of  new 
branches.  Data/item  processing  expense increased  $0.1  million  or  14.2%  to  $0.6 million  in  2010  from  $0.5 million  in  2009  and 
increased  $0.01  million  or  1.0%  in  2009  from  $0.5  million  in  2008.  The  increase  in  data/item  processing  expense  represents 
investment  in  the  network  infrastructure.  Advertising  expense increased  $0.1  million  or  19.5%  to  $0.5  million  in  2010  from  $0.4
million in 2009 and increased $0.02 million or 3.9% in 2009 from $0.4 million in 2008. The increase in advertising relates to opening 
branches in new markets and the 100th anniversary of the Bank. FDIC assessments decreased $0.3 million or 19.1% to $1.3 million in 
2010 from $1.6 million in 2009 and increased $1.3 million or 489.5% in 2009 from $0.3 million in 2008. In 2009, the increase was 
related to the growth in deposits and higher assessment rates. Additionally during 2009, the Bank incurred a special assessment fee 
from the FDIC of $0.4 million. Other operating expenses increased $0.8 million or 15.2% to $5.6 million in 2010 from $4.8 million in 
2009  and  increased  $0.3  million  or  6.2%  in  2009  from  $4.5  million  in  2008.  The  increase  during 2010 was  primarily  related  to 
infrastructure costs and  marketing expenses  for the  new branches and the 100th anniversary of the Bank. The increase during 2009 
included higher professional fees associated with legal and consulting fees. 

Income Tax Expense

Income tax expense for December 31, 2010, and 2009, respectively remained the same at $4.0 million. Income tax expense for 2008 
was $4.3 million. The decrease in 2009 was due to a decrease in income before income taxes of $0.2 million to $12.8 million from 
$13.0  million  in  2008  and  a  lower  effective  tax  rate.  The  effective  tax  rate  was  30.6%,  31.6%  and  32.9%  for  the  years  ended 
December 31, 2010, 2009, and 2008, respectively. The reduction in the effective tax rate was a result of a higher percentage of interest 
income from tax exempt securities. 

Page -25-

FINANCIAL CONDITION

The  assets  of  the  Company  totaled  $1.03  billion  at  December  31,  2010,  an  increase  of  $131.2  million  or  14.6%  from  the  previous 
year-end. This increase was primarily driven by growth in total securities of $88.0 million, net loans of $53.6 million, premises and 
equipment of $2.4 million, partly offset by a decrease in cash and cash equivalents of $11.2 million and a decrease in other assets of 
$2.0 million.

This  growth  in  assets  was  funded  principally  by  growth  in  deposits  fueled  by  increased  sales  initiatives  and  maturation  of  newer 
branches. The deposit growth occurred in all markets and included both new commercial and consumer relationships. Core retail and 
commercial deposits increased $90.2 million or 14.3% over the prior year to $722.1 million at December 31, 2010. Demand deposits 
increased $27.2 million or 12.8% to $239.3 million at December 31, 2010 compared to $212.1 million at December 31, 2009. Savings, 
NOW and money market deposits increased $104.0 million or 23.6% to $544.5 million at December 31, 2010 from $440.4 million at 
December  31,  2009.  Certificates  of  deposit  of  $100,000  or  more  increased  $4.5 million  or  5.3%  and  other  time  deposits  decreased 
$12.3 million or 22.3%.

Federal  funds  purchased  and  FHLB  overnight  borrowings  at  December  31,  2010  were  $5.0 million.  There  were  no  Federal  Funds 
In  addition,  there  were  no  Federal  Home  Loan  Bank  term 
purchased  and  FHLB  overnight  borrowings  at  December  31,  2009.
advances as of December 31, 2010 and December 31, 2009. Repurchase agreements increased $1.4 million at December 31, 2010 to 
$16.4 million compared to $15.0 million at December 31, 2009. 

Other liabilities decreased $2.4 million to $7.9 million at December 31, 2010 from $10.3 million at December 31, 2009 due primarily 
to a decrease in deferred tax  liabilities related to decreases in  unrealized gains on securities as of  December 31, 2010 compared to 
December 31, 2009.

Total stockholders’ equity  was $65.7  million at December  31, 2010, an increase of $3.9  million or 6.2% from December 31, 2009 
primarily due to net income of $9.2 million, proceeds from the issuance of shares of common stock under the Dividend Reinvestment 
Plan of $1.4 million and stock based compensation expense of $0.9 million which was partially offset by the declaration of dividends 
totaling $5.8 million and a decrease in the unrealized gains in securities of $1.7 million. In December 2010, the Company declared a 
quarterly dividend of $0.23 per share. The Company continues its long term trend of uninterrupted dividends.

Loans

During 2010, the Company continued to experience growth trends in commercial and residential real estate lending. The concentration 
of loans in our primary market areas may increase risk. Unlike larger banks that are more geographically diversified, 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 in Suffolk County which is located on eastern Long Island. The markets in which the Company operates have 
experienced substantial growth in construction and land development activity over the past several years, which has been a factor in 
overall  loan  growth.  The  local  economic  conditions  on  eastern  Long  Island  have  a  significant  impact  on  the  volume  of  loan 
originations and the quality of our loans, the ability of borrowers to repay these loans, and the value of collateral securing these loans. 
A considerable decline in the general economic conditions caused by inflation, recession, unemployment or other factors beyond the 
Company’s control would impact these local economic conditions and could negatively affect the financial results of the Company’s 
operations.  Additionally,  while  the  Company  has  a  significant  amount  of  commercial  real  estate  loans,  the  majority  of  which  are 
owner-occupied, decreases in tenant occupancy may also have a negative effect on the ability of borrowers to make timely repayments
of their loans, which would have an adverse impact on the Company’s earnings.

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 Bank targets its business lending and marketing initiatives towards promotion of loans that primarily meet the needs of small to 
medium-sized  businesses.  These  small  to  medium-sized  businesses  generally  have  fewer  financial  resources  in  terms  of  capital  or 
borrowing capacity than larger entities. If general economic conditions negatively impact these businesses, the results of operations 
and financial condition may be adversely affected.

With respect to the underwriting of loans, there are certain risks, including the risk of non-payment that is associated with each type of 
loan  that  the  Bank  markets.  Approximately  78.7%  of  the  Bank’s  loan  portfolio  at  December  31,  2010  is  secured  by  real  estate. 
Approximately 48.7% of the Bank’s loan portfolio is comprised of commercial real estate loans. Residential real estate mortgage loans 
represent  28.0%  of  the  Bank’s  loan  portfolio  and  include  home  equity  lines  of  credit  of  approximately  13.3%  of  the  Bank’s  loan 
portfolio and residential  mortgages  of  approximately  14.7%  of  the  Bank’s  loan  portfolio.  Real  estate  construction  and  land  loans 
comprise approximately 2.0% of the Bank’s loan portfolio. Risks associated with a concentration in real estate loans include potential 
losses from fluctuating values of land and improved properties. Home equity loans represent loans originated in the Bank’s geographic 

Page -26-

markets with original loan to value ratios generally of 75% or less. The Bank’s residential mortgage portfolio includes approximately 
$2.2 million in interest only mortgages. The underwriting standards for interest only mortgages are consistent with the remainder of 
the loan portfolio and do not include any features that result in negative amortization. The largest loan concentrations by industry are 
loans  granted  to  lessors  of  commercial  property  both  owner  occupied  and  nonowner  occupied.  The  Bank  uses  conservative 
underwriting criteria to better insulate itself from a downturn in real estate values and economic conditions on eastern Long Island that 
could have a significant impact on the value of collateral securing the loans as well as the ability of customers to repay loans.

The  remainder  of  the  loan  portfolio  is  comprised  of  commercial  and  consumer  loans,  which  represent  approximately  21.3%  of  the
Bank’s  loan  portfolio.  The  primary risks  associated  with  commercial  loans  are  the  cash  flow  of  the  business,  the  experience  and 
quality of the borrowers’ management, the business climate, and the impact of economic factors. The primary risks associated  with 
consumer loans relate to the borrower, such as the risk of a borrower’s unemployment as a result of deteriorating economic conditions 
or the amount and nature of a borrower’s other existing indebtedness, and the value of the collateral securing the loan if the Bank must 
take possession of the collateral. Consumer loans also have risks associated with concentrations of loans in a single type of loan.

The Bank’s policy for charging off loans is a multi-step process. A loan is considered a potential charge-off when it is in default of 
either principal or interest  for a period of 90, 120 or 180 days, depending  upon the loan type, as of the end of the prior  month. In 
addition to date criteria, other triggering events may include, but are not limited to, notice of bankruptcy by the borrower or guarantor, 
death of  the borrower, and deficiency balance  from the sale of collateral. These loans  identified are presented  for evaluation at the 
regular meeting of the Credit Risk Committee. A loan is charged off when a loss is reasonably assured. The recovery of charged-off 
balances is actively pursued until the potential for recovery has been exhausted, or until the expense of collection does not justify the 
recovery efforts.

Total loans grew $55.9 million or 12.5%, during 2010 and $18.4 million or 4.3% during 2009. Average net loans grew $25.6 million 
or 5.9% during 2010 over 2009 and $38.1 million or 9.6% during 2009 when compared to 2008. Real estate mortgage loans were the 
largest  contributor  of  the  growth  for  both  2010  and  2009 and  increased $59.1  million  or  18.1%  and  $10.3  million  or  3.3%, 
respectively. Commercial real estate  mortgage loans grew  $41.1 million or 20.1% during 2010 and residential real estate  mortgage 
loans grew $18.0 million or 14.6% during 2010. Commercial, financial and agricultural loans increased $4.0 million or 4.2% in 2010 
from 2009 and increased $17.8 million or 23.4% in 2009 from 2008. Real estate construction loans decreased $9.4 million or 48.7% in 
2010 and decreased $9.7 million or 33.5% in 2009. Installment/consumer loans increased $2.3 million or 31.4% in 2010 and decreased 
$0.2 million or 2.6% during 2009. Fixed rate loans represented 27.7%, 25.2% and 23.3% of total loans at December 31, 2010, 2009, 
and 2008, respectively.

The following table sets forth the major classifications of loans:

December 31,
(In thousands)
Commercial real estate mortgage loans
Residential real estate mortgage loans
Commercial, financial and agricultural loans
Installment/consumer loans
Real estate construction and land loans
Total loans
Net deferred loan costs and fees

Allowance for loan losses
Net loans

2010

2009

2008

2007

2006

$ 245,265
140,986
97,663
9,659
9,928
503,501
559
504,060
(8,497)
$ 495,563

$ 204,159
123,013
93,682
7,352
19,347
447,553
485
448,038
(6,045)
$ 441,993

$ 191,046
125,813
75,919
7,545
29,094
429,417
266
429,683
(3,953)
$ 425,730

$ 170,709
109,697
58,184
7,382
29,172
375,144
92
375,236
(2,954)
$ 372,282

$ 156,288
103,822
42,166
7,593
16,068
325,937
60
325,997
(2,512)
$ 323,485

Page -27-

Selected Loan Maturity Information 

The following table sets forth the approximate maturities and sensitivity to changes in interest rates of certain loans, exclusive of real 
estate mortgage loans and installment/consumer loans to individuals as of December 31, 2010:

(In thousands)
Commercial loans
Construction and land loans (1)

Total

Rate provisions:

Amounts with fixed interest rates
Amounts with variable interest rates

Total

(1)

Within One
Year

After One
But Within
Five Years

After
Five Years

Total

$

$

$

$

22,590
5,876
28,466

13,029
15,437
28,466

$

$

$

$

29,011
—
29,011

21,168
7,843
29,011

$

$

$

$

46,062
4,052
50,114

$

97,663
9,928
$ 107,591

21,795
28,319
50,114

$

55,992
51,599
$ 107,591

Included in the “After Five Years” column, are one-step construction loans that contain a preliminary construction 
period (interest only) that automatically converts to amortization at the end of the construction phase.

Past Due, Nonaccrual and Restructured Loans 

The following table sets forth selected information about past due, nonaccrual and restructured loans:

December 31,
(In thousands)
Loans 90 days or more past due and still accruing
Nonaccrual loans
Restructured loans  - Nonaccrual
Restructured loans  - Performing
Other real estate owned, net
Total

Years Ended December 31,
(In thousands)
Gross interest income that has not been paid or recorded 
during the year under original terms:
Nonaccrual loans
Restructured loans

Gross interest income recorded during the year:
Nonaccrual loans
Restructured loans

Commitments for additional funds

$

$

$

$

2010

2009

2008

2007

2006

— $

1,997
4,728
3,219
—
9,944 $

— $

1,001
4,890
3,229
—
9,120 $

— $

3,068
—
3,229
—
6,297 $

— $
229
—
—
—
229 $

—
305
118
—
—
423

2010

2009

2008

2007

2006

123 $
255

52 $
189

127 $
12

17 $
105

—

37 $
288

—

189 $
238

—

12 $
—

5 $
—

—

9
1

12
9

—

Page -28-

The following table sets forth impaired loans by loan type:

December 31,
(In thousands)
Nonaccrual Loans:
Commercial real estate mortgage loans
Residential real estate mortgage loans
Commercial, financial and agricultural loans
Installment/consumer loans
Real estate construction and land loans

Total

Restructured Loans:
Commercial real estate mortgage loans
Residential real estate mortgage loans
Commercial, financial and agricultural loans
Installment/consumer loans
Real estate construction and land loans

Total

Total Impaired Loans

2010

2009

2008

2007

2006

$

478 $

1,401
32
86
—
1,997

3,219
2,042
—
—
2,686
7,947

324 $
511
61
105
—
1,001

— $
426
96
6
2,540
3,068

— $
223
6
—
—
229

3,229
2,120
—
—
2,770
8,119

3,229
—
—
—
—
3,229

—
—
—
—
—
—

$

9,944 $

9,120 $

6,297 $

229 $

—
182
108
15
—
305

—
—
118
—
—
118

423

Restructured loans totaled $7.9 million at December 31, 2010, of which $4.7 million of the restructured loans were nonaccrual as of 
December 31, 2010.

Securities

Total securities increased to $471.5 million at December 31, 2010 from $383.5 million at December 31, 2009. The available for sale 
portfolio increased 5.7% to $323.5 million from $306.1 million at December 31, 2009. Securities held as available for sale may be 
sold in response to, or in anticipation of, changes in interest rates and resulting prepayment risk, or other factors. U.S. government 
sponsored entity (“U.S. GSE”) securities decreased to $41.3 million at December 31, 2010 from $45.9 million at December 31, 2009, 
while  state  and  municipal  obligations  increased  by  $6.3  million,  residential  mortgage-backed  securities  decreased  by  $26.2  million 
and residential collateralized mortgage obligations increased by $41.9 million. Securities held to maturity increased 91.1% to $148.0 
million at December 31, 2010 compared to $77.4 million at December 31, 2009. Residential collateralized mortgage obligations held 
to maturity increased to $40.3 million at December 31, 2010 from $18.3 at December 31, 2009, while U.S. GSE securities increased 
by  $20.0  million  and  state  and  municipal  obligations  increased  by  $10.6  million.  Fixed  rate  securities  represented  87.9%  of  total 
securities  at  December  31,  2010  compared  to  87.4%  at  December  31,  2009.  Residential  collateralized  mortgage  obligations 
represented approximately 47.6% of the available for sale balance at December 31, 2010 as compared to 36.6% at the prior year-end. 
A  change  in  market  rates  was  the  primary  reason  for  the  net  decrease  in  unrealized  gains  in  securities  available  for  sale,  which 
decreased other comprehensive income.

Page -29-

The  following  table  sets  forth  the  fair  value,  amortized  cost,  maturities  and  approximated  weighted  average  yield  at  December 31, 
2010. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations 
with or without call or prepayment penalties. Yields on tax-exempt obligations have been computed on a tax-equivalent basis.

December 31, 2010
(Dollars in 
thousands)

Within
One Year
Amortized
Cost

Amount Yield

Fair 
Value
Amount

After One But
Within Five Years

After Five But
Within Ten Years

Fair 
Value
Amount

Amortized
Cost

Amount Yield

Fair 
Value
Amount

Amortized
Cost

Amount Yield

Fair 
Value
Amount

After
Ten Years

Amortized
Cost

Amount Yield

Total

Fair 
Value
Amount

Amortized
Cost
Amount

Available for sale:

U.S. GSE securities $
State and municipal 

obligations

Residential 

mortgage-backed 
securities
Residential 

collateralized 
mortgage 
obligations

Total available for 

805 $

800 1.04% $ 10,871 $

10,674 3.10% $ 29,657 $

29,989 2.03% $

— $

— —% $ 41,333 $

41,463

10,094

9,992 2.74

26,829

26,385 2.83

11,142

10,798 3.63

—

— —

48,065

47,175

651

634 5.39

1,698

1,640 4.30

22,739

21,868 3.83

55,083

52,672

4.16

80,171

76,814

—

— —

—

— —

9,293

9,136 2.50

144,677

143,066

3.06

153,970

152,202

sale

11,550

11,426 2.77

39,398

38,699 2.97

72,831

71,791 2.94

199,760

195,738

3.32

323,539

317,654

Held to maturity:

U.S. GSE securities
State and municipal 

obligations

Residential 

collateralized 
mortgage 
obligations
Corporate Bonds
Total held to 
maturity
Total securities

—

— —

14,972

14,988 2.44

9,920

9,985 2.86

—

— —

24,892

24,973

18,250

18,218 1.14

22,918

22,531 2.26

2,813

2,887 1.60

20,264

21,092

3.54

64,245

64,728

—
—

— —
— —

—
6,953

— —
7,000 3.06

—
10,889

— —
11,000 4.84

41,165
—

40,264

3.24
— —

41,165
17,842

40,264
18,000

18,250
$ 29,800 $

18,218 1.14
29,644 1.77% $ 84,241 $

44,843

44,519 2.45
83,218 2.69% $ 96,453 $

23,622

23,872 3.62
61,356
95,663 3.12% $ 261,189 $ 257,094

61,429

3.35
3.33% $ 471,683 $

148,144

147,965
465,619

Deposits and Borrowings

Borrowings  including  Fed  funds  purchased,  repurchase  agreements  and  junior  subordinated  debentures,  increased  $6.4  million  to
$37.4 million at December 31, 2010 from the prior year-end. Total deposits increased $123.5 million or 15.6% in 2010 as compared to 
2009.  The  growth  in  deposits  is  attributable  to  an  increase  in  core  deposits  of  $90.2  million,  driven  by  the  opening  of  two  new 
branches in 2009, three new  branches opening during 2010, and the building of new relationships in current markets, as well as an 
increase of $33.3 million in public funds deposits. Demand deposits increased $27.2 million or 12.8% and Savings, NOW and money 
market deposits increased $104.0 million or 23.6% primarily related to core deposits growth. Certificates of deposit of $100,000 or 
more increased $4.5 million or 5.3% from December 31, 2009 and other time deposits decreased $12.3 million or 22.3% as compared 
to the prior year.

