NEWBRIDGE BANCORP - FORM 8-K/A - EX-99.3 - EXHIBIT 99.3 - December 12, 2013

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8-K/A - AMENDMENT TO FORM 8-K - NEWBRIDGE BANCORPv362592_8ka.htm
EX-99.2 - EXHIBIT 99.2 - NEWBRIDGE BANCORPv362592_ex99-2.htm
EX-99.1 - EXHIBIT 99.1 - NEWBRIDGE BANCORPv362592_ex99-1.htm
EX-23.1 - EXHIBIT 23.1 - NEWBRIDGE BANCORPv362592_ex23-1.htm

 

Exhibit 99.3

 

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL

INFORMATION RELATING TO THE MERGER

 

The following unaudited combined condensed consolidated pro forma financial information is based on the historical financial statements of NewBridge Bancorp (the “Company”) and its subsidiaries and the historical financial statements of Security Savings Bank, SSB (“Security Savings”) and has been prepared to illustrate the effects of the merger of NewBridge Bank (“the Bank”) and Security Savings. On October 2, 2013, the Company announced that the Bank had completed its supervisory acquisition of Security Savings on October 1, 2013. The unaudited pro forma combined condensed consolidated balance sheet as of September 30, 2013 and the unaudited pro forma combined condensed consolidated statement of income for the nine months ended September 30, 2013 and the year ended December 31, 2012 give effect to the merger, accounted for under the acquisition method. Under the acquisition method, the assets and liabilities of Security Savings, as of the effective date of the acquisition, are recorded at their respective fair values. For the acquisition of Security Savings, estimated fair values of assets acquired and liabilities assumed are based on the information that is available, and the Company believes this information provides a reasonable basis for determining fair values. Management is currently evaluating these fair values, which are subject to revision as more detailed analyses are completed and additional information becomes available. Any changes resulting from the evaluation of these or other estimates as of the acquisition date may change the amount of the preliminary fair values recorded.

 

The unaudited pro forma combined condensed consolidated balance sheet and the unaudited pro forma combined condensed consolidated statement of income as of and for the nine months ended September  30, 2013 have been derived from the unaudited interim financial statements of the Company and Security Savings. The unaudited pro forma combined condensed consolidated statement of income for the year ended December 31, 2012 has been derived from the audited financial statements of the Company and Security Savings. The unaudited pro forma combined condensed consolidated statements of income give effect to the transaction as if it had been consummated at the beginning of the earliest period presented. The unaudited pro forma combined condensed consolidated balance sheet gives effect to the transaction as if consummated on September 30, 2013. Certain reclassifications have been made to the historical financial statements of Security Savings to conform to the presentation in the Company’s consolidated financial statements. Merger-related expenses estimated at $1.6 million are not included in the unaudited pro forma combined condensed consolidated statements of income.

 

The unaudited pro forma combined condensed consolidated financial statements should be considered together with the historical statements of the Company and Security Savings, including the respective notes to those statements. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenue and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the acquisition been consummated during these periods.

 

 
 

 

The following table presents the estimated fair value of the assets acquired and the liabilities assumed as of the acquisition date (in thousands):

 

   October 1, 
   2013 
Fair value of assets acquired:     
Cash and cash equivalents  $55,054 
Investment securities   3,541 
Loans held for investment   131,361 
Premises and equipment   9,727 
Other real estate owned   4,328 
Net deferred tax asset   1,945 
Goodwill   3,831 
Core deposit intangible   1,460 
Other assets   1,920 
Total assets acquired   213,167 
Fair value of liabilities assumed:     
Deposits   167,939 
Borrowings from the Federal Home Loan Bank   44,324 
Other liabilities   904 
Total liabilities assumed   213,167 
Net assets acquired  $- 

 

No cash was paid or stock issued in the acquisition.

 

 
 

 

NewBridge Bancorp (NBBC) Combined with Security Savings Bank, SSB (SSB)

Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet

As of September 30, 20131

 

(Dollars in thousands)

 

   NBBC   SSB   Reclassification   Pro Forma   Pro Forma 
   Historical   Historical   Adjustments   Adjustments   Combined 
Assets                         
Cash and cash equivalents  $56,896   $55,054   $-   $-   $111,950 
Investment securities   357,537    1,450    2,090 2   1 4   361,078 
Loans held for investment   1,266,361    138,702    -    (7,341 )5   1,397,722 
Allowance for credit losses (ALLL)   (25,385)   (4,514)   -    4,514 6   (25,385)
Loans held for sale   3,744    -    -    -    3,744 
Premises and equipment   34,399    9,543    1,785 3   (1,601 )7   44,126 
Other real estate owned (OREO)   2,695    6,057    -    (1,729 )8   7,023 
Net deferred tax asset   36,908    -    -    1,945 9   38,853 
Goodwill   -    -    -    3,831 10   3,831 
Core deposit intangibles (CDI)   2,535    -    -    1,460 11   3,995 
Other assets   66,652    6,049    (3,875)2,3   (254 )12   68,572 
Total Assets  $1,802,342   $212,341   $-   $826   $2,015,509 
                          
