U.S. Securities and Exchange Commission
                              Washington, DC 20549

                                   FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934

(Mark one) 

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities and Exchange
    Act of 1934

For the fiscal year ended December 31, 1998

                                       or

[ ] Transition  Report  Pursuant to Section 13 or 15(d) of the  Securities  and
    Exchange Act of 1934

For the Transition period from ____________________ to _____________________

Commission file Number 0-18546

                               BRIDGE BANCORP, INC
             (Exact name of registrant as specified in its charter)

         NEW YORK                                         11-2934195
- -----------------------------------                 ---------------------------
(State  or  other   jurisdiction  of                  (I.R.S.   Employer
incorporation or organization)                       Identification Number)

2200  Montauk  Highway,  Bridgehampton,  New York            11932
- -------------------------------------------------   ---------------------------
 (Address  of  principal executive office)                 (Zip Code)

Issuer's telephone number, including area code (516) 537-1000

Securities registered under Section 12 (b) of the Exchange Act:

                                                  Name of each exchange on
      Title of each class                            which registered
   -----------------------------------         -------------------------------

   -----------------------------------         -------------------------------

Securities registered under Section 12 (g) of the Exchange Act:

                   Common Stock, Par Value of $5.00 Per Share,
                                (Title of Class)

 -----------------------------------------------------------------------------

                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

Yes  X   No
   ----     ----

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (section 229.405) of this chapter is not contained herein, and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10- K or any amendment to this Form 10-K. [X]

The  aggregate  market value of the voting stock owned by non  affiliates of the
Registrant as of March 16, 1999 was $72,040,199.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to  Shareholders  for the year ended  December 31,
1998 are  incorporated  by reference into Part II and Part III.  Portions of the
Proxy  Statement  for the Annual  Meeting of  Shareholders  to be held April 19,
1999, dated March 16, 1999, are incorporated by reference into Part III.

                                     PART I

Item 1. Business
- ----------------

Bridge Bancorp,  Inc. (the  "Registrant")  is a registered bank holding company,
the sole  subsidiary of which is The  Bridgehampton  National Bank (the "Bank").
The Registrant was organized as a New York business corporation and incorporated
under the laws of the State of New York in 1988,  at the  direction of the Board
of  Directors  of the Bank for the  purpose of becoming a bank  holding  company
pursuant to a plan of reorganization;  under the plan the former stockholders of
the Bank became the stockholders of the Company.  Since  commencing  business in
March 1989 after the reorganization,  the Registrant has functioned primarily as
the holder of all of the Bank's common stock.

At present,  the  Registrant  does not own or lease any property and has no paid
employees.  The Registrant uses the Bank's space and employees  without separate
payment.

The Bank was established in 1910 as a national banking  association and is under
the  supervision  of the Office of the  Comptroller of the Currency (the "OCC").
Its headquarters are located at 2200 Montauk  Highway,  Bridgehampton,  New York
11932.

The Bank engages in full  service  commercial  and consumer  banking and limited
trust business,  including accepting time and demand deposits, as well as making
secured and unsecured  commercial and consumer loans,  including auto, personal,
home equity, home improvement,  residential and commercial mortgages, commercial
construction and S.B.A.  guaranteed  loans. In addition the Bank offers merchant
credit and debit card processing,  automated teller machines, safe deposit boxes
and individual retirement accounts.

The Bank  employees  91 people on a  full-time  and  part-time  basis.  The Bank
provides a variety of employment  benefits and considers its  relationship  with
its employees to be good.

All phases of the Bank's business are highly  competitive.  The Bank's market is
primarily  the  trade  areas of the North and  South  Forks of  Eastern  Suffolk
County,  with  concentrations  in the  Bridgehampton,  East Hampton,  Mattituck,
Montauk, Southampton, and Southold, New York areas. The Bank considers its major
competition to be local  commercial banks as well as other commercial banks with
branches in the Bank's market area.

Regulation
- ----------

References  in this section to  applicable  statutes and  regulations  are brief
summaries  only,  and do not purport to be complete.  The reader should  consult
such statutes and regulations themselves for a full understanding of the details
of their operation.

