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8-K/A - AMENDMENT TO 8-K - NEWBRIDGE BANCORPv377893_8ka.htm
EX-23.1 - EXHIBIT 23.1 - NEWBRIDGE BANCORPv377893_ex23-1.htm
EX-99.1 - EXHIBIT 99.1 - NEWBRIDGE BANCORPv377893_ex99-1.htm

 

Exhibit 99.2

 

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 subsidiary and the historical financial statements of CapStone Bank (“CapStone”) and has been prepared to illustrate the effects of the merger of CapStone with and into the Company’s wholly-owned subsidiary, NewBridge Bank (“the Bank”), which became effective on April 1, 2014. The unaudited pro forma combined condensed consolidated balance sheet as of December 31, 2013 and the unaudited pro forma combined condensed consolidated statement of income for the year ended December 31, 2013, give effect to the Merger, accounted for under the acquisition method. Under the acquisition method, the assets and liabilities of CapStone, as of the effective date of the Merger, are recorded at their respective fair values. For the acquisition of CapStone, 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 year ended December 31, 2013, have been derived from the audited financial statements of the Company and CapStone. The unaudited pro forma combined condensed consolidated statement of income gives effect to the Merger as if it had been consummated on January 1, 2013. The unaudited pro forma combined condensed consolidated balance sheet gives effect to the Merger as if consummated on December 31, 2013. Merger-related expenses estimated at $6.2 million are not included in the unaudited pro forma combined condensed consolidated statement of income.

 

The unaudited pro forma combined condensed consolidated financial statements should be considered together with the historical statements of the Company and CapStone, 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 Merger been consummated during this period.

 

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

 

   April 1, 2014 
Fair value of assets acquired :     
Cash and cash equivalents  $6,198 
Time deposits due from banks   18,250 
Federal funds sold   1,000 
Investment securities   49,511 
Loans   292,848 
Premises and equipment   3,185 
Core deposit intangible   2,490 
Real estate acquired in settlement of loans   165 
Deferred tax assets   3,257 
Other assets   4,357 
Total assets acquired   381,261 
Fair value of liabilities assumed:     
Deposits   273,665 
Borrowings from the Federal Home Loan Bank   61,268 
Other liabilities   1,783 
Total liabilities assumed   336,716 
Net assets acquired  $44,545 
Purchase price:  $61,776 
Goodwill:  $17,231 

 

Under the terms of the Agreement and Plan of Combination and Reorganization, CapStone’s shareholders received 2.25 shares of the Company’s Class A common stock for each share of CapStone common stock. Accordingly, the Company issued approximately 8,074,233 shares of Class A common stock (based on 3,589,028 shares of CapStone common stock issued and outstanding as of the effective date of the Merger) at a price of $7.14 per common share, the closing stock price of the Class A common stock on March 31, 2014. The implied value of the consideration received by CapStone shareholders was $16.065 per share of CapStone common stock. The total purchase price was $61.8 million, net of stock issuance costs of $352,000, including the conversion of 602,782 CapStone stock options having an aggregate fair value of $4.5 million. No cash was issued in the transaction other than an immaterial amount of cash paid in lieu of fractional shares. The acquisition was a tax-free transaction for the Company.

 

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 NewBridge Bancorp (“NewBridge”) Combined with CapStone Bank (“CapStone”)

Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet

As of December 31, 20131

  

(Dollars in thousands)                
                 
   NewBridge   CapStone   Pro Forma   Pro Forma 
   Historical   Historical   Adjustments   Combined 
Assets                    
Cash and cash equivalents  $33,513   $5,912   $-   $39,425 
Time deposits due from banks   -    18,200    2992   18,499 
Investment securities   368,866    50,426    1023   419,394 
Loans held for investment   1,416,703    298,246    (6,154)4   1,708,795 
Allowance for credit losses   (24,550)   (3,343)   3,3435   (24,550)
Loans held for sale   3,530    -    -    3,530 
Premises and equipment   44,249    2,910    3346   47,493 
Real estate acquired in settlement of loans   8,025    173    -    8,198 
Net deferred tax asset   36,779    3,457    3947   40,630 
Goodwill   4,118    -    17,2768   21,394 
Core deposit intangibles   3,725    542    1,9489   6,215 
Other assets   70,274    5,008    (212)10   75,070 
Total Assets  $1,965,232   $381,531   $17,330   $2,364,093 
                     
Liabilities                    
Deposits  $1,553,996   $280,549   $39211  $1,834,937 
Short and long term borrowings   229,774    54,460    26812   284,502 
Other liabilities   14,670    1,416    -    16,086 
Total Liabilities   1,798,440    336,425    660    2,135,525 
                     
Equity                    
Preferred equity   15,000    -    -    15,000 
Common equity   151,792    45,106    16,67013   213,568 
Total Equity   166,792    45,106    16,670    228,568 
Total Liabilities and Equity  $1,965,232   $381,531   $17,330   $2,364,093 

  

