It has been nearly a quarter century since the Bridgehampton National Bank moved out of its original headquarters in downtown Bridgehampton for a brand new building at the corner of Montauk Highway and Snake Hollow Road in 1997. Over that time, the bank has gone from a federally to a state-chartered institution, changed its name to BNB Bank, and moved its administrative offices to Hauppauge.
Now, it has announced it is merging with Dime Community Bank. Although the companies announced it would be “a merger of equals” in an all-stock transaction valued at $489 million, the new entity will operate under the Dime Community Bank name and trade under that company’s ticker symbol, DCOM, on the NASDAQ.
The merger will eliminate the last of the freestanding community banks on the East End. The Sag Harbor Savings Bank was taken over by Apple Bank for Savings, the North Fork Bank was gobbled up by Capital One, and Suffolk County National Bank was purchased by People’s United Bank.
But bank officials said it was an opportunity that could not be passed up.
“This highly compelling combination will allow us to build on our complementary strengths and provide significant value for shareholders,” Kevin O’Connor, the president and chief executive officer of Bridge Bancorp, said in a release that accompanied the merger announcement. “Dime has earned its strong reputation in the greater New York metropolitan market, and I’m thrilled to partner with them. Our enhanced branch footprint and increased capital base will allow us to better serve the needs of our customers.”
In a phone interview on Monday, Mr. O’Connor said one of the key aspects of his job is to keep his eyes open for ways “to expand the franchise.” He said he called Kenneth Mahon, the CEO of Dime, last November to feel him out on a possible merger. “We both recognized there was something of value here,” Mr. O’Connor said.
Merger talks began in earnest early this year, before being put on hold during the height of the pandemic, before resuming again this spring.
Dime, formerly known as the Dime Savings Bank of Williamsburg, has its roots as a classic savings and loan. A major part of its portfolio is mortgages on apartment buildings in New York City. BNB, on the other hand, has a loan portfolio more heavily weighted toward small businesses on Long Island.
The combined bank will have 66 branch offices, including the 36 of BNB, which are scattered across Long Island, and the 30 of Dime, which are concentrated in Brooklyn and Queens.
The combined bank will have more than $11 billion in assets. Even though that will still be a small bank when compared to behemoths like J.P. Morgan/Chase, or Citibank, in a conference call on Thursday, Mr. O’Connor said “the increased size and scale cannot be scoffed at.” He noted that the banks have limited customer overlap and would control 22 percent of the community bank market on Long Island.
He said BNB’s strategy has been to grow organically, by expanding its customer base and said the company had won about 1,000 new customers after it processed nearly $1 billion in loans for the federal Paycheck Protection Program.
Once the merger is approved by regulators, which is expected to take place by the first quarter of 2021, Kenneth J. Mahon, the CEO of Dime, will serve as executive chairman of the company. Mr. O’Connor will be the company’s chief executive officer. Stuart Lubow, the president of Dime, will be president and chief operating officer, while John McCaffrey, the chief financial officer of BNB, will be senior vice president and chief risk officer.
When the deal closes, each share of BNB stock will be converted to a 0.648 share of Dime stock.
The companies expect to save about 15 percent in operating costs once the merger is completed, said Avinash Reddy, the senior executive vice president and chief financial officer of Dime, during the conference call. He cited eliminating overlap in back office operations as an area of expected savings
On Monday, Mr. O’Connor, who said BNB has nearly 500 employees, and Dime, which has about 480 employees, will have to shed some jobs in the near future, although he said it was too early say if that will be accomplished through attrition or layoffs.
Still, Mr. O’Connor said he was committed to serving BNB’s long-time core customers, especially those on the East End, whom he said were “a tremendously valuable part of our business.”
Some of BNB’s oldest, and most dedicated customers are the descendants of the Bridgehampton farmers and local merchants who established the bank in 1910.
“One of my biggest disappointments is after COVID, we didn’t get to have our annual meeting in the conference room in Bridgehampton,” Mr. O’Connor said. “Typically, there are 120, 130 people there, and you always get a handful of longtime shareholders who want to talk about the bank. It has a real family feel about it.”
A frequent question posed by those shareholders is whether the bank will continue paying its regular dividend. “It’s 24 cents, and it was declared today,” Mr. O’Connor said.