BRIDGE BANCORP, INC. 2013 Annual Report Our Lending Reach CT NY NJ New York Metro Area Long Island Bridgehampton Center Moriches Cutchogue Deer Park East Hampton East Hampton Village Greenport Hampton Bays Hauppauge Massapequa Mattituck Melville Merrick Montauk Patchogue Peconic Landing Rocky Point Ronkonkoma Sag Harbor Shelter Island Shirley Southampton (Windmill Lane) Southampton Village Southold Wading River Westhampton Beach Commercial Loan Offices Manhattan Riverhead Financial Highlights (in thousands, except per share data and financial ratios) For the year ended December 31, 2013 2012 EARNINGS Net income Return on average equity Return on average assets BALANCE SHEET Assets Deposits Loans Stockholders’ equity PER SHARE DATA Diluted earnings Cash dividends paid Book value $ 13,093 $ 12,772 9.89% 0.77% 11.78% 0.88% $1,896,746 $1,539,079 $1,013,263 $ 159,460 $1,624,713 $1,409,322 $ 798,446 $ 118,672 $ $ $ 1.36 0.69 14.10 $ $ $ 1.48 1.15 13.32 $2,000 $2,000 $1,896.7 $2,000 $1,896.7 $2,000 $15 $15 20% 20% $13.1 $13.1 $1,500 $1,500 $1,500 $1,500 15% 15% $1,539.1 $1,539.1 $12 $12 1000 1000 1000 1000 $1,000 $1,000 $1,000 $1,000 $500 $500 $500 $500 $0 $0 ’09 ’10 ’11 ’09 ’12 ’10 ’13 ’11 $0 ’13 ’12 $0 ’09 ’10 ’11 ’09 ’12 ’10 ’13 ’11 $9 $6 $3 $0 ’13 ’12 $9 $6 $3 $0 ’09 ’10 ’11 ’09 ’12 ’10 ’13 ’11 10% 10% 9.89% 9.89% 5% 5% 0% ’12 ’13 ’09 0% ’10 ’11 ’09 ’12 ’10 ’13 ’11 ’12 ’13 TOTAL ASSETS TOTAL ASSETS TOTAL DEPOSITS TOTAL DEPOSITS (at December 31, in millions) (at December 31, in millions) (at December 31, in millions) (at December 31, in millions) NET INCOME NET INCOME (in millions) (in millions) RETURN ON RETURN ON AVERAGE EQUITY AVERAGE EQUITY (percentage) (percentage) TOTAL ASSETS (at December 31, in millions) TOTAL ASSETS (at December 31, in millions) TOTAL DEPOSITS (at December 31, in millions) TOTAL DEPOSITS (at December 31, in millions) NET INCOME (in millions) NET INCOME (in millions) RETURN ON AVERAGE EQUITY (percentage) RETURN ON AVERAGE EQUITY (percentage) $2,000 $2,000 $1,896.7 $1,896.7 $2,000 $2,000 $15 $15 $1,500 $1,500 $1,500 $1,500 $1,539.1 $1,539.1 $12 $12 20% $13.1 $13.1 20% 15% 15% $1,000 $1,000 $1,000 $1,000 $500 $500 $500 $500 $9 $6 $3 $9 $6 $3 10% 10% 9.89% 9.89% 5% 5% $0 $0 ’10 ’09 ’11 ’09 ’12 ’10 ’13 ’11 ’12 ’13 $0 $0 ’10 ’09 ’11 ’09 ’12 ’10 ’13 ’11 ’12 $0 ’13 $0 ’10 ’09 ’11 ’09 ’12 ’10 ’13 ’11 ’12 0% ’13 0% ’10 ’09 ’11 ’09 ’12 ’10 ’13 ’11 ’12 ’13 TOTAL ASSETS (at December 31, in millions) TOTAL ASSETS (at December 31, in millions) TOTAL DEPOSITS (at December 31, in millions) TOTAL DEPOSITS (at December 31, in millions) NET INCOME (in millions) NET INCOME (in millions) RETURN ON RETURN ON AVERAGE EQUITY AVERAGE EQUITY (percentage) (percentage) 1 E G A P • t r o p e R l a u n n A 3 1 0 2 • . c n I , p r o c n a B e g d i r B TOTAL ASSETS TOTAL ASSETS TOTAL DEPOSITS TOTAL DEPOSITS (at December 31, in millions) (at December 31, in millions) (at December 31, in millions) (at December 31, in millions) NET INCOME NET INCOME (in millions) (in millions) RETURN ON RETURN ON AVERAGE EQUITY AVERAGE EQUITY (percentage) (percentage) 2000 2000 2000 2000 20 20 1500 1500 1500 1500 500 500 500 500 0 0 0 0 15 10 5 0 15 10 5 0 15 12 9 6 3 0 15 12 9 6 3 0 20 20 15 15 10 10 5 0 5 0 2000 2000 2000 2000 1500 1500 1500 1500 1000 1000 1000 1000 500 500 500 500 0 0 0 0 15 12 9 6 3 0 15 12 9 6 3 0 Fellow Shareholders: $1.9 Billion in Assets To prepare this message to you, our shareholders, I assimilate informa- tion from many sources. I start by reviewing our past annual reports and my messages, determining their relevance and our perfor- mance compared to our commit- ments. I gather input from our officers regarding the significant events, chal- lenges and successes of the past year and solicit the opinions of our Board members, who bring perspective and a broad diversity of experience to our Company. Finally, I review the insights of other stakeholders including customers, regula- tors, industry experts and shareholders. helped our legacy branches achieve record levels of deposits. Our loan portfolio ended 2013 at over $1.0 billion, an aggregation of thousands of individual loans to local businesses and consumers. Recognizing these aggregated amounts as individual customers is the key to our success and fundamental to the success of any organization. Each day we challenge our employees to balance the needs of their existing relationships, while simultaneously identifying and attracting new customers. Our overall suc- cess reflects the results of each of our bankers in understanding this dual mandate. My goal in collecting this information remains simple: to