Liabilities                         
Deposits  $1,412,010   $167,180   $-    $                759 13  $1,579,949 
Short and long term borrowings   209,474    40,000    -    4,324 14   253,798 
Other liabilities   18,012    904    -    -    18,916 
Total Liabilities   1,639,496    208,084    -    5,083    1,852,663 
                          
Equity                         
Preferred equity   14,981    -    -    -    14,981 
Common equity   147,865    4,257    -    (4,257 )15   147,865 
Total Equity   162,846    4,257    -    (4,257)   162,846 
Total Liabilities and Equity  $1,802,342   $212,341   $-   $826   $2,015,509 

 

 
 

 

 

1NBBC completed its acquisition of SSB on October 1, 2013. The pro forma combined condensed consolidated balance sheet assumes the acquisition took place as of September 30, 2013.

2Reclassifies Federal Home Loan Bank stock from other assets to investment securities.
3Reclassifies real estate held for future branch sites from other assets to premises and equipment.
4Marks the investment portfolio to fair value as of the acquisition date.
5Includes a credit mark of ($10.7) million and a yield premium of $3.4 million based on the Company’s evaluation as of the acquisition date.
6Eliminates the historical allowance for credit losses of SSB.
7Reflects fair value adjustments to acquired premises and equipment based on the Company's evaluation as of the acquisition date.
8Reflects fair value of OREO based on the Company's evaluation of the acquired OREO portfolio.
9Records deferred tax asset generated by the net fair value adjustments (tax rate = 38.25%).
10Establishes goodwill resulting from fair value of liabilities assumed exceeding fair value of assets acquired.
11Establishes CDI on the acquired core deposit accounts.
12Reflects fair value of accrued interest receivable.
13Establishes deposit premium on acquired interest-bearing deposits.
14Reflects fair value adjustments to Federal Home Loan Bank advances.
15Eliminates SSB’s equity.

 

 
 

 

NewBridge Bancorp (NBBC) Combined with Security Savings Bank, SSB (SSB)

Unaudited Pro Forma Combined Condensed Consolidated Statement of Income

For the Nine Months Ended September 30, 20131

 

(Dollars in thousands, except per share data)

 

   NBBC   SSB   Reclassification   Pro Forma   Pro Forma 
   Historical   Historical   Adjustments   Adjustments   Combined 
Interest Income                         
Loans, including fees  $41,135   $6,028   $-    $                (473)4  $46,690 
Investment securities   9,122    84    -    -    9,206 
Interest-bearing bank balances   15    67    -    -    82 
Total Interest Income   50,272    6,179    -    (473)   55,978 
                          
Interest Expense                         
Deposits   2,247    829    -    (114)5   2,962 
Federal Home Loan Bank advances   768    1,338    -    (891)6   1,215 
Other borrowings   994    -    -    -    994 
Total Interest Expense   4,009    2,167    -    (1,005)   5,171 
Net Interest Income   46,263    4,012    -    532    50,807 
Provision for Credit Losses   2,049    -    -    -    2,049 
Net Interest Income After Provision   44,214    4,012         532    48,758 
                          
Noninterest Income                         
Retail banking   7,592    340    -    -    7,932 
Mortgage banking services   1,347    11    -    -    1,358 
Wealth management services   1,932    -    -    -    1,932 
Gains on sales of investment securities   736    -    -    -    736 
Bank-owned life insurance   1,107    45    -    -    1,152 
Other   671    152    -    -    823 
Total Noninterest Income   13,385    548         -    13,933 
                          
Noninterest Expense                         
Personnel   23,387    2,470         -    25,857 
Occupancy   3,073    788    (326)2   -    3,535 
Furniture and equipment   2,510    -    326 2   -    2,836 
Technology and data processing   3,071    700    (219)3   -    3,552 
Legal and professional   2,031    -    2193   -    2,250 
FDIC insurance   1,329    567    -    -    1,896 
Other real estate owned   (285)   1,297    -    -    1,012 
Amortization of core deposit intangibles   539    -    -    261 7   800 
Other   6,339    629    -    -    6,968 
Total Noninterest Expense   41,994    6,451    -    261    48,706 
Net income (loss) before income taxes   15,605    (1,891)   -    271    13,985 
Income tax expense (benefit)   (3,740)   -    -    978   (3,643)
Net Income (Loss)   19,345    (1,891)   -    174    17,628 
Dividends and accretion on preferred stock   (1,616)   -    -    -    (1,616)
Net Income (Loss) available to common shareholders  $17,729   $(1,891)  $-   $174   $16,012 

 

 
 

 

   NBBC   Pro Forma 
   Historical   Combined 
         
Earnings per share          
Basic  $0.68   $0.62 
Diluted  $0.61   $0.55 
           
Weighted average shares outstanding          
Basic   26,025,601    26,025,601 
Diluted   29,203,192    29,203,192 

 

1NBBC completed its acquisition of SSB on October 1, 2013. The pro forma combined condensed consolidated statement of income for the nine months ended September 30, 2013 assumes the acquisition took place as of January 1, 2012.