The Registrant is subject to the  provisions of the Bank Holding  Company Act of
1956, as amended (the "Act") and to  supervision  by the Federal  Reserve Board.
The Act  requires  the  Registrant  to secure the prior  approval of the Federal
Reserve  Board before it can acquire all or  substantially  all of the assets of
any bank, or acquire ownership or control of any voting shares of any bank other
than the Bank,  if after such  acquisition,  it would own or control more than 5
percent  of  the  voting  shares  of  such  bank.  Federal  law  also  prohibits
acquisitions  of control  of a bank  holding  company  without  prior  notice to
certain federal bank regulators.

As a bank holding  company,  the Registrant is required to file an annual report
with the Federal  Reserve Board and any  additional  information  as the Federal
Reserve  Board may require  pursuant to the Act. The Federal  Reserve  Board may
also make examinations of the Registrant and any or all of its subsidiaries.

Subsidiary  banks of a bank holding company are subject to certain  restrictions
imposed by the Act on any extension of credit to the bank holding company or any
of its subsidiaries, on investments in the stock or other securities of the bank
holding  company  or its  subsidiaries,  and on the  taking  of  such  stock  or
securities as collateral for loans to any borrower.

The  Federal  Reserve  Board  permits  bank  holding   companies  to  engage  in
non-banking  activities so closely related to banking or managing or controlling
banks so as to be a proper incident  thereto  including,  for example,  consumer
finance  companies,  mortgage  companies,  leasing  companies,  data  processing
companies, financial advisor and securities brokerage.

Federal  Reserve Board approval is required  before the Registrant or a non-bank
subsidiary of the Registrant may begin to engage in any of the above  activities
and  before  any  such  business  may be  acquired.  At the  present  time,  the
Registrant does not contemplate conduct of any non-banking  activities permitted
by the Act.

The operations of the Bank are subject to federal and state statutes  applicable
to banks  chartered  under the banking laws of the United States,  to members of
the  Federal  Reserve  System and to banks  whose  deposits  are  insured by the
Federal Deposit  Insurance  Corporation  (the "FDIC").  Bank operations are also
subject to regulations of the OCC, the Federal Reserve Board,  the FDIC, and the
New York State Banking Department. The primary supervisory authority of the Bank
is the OCC, who regularly examines the Bank.

Federal and state banking laws and  regulations  govern,  among other things the
scope of a bank's  business,  the  investments  a bank may  make,  the  reserves
against deposits a bank must maintain,  the loans a bank makes and collateral it
takes, the maximum interest rates a bank must pay on deposits, the activities of
a bank with  respect to mergers  and  consolidations  and the  establishment  of
branches.

The  Financial  Institutions  Reform,  Recovery  and  Enforcement  Act  of  1989
("FIRREA") expanded the Federal Reserve Board's authority to prohibit activities
of bank holding  companies and their  non-banking  subsidiaries  which represent
unsafe and unsound banking  practices or which constitute  violations of laws or
regulations.  FIRREA  increased  the amount of civil  money  penalties  that the
Federal Reserve Board can assess for such practices or violations. The penalties
can be as high as $1  million  per  day.  FIRREA  also  expanded  the  scope  of
individuals and entities against which such penalties may be assessed.

The Federal  Deposit  Insurance  Corporation  Improvement Act of 1991 ("FDICIA")
required each federal banking agency to revise its risk-based  capital standards
to ensure that those  standards  take  adequate  account of interest  rate risk,
concentrations of credit risk and the risks of  non-traditional  activities,  as
well  as  reflect  the  actual   performances  and  expected  risk  of  loss  on
multi-family  mortgages.  This law also required each federal  banking agency to
specify,  by  regulation  the  levels at which an insured  institution  would be
considered "well capitalized,"  "adequately  capitalized,"  "under-capitalized,"
"significantly  under-capitalized" and "critically under-capitalized." Under the
regulations  adopted  by the  banking  agencies,  the Bank is  considered  "well
capitalized."

