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Bridge Bancorp & Dime Community Ink 'Merger of Equals' Deal
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Bridge Bancorp, Inc. and Dime Community Bancshares, Inc. (DCOM - Free Report) announced a ‘merger of equals’ deal last week. The all-stock deal, valued at roughly $489 million, has been approved by board of directors of both the companies.
The combined entity will have $11.5 billion in assets, $8.9 billion in total deposits, $8.4 billion as deposits and 66 branches spread across the New York state.
Since the announcement of the deal, Bridge Bancorp has plunged almost 7%, while Dime Community has gained 1.4%.
Deal Benefits
Based on pro-forma calculations, the combined firm reflects “GAAP EPS accretion of 7% to Bridge and 40% to Dime.” Also, the deal will be nearly 0.4% accretive to Bridge Bancorp’s tangible book value.
One-time pre-tax merger & integration expenses are expected to be $60 million. Further, cost savings are anticipated to be roughly 15% of the combined expense base. Of this, 67% is likely to realized in 2021 and 100% thereafter.
Additionally, the combined company will likely have enhanced scale, driven by improved opportunities for growth. Bridge Bancorp has solid commercial & industrial, commercial real estate, as well as small business lending loan portfolios, while Dime Community is one of the leading players in low-LTV New York multifamily lending.
The combined entity is expected to have strong deposit franchise with approximately 24% non-interest-bearing accounts. This will in turn help the companies lower cost of deposits.
A meaningful dividend accretion for Dime Community shareholders is also expected.
Transaction Details
Per the terms of the agreement, Dime Community shareholders will receive 0.6480 shares of Bridge Bancorp for each share of Dime Community.
Notably, Dime Community will merge with and into Bridge Bancorp. Thus, Bridge Bancorp will be the surviving entity. Likewise, Dime Community Bank will merge with and into BNB Bank, with BNB Bank as the surviving firm.
Following the deal closure, expected in first-quarter 2021 and still subject to approval of both the companies’ shareholders as well as regulators, Dime Community will own 52% of the combined firm, with Bridge Bancorp owing the remaining 48%.
Notably, the combined entity will operate as “Dime Community Bancshares, Inc.” and trade on Nasdaq under “DCOM” ticker symbol. This will likely leverage Dime Community’s brand name and “network coverage over the entire Long Island market.”
The combined company will be based out of Hauppauge, NY. Additionally, the firm’s board of directors will have 12 members, comprising six directors from each Bridge Bancorp and Dime Community.
Our Take
At a time when the banking sector is facing a tough operating backdrop amid the coronavirus pandemic and subsequent economic slowdown, consolidation among industry players are likely to rise in the coming days.
So far this year, consolidations in the banking sector have been few and far between as the aforementioned concerns put the brakes on the same. Nonetheless, a few notable ones include South State Corporation’s (SSB - Free Report) merger with CenterState Bank Corp in January and Pacific Premier Bancorp’s (PPBI - Free Report) alliance with Opus Bank in February.
Near-zero interest rates and the Federal Reserve’s accommodative monetary policy remain major headwinds. Thus, Bridge Bancorp and Dime Community are likely to have agreed to merge to combat such a challenging environment, as well as improve scale and size.
Over the past three months, shares of Bridge Bancorp have rallied 6.9%. Conversely, shares of Dime Community have declined 2.4% in the said period.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Bridge Bancorp & Dime Community Ink 'Merger of Equals' Deal
Bridge Bancorp, Inc. and Dime Community Bancshares, Inc. (DCOM - Free Report) announced a ‘merger of equals’ deal last week. The all-stock deal, valued at roughly $489 million, has been approved by board of directors of both the companies.
The combined entity will have $11.5 billion in assets, $8.9 billion in total deposits, $8.4 billion as deposits and 66 branches spread across the New York state.
Since the announcement of the deal, Bridge Bancorp has plunged almost 7%, while Dime Community has gained 1.4%.
Deal Benefits
Based on pro-forma calculations, the combined firm reflects “GAAP EPS accretion of 7% to Bridge and 40% to Dime.” Also, the deal will be nearly 0.4% accretive to Bridge Bancorp’s tangible book value.
One-time pre-tax merger & integration expenses are expected to be $60 million. Further, cost savings are anticipated to be roughly 15% of the combined expense base. Of this, 67% is likely to realized in 2021 and 100% thereafter.
Additionally, the combined company will likely have enhanced scale, driven by improved opportunities for growth. Bridge Bancorp has solid commercial & industrial, commercial real estate, as well as small business lending loan portfolios, while Dime Community is one of the leading players in low-LTV New York multifamily lending.
The combined entity is expected to have strong deposit franchise with approximately 24% non-interest-bearing accounts. This will in turn help the companies lower cost of deposits.
A meaningful dividend accretion for Dime Community shareholders is also expected.
Transaction Details
Per the terms of the agreement, Dime Community shareholders will receive 0.6480 shares of Bridge Bancorp for each share of Dime Community.
Notably, Dime Community will merge with and into Bridge Bancorp. Thus, Bridge Bancorp will be the surviving entity. Likewise, Dime Community Bank will merge with and into BNB Bank, with BNB Bank as the surviving firm.
Following the deal closure, expected in first-quarter 2021 and still subject to approval of both the companies’ shareholders as well as regulators, Dime Community will own 52% of the combined firm, with Bridge Bancorp owing the remaining 48%.
Notably, the combined entity will operate as “Dime Community Bancshares, Inc.” and trade on Nasdaq under “DCOM” ticker symbol. This will likely leverage Dime Community’s brand name and “network coverage over the entire Long Island market.”
The combined company will be based out of Hauppauge, NY. Additionally, the firm’s board of directors will have 12 members, comprising six directors from each Bridge Bancorp and Dime Community.
Our Take
At a time when the banking sector is facing a tough operating backdrop amid the coronavirus pandemic and subsequent economic slowdown, consolidation among industry players are likely to rise in the coming days.
So far this year, consolidations in the banking sector have been few and far between as the aforementioned concerns put the brakes on the same. Nonetheless, a few notable ones include South State Corporation’s (SSB - Free Report) merger with CenterState Bank Corp in January and Pacific Premier Bancorp’s (PPBI - Free Report) alliance with Opus Bank in February.
Near-zero interest rates and the Federal Reserve’s accommodative monetary policy remain major headwinds. Thus, Bridge Bancorp and Dime Community are likely to have agreed to merge to combat such a challenging environment, as well as improve scale and size.
Over the past three months, shares of Bridge Bancorp have rallied 6.9%. Conversely, shares of Dime Community have declined 2.4% in the said period.
Three-Month Price Performance
Currently, both Bridge Bancorp and Dime Community carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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