explain our performance, our plans and our vision for the future. You might assume that with the dramatic changes in our industry, the economy, and on the world stage, our direction would have to change significantly. But, that is not entirely true. We began over 100 years ago as a commu- nity bank providing the basic services of deposit gathering and lending to local-businesses and individuals. We forged long-term relationships and partnerships in Bridgehampton, helping our community to build savings, buy homes, and expand their businesses or farms. We have this same focus today. It is on a larger scale, for some vastly different industries, and for new geogra- phies, but it is still the essence of community banking. Our understanding of mission and pur- pose coupled with our commitment to execution is the overarching reason for our continued and sustained success. This year was highlighted by growth in loca- tions, customers and relationships. The increase in scale and size translated into financial growth. Our overall deposits eclipsed $1.5 billion and in every branch, balances were higher than 2012. New customers in new markets moved deposit relationships; while new and existing customers The increase in scale and asset base allows us to continue to identify growth opportunities and reinvest back into your Company. We opened two branches, we strengthened systems and pro- cesses with technology and people, and contin- ued to balance and align our goals with those of our regulators, while still delivering strong returns and dividends. Net income exceeded $13 million and our returns on assets and equity, while less than 2012, still exceed the perfor- mance of most of the industry. Our strong performance provided a great oppor- tunity to leverage our infrastructure with an opportunistic acquisition. In October 2013, we announced the $5.3 million purchase of the for- mer First National Bank of New York, (FNBNY), a three-branch bank with over $200 million in assets, operating in Melville with two branches in Nassau County: Merrick and Massapequa. This was followed, almost immediately, with a successful common stock offering through which we raised almost $38 million in capital, support- ing both the FNBNY transaction and our organic growth. The offering’s success was due in part to the adoption and execution of a strategic initiative to increase investor awareness and improve market liquidity, ultimately enhancing the value of your share ownership. 2 E G A P • t r o p e R l a u n n A 3 1 0 2 • . c n I , p r o c n a B e g d i r B Our understanding of mission and purpose coupled with our commitment to execution is the over arching reason for our success. 3 E G A P • t r o p e R l a u n n A 3 1 0 2 • . c n I , p r o c n a B e g d i r B Growth Str ategically The br anch network is a vital asset, the customers’ touch point and a community anchor. Hauppauge Melville East Hampton Montauk This merger, approved by our primary regulator, closed on February 14, 2014. We immediately converted the acquired customers and branch locations onto our systems, and the three former FNBNY branches reopened as BNB on Tuesday, February 18th as part of our 26-branch network, allowing our new customers to use all of our branches. Given the inherent complexity and abbreviated time frame, this was a significant accomplishment, and is a testament to the talents of our staff, who leveraged on the plans and experience we gained in executing our first acqui- sition of Hamptons State Bank in 2011. We look forward to replicating similar success, expanding the 4 E G A P • t r o p e R l a u n n A 3 1 0 2 • . c n I , p r o c n a B e g d i r B Commercial Mortgages Commercial Loans Residential & Consumer Loans Equity Loans Multifamily Loans Construction & Land Loans 48% 21% 10% 6% 10% 5% Average Yield 5.12% TOTAL LOANS BY TYPE at December 31, 2013 Demand Deposits Money Markets Savings & NOW Certificates of Deposit Average Cost of Customer Deposits 0.34% 38% 39% 17% 6% TOTAL DEPOSITS BY TYPE at December 31, 2013 Commercial Mortgages Commercial Loans Residential & Consumer Loans Equity Loans Multifamily Loans Construction & Land Loans 48% 21% 10% 6% 10% 5% Average Yield 5.12% TOTAL LOANS BY TYPE at December 31, 2013 Shelter Island Southampton Merrick Massapequa business of the former FNBNY, as we begin to deliver the BNB experience in these new markets and to new potential customers. The demograph- ics of the markets we’ve entered, as measured by various metrics such as median income, business density, and employment levels, are incredibly favorable. The reputation and brand recognition we have