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1 NewBridge completed its acquisition of CapStone on April 1, 2014. The pro forma combined condensed consolidated balance sheet assumes the acquisition took place as of December 31, 2013.
2 Establishes the premium on acquired certificates of deposit.
3 Marks the investment portfolio to fair value as of the acquisition date.
4 Includes a credit mark of ($7.0) million and a yield discount of ($1.2) million based on NewBridge’s evaluation as of the acquisition  date, a reversal of loan fees of $710,000, and the elimination of the discount of $1.4 million from the purchased loans related to CapStones’s acquisition of Patriot State Bank (Patriot).
5 Eliminates the historical allowance for credit losses of CapStone.
6 Reflects fair value adjustments to acquired premises and equipment based on NewBridge’s evaluation as of the acquisition date.
7 Records deferred tax asset generated by the net fair value adjustments (tax rate = 38.25%).
8 Records the goodwill from the acquisition of CapStone and represents the net amount of consideration given in excess of the net  assets acquired.
9 Eliminates the prior core deposit intangible on CapStone’s acquisition of Patriot of $542,000 and establishes the new core deposit intangible of $2.5 million.
10 Reflects fair value adjustments to accrued interest receivable.
11 Eliminates the prior deposit premium on CapStone’s acquisition of Patriot of $757,000 and establishes the new deposit premium of $1.1 million.
12 Reflects fair value adjustments to Federal Home Loan Bank advances.
13 Reflects total consideration of $61.8 million, consisting of approximately 8,074,233 shares issued valued at $7.14 per share and $4.5 million fair value of 602,782 stock options outstanding less stock issuance costs of $352,000, less CapStone equity of  $45.1 million.

  

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NewBridge Bancorp (“NewBridge”) Combined with CapStone Bank (“CapStone”)

Unaudited Pro Forma Combined Condensed Consolidated Statement of Income

For the Year Ended December 31, 20131

  

   NewBridge   CapStone   Pro Forma   Pro Forma 
   Historical   Historical   Adjustments   Combined 
Interest Income                    
Loans, including fees  $56,617   $14,419   $(48)2  $70,988 
Investment securities   12,179    1,359    (253)3   13,285 
Interest-bearing bank balances   23    364    (179)4   208 
Federal funds sold   -    7    -    7 
Total Interest Income   68,819    16,149    (480)   84,488 
                     
Interest Expense                    
Deposits   3,116    1,112    (27)5   4,201 
Federal Home Loan Bank advances   1,195    383    -    1,578 
Other borrowings   1,332    9    -    1,341 
Total Interest Expense   5,643    1,504    (27)   7,120 
Net Interest Income   63,176    14,645    (453)   77,368 
Provision for Credit Losses   2,691    250    -    2,941 
Net Interest Income After Provision   60,485    14,395    (453)   74,427 
                     
Noninterest Income                    
Retail banking   10,228    89    -    10,317 
Wealth management services   2,570    -    -    2,570 
Mortgage banking services   1,644    -    -    1,644 
Gain on acquisition   -    5,127    -    5,127 
Gains on sales of investment securities   736    -    -    736 
Bank-owned life insurance   1,429    77    -    1,506 
Other   847    445    -    1,292 
Total Noninterest Income   17,454    5,738    -    23,192 
                     
Noninterest Expense                    
Personnel   32,104    5,266    -    37,370 
Occupancy, furniture and equipment   7,709    647    -    8,356 
Technology and data processing   4,192    680    -    4,872 
FDIC insurance   1,565    207    -    1,772 
Real estate acquired in settlement of loans   (126)   222    -    96 
Amortization of core deposit intangibles   809    116    5876   1,512 
Other   14,131    2,026    -    16,157 
Total Noninterest Expense   60,384    9,164    587    70,135 
Net income before income taxes   17,555    10,969    (1,040)   27,484 
Income tax expense (benefit)   (3,216)   2,213    (370)7   (1,373)
Net Income (Loss)   20,771    8,756    (670)   28,857 
Dividends and accretion on preferred stock   (1,854)   -    -    (1,854)
Net Income (Loss) available to common shareholders  $18,917   $8,756   $(670)  $27,003 

 

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   NewBridge   CapStone   Pro Forma 
   Historical   Historical   Combined 
Earnings per share               
Basic  $0.71   $2.50   $0.78 
Diluted  $0.65   $2.34   $0.72 
                
Weighted average shares outstanding               
Basic   26,643,820    3,503,992    34,527,802 
Diluted   29,070,127    3,743,446    37,492,880 

  

1 NewBridge completed its acquisition of CapStone on April 1, 2014. The pro forma combined condensed consolidated statement
  of income for the year ended December 31, 2013 assumes the acquisition took place as of January 1, 2013.
2 Reflects accretion and amortization of loan purchase accounting adjustments.
3 Reflects amortization of premium on acquired investment securities.
4 Reflects amortization of premium on acquired certificates of deposit.
5 Reflects amortization of deposit premium on acquired interest-bearing deposits and eliminates amortization of Patriot deposit premium.
6 Reflects amortization of core deposit intangible on the acquired core deposit accounts and eliminates amortization of Patriot core
  deposit intangible.
7 Reflects income tax on adjustments at the effective rate of 35.62%.

  

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