Edgar Filing: BRIDGE BANCORP INC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

Commission file number 001-34096

BRIDGE BANCORP, INC.

(Exact name of registrant as specified in its charter)

NEW YORK	11-2934195
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)

2200 MONTAUK HIGHWAY, BRIDGEHAMPTON, NEW YORK	11932
(Address of principal executive offices)	(Zip Code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant 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 x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨	Accelerated filer x

Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ¨

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

There were 17,458,781 shares of common stock outstanding as of May 6, 2016.

BRIDGE BANCORP, INC.

PART I -	FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	3

	Consolidated Statements of Income for the Three Months Ended March 31, 2016 and 2015	4

	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2016 and 2015	5

	Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2016 and 2015	6

	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	7

	Condensed Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	48

Item 4.	Controls and Procedures	49

PART II -	OTHER INFORMATION

Item 1.	Legal Proceedings	49

Item 1A.	Risk Factors	49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50

Item 3.	Defaults Upon Senior Securities	50

Item 4.	Mine Safety Disclosures	50

Item 5.	Other Information	50

Item 6.	Exhibits	50

Signatures		51

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Item 1. Financial Statements

BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets (unaudited)

(In thousands, except share and per share amounts)

	March 31,			December 31,
	2016			2015
ASSETS
Cash and due from banks	$	44,797		$	79,750
Interest earning deposits with banks		22,411			24,808
Total cash and cash equivalents		67,208			104,558

Securities available for sale, at fair value		883,626			800,203
Securities held to maturity (fair value of $223,535 and $210,003, respectively)		218,278			208,351
Total securities		1,101,904			1,008,554

Securities, restricted		24,865			24,788

Loans held for investments		2,481,247			2,410,774
Allowance for loan losses		(21,799	)		(20,744	)
Loans, net		2,459,448			2,390,030

Premises and equipment, net		34,828			39,595
Accrued interest receivable		9,982			9,270
Goodwill		105,950			98,445
Other intangible assets		7,707			8,376
Prepaid pension		6,015			6,047
Bank owned life insurance		53,685			53,314
Other real estate owned		-			250
Other assets		41,964			38,732
Total Assets	$	3,913,556		$	3,781,959

LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits	$	1,052,864		$	1,156,882
Savings, NOW and money market deposits		1,619,970			1,393,888
Certificates of deposit of $100,000 or more		150,651			167,750
Other time deposits		116,927			125,105
Total deposits		2,940,412			2,843,625

Federal Funds Purchased		135,000			120,000
Federal Home Loan Bank term advances		299,174			297,507
Repurchase agreements		50,965			50,891
Subordinated debentures		78,397			78,363
Junior subordinated debentures		15,879			15,878
Other liabilities and accrued expenses		42,791			34,567
Total Liabilities		3,562,618			3,440,831

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: 40,000,000 shares; 17,460,529 and 17,388,918 shares issued, respectively; 17,448,727 and 17,388,918 shares outstanding, respectively		175			174
Surplus		279,099			278,333
Retained earnings		76,852			72,243
Less: Treasury Stock at cost, 11,802 and 0 shares, respectively		(331	)		-
		355,795			350,750
Accumulated other comprehensive loss, net of income tax		(4,857	)		(9,622	)
Total Stockholders' Equity		350,938			341,128
Total Liabilities and Stockholders' Equity	$	3,913,556		$	3,781,959

See accompanying condensed notes to the Unaudited Consolidated Financial Statements

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BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Income (unaudited)

(In thousands, except per share amounts)

	Three Months Ended
	March 31,
	2016			2015
Interest income:
Loans (including fee income)	$	27,949		$	16,490
Mortgage-backed securities, CMOs and other asset-backed securities		3,849			2,567
U.S. GSE securities		356			405
State and municipal obligations		894			746
Corporate Bonds		277			185
Deposits with banks		37			7
Other interest and dividend income		245			107
Total interest income		33,607			20,507

Interest expense:
Savings, NOW and money market deposits		1,278			773
Certificates of deposit of $100,000 or more		215			190
Other time deposits		194			112
Federal funds purchased and repurchase agreements		185			146
Federal Home Loan Bank advances		827			250
Subordinated debentures		1,135			-
Junior subordinated debentures		341			341
Total interest expense		4,175			1,812

Net interest income		29,432			18,695
Provision for loan losses		1,250			800
Net interest income after provision for loan losses		28,182			17,895

Non interest income:
Service charges on deposit accounts		1,073			853
Fees for other customer services		919			598
Net securities gains (losses)		66			(10	)
Title fee income		477			463
Other operating income		1,460			900
Total non interest income		3,995			2,804

Non interest expense:
Salaries and employee benefits		10,537			7,523
Occupancy and equipment		2,924			2,203
Technology and communications		1,085			790
Marketing and advertising		757			573
Professional services		1,008			521
FDIC assessments		508			311
Acquisition costs		(270	)		175
Amortization of other intangible assets		676			48
Other operating expenses		1,682			1,166
Total non interest expense		18,907			13,310

Income before income taxes		13,270			7,389
Income tax expense		4,644			2,626
Net income	$	8,626		$	4,763
Basic earnings per share	$	0.49		$	0.41
Diluted earnings per share	$	0.49		$	0.41

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

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BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income (unaudited)

(In thousands)

	For the
	Three Months Ended
	March 31,
	2016			2015
Net Income	$	8,626		$	4,763
Other comprehensive income:
Change in unrealized net gains on securities available for sale, net of reclassifications and deferred income taxes		5,757			2,966
Adjustment to pension liability, net of reclassifications and deferred income taxes		61			54
Unrealized losses on cash flow hedge, net of reclassifications and deferred income taxes		(1,053	)		(420	)
Total other comprehensive income		4,765			2,600
Comprehensive income	$	13,391		$	7,363

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

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BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (unaudited)

(In thousands, except per share amounts)

	Common Stock		Surplus			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Total
Balance at January 1, 2016	$	174	$	278,333		$	72,243		$	-		$	(9,622	)	$	341,128
Net income							8,626									8,626
Shares issued under the dividend reinvestment plan ("DRP")				221												221
Stock awards granted and distributed		1		(11	)					10						-
Stock awards forfeited				50						(50	)					-
Vesting of stock awards										(291	)					(291	)
Share based compensation expense				506												506
Cash dividend declared, $0.23 per share							(4,017	)								(4,017	)
Other comprehensive income, net of deferred income taxes													4,765			4,765
Balance at March 31, 2016	$	175	$	279,099		$	76,852		$	(331	)	$	(4,857	)	$	350,938

	Common Stock		Surplus			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Total
Balance at January 1, 2015	$	117	$	118,846		$	64,547		$	(25	)	$	(8,367	)	$	175,118
Net income							4,763									4,763
Shares issued under the dividend reinvestment plan ("DRP")				169												169
Stock awards granted and distributed				(43	)					43						-
Vesting of stock awards										(210	)					(210	)
Income tax effect of stock plans				48												48
Share based compensation expense				350												350
Cash dividend declared, $0.23 per share							(2,687	)								(2,687	)
Other comprehensive income, net of deferred income taxes													2,600			2,600
Balance at March 31, 2015	$	117	$	119,370		$	66,623		$	(192	)	$	(5,767	)	$	180,151

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

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BRIDGE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows (unaudited)

(In thousands)

	Three Months Ended
	March 31,
	2016			2015
Cash flows from operating activities:
Net Income	$	8,626		$	4,763
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses		1,250			800
Depreciation and (accretion)		(1,294	)		(645	)
Net amortization on securities		1,464			1,038
Increase in cash surrender value of bank owned life insurance		(371	)		(230	)
Amortization of intangible assets		676			48
Share based compensation expense		506			350
Excess tax benefit from share based compensation		97			-
Net securities (gains) losses		(66	)		10
(Increase) decrease in accrued interest receivable		(712	)		36
Small Business Administration ("SBA") loans originated for sale		(1,170	)		-
Proceeds from sale of the guaranteed portion of SBA loans		1,310			-
Gain on sale of the guaranteed portion of SBA loans		(114	)		-
Decrease (increase) decrease in other assets		1,360			(502	)
Decrease in accrued expenses and other liabilities		(2,223	)		(996	)
Net cash provided by operating activities		9,339			4,672

Cash flows from investing activities:
Purchases of securities available for sale		(145,053	)		(37,811	)
Purchases of securities, restricted		(23,445	)		(34,875	)
Purchases of securities held to maturity		(21,329	)		-
Proceeds from sales of securities available for sale		28,705			73,788
Redemption of securities, restricted		23,368			36,293
Maturities, calls and principal payments of securities available for sale		46,817			25,281
Maturities, calls and principal payments of securities held to maturity		11,185			3,052
Net increase in loans		(76,145	)		(65,656	)
Proceeds from loan sale		-			1,861
Proceeds from sales of other real estate owned, net		278			-
Purchase of premises and equipment		(960	)		(1,064	)
Net cash (used in) provided by investing activities		(156,579	)		869

Cash flows from financing activities:
Net increase in deposits		97,110			5,704
Net increase in federal funds purchased		15,000			30,000
Net increase (decrease) in FHLB advances		1,793			(31,499	)
Net increase (decrease) in repurchase agreements		74			(10,019	)
Net proceeds from issuance of common stock		221			169
Repurchase of surrendered stock from vesting of restricted stock awards		(291	)		(210	)
Excess tax benefit from share based compensation		-			48
Cash dividends paid		(4,017	)		(2,687	)
Net cash provided by (used in) financing activities		109,890			(8,494	)

Net increase in cash and cash equivalents		(37,350	)		(2,953	)
Cash and cash equivalents at beginning of period		104,558			51,730
Cash and cash equivalents at end of period	$	67,208		$	48,777

Supplemental Information-Cash Flows:
Cash paid for:
Interest	$	5,251		$	1,842
Income tax	$	1,970		$	1,260

Noncash investing and financing activities:
Securities which settled in the subsequent period	$	5,400		$	-

See accompanying condensed notes to the Unaudited Consolidated Financial Statements.

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BRIDGE BANCORP, INC. AND SUBSIDIARIES

CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. BASIS OF PRESENTATION

Bridge Bancorp, Inc. (the “Company”) is a bank holding company incorporated under the laws of the State of New York. 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”), a financial title insurance subsidiary, Bridge Abstract LLC (“Bridge Abstract”), and Bridge Financial Services, Inc. (“Bridge Financial Services”), an investment services subsidiary. 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.

The accompanying Unaudited Consolidated Financial Statements, which include the accounts of the Company and its wholly-owned subsidiary, the Bank, have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The Unaudited Consolidated Financial Statements included herein reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. In preparing the interim financial statements, management has made estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported periods. Such estimates are subject to change in the future as additional information becomes available or previously existing circumstances are modified. Actual future results could differ significantly from those estimates. The annualized results of operations for the three months ended March 31, 2016 are not necessarily indicative of the results of operations that may be expected for the entire fiscal year. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain reclassifications have been made to prior year amounts, and the related discussion and analysis, to conform to the current year presentation. These reclassifications did not have an impact on net income or total stockholders’ equity. The Unaudited Consolidated Financial Statements should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

2. EARNINGS PER SHARE

Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) No. 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 certain restricted stock units granted by the Company contain non-forfeitable 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.

The computation of EPS for the three months ended March 31, 2016 and 2015 is as follows:

	Three months ended,
	March 31,
(In thousands, except per share data)	2016			2015
Net Income	$	8,626		$	4,763
Less: Dividends paid on and earnings allocated to participating securities		(170	)	$	(118	)
Income attributable to common stock	$	8,456		$	4,645

Weighted average common shares outstanding, including participating securities		17,479			11,720
Less: weighted average participating securities		(353	)		(301	)
Weighted average common shares outstanding		17,126			11,419
Basic earnings per common share	$	0.49		$	0.41

Income attributable to common stock	$	8,456		$	4,645

Weighted average common shares outstanding		17,126			11,419
Weighted average common equivalent shares outstanding		11			1
Weighted average common and equivalent shares outstanding		17,137			11,420
Diluted earnings per common share	$	0.49		$	0.41

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There were no stock options that were antidilutive at March 31, 2016. There were 37,739 options outstanding at March 31, 2015 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 March 31, 2016 and March 31, 2015, were not included in the computation of diluted earnings per share because the assumed conversion of the trust preferred securities was antidilutive.

3. STOCK BASED COMPENSATION PLANS

The Compensation Committee of the Board of Directors determines stock options and restricted stock awarded under the Bridge Bancorp, Inc. Equity Incentive Plan (“Plan”) and the Company accounts for this Plan under the FASB ASC No. 718 and 505. On May 4, 2012, the stockholders of the Company approved the Company’s 2012 Stock-Based Incentive Plan which supersedes the Bridge Bancorp, Inc. Equity Incentive Plan that was approved in 2006 (the “2006 Plan”). The plan provides for the grant of stock-based and other incentive awards to officers, employees and directors of the Company.

No new grants of stock options were awarded and no compensation expense was attributable to stock options for the three months ended March 31, 2016 and March 31, 2015 because all stock options were vested.

The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the market price of our common stock as of the exercise or reporting date. The intrinsic value of options exercised during the first quarter of 2016 and 2015 was $15,000 and $0, respectively. The intrinsic value of options outstanding and exercisable at March 31, 2016 and March 31, 2015 was $103,000 and $20,000, respectively.

