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.
Theunaudited 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.Theunaudited 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 theunaudited 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 | ||||||||||
| 1 | NBBC 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. |
| 2 | Reclassifies Federal Home Loan Bank stock from other assets to investment securities. |
| 3 | Reclassifies real estate held for future branch sites from other assets to premises and equipment. |
| 4 | Marks the investment portfolio to fair value as of the acquisition date. |
| 5 | Includes 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. |
| 6 | Eliminates the historical allowance for credit losses of SSB. |
| 7 | Reflects fair value adjustments to acquired premises and equipment based on the Company's evaluation as of the acquisition date. |
| 8 | Reflects fair value of OREO based on the Company's evaluation of the acquired OREO portfolio. |
| 9 | Records deferred tax asset generated by the net fair value adjustments (tax rate = 38.25%). |
| 10 | Establishes goodwill resulting from fair value of liabilities assumed exceeding fair value of assets acquired. |
| 11 | Establishes CDI on the acquired core deposit accounts. |
| 12 | Reflects fair value of accrued interest receivable. |
| 13 | Establishes deposit premium on acquired interest-bearing deposits. |
| 14 | Reflects fair value adjustments to Federal Home Loan Bank advances. |
| 15 | Eliminates 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 | - | 219 | 3 | - | 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 | ) | - | - | 97 | 8 | (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 | ||||||
| 1 | NBBC 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. |
| 2 | Reclassifies furniture and equipment expense out of occupancy expense. |
| 3 | Reclassifies legal and professional fees out of technology and data processing. |
| 4 | Reflects accretion and amortization of loan purchase accounting adjustments. |
| 5 | Reflects amortization of deposit premium on acquired interest-bearing deposits. |
| 6 | Reflects amortization of Federal Home Loan Bank advances purchase accounting adjustment. |
| 7 | Reflects amortization of core deposit intangible on the acquired core deposit accounts. |
| 8 | Reflects 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 | - | 589 | 2 | - | 3,924 | ||||||||||||||
| Technology and data processing | 4,063 | 1,063 | (414 | )3 | - | 4,712 | ||||||||||||||
| Legal and professional | 3,029 | - | 414 | 3 | - | 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 | - | - | 417 | 7 | 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 | ) | - | 137 | 8 | (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 | ||||||
| 1 | NBBC 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. |
| 2 | Reclassifies furniture and equipment expense out of occupancy expense. |
| 3 | Reclassifies legal and professional fees out of technology and data processing. |
| 4 | Reflects accretion and amortization of loan purchase accounting adjustments. |
| 5 | Reflects amortization of deposit premium on acquired interest-bearing deposits. |
| 6 | Reflects amortization of Federal Home Loan Bank advances purchase accounting adjustment. |
| 7 | Reflects amortization of core deposit intangible on the acquired core deposit accounts. |
| 8 | Reflects income tax on adjustments at the effective rate of 35.62%. |