The following table sets forth the remaining maturities of the Bank’s time deposits at December 31, 2010:

(In thousands)
3 Months or less
Over 3 through 6 months
Over 6 through 12 months
Over 12 months through 24 months
Over 24 months through 36 months
Over 36 months through 48 months
Over 48 months through 60 months
Over 60 months
Total

Less than
$100,000

$100,000 or
Greater

Total

$

$

12,761
7,060
11,759
9,001
1,060
190
804
—
42,635

$

$

37,452
16,800
18,550
13,418
1,127
838
2,389
—
90,574

$

$

50,213
23,860
30,309
22,419
2,187
1,028
3,193
—
133,209

Page -30-

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.
The  Company’s  principal  sources  of  liquidity  included  cash  and  cash  equivalents  of  $3.4  million  as  of  December  31,  2010,  and 
dividends  from  the  Bank.  Cash  available  for  distribution  of  dividends  to  shareholders  of  the  Company  is  primarily  derived  from
dividends paid by the Bank to the Company. During 2010, the Bank declared and paid $1.7 million in cash dividends to the Company. 
Prior regulatory approval is required if the total of all dividends declared by the Bank in any calendar year exceeds the total of the 
Bank’s net income of that year combined with its retained net income of the preceding two years. At December 31, 2010, the Bank 
had $18.7 million of retained net income available for dividends to the Company. 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  deposit.  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.

During 2010, 2009 and 2008, the Bank grew its individual, partnership and corporate account balances (“core deposits”) as well as its 
level of public  funds. The Bank’s  Asset/Liability and Funds Management Policy allows  for  wholesale borrowings of  up to 25% of 
total assets. At December 31, 2010, the Bank had aggregate lines of credit of $222.5 million with unaffiliated correspondent banks to 
provide short-term credit  for  liquidity requirements. Of these aggregate lines of credit, $202.5 million 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 and commercial mortgages owned by the Bank. The Bank also has a master repurchase agreement with the FHLB, which 
increases its borrowing capacity. As of December 31, 2010, the amount of overnight borrowings under these lines was $5.0 million.
The Bank had $15.0 million of securities sold under agreements to repurchase outstanding as of December 31, 2010 with brokers and 
$1.4  million  outstanding  with  customers.    In  addition,  the  Bank  has  an  approved  broker  relationship  for  the  purpose  of  issuing
brokered certificates of deposit. As of December 31, 2010 and 2009 the Bank had no brokered certificates of deposits.  

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 or in an interest earning account at the Federal Reserve

CONTRACTUAL OBLIGATIONS

In the ordinary course of operations, the Company enters into certain contractual obligations.

The following represents contractual obligations outstanding at December 31, 2010:

(In thousands)
Operating leases
Purchase obligation
FHLB term advances and repurchase agreements
Junior subordinated debentures
Time deposits
Total contractual obligations outstanding

Total
Amounts
Committed

Less than
One Year

One to
Three Years

Four to
Five Years

Over Five
Years

$

$

6,464 $
250
16,370
16,002
133,209
172,295 $

948 $
250
1,370
—
104,382
106,950 $

1,732 $
—
5,000
—
24,606
31,338 $

1,360 $
—
10,000
—
4,221
15,581 $

2,424
—
—
16,002
—
18,426

Page -31-

COMMITMENTS, CONTINGENT LIABILITIES, AND OFF-BALANCE SHEET ARRANGEMENTS

Some  financial  instruments,  such  as  loan  commitments,  credit  lines,  letters  of  credit,  and  overdraft  protection,  are  issued  to  meet 
customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in 
the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk to credit 
loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to 
make such commitments as are used for loans, often including obtaining collateral at exercise of the commitment. At December 31, 
2010, the Company had $46.5 million in outstanding loan commitments and $112.8 million in outstanding commitments for various 
lines of credit including unused overdraft lines. The Company also has $1.7 million of standby letters of credit as of December 31, 
2010. See Note 11 of the Notes to the Consolidated Financial Statements for additional information on loan commitments and standby 
letters of credit.

CAPITAL RESOURCES

Stockholders’  equity  increased  to  $65.7  million  at  December  31,  2010  from  $61.9  million  at December  31,  2009  as  a  result  of 
undistributed  net  income;  plus  the  issuance  of  shares  of  common  stock  under  the  Dividend  Reinvestment  Plan  and  stock  based 
compensation expense; less the declaration of dividends; the change in net unrealized appreciation in securities available for sale, net 
of  deferred  taxes;  and  the  change  in  pension  liability  under  FASB  ASC  715-30,  net  of  deferred  taxes.  The  ratio  of  average 
stockholders’ equity to average total assets decreased to 6.18% at year end 2010 from 6.80% at year end 2009.

The  Company’s  capital  strength  is  paralleled  by  the  solid  capital  position  of  the  Bank,  as  reflected  in  the  excess  of  its  regulatory 
capital ratios over the risk-based capital adequacy ratio levels required for classification as a “well capitalized” institution by the FDIC 
(see Note 14 to the Consolidated Financial Statements). In April 2009, the Company announced that its Board of Directors approved 
and adopted a Dividend Reinvestment Plan (“DRP Plan”) and filed a registration statement on Form S-3 to register 600,000 shares of 
common  stock  with  the  Securities  and  Exchange  Commission  (“SEC”)  pursuant  to  the  DRP  Plan.  In  April  2010,  the  Company 
increased  the  discount  from  3%  to  5%,  and  raised  the  quarterly  optional  cash  purchase  amount  to  $50,000  under  the  DRP  Plan. 
Proceeds  from  the  issuance  of  common  stock  related  to  the  DRP  Plan  for  the  twelve  months  ended  December  31,  2010,  was  $1.4 
million. Since the inception of the  DRP Plan in  April 2009 through December 31, 2010, the Company has issued 70,436 shares of 
common  stock  and  raised  $1.7  million  in  capital.  In  June  2009,  the  Company  filed  a  shelf  registration  statement  on  Form  S-3  to 
register  up  to  $50  million  of  securities  with  the  SEC.  To  date,  no  shares  have  been  sold related  to  this  filing. During 2009,  the 
Company  completed  the  private  placement  of  $16.0  million  in  aggregate  liquidation  amount  of  8.50%  cumulative  convertible  trust
preferred  securities  (the  "TPS”),  through  its  subsidiary,  Bridge  Statutory  Capital  Trust  II.  The  TPS  have  a  liquidation  amount  of 
$1,000 per security and the TPS shares are convertible into our common stock, at an effective conversion price of $31 per share.  The 
TPS mature in 30 years but are callable by the Company at par any time after September 30, 2014. The Company issued $16.0 million 
of Junior Subordinated Debentures (the “Debentures”) to the trust in exchange for ownership of all of the common security of the trust 
and  the  proceeds  of  the  preferred  securities  sold  by  the  trust.  In  accordance  with  current  accounting  guidance,  the  trust  is  not 
consolidated in the Company’s financial statements, but rather the Debentures are shown as a liability. The Debentures bear interest at 
a fixed rate equal to 8.50% and mature on December 31, 2039. Consistent with regulatory requirements, the interest payments may be 
deferred for up to 5 years, and are cumulative. The Debentures have the same prepayment provisions as the TPS. The Debentures may 
be included in Tier I capital (with certain limitations applicable) under current regulatory guidelines and interpretations. Management 
believes  that  the  current  capital  levels  along  with  future  retained  earnings  will  allow  the  Bank  to  maintain  a  position  exceeding 
required  capital  levels  and  which  is  sufficient  to  support  Company  growth.  Additionally,  the  Company  has  the  ability  to  issue 
additional common stock and/or preferred stock should the need arise. 

The  Company  had  returns  on  average  equity  of  15.29%,  15.58%,  and 16.29%  and  returns  on  average  assets  of  0.95%,  1.06%, and 
1.24%,  for  the  years  ended  December  31,  2010,  2009,  and  2008,  respectively.  The  Company  utilizes  cash  dividends  and  stock 
repurchases to manage capital levels. Cash dividends totaled $5.8 million in 2010 and $5.7 million in 2009. The dividend payout ratios 
for 2010 and 2009 were 63.42% and 65.43%, respectively. The Company continues its trend of uninterrupted dividends. On March 27, 
2006, the Company approved its stock repurchase plan allowing the repurchase of  up to 5% of its then current outstanding  shares, 
309,000 shares. There is no expiration date for the share repurchase plan. The Company considers opportunities for stock repurchases 
carefully. The Company did not repurchase any shares in 2010, 2009 or 2008. 

Page -32-

IMPACT OF INFLATION AND CHANGING PRICES

The  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 adversely 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.

IMPACT OF PROSPECTIVE ACCOUNTING STANDARDS

For discussion regarding the impact of new accounting standards, refer to Note 1 r) of the notes to Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

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 December 31, 2010, $414.6 million or 87.9% 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.  Increases  in  interest  rates  could  result  in  decreases  in  the market  value  of  interest  earning 
assets,  which could adversely affect the  Company’s stockholders’ equity and its results  of operations if  sold. The Company is also 
subject to reinvestment risk associated with changes in interest rates. Changes 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.

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 seasonality of the Company’s deposit flows and 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 consolidated balance 
sheet.    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 a 100 and 200 basis point upward shift in interest rates and a 100 basis point 
downward shift in interest rates.  A parallel and pro-rata shift in rates over a twelve-month period is assumed.  

Page -33-

The following reflects the Company’s net interest income sensitivity analysis at December 31, 2010:

Change in Interest
Rates in Basis Points
(Dollars in thousands)
200
100
Static
(100)

2010
Potential Change
in Net
Interest Income

$ Change

% Change

$
$

$

(2,022)
(872)
—
183

(5.13)%
(2.21)%
—
0.46%

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.

Page -34-

Item 8. Financial Statements and Supplementary Data
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts) 

ASSETS
Cash and due from banks
Interest earning deposits with banks

Total cash and cash equivalents

Securities available for sale, at fair value
Securities held to maturity (fair value of $148,144 and $78,330, respectively)

Total securities

Securities, restricted

Loans

Allowance for loan losses

Loans, net

Premises and equipment, net
Accrued interest receivable
Other assets
Total Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand deposits
Savings, NOW and money market deposits
Certificates of deposit of $100,000 or more
Other time deposits
Total deposits

Federal funds purchased and Federal Home Loan Bank overnight borrowings
Repurchase agreements
Junior subordinated debentures
Accrued interest payable
Other liabilities and accrued expenses
Total Liabilities

Commitments and Contingencies

Stockholders’ equity:

Preferred stock, par value $.01 per share (2,000,000 shares authorized; none issued)
Common stock, par value $.01 per share:

Authorized: 20,000,000 shares; 6,456,742 and 6,397,088 shares issued, respectively; 

6,364,656 and 6,261,216 shares outstanding, respectively

Surplus
Retained earnings
Less: Treasury Stock at cost, 92,086 and 135,872 shares, respectively

Accumulated other comprehensive income (loss):

Net unrealized gain on securities, net of deferred income taxes of ($2,336) and ($3,457), 

respectively

Pension liability, net of deferred income taxes of $1,202 and $1,166, respectively

Total Stockholders’ Equity
Total Liabilities and Stockholders’ Equity

See accompanying notes to Consolidated Financial Statements.

Page -35-

December 31,
2010

December 31,
2009

$

$

$

$

21,598
1,320
22,918

$

$

323,539
147,965
471,504

1,284

504,060
(8,497)
495,563

23,683
4,153
9,351
1,028,456

239,314
544,470
90,574
42,635
916,993

5,000
16,370
16,002
433
7,938
962,736

—

—

64
20,946
46,463
(3,520)
63,953

27,108
7,039
34,147

306,112
77,424
383,536

1,205

448,038
(6,045)
441,993

21,306
3,679
11,391
897,257

212,137
440,447
86,054
54,900
793,538

—
15,000
16,002
531
10,331
835,402

—

—

64
19,950
43,110
(4,791)
58,333

3,549
(1,782)
65,720
1,028,456

$

$

5,249
(1,727)
61,855
897,257

2010

2009

2008

$

$
$
$
$

30,223
9,585
2,704
2,097
231
5
54
44,899

3,594
1,489
762
530
—
1,365
7,740

37,159
3,500
33,659

2,756
2,163
1,103
1,303
108
7,433

15,978
2,837
1,138
555
546
1,274
5,551
27,879

13,213
4,047
9,166
1.45
1.45
7,411

$

$
$
$
$

29,167
11,074
2,201
880
—
33
13
43,368

3,698
2,154
1,371
401
1
190
7,815

35,553
4,150
31,403

2,997
1,678
903
529
67
6,174

14,084
2,337
1,007
486
457
1,574
4,820
24,765

12,812
4,049
8,763
1.41
1.41
10,434

$

$
$
$
$

28,040
8,404
1,907
1,081
—
183
5
39,620

5,681
2,125
1,148
478
57
—
9,489

30,131
2,000
28,131

3,067
1,759
1,120
—
118
6,064

12,710
1,870
850
481
440
267
4,539
21,157

13,038
4,288
8,750
1.42
1.42
10,369

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts) 

Years Ended December 31,
Interest income:

Loans (including fee income)
Mortgage-backed securities and collateralized mortgage obligations
State and municipal obligations
U.S. GSE securities
Corporate bonds
Federal funds sold
Deposits with banks

Total interest income

Interest expense:

Savings, NOW and money market deposits
Certificates of deposit of $100,000 or more
Other time deposits
Federal funds purchased and repurchase agreements
Federal Home Loan Bank Advances
Junior subordinated debentures

Total interest expense

Net interest income
Provision for loan losses
Net interest income after provision for loan losses

Non interest income:

Service charges on deposit accounts
Fees for other customer services
Title fee income
Net securities gains 
Other operating income

Total non interest income

Non interest expense:

Salaries and employee benefits
Net occupancy expense
Furniture and fixture expense
Data/Item processing
Advertising
FDIC assessments
Other operating expenses

Total non interest expense

Income before income taxes
Income tax expense
Net income
Basic earnings per share
Diluted earnings per share
Comprehensive Income

See accompanying notes to Consolidated Financial Statements.

Page -36-

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except per share amounts) 

Balance at January 1, 2008
Net income 
Stock awards granted
Stock awards forfeited
Vesting of stock awards
Exercise of stock options, including tax benefit
Shared based compensation expense
Cash dividend declared, $0.92 per share
Other comprehensive income, net of deferred 

taxes:

Change in unrealized net gains in securities 

available for sale, net of reclassification and 
deferred tax effects

Adjustment to pension liability, net of deferred 

taxes

Comprehensive Income 
Balance at December 31, 2008

Net income 
Proceeds from issuance of common stock, net 

of offering costs
Stock awards granted 
Vesting of stock awards
Exercise of stock options, including tax benefit 
Shared based compensation expense
Cash dividend declared, $0.92 per share
Other comprehensive income, net of deferred 

taxes:

Change in unrealized net gains in securities 

available for sale, net of reclassification and 
deferred tax effects

Adjustment to pension liability, net of deferred 

taxes

Comprehensive Income
Balance at December 31, 2009

Net income 
Proceeds from issuance of common stock, net 

of offering costs
Stock awards granted 
Vesting of stock awards
Exercise of stock options, including tax benefit 
Shared based compensation expense
Cash dividend declared, $0.92 per share
Other comprehensive income, net of deferred 

taxes:

Change in unrealized net gains in securities 

available for sale, net of reclassification and 
deferred tax effects

Adjustment to pension liability, net of deferred 

taxes

Comprehensive Income
Balance at December 31, 2010

Common 
Stock

Surplus

$

64

$

21,671

Comprehensive
Income

$

8,750

Retained
Earnings
37,031
$
8,750

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

$

(7,889)

$

232

(1,848)
91
(34)
140
432

1,848
(91)
(40)
(137)

(5,665)

Total
$ 51,109
8,750
—
—
(74)
3
432
(5,665)

3,204

(1,585)
10,369

(35)

(1,585)

$

40,081

$

(6,309)

$

1,851

3,204

3,204

$

64

$

20,452

252
(1,664)
(1)
161
750

$

64

$

19,950

1,389
(1,274)
5
(5)
881

$

$

$

$

$

8,763

8,763

3
1,664
(52)
(97)

(5,734)

1,832

(161)
10,434

$

43,110

$

(4,791)

$

9,166

9,166

6
1,274
(37)
28

(5,813)

(1,700)

(55)
7,411

(1,620)
—
$ 56,139

8,763

255
—
(53)
64
750
(5,734)

1,832

1,832

(161)

3,522

(161)
—
$ 61,855

9,166

1,395
—
(32)
23
881
(5,813)

(1,700)

(1,700)

(55)

(55)
—
$ 65,720

$

64

$

20,946

$

46,463

$

(3,520)

$

1,767

See accompanying notes to Consolidated Financial Statements.