A summary of the status of the Company’s stock options as of and for the three months ended March 31, 2016 is as follows:

						Weighted
				Weighted		Average
	Number			Average		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
(Dollars in thousands, except per share amounts)	Options			Price		Life		Value
Outstanding, January 1, 2016		23,725		$	25.25
Granted		-			-
Exercised		(4,000	)	$	25.25
Forfeited		-			-
Expired		-			-
Outstanding, March 31, 2016		19,725		$	25.25		0.66 years	$	103
Vested and Exercisable, March 31, 2016		19,725		$	25.25		0.66 years	$	103

	Number of		Exercise
Range of Exercise Prices	Options		Price
		19,725	$	25.25
		19,725

During the three months ended March 31, 2016, restricted stock awards of 63,709 shares were granted. Of the 63,709 shares granted, 36,000 shares vest over seven years with a third vesting after years five, six and seven, 27,209 shares vest over five years with a third vesting after years three, four and five, and 500 shares vest ratably over three years. During the three months ended March 31, 2015, restricted stock awards of 55,437 shares were granted. Of the 55,437 shares granted, 30,625 shares vest over seven years with a third vesting after years five, six and seven and 24,812 shares vest over five years with a third vesting after years three, four and five. Compensation expense attributable to restricted stock awards was $351,000 and $302,000 for the three months ended March 31, 2016 and 2015, respectively.

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A summary of the status of the Company’s unvested restricted stock as of and for the three months ended March 31, 2016 is as follows:

				Weighted
				Average Grant-Date
	Shares			Fair Value
Unvested, January 31, 2016		281,076		$	23.46
Granted		63,709		$	27.80
Vested		(34,927	)	$	21.70
Forfeited		(2,079	)	$	23.83
Unvested, March 31, 2016		307,779		$	24.55

Effective in 2015, the Board revised the design of the Long Term Incentive Plan (“LTI Plan”) for Named Executive Officers (“NEOs”) to include performance based awards. The LTI Plan includes 60% performance vested awards based on 3-year relative Total Shareholder Return (“TSR”) to the proxy peer group and 40% time vested awards. The awards are in the form of restricted stock units and cliff vest after five years and require an additional two year holding period before the restricted stock units are delivered in shares of common stock. The Company recorded expense of approximately $40,000 and $14,000 in connection with these awards for the three months ended March 31, 2016 and 2015, respectively.

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 $115,000 and $34,000 for the three months ended March 31, 2016 and 2015, respectively.

4. SECURITIES

The following table summarizes the amortized cost and fair value of the available for sale and held to maturity investment securities portfolio at March 31, 2016 and December 31, 2015 and the corresponding amounts of unrealized gains and losses therein:

	March 31, 2016
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
(In thousands)	Cost		Gains		Losses			Value
Available for sale:
U.S. GSE securities	$	67,242	$	82	$	(18	)	$	67,306
State and municipal obligations		102,417		1,346		(84	)		103,679
U.S. GSE residential mortgage-backed securities		214,827		1,775		(78	)		216,524
U.S. GSE residential collateralized mortgage obligations		360,008		1,663		(808	)		360,863
U.S. GSE commercial mortgage-backed securities		12,432		224		-			12,656
U.S. GSE commercial collateralized mortgage obligations		68,741		449		(129	)		69,061
Other asset backed securities		24,250		-		(1,940	)		22,310
Corporate bonds		32,000		103		(876	)		31,227
Total available for sale		881,917		5,642		(3,933	)		883,626

Held to maturity:
U.S. GSE securities		-		-		-			-
State and municipal obligations		63,326		2,620		-			65,946
U.S. GSE residential mortgage-backed securities		12,393		34		(13	)		12,414
U.S. GSE residential collateralized mortgage obligations		63,969		1,544		(66	)		65,447
U.S. GSE commercial mortgage-backed securities		29,291		512		(81	)		29,722
U.S. GSE commercial collateralized mortgage obligations		38,299		821		(147	)		38,973
Corporate bonds		11,000		33		-			11,033
Total held to maturity		218,278		5,564		(307	)		223,535
Total securities	$	1,100,195	$	11,206	$	(4,240	)	$	1,107,161

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	December 31, 2015
			Gross		Gross			Estimated
	Amortized		Unrealized		Unrealized			Fair
(In thousands)	Cost		Gains		Losses			Value
Available for sale:
U.S. GSE securities	$	63,238	$	-	$	(564	)	$	62,674
State and municipal obligations		87,830		427		(322	)		87,935
U.S. GSE residential mortgage-backed securities		201,297		237		(1,270	)		200,264
U.S. GSE residential collateralized mortgage obligations		321,253		513		(3,888	)		317,878
U.S. GSE commercial mortgage-backed securities		12,491		7		(80	)		12,418
U.S. GSE commercial collateralized mortgage obligations		64,809		9		(620	)		64,198
Other asset backed securities		24,250		-		(1,879	)		22,371
Corporate bonds		33,000		-		(535	)		32,465
Total available for sale		808,168		1,193		(9,158	)		800,203

Held to maturity:
U.S. GSE securities		7,466		1		-			7,467
State and municipal obligations		64,878		1,715		(113	)		66,480
U.S. GSE residential mortgage-backed securities		7,609		-		(106	)		7,503
U.S. GSE residential collateralized mortgage obligations		60,933		617		(498	)		61,052
U.S. GSE commercial mortgage-backed securities		23,056		210		(313	)		22,953
U.S. GSE commercial collateralized mortgage obligations		33,409		282		(185	)		33,506
Corporate bonds		11,000		42		-			11,042
Total held to maturity		208,351		2,867		(1,215	)		210,003
Total securities	$	1,016,519	$	4,060	$	(10,373	)	$	1,010,206

The following table summarizes the amortized cost, fair value and maturities of the available for sale and held to maturity investment securities portfolio at March 31, 2016. 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.

	March 31, 2016
	Amortized		Fair
(In thousands)	Cost		Value
Maturity
Available for sale:
Within one year	$	10,507	$	10,521
One to five years		90,049		90,378
Five to ten years		128,043		128,594
Beyond ten years		653,318		654,133
Total	$	881,917	$	883,626

Held to maturity:
Within one year	$	4,910	$	4,926
One to five years		31,088		31,457
Five to ten years		62,414		65,077
Beyond ten years		119,866		122,075
Total	$	218,278	$	223,535

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Securities with unrealized losses at March 31, 2016 and December 31, 2015, aggregated by category and length of time that individual securities have been in a continuous unrealized loss position, are as follows:

	Less than 12 months				Greater than 12 months
March 31, 2016			Unrealized				Unrealized
(In thousands)	Fair Value		losses		Fair Value		losses
Available for sale:
U.S. GSE securities	$	29,231	$	18	$	-	$	-
State and municipal obligations		16,528		81		4,586		3
U.S. GSE residential mortgage-backed securities		26,843		53		10,494		25
U.S. GSE residential collateralized mortgage obligations		58,730		85		64,799		723
U.S. GSE commercial mortgage-backed securities		-		-		-		-
U.S. GSE commercial collateralized mortgage obligations		21,205		57		10,112		72
Other asset backed securities		-		-		22,310		1,940
Corporate bonds		17,249		751		4,875		125
Total available for sale		169,786		1,045		117,176		2,888

Held to maturity:
U.S. GSE securities		-		-		-		-
State and municipal obligations		586		-		-		-
U.S. GSE residential mortgage-backed securities		-		-		5,251		13
U.S. GSE residential collateralized mortgage obligations		2,472		4		4,737		62
U.S. GSE commercial mortgage-backed securities		6,260		70		5,094		11
U.S. GSE commercial collateralized mortgage obligations		4,846		80		3,923		67
Corporate bonds		-		-		-		-
Total held to maturity	$	14,164	$	154	$	19,005	$	153

	Less than 12 months				Greater than 12 months
December 31, 2015			Unrealized				Unrealized
(In thousands)	Fair Value		losses		Fair Value		losses
Available for sale:
U.S. GSE securities	$	37,759	$	235	$	24,914	$	329
State and municipal obligations		39,621		298		5,118		24
U.S. GSE residential mortgage-backed securities		136,025		1,224		1,510		46
U.S. GSE residential collateralized mortgage obligations		187,543		1,781		66,830		2,107
U.S. GSE commercial mortgage-backed securities		8,594		80		-		-
U.S. GSE commercial collateralized mortgage obligations		51,178		503		10,034		117
Other Asset backed securities		-		-		22,371		1,879
Corporate bonds		27,640		360		4,825		175
Total available for sale		488,360		4,481		135,602		4,677

Held to maturity:
U.S. GSE securities		-		-		-		-
State and municipal obligations		18,375		113		-		-
U.S. GSE residential mortgage-backed securities		7,503		106		-		-
U.S. GSE residential collateralized mortgage obligations		15,918		149		15,679		349
U.S. GSE commercial mortgage-backed securities		13,982		313		-		-
U.S. GSE commercial collateralized mortgage obligations		7,912		8		3,813		177
Corporate bonds		-		-		-		-
Total held to maturity	$	63,690	$	689	$	19,492	$	526

Other-Than-Temporary Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant. The investment securities portfolio is evaluated for OTTI by segregating the portfolio into two general segments and applying the appropriate OTTI model. Investment securities classified as available for sale or held-to-maturity are generally evaluated for OTTI under FASB ASC 320, Accounting for Certain Investments in Debt and Equity Securities. In determining OTTI under the FASB ASC 320 model, management considers many factors, including: (1) the length of time and the extent to which

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the 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) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. If either of the criteria regarding intent or 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 an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

At March 31, 2016, the majority of unrealized losses on the available for sale securities are related to the Company’s U.S. GSE residential collateralized mortgage obligations, other asset backed securities, and corporate bonds. The decrease in fair value of the U.S. GSE residential collateralized mortgage obligations, other asset backed securities, and corporate bonds is attributable to changes in interest rates and not credit quality. The Company does not have the intent to sell these securities and it is more likely than not that it will not be required to sell the securities before their anticipated recovery. Therefore, the Company does not consider these securities to be other-than-temporarily impaired at March 31, 2016.

There were $28.7 million of proceeds from sales of securities with gross gains of approximately $0.3 million and gross losses of approximately $0.2 million realized for the three months ended March 31, 2016. There were $73.8 million of proceeds from sales of securities with gross gains of approximately $0.5 million and gross losses of approximately $0.5 million realized for the three months ended March 31, 2015. Proceeds from calls of securities were $30.6 million and $0.2 million for the three months ended March 31, 2016 and 2015, respectively.

Securities having a fair value of approximately $793.2 million and $611.0 million at March 31, 2016 and December 31, 2015, 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 three months ended March 31, 2016 or the year ended December 31, 2015.

The Bank is a member of the Federal Home Loan Bank (“FHLB”) of New York. 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. The Bank is a member of the Atlantic Central Banker’s Bank (“ACBB”) and is required to own ACBB stock. The Bank is also a member of the Federal Reserve Bank (“FRB”) system and required to own FRB stock. FHLB, ACBB and FRB stock is carried at cost and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. The Bank owned approximately $24.9 million and $24.8 million in FHLB, ACBB and FRB stock at March 31, 2016 and December 31, 2015, respectively. These amounts were reported as restricted securities in the consolidated balance sheets.

5. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

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.

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Assets and liabilities measured on a recurring basis:

			Fair Value Measurements at
			3/31/2016
				Significant
			Quoted Prices In	Other		Significant
			Active Markets for	Observable		Unobservable
	Carrying		Identical Assets	Inputs		Inputs
(In thousands)	Value		(Level 1)	(Level 2)		(Level 3)
Financial Assets:
Available for sale securities:
U.S. GSE securities	$	67,306		$	67,306
State and municipal obligations		103,679			103,679
U.S. GSE residential mortgage-backed securities		216,524			216,524
U.S. GSE residential collateralized mortgage obligations		360,863			360,863
U.S. GSE commercial mortgage-backed securities		12,656			12,656
U.S. GSE commercial collateralized mortgage obligations		69,061			69,061
Other asset backed securities		22,310			22,310
Corporate bonds		31,227			31,227
Total available for sale	$	883,626		$	883,626
Derivatives	$	2,096		$	2,096

Financial Liabilities:
Derivatives	$	5,162		$	5,162

			Fair Value Measurements at
			December 31, 2015 Using:
				Significant
			Quoted Prices In	Other		Significant
			Active Markets for	Observable		Unobservable
	Carrying		Identical Assets	Inputs		Inputs
(In thousands)	Value		(Level 1)	(Level 2)		(Level 3)
Financial Assets:
Available for sale securities:
U.S. GSE securities	$	62,674		$	62,674
State and municipal obligations		87,935			87,935
U.S. GSE residential mortgage-backed securities		200,264			200,264
U.S. GSE residential collateralized mortgage obligations		317,878			317,878
U.S. GSE commercial mortgage-backed securities		12,418			12,418
U.S. GSE commercial collateralized mortgage obligations		64,198			64,198
Other Asset backed securities		22,371			22,371
Corporate bonds		32,465			32,465
Total available for sale	$	800,203		$	800,203
Derivatives	$	779		$	779

Financial Liabilities:
Derivatives	$	2,073		$	2,073

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

Fair Value Measurements at

March 31, 2016 Using:

Significant

Quoted Prices In

Other

Significant

Active Markets for

Observable

Unobservable

Carrying

Identical Assets

Inputs

(In thousands)

Value

(Level 1)

(Level 2)

(Level 3)

Impaired loans

167

—

167

Fair Value Measurements at

December 31, 2015 Using:

Significant

Quoted Prices In

Other

Significant

Active Markets for

Observable

Unobservable

Carrying

Identical Assets

Inputs

(In thousands)

Value

(Level 1)

(Level 2)

(Level 3)

Impaired loans

483

—

483

Other real estate owned

250

—

250

Impaired loans with allocated allowance for loan losses at March 31, 2016 had a carrying amount of $0.2 million, which is made up of the outstanding balance of $0.2 million, net of a valuation allowance of $0.02 million. This resulted in an additional provision for loan losses of $0.02 million that is included in the amount reported on the income statement. Impaired loans with allocated allowance for loan losses at December 31, 2015, had a carrying amount of $0.5 million, which is made up of the outstanding balance of $0.5 million, net of a valuation allowance of $0.03 million. This resulted in an additional provision for loan losses of $0.03 million that is included in the amount reported on the Consolidated Statements of Income.

There was no other real estate owned at March 31, 2016. Other real estate owned at December 31, 2015 had a carrying amount of $250,000 and no valuation allowance recorded. Accordingly, there was no additional provision for loan losses include in the amount reported on the Consolidated Statements of Income.