diligently developed and marketed across the breadth of Long Island, coupled with our experienced team, will be the impetus for our success. Despite a year of very positive macro develop- ments, these are still “challenging times.” While the challenges have evolved, many underlying Demand Deposits Money Markets Savings & NOW Certificates of Deposit Average Cost of Customer Deposits 0.34% 38% 39% 17% 6% TOTAL DEPOSITS BY TYPE at December 31, 2013 5 E G A P • t r o p e R l a u n n A 3 1 0 2 • . c n I , p r o c n a B e g d i r B Growth and Our Infr astructure Enhanced internal oper ations, secure technology platforms and improved systems are fundamental to the strong infrastructure we have put in place to support growth. 27% Increase in Loans trends and concerns remain. Beginning in 2007 and continuing into 2009, we were on the precipice of—and then deep into—the “Great Recession,” with unprecedented financial upheaval, and massive realignment of financial markets and organiza- tions. As a result, government intervention ensued in ways never before contemplated. It owned, then sold, pieces of our largest financial institutions, and for a time, even owned one of the largest auto manufacturers. The methods employed to stimulate/resuscitate the economy gave rise to new acronyms: TARP, TALF, and QE 1, 2 and 3. There were identified victims, vil- lains and innocent bystanders, and in many cases the same groups wore multiple hats. Today, while the crisis has passed, we still deal daily with the vestiges from this period. Our industry faces increased regulation enacted under Dodd-Frank legislation, more oversight, significantly higher levels of required capital and reserves, and finally, low absolute levels of market interest rates. Our success in managing through these chal- lenges and cycles is a tribute to our organization’s historical long-term conservative approach. We entered this period with a defined culture and leader- ship. It begins at the Board level and is dedicated to building on long- term relationships with individuals and businesses. This solid founda- tion allowed our newest employees the ability and freedom to build and grow, rather than repair and retrench. We have certainly invested in our infrastructure, both with people and systems, but we’ve done it from a position of strength. We have had the opportunity to prop- erly serve long-standing customers, add new cus- tomers, and consider new markets and products. We remain diligent in these endeavors. The conti- nuity of both the Board and our senior manage- ment team provides the opportunity to look forward, while remaining true to our founding principles. The future will always create new challenges. We must manage each one strategically and proac- tively. We have to navigate the unwinding of unprecedented monetary intervention and the generational lows in market interest rates. We must be relevant with our technology, while 6 E G A P • t r o p e R l a u n n A 3 1 0 2 • . c n I , p r o c n a B e g d i r B 7 E G A P • t r o p e R l a u n n A 3 1 0 2 • . c n I , p r o c n a B e g d i r B Growth and Our People People are our top resource. We hire and tr ain the best bankers on Long Island. They deliver on our promise to put customers first. diligent to the attendant cybersecurity risks. We must continue to hire, retain and train our most valuable resource, our people. We must preserve and protect our culture. We must listen and respond to the challenges faced by our custom- ers, as their businesses and industries change and evolve. During my tenure, we have been highly cogni- zant of the challenges we faced. We have addressed them directly with our predecessors’ principles at our core, and with a view to the opportunities they may create. Our strong proac- tive regulatory relationships will always be criti- cal to our success. Smart pricing decisions, with a longer-term view on profitability and managing interest rate risk will be critical. Our customers will continue to benefit from current, carefully tested technology integrated with leading edge security features, providing protection for both the customer and the Bank. Our workforce is committed and able, and we are systematically recruiting and training tomorrow’s bankers, steeped in BNB culture. Perhaps most important of all, the personal contact of a customer visit, providing a face-to-face relationship with their banker, will always be a fundamental component of the BNB Community Banking Model. In an increasingly centralized and digital financial services world, this local connection and com- mitment sets us apart. I remain very grateful