2Reclassifies furniture and equipment expense out of occupancy expense.
3Reclassifies legal and professional fees out of technology and data processing.
4Reflects accretion and amortization of loan purchase accounting adjustments.
5Reflects amortization of deposit premium on acquired interest-bearing deposits.
6Reflects amortization of Federal Home Loan Bank advances purchase accounting adjustment.
7Reflects amortization of core deposit intangible on the acquired core deposit accounts.
8Reflects income tax on adjustments at the effective rate of 35.62%.

 

 
 

 

NewBridge Bancorp (NBBC) Combined with Security Savings Bank, SSB (SSB)

Unaudited Pro Forma Combined Condensed Consolidated Statement of Income

For the Twelve Months Ended December 31, 20121

 

(Dollars in thousands, except per share data)

 

   NBBC   SSB   Reclassification   Pro Forma   Pro Forma 
   Historical   Historical   Adjustments   Adjustments   Combined 
Interest Income                         
Loans, including fees  $57,676   $10,101   $-    $              (710)4  $67,067 
Investment securities   13,364    271    -    -    13,635 
Interest-bearing bank balances   40    133    -    -    173 
Total Interest Income   71,080    10,505    -    (710)   80,875 
                          
Interest Expense                         
Deposits   5,135    1,813    -    (152)5   6,796 
Federal Home Loan Bank advances   1,012    1,944    -    (1,360)6   1,596 
Other borrowings   1,367    -    -    -    1,367 
Total Interest Expense   7,514    3,757    -    (1,512)   9,759 
Net Interest Income   63,566    6,748    -    802    71,116 
Provision for Credit Losses   35,893    1,113    -    -    37,006 
Net Interest Income After Provision   27,673    5,635         802    34,110 
                          
Noninterest Income                         
Retail banking   9,739    602    -    -    10,341 
Mortgage banking services   2,636    37    -    -    2,673 
Wealth management services   2,349    -    -    -    2,349 
Gains on sales of investment securities   3    -    -    -    3 
Bank-owned life insurance   1,494    56    -    -    1,550 
Other   667    30    -    -    697 
Total Noninterest Income   16,888    725         -    17,613 
                          
Noninterest Expense                         
Personnel   29,354    4,092         -    33,446 
Occupancy   5,171    1,351    (589)2   -    5,933 
Furniture and equipment   3,335    -    5892   -    3,924 
Technology and data processing   4,063    1,063    (414)3   -    4,712 
Legal and professional   3,029    -    4143   -    3,443 
FDIC insurance   1,770    888    -    -    2,658 
Other real estate owned   15,726    5,444    -    -    21,170 
Amortization of core deposit intangibles   726    -    -    4177   1,143 
Other   9,239    973    -    -    10,212 
Total Noninterest Expense   72,413    13,811    -    417    86,641 
Net income (loss) before income taxes   (27,852)   (7,451)   -    385    (34,918)
Income tax expense (benefit)   (2,598)   (4)   -    1378   (2,465)
Net Income (Loss)   (25,254)   (7,447)   -    248    (32,453)
Dividends and accretion on preferred stock   (2,918)   -    -    -    (2,918)
Net Income (Loss) available to common shareholders  $(28,172)  $(7,447)  $-   $248   $(35,371)

 

 
 

 

   NBBC   Pro Forma 
   Historical   Combined 
         
Earnings per share          
Basic  $(1.80)  $(2.26)
Diluted  $(1.80)  $(2.26)
           
Weighted average shares outstanding          
Basic   15,655,868    15,655,868 
Diluted   15,655,868    15,655,868 

 

1NBBC completed its acquisition of SSB on October 1, 2013. The pro forma combined condensed consolidated statement of income for the twelve months ended December 31, 2012 assumes the acquisition took place as of January 1, 2012.

2Reclassifies furniture and equipment expense out of occupancy expense.
3Reclassifies legal and professional fees out of technology and data processing.
4Reflects accretion and amortization of loan purchase accounting adjustments.
5Reflects amortization of deposit premium on acquired interest-bearing deposits.
6Reflects amortization of Federal Home Loan Bank advances purchase accounting adjustment.
7Reflects amortization of core deposit intangible on the acquired core deposit accounts.
8Reflects income tax on adjustments at the effective rate of 35.62%.

 

 

 

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