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. Cash on hand and non-interest due from bank accounts are Level 1 and interest bearing Cash Due from Banks and Federal Funds Sold are Level 2.

Securities Available for Sale and Held to Maturity: The estimated fair values are based on independent dealer quotations on nationally recognized securities exchanges, if available (Level 1). For securities where quoted prices are not available, fair value is based on 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).

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

Derivatives: Represents interest rate swaps and the estimated fair values are based on valuation models using observable market data as of measurement date (Level 2).

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 resulting in a Level 3 classification. 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. All nonaccrual loans are carried at their current fair value. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price and therefore, while permissible for presentation purposes under ASC 825-10, do not conform to ASC 820-10.

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Impaired Loans and Other Real Estate Owned: For impaired 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 other real estate owned is also evaluated in accordance with current accounting guidance and determined based upon recent appraised values less the estimated cost to sell. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Adjustments may relate to location, square footage, condition, amenities, market rate of leases as well as timing of comparable sales. All appraisals undergo a second review process to insure that the methodology employed and the values derived are accurate. The fair value of the loan is compared to the carrying value to determine if any write-down or specific reserve is required. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Credit Administration department reviews the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. On a quarterly basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value. Management also considers the appraisal values for commercial properties associated with current loan origination activity. Collectively, this information is reviewed to help assess current trends in commercial property values. For each collateral dependent impaired loan, management considers information that relates to the type of commercial property to determine if such properties may have appreciated or depreciated in value since the date of the most recent appraisal. Adjustments to fair value are made only when the analysis indicates a probable decline in collateral values. Adjustments made in the appraisal process are not deemed material to the overall consolidated financial statements given the level of impaired loans measured at fair value on a nonrecurring basis.

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 resulting in a Level 2 classification. Stated value is fair value for all other deposits resulting in a Level 1 classification.

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 resulting in a Level 2 classification.

Subordinated Debentures: The estimated fair value is derived using discounted cash flow methodology based on a spread to the London Interbank Offered Rate (“LIBOR”) curve at the time of issuance and assuming the debt was issued at PAR resulting in a Level 3 classification.

Junior Subordinated Debentures: The estimated fair value is based on estimates using market data for similarly risk weighted items and takes into consideration the convertible features of the debentures into common stock of the Company which is an unobservable input resulting in a Level 3 classification.

Accrued Interest Receivable and Payable: For these short-term instruments, the carrying amount is a reasonable estimate of the fair value resulting in a Level 1 or 2 classification.

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 March 31, 2016 and December 31, 2015.

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 Company’s entire holdings of a particular financial instrument, or the tax consequences of realizing gains or losses on the sale of financial instruments.

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The estimated fair values and recorded carrying amounts of the Company’s financial instruments at March 31, 2016 and December 31, 2015 are as follows:

			Fair Value Measurements at
			March 31, 2016 Using:
					Significant
			Quoted Prices In		Other		Significant
			Active Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Cash and due from banks	$	44,797	$	44,797	$	-	$	-	$	44,797
Interest bearing deposits with banks		22,411		-		22,411		-		22,411
Securities available for sale		883,626		-		883,626		-		883,626
Securities restricted		24,865		n/a		n/a		n/a		n/a
Securities held to maturity		218,278		-		223,535		-		223,535
Loans, net		2,459,448		-		-		2,468,721		2,468,721
Derivatives		2,096				2,096				2,096
Accrued interest receivable		9,982		-		3,810		6,172		9,982

Financial liabilities:
Certificates of deposit		267,578		-		268,784		-		268,784
Demand and other deposits		2,672,834		2,672,834		-		-		2,672,834
Federal funds purchased		135,000		135,000		-		-		135,000
Federal Home Loan Bank term advances		299,174		199,207		102,149		-		301,356
Repurchase agreements		50,965		-		52,029		-		52,029
Subordinated Debentures		78,397		-		-		82,681		82,681
Junior Subordinated Debentures		15,879		-		-		17,464		17,464
Derivatives		5,162		-		5,162		-		5,162
Accrued interest payable		568		74		494		-		568

			Fair Value Measurements at
			December 31, 2015 Using:
					Significant
			Quoted Prices In		Other		Significant
			Active Markets for		Observable		Unobservable
	Carrying		Identical Assets		Inputs		Inputs
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Total
Financial assets:
Cash and due from banks	$	79,750	$	79,750	$	-	$	-	$	79,750
Interest bearing deposits with banks		24,808		-		24,808		-		24,808
Securities available for sale		800,203		-		800,203		-		800,203
Securities restricted		24,788		n/a		n/a		n/a		n/a
Securities held to maturity		208,351		-		210,003		-		210,003
Loans, net		2,390,030		-		-		2,379,171		2,379,171
Derivatives		779				779				779
Accrued interest receivable		9,270		-		3,228		6,042		9,270

Financial liabilities:
Certificates of deposit		292,855		-		293,368		-		293,368
Demand and other deposits		2,550,770		2,550,770		-		-		2,550,770
Federal funds purchased		120,000		120,000		-		-		120,000
Federal Home Loan Bank term advances		297,507		197,243		100,772		-		298,015
Repurchase agreements		50,891		-		51,480		-		51,480
Subordinated Debentures		78,363		-		-		78,830		78,830
Junior Subordinated Debentures		15,878		-		-		16,566		16,566
Derivatives		2,073		-		2,073		-		2,073
Accrued interest payable		1,644		93		1,551		-		1,644

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6. LOANS

The following table sets forth the major classifications of loans:

	March 31, 2016			December 31, 2015
(In thousands)
Commercial real estate mortgage loans	$	1,011,068		$	1,053,399
Multi-family mortgage loans		380,125			350,793
Residential real estate mortgage loans		448,164			392,815
Commercial, financial, and agricultural loans		511,190			501,766
Real estate-construction and land loans		111,180			91,153
Installment/consumer loans		16,135			17,596
Total loans		2,477,862			2,407,522
Net deferred loan costs and fees		3,385			3,252
		2,481,247			2,410,774
Allowance for loan losses		(21,799	)		(20,744	)
Net loans	$	2,459,448		$	2,390,030

On June 19, 2015, the Company completed the acquisition of Community National Bank (“CNB”) resulting in the addition of $734.0 million of acquired loans recorded at their fair value. There were approximately $632.0 million and $659.7 million of acquired CNB loans remaining as of March 31, 2016 and December 31, 2015, respectively.

On February 14, 2014, the Company completed the acquisition of FNBNY Bancorp, Inc. and its wholly owned subsidiary First National Bank of New York (collectively “FNBNY”) resulting in the addition of $89.7 million of acquired loans recorded at their fair value. There were approximately $37.0 million and $37.7 million of acquired FNBNY loans remaining as of March 31, 2016 and December 31, 2015, respectively.

Lending Risk

The principal business of the Bank is lending, primarily in commercial real estate mortgage loans, multi-family 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 Nassau and Suffolk Counties located on Long Island and a substantial portion of the Bank’s loans are secured by real estate in this area. Accordingly, the ultimate collectibility of such a loan portfolio is susceptible to changes in market and economic conditions in this region.

Commercial Real Estate Mortgages

Loans in this classification include income producing investment properties and owner occupied real estate used for business purposes. The underlying properties are generally located largely in our primary market area. The cash flows of the income producing investment properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on credit quality. Generally, management seeks to obtain annual financial information for borrowers with loans in excess of $0.25 million in this category. In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending will have an adverse effect on credit quality.

Multi-Family Mortgages

Loans in this classification include income producing residential investment properties of 5 or more families. The loans are usually made in areas with limited single family residences generating high demand for these facilities. Loans are made to established owners with a proven and demonstrable record of strong performance. Loans are secured by a first mortgage lien on the subject property with a loan to value ratio generally not exceeding 75%. Repayment is derived generally from the rental income generated from the property and maybe supplemented by the owners’ personal cash flow. Credit risk arises with an increase in vacancy rates, property mismanagement and the predominance of non-recourse loans that are customary in the industry.

Residential Real Estate Mortgages and Home Equity Loans

Loans in these classifications are made to and secured by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, can have an effect on the credit quality in this loan class. The Bank generally does not originate loans with a loan-to-value ratio greater than 80% and does not grant subprime loans.

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Commercial, Industrial and Agricultural Loans

Loans in this classification are made to businesses and include term loans, lines of credit, senior secured loans to corporations and taxi medallion loans. Generally these loans are secured by assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending will have an effect on the credit quality in this loan class.

Real Estate Construction and Land Loans

Loans in this classification primarily include land loans to local individuals, contractors and developers for developing the land for sale or for the purpose of making improvements thereon. Repayment is derived primarily from sale of the lots/units including any pre-sold units. Credit risk is affected by market conditions, time to sell at an adequate price and cost overruns. To a lesser extent this class includes commercial development projects that the Company finances, which in most cases require interest only during construction, and then convert to permanent financing. Credit risk is affected by construction delays, cost overruns, market conditions and the availability of permanent financing, to the extent such permanent financing is not being provided by us.

Installment and Consumer Loans

Loans in this classification may be either secured or unsecured and repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan such as automobiles. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan class.

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. Assigned risk rating grades are continuously updated as new information is obtained. Loans risk rated special mention, substandard and doubtful are reviewed on a quarterly basis. 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.

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The following table represents loans by class categorized by internally assigned risk grades as of March 31, 2016 and December 31, 2015:

	Grades:
March 31, 2016	Pass		Special Mention		Substandard		Doubtful		Total
(In thousands)

Commercial real estate:
Owner occupied	$	467,139	$	2,557	$	1,861	$	-	$	471,557
Non-owner occupied		532,504		525		6,482		-		539,511
Multi-Family		379,743		-		382		-		380,125
Residential real estate:
Residential mortgage		377,437		86		1,092		-		378,615
Home equity		68,016		517		1,016		-		69,549
Commercial:
Secured		113,867		284		2,025		-		116,176
Unsecured		388,248		2,969		3,797		-		395,014
Real estate construction and land loans		111,180		-		-		-		111,180
Installment/consumer loans		16,035		-		100		-		16,135
Total loans	$	2,454,169	$	6,938	$	16,755	$	-	$	2,477,862

At March 31, 2016 there were $0.02 million and $6.8 million, respectively, of acquired CNB loans included in the special mention and substandard grades and $0.1 million and $0.6 million, respectively, of acquired FNBNY loans included in the special mention and substandard grades.

	Grades:
December 31, 2015	Pass		Special Mention		Substandard		Doubtful		Total
(In thousands)

Commercial real estate:
Owner occupied	$	465,967	$	3,239	$	2,115	$	-	$	471,321
Non-owner occupied		573,049		542		8,487		-		582,078
Multi-Family		350,785		—		8		-		350,793
Residential real estate:
Residential mortgage		323,557		87		845				324,489
Home equity		66,910		523		893				68,326
Commercial:
Secured		121,037		151		2,549		-		123,737
Unsecured		370,642		3,191		4,196		-		378,029
Real estate construction and land loans		91,153		—		—		-		91,153
Installment/consumer loans		17,496		—		100		-		17,596
Total loans	$	2,380,596	$	7,733	$	19,193	$	-	$	2,407,522

At December 31, 2015 there were $0.02 million and $9.6 million, respectively, of acquired CNB loans included in the special mention and substandard grades and $0.1 million and $0.2 million, respectively, of acquired FNBNY loans included in the special mention and substandard grades.

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Past Due and Nonaccrual Loans

The following table represents the aging of the recorded investment in past due loans as of March 31, 2016 and December 31, 2015 by class of loans, as defined by ASC 310-10:

March 31, 2016	30-59 Days Past Due		60-89 Days Past Due		≥90 Days Past Due and Accruing		Nonaccrual Including 90 Days or More Past Due		Total Past Due and Nonaccrual		Current		Total Loans
(In thousands)
Commercial real estate:
Owner occupied	$	222	$	-	$	599	$	224	$	1,045	$	470,512	$	471,557
Non-owner occupied		-		-		-		-		-		539,511		539,511
Multi-Family		-		-		-		-		-		380,125		380,125
Residential real estate:
Residential mortgages		1,653		87		852		473		3,065		375,550		378,615
Home equity		138		69		216		804		1,227		68,322		69,549
Commercial and Industrial:
Secured		20		-		258		-		278		115,898		116,176
Unsecured		14		190		55		131		390		394,624		395,014
Real estate construction and land loans		-		-		-		-		-		111,180		111,180
Installment/consumer loans		-		1		-		3		4		16,131		16,135
Total loans	$	2,047	$	347	$	1,980	$	1,635	$	6,009	$	2,471,853	$	2,477,862

December 31, 2015	30-59 Days Past Due		60-89 Days Past Due		≥90 Days Past Due and Accruing		Nonaccrual Including 90 Days or More Past Due		Total Past Due and Nonaccrual		Current		Total Loans
(In thousands)
Commercial real estate:
Owner occupied	$	-	$	-	$	435	$	631	$	1,066	$	470,255	$	471,321
Non-owner occupied		-		-		-		-		-		582,078		582,078
Multi-Family		-		-		-		-		-		350,793		350,793
Residential real estate:
Residential mortgages		939		245		-		62		1,246		323,243		324,489
Home equity		69		100		188		610		967		67,359		68,326
Commercial and Industrial:
Secured		-		-		341		-		341		123,396		123,737
Unsecured		128		24		-		44		196		377,833		378,029
Real estate construction and land loans		-		-		-		-		-		91,153		91,153
Installment/consumer loans		-		-		-		3		3		17,593		17,596
Total loans	$	1,136	$	369	$	964	$	1,350	$	3,819	$	2,403,703	$	2,407,522

At March 31, 2016 and December 31, 2015 there were no FNBNY acquired loans 30-59 days past due. At March 31, 2016, there were $1.7 million of CNB acquired loans that were 30-89 days past due. There were $1.2 million of CNB acquired loans 30-59 days past due at December 31, 2015. All loans 90 days or more past due that are still accruing interest represent loans acquired from CNB, FNBNY and Hamptons State Bank (“HSB”) which were recorded at fair value upon acquisition. These loans are considered to be accruing as management can reasonably estimate future cash flows and expect to fully collect the carrying value of these acquired loans. Therefore, the difference between the carrying value of these loans and their expected cash flows is being accreted into income.