for the opportunities I have been provided to lead this Company, along with its professional and expert team of bankers, from a place I have called home for my entire life. It is truly a privilege and honor to work with a Board that is mindful of our legacy, yet vision- ary for our future. It is gratifying to reflect on our past accomplishments, but more exciting to share our vision for future possibilities. Thank you again and I look forward to deliver- ing an even better report next year. Sincerely, Kevin M. O’Connor President and Chief Executive Officer 8 E G A P • t r o p e R l a u n n A 3 1 0 2 • . c n I , p r o c n a B e g d i r B Corpor ate Information Bridge Bancorp, inc. BOARD OF DIRECTORS Marcia Z. Hefter Chairperson Dennis A. Suskind Vice Chairperson Kevin M. O’Connor Emanuel Arturi Antonia M. Donohue Charles I. Massoud Albert E. McCoy, Jr. Raymond A. Nielsen Howard H. Nolan, CPA 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 and Corporate Secretary Bridgehampton national Bank EXECUTIVE OFFICERS Kevin M. O’Connor President and Chief Executive Officer Howard H. Nolan, CPA Senior Executive Vice President, Chief Administrative and Financial Officer James J. Manseau Executive Vice President, Chief Retail Banking Officer John M. McCaffery Executive Vice President, Treasurer Kevin L. Santacroce Executive Vice President, Chief Lending Officer SENIOR VICE PRESIDENTS Seamus J. Doyle Nancy Foster Patricia F. Horan Deborah McGrory William J. Newham, III Stephen Sheridan Thomas H. Simson John P. Vivona Joseph Walsh Aidan P. Wood VICE PRESIDENTS Sharon Abbondondelo William Araneo Steven Bodziner Edward Burger Lance P. Burke Kimberly Cioch Stephanie Clancy Deborah Cosgrove Lisa DiIorio Michelle Dosch Michael Fearon Beth Flanagan Maria M. Fontana Peter M. Gajda Stanley Glinka Michael V. Hadix Maureen Hines Monica LaCroix-Rubin Patricia Liotta John B. MacCulley Theresa Mackey Norma Marx Marie A. McAlary Michelle McAteer Margaret B. Meighan Robert P. Mensing Nancy Messer Corrine Newman Deborah Orlowski Claudia Pilato Philip Rinaldi Ann Marie Roberts Keith Robertson Raymond Sanchez Susan G. Schaefer Thomas Sullivan John Tuohy Dawn M. Turnbull Donna Wetjen Annual Report Design by Curran & Connors, Inc. / www.curran-connors.com Photography by Jim Lennon 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. stock transfer agent and r egistrar 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 mail- ings, 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 2, 2014 in the Community Room, Bridgehampton National Bank, 2200 Montauk Highway, Bridgehampton, NY 11932. BRIDGE BANCORP, INC. 2200 Montauk Highway P.O. Box 3005 Bridgehampton, New York 11932 631.537.1000 www.bridgenb.com Bridgehampton national Bank Branches Patchogue 631.923.1495 Peconic Landing (Greenport) 631.477.8150 Rocky Point 631.886.0002 Ronkonkoma 631.940.1470 Sag Harbor 631.725.6622 Shelter Island 631.907.2125 Shirley 631.281.1245 Southampton Village 631.287.6504 Southampton, Windmill Lane 631.287.9500 Southold 631.765.1500 Wading River 631.929.4250 Westhampton Beach 631.288.7756 Bridgehampton 631.537.8834 Center Moriches 631.909.4990 Cutchogue 631.734.5002 Deer Park 631.392.1301 East Hampton 631.324.8480 Hampton Bays 631.728.9041 Hauppauge 631.909.7500 Massapequa 516.882.1111 Mattituck 631.298.0190 Melville 631.546.1500 East Hampton Village 631.324.8481 Merrick 516.632.1600 Greenport 631.477.0220 Montauk 631.668.6400 Bridge aBstract llc 2200 Montauk Highway P.O. Box 3031 Bridgehampton, NY 11932 631.537.5750 www.bridgeabstractllc.com About Us Bridge Bancorp, Inc., a New York corporation (NASDAQ: BDGE), is a bank holding company engaged in commercial banking and financial services through its wholly owned subsidiary, Bridgehampton National Bank (the Bank, BNB). Established in 1910 by farmers and merchants, the Bank today has approximately $1.9 billion in assets and an ongoing commitment to the tenets of community banking: developing long-term relationships with customers, offering knowledge and 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, BNB has established a reputation for personal service, access to decision makers and engaged involvement in the community. A full range of products and services to businesses, consumers and municipalities is offered by BNB. Its professional team of lenders and branch managers offers flexible banking programs in partnership with customers to help meet their financial needs. Products and services include convenient 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. BNB operates 26 branches in markets in Suffolk and Nassau counties on Long Island.