Page -37-

CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands)

Years Ended December 31,
Cash flows from operating activities:

2010

2009

2008

Net Income 
Adjustments to reconcile net income to net cash provided by operating activities:

$

9,166

$

8,763

$

8,750

Provision for loan losses
Depreciation and amortization
Amortization and (accretion), net 
Share based compensation expense
Tax (benefit) expense from the vesting of restricted stock awards
Tax benefit from exercise of stock options
SERP expense
Net securities gains
Increase in accrued interest receivable
Deferred income tax expense (benefit) 
Decrease (increase) in other assets 
(Decrease) increase in accrued expenses and other liabilities

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of securities available for sale
Purchases of securities, restricted
Purchases of securities held to maturity
Proceeds from sales of securities available for sale
Redemption of securities, restricted
Maturities and calls of securities available for sale 
Maturities and calls of securities held to maturity
Principal payments on securities
Net increase in loans
Purchases of premises and equipment

Net cash used in investing activities

Cash flows from financing activities:

Net increase in deposits 
Net increase (decrease) in federal funds purchased and FHLB overnight borrowings 
Net (decrease) increase in FHLB term advances
Net increase (decrease) in repurchase agreements 
Proceeds from issuance of junior subordinated debentures
Net proceeds from exercise of stock options 
Net proceeds from issuance of common stock
Repurchase of surrendered stock from exercise of stock options and vesting of 

restricted stock awards

Cash dividends paid

Net cash provided by financing activities 

Net (decrease) increase in cash and cash equivalents 
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period 

Supplemental Information-Cash Flows:

Cash paid for:
Interest 
Income tax

Noncash investing and financing activities:

Dividends declared and unpaid at end of period

See accompanying notes to Consolidated Financial Statements.

Page -38-

3,500
1,612
1,454
881
(5)
(6)
205
(1,303)
(474)
177
1,869
(1,653)
15,423

(226,213)
(2,055)
(137,240)
31,446
1,976
100,185
54,685
86,199
(57,070)
(3,989)
(152,076)

123,455
5,000
—
1,370
—
23
1,395

(32)
(5,787)
125,424

(11,229)
34,147
22,918

7,838
5,922

1,467

$

$
$

$

4,150
1,453
305
750
1
(13)
281
(529)
(53)
(948)
(5,928)
1,261
9,493

(113,975)
(19,514)
(65,838)
13,087
22,109
46,150
25,713
68,727
(20,413)
(4,382)
(48,336)

134,453
(70,900)
(30,000)
—
16,002
47
255

(36)
(5,716)
44,105

5,262
28,885
34,147

7,956
3,264

$

$
$

2,000
1,214
(55)
432
34
(19)
166
—
(919)
441
(863)
(1,468)
9,713

(213,851)
(65,496)
(46,571)
—
64,083
69,496
7,945
27,431
(55,448)
(1,122)
(213,533)

150,176
63,900
20,000
(10,000)
—
—
—

(71)
(5,648)
218,357

14,537
14,348
28,885

9,457
4,419

1,441

$

1,423

$

$
$

$

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
December 31, 2010, 2009 and 2008

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

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
financial title insurance subsidiary, Bridge Abstract LLC (“Bridge Abstract”). 

In  addition  to  the  Bank,  the  Company  has  another  subsidiary,  Bridge  Statutory  Capital  Trust  II  which  was  formed  in  2009.  In 
accordance  with current accounting guidance, the trust is not consolidated in the Company’s financial statements.  See Note 7 for a 
further discussion of Bridge Statutory Capital Trust II. 

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and general 
practices  within  the  financial  institution  industry.  The  following  is  a  description  of  the  significant  accounting  policies  that  the 
Company follows in preparing its Consolidated Financial Statements. 

a) Subsequent Events

As  defined  in  Financial  Accounting  Standards  Board  (“FASB”)  Accounting  Standards  Codification (“ASC”) 855-10,  “Subsequent 
Events”, subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued 
or  available  to  be  issued.    Financial  statements  are  considered  issued  when  they  are  widely  distributed  to  shareholders  and  other 
financial statement users for general use and reliance in a form and format that complies with GAAP. Based on the evaluation, the 
Company  did  not  identify  any  subsequent  events  that  would  have required  an  adjustment  to  the  financial  statements. However,  the 
Company did announce on February 8, 2011, a definitive merger agreement under which the Bank will acquire Hamptons State Bank. 
Refer to Note 17 for details on the agreement.

b) Basis of Financial Statement Presentation 

The accompanying Consolidated Financial Statements are prepared on the accrual basis of accounting and include the accounts of the 
Company and its wholly-owned subsidiary, the Bank. All material intercompany transactions and balances have been eliminated.

The  preparation  of  financial  statements,  in  conformity  with  U.S. generally  accepted  accounting  principles,  requires  management  to 
make  estimates  and  assumptions  that  affect  the  reported  amounts  of  assets  and  liabilities  and  disclosure  of  contingent  assets and 
liabilities as of the date of each consolidated balance sheet and the related consolidated statement of income for the years then ended. 
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  allowance  for  loan  losses,  fair  values  of 
financial  instruments,  deferred  taxes,  prepayment  speeds  on  mortgage-backed  securities,  and  pension  assumptions  are  particularly 
subject to change. 

c) Cash and Cash Equivalents 

For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold, 
which  mature  overnight.  Cash  flows  are  reported  net  for  customer  loan  and  deposit  transactions, overnight  borrowings and  federal 
funds purchased, Federal Home Loan Bank advances, and repurchase agreements.

d) Securities 

Debt and equity securities are classified in one of the following categories: (i) “held to maturity” (management has a positive intent 
and ability to hold to maturity),  which are reported at amortized cost, (ii) “available for sale” (all other debt and marketable equity 
securities), which are reported at fair value, with unrealized gains and losses reported net of tax, as accumulated other comprehensive 
income, a separate component of stockholders’ equity, and (iii) “restricted” which represents FHLB, FRB and bankers’ banks stock 
which are reported at cost.

Premiums  and  discounts  on  securities  are  amortized  to  expense  and  accreted  to  income  over  the estimated  life  of  the  respective 
securities using the interest method. Gains and losses on the sales of securities are recognized upon realization based on the specific 
identification method. Declines in the fair value of securities below their cost that are other than temporary are reflected as realized 
losses.  In  estimating  other-than-temporary  impairment  (“OTTI”),  management  considers many  factors  including:  (1)  the  length  of 
time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) whether the 
market decline was affected by macroeconomic conditions, and (4) the whether the Company has the intent to sell the security or more 
than  likely  than  not  will  be  required  to  sell  the  security  before  its  anticipated  recovery. If  either  of  the  criteria  regarding  intent  or 

Page -39-

requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. 
For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: (1) 
OTTI  related  to  credit  loss,  which  must  be  recognized  in  the  income  statement  and  (2)  OTTI  related  to  other  factors,  which  is
recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows 
expected to be collected and the amortized cost basis. The assessment of whether any other than temporary decline exists may involve 
a high degree of subjectivity and judgment and is based on the information available to management at a point in time. 

e) Loans and Loan Interest Income Recognition 

Loans are stated at the principal amount outstanding, net deferred origination costs and fees. Loan origination and commitment fees 
and certain direct and indirect costs incurred in connection with loan originations are deferred and amortized to income over the life of 
the related loans as an adjustment to yield. When a loan prepays, the remaining unamortized net deferred origination fees or costs are 
recognized in the current year. Interest on loans is credited to income based on the principal outstanding during the period. Loans that 
are 90 days past due are automatically placed on nonaccrual and previously accrued interest is reversed and charged against interest 
income.  However,  if  the  loan  is  in  the  process  of  collection  and  the  Bank  has  reasonable  assurance  that  the  loan  will  be  fully 
collectible  based  upon  individual  loan  evaluation  assessing  such  factors  as  collateral  and  collectibility,  accrued  interest  will  be 
recognized as earned. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought 
current and future payments are reasonably assured. 

A loan is considered impaired when, based on current information and events, it is probable that the Bank will be unable to collect the 
scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by 
management  in  determining  impairment  include  payment  status  and  the  probability  of  collecting  scheduled  principal  and  interest
payments  when  due.  Loans  for  which  the  terms  have  been  modified  due  to  the  borrower  experiencing  financial  difficulties  are 
considered troubled debt restructurings and are classified as impaired. The impairment of a loan is measured at the value of expected 
future cash flows using the loan’s effective interest rate, or at the loan’s observable market price or the fair value of the collateral less 
costs to sell if the loan is collateral dependent. Generally, the Bank measures impairment of such loans by reference to the fair value of 
the  collateral  less  costs  to  sell.  Loans  that  experience  minor  payment  delays  and  payment  shortfall  generally  are  not  classified  as 
impaired. 

f) Allowance for Loan Losses 

The Bank monitors its entire loan portfolio on a regular basis, with consideration given to loan growth, 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 Credit Risk Committee, the overall level of allowance is 
periodically adjusted to account for the inherent and specific risks within the entire portfolio. Based on the Credit Risk Committee’s 
review  of  the  classified  loans  and  the  overall  allowance  levels  as  they  relate  to  the  entire  loan  portfolio  at  December  31,  2010,
management believes the allowance for loan losses is adequate. 

A  loan  is  considered  a  potential  charge-off  when  it  is  in  default  of  either  principal  or  interest  for  a  period  of  90,  120  or  180  days, 
depending  upon  the  loan  type,  as  of  the  end  of  the  prior  month.  In  addition  to  delinquency  criteria,  other  triggering  events  may 
include, but are not limited to, notice of bankruptcy by the borrower or guarantor, death of the borrower, and deficiency balance from 
the sale of collateral. 

While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based 
on changes in conditions. In addition, various regulatory agencies, as an integral part of the examination process, periodically review 
the  Bank’s  allowance  for  loan  losses.  Such  agencies  may  require  the  Bank  to  recognize  additions  to,  or  charge-offs  against,  the 
allowance based on their judgment about information available to them at the time of their examination. Refer to Note 3 for further 
details.

g) Premises and Equipment 

Buildings, furniture and fixtures and equipment are stated at cost less accumulated depreciation. Buildings and related components are 
depreciated using the straight-line method using a useful life of fifty years for buildings and a range of two to ten years for equipment, 
computer hardware and software, and furniture and fixtures. Leasehold improvements are amortized over the lives of the respective 
leases or the service lives of the improvements, whichever is shorter. Land is recorded at cost. 

Improvements and major repairs are capitalized, while the cost of ordinary maintenance, repairs and minor improvements are charged 
to expense. 

Page -40-

h) Loan Commitments and Related Financial Instruments 

Financial  instruments  include  off-balance  sheet  credit  instruments,  such  as  unused  lines  of  credit,  commitments  to  make  loans  and 
commercial letters of credit, issued to meet customer-financing needs. The face amount for these items represents the exposure to loss, 
before considering customer collateral or ability to repay. Such financial instruments are recorded on the balance sheet when they are 
funded. 

i) Income Taxes 

The  Company  follows  the  asset  and  liability  approach,  which  requires  the  recognition  of  deferred  tax  assets  and  liabilities  for  the 
expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities, 
computed using enacted tax rates. Deferred tax assets are recognized if it is more likely than not that a future benefit will be realized.
It is management’s position, as currently supported by the facts and circumstances, that no valuation allowance is necessary against 
any of the Company’s deferred tax assets. 

In accordance with FASB ASC 740, Accounting for Uncertainty in Income Taxes (“FIN 48”), 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. There are no such tax positions 
on the Company’s financial statements at December 31, 2010 and 2009, respectively.

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 December 31, 2010 or 2009.

j) Treasury Stock 

Repurchases of common stock are recorded as treasury stock at cost. Treasury stock is reissued using the first in, first out method. 

k) Earnings Per Share 

Earnings per share is calculated in accordance with FASB ASC 260-10, “Determining Whether Instruments Granted in Share-Based 
Payment  Transactions  Are  Participating  Securities”.  This  ASC  addresses  whether  instruments  granted  in  share-based  payment 
transactions  are  participating  securities  prior  to  vesting  and,  therefore,  need  to  be  included  in  the  earnings  allocation  in  computing 
earnings  per  share  (“EPS”).  Basic  earnings  per  common  share  is  net  income attributable  to  common  shareholders divided  by  the 
weighted average  number of  common shares outstanding during the period. Diluted earnings per share,  which reflects the potential 
dilution  that  could  occur  if  outstanding  stock  options  were  exercised  and  if junior  subordinated  debentures  were  converted  into 
common  shares,  is  computed  by  dividing  net  income attributable  to  common  shareholders by  the  weighted average  number  of 
common shares and common stock equivalents. 

l) Dividends 

Cash available for distribution of dividends to shareholders of the Company is primarily derived from dividends paid by the Bank to 
the Company. Due to regulatory restrictions, dividends from the Bank to the Company at December 31, 2010, were limited to $18.7
million which represents the Bank’s 2010 retained net income and net retained earnings from the previous two years. During 2010,
$1.7 million was declared and paid from the Bank to the Company. Prior regulatory approval is required if the total of all dividends 
declared  by  the  Bank  in  any  calendar  year  exceeds  the  total  of  the  Bank’s  net  income  of  that  year  combined  with  its  retained  net 
income of the preceding two years.

m) Segment Reporting 

While management monitors the revenue streams of the various products and services, the identifiable segments are not material and 
operations  are  managed  and  financial  performance  is  evaluated  on  a  Company-wide  basis.  Accordingly,  all of  the  financial  service 
operations are considered by management to be aggregated in one reportable operating segment. 

n) Stock Based Compensation Plans 

Stock  based  compensation  awards  are  recorded  in  accordance  with  FASB  ASC  No.  718 and  505,  “Accounting  for  Stock-Based 
Compensation” which requires companies to record compensation cost for stock options and stock awards granted to employees in 
return for employee service. The cost is measured at the fair value of the options and awards when granted, and this cost is expensed 
over the employee service period, which is normally the vesting period of the options and awards. 

Page -41-

o) Comprehensive Income 

Comprehensive income includes net income and all other changes in equity during a period, except those resulting from investments 
by  owners  and  distributions  to  owners.  Other  comprehensive  income  includes  revenues,  expenses,  gains  and  losses  that  under 
generally  accepted  accounting  principles  are  included  in  comprehensive  income  but  excluded  from  net  income.  Comprehensive 
income and accumulated other comprehensive income are reported net of deferred income taxes. Accumulated other comprehensive 
income for the Company includes unrealized holding gains or losses on available for sale securities, and the pension liability. FASB 
ASC  715-30 “Compensation  – Retirement  Benefits  – Defined  Benefit  Plans  – Pension”  requires  employers  to  recognize  the 
overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position 
and to recognize changes in  that  funded status in the  year  the changes occur through comprehensive income. Other comprehensive
income is net of reclassification adjustments for realized gains (losses) on sales of available for sale securities. 

p) Fair Value of Financial Instruments 

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in
Note  12.  Fair  value  estimates  involve  uncertainties  and  matters  of  significant  judgment  regarding  interest  rates,  credit  risk, 
prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market 
conditions could significantly affect the estimates. 

q) New Accounting Standards 

In June 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-16 “Accounting for Transfers of Financial Assets”.
This  standard  improves  the  relevance,  representational  faithfulness,  and  comparability  of  the  information  that  a  reporting  entity 
provides  in  its  financial  statements  about  a  transfer  of  financial  assets;  the  effects  of  a  transfer  on  its  financial  position,  financial 
performance and cash flows; and a transferor’s continuing involvement.  This Statement must be applied as of the beginning of each 
reporting  entity’s  first  annual  reporting  period  that  begins  after  November  15,  2009,  for  interim  periods  within  that  first  annual 
reporting period and for interim and annual reporting periods thereafter.  This Statement must be applied to transfers occurring on or 
after the effective date.  Additionally, on and after the effective date, the concept of a qualifying special-purpose entity is no longer 
relevant  for  accounting  purposes.    Therefore,  formerly  qualifying  special-purpose  entities  should  be  evaluated  for  consolidation  by 
reporting entities on and after the effective date in accordance with the applicable consolidation guidance.  Additionally, the disclosure 
provisions of this Statement should be applied to transfers that occurred both before and after the effective date of this Statement.  The 
adoption of this Statement did not have a significant impact to the Company’s financial statements.

In August 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, “Measuring Liabilities at Fair Value”, which 
is codified as ASC 820, “Fair Value Measurements and Disclosures”.  This Update provides amendments to Topic 820-10, Fair Value 
Measurements  and  Disclosures  – Overall,  for  the  fair  value  measurement  of  liabilities.    This  Update  provides  clarification  that  in 
circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to 
measure  fair  value  using  a  valuation  technique  that  uses  the  quoted  price  of  the  identical  liability  when  traded  as  an  asset, quoted 
prices  for  similar  liabilities  or  similar  liabilities  when  traded  as  assets,  or  that  is  consistent  with  the  principles  of  Topic  820.    The 
amendments in this Update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a 
separate  input  or  adjustment  to  other  inputs  relating  to  the  existence  of  a  restriction  that  prevents  transfer  of  the  liability.    The 
amendments in this Update also clarify that both a quoted price in an active market for the identical liability at the measurement date 
and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of 
the asset are required are Level 1 fair value measurements.  The guidance provided in this Update is effective for the first reporting 
period  (including  interim  periods)  beginning  after  issuance.    The  adoption  of  this  Update  did  not  have  a  significant  impact  to  the 
Company’s financial statements.  

