Attached files
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8-K/A - AMENDMENT TO 8-K - NEWBRIDGE BANCORP | v377893_8ka.htm |
EX-23.1 - EXHIBIT 23.1 - NEWBRIDGE BANCORP | v377893_ex23-1.htm |
EX-99.1 - EXHIBIT 99.1 - NEWBRIDGE BANCORP | v377893_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.
1 |
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.
2 |
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 | 299 | 2 | 18,499 | |||||||||||
Investment securities | 368,866 | 50,426 | 102 | 3 | 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 | ) | 3,343 | 5 | (24,550 | ) | ||||||||
Loans held for sale | 3,530 | - | - | 3,530 | ||||||||||||
Premises and equipment | 44,249 | 2,910 | 334 | 6 | 47,493 | |||||||||||
Real estate acquired in settlement of loans | 8,025 | 173 | - | 8,198 | ||||||||||||
Net deferred tax asset | 36,779 | 3,457 | 394 | 7 | 40,630 | |||||||||||
Goodwill | 4,118 | - | 17,276 | 8 | 21,394 | |||||||||||
Core deposit intangibles | 3,725 | 542 | 1,948 | 9 | 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 | $ | 392 | 11 | $ | 1,834,937 | |||||||
Short and long term borrowings | 229,774 | 54,460 | 268 | 12 | 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 | 16,670 | 13 | 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 |
3 |
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. |
4 |
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 | 587 | 6 | 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 |
5 |
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%. |
6 |