Impaired Loans

As of March 31, 2016 and December 31, 2015, the Company had impaired loans as defined by FASB ASC No. 310, “Receivables” of $3.7 million and $2.6 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. 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 loans, the Bank evaluates the impairment of the loan in accordance with FASB ASC 310-10-35-22. Impairment is determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate. For loans that are collateral dependent, the fair value of the collateral is used to determine the fair value of the

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loan. The fair value of the collateral is determined based upon recent appraised values. The fair value of the collateral or present value of expected cash flows is compared to the carrying value to determine if any write-down or specific loan loss allowance allocation is required. These methods of fair value measurement for impaired loans are considered level 3 within the fair value hierarchy described in FASB ASC 820-10-50-5.

For individually impaired loans, the following tables set forth by class of loans at March 31, 2016 and December 31, 2015 the recorded investment, unpaid principal balance and related allowance. The tables also set forth the average recorded investment of individually impaired loans and interest income recognized while the loans were impaired during the three months ended March 31, 2016 and 2015:

	March 31, 2016						Three Months Ended March 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allocated Allowance		Average Recorded Investment		Interest Income Recognized
(In thousands)
With no related allowance recorded:
Commercial real estate:
Owner occupied	$	369	$	557	$	-	$	376	$	2
Non-owner occupied		1,237		1,237		-		1,240		19
Residential real estate:
Residential mortgages		473		485		-		198		-
Home equity		804		898		-		674		-
Commercial:
Secured		198		198		-		129		3
Unsecured		483		483		-		492		4
Total with no related allowance recorded	$	3,564	$	3,858	$	-	$	3,109	$	28

With an allowance recorded:
Commercial real estate - Owner occupied	$	-	$	-	$	-	$	-	$	-
Commercial real estate - Non-owner occupied		-		-		-		-		-
Residential real estate - Residential mortgages		-		-		-		-		-
Residential real estate - Home equity		-		-		-		-		-
Commercial - Secured		-		-		-		-		-
Commercial - Unsecured		185		190		18		188		2
Total with an allowance recorded:	$	185	$	190	$	18	$	188	$	2

Total:
Commercial real estate:
Owner occupied	$	369	$	557	$	-	$	376	$	2
Non-owner occupied		1,237		1,237		-		1,240		19
Residential real estate:
Residential mortgages		473		485		-		198		-
Home equity		804		898		-		674		-
Commercial:
Secured		198		198		-		129		3
Unsecured		668		673		18		680		6
Total	$	3,749	$	4,048	$	18	$	3,297	$	30

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							Three Months Ended
	December 31, 2015						March 31, 2015
December 31, 2015	Recorded Investment		Unpaid Principal Balance		Related Allocated Allowance		Average Recorded Investment		Interest Income Recognized
(In thousands)
With no related allowance recorded:
Commercial real estate:
Owner occupied	$	384	$	564	$	-		3,854	$	28
Non-owner occupied		927		928		-		947		15
Residential real estate:
Residential mortgage		62		73		-		141		-
Home equity		610		700		-		309		-
Commercial:
Secured		96		96		-		48		1
Unsecured		-		-		-		-		-
Total with no related allowance recorded	$	2,079	$	2,361	$	-	$	5,299	$	44

With an allowance recorded:
Commercial real estate- Owner occupied	$	-	$	-	$	-	$	-	$	-
Commercial real estate- Non owner occupied		318		318		20		322		4
Residential real estate - Residential mortgage		-		-		-		-		-
Residential real estate - Home equity		-		-		-		50		-
Commercial - Secured		-		-		-		330		-
Commercial - Unsecured		194		194		9		252		3
Total with an allowance recorded:	$	512	$	512	$	29	$	954	$	7

Total:
Commercial real estate:
Owner occupied	$	384	$	564	$	-	$	3,854	$	28
Non-owner occupied		1,245		1,246		20		1,269		19
Residential real estate:
Residential mortgage		62		73		-		141		-
Home equity		610		700		-		359		-
Commercial:
Secured		96		96		-		378		1
Unsecured		194		194		9		252		3
Total	$	2,591	$	2,873	$	29	$	6,253	$	51

The Bank had no other real estate owned at March 31, 2016 compared to $0.3 million at December 31, 2015.

Troubled Debt Restructurings

The terms of certain loans were modified and are considered troubled debt restructurings (“TDR”). The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. The modification of these loans involved a loan to borrowers who were experiencing financial difficulties.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed to determine if that borrower is currently in payment default under any of its obligations or whether there is a probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

During the three months ended March 31, 2016, the Bank modified two loans as TDRs totaling $0.6 million compared to two loans modified as TDRs totaling $0.1 million for the three months ended March 31, 2015. During the quarters ending March 31, 2016 and

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2015, there were no charge offs relating to TDRs and there were no loans modified as TDRs for which there was a payment default within twelve months following the modification. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

As of March 31, 2016 and December 31, 2015, the Company had $0.2 million and $0.1 million, respectively of nonaccrual TDR loans and $2.2 million and $1.7 million, respectively of performing TDRs. At March 31, 2016 and December 31, 2015, total nonaccrual TDR loans are secured with collateral that has an appraised value of $0.3 million and $0.3 million, respectively. Furthermore, the Bank has no commitment to lend additional funds to these debtors.

The terms of certain other loans were modified during the quarter ending March 31, 2016 that did not meet the definition of a TDR. These loans have a total recorded investment as of March 31, 2016 of $12.1 million. The modification of these loans involved a modification of the terms of loans to borrowers who were not experiencing financial difficulties.

Acquired Loans

Loans acquired in a business combination are recorded at their fair value at the acquisition date. Credit discounts are included in the determination of fair value; therefore, an allowance for loan losses is not recorded at the acquisition date.

In determining the acquisition date fair value of purchased loans, acquired loans are aggregated into pools of loans with common characteristics. Each loan is reviewed at acquisition to determine if it should be accounted for as a loan that has experienced credit deterioration and it is probable that at acquisition, the Company will not be able to collect all the contractual principle and interest due from the borrower. All loans with evidence of deterioration in credit quality are considered purchased credit impaired (“PCI”) loans unless the loan type is specifically excluded from the scope of ASC 310-30 “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” such as loans with active revolver features or because management has minimal doubt in the collection of the loan.

The Bank makes an estimate of the loans’ contractual principal and contractual interest payments as well as the total cash flows it expects to collect from the pools of loans, which includes undiscounted expected principal and interest. The excess of contractual amounts over the total cash flows expected to be collected from the loans is referred to as non-accretable difference, which is not accreted into income. The excess of the expected undiscounted cash flows over the fair value of the loans is referred to as accretable discount. Accretable discount is recognized as interest income on a level-yield basis over the life of the loans. Management has not included prepayment assumptions in its modeling of contractual or expected cash flows. The Bank continues to estimate cash flows expected to be collected over the life of the loans. Subsequent increases in total cash flows expected to be collected are recognized as an adjustment to the accretable yield with the amount of periodic accretion adjusted over the remaining life of the loans. Subsequent decreases in cash flows expected to be collected over the life of the loans are recognized as impairment in the current period through allowance for loan losses.

A PCI loan may be resolved either through a sale of the loan, by working with the customer and obtaining partial or full repayment, by short sale of the collateral, or by foreclosure. When a loan accounted for in a pool is resolved, it is removed from the pool at its carrying amount. Any differences between the amounts received and the outstanding balance are absorbed by the non-accretable difference of the pool. For loans not accounted for in pools, a gain or loss on resolution would be recognized based on the difference between the proceeds received and the carrying amount of the loan.

Payments received earlier than expected or in excess of expected cash flows from sales or other resolutions may result in the carrying value of a pool being reduced to zero even though outstanding contractual balances and expected cash flows remain related to loans in the pool. Once the carrying value of a pool is reduced to zero, any future proceeds, which may include cash or real estate acquired in foreclosure, from the remaining loans, representing further realization of accretable yield, are recognized as interest income upon receipt.

At the acquisition date, the purchased credit impaired loans acquired as part of the FNBNY acquisition had contractually required principal and interest payments receivable of $40.3 million; expected cash flows of $28.4 million; and a fair value (initial carrying amount) of $21.8 million. The difference between the contractually required principal and interest payments receivable and the expected cash flows ($11.9 million) represented the non-accretable difference. The difference between the expected cash flows and fair value ($6.6) million represented the initial accretable yield. At March 31, 2016, the contractually required principal and interest payments receivable and carrying amount of the purchased credit impaired loans was $16.9 million and $8.3 million with a remaining non-accretable difference of ($1.9 million). At December 31, 2015, the contractually required principal and interest payments receivable and carrying amount of the purchased credit impaired loans was $16.7 million and $8.3 million, respectively, with a remaining non-accretable difference of ($1.5 million).

At the acquisition date, the purchased credit impaired loans acquired as part of the CNB acquisition had contractually required principal and interest payments receivable of $19.8 million; expected cash flows of $8.1 million; and a fair value (initial carrying amount) of $7.5 million. The difference between the contractually required principal and interest payments receivable and the expected cash flows

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($11.7 million) represented the non-accretable difference. The difference between the expected cash flows and fair value ($0.6) million represented the initial accretable yield. At March 31, 2016, the contractually required principal and interest payments receivable and carrying amount of the purchased credit impaired loans was $19.5 million and $7.2 million, respectively, with a remaining non-accretable difference of ($11.7 million). At December 31, 2015, the contractually required principal and interest payments receivable and carrying amount of the purchased credit impaired loans was $19.9 million and $7.5 million, respectively, with a remaining non-accretable difference of ($11.7 million).

The following table summarizes the activity in the accretable yield for the purchased credit impaired loans:

	Three Months Ended
	March 31,
	2016			2015
(In thousands)
Balance at beginning of period	$	7,113		$	8,432
Accretable discount arising from acquisition of PCI loans		-			-
Accretion		(792	)		(1,252	)
Reclassification from (to) nonaccretable difference during the period		133			380
Other		418			-
Accretable discount at end of period	$	6,872		$	7,560

7. ALLOWANCE FOR LOAN LOSSES

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, multi-family mortgage loans, 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.

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For purchased credit impaired loans, a valuation allowance is established when it is probable that the Bank will be unable to collect all the cash flows expected at acquisition plus additional cash flows expected to be collected arising from changes in estimate after acquisition. A specific allowance is established when subsequent evaluations of expected cash flows from purchased credit impaired loans reflect a decrease in those estimates. The allowance established represents the excess of the recorded investment in those loans over the present value of the currently estimated future cash flow, discounted at the last effective accounting yield.

The Bank uses assumptions and methodologies that are relevant to estimating the level of impairment and probable losses in the loan portfolio. To the extent that the data supporting such assumptions has limitations, management's judgment and experience play a key role in recording the allowance estimates. Additions to the allowance for loan losses are made by provisions charged to earnings. Furthermore, an improvement in the expected cash flows related to purchased credit impaired loans would result in a reduction of the required specific allowance with a corresponding credit to the provision.

The Credit Risk Management Committee is comprised of Bank management. The adequacy of the allowance is analyzed quarterly, with any adjustment to a level deemed appropriate by the Credit Risk Management Committee, based on its risk assessment of the entire portfolio. Each quarter, members of the Credit Risk Management Committee meet with the Credit Risk Committee of the Board to review credit risk trends and the adequacy of the allowance for loan losses. Based on the Credit Risk Management Committee’s review of the classified loans and the overall allowance levels as they relate to the entire loan portfolio at March 31, 2016 and December 31, 2015, 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.

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 March 31, 2016 and December 31, 2015. Additionally, the following tables represent the changes in the allowance for loan losses for the three month period ended March 31, 2016 and 2015, and the twelve month period ended December 31, 2015, by portfolio segment, as defined under ASC 310-10. The loan segment represents the categories that the Bank develops to determine its allowance for loan losses.

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	For the Three Months Ended March 31, 2016
	Commercial Real Estate Mortgage Loans			Multi- Family		Residential Real Estate Mortgage Loans		Commercial, Financial and Agricultural Loans			Real Estate Construction and Land Loans		Installment/ Consumer Loans		Total
(In thousands)
Allowance for Loan Losses:
Beginning balance	$	7,850		$	4,208	$	2,115	$	5,405		$	1,030	$	136	$	20,744
Charge-offs		-			-		-		(200	)		-		-		(200	)
Recoveries		-			-		-		4			-		1		5
Provision		(404	)		461		583		359			247		4		1,250
Ending Balance	$	7,446		$	4,669	$	2,698	$	5,568		$	1,277	$	141	$	21,799

Ending balance: individually evaluated for impairment	$	-		$	-	$	-	$	18		$	-	$	-	$	18

Ending balance: collectively evaluated for impairment	$	7,446		$	4,669	$	2,698	$	5,550		$	1,277	$	141	$	21,781

Ending balance: loan acquired with deteriorated credit quality	$	-		$	-	$	-	$	-		$	-	$	-	$	-

Loans	$	1,011,068		$	380,125	$	448,164	$	511,190		$	111,180	$	16,135	$	2,477,862

Ending balance: individually evaluated for impairment	$	1,606		$	-	$	1,277	$	866		$	-	$	-	$	3,749

Ending balance: collectively evaluated for impairment	$	1,004,120		$	376,763	$	445,590	$	504,290		$	111,180	$	16,135	$	2,458,078

Ending balance: loans acquired with deteriorated credit quality	$	5,342		$	3,362	$	1,297	$	6,034		$	-	$	-	$	16,035

The table above includes loans acquired on June 19, 2015 from CNB and February 14, 2014 from FNBNY.