In  July  2010,  the  Financial  Accounting  Standards  Board  (“FASB”)  issued  Accounting  Standards  Update  (“ASU”)  No.  2010-20,
“Receivables” that requires companies to provide more information about the credit risks inherent in its loan and lease portfolios and 
how management considers those credit risks in determining the allowance for credit losses. A company would be required to disclose 
its  accounting  policies,  the  methods  it  uses  to  determine  the  components  of  the  allowance  for  credit  losses,  and  qualitative  and 
quantitative information about the credit quality of its loan portfolio, such as aging information and credit quality indicators. Both new 
and existing disclosures would be required either by portfolio segment or class, based on how a company develops its allowance for 
credit losses and how it manages its credit exposure. The guidance is effective for all financing receivables, including loans and trade 
accounts receivables. However, short-term trade accounts receivables, receivables measured at fair value or lower of cost or fair value, 
and debt securities are exempt from these disclosure requirements. For public companies, any period-end disclosure requirements are 
effective for periods ending on or after December 15, 2010. Refer to Note 3 for the updated period-end disclosures. Any disclosures 
about  activity  that  occurs  during  a  reporting  period  are  effective  for  periods  beginning  on  or  after  December  15,  2010.  As  this 
guidance affects only disclosures, the adoption of this guidance on January 1, 2011 for intra-period activity is not expected to have a 
significant impact to the Company’s financial statements.

Page -42-

r) Federal Home Loan Bank (FHLB) Stock 

The  Bank  is  a  member  of  the  FHLB  system.  Members  are  required  to  own  a  particular  amount  of  stock  based  on  the  level  of 
borrowings  and  other  factors,  and  may  invest  in  additional  amounts.  FHLB  stock  is  carried  at  cost  and  classified  as  a  restricted 
security,  and  periodically  evaluated  for  impairment  based  on  ultimate  recovery  of  par  value.  Both  cash  and  stock  dividends  are
reported as income. 

s) Reclassifications 

Certain reclassifications have been made to prior year amounts, and the related discussion and analysis, to conform to the current year 
presentation. 

2. SECURITIES 

A summary of the amortized cost, gross unrealized gains and losses and fair value of securities is as follows: 

December 31,
(In thousands)

Available for sale:

2010

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Amortized
Cost

Fair
Value

Amortized
Cost

2009

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Fair
Value

U.S. GSE securities 
State and municipal obligations 
Residential mortgage-backed 

$

41,463
47,175

$

securities 

Residential collateralized 
mortgage obligations

Total available for sale 

Held to maturity:

U.S. GSE securities
State and municipal obligations 
Residential collateralized 
mortgage obligations

     Corporate Bonds
Total held to maturity 
Total securities 

76,814

152,202
317,654

24,973
64,728

40,264
18,000
147,965
$ 465,619

$

213
1,173

3,481

2,618
7,485

118
439

954
—
1,511
8,996

$

$

$

(343)
(283)

(124)

41,333
48,065

80,171

(850)
(1,600)

153,970
323,539

(199)
(922)

(53)
(158)
(1,332)
(2,932)

24,892
64,245

41,165
17,842
148,144
471,683

$

$

45,787
40,340

$

101,837

109,442
297,406

5,000
54,104

18,320
—
77,424
$ 374,830

$

309
1,473

4,561

2,722
9,065

—
400

589
—
989
10,054

$

(157)
(8)

$

45,939
41,805

(61)

106,337

(133)
(359)

(73)
(8)

(2)
—
(83)
(442)

112,031
306,112

4,927
54,496

18,907
—
78,330
$ 384,442

$

All of the residential mortgage-backed securities and residential collateralized mortgage obligations were backed by U.S. Government 
Sponsored Entities as of December 31, 2010 and 2009.

Securities with unrealized losses at year-end 2010 and 2009, aggregated by category and length of time that individual securities have 
been in a continuous unrealized loss position, are as follows: 

December 31,
(In thousands)

Available for sale:

U.S. GSE securities 
State and municipal obligations 
Residential mortgage-backed 

securities

Residential collateralized 
mortgage obligations

Total available for sale

Held to maturity:

U.S. GSE securities 
State and municipal obligations 
Residential collateralized 
mortgage obligations

     Corporate Bonds
Total held to maturity

2010

2009

Less than 12 months
Fair 
Value

Unrealized
losses

Greater than 12 months
Unrealized
losses

Fair 
Value

Less than 12 months

Greater than 12 months

Fair Value

Unrealized
losses

Fair Value

Unrealized
losses

$

25,145
11,927

7,591

55,906
$ 100,569

$

$

9,800
27,416

4,952
17,842
60,010

$

$

$

$

343
283

124

850
1,600

199
922

53
158
1,332

$

$

$

$

— $
—

— $
—

15,637
742

—

—

9,879

—
— $

—
— $

5,845
32,103

— $
—

— $
—

—

—

— $

— $

4,927
10,818

4,952
—
20,697

$

$

$

$

157
8

61

133
359

73
8

2
—
83

$

$

$

$

— $
—

—

—
— $

— $
—

—
—
— $

—
—

—

—
—

—
—

—
—
—

Unrealized losses on securities have not been recognized into income, as the losses on these securities would be expected to dissipate 
as they approach their maturity dates. The Company evaluates securities for other-than-temporary impairment periodically and with 
increased frequency when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the 

Page -43-

extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, whether the market 
decline was affected by macroeconomic conditions, and whether the Company has the intent to sell the security or more than likely 
than not will be required to sell the security before its anticipated recovery. In analyzing an issuer’s financial condition, the Company 
may consider whether the securities are issued by the federal government or its entities, whether downgrades by bond rating agencies 
have occurred, and the issuer’s financial condition. 

The following table sets forth the fair value, amortized cost and maturities of the securities at December 31, 2010. Expected maturities 
will  differ  from  contractual  maturities  because  borrowers  may  have  the  right  to  call  or  prepay  obligations  with  or  without  call  or 
prepayment penalties. 

December 31, 2010
(In thousands)

Available for sale:

U.S. GSE securities 
State and municipal 

obligations 

Residential mortgage-
backed securities

Residential collateralized 
mortgage obligations

Total available for sale 

Held to maturity:

U.S. GSE securities 
State and municipal 

obligations 

Residential collateralized 
mortgage obligations

Corporate Bonds
Total held to maturity 
Total securities 

Within
One Year

After One But
Within Five Years

After Five But
Within Ten Years

After
Ten Years

Total

Fair Value
Amount

Amortized
Cost
Amount

Fair Value 
Amount

Amortized
Cost
Amount

Fair Value
Amount

Amortized
Cost
Amount

Fair Value
Amount

Amortized
Cost
Amount

Fair Value
Amount

Amortized
Cost
Amount

$

805 $

800

$

10,871 $

10,674

$

29,657 $

29,989

$

— $

— $

41,333 $

41,463

10,094

9,992

26,829

26,385

11,142

10,798

—

—

48,065

47,175

651

634

1,698

1,640

22,739

21,868

55,083

52,672

80,171

76,814

—
11,550

—
11,426

—
39,398

—
38,699

9,293
72,831

9,136
71,791

144,677
199,760

143,066
195,738

153,970
323,539

152,202
317,654

—

—

14,972

14,988

18,250

18,218

22,918

22,531

9,920

2,813

—
—
18,250
29,800 $

—
—
18,218
29,644

$

—
6,953
44,843
84,241 $

—
7,000
44,519
83,218

$

—
10,889
23,622
96,453 $

$

9,985

2,887

—
11,000
23,872
95,663

—

—

24,892

24,973

20,264

21,092

64,245

64,728

41,165
—
61,429
$ 261,189 $

40,264
—
61,356
257,094

41,165
17,842
148,144
$ 471,683 $

40,264
18,000
147,965
465,619

There were $31.4 million of proceeds on sales of available for sale securities and gross gains of approximately $1.3 million realized,
in 2010.  No securities were sold at a loss in 2010.  There were $13.1 million of proceeds on sales of available for sale securities and 
gross gains of approximately $0.5 million realized, in 2009. No securities were sold at a loss in 2009. There were no sales of available 
for securities in 2008. There were no sales of held to maturity securities during 2010, 2009 and 2008.

Securities having a fair value of approximately $277.9 million and $247.3 million at December 31, 2010 and 2009, respectively, were 
pledged to secure public deposits and Federal Home Loan Bank and Federal Reserve Bank overnight borrowings. The Company did 
not hold any trading securities during the years ended December 31, 2010, 2009 and 2008.

As of December 31, 2010, there was one issuer where the Bank had invested holdings that exceeded 10% of stockholder’s equity and 
represented  14%  of  stockholder’s  equity.  The  majority  of  these  holdings  will  mature  in  the  first  quarter  of  2011. There  were  no 
investment holdings of any one issuer that exceeded 10% of stockholders’ equity at December 31, 2009, other than U.S. Government 
and its Sponsored Entities. 

3. LOANS 

The following table sets forth the major classifications of loans: 

December 31,
(In thousands)
Commercial real estate mortgage loans 
Residential real estate mortgage loans 
Commercial, financial and agricultural loans 
Installment/consumer loans 
Real estate construction and land loans 
Total loans 
Net deferred loan costs and fees 

Allowance for loan losses 
Net loans 

2010

2009

$

$

245,265
140,986
97,663
9,659
9,928
503,501
559
504,060
(8,497)
495,563

$

$

204,159
123,013
93,682
7,352
19,347
447,553
485
448,038
(6,045)
441,993

Page -44-

Lending Risk 

The  principal  business  of  the  Bank  is  lending,  primarily  in  commercial  real  estate  mortgage  loans,  residential  real  estate  mortgage 
loans, construction loans, home equity loans, commercial and industrial loans, land loans and consumer 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  collectability of  such  a  loan  portfolio  is  susceptible  to  changes  in  market  and 
economic conditions in this region. 

Allowance for Loan Losses 

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.

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  FASB  Accounting  Standard  Codification  (“ASC”)  No.  310,  “Receivables”.  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  are  also  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 into loans with homogenous characteristics by loan type and include commercial real estate mortgages, home equity 
loans, residential real estate mortgages, commercial and industrial loans, real estate construction and land loans and consumer loans.  
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  credit’s  risk  rating  which  includes  management’s  evaluation  of:  cash  flow,  collateral,  guarantor  support,  financial  disclosures, 
industry trends and strength of borrowers’ management, the impact that 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.

The Credit Risk Committee is comprised of members of both management and the Board of Directors. The adequacy of the allowance
is analyzed quarterly, with any adjustment to a level deemed appropriate by the Credit Risk Committee, based on its risk assessment 
of the entire portfolio. Based on the Credit Risk Committee’s review of the classified loans and the overall allowance levels as they 
relate to the entire loan portfolio at December 31, 2010, 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 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.

Page -45-

The following table sets forth changes in the allowance for loan losses: 

December 31,
(In thousands)
Allowance for loan losses balance at beginning of period 
Charge-offs 
Recoveries 
Net charge-offs
Provision for loan losses charged to operations 
Balance at end of period 

2010

2009

2008

$

$

6,045
(1,120)
72
(1,048)
3,500
8,497

$

$

3,953
(2,093)
35
(2,058)
4,150
6,045

$

$

2,954
(1,070)
69
(1,001)
2,000
3,953

The following table represents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, 
as defined under ASC 310-10, and based on impairment method as of December 31, 2010. The loan segment represents the categories 
that the Bank develops to determine its allowance for loan losses.  

Commercial 
Real Estate 
Mortgage 
Loans

Residential 
Real Estate 
Mortgage 
Loans

Commercial, 
Financial and 
Agricultural 
Loans

Installment/ 
Consumer 
Loans

Real Estate
Construction 
and Land 
Loans

Unallocated

Total

3,443

$

1,642

$

2,804

$

423 $

185

$

— $

8,497

— $

7

$

— $

— $

— $

— $

7

3,443

245,265

$

$

1,635

140,986

$

$

2,804

97,663

$

$

423 $

185

$

— $

8,490

9,659 $

9,928

$ 503,501

6,197

$

3,443

$

102

$

4 $

2,686

$

12,432

239,068

$

137,543

$

97,561

$

9,655 $

7,242

$ 491,069

December 31, 2010
(In thousands)
Allowance for loan losses 

Ending balance: individually evaluated 

for impairment

Ending balance: collectively evaluated 

for impairment

Loans

Ending balance: individually evaluated 

for impairment

Ending balance: collectively evaluated 

for impairment

Credit Quality Indicators

$

$

$

$

$

$

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt 
including  repayment  patterns,  probable  incurred  losses,  past  loss  experience,  current  economic  conditions,  and  various  types  of 
concentrations of credit. The Company uses the following definitions for risk rating grades:

Pass: Loans classified as pass include current loans performing in accordance with contractual terms, pools of homogenous residential 
real estate and installment/consumer loans that are not individually risk rated and loans which exhibit certain risk factors that require 
greater than usual monitoring by management.

Special  mention:  Loans  classified  as  special  mention, while  generally  not  delinquent,  have potential  weaknesses  that  deserve 
management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for 
the loan or in the Bank's credit position at some future date. 

Substandard: Loans classified as substandard have a well defined weakness or weaknesses that jeopardize the liquidation of the debt. 
There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in a substandard loan, and may also be at delinquency status 
and have defined weaknesses based on currently existing facts, conditions and values making collection or liquidation in full highly 
questionable and improbable.

Page -46-

The following table represents loans by class categorized by internally assigned risk grades:

December 31, 2010

(In thousands)
Commercial real estate:

Owner occupied

Non-owner occupied

Residential real estate:

First lien

Home equity

Commercial:

Secured

Unsecured

Installment/consumer loans

Real estate construction and land loans
Total loans

Past Due and Nonaccrual Loans

Pass

Special Mention

Substandard

Doubtful

Total

Grades:

$

110,395

$

107,095

4,892

$

7,652

4,298

$

10,683

— $

250

119,585

125,680

71,686

64,708

49,146

41,058

9,484

6,020

—

—

1,949

1,072

175

223

1,194

1,834

3,212

1,226

—

3,685

1,269

295

—

—

—

—

74,149

66,837

54,307

43,356

9,659

9,928

$

459,592

$

15,963

$

26,132

$

1,814

$

503,501

The following table represents the aging of the recorded investment in past due loans as of December 31, 2010 by class of loans, as 
defined by ASC 310-10:

December 31, 2010

(In thousands)
Commercial real estate:

Owner occupied

Non-owner occupied

Residential real estate:

First lien

Home equity

Commercial:

Secured

Unsecured

Installment/consumer loans

Real estate construction and land loans
Total loans

30-59 Days 
Past Due

60-89 Days 
Past Due

Nonaccrual 
Including 90 
Days or More 
Past Due

Total Past Due
and 
Nonaccrual

$

— $

—

151

782

10

105

10

—

511

$

—

165

298

—

—

5

—

— $

478

1,747

1,696

—

32

86

2,686

511

478

2,063

2,776

10

137

101

2,686

Current

Total Loans

$

119,074

$

125,202

119,585

125,680

72,086

64,061

54,297

43,219

9,558

7,242

74,149

66,837

54,307

43,356

9,659

9,928

$

1,058

$

979

$

6,725

$

8,762

$

494,739

$

503,501

There were no loans 90 days or more past due that were still accruing interest at December 31, 2010 and 2009. 

Impaired Loans

As  of  December  31,  2010  and  December 31,  2009,  the  Company  had  impaired  loans  as  defined  by  FASB  ASC  No. 310, 
“Receivables”  of  $9.9 million  and  $9.1 million,  respectively.  For  a  loan  to  be  considered  impaired,  management  determines  after 
review whether it is probable that the Bank 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. Impaired loans include 
individually  classified  nonaccrual  loans  and  troubled  debt  restructured  (“TDR”)  loans.  For  impaired  and  TDR  loans,  the  Bank 
evaluates  the  fair  value  of  the  loan  in  accordance  with  FASB  ASC  310-10-35-22.  For  loans  that  are  collateral  dependent,  the  fair 
value of the collateral is used to determine the fair value of the loan. The fair value of the collateral is determined based upon recent 
appraised  values.  For  unsecured  loans,  the  fair  value  is  determined based  on  the  present  value  of  expected  future  cash  flows 
discounted at the loan’s effective interest rate. The fair value of the loan is compared to the carrying value to determine if any write-
down or specific reserve is required. These methods of  fair value  measurement for impaired and TDR loans are considered level 3 
within the fair value hierarchy described in FASB ASC 820-10-50-5. 

Page -47-

Nonaccrual loans increased $0.8 million to $6.7 million or 1.34% of total loans at December 31, 2010 from $5.9 million or 1.32% of 
total loans at December 31, 2009. Approximately $4.7 million of the nonaccrual loans at December 31, 2010 represent troubled debt 
restructured loans  where the  borrowers are complying  with the  modified terms of the  loans and are currently  making payments. In 
2009,  nonaccrual  loans  increased  $2.8  million to  $5.9  million  from  $3.1  million  in  2008.  The  increase  in  nonaccrual  loans  at 
December 31, 2009 was due to the same troubled debt restructured loans outstanding at December 31, 2010. The balances totaled $4.9 
million as of December 31, 2009 and the borrowers were complying with the modified terms of the loans and were currently making 
payments. 

In addition, the Company has one borrower with TDR loans of $3.2 million at December 31, 2010 and 2009 that are current and are 
secured with collateral that has a fair value of approximately $5.4 million as well as personal guarantors. Management believes that 
the  ultimate  collection  of  principal  and  interest  is  reasonably  assured  and  therefore  continues  to  recognize  interest  income  on  an 
accrual  basis.  In  addition,  the  Bank  has  no  commitment  to  lend  additional  funds  to  this  debtor.  The  loan  was  determined  to  be
impaired during the third quarter of 2008 and since that determination $0.3 million of interest income has been recognized. 

The following table represents impaired loans by class at December 31, 2010:

December 31, 2010

(In thousands)
With no related allowance recorded:
Commercial real estate:

Owner occupied

Non-owner occupied

Residential real estate:

First lien

Home equity

Commercial:

Secured

Unsecured

Installment/consumer loans

Real estate construction and land loans

Total with no related allowance recorded

With an allowance recorded:
Residential real estate - Home equity

Total with an allowance recorded

Total:
Commercial real estate:
Owner occupied
Non-owner occupied
Residential real estate:

First lien
Home equity

Commercial:
Secured
Unsecured

Installment/consumer loans
Real estate construction and land loans

Total

Recorded 
Investment

Unpaid Principal 
Balance

Related 
Allocated 
Allowance

$

$

$

$

$

3,219

$

478

3,219

$

599

1,747

996

—

32

86

1,829

996

—

35

86

2,686

9,244

$

2,800

9,564

$

$

$

$

700

700

3,219
478

1,747
1,696

—
32
86
2,686

$

$

$

700

700

3,219
599

1,829
1,696

—
35
86
2,800

$

9,944

$

10,264

$

—

—

—

—

—

—

—

—

—

7

7

—
—

—
7

—
—
—
—

7

Residential home equity loans represent the only class of impaired loans with a related allowance recorded. 

Individually  impaired  loans  with  no  allocated  allowance  for  loan  loss  as  of  December  31,  2009  totaled  $9.0  million.  Individually 
impaired  loans  with  an  allocated  allowance  for  loan  loss  as  of  December  31,  2009  totaled  $0.1  million  and  the  amount  of  the 
allowance for loan losses that was allocated was $0.05 million. 

Page -48-

Individually impaired loans were as follows:

December 31,
(In thousands)
Average of individually impaired loans during the year
Interest income recognized during impairment
Cash basis interest income recognized

Related Party Loans

2010

2009

2008

$

$

10,124
122
—

$

7,406
135
—

1,725
52
—

Certain  directors,  executive  officers,  and  their  related  parties,  including  their  immediate  families  and  companies  in  which  they  are 
principal owners, were loan customers of the Bank during 2010 and 2009.

The following table sets forth selected information about related party loans at December 31, 2010:

(In thousands)
Balance at December 31, 2009
New loans 
Effective change in related parties 
Advances 
Repayments 
Balance at December 31, 2010

4. PREMISES AND EQUIPMENT

Premises and equipment consist of:

December 31,
(In thousands)
Land
Construction in progress 
Building and improvements 
Furniture, fixtures and equipment
Leasehold improvements 

Less: accumulated depreciation and amortization 

5. DEPOSITS

Time Deposits

Balance
Outstanding

2,474
1,000
—
1
(2,401)
1,074

2010

2009

6,583
—
13,673
11,340
5,551
37,147

(13,464)
23,683

$

$

$

6,142
565
13,905
9,602
3,319
33,533

(12,227)
21,306

$

$

$

$

$

The following table sets forth the remaining maturities of the Bank’s time deposits at December 31, 2010:

(In thousands)
2011
2012
2013
2014
2015
Total 

Less than
$100,000

$100,000 or
Greater

Total

31,580
9,001
1,060
190
804
42,635 $

$

72,802
13,418
1,127
838
2,389
90,574 $

104,382
22,419
2,187
1,028
3,193
133,209

Deposits from principal officers, directors and their affiliates at December 31, 2010 and 2009 were approximately $8.3 million and 
$6.0 million, respectively. Public fund deposits at December 31, 2010 and 2009 were $194.9 million and $161.6 million, respectively.

Page -49-

6. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

At December 31, 2010 and 2009, securities sold under agreements to repurchase totaled $16.4 million and $15.0 million, respectively,
and  were  secured  by  U.S.  GSE,  residential  mortgage-backed  securities  and  residential  collateralized  mortgage  obligations  with  a
carrying amount of $22.3 million and $22.2 million, respectively.

Securities sold under agreements to repurchase are financing arrangements with $1.4 million maturing during the first quarter of 2011, 
$5.0 million maturing during the first quarter of 2013 and $10.0 million maturing during the first quarter of 2015.  At maturity, the 
securities  underlying  the  agreements  are  returned  to  the  Company.  Information  concerning  the  securities  sold  under  agreements  to 
repurchase is summarized as follows:

(In thousands)
Average daily balance during the year 
Average interest rate during the year 
Maximum month-end balance during the year 
Weighted average interest rate at year-end 

7. JUNIOR SUBORDINATED DEBENTURES

2010

2009

2008

$

$

16,648

3.10%

17,192

3.21%

$

$

15,000

2.35%

15,000

2.35%

$

$

13,183

2.39%

15,000

2.39%

In  December  2009,  the  Company  completed  the  private  placement  of  $16.0  million in  aggregate  liquidation  amount  of  8.50% 
cumulative convertible trust preferred securities (the "TPS”), through its subsidiary, Bridge Statutory Capital Trust II. The TPS have a 
liquidation  amount  of  $1,000 per  security  and are  convertible  into  our  common stock,  at  an  effective  conversion  price  of  $31  per 
share.  The TPS mature in 30 years but are callable by the Company at par any time after September 30, 2014.

The Company issued $16.0 million of junior subordinated debentures (the “Debentures”) to the trust in exchange for ownership of all 
of  the  common  security  of  the  trust  and  the  proceeds  of  the  preferred  securities  sold  by  the  trust.  In  accordance  with  current 
accounting  guidance, the trust is  not consolidated in the  Company’s  financial statements, but rather the Debentures are shown as a 
liability. The Debentures bear interest at a fixed rate equal to 8.50% and mature on December 31, 2039. Consistent with regulatory 
requirements, the interest payments may be deferred for up to 5 years, and are cumulative. The Debentures have the same prepayment 
provisions as the TPS. 

The  Debentures  may  be  included  in  Tier  I  capital  (with  certain  limitations  applicable)  under  current  regulatory  guidelines  and
interpretations.

8. INCOME TAXES

The components of income tax expense are as follows:

Years Ended December 31,
(In thousands)
Current:

Federal 
State 

Deferred:

Federal 
State 

Income tax expense

2010

2009

2008

$

$

3,340
530
3,870

347
(170)
177
4,047

$

$

4,467
530
4,997

(788)
(160)
(948)
4,049

$

$

3,263
584
3,847

399
42
441
4,288

Page -50-

The reconciliation of the expected Federal income tax expense at the statutory tax rate to the actual provision follows:

Years Ended December 31,
(Dollars in thousands)

2010

Percentage
of Pre-tax
Earnings

Amount

2009

2008

Percentage
of Pre-tax
Earnings

Percentage
of Pre-tax
Earnings

Amount

Amount

Federal income tax expense computed by 

applying the statutory rate to income before 
income taxes 
Tax exempt interest 
State taxes, net of federal income tax benefit 
Other 
Income tax expense 

$

$

4,492
(817)
262
110
4,047

34% $
(6)
2
1
31% $

4,362
(682)
302
67
4,049

34% $
(6)
3
1
32% $

4,442
(588)
413
21
4,288

34%
(4)
3
-
33%

Deferred income tax assets and liabilities are comprised of the following:

December 31,
(In thousands)
Deferred income tax assets:
Allowance for loan losses 
Compensation expense related to restricted stock awards
Other

Total 

Deferred income tax liabilities:
Pension and SERP expense 
Depreciation
REIT undistributed net income
Net deferred loan costs and fees
Other

Total 

Total before other comprehensive income 

Deferred income tax liabilities:

Net unrealized gains on securities 

Deferred income tax assets:

Net change in pension liability 
Net deferred income tax liability 

2010

2009

$

$

3,613
869
206
4,688

(1,470)
(830)
(648)
(481)
(385)
(3,814)

874

(2,336)

1,202
(260)

$

$

2,567
511
238
3,316

(1,167)
(580)
—
(448)
(70)
(2,265)

1,051

(3,457)

1,166
(1,240)

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  2006.  The  Company  does  not  expect  the  total 
amount of unrecognized income tax benefits to significantly increase in the next twelve months.

9. EMPLOYEE BENEFITS

a) Pension Plan and Supplemental Executive Retirement Plan

The Bank maintains a noncontributory pension plan through the New York State Bankers Association Retirement System covering all 
eligible  employees.  The  Bank  uses  a  December  31st measurement  date  for  this  plan  in  accordance  with  FASB  ASC  715-30
“Compensation – Retirement Benefits – Defined Benefit Plans – Pension”.

During  2001,  the  Bank  adopted  the  Bridgehampton  National  Bank  Supplemental  Executive  Retirement  Plan  (“SERP”).  The  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. During 2008, the assets of the SERP were held in a rabbi trust 
to  maintain  the  tax-deferred  status  of  the  plan  and  are  subject  to  the  general,  unsecured  creditors  of  the  Company.  As  a  result,  the 
assets of the trust are reflected on the Consolidated Balance Sheets of the Company.

Page -51-

Information about changes in obligations and plan assets of the defined benefit pension plan and the defined benefit plan component 
of the SERP are as follows:

At December 31,
(In thousands)
Change in benefit obligation:

Benefit obligation at beginning of year 
Service cost 
Interest cost 
Benefits paid and expected expenses 
Assumption changes and other 
Benefit obligation at end of year 

Change in plan assets, at fair value:
Plan assets at beginning of year 
Actual return on plan assets 
Employer contribution 
Benefits paid and actual expenses 

Plan assets at end of year 

Funded status (plan assets less benefit obligations)

Pension Benefits

2010

2009

SERP Benefits

2010

2009

$

$

$

$

$

7,467
769
434
(275)
366
8,761

9,183
799
1,322
(281)
11,023

2,262

$

$

$

$

$

5,357
481
318
(225)
1,536
7,467

6,572
1,428
1,400
(217)
9,183

1,716

$

$

$

$

$

1,491
96
62
(84)
(23)
1,542

$

$

1,481
162
59
—
(211)
1,491

— $
—
84
(84)
— $

—
—
—
—
—

(1,542)

$

(1,491)

Amounts recognized in accumulated other comprehensive income at December 31, consist of:

At December 31,
(In thousands)
Net actuarial loss
Prior service cost 
Transition obligation 
Net amount recognized 

Pension Benefits

SERP Benefits

2010

2009

2010

2009

$

$

2,609
90
—
2,699

$

$

2,458
99
—
2,557

$

$

65
—
197
262

$

$

87
—
225
312

The  accumulated  benefit  obligation  was  $6.9 million  and  $1.3  million  for  the  pension  plan  and  the  SERP,  respectively,  as  of 
December 31, 2010. As of December 31, 2009, the accumulated benefit obligation was $5.8 million and $1.3 million for the pension 
plan and the SERP, respectively.

Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income

At December 31,
(In thousands)
Components of net periodic benefit cost and other 
amounts recognized in Other Comprehensive 
Income
Service cost 
Interest cost 
Expected return on plan assets 
Amortization of net loss 
Amortization of unrecognized prior service cost 
Amortization of unrecognized transition (asset) 

obligation 

Net periodic benefit cost 

$

$

Net loss (gain) 
Prior service cost 
Transition obligation 
Amortization of net gain 
Amortization of prior service cost 
Amortization of transition obligation 

Deferred taxes 
Total recognized in other comprehensive income 
Total recognized in net periodic benefit cost and other 

Pension Benefits

SERP Benefits

2010

2009

2008

Transition 
2007

2010

2009

2008

$

$

$

769
434
(681)
104
9

—
635

254
—
—
(104)
(9)
—
141
(56)
85

$

481
318
(516)
88
9

$

442
279
(495)
—
9

—
380

$

—
235

$

616
—
—
(88)
(9)
—
519
(206)
313

2,361
—
—
—
(11)
—
2,350
(933)
1,417

$

$

$

111
70
(124)
—
2

—
59

(24)

$

96
62
—
—
—

28
186

$

(22) $
—
—
—
—
(28)
(50)
20
(30)

162
59
—
13
—

28
262

$

$

(211) $
—
—
(13)
—
(28)
(252)
100
(152)

71
47
—
—
—

28
146

308
—
—
—
—
(28)
280
(111)
169

comprehensive income 

$

720

$

693

$

1,711

$

35

$

156

$

110

$

315

Page -52-

The estimated net loss, transition obligation and prior service costs for the defined benefit pension plan that will be amortized from 
accumulated  other  comprehensive  income  into  net  periodic  benefit  cost  over  the  next  fiscal  year  are  $102,000,  $0  and  $9,000, 
respectively. The estimated net gain and unrecognized net transition obligation for the SERP that will be amortized from accumulated 
other comprehensive income into net periodic benefit cost over the next fiscal year is $0 and $28,000, respectively.

Expected Long-Term Rate-of-Return

The  expected  long-term  rate-of-return  on  plan  assets  reflects  long-term  earnings  expectations  on  existing  plan  assets  and  those 
contributions  expected  to  be  received  during  the  current  plan  year.  In  estimating  that  rate,  appropriate  consideration  was  given  to 
historical returns earned by plan assets in the fund and the rates of return expected to be available for reinvestment. Average rates of 
return  over  the  past  1,  3,  5  and  10-year  periods  were  determined  and  subsequently  adjusted  to  reflect  current  capital  market 
assumptions and changes in investment allocations.

At December 31,
Weighted Average Assumptions Used to 

Determine Benefit Obligations

Discount rate 
Rate of compensation increase 
Weighted Average Assumptions Used to 
Determine Net Periodic Benefit Cost

Discount rate 
Rate of compensation increase 
Expected long-term rate of return 

Plan Assets

Pension Benefits
2009

2010

2008

2010

SERP Benefits
2009

2008

5.58%
3.50

5.89%
4.00

5.89%
4.00
7.50

6.00%
4.00
7.50

6.00%
3.50

6.00%
4.00
7.75

3.87%
5.00

4.31%
5.00
—

4.31%
5.00

4.00%
5.00
—

4.00%
5.00

4.52%
5.00
—

The New York State Bankers Retirement System (the “System”)  was established in 1938 to provide for the payment  of benefits to
employees  of  participating  banks.  The  System  is  overseen  by  a  Board  of  Trustees  (“Trustees”),  who  meet  quarterly,  and  set  the
investment policy guidelines.

The System's overall investment strategy is to achieve a mix of approximately 97% of investments for long-term growth and 3% for 
near-term benefit payments with a wide diversification of asset types, fund strategies, and fund managers. 

Cash equivalents consist primarily of short term investment funds. 

Equity securities primarily include investments in common stock and depository receipts. 
Fixed income securities include corporate bonds, government issues and mortgage backed securities. 

Other financial instruments primarily include rights and warrants.

The weighted average expected long-term rate-of-return is estimated based on current trends in System’s assets as well as projected 
future rates of return on those assets and reasonable actuarial assumptions based on the guidance provided by ASOP No. 27 for long 
term inflation, and the real and nominal rate of investment return for a specific mix of asset classes. The following assumptions were 
used in determining the long-term rate-of-return:

Equity securities 

Dividend discount model, the smoothed earnings yield model
and the equity risk premium model

Fixed income securities 

Current yield-to-maturity and forecasts of future yields

Other financial instruments 

Comparison of the specific investment’s risk to that of fixed
income and equity instruments and using judgment

The long term rate of return considers historical returns. Adjustments were made to historical returns in order to reflect expectations of 
future returns. These adjustments were due to factor forecasts by economists and long-term U.S. Treasury yields to forecast long-term 
inflation.  In  addition  forecasts  by  economists  and  others  for  long-term  GDP  growth  were  factored  into  the  development  of 
assumptions for earnings growth and per capital income.

Page -53-

Effective  March  2009,  the  System  revised  its  investment  guidelines.  The  System  currently  prohibits  its  investment  managers  from 
purchasing the following investments:

Equity securities 

Fixed income securities 

Securities in emerging market countries as defined by the
Morgan Stanley Emerging Markets Index, Short sales,
Unregistered securities and
Margin purchases

Securities of BBB quality or less,
CMOs that have an inverse floating rate and whose payments
don't include principal, CBMSs or commercial property mortgages which 
aren't certified and guaranteed by the U.S. Government,
ABSs that aren't issued or guaranteed by the U.S., or its
agencies or its instrumentalities,
Non-agency residential subprime or ALT-A MBSs and
Structured Notes

Other financial instruments 

Unhedged currency exposure in countries not defined as "high
income economies" by the World Bank

All other investments not prohibited by the System are permitted. At December 31, 2010 the System holds certain investments which 
are  no  longer  deemed  acceptable  to  acquire.  These  positions  will  be  liquidated  when  the  investment  managers  deem  that  such 
liquidation is in the best interest of the System. 

The target allocations for System assets are shown in the table below:

Target 
Allocation
2011

Percentage of Plan Assets 
at December 31,

2010

2009

Weighted-
Average 
Expected 
Long-Term 
Rate of 
Return

0 - 20%
40 - 60%
40 - 60%
0 - 5%

11.2%
48.2%
40.6%
—
100.0%

13.6%
45.9%
40.5%
—
100.0%

—
4.6%
1.9%
—

Asset Category
Cash equivalents
Equity securities
Fixed income securities
Other financial instruments
Total

Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit 
price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on 
the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs 
and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which 
the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the 
measurement date.