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	For the Twelve Months Ended December 31, 2015
	Commercial Real Estate Mortgage Loans			Multi- Family		Residential Real Estate Mortgage Loans			Commercial, Financial and Agricultural Loans			Real Estate Construction and Land Loans			Installment/ Consumer Loans			Total
(In thousands)
Allowance for Loan Losses:
Beginning balance	$	6,994		$	2,670	$	2,208		$	4,526		$	1,104		$	135		$	17,637
Charge-offs		(50	)		-		(249	)		(827	)		-			(2	)		(1,128	)
Recoveries		-			-		79			149			-			7			235
Provision		906			1,538		77			1,557			(74	)		(4	)		4,000
Ending Balance	$	7,850		$	4,208	$	2,115		$	5,405		$	1,030		$	136		$	20,744

Ending balance: individually evaluated for impairment	$	20		$	-	$	-		$	9		$	-		$	-		$	29

Ending balance: collectively evaluated for impairment	$	7,830		$	4,208	$	2,115		$	5,396		$	1,030		$	136		$	20,715

Ending balance: loan acquired with deteriorated credit quality	$	-		$	-	$	-		$	-		$	-		$	-		$	-

Loans	$	1,053,399		$	350,793	$	392,815		$	501,766		$	91,153		$	17,596		$	2,407,522

Ending balance: individually evaluated for impairment	$	1,629		$	-	$	672		$	290		$	-		$	-		$	2,591

Ending balance: collectively evaluated for impairment	$	1,051,135		$	347,054	$	390,876		$	495,045		$	91,153		$	17,596		$	2,392,859

Ending balance: loans acquired with deteriorated credit quality	$	635		$	3,739	$	1,267		$	6,431		$	-		$	-		$	12,072

The table above includes loans acquired on June 19, 2015 from CNB and February 14, 2014 from FNBNY.

	Three Months Ended March 31, 2015
(In thousands)	Commercial Real Estate Mortgage Loans			Multi-Family		Residential Real Estate Mortgage Loans			Commercial, Financial and Agricultural Loans			Real Estate Construction and Land Loans		Installment/ Consumer Loans			Total
Allowance for Loan Losses:
Beginning balance	$	6,994		$	2,670	$	2,208		$	4,526		$	1,104	$	135		$	17,637
Charge-offs		-			-		-			(200	)		-		(2	)		(202	)
Recoveries		-			-		-			20			1		4			25
Provision		(4	)		310		(71	)		559			1		5			800
Ending Balance	$	6,990		$	2,980	$	2,137		$	4,905		$	1,106	$	142		$	18,260

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8. EMPLOYEE BENEFITS

The Bank maintains a noncontributory pension plan covering all eligible employees. The Bank uses a December 31^st measurement date for this plan in accordance with FASB ASC 715-30 “Compensation – Retirement Benefits – Defined Benefit Plans – Pension.” During 2012, the Company amended the pension plan revising the formula for determining benefits effective January 1, 2013, except for certain grandfathered employees. Additionally, new employees hired on or after October 1, 2012 are not eligible for the pension plan.

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. The assets of the SERP are 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.

There were no contributions to the pension plan or the SERP during the three months ended March 31, 2016. In accordance with the SERP, a retired executive received a distribution from the Plan totaling $28,000 during the three months ended March 31, 2016.

The Company’s funding policy with respect to its benefit plans is to contribute at least the minimum amounts required by applicable laws and regulations.

The following table sets forth the components of net periodic benefit cost/(recovery):

	Three Months Ended March 31,
	Pension Benefits						SERP Benefits
(In thousands)	2016			2015			2016		2015
Service cost	$	291		$	280		$	44	$	42
Interest cost		196			174			26		22
Expected return on plan assets		(455	)		(453	)		-		-
Amortization of net loss		99			93			7		8
Amortization of unrecognized prior service cost		(19	)		(20	)		-		-
Amortization of unrecognized transition obligation		-			-			7		7
Net periodic benefit cost/(recovery)	$	112		$	74		$	84	$	79

9. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

At March 31, 2016 and December 31, 2015, securities sold under agreements to repurchase totaled $51.0 million and $50.9 million, respectively, and were secured by U.S. GSE, residential mortgage-backed securities and residential collateralized mortgage obligations with a carrying amount of $55.9 million and $55.9 million, respectively.

Securities sold under agreements to repurchase are financing arrangements with $1.0 million maturing during the second quarter of 2016 and $50.0 million maturing during the fourth quarter of 2016. 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:

	For the three months ended
(Dollars in thousands)	March 31, 2016			March 31, 2015
Average daily balance	$	50,850		$	32,122
Average interest rate		0.85	%		1.01	%
Maximum month-end balance	$	51,025		$	36,230
Weighted average interest rate		0.84	%		1.01	%

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10. FEDERAL HOME LOAN BANK ADVANCES

The following table sets forth the contractual maturities and weighted average interest rates of FHLB advances over the next four years at March 31, 2016 and December 31, 2015:

	March 31, 2016
Contractual Maturity	Amount		Weighted Average Rate
(Dollars in thousands)
Overnight	$	—		—	%

2016		251,571		0.70	%
2017		19,141		0.74	%
2018		25,693		1.04	%
2019		2,769		1.07	%
		299,174		0.73	%
	$	299,174		0.73	%

	December 31, 2015
Contractual Maturity	Amount		Weighted Average Rate
(Dollars in thousands)
Overnight	$	—		—	%

2016		249,599		0.75	%
2017		19,149		0.74	%
2018		25,781		1.04	%
2019		2,978		1.08	%
		297,507		0.78	%
	$	297,507		0.78	%

Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances. The advances were collateralized by $763.9 million and $666.3 million of residential and commercial mortgage loans under a blanket lien arrangement at March 31, 2016 and December 31, 2015, respectively. Based on this collateral and the Company’s holdings of FHLB stock, the Company is eligible to borrow up to a total of $1.2 billion at March 31, 2016.

11. BORROWED FUNDS

Subordinated Debentures

In September 2015, the Company issued $80.0 million in aggregate principal amount of fixed-to-floating rate subordinated debentures (the “Notes”). $40.0 million of the Notes are callable at par after five years, have a stated maturity of September 30, 2025 and bear interest at a fixed annual rate of 5.25% per year, from and including September 21, 2015 until but excluding September 30, 2020. From and including September 30, 2020 to the maturity date or early redemption date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR plus 360 basis points. The remaining $40.0 million of the Notes are callable at par after ten years, have a stated maturity of September 30, 2030 and bear interest at a fixed annual rate of 5.75% per year, from and including September 21, 2015 until but excluding September 30, 2025. From and including September 30, 2025 to the maturity date or early redemption date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR plus 345 basis points.

The Notes are included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

Junior Subordinated Debentures

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

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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 are included in Tier I capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

12. DERIVATIVES

Cash Flow Hedges of Interest Rate Risk

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swap does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Interest rate swaps with notional amounts totaling $125.0 million as of March 31, 2016 and December 31, 2015, were designated as cash flow hedges of certain Federal Home Loan Bank advances and repurchase agreements. The swaps were determined to be fully effective during the periods presented and therefore no amount of ineffectiveness has been included in net income. The aggregate fair value of the swaps is recorded in other assets/(other liabilities), with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining term of the swaps.

Summary information about the interest rate swaps designated as cash flow hedges is as follows:

	Three Months Ended
(Dollars in thousands)	March 31, 2016			March 31, 2015
Notional amounts	$	125,000		$	75,000
Weighted average pay rates		1.58	%		1.66	%
Weighted average receive rates		0.63	%		0.26	%
Weighted average maturity		2.97 years			3.61 years

Interest expense recorded on these swap transactions totaled $250,000 and $134,000 for the three months ended March 31, 2016 and 2015, respectively, and is reported as a component of interest expense on FHLB Advances. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income/expense as interest payments are made/received on the Company’s variable-rate assets/liabilities. During the three months ended March 31, 2016 the Company had $250,000 of reclassifications to interest expense. During the next twelve months, the Company estimates that $992,000 will be reclassified as an increase in interest expense.

The following table presents the net gains (losses) recorded, net of income tax, in accumulated other comprehensive income and the Consolidated Statements of Income relating to the cash flow derivative instruments for the three months ended March 31, 2016 and March 31, 2015:

March 31, 2016

Amount of (loss)

recognized in other

recognized in OCI

reclassified from OCI

non-interest income

(In thousands)

(Effective Portion)

to interest expense

(Ineffective Portion)

Interest rate contracts

(2,023

)

(250

)

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March 31, 2015

Amount of (loss)

recognized in other

recognized in OCI

reclassified from OCI

non-interest income

(In thousands)

(Effective Portion)

to interest expense

(Ineffective Portion)

Interest rate contracts

(815

)

(134

)

The following table reflects the cash flow hedge included in the Consolidated Balance Sheets:

	March 31, 2016							December 31, 2015
			Fair		Fair					Fair		Fair
	Notional		Value		Value			Notional		Value		Value
(In thousands)	Amount		Asset		Liability			Amount		Asset		Liability
Included in other assets/(liabilities):
Interest rate swaps related to FHLB Advances	$	100,000	$	-	$	(2,044	)	$	100,000	$	14	$	(713	)
Forward starting interest rate swap related to FHLB Advances	$	25,000	$	-	$	(1,023	)	$	25,000	$	-	$	(595	)

Non-Designated Hedges

Derivatives not designated as hedges may be used to manage the Company’s exposure to interest rate movements or to provide service to customers but do not meet the requirements for hedge accounting under U.S. GAAP. The Company executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that the Company executes with a third party in order to minimize the net risk exposure resulting from such transactions. These interest-rate swap agreements do not qualify for hedge accounting treatment, and therefore changes in fair value are reported in current period earnings.

The following table presents summary information about these interest rate swaps:

	Three Months Ended
(Dollars in thousands)	March 31, 2016			March 31, 2015
Notional amounts	$	56,014		$	37,125
Weighted average pay rates		3.47	%		3.28	%
Weighted average receive rates		3.47	%		3.28	%
Weighted average maturity		15.33 years			16.81 years
Fair value of combined interest rate swaps	$	-		$	-

Credit-Risk-Related Contingent Features

As of March 31, 2016 the termination value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $5.3 million. As of March 31, 2016, the Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral of $5.0 million against its obligations under these agreements. If the Company had breached any of these provisions at March 31, 2016, it could have been required to settle its obligations under the agreements at the termination value.

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13. OTHER COMPREHENSIVE INCOME (LOSS)

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

	Three Months Ended
(In thousands)	March 31, 2016			March 31, 2015
Unrealized holding gains on available for sale securities	$	9,740		$	4,915
Reclassification adjustment for (gains) losses realized in income		(66	)		10
Income tax effect		(3,917	)		(1,959	)
Net change in unrealized gains on available for sale securities		5,757			2,966

Reclassification adjustment for amortization realized in income		94			88
Income tax effect		(33	)		(34	)
Net change in post-retirement obligation		61			54

Change in fair value of derivatives used for cash flow hedges		(2,023	)		(815	)
Reclassification adjustment for losses realized in income		250			134
Income tax effect		720			261
Net change in unrealized loss on cash flow hedges		(1,053	)		(420	)

Total	$	4,765		$	2,600

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

	Balance as of						Balance as of
	December 31,			Current Period			March 31,
(In thousands)	2015			Change			2016
Unrealized (losses) gains on available for sale securities	$	(4,741	)	$	5,757		$	1,016
Unrealized (losses) gains on pension benefits		(4,111	)		61			(4,050	)
Unrealized losses on cash flow hedges		(770	)		(1,053	)		(1,823	)
Total	$	(9,622	)	$	4,765		$	(4,857	)

The following represents the reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2016 and 2015:

							Affected Line Item
	Three Months Ended						in the Consolidated
(In thousands)	March 31, 2016			March 31, 2015			Statements of Income
Realized gains (losses) on sale of available for sale securities	$	66		$	(10	)	Net securities losses
Income tax (expense) benefit		(27	)		4		Income tax expense
Net of income tax	$	39		$	(6	)

Amortization of defined benefit pension plan and the defined benefit plan component of the SERP:
Prior service credit (cost)	$	19		$	20		Salaries and employee benefits
Transition obligation		(7	)		(7	)	Salaries and employee benefits
Actuarial losses		(106	)		(101	)	Salaries and employee benefits
	$	(94	)	$	(88	)
Income tax benefit		38			34		Income tax expense
Net of income tax	$	(56	)	$	(54	)

Realized losses on cash flow hedges	$	(250	)	$	(134	)	Interest expense
Income tax benefit		101			52		Income tax expense
Net of income tax	$	(149	)	$	(82	)

Total reclassifications, net of income tax	$	(166	)	$	(142	)

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14. BUSINESS COMBINATIONS

On June 19, 2015, the Company acquired Community National Bank (“CNB”) at a purchase price of $157.5 million, issued an aggregate of 5.647 million Bridge Bancorp common shares in exchange for all the issued and outstanding common stock of CNB and recorded goodwill of $96.5 million, which is not deductible for tax purposes. At acquisition, CNB had total acquired assets on a fair value basis of $895.3 million, with loans of $729.4 million, investment securities of $90.1 million and deposits of $786.9 million. The transaction expanded the Company’s geographic footprint across Long Island including Nassau County, Queens and into New York City. It complements the Bank’s existing branch network and enhances asset generation capabilities. The expanded branch network allows the Bank to serve a greater portion of the Long Island and metropolitan marketplace through a network of 40 branches.

The acquisition was accounted for under the acquisition method of accounting in accordance with FASB ASC 805, “Business Combinations.” Accordingly, the assets acquired and liabilities assumed were recorded at their respective acquisition date fair values, and identifiable intangible assets were recorded at fair value. The operating results of the Company for the three month period ended March 31, 2016 includes the operating results of CNB since the acquisition date of June 19, 2015.