Level  2:  Significant  other  observable  inputs  other  than  Level  1  prices  such  as  quoted  prices  for  similar  assets  or  liabilities;  quoted 
prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level  3:  Significant  unobservable  inputs  that  reflect  a  reporting  entity’s  own  assumptions  about  the  assumptions  that  market 
participants would use in pricing an asset or liability.

In  instances  in  which  the  inputs  used  to  measure  fair  value  fall  into  different  levels  of  the  fair  value  hierarchy,  the  fair  value 
measurement  has  been  determined  based  on  the  lowest  level  input  that  is  significant  to  the  fair value  measurement  in  its  entirety. 
Investments  valued  using  the  Net  Asset  Value  (“NAV”)  are  classified  as  level  2  if  the  System  can  redeem  its  investment  with  the 
investee  at  the  NAV  at  the  measurement  date.  If  the  System  can  never  redeem  the  investment  with  the  investee  at  the  NAV,  it  is 
considered a level 3. If the System can redeem the investment at the NAV at a future date, the System's assessment of the significance 
of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the 
asset.

Page -54-

In accordance with FASB ASC 715-20, the following table represents the Plan’s fair value hierarchy for its financial assets measured 
at fair value on a recurring basis as of December 31, 2010 and 2009:

Fair Value Measurements at

December 31, 2010 Using:

Quoted Prices In

Significant

Other 

Significant

Active Markets for

Observable 

Unobservable

Carrying

Value

Identical Assets

(Level 1)

Inputs

(Level 2)

Inputs

(Level 3)

(Dollars in thousands)

Cash Equivalents:

Short term investment funds

Foreign currencies

Total cash equivalents

Equities:

U.S. Large cap

U.S. Mid cap

U.S. Small cap

International

Total equities

Fixed income securities:

Corporate bonds

Government issues

Collateralized mortgage obligations

Other fixed income securities

Total fixed income securities

$       1,220 

                24 

           1,244 

           3,088 

              315 

                23 

           1,916 

           5,342 

           1,028 

           3,168 

              241 

—

           4,437 

$             1,220 

$                               24 

—

                                24 

              1,220 

                           3,088 

                              315 

                                23 

                           1,916 

                           5,342 

              1,028 

              3,168 

                 241 

—

              4,437 

Total Plan Assets

$       11,023 

$                          5,366 

$         

5,657 

Fair Value Measurements at

December 31, 2009 Using:

Quoted Prices In

Significant

Other 

Significant

Active Markets for

Observable 

Unobservable

Carrying

Value

Identical Assets

(Level 1)

Inputs

(Level 2)

Inputs

(Level 3)

(Dollars in thousands)

Cash Equivalents:

Short term investment funds

Foreign currencies

Total cash equivalents

Equities:

U.S. Large cap

U.S. Mid cap

U.S. Small cap

International

Total equities

Fixed income securities:

Corporate bonds

Government issues

Collateralized mortgage obligations

Other fixed income securities

Total fixed income securities

$         1,258 

                32 

           1,290 

           2,270 

                81 

                23 

           1,883 

           4,257 

              885 

           2,474 

              225 

                52 

           3,636 

$               1,258 

$                                32 

—

                                32 

              1,258 

                           2,270 

                                81 

                                23 

                           1,883 

                           4,257 

                 885 

              2,474 

                 225 

                   52 

              3,636 

Total Plan Assets

$       9,183 

$                           4,289 

$          

4,894 

Page -55-

The Company expects to contribute $1.4 million to the pension plan during 2011.

Estimated Future Payments

The following benefit payments, which reflect expected future service, are expected to be paid as follows:

Year
(In thousands)
2011
2012
2013
2014
2015
Following 5 years 

b) 401(k) Plan

Pension and SERP Payments

$

329
352
367
383
404
2,945

A  savings  plan  is  maintained  under  Section  401(k)  of  the  Internal  Revenue  Code  and  covers  substantially  all  current  employees.
Newly hired employees can elect to participate in the savings plan after completing six months of service. Under the provisions of the 
savings plan, employee contributions are partially matched by the Bank with cash contributions. Participants can invest their account 
balances  into  several  investment  alternatives.  The  savings  plan  does  not  allow  for  investment  in  the  Company’s  common  stock. 
During the years ended December 31, 2010, 2009 and 2008 the Bank made cash contributions of $243,000, $181,000, and $189,000 
respectively.

c) Equity Incentive Plan

During 2006, the Bridge Bancorp, Inc. Equity Incentive Plan (the “Plan”) was approved by the shareholders to provide for the grant of 
options to purchase shares of common stock of the Company and for the award of shares of restricted stock. The plan supersedes the 
Bridge Bancorp, Inc. Equity Incentive Plan that was approved in 1996 and amended in 2001. Of the total 620,000 shares of common 
stock approved for issuance under the Plan, 365,595 shares remain available for issuance at December 31, 2010.

The Compensation Committee of the Board of Directors determines options awarded under the Plan. The Company accounts for this 
Plan under FASB ASC No. 718 and 505.

The  fair  value  of  each  option  granted  is  estimated  on  the  date  of  the  grant  using  the  Black-Scholes option-pricing  model.  No  new 
grants of stock options were awarded during the years ended December 31, 2010, 2009, and 2008.

A summary of the status of the Company’s stock options as of December 31, 2010 follows:

Outstanding, December 31, 2009
Granted
Exercised
Forfeited
Expired
Outstanding, December 31, 2010
Vested and Exercisable, December 31, 2010

Range of Exercise Prices

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Life

Aggregate
Intrinsic
Value

5.33 years
5.33 years

$
$

22,963
22,963

$

$
$

$
$

$
$
$
$
$

24.74
—
14.49
25.25
—
25.06
25.06

Exercise
Price

15.47
24.00
25.25
26.55
30.60

Number
of
Options

59,405
—
(1,800)
(1,230)
—
56,375
56,375

Number
of
Options

2,100
5,659
43,213
3,000
2,403
56,375

Page -56-

The  aggregate  intrinsic  value  for  options  outstanding  and  exercisable  as  of  December  31,  2010 is  the  same  because  all options  are 
currently vested.

A summary of activity related to the stock options follows:

December 31,
(In thousands)
Intrinsic value of options exercised
Cash received from options exercised
Tax benefit realized from option exercises
Weighted average fair value of options granted

2010

2009

2008

$

$

16
17
6
—

$

29
34
13
—

75
—
19
—

The Company did not  grant any stock options in 2010, 2009 and 2008. Compensation expense attributable to options was $41,000,
$42,000, and $39,000 for the years ended December 31, 2010, 2009, and 2008, respectively. As of December 31, 2010, there was $0 
of total unrecognized compensation costs related to stock options since all stock options were vested.

A summary of the status of the Company’s shares of unvested restricted stock for the year ended December 31, 2010 follows:

Unvested, December 31, 2009
Granted
Vested
Forfeited
Unvested, December 31, 2010

Weighted
Average Grant-Date
Fair Value

21.31
24.70
24.05
—
21.96

Shares
148,882
43,850
(11,144)

$
$
$
— $
$

181,588

The  Company’s  Equity  Incentive  Plan  also  provides  for  issuance  of  restricted  stock  awards.  During  the  year  ended  December  31, 
2010, the Company granted restricted stock awards of 43,850 shares. Of the 43,850 shares granted, 29,420 shares vest over five years 
with a third vesting after years three, four and five and 10,000 shares vest over approximately 7 years with a third vesting after years 
five, six and seven. The remaining 4,430 vest ratably over approximately five years. During the year ended December 31, 2009, the 
Company granted restricted stock awards of 58,792 shares. Of the 58,792 shares granted, 33,892 shares vest over five years with a 
third vesting after years three, four and five. The remaining 24,900 vest ratably over five years beginning in December 2009. During 
the year ended December 31, 2008, the Company granted restricted stock awards of 78,970 shares. These awards vest over five years 
with a third vesting after years three, four and five.  Such shares are subject to restrictions based on continued service as employees of 
the  Company  or  its subsidiaries. Compensation  expense  attributable  to  these  awards  was  approximately  $728,000,  $656,000  and 
$393,000 for the years ended December 31, 2010, 2009, and 2008, respectively. The total fair value of shares vested during the years 
ended December 31, 2010, 2009 and 2008 was $280,000, $125,000 and $286,000, respectively. As of December 31, 2010, there was 
$2,743,000 of total unrecognized compensation costs related to nonvested restricted stock awards granted under the Plan. The cost is 
expected to be recognized over a weighted-average period of 3.7 years.

In  April  2009,  the  Company  adopted  a  Directors  Deferred  Compensation  Plan.  Under  the  Plan,  independent  directors  may  elect  to
defer  all  or  a  portion  of  their  annual  retainer  fee  in  the  form  of  restricted  stock  units.  In  addition,  Directors  receive  a  non-election 
retainer in the form of restricted stock units. These restricted stock units vest ratably over one year and have dividend rights but no 
voting  rights.  In  connection  with  this  Plan,  the  Company  recorded  expenses of  approximately  $112,000  and  $52,000  for the  years
ended December 31, 2010 and 2009, respectively.

10. EARNINGS PER SHARE

FASB ASC 260-10-45 addresses whether instruments granted in share-based payment transactions are participating securities prior to 
vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (“EPS”). The restricted stock 
awards  and  restricted  stock  units  granted  by  the  Company  contain  nonforfeitable  rights  to  dividends  and  therefore  are  considered 
participating securities. The two-class method for calculating basic EPS excludes dividends paid to participating securities and any 
undistributed  earnings  attributable  to  participating  securities.  Prior  period  EPS  figures  have  been  presented  in  accordance  with  this 
accounting guidance.

Page -57-

The following is a reconciliation of earnings per share for December 31, 2010, 2009 and 2008:

For the Years Ended December 31,
(In thousands, except per share data)
Net Income
Less: Dividends paid on and earnings allocated to participating securities
Income attributable to common stock

Weighted average common shares outstanding, including participating securities
Less: weighted average participating securities
Weighted average common shares outstanding
Basic earnings per common share

Income attributable to common stock

Weighted average common shares outstanding
Weighted average common equivalent shares outstanding
Weighted average common and equivalent shares outstanding
Diluted earnings per common share

2010

2009

2008

$ 9,166 $ 8,763 $ 8,750
(92)
$ 8,923 $ 8,588 $ 8,658

(175)

(243)

6,308
(170)
6,138
1.45 $

6,224
(127)
6,097

1.41 $

6,145
(69)
6,076
1.42

$

$ 8,923 $ 8,588 $ 8,658

6,138
1
6,139
1.45 $

$

6,097
4
6,101

1.41 $

6,076
10
6,086
1.42

There were 54,275 options outstanding at December 31, 2010 that were not included in the computation of diluted earnings per share 
because the options’ exercise prices were greater than the average market price of common stock and were, therefore, antidilutive. The 
$16.0  million  in  convertible  trust  preferred  securities  outstanding  at  December  31,  2010,  were  not  included  in  the  computation  of 
diluted earnings per share because the assumed conversion of the trust preferred securities was antidilutive.

11. COMMITMENTS AND CONTINGENCIES AND OTHER MATTERS

In  the  normal  course  of  business,  there  are  various  outstanding  commitments  and  contingent  liabilities,  such  as  claims  and  legal 
actions, minimum annual rental payments under non-cancelable operating leases, guarantees and commitments to extend credit, which 
are  not  reflected  in  the  accompanying  consolidated  financial  statements.  No  material  losses  are  anticipated  as  a  result  of  these 
commitments and contingencies.

a) Leases

At December 31, 2010, the Company was obligated to make minimum annual rental payments under non-cancelable operating leases 
for its premises. Projected minimum rentals under existing leases are as follows:

December 31, 2010
(In thousands)
2011
2012
2013
2014
2015
Thereafter
Total minimum rentals

$

$

948
877
855
852
508
2,424
6,464

Certain leases contain rent escalation clauses which are reflected in the amounts listed above. In addition, certain leases provide for 
additional  payments  based  upon  real  estate  taxes,  interest  and  other  charges.  Certain  leases  contain  renewal  options which  are  not 
reflected. Rental  expenses  under  these  leases  for  the  years  ended  December  31,  2010,  2009 and  2008 approximated  $1.2  million,
$883,000, and $659,000, respectively.

b) Loan commitments

Some  financial  instruments,  such  as  loan  commitments,  credit  lines,  letters  of  credit,  and  overdraft  protection,  are  issued  to  meet 
customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in 
the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk of credit 
loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to 
make such commitments as are used for loans, often including obtaining collateral at exercise of the commitment. 

Page -58-

The following represents commitments outstanding:

December 31,
(In thousands)
Standby letters of credit
Loan commitments outstanding (1)
Unused lines of credit
Total commitments outstanding

2010

2009

$

$

1,682
46,462
112,781
160,925

$

$

1,150
25,380
103,417
129,947

(1) Of the $46.5 million of loan commitments outstanding at December 31, 2010, $10.1 million are fixed rate

commitments and $36.4 million are variable rate commitments.

c) Other

During 2010, the Bank was required to maintain certain cash balances with the Federal Reserve Bank of New York for reserve and 
clearing requirements. The required cash balance at December 31, 2010 was $1.0 million. During 2010, the Federal Reserve Bank of 
New  York  offered  higher  interest  rates  on  overnight  deposits  compared  to  our  correspondent  banks.  Therefore  the  Bank  invested 
overnight with the Federal Reserve Bank of New York and the average balance maintained during 2010 was $20.4 million.

During  2010, 2009 and  2008,  the  Bank  maintained  an  overnight  line  of  credit  with  the  Federal  Home  Loan  Bank  of  New  York 
(“FHLB”).  The  Bank  has  the  ability  to  borrow  against  its  unencumbered  residential  and  commercial  mortgages  and  investment 
securities  owned  by  the  Bank.  At  December  31,  2010,  the  Bank  had  aggregate  lines  of  credit  of  $222.5  million  with  unaffiliated
correspondent  banks  to  provide  short-term  credit  for  liquidity  requirements.  Of  these  aggregate  lines  of  credit,  $202.5  million  is 
available on an unsecured basis. As of December 31, 2010, the Bank had $5.0 million in such borrowings outstanding.

In  March  2001,  the  Bank  entered  into  a  Master  Repurchase  Agreement  with  the  FHLB  whereby  the  FHLB  agrees  to  purchase 
securities from the Bank, upon the Bank’s request, with the simultaneous agreement to sell the same or similar securities back to the 
Bank  at  a  future  date.  Securities  are  limited,  under  the  agreement,  to  government  securities,  securities  issued,  guaranteed  or
collateralized by any agency or instrumentality of the U.S. Government or any government sponsored enterprise, and non-agency AA 
and  AAA  rated  mortgage-backed  securities.  At  December  31,  2010,  there  was  $81.2  million  available  for  transactions  under  this 
agreement.

The Bank had $16.4 million of securities sold under agreements to repurchase outstanding as of December 31, 2010 (See Note 6).

12. FAIR VALUE

FASB ASC No. 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit 
price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on 
the  measurement  date.  FASB  ASC  820-10  also  establishes  a  fair  value  hierarchy  which  requires  an  entity  to  maximize  the  use  of 
observable  inputs  and  minimize  the  use  of  unobservable  inputs  when  measuring  fair  value.  The  standard  describes  three  levels  of 
inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the 
measurement date.

Level  2:  Significant  other  observable  inputs  other  than  Level  1  prices  such  as  quoted  prices  for  similar  assets  or  liabilities;  quoted 
prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level  3:  Significant  unobservable  inputs  that  reflect  a  reporting  entity’s  own  assumptions  about  the  assumptions  that  market 
participants would use in pricing an asset or liability.

The fair value of securities available for sale is determined by obtaining quoted prices on nationally recognized securities exchanges 
(Level  1  inputs)  or  matrix  pricing,  which  is  a  mathematical  technique  widely  used  in  the  industry  to  value  debt  securities  without 
relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark 
quoted securities (Level 2 inputs).

Page -59-

Assets and Liabilities Measured on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below:

Fair Value Measurements at

December 31, 2010 Using:

Quoted Prices In

Significant

Other 

Significant

Active Markets for

Observable 

Unobservable

Carrying

Value

Identical Assets

(Level 1)

Inputs

(Level 2)

Inputs

(Level 3)

(In thousands)

Financial Assets:

Available for sale securities

U.S. GSE securities

State and municipal obligations

Residential mortgage-backed securities

Residential collateralized mortgage obligations

Total available for sale

$               41,333

         48,065

       80,171

       153,970

$            323,539

$              41,333 

            48,065

          80,171

          153,970

$            323,539

Fair Value Measurements at

December 31, 2009 Using:

Quoted Prices In

Active Markets for

Identical Assets

(Level 1)

Carrying

Value

Significant

Other 

Observable 

Inputs

(Level 2)

Significant

Unobservable

Inputs

(Level 3)

(In thousands)

Financial Assets:

Available for sale securities

U.S. GSE securities

State and municipal obligations

Residential mortgage-backed securities

Residential collateralized mortgage obligations

Total available for sale

$               45,939

         41,805

       106,337

         112,031

$             306,112

$              45,939

           41,805

106,337

112,031

$            306,112 

Fair value estimates are made at specific points in time and are based on existing on-and off-balance sheet financial instruments. Such 
estimates are generally subjective in nature and dependent upon a number of significant assumptions associated with each financial 
instrument or group of financial instruments, including estimates of discount rates, risks associated with specific financial instruments, 
estimates  of  future  cash  flows,  and  relevant  available  market  information.  Changes  in  assumptions  could  significantly  affect  the 
estimates. In addition,  fair value estimates do not reflect the value of anticipated  future business, premiums or discounts that could
result  from  offering  for  sale  at  one  time  the  Bank’s  entire  holdings  of  a  particular  financial  instrument,  or  the  tax  consequences  of 
realizing gains or losses on the sale of financial instruments.

Assets measured at fair value on a non-recurring basis are summarized below:

Fair Value Measurements at

December 31, 2010 Using:

Quoted Prices In

Significant

Other 

Significant

Active Markets for

Observable 

Unobservable

Identical Assets

(Level 1)

Inputs

(Level 2)

Inputs

(Level 3)

$                        693

Carrying

Value

$      

   693

Page -60-

(In thousands)

Impaired loans

(In thousands)

Impaired loans

Carrying

Value

$             48

Fair Value Measurements at

December 31, 2009 Using:

Quoted Prices In

Active Markets for

Identical Assets

(Level 1)

Significant

Other 

Observable 

Inputs

(Level 2)

Significant

Unobservable

Inputs

(Level 3)

$                             48 

For impaired and TDR loans, the Company evaluates the fair value of the loan in accordance with current accounting guidance. For 
loans that are collateral dependent, the fair value of the collateral is used to determine the fair value of the loan. The fair value of the 
collateral is determined based upon recent appraised values. The fair value of the loan is compared to the carrying value to determine 
if  any  write-down  or  specific  reserve  is  required.  These  methods  of  fair  value  measurement  for  impaired  and  TDR  loans  are 
considered level 3 within the fair value hierarchy described in current accounting guidance. Impaired loans with allocated allowance 
for loan losses at December 31, 2010, had a carrying amount of $693,000, which is made up of the outstanding balance of $700,000,
net of a valuation allowance of $7,000. This resulted in an additional provision for loan losses of $7,000 that is included in the amount 
reported  on  the  income  statement.  Impaired  loans  with  allocated  allowance  for  loan  losses  at  December  31,  2009,  had  a  carrying
amount of $48,000, which is made up of the outstanding balance of $98,000, net of a valuation allowance of $50,000. This resulted in 
an additional provision for loan losses of $50,000 that is included in the amount reported on the income statement. 

The Company used the following method and assumptions in estimating the fair value of its financial instruments:

Cash  and  Due  from  Banks  and  Federal  Funds  Sold:  Carrying  amounts  approximate  fair  value,  since  these  instruments  are  either 
payable on demand or have short-term maturities.

Securities Available for Sale and Held to Maturity: The estimated fair values are based on independent dealer quotations on nationally 
recognized  securities  exchanges  or  matrix  pricing,  which  is  a  mathematical  technique  widely  used  in  the  industry  to  value  debt
securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to 
other benchmark quoted securities.

Restricted  Stock:  It  is  not  practicable  to  determine  the  fair  value  of  FHLB  and  FRB  stock  due  to  restrictions  placed  on  its 
transferability.

Loans:  The  estimated  fair  values  of  real  estate  mortgage  loans  and  other  loans  receivable  are  based  on  discounted  cash  flow 
calculations that use available market benchmarks when establishing discount factors for the types of loans. All nonaccrual loans are 
carried at their current fair value. Exceptions may be made for adjustable rate loans (with resets of one year or less), which would be 
discounted straight to their rate index plus or minus an appropriate spread.

Deposits: The estimated fair  value of certificates of deposits are based on discounted cash  flow calculations that  use  a replacement 
cost  of  funds  approach  to  establishing  discount  rates  for  certificates  of  deposits  maturities.  Stated  value  is  fair  value  for all  other 
deposits.

Borrowed Funds: The estimated fair value of borrowed funds are based on discounted cash flow calculations that use a replacement 
cost of funds approach to establishing discount rates for funding maturities.

Junior Subordinated Debentures: The estimated fair value is based on estimates using market data for similarly risk weighted items 
taking into consideration the convertible features of the debentures into common stock of the Company. 

Accrued Interest Receivable and Payable: For these short-term instruments, the carrying amount is a reasonable estimate of the fair 
value.

Off-Balance-Sheet  Liabilities:  The  fair  value  of  off-balance-sheet  commitments  to  extend  credit  is  estimated  using  fees  currently 
charged to enter into similar agreements. The fair value is immaterial as of December 31, 2009 and 2008.

Page -61-

The estimated fair values and recorded carrying values of the Company’s financial instruments are as follows:

December 31,
(In thousands)

Financial Assets:

Cash and due from banks
Interest bearing deposits with banks
Securities available for sale
Securities restricted
Securities held to maturity
Loans, net
Accrued interest receivable

Financial liabilities:

Demand and other deposits
Federal funds purchased and Federal Home Loan Bank overnight 

borrowings

Repurchase agreements
Junior subordinated debentures
Accrued interest payable

13. REGULATORY CAPITAL REQUIREMENTS

2010

2009

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

$

21,598
1,320
323,539
1,284
147,965
495,563
4,153

$

21,598
1,320
323,539
n/a
148,144
513,344
4,153

$

27,108
7,039
306,112
1,205
77,424
441,993
3,679

$

27,108
7,039
306,112
n/a
78,330
449,496
3,679

916,993

917,786

793,538

794,512

5,000
16,370
16,002
433

5,000
17,383
14,783
433

—
15,000
16,002
531

—
15,210
15,500
531

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 
requirements 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 Bank’s capital amounts and classifications 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  December  31,  2010,  the
Company  and  the  Bank  met  all  capital  adequacy  requirements.  In  April  2009,  the  Company  announced  that  its  Board  of  Directors 
approved and adopted a Dividend Reinvestment Plan (“DRP Plan”) and filed a registration statement on Form S-3 to register 600,000 
shares  of  common  stock  with  the  Securities  and  Exchange  Commission  (“SEC”)  pursuant  to  the  DRP  Plan.  In  April  2010,  the 
Company increased the discount from 3% to 5%, and raised the quarterly optional cash purchase amount to $50,000 under the DRP
Plan. Proceeds from the issuance of common stock related to the DRP Plan for the twelve months ended December 31, 2010, was $1.4 
million. Since the inception of the  DRP Plan in  April 2009 through December 31, 2010, the Company has issued 70,436 shares of 
common  stock  and  raised  $1.7  million  in  capital.  In  June  2009,  the  Company  filed  a  shelf  registration  statement  on  Form  S-3  to 
register up to $50 million of securities with the SEC. In December 2009, the Company completed a private placement of $16.0 million 
aggregate  liquidation  amount  of  8.50%  cumulative  convertible  trust  preferred  securities  (the  “TPS”)  through  a  newly-formed 
subsidiary, Bridge Statutory Capital Trust II, a wholly-owned Delaware statutory trust (the “Trust”).  The TPS mature in 30 years, and 
carry a fixed distribution rate of 8.50%.  The TPS have a liquidation amount of $1,000 per security.  The Company has the right to 
redeem the TPS at par (plus any accrued but  unpaid distributions) at any time after September 30, 2014.  Holders of the TPS may 
convert the TPS into shares of the Company’s common stock at a conversion price equal to $31.00 per share, which represents 125% 
of the average closing price of the Company’s common stock over the 20 trading days ended on October 14, 2009.  Each $1,000 in
liquidation amount of the TPS is convertible into 32.2581 shares of the Company’s common stock. As provided in the regulations, 
TPS are included in holding company Tier 1 capital (up to a limit of 25% of Tier 1 capital).

As of December 31, 2010, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as “well 
capitalized”  under  the  regulatory  framework  for  prompt  corrective  action.  To  be  categorized  as  “well  capitalized,”  the  Bank  must 
maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table. Since that notification, there 
are no conditions or events that management believes have changed the institution’s category.

Page -62-

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

Bridge Bancorp, Inc. (Consolidated)
As of December 31,
(Dollars In thousands)

Total Capital (to risk weighted assets)
Tier 1 Capital (to risk weighted assets)
Tier 1 Capital (to average assets)

As of December 31,
(Dollars In thousands)

Total Capital (to risk weighted assets)
Tier 1 Capital (to risk weighted assets)
Tier 1 Capital (to average assets)

Bridgehampton National Bank
As of December 31,
(Dollars In thousands)

Total Capital (to risk weighted assets)
Tier 1 Capital (to risk weighted assets)
Tier 1 Capital (to average assets)

As of December 31,
(In thousands)

2010

For Capital
Adequacy
Purposes

Actual

Amount
$ 88,006
79,953
79,953

Ratio

Amount
13.7% $ 51,504
12.4% 25,752
7.9% 40,667

Ratio

8.0%
4.0%
4.0%

2009

For Capital
Adequacy
Purposes

Actual

Amount
$ 80,378
74,333
74,333

Ratio

Amount
14.5% $ 44,361
22,180
13.4%
34,499
8.6%

Ratio

8.0%
4.0%
4.0%

2010

For Capital
Adequacy
Purposes

Actual

To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
Ratio

Amount
n/a
n/a
n/a

To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
Ratio

Amount
n/a
n/a
n/a

n/a
n/a
n/a

n/a
n/a
n/a

To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
Ratio

Amount
$ 85,514
77,470
77,470

Ratio

Amount
13.3% $ 51,444
12.1% 25,722
7.6% 40,639

Ratio

Amount
8.0% $ 64,304
4.0% 38,583
4.0% 50,799

10.0%
6.0%
5.0%

2009

For Capital
Adequacy
Purposes

Actual

To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
Ratio

Ratio

Amount
8.0% $ 55,421
33,253
4.0%
43,117
4.0%

10.0%
6.0%
5.0%

Total Capital (to risk weighted assets)
Tier 1 Capital (to risk weighted assets)
Tier 1 Capital (to average assets)

Amount
$ 74,191
68,146
68,146

Ratio

Amount
13.4% $ 44,337
22,168
12.3%
34,494
7.9%

Page -63-

14. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

Condensed financial information of Bridge Bancorp, Inc. (Parent Company only) follows:

Condensed Balance Sheets

December 31,
(In thousands)
ASSETS
Cash and cash equivalents 
Other assets 
Investment in the Bank 

Total Assets 

LIABILITIES AND STOCKHOLDERS’ EQUITY
Junior subordinated debentures
Dividends payable 
Other liabilities 

Total Liabilities 

Total Stockholders’ Equity 

Total Liabilities and Stockholders’ Equity 

Condensed Statements of Income

Years ended December 31,
(In thousands)
Dividends from the Bank 
Interest expense
Non interest expense
Income before income taxes and equity in undistributed earnings of the Bank 

Income tax benefit 
Income before equity in undistributed earnings of the Bank 
Equity in undistributed earnings of the Bank 
Net income 

2010

2009

$

$

$

$

$

$

3,356
750
79,118
83,224

16,002
1,467
35
17,504

65,720
83,224

2010

1,700
1,365
43
292

(431)
723
8,443
9,166

$

$

$

$

$

$

7,490
300
71,549
79,339

16,002
1,441
41
17,484

61,855
79,339

2009

2008

4,500
190
34
4,276

(69)
4,345
4,418
8,763

$

$

3,000
—
149
2,851

(50)
2,901
5,849
8,750

Page -64-

Condensed Statements of Cash Flows 

Years ended December 31,
(In thousands)
Cash flows from operating activities:

Net income 
Adjustments to reconcile net income to net cash provided by operating activities: 

Equity in undistributed earnings of the Bank 
(Increase) decrease in other assets 
(Decrease) increase in other liabilities 

Net cash provided by operating activities 

Cash flows from investing activities:

Investment in the Bank

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of junior subordinated debentures
Net proceeds from issuance of common stock
Net proceeds from exercise of stock options
Repurchase of surrendered stock from exercise of stock options and vesting

of restricted stock awards

Dividends paid 

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year 
Cash and cash equivalents at end of year 

15. OTHER COMPREHENSIVE INCOME (LOSS)

2010

2009

2008

$

9,166

$

8,763

$

8,750

(8,443)
(450)
(6)
267

(4,418)
(217)
1
4,129

(5,849)
1,319
57
4,277

—
—

(11,500)
(11,500)

—
1,395
23

(32)
(5,787)
(4,401)

(4,134)
7,490
3,356

$

16,002
255
47

(36)
(5,716)
10,552

3,181
4,309
7,490

$

$

—
—

—
—
—

(71)
(5,648)
(5,719)

(1,442)
5,751
4,309

Other comprehensive income (loss) components and related income tax effects were as follows:

Years Ended December 31,
(In thousands)
Unrealized holding (losses) gains on available for sale securities 
Reclassification adjustment for gains realized in income 
Income tax effect 

2010

2009

2008

$

(1,518) $
(1,303)
1,121

4,085 $
(529)
(1,724)

5,314
—
(2,110)

Net change in unrealized (loss) gain on available for sale securities 

(1,700)

1,832

3,204

Change in post-retirement obligation 
Income tax effect 
Net change in post-retirement obligation 

Total 

(91)
36
(55)

(267)
106
(161)

(2,629)
1,044
(1,585)

$

(1,755) $

1,671 $

1,619

The following is a summary of the accumulated other comprehensive income balances, net of income tax:

(In thousands)
Unrealized gains on available for sale securities 
Unrealized gains (loss) on pension benefits 
Total 

Balance as of 
December 31, 
2009

Current 
Period 
Change

Balance as of 
December 31, 
2010

$

$

5,249 $
(1,727)
3,522 $

(1,700) $
(55)
(1,755) $

3,549
(1,782)
1,767

Page -65-

16. QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected Consolidated Quarterly Financial Data

2010 Quarter Ended,
(In thousands, except per share amounts)
Interest income 
Interest expense 
Net interest income 
Provision for loan losses 
Net interest income after provision for loan losses 
Non interest income 
Non interest expenses 
Income before income taxes 
Income tax expense 
Net income 
Basic earnings per share 
Diluted earnings per share 

2009 Quarter Ended,
(In thousands, except per share amounts)
Interest income 
Interest expense 
Net interest income 
Provision for loan losses 
Net interest income after provision for loan losses 
Non interest income 
Non interest expenses 
Income before income taxes 
Income tax expense 
Net income 
Basic earnings per share 
Diluted earnings per share 

17. SUBSEQUENT EVENT (UNAUDITED)

March 31,

June 30,

September 30, December 31,

$

$
$
$

$

$
$
$

10,798
1,967
8,831
1,300
7,531
2,202
6,601
3,132
1,002
2,130
0.34
0.34

March 31,

11,023
1,940
9,083
900
8,183
1,179
6,089
3,273
1,064
2,209
0.36
0.36

$

$
$
$

$

$
$
$

10,957
2,003
8,954
700
8,254
2,029
6,999
3,284
1,035
2,249
0.36
0.36

$

$
$
$

11,377 $
1,937
9,440
600
8,840
1,673
7,057
3,456
1,074
2,382 $
0.38 $
0.38 $

11,767
1,833
9,934
900
9,034
1,529
7,222
3,341
936
2,405
0.38
0.38

June 30,

September 30, December 31,

10,864
1,935
8,929
1,400
7,529
1,925
6,450
3,004
981
2,023
0.33
0.33

$

$
$
$

10,727 $
1,916
8,811
900
7,911
1,565
6,064
3,412
1,092
2,320 $
0.37 $
0.37 $

10,754
2,024
8,730
950
7,780
1,505
6,162
3,123
912
2,211
0.35
0.35

On  February  8,  2011,  the  Company  announced  a  definitive  merger  agreement  under  which  the  Bank  will  acquire  Hamptons  State 
Bank. The transaction augments the Bank’s franchise in eastern Long Island and the combined entity will serve customers through a 
network of 20 branches and have total assets of approximately $1.1 billion and deposits of $1.0 billion.

Under  the  terms  of  the  Agreement,  each  share  of  Hamptons  State  Bank  will  be  converted  into 0.3434  shares  of  the  Company’s 
common  stock. The  Company  will  issue  approximately  274,000  shares,  which  will  represent  4.1%  of  the  total  shares  of  the 
Company’s  common  stock  to  be  outstanding.  Based  upon  the  Company’s closing  stock  price  on  February  7,  2011,  the  transaction 
value is approximately $6.3 million and represents 136% of Hamptons State Bank’s tangible book value as of December 31, 2010, and 
a 4.4% premium on core deposits.

The  acquisition,  which  has  been  unanimously  approved  by  the  boards  of  directors  of the  Company  and  Hamptons State  Bank,  is 
subject  to  the  approval  of  Hamptons  State  Bank  shareholders  and  the  approval  of  bank  regulatory  authorities,  as  well  as  other 
customary conditions.  The transaction is expected to close in the third quarter of 2011.

Page -66-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audit Committee
Board of Directors
Bridge Bancorp, Inc.
Bridgehampton, New York

We have audited the accompanying consolidated balance sheets of Bridge Bancorp, Inc. as of December 31, 2010 and 2009, and the 
related consolidated statements of income, stockholders’ equity and cash flows  for each of the years in the three-year period ended 
December 31, 2010. We also have audited Bridge Bancorp, Inc’s. internal control over financial reporting as of December 31, 2010,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the 
Treadway  Commission  (COSO).  Bridge  Bancorp,  Inc.’s  management  is  responsible  for  these  consolidated  financial  statements,  for 
maintaining  effective  internal  control  over  financial  reporting,  and  for  its  assessment  of  the  effectiveness  of  internal  control  over 
financial  reporting,  included  in  the  Report  By  Management  on  Internal  Control  Over  Financial  Reporting  located  in  Item  9A.  Our 
responsibility  is  to  express  an  opinion  on  these  consolidated  financial  statements  and  an  opinion  on  Bridge  Bancorp, Inc’s  internal 
control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those 
standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of 
material  misstatement  and  whether  effective  internal  control  over  financial  reporting  was  maintained  in  all  material  respects.  Our 
audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial 
statements,  assessing  the  accounting  principles  used  and  significant  estimates  made  by  management,  and  evaluating  the  overall 
financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal 
control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness  of  internal  control,  based  on  the  assessed  risk.  Our  audits  also  included  performing  such  other  procedures  as  we
considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed 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.  A  company’s  internal  control  over  financial  reporting  includes  those  policies  and  procedures  that  (1)  pertain  to the 
maintenance  of  records  that,  in  reasonable  detail,  accurately  and  fairly  reflect  the  transactions  and  dispositions  of  the  assets  of  the 
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in 
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in 
accordance  with  authorizations  of  management  and  directors  of  the  company;  and  (3)  provide  reasonable  assurance  regarding 
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect 
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections 
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in 
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of 
Bridge Bancorp, Inc. as of December 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years in the 
three-year  period  ended  December  31,  2010 in  conformity  with  accounting  principles  generally  accepted  in  the  United  States  of 
America.  Also  in  our  opinion,  Bridge  Bancorp,  Inc.  maintained,  in  all  material  respects,  effective  internal  control  over  financial 
reporting as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee 
of Sponsoring Organizations of the Treadway Commission (COSO).