The following summarizes the finalized fair value of the assets acquired and liabilities assumed on June 19, 2015:

			Measurement
	As Initially		Period
(In thousands)	Reported		Adjustments			As Adjusted
Cash and due from banks	$	24,628	$	-		$	24,628
Securities		90,109		-			90,109
Loans		736,348		(6,935	)		729,413
Bank Owned Life Insurance		21,445		-			21,445
Premises and equipment		6,398		(5,122	)		1,276
Other intangible assets		6,698		-			6,698
Other assets		14,484		7,245			21,729
Total Assets Acquired	$	900,110	$	(4,812	)	$	895,298

Deposits	$	786,853	$	-		$	786,853
Federal Home Loan Bank term advances		35,581		-			35,581
Other liabilities and accrued expenses		5,647		6,214			11,861
Total Liabilities Assumed	$	828,081	$	6,214		$	834,295

Net Assets Acquired		72,029		(11,026	)		61,003
Consideration Paid		157,503		-			157,503
Goodwill Recorded on Acquisition	$	85,474	$	11,026		$	96,500

15. RECENT ACCOUNTING PRONOUNCEMENTS

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share Based-Based Payment Accounting.” ASU 2016-09 simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU 2016-09 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. The Company adopted ASU 2016-09 in the first quarter of 2016. The adoption of ASU 2016-09 did not have a material impact on the Company’s consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, “Business Combinations (Topic 805): Simplifying the Accounting for Measurement Period Adjustments.” ASU 2015-16 eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. ASU 2015-16 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of ASU 2015-16 resulted in a fixed asset measurement period adjustment for $0.3 million that was recorded in 2016 related to the recovery of depreciation expense recorded in 2015.

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

Private Securities Litigation Reform Act Safe Harbor Statement

This report may contain statements relating to the future results of the Company (including certain projections and business trends) that are considered “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). Such forward-looking statements, in addition to historical information, which involve risk and uncertainties, are based on the beliefs, assumptions and expectations of management of the Company. Words such as “expects,” “believes,” “should,” “plans,” “anticipates,” “will,” “potential,” “could,” “intend,” “may,” “outlook,” “predict,” “project,” “would,” “estimated,” “assumes,” “likely,” and variation 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 consumer, commercial and other lending businesses; current and future capital management programs; non-interest income levels, including fees from the title abstract subsidiary and banking services as well as product sales; tangible capital generation; market share; expense levels; and other business operations and strategies. For this presentation, the Company claims the protection of the safe harbor for forward-looking statements contained in the PSLRA.

Factors that could cause future results to vary from current management expectations include, but are not limited to, changing economic conditions; legislative and regulatory changes, including increases in FDIC insurance rates; monetary and fiscal policies of the federal government; changes in tax policies; rates and regulations of federal, state and local tax authorities; changes in interest rates; deposit flows; the cost of funds; demands for loan products; demand for financial services; competition; our ability to successfully integrate acquired entities; 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; expanded regulatory requirements as a result of the Dodd-Frank Act, which could adversely affect operating results; and the “Risk Factors” discussed in our Annual Report on Form 10-K for the year ended December 31, 2015 and elsewhere in this report. 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 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. These reclassifications did not have an impact on net income or total stockholders’ equity.

Principal Products and Services and Locations of Operations

Federally chartered in 1910, the Bank was founded by local farmers and merchants and now operates forty branches, thirty-eight in the primary market areas of Suffolk and Nassau Counties, Long Island, with one branch in Bayside, Queens and one in Manhattan. For over a century, the Bank has maintained its focus on building customer relationships in its 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) multi-family mortgage loans; (3) home equity loans; (4) construction loans; (5) residential mortgage loans; (6) secured and unsecured commercial and consumer loans; (7) FHLB, FNMA, GNMA and FHLMC and non-agency mortgage-backed securities, collateralized mortgage obligations and other asset backed securities; (8) New York State and local municipal obligations; and (9) U.S government sponsored entity (“U.S. GSE”) securities. The Bank also offers the CDARS program, providing multi-millions of FDIC insurance on CD deposits 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,

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safe deposit boxes, individual retirement accounts as well as investment services through Bridge Financial Services, which offers 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.

Significant Events

Issuance of Subordinted Debentures

The Notes are included in Tier 2 capital (with certain limitations applicable) under current regulatory guidelines and interpretations.

Acquisition of Community National Bank

On June 19, 2015, the Company acquired CNB at a purchase price of $157.5 million, issued an aggregate of 5.647 million Bridge Bancorp common shares in exchange for all the issued and outstanding common stock of CNB and recorded goodwill of $96.5 million, which is not deductible for tax purposes. At acquisition, CNB had total acquired assets on a fair value basis of $899.3 million, with loans of $729.4 million, investment securities of $90.1 million and deposits of $786.9 million. The transaction expanded the Company’s geographic footprint across Long Island including Nassau County, Queens and into New York City. It complements the Bank’s existing branch network and enhances asset generation capabilities. The expanded branch network allows the Bank to serve a greater portion of the Long Island and metropolitan marketplace through a network of 40 branches.

Acquisition of FNBNY

On February 14, 2014, the Company acquired FNBNY Bancorp and its wholly owned subsidiary, the First National Bank of New York (collectively “FNBNY”) at a purchase price of $6.1 million and issued an aggregate of 240,598 Company shares in exchange for all the issued and outstanding stock of FNBNY. The purchase price was subject to certain post-closing adjustments equal to 60 percent of the net recoveries on $6.3 million of certain identified problem loans over a two-year period after the acquisition. As of February 14, 2016, a net recovery was realized and $0.3 million has been distributed to the former FNBNY shareholders. No further distributions are required. At acquisition, FNBNY had total acquired assets on a fair value basis of $211.9 million, with loans of $89.7 million, investment securities of $103.2 million and deposits of $169.9 million. With three full-service branches, including the Company’s first two branches in Nassau County located in Merrick and Massapequa, and one in western Suffolk County located in Melville, the transaction expanded our geographic footprint into Nassau County, complemented our existing branch network and enhanced our asset generation capabilities. The expanded branch network allowed the Company to serve a greater portion of the Long Island and metropolitan marketplace.

Quarterly Highlights

Net income for the first quarter of 2016 was $8.6 million and $0.49 per diluted share, compared to $4.8 million and $0.41 per diluted share for the first quarter of 2015.

Net interest income increased to $29.4 million for the first quarter of 2016 compared to $18.7 million in 2015.

Net interest margin was 3.43% for the first quarter of 2016 compared to 3.63% for the 2015 period.

Loans held for investment at March 31, 2016 of $2.48 billion increased $70.5 million or 2.9% over December 31, 2015 and increased $1.078 billion or 76.8% over March 31, 2015.

Total assets of $3.91 billion at March 31, 2016, increased $131.6 million compared to December 31, 2015 and increased $1.626 billion or 71.1% compared to March 31, 2015.

Deposits of $2.94 billion at March 31, 2016, increased $96.8 million over December 31, 2015 and increased $1.101 billion or 59.9% compared to March 31, 2015 levels.

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Allowance for loan losses to total loans ratio, which was calculated inclusive of $632 million and $660 million, respectively, of CNB acquired loans, was 0.88% as of March 31, 2016 compared to 0.86% at December 31, 2015. The allowance for loan losses to total loans ratio at March 31, 2016, was 1.30% excluding CNB acquired loans.

All capital ratios exceed the fully phased in requirements of Basel III as of March 31, 2016.

A cash dividend of $0.23 per share was declared in April 2016 for the first quarter.

Current Environment

The Federal Deposit Insurance Corporation and the other federal bank regulatory agencies issued a final rule in July 2013 that revised their leverage and risk-based capital requirements and the method for calculating risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. Among other things, the rule established a new common equity Tier 1 minimum capital requirement (4.5% of risk-weighted assets), increased the minimum Tier 1 capital to risk-based assets requirement (from 4% to 6% of risk-weighted assets) and assigned a higher risk weight (150%) to exposures that are more than 90 days past due or are on nonaccrual status and to certain commercial real estate facilities that finance the acquisition, development or construction of real property. The rule also requires unrealized gains and losses on certain “available-for-sale” securities holdings to be included for purposes of calculating regulatory capital unless a one-time opt-out is exercised. Additional constraints were also imposed on the inclusion in regulatory capital of mortgage-servicing assets, defined tax assets and minority interests. The rule limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets in addition to the amount necessary to meet its minimum risk-based capital requirements. The final rule became effective for the Bank on January 1, 2015. The capital conservation buffer requirement will be phased in beginning January 1, 2016 and ending January 1, 2019, when the full capital conservation buffer requirement will be effective. The final rules, while more favorable to community banks, require that all banks maintain higher levels of capital. The Bank’s current capital levels meet these new requirements.

In December 2015, the Federal Reserve increased the federal funds target rate 25 basis points. The Federal Open Market Committee (“FOMC”) anticipates maintaining the federal funds target rate at 25 to 50 basis points due to uncertain global economic conditions. In determining the timing and amount of future adjustments to the target rate, the Committee will assess labor market conditions, inflation and economic activity, as well as global market developments. The Committee continues its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities and rolling over maturing Treasury securities at auction and anticipates doing so until normalization of the level of the federal funds rate is well under way.

Growth and service strategies have the potential to offset the compression on net interest margin with volume as the customer base grows through expanding the Bank’s footprint, while maintaining and developing existing relationships. Since 2010, the Bank has opened ten new branches, including the most recent branch openings in September 2014 in Bay Shore, New York, November 2014 in Port Jefferson, New York and December 2014 in Smithtown, New York. Most of the recent branch openings move the Bank geographically westward and demonstrate its commitment to traditional growth through branch expansion. The Bank has also grown through acquisitions including the June 2015 acquisition of CNB, the February 2014 acquisition of FNBNY, and the May 2011 acquisition of Hampton State Bank. Management will continue to seek opportunities to expand its reach into other contiguous markets by network expansion, or through the addition of professionals with established customer relationships.

Challenges and Opportunities

As noted earlier, on June 19, 2015, the Company acquired CNB. This acquisition increases the Company’s scale and continues the westward expansion into new markets in Nassau County, Queens and Manhattan. Management recognizes the challenges associated acquisitions and leveraged the experience gained in the acquisitions of FNBNY in 2014 and Hamptons State Bank in 2011, to successfully integrate the operations of CNB.

Although the economy, real estate values and unemployment rates have improved, recent volatility in the stock market and declines in oil prices indicate that economic uncertainty still exists. The Bank continues to face challenges associated with ever increasing regulations and the current historically low interest rate environment. Over time, additional rate increases should provide some relief to net interest margin compression as new loans are funded and securities are reinvested at higher rates. However, in the short term, the fair value of our available for sale securities declines when rates increase, resulting in net unrealized losses and a reduction in stockholders’ equity. Strategies for managing for the eventuality of higher rates have a cost. Extending liability maturities or shortening the tenor of assets increases interest expense and reduces interest income. An additional method for managing in a higher rate environment is to grow stable core deposits, requiring continued investment in people, technology and branches. Over time, the costs of these strategies should provide long term benefits.

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The key to delivering on the Company’s mission is combining its expanding branch network, improving technology, and experienced professionals with the critical element of local decision making. The successful expansion of the franchise’s geographic reach continues to deliver the desired results: increasing core deposits and loans, and generating higher levels of revenue and income.

Corporate objectives for 2016 include: leveraging our expanding branch network to build customer relationships and grow loans and deposits; 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. Management believes there remain opportunities to grow its franchise and that continued investments to generate core funding, quality loans and new sources of revenue remain keys to continue creating long term shareholder value. The ability to attract, retain, train and cultivate employees at all levels of the Company remains significant to meeting corporate 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. 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

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. 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.

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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.

Net Income

Net income for the three months ended March 31, 2016 was $8.6 million and $0.49 per diluted share as compared to $4.8 million and $0.41 per diluted share for the same period in 2015. Changes in net income for the three months ended March 31, 2016 compared to March 31, 2015 include: (i) a $10.7 million or 57.4% increase in net interest income as a result of growth in interest earning assets primarily related to loans and investments; (ii) a $0.5 million or 56.3% increase in the provision for loan losses; (iii) a $1.2 million or 42.5% increase in non-interest income related to $0.6 million in service charges and customer fees, title fee income, net securities gains, and $0.6 million in other non-interest income; (iv) an increase in non-interest expenses of $5.6 million related to higher operating costs associated with the acquired CNB operations and facilities, investments in technology, additional marketing costs, and amortization of CNB related intangible assets partially offset by a net recovery of $0.3 million of accrued costs associated with the CNB acquisition; and (v) a $2.0 million increase in income taxes associated with higher pre-tax income. The effective income tax rate was 35.0% for the quarter ended March 31, 2016 compared to 35.5% for the same period last year.

Analysis of Net Interest Income

Net interest income, the primary contributor to earnings, represents the difference between income on interest earning assets and expenses on interest bearing liabilities. Net interest income depends upon the volume of interest earning assets and interest bearing liabilities and the interest rates earned or paid on them.

The following table sets forth certain information relating to the Company’s average consolidated 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.”