Livingston, New Jersey 
March 8, 2011

Crowe Horwath LLP

Page -67-

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure 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 
December  31,  2010.  Based  on  that  evaluation,  the  Company’s  Principal  Executive  Officer  and  Principal  Chief  Financial  Officer
concluded that the  Company’s disclosure controls and procedures  were effective as of the end of the period covered by the annual 
report.

Report By Management On Internal Control Over Financial Reporting

Management of Bridge Bancorp, Inc. (“the Company”) is responsible for establishing and maintaining an effective system of internal 
control over financial reporting. The Company’s system of internal control over financial reporting is designed 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. There are inherent limitations in the effectiveness of any system of internal 
control over financial reporting, including the possibility  of human error and circumvention or overriding of controls. Accordingly, 
even an effective system of internal control over financial reporting can provide only reasonable assurance with respect to financial 
statement preparation. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become 
inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the Company’s internal control over financial reporting as of December 31, 2010. This assessment was based 
on criteria for effective internal control over financial reporting described in Internal Control - Integrated Framework issued by the 
Committee  of  Sponsoring  Organizations  of  the  Treadway  Commission.  Based  on  this  assessment,  management  believes  that,  as  of 
December 31, 2010, the Company maintained effective internal control over financial reporting based on those criteria.

The Company’s independent  registered public accounting  firm that  audited the financial statements that are  included  in this annual 
report on Form 10-K, has issued an audit report on the Company’s internal control over financial reporting. The audit report of Crowe 
Horwath LLP appears on the previous page.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the quarter ended December 31, 2010, that 
has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

“Item  1  – Election  of  Directors,”  “Compliance  with  Section  16  (a)  of  the  Exchange  Act,”  and  “Code  of  Ethics”  set  forth  in  the 
Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 6, 2011, are incorporated herein by reference.

Item 11. Executive Compensation

“Compensation  of  Directors,”  “Compensation  of  Executive  Officers,”  “Report  of  the  Compensation  Committee  on  Executive 
Compensation,”  “Compensation  Committee  Interlocks  and  Insider  Participation,”  and  “Employment  Contracts  and  Severance 
Agreements” set forth in the Registrant’s Proxy Statement for the  Annual Meeting of Shareholders to be held on May 6, 2011, are 
incorporated herein by reference.

Page -68-

Item  12. Security  Ownership  of  Certain  Beneficial  Owners  and  Management  and  Related  Stockholder 
Matters

“Beneficial Ownership” and “Item 1 – Election of Directors”, set forth in the Registrant’s Proxy Statement for the Annual Meeting of 
Shareholders to be held on May 6, 2011, are incorporated herein by reference.

Set  forth  below  is  certain  information  as  of  December  31,  2010,  regarding  the  Company’s  equity  compensation  plan  that  has  been 
approved by stockholders.

Equity Compensation
Plan approved by
Stockholders

1996 Equity Incentive Plan

2006 Equity Incentive Plan

Total

Number of securities to
be Issued upon 
Exercise
of outstanding options
and awards

Weighted Average
Exercise Price with
respect to 
Outstanding
Stock Options

Number of Securities
Remaining Available 
for
Issuance under the Plan

13,162

234,351

247,513

$

$

$

24.42

25.25

25.06

—

365,595

365,595

Item 13. Certain Relationships and Related Transactions, and Director Independence

“Certain Relationships and Related Transactions”, and “Director Nominations” set forth in the Registrant’s Proxy Statement for the 
Annual Meeting of Shareholders to be held on May 6, 2011, is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

“Item 2 - Ratification of the Appointment of the Independent Registered Public Accounting Firm” “Fees Paid to Crowe Horwath,” and 
“Policy on Audit Committee Pre-approval of Audit and Non-audit Services of Independent Registered Public Accounting Firm” set 
forth in the Registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 6, 2011, is incorporated herein by 
reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The  following  Consolidated  Financial  Statements,  including  notes  thereto,  and  financial  schedules  of  the  Company,  required in 
response to this item are included in Part II, Item 8.

1.

Financial Statements

Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm

2.

Financial Statement Schedules

Page No.

35
36
37
38
39
67

Financial  Statement  Schedules  have  been  omitted  because  they  are  not  applicable  or  the  required  information  is  shown  in  the 
Consolidated Financial Statements or Notes thereto under Item 8, “Financial Statements and Supplementary Data.”

3.

Exhibits.

            See Index of Exhibits on page 71.

Page -69-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this 
report to be signed on its behalf by the undersigned, thereunto duly authorized.

March 11, 2011

March 11, 2011

March 11, 2011

BRIDGE BANCORP, INC.
Registrant

/s/ Kevin M. O’Connor
Kevin M. O’Connor
President and Chief Executive Officer

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

/s/ Sarah K. Quinn
Sarah K. Quinn
Vice President, Controller and Principal
Accounting Officer

Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons 
on behalf of the registrant and in the capacities and on the dates indicated.

March 11, 2011

March 11, 2011

March 11, 2011

March 11, 2011

March 11, 2011

March 11, 2011

March 11, 2011

March 11, 2011

March 11, 2011

March 11, 2011

,Director

,Director

,Director

,Director

,Director

,Director

,Director

,Director

,Director

,Director

/s/ Marcia Z. Hefter
Marcia Z. Hefter

/s/ Dennis A. Suskind
Dennis A. Suskind

/s/ Kevin M. O’Connor
Kevin M. O’Connor

/s/ Emanuel Arturi
Emanuel Arturi

/s/ R. Timothy Maran
R. Timothy Maran

/s/ Charles I. Massoud
Charles I. Massoud

/s/ Albert E. McCoy Jr.
Albert E. McCoy Jr.

/s/ Howard H. Nolan
Howard H. Nolan

/s/ Rudolph J. Santoro
Rudolph J. Santoro

/s/ Thomas J. Tobin
Thomas J. Tobin

Page -70-

EXHIBIT INDEX

Exhibit Number

Description of Exhibit

Exhibit

2.1

3.1

3.1(i)

3.1(ii)

3.2

10.1

10.2

10.3

10.5

10.6

10.7

23

31.1

31.2

32.1

Agreement and Plan of Merger and among Bridge Bancorp, Inc., The Bridgehampton 
National Bank and Hamptons State Bank (incorporated by reference to Registrant’s Form 8-
K, File No. 0-18546, filed February 10, 2011)

Certificate of Incorporation of the registrant (incorporated by reference to Registrant’s 
amended Form 10, File No. 0-18546, filed October 15, 1990)

Certificate of Amendment of the Certificate of Incorporation of the Registrant (incorporated 
by reference to Registrant’s Form 10, File No. 0-18546, filed August 13, 1999)

Certificate of Amendment of the Certificate of Incorporation of the Registrant (incorporated 
by reference to Registrant’s Definitive Proxy Statement, File No. 0-18546, filed November 
18, 2008)

Revised By-laws of the Registrant (incorporated by reference to Registrant’s Form 8-K, File 
No. 0-18546, filed December 17, 2007)

Amended and Restated Employment Contract - Thomas J. Tobin (incorporated by reference 
to Registrant’s Form 8-K, File No. 0-18546, filed October 9, 2007)

Amended and Restated Employment Contract – Howard H. Nolan (incorporated by reference 
to Registrant’s Form 10-K, File No. 0-18546, filed March 12, 2009)

Employment Contract – Kevin M. O’Connor (incorporated by reference to Registrant’s Form 
8-K, File No. 0-18546, filed October 9, 2007)

Equity Incentive Plan (incorporated by reference to Registrant’s Form S-8, File No. 0-18546, 
filed August 14, 2006)

Supplemental Executive Retirement Plan (Revised for 409A) (incorporated by reference to 
Registrant’s Form 10-K, File No. 0-18546, filed March 14, 2008)

Agreement and Plan of Merger and among Bridge Bancorp, Inc., The Bridgehampton 
National Bank and Hamptons State Bank (incorporated by reference to Registrant’s Form 8-
K, File No. 0-18546, filed February 10, 2011)

*

*

*

*

*

*

*

*

*

*

*

Consent of Independent Registered Public Accounting Firm

Certification of Principal Executive Officer pursuant to Rule 13a-14(a)

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)

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

*

Denotes incorporated by reference.

Page -71-

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

We  consent  to  the  incorporation  by  reference  in  Registration  Statements on  Form  S-3  and  S-8  (File  Numbers:  333-136600,  333-
160240,  and  333-158869)  of  Bridge  Bancorp,  Inc.  of  our  report  dated  March  8,  2011 with respect  to  the  consolidated  financial 
statements  of  Bridge  Bancorp,  Inc.  and  the  effectiveness  of  internal  control  over  financial  reporting,  which  report  appears  in  this 
Annual Report on Form 10-K of Bridge Bancorp, Inc. for the year ended December 31, 2010.

Livingston, New Jersey 
March 8, 2011

Crowe Horwath LLP 

Page -72-

EXHIBIT 31.1

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

I, Kevin M. O’Connor, certify that: 

1)

2)

3)

4)

I have reviewed this annual report on Form 10-K of Bridge Bancorp, Inc.; 

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; 

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; 

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 15d-15(f)) for the registrant and have: 

a)

b)

c)

d)

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 report 
is being prepared; 

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; 

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 

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 (the registrant’s fourth fiscal quarter in the case of an annual report) that 
has  materially  affected,  or  is  reasonably  likely  to  materially  affect,  the  registrant’s  internal  control  over  financial 
reporting; 

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  (or  persons 
performing the equivalent functions): 

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: March 11, 2011

/s/ Kevin M. O’Connor 
Kevin M. O’Connor
President and Chief Executive Officer 

Page -73-

EXHIBIT 31.2

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

I, Howard H. Nolan, certify that: 

1)

2)

3)

4)

I have reviewed this annual report on Form 10-K of Bridge Bancorp, Inc.; 

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; 

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; 

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 15d-15(f)) for the registrant and have: 

a)

b)

c)

d)

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 report 
is being prepared; 

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; 

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 

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 (the registrant’s fourth fiscal quarter in the case of an annual report) that 
has  materially  affected,  or  is  reasonably  likely  to  materially  affect,  the  registrant’s  internal  control  over  financial 
reporting; 

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  (or  persons 
performing the equivalent functions): 

a)

b)

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 

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: March 11, 2011

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

Page -74-

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 Annual Report of Bridge Bancorp, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2010
as filed  with  the  Securities and Exchange  Commission on March 11, 2011, (the “Report”),  we, Kevin M. O’Connor, President and 
Chief  Executive  Officer  of  the  Company  and,  Howard  H.  Nolan,  Senior  Executive  Vice  President,  Chief  Financial  Officer  and 
Treasurer 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)

(2)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, 
as amended; and 

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

Date: March 11, 2011

/s/ Kevin M. O’Connor 
Kevin M. O’Connor 
President and Chief Executive Officer

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

A signed original of this written statement required by Section 906 has been provided to Bridge Bancorp, Inc. and will be retained by 
Bridge Bancorp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Page -75-

                Strength. 

Bridge Bancorp, Inc., a New York corporation (NASDAQ:BDGE), 

is  a  one  bank  holding  company  engaged  in  commercial  banking

and  financial  services  through 

its  wholly  owned  subsidiary, 

Bridgehampton National Bank.  Established in 1910 by farmers and

merchants,  the  Bank  recently  celebrated  its  100th  anniversary  and 

renewed  its  commitment  to  the  tenants  of  community  banking: 

developing  long-term  relationships  with  local  customers,  offering 

knowledge and  an understanding of the local marketplace and taking 

an active role in making the towns and villages it serves better places

to live and work.

Throughout  its  history,  Bridgehampton  National  Bank  has  estab-

lished a reputation for personal service, access to decision makers and 

engaged involvement in the community.  As it enters its next century, 

the Bank will continue to build on its mission, while taking advantage 

of market opportunities created by a changing economic environment. 

Bridgehampton  National  Bank  operates  in  markets  throughout 

Suffolk County, Long Island. It continues to grow, opening branches 

in  Center  Moriches,  Deer  Park  and  Patchogue  in  2010,  bringing 

the total number of branches to 19. The Bank offers a full range of 

products  and  services  to  businesses,  consumers  and  municipalities. 

Its  professional  teams  of 

lenders  and  branch  managers  offer 

flexible  banking  programs  designed  to  help  customers  meet  their 

financial needs. Products and services include effective technologies

like  online  banking,  online  bill  pay,  remote  deposit  capture,

merchant  services  and  lockbox  as  well  as  the  traditional  menu  of 

deposit  and  loan  products.  In  addition,  title  insurance  is  offered

through Bridge Abstract and investment council is provided by Bridge 

Investment Services. 

                                       Vision. 

                   Growth.

Bridge Bancorp, Inc.   •    2010 Annual Report

Corporate Information

Bridge Bancorp, Inc.
BOARD OF DIRECTORS  
AND AFFILIATIONS

Marcia Z. Hefter
Chairperson

Dennis A. Suskind
Vice Chairperson

Kevin M. O’Connor

Emanuel Arturi

R. Timothy Maran

Charles I. Massoud

Albert E. McCoy, Jr.

Howard H. Nolan

Rudolph J. Santoro

Thomas J. Tobin

COMPANY OFFICERS

Kevin M. O’Connor
President and 
Chief Executive Officer

Howard H. Nolan, CPA
Sr. Executive Vice President
Chief Financial Officer,
Corporate Secretary and Treasurer

Bridgehampton National Bank
EXECUTIVE OFFICERS

Kevin M. O’Connor
President and 
Chief Executive Officer

Howard H. Nolan, CPA
Sr. Executive Vice President,
Chief Administrative and 
Financial Officer 

James J. Manseau
Executive Vice President,
Chief Retail Banking Officer

Kevin L. Santacroce
Executive Vice President,
Chief Lending Officer

SENIOR VICE PRESIDENTS

Seamus J. Doyle

Deborah McGrory

Thomas H. Simson

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VICE PRESIDENTS

William Araneo

Steven Bodziner, Esq.

Kimberly Cioch

Michelle Dosch

Michael Fearon

Nancy Foster

Patricia F. Horan

John B. MacCulley

Theresa Mackey

Norma Marx

Marie McAlary

Margaret Meighan 

Nancy Messer

Maureen P. Mougios

Corrinne Newman

Claudia Pilato

Sarah Quinn, CPA

Stephanie Saggio

Raymond Sanchez

Susan G. Schaefer

Dawn Turnbull

Joseph Walsh

Donna Wetjen

Aidan Wood

ASSISTANT  
VICE PRESIDENTS

Sharon Abbondondelo

Sabrina Aucello

Lance Burke

Mary Beth Callaghan

Deborah Cosgrove

Robert Curtin

Joanne Dougherty

Jeffrey M. Greenwald

Emily Healy

STOCK TRANSFER AGENT  
AND REGISTRAR

Registrar and Transfer Co.
10 Commerce Drive
Cranford, NJ 07016
800.368.5948
www.rtco.com

Shareholders that would like to 
make changes to the name, address 
or ownership of their stock, consolidate
accounts, eliminate duplicate mailings,
or replace lost certificates or dividend
checks, should contact Registrar and 
Transfer Co.

SECURITIES COUNSEL

Luse Gorman Pomerenk  
& Schick, P.C.
5335 Wisconsin Avenue, NW  
Suite 780
Washington, DC 20015-2035

NOTICE OF ANNUAL MEETING

The Annual Meeting of Shareholders 
is scheduled for 11:00 a.m. on 
Friday, May 6, 2011 in the  
Community Room  
Bridgehampton National Bank 
2200 Montauk Highway
Bridgehampton, NY 11932.

Peter Hillick

Joseph Jones

Erin D. Kaelin

Caroline Kalish

Deborah Orlowski

Julia Pratt

Maria L. Press

Keith Robertson

Marion Stark

ASSISTANT CASHIERS

Lisa Babinski

Mimi Bristel

Linda Carlson

Theresa Ceriello

Laura Gorman

Tiana Grampus

Julia Hartmann

Christie G. Pfeil

Jill Ramundo

Gisella Recalde

INVESTOR RELATIONS

Exchange: NASDAQ®
Symbol: BDGE

Howard H. Nolan, CPA
Senior Executive Vice President  
and Corporate Secretary
2200 Montauk Highway  
P.O. Box 3005
Bridgehampton, NY 11932
631.537.1000
hnolan@bridgenb.com

Shareholders seeking information 
about the Company may access 
presentations, press releases and 
government filings through the 
Bank’s website: www.bridgenb.com

BHBAnnualCover.indd  2

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BRIDGE
BANCORP, INC.

2200 Montauk Highway
P.O. Box 3005
Bridgehampton, New York 11932

631.537.1000
www.bridgenb.com

BRIDGE

BANCORP, INC.

2010 Annual Report

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