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	Three Months Ended March 31,
	2016								2015
						Average								Average
	Average					Yield/			Average					Yield/
(Dollars in thousands)	Balance		Interest			Cost			Balance		Interest			Cost
Interest earning assets:
Loans, net ⁽¹⁾⁽²⁾	$	2,423,498	$	28,047			4.65	%	$	1,349,992	$	16,493			4.95	%
Mortgage-backed securities, CMOs and other asset-backed securities		737,161		3,849			2.10			493,502		2,567			2.11
Taxable securities		217,806		1,361			2.51			189,295		1,017			2.18
Tax exempt securities ⁽²⁾		73,507		631			3.45			71,672		654			3.70
Deposits with banks		31,911		37			0.47			12,699		7			0.22
Total interest earning assets		3,483,883		33,925			3.92			2,117,160		20,738			3.97
Non interest earning assets:
Cash and due from banks		59,913								45,694
Other assets		250,657								101,645
Total assets	$	3,794,453							$	2,264,499

Interest bearing liabilities:
Savings, NOW and money market deposits	$	1,574,728	$	1,278			0.33	%	$	1,056,512	$	773			0.30	%
Certificates of deposit of $100,000 or more		156,876		215			0.55			83,579		190			0.92
Other time deposits		120,760		194			0.65			56,862		112			0.80
Federal funds purchased and repurchase agreements		106,757		185			0.70			121,188		146			0.49
Federal Home Loan Bank advances		287,646		827			1.16			85,686		250			1.18
Subordinated Debentures		78,374		1,135			5.82			-		-			-
Junior Subordinated Debentures		15,878		341			8.64			15,873		341			8.71
Total interest bearing liabilities		2,341,019		4,175			0.72			1,419,700		1,812			0.52
Non interest bearing liabilities:
Demand deposits		1,068,944								650,635
Other liabilities		37,191								14,380
Total liabilities		3,447,154								2,084,715
Stockholders' equity		347,299								179,784
Total liabilities and stockholders' equity	$	3,794,453							$	2,264,499

Net interest income/interest rate spread ⁽³⁾				29,750			3.20	%				18,926			3.45	%

Net interest earning assets/net interest margin ⁽⁴⁾	$	1,142,864					3.43	%	$	697,460					3.63	%

Ratio of interest earning assets to interest bearing liabilities							148.82	%							149.13	%

Less: Tax equivalent adjustment				(318	)							(231	)

Net interest income			$	29,432							$	18,695

(1) Amounts are net of deferred origination costs/(fees) and the allowance for loan losses.

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

(3) Net interest rate spread represents the difference between the yield on average interest earning assets and the cost of average interest bearing liabilities.

(4) Net interest margin represents net interest income divided by average interest earning assets.

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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.

	Three Months Ended March 31,
	2016 Over 2015
	Changes Due To
(In thousands)	Volume			Rate			Net Change
Interest income on interest earning assets:
Loans, net ⁽¹⁾⁽²⁾	$	18,262		$	(6,708	)	$	11,554
Mortgage-backed securities, CMOs and other asset-backed securities		1,367			(85	)		1,282
Taxable securities		172			172			344
Tax exempt securities ⁽²⁾		92			(115	)		(23	)
Deposits with banks		17			13			30
Total interest earning assets		19,910			(6,723	)		13,187

Interest expense on interest bearing liabilities:
Savings, NOW and money market deposits		419			86			505
Certificates of deposit of $100,000 or more		441			(416	)		25
Other time deposits		216			(134	)		82
Federal funds purchased and repurchase agreements		(102	)		141			39
Federal Home Loan Bank Advances		622			(45	)		577
Subordinated Debentures		1,135			-			1,135
Junior Subordinated Debentures		1			(1	)		-
Total interest bearing liabilities		2,732			(369	)		2,363
Net interest income	$	17,178		$	(6,354	)	$	10,824

(1) Amounts are net of deferred origination costs/(fees) and the allowance for loan losses.

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

Analysis of Net Interest Income for the Three Months Ended March 31, 2016 and March 31, 2015

Net interest income was $29.4 million for the three months ended March 31, 2016 compared to $18.7 million for the same period in 2015, an increase of $10.7 million or 57.4%. Net interest margin decreased to 3.43% for the quarter ended March 31, 2016, compared to 3.63% for the quarter ended March 31, 2015 as a result of higher costs of borrowings associated with the $80 million in subordinated debentures issued in September 2015, and lower yields on interest earning assets. The total average interest earning assets increased $1.367 billion or 64.6%, yielding 3.92% and the overall funding cost was 0.49%, including demand deposits. The yield on interest earning assets decreased approximately 5 basis points from 3.97% to 3.92%. The cost of interest bearing liabilities increased approximately 20 basis points during the first quarter of 2016 compared to 2015. The increase in average total deposits of $1.074 billion funded higher yielding loans, which grew $1.074 billion from the comparable 2015 quarter.

For the three months ended March 31, 2016, average net loans grew by $1.074 billion or 79.5% to $2.42 billion as compared to $1.35 billion for the same period in 2015, driven by growth in commercial real estate mortgage loans, commercial, financial and agricultural loans, and multi-family mortgage loans. The Bank remains committed to growing loans with prudent underwriting, sensible pricing and limited credit and extension risk.

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For the three months ended March 31, 2016, average total investments increased by $274.0 million or 36.3% to $1.03 billion as compared to $754.5 million for the three months ended March 31, 2015. There were no federal funds sold for the three months ended March 31, 2016 and 2015. The average interest earning cash increased by $19.2 million to $31.9 million for the three months ended March 31, 2016 as compared to $12.7 million for the same period in 2015.

Average total interest bearing liabilities were $2.3 billion for the three months ended March 31, 2016 compared to $1.4 billion for the same period in 2015. The yield on total interest bearing liabilities increased to 0.72% compared to 0.52% primarily due to the issuance of subordinated debentures of $80.0 million in September 2015. 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 three months ended March 31, 2016, average total deposits increased by $1.074 billion or 58.1% to $2.9 billion from $1.8 billion from the same period in 2015. Components of this increase include an increase in average balances in savings, NOW and money market accounts of $518.2 million or 49.0% to $1.6 billion for the three months ended March 31, 2016 compared to $1.1 billion for the same period last year. Average balances in certificates of deposit of $100,000 or more and other time deposits increased $137.2 million to $277.6 million for 2016 as compared to $140.4 million for the same period last year. Average balances in demand deposits increased $418.3 million or 64.3% to $1.07 billion for 2016 as compared to $650.6 million for the same period last year. Average public fund deposits comprised 17.9% of total average deposits during the three months ended March 31, 2016 and 19.5% of total average deposits for the same period in 2015. Average federal funds purchased and repurchase agreements decreased $14.4 million or 11.9% to $106.8 million for the three months ended March 31, 2016 compared to $121.2 million for the same period in the prior year. Average FHLB advances increased $202.0 million or 235.7% to $287.6 million for the three months ended March 31, 2016 compared to $85.7 million for the same period 2015.

Total interest income increased $13.1 million or 63.9% to $33.6 million for the three months ended March 31, 2016 from $20.5 million for the same period in 2015. Interest income on loans increased $11.4 million or 69.5% to $27.9 million for the three months ended March 31, 2016 from $16.5 million for the same period in 2015. The yield on average loans was 4.65% for 2016 as compared to 4.95% in 2015.

Interest income on investments in asset-backed, taxable and tax exempt securities increased $1.5 million to $5.4 million for the three months ended March 31, 2016 compared to $3.9 million for the same period in 2015. Interest income on securities included net amortization of premiums on securities of $1.5 million for the three months ended March 31, 2016 compared to $1.0 million for the same period in 2015. The tax adjusted average yield on total securities was 2.28% for the three months ended March 31, 2016 and 2015, respectively.

Total interest expense increased to $4.2 million for the three months ended March 31, 2016 compared to $1.8 million for the same period in 2015. The increase for the three months ended March 31, 2016 is a result of the increase in average interest bearing liabilities, principally the issuance of $80.0 million subordinated debentures in September 2015 and an increase in average FHLB advances.

Provision and Allowance for Loan Losses

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

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, a provision for loan losses of $1.3 million was recorded during the three months ended March 31, 2016 compared to a provision for loan loss of $0.8 million that was recorded during the same period in 2015. Net charge-offs were $0.2 million for the quarter ended March 31, 2016 compared to $0.9 million for the year ended December 31, 2015 and $0.2 million for the quarter ended March 31, 2015. The ratio of allowance for loan losses to nonaccrual loans was 1333%, 1537% and 780%, at March 31, 2016, December 31, 2015, and March 31, 2015, respectively. The allowance for loan losses increased to $21.8 million at March 31, 2016 as compared to $20.7 million at December 31, 2015 and $18.3 million at March 31, 2015. As a percentage of total loans the allowance was 0.88% at March 31, 2016 compared to 0.86% at December 31, 2015 and 1.30% at March 31, 2015. In accordance with current accounting guidance, the acquired CNB loans were recorded at fair value as of acquisition, effectively netting estimated future losses against the loan balances. Management continues to carefully monitor the loan portfolio as well as real estate trends in Nassau and Suffolk Counties.

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Loans of approximately $23.7 million or 1.0% of total loans at March 31, 2016 were categorized as classified loans compared to $26.9 million or 1.1% at December 31, 2015 and $28.5 million or 2.0% at March 31, 2015. Classified loans include loans with credit quality indicators with the internally assigned grades of special mention, substandard and doubtful. These loans are categorized as classified 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. At March 31, 2016, classified loans included $0.7 million of acquired FNBNY loans and $6.8 million of acquired CNB loans. At December 31, 2015, classified loans included $0.3 million of acquired FNBNY loans and $9.6 million of acquired CNB loans.

At March 31, 2016, approximately $11.8 million of classified loans were commercial real estate (“CRE”) loans, including multi-family loans, and were well secured with real estate as collateral. Of the $11.8 million of CRE loans, $11.0 million were current and $0.8 million were past due. In addition, all the CRE loans have personal guarantees. At March 31, 2016, approximately $2.7 million of classified loans were residential real estate loans with $1.4 million current and $1.3 million past due. Commercial, financial, and agricultural loans represented $9.1 million of classified loans, with $0.4 million past due and $8.7 million current. There were no real estate construction and land loans considered classified. All real estate construction and land loans are well secured with collateral. The remaining $0.01 million in classified loans are consumer loans that are unsecured and demonstrate sufficient cash flow to pay the loans.

CRE loans, including multi-family loans, represented $1.39 billion or 56.1% of the total loan portfolio at March 31, 2016 compared to $1.40 billion or 58.3% at December 31, 2015 and $871.6 million or 62.2% at March 31, 2015. 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 generally 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.

As of March 31, 2016 and December 31, 2015, the Company had impaired loans as defined by FASB ASC No. 310, “Receivables” of $3.7 million and $3.0 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. 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 loans, the Bank evaluates the impairment of the loan in accordance with FASB ASC 310-10-35-22. Impairment is determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate. 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 collateral or present value of expected cash flows is compared to the carrying value to determine if any write-down or specific loan loss allowance allocation is required. These methods of fair value measurement for impaired loans are considered Level 3 within the fair value hierarchy described in FASB ASC 820-10-50-5.

Nonaccrual loans were $1.6 million or 0.07% of total loans at March 31, 2016 and $1.4 million or 0.06% of total loans at December 31, 2015. Approximately $0.2 million of the nonaccrual loans at March 31, 2016 and $0.09 million at December 31, 2015, represent troubled debt restructured loans.

The Bank had no other real estate owned at March 31, 2016, $0.3 million at December 31, 2015, and none at March 31, 2015.

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

	Three Months Ended			For the Year Ended
	March 31, 2016			December 31, 2015
(In thousands)
Allowance for loan losses balance at beginning of period	$	20,744		$	17,637

Charge-offs:
Commercial real estate mortgage loans		-			(50	)
Multi-family mortgage loans		-			-
Residential real estate mortgage loans		-			(249	)
Commercial, financial and agricultural loans		(200	)		(827	)
Real estate construction and land loans		-			-
Installment/consumer loans		-			(2	)
Total		(200)			(1,128	)

Recoveries:
Commercial real estate mortgage loans		-			-
Multi-family mortgage loans		-			-
Residential real estate mortgage loans		-			79
Commercial, financial and agricultural loans		4			149
Real estate construction and land loans		-			-
Installment/consumer loans		1			7
Total		5			235

Net charge-offs		(195	)		(893	)
Provision for loan losses charged to operations		1,250			4,000
Balance at end of period	$	21,799		$	20,744

Allocation of Allowance for Loan Losses

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

	March 31, 2016					December 31, 2015
			Percentage					Percentage
			of Loans					of Loans
			to Total					to Total
(Dollars in thousands)	Amount		Loans			Amount		Loans
Commercial real estate mortgage loans	$	7,446		40.8	%	$	7,850		43.8	%
Multi-family loans		4,669		15.3			4,208		14.6
Residential real estate mortgage loans		2,698		18.1			2,115		16.3
Commercial, financial & agricultural loans		5,568		20.6			5,405		20.8
Real estate construction and land loans		1,277		4.5			1,030		3.8
Installment/consumer loans		141		0.7			136		0.7
Total	$	21,799		100.0	%	$	20,744		100.0	%

Non-Interest Income

Total non-interest income increased $1.2 million to $4.0 million for the three months ended March 31, 2016 compared to $2.8 million for the same period in 2015. The increase reflects $0.6 million in higher levels of other non-interest income associated with BOLI, a net recovery associated with certain identified FNBNY acquired problem loans, gains on sale of the guaranteed portion of SBA loans and $0.5 million of higher service charges and fee income compared to prior year.

Non-Interest Expense

Total non-interest expense increased $5.6 million or 42.1% to $18.9 million during the three months ended March 31, 2016 compared to $13.3 million over the same period in 2015. Salaries and benefits increased $3.0 million to $10.5 million for the three months ended

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March 31, 2016 compared to $7.5 million for the same period in 2015. Occupancy and equipment increased $0.7 million to $2.9 million compared to $2.2 for the same period in 2015. Technology and communications increased to $1.1 million from $0.8 million for the same period in prior year. Marketing and advertising increased to $0.8 million compared to $0.6 million for the same period in 2015. Professional services increased $0.5 million to $1.0 million for the three months ended March 31, 2016 compared to $0.5 million for the same period in 2015. FDIC assessments increased $0.2 million to $0.5 million for the three months ended March 31, 2016. Additionally, amortization of other intangible assets and other operating expenses increased $0.6 million and $0.5 million to $0.7 million and $1.7 million, respectively for the three months ended March 31, 2016. The above mentioned increases in non-interest expense are primarily related to higher operating costs associated with the acquired CNB operations and facilities, investments in technology, additional marketing costs, and amortization of CNB related intangible assets.

Income Taxes

The provision for income taxes increased $2.0 million to $4.6 million for the three months ended March 31, 2016 compared to $2.6 million for the three months ended March 31, 2015 primarily due to higher pretax income. The effective tax rate for the three months ended March 31, 2016 decreased to 35.0% from 35.5% for the same period last year.

Financial Condition

Total assets of the Company at March 31, 2016 increased $1.62 billion or 71.1% to $3.91 billion over the March 31, 2015 level of $2.29 billion, and increased $131.6 million compared to December 31, 2015. The growth from March 31, 2015 includes $0.9 billion of assets from the CNB acquisition and reflects strong organic growth in new and existing markets. Cash and due from banks decreased $35.0 million and interest earning deposits with banks decreased $2.4 million compared to December 31, 2015. Total securities increased $93.4 million or 9.3% to $1.10 billion and net loans increased $69.4 million or 2.9% to $2.5 billion compared to December 31, 2015. Total deposits increased $96.8 million to $2.940 billion at March 31, 2016 compared to $2.844 billion at December 31, 2015. Demand deposits decreased $104.0 million to $1.1 billion as of March 31, 2016 compared to $1.2 billion at December 31, 2015 primarily related to the seasonal outflow of public funds. Savings, NOW and money market deposits increased $226.1 million to $1.620 billion at March 31, 2016 from $1.394 billion at December 31, 2015. Certificates of deposit of $100,000 or more decreased $17.1 million to $150.7 million at March 31, 2016, from $167.8 million at December 31, 2015. Other time deposits decreased $8.2 million to $116.9 million at March 31, 2016, from $125.1 million at December 31, 2015.

Federal funds purchased were $135.0 million as of March 31, 2016 compared to $120.0 million at December 31, 2015. Federal Home Loan Bank advances were $299.2 million as of March 31, 2016 and $297.5 million at December 31, 2015. Repurchase agreements increased $0.1 million to $51.0 million at March 31, 2016 compared to $50.9 million as of December 31, 2015. Junior subordinated debentures remained at $15.9 million as of March 31, 2016 compared to December 31, 2015. Other liabilities and accrued expenses increased $8.2 million to $42.8 million as of March 31, 2016 from $34.6 million as of December 31, 2015. Stockholders’ equity was $350.9 million at March 31, 2016, an increase of $9.8 million or 2.9% from December 31, 2015, reflecting net income of $8.6 million and $0.5 million related to stock based compensation plans, a decrease in the unrealized loss on available for sale securities of $5.8 million, partially offset by $4.0 million paid in dividends. In April 2016, the Company declared a quarterly dividend of $0.23 per share and continues its long term trend of uninterrupted dividends.

Liquidity

The objective of liquidity management is to ensure the sufficiency of funds available to respond to the needs of depositors and borrowers, and to take advantage of unanticipated earnings enhancement opportunities for Company growth. Liquidity management addresses the ability of the Company to meet financial obligations that arise in the normal course of business. Liquidity is primarily needed to meet customer borrowing commitments, deposit withdrawals either on demand or contractual maturity, to repay borrowings as they mature, to fund current and planned expenditures and to make new loans and investments as opportunities arise. The Holding Company’s principal sources of liquidity included cash and cash equivalents of $19.1 million as of March 31, 2016, 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. For the three months ended March 31, 2016, the Bank did not pay a cash dividend 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. As of April 1, 2016, the Bank has $37.2 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 and Federal Reserve Bank, growth in core deposits and sources of

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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.

The Bank’s Asset/Liability and Funds Management Policy allows for wholesale borrowings of up to 25% of total assets. At March 31, 2016, the Bank had aggregate lines of credit of $295.0 million with unaffiliated correspondent banks to provide short term credit for liquidity requirements. Of these aggregate lines of credit, $275.0 million is available on an unsecured basis. As of March 31, 2016, the Bank had $135.0 million in overnight borrowings outstanding under these lines. 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 March 31, 2016, the Bank had nothing outstanding in FHLB overnight borrowings and $299.2 million outstanding in FHLB term borrowings. As of December 31, 2015, the Bank had $120.0 million in overnight borrowings outstanding, nothing outstanding in FHLB overnight borrowings and $297.5 million outstanding in FHLB term borrowings. The Bank had $50.0 million of securities sold under agreements to repurchase outstanding as of March 31, 2016 with brokers and $1.0 million outstanding with customers. As of December 31, 2015, the Bank had $50.0 million of securities sold under agreements to repurchase outstanding with brokers and $0.9 million outstanding with customers. In addition, the Bank has approved broker relationships for the purpose of issuing brokered deposits. As of March 31, 2016, the Bank had $22.4 million outstanding in brokered certificates of deposits and $128.5 million outstanding in brokered money market accounts. As of December 31, 2015, the Bank had $22.4 million outstanding in brokered certificates of deposits and $148.0 million outstanding in brokered money market accounts.

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.

Capital Resources

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital 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 of total and Tier 1 capital to risk weighted assets and of Tier 1 capital to average assets. Tier 1 capital, risk weighted assets and average assets are as defined by regulation. The required minimums for the Corporation and Bank are set forth in the table that follows. The Company and the Bank met all capital adequacy requirements on March 31, 2016.

On January 1, 2015, the Basel III Capital Rules became effective and include transition provisions through January 1, 2019. These rules provide for the following minimum capital to risk-weighted assets ratios as of January 1, 2015: a) 4.5% based upon common equity tier 1 capital ("CET1"); b) 6.0% based upon tier 1 capital; and c) 8.0% based upon total regulatory capital. A minimum leverage ratio (tier 1 capital as a percentage of total average assets) of 4.0% is also required under the Basel III Capital Rules.

When fully phased in, the Basel III Capital Rules will additionally require institutions to retain a capital conservation buffer, composed of CET1, of 2.5% above these required minimum capital ratio levels. The capital conservation buffer requirement is being phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increasing by 0.625% each subsequent January 1, until it reaches 2.5% on January 1, 2019. When the capital conservation buffer is fully phased in on January 1, 2019, the Company and the Bank will effectively have the following minimum capital to risk-weighted assets ratios: a) 7.0% based upon CET1; b) 8.5% based upon tier 1 capital; and c) 10.5% based upon total regulatory capital.

The Company and the Bank made the one-time, permanent election to continue to exclude the effects of accumulated other comprehensive income or loss items included in stockholders' equity for the purposes of determining the regulatory capital ratios.

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As of March 31, 2016 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 below. Since that notification, there are no conditions or events that management believes have changed the institution’s category.

The following table presents actual capital levels and minimum required levels for the Company and the Bank under Basel III rules at March 31, 2016 and December 31, 2015.

	Basel III
											Minimum To Be Well
						Minimum Capital					Capitalized Under Prompt
As of March 31, 2016	Actual					Adequacy Requirement					Corrective Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Common Equity Tier 1 Capital to Risk Weighted Assets:
Consolidated	$	246,518		8.9	%	$	124,248		4.5	%		n/a		n/a
Bank		321,134		11.6			124,236		4.5		$	179,453		6.5	%
Total Capital to Risk Weighted Assets:
Consolidated		364,172		13.2			220,885		8.0			n/a		n/a
Bank		343,209		12.4			220,865		8.0			276,081		10.0
Tier 1 Capital to Risk Weighted Assets:
Consolidated		262,097		9.5			165,664		6.0			n/a		n/a
Bank		321,134		11.6			165,649		6.0			220,865		8.0
Tier 1 Capital to Average Assets:
Consolidated		262,097		7.1			147,540		4.0			n/a		n/a
Bank		321,134		8.7			147,559		4.0			184,449		5.0

	Basel III
											Minimum To Be Well
						Minimum Capital					Capitalized Under Prompt
As of December 31, 2015	Actual					Adequacy Requirement					Corrective Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Common Equity Tier 1 Capital to Risk Weighted Assets:
Consolidated	$	249,921		9.3	%	$	121,074		4.5	%		n/a		n/a
Bank		319,351		11.9			121,074		4.5		$	174,884		6.5	%
Total Capital to Risk Weighted Assets:
Consolidated		366,393		13.6			215,243		8.0			n/a		n/a
Bank		340,371		12.7			215,242		8.0			269,053		10.0
Tier 1 Capital to Risk Weighted Assets:
Consolidated		265,373		9.9			161,432		6.0			n/a		n/a
Bank		319,351		11.9			161,432		6.0			215,242		8.0
Tier 1 Capital to Average Assets:
Consolidated		265,373		7.6			140,490		4.0			n/a		n/a
Bank		319,351		9.1			140,492		4.0			175,615		5.0

Impact of Inflation and Changing Prices

The Unaudited Consolidated Financial Statements and notes thereto 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.

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Recent Regulatory and Accounting Developments

Refer to Note 15. “Recent Accounting Pronouncements,” of the Condensed Notes to the Consolidated Financial Statements for details related to recent regulatory and accounting developments.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Asset/Liability Management

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

The Company’s primary earnings source is net interest income, which is affected by changes in the level of interest rates, the relationship between rates, the impact of interest rate fluctuations on asset prepayments, the level and composition of deposits and liabilities, and the credit quality of earning assets. The Company’s objectives in its asset and liability management are to maintain a strong, stable net interest margin, to utilize its capital effectively without taking undue risks, to maintain adequate liquidity, and to reduce vulnerability of its operations to changes in interest rates.

The Company’s Asset and Liability Committee evaluates periodically, but at least four times a year, the impact of changes in market interest rates on assets and liabilities, net interest margin, capital and liquidity. Risk assessments are governed by policies and limits established by senior management, which are reviewed and approved by the full Board of Directors at least annually. The economic environment continually presents uncertainties as to future interest rate trends. The Asset and Liability Committee regularly utilizes a model that projects net interest income based on increasing or decreasing interest rates, in order to be better able to respond to changes in interest rates.

At March 31, 2016, $1.037 billion or 94.1% 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. 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.

In addition to the above scenarios, the Company considers other, non-parallel rate shifts that would also exert pressure on earnings. The recent increase in short-term interest rates by the FOMC without a corresponding rise in long-term rates has resulted in the flattening of the yield curve. This has had the effect of raising short-term borrowings costs without allowing longer term assets to reprice higher.

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The following reflects the Company’s net interest income sensitivity analysis at March 31, 2016:

	Potential Change
Change in Interest	in Future Net
Rates in Basis Points	Interest Income
(Dollars in thousands)	$ Change			% Change
200	$	(5,451	)		(4.80	)%
100	$	(2,561	)		(2.26	)%
Static		-			-
(100)	$	237			0.21	%

As noted in the table above, a 200 basis point increase in interest rates is projected to decrease net interest income over the next twelve months by 4.80 percent. Our balance sheet sensitivity to such a move in interest rates at March 31, 2016 decreased as compared to March 31, 2015 (which was a decrease of 5.23 percent in net interest income over a 12 month period). This decrease is due to several factors which reflect our strategy to lessen our exposure to rising rates. Over the intervening year, the effective duration (a measure of price sensitivity to interest rates) of the bond portfolio remained stable from 3.21 to 3.30. Additionally, the bank has increased its use of swaps to extend liabilities.

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

Item 4. Controls and Procedures

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of March 31, 2016. Based on that evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this quarterly report. There has been no change in the Company’s internal control over financial reporting during the quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time the Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the consolidated Company’s consolidated financial condition or results of operations.

Item 1A. Risk Factors

The following additional risk factor supplements the risk factors disclosed in Item 1A., Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2015.

If The Bank Regulators Impose Limitations On Our Commercial Real Estate Lending Activities, Our Earnings Could Be Adversely Affected

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In 2006, the FDIC, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System (collectively, the “Agencies”) issued joint guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” (the “CRE Guidance”). Although the CRE Guidance did not establish specific lending limits, it provides that a bank’s commercial real estate lending exposure may receive increased supervisory scrutiny where total non-owner occupied commercial real estate loans, including loans secured by apartment buildings, investor commercial real estate and construction and land loans, represent 300% or more of an institution’s total risk-based capital and the outstanding balance of the commercial real estate loan portfolio has increased by 50% or more during the preceding 36 months. Our level of non-owner occupied commercial real estate equaled 325% of our total risk-based capital at March 31, 2016. Including owner-occupied commercial real estate, our ratio of commercial real estate loans to total risk-based capital ratio would be 471% at March 31, 2016.

In December 2015, the Agencies released a new statement on prudent risk management for commercial real estate lending (the “2015 Statement”). In the 2015 Statement, the Agencies express concerns about easing commercial real estate underwriting standards, direct financial institutions to maintain underwriting discipline and exercise risk management practices to identify, measure and monitor lending risks, and indicate that the Agencies will continue “to pay special attention” to commercial real estate lending activities and concentrations going forward. If the OCC were to impose restrictions on the amount of commercial real estate loans we can hold in our portfolio, or require higher capital ratios as a result of the level of commercial real estate loans we hold, our earnings would be adversely affected.

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

(a)

Not applicable.

(b)

Not applicable.

(c)

Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits and Reports on Form 8-K

10.1	First Amendment to Amended and Restated Employment Agreement by and between Bridge Bancorp, Inc., The Bridgehampton National Bank, and Howard H. Nolan, dated as of April 11, 2016.
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350
101	The following financial statements from Bridge Bancorp, Inc.'s Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2016, filed on May 10, 2016, formatted in XBRL: (i) Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015, (ii) Consolidated Statements of Income for the Three Months Ended March 31, 2016 and 2015, (iii) Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2016 and 2015, (iv) Consolidated Statement of Stockholders' Equity for the Three Months Ended March 31, 2016 and 2015, (v) Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015, and (vi) the Condensed Notes to Consolidated Financial Statements.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document

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SIGNATURES

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

	BRIDGE BANCORP, INC.
	Registrant

May 10, 2016	/s/ Kevin M. O’Connor
	Kevin M. O’Connor
	President and Chief Executive Officer

May 10, 2016	/s/ Howard H. Nolan
	Howard H. Nolan
	Senior Executive Vice President, Chief Financial Officer