FDICIA  requires bank regulators to take "prompt  corrective  action" to resolve
problems  associated  with  insured  depository  institutions.  In the  event an
institution  becomes  "under-capitalized,"  it must submit a capital restoration
plan. If an institution becomes "significantly under-capitalized" or "critically
under-Capitalized,"  additional and  significant  limitations  are placed on the
institution.  The capital restoration plan of an  under-capitalized  institution
will not be accepted by the regulators  unless each company  "having control of"
the under-capitalized  institution "guarantees" the subsidiary's compliance with
the capital restoration plan until it becomes "adequately capitalized."

Under FDICIA, the aggregate liability of all companies  controlling a particular
institution  is limited to the lesser of 5% of the  institution's  assets at the
time  it  became   under-capitalized  or  the  amount  necessary  to  bring  the
institution  into compliance with applicable  capital  standards.  FDICIA grants
powers  to the  bank  regulators  in  situations  where an  institution  becomes
"significantly" or "critically  under-capitalized"  or fails to submit a capital
restoration  plan.  For example,  a bank  holding  company  controlling  such an
institution  can be required to obtain prior Federal  Reserve Board  approval of
proposed dividends, or might be required to consent to a merger or to divest the
troubled institution or other affiliates.

Additionally,  Federal Reserve Board policy discourages the payment of dividends
by a bank holding  company from  borrowed  funds as well as payments  that would
adversely affect capital  adequacy.  Failure to meet the capital  guidelines may
result in institution by the Federal Reserve Board of appropriate supervisory or
enforcement actions.

The prompt  corrective  action  provisions  of FDICIA  reflect the same concerns
which gave rise to a position  adopted by the Federal Reserve Board known as the
"source of strength  doctrine,"  which is based on the Federal  Reserve  Board's
Regulation Y. Regulation Y directs bank holding  companies to "serve as a source
of financial and managerial  strength" to their subsidiary  banks, and bars them
from engaging in unsafe and unsound practices.

                             STATISTICAL INFORMATION
                             -----------------------

The  following  tables  set  forth  statistical   information  relating  to  the
Registrant  and the Bank.  The  tables  should be read in  conjunction  with the
consolidated  financial statements and related notes and the discussion included
in  Management's  Discussion and Analysis of Financial  Condition and Results of
Operations.

I.A. & I.B.  DISTRIBUTION  OF ASSETS,  LIABILITIES  AND  STOCKHOLDERS'  EQUITY:
- -------------------------------------------------------------------------------
INTEREST RATES AND INTEREST DIFFERENTIAL
- ----------------------------------------
The  information  required by Items I.A. & I.B. is included in the  "Analysis of
Net Interest  Income" which appears on page 10 of the  Registrant's  1998 Annual
Report to Shareholders which is incorporated herein by reference.

I.C.  VOLUME AND YIELD/RATE VARIANCES
- -------------------------------------
The information required by Item I.C. is included in the "Rate/Volume  Analysis"
which appears on page 11 of the Registrant's  1998 Annual Report to Shareholders
which is incorporated herein by reference.

II.A. & II.B. INVESTMENT PORTFOLIO
- ----------------------------------
The information required by Items II.A. & II.B. is included in Footnote 2 of the
Notes to Consolidated  Financial  Statements which appears on pages 22 and 23 of
the Registrant's 1998 Annual Report to Shareholders which is incorporated herein
by reference.

III.A., III.B., III.C.1 & III.C.3  LOANS
- ---------------------------------------
The information required by Items III.A.,  III.B., III.C.1 & III.C.3 is included
in Footnote 3 of the Notes to Consolidated Financial Statements which appears on
pages 23 through 25 of the Registrant's 1998 Annual Report to Shareholders which
is incorporated herein by reference.

III.C.2. POTENTIAL PROBLEM LOANS
- --------------------------------
In  addition  to the  total  non-performing  loans  set  forth  above,  loans of
approximately  $4,439,000  at December 31, 1998,  were  classified  as potential
problem  loans.  These  are loans for which  management  has  information  which
indicated  that the borrower may not be able to comply with the present  payment
terms.  These  loans are  subject to  constant  management  attention  and their
classification is reviewed on at least a quarterly basis.

III.C.4. LOAN CONCENTRATIONS
- ----------------------------
At December 31, 1998, there were no loan concentrations.

IV.A. & IV.B.  SUMMARY OF LOAN LOSS EXPERIENCE
- ----------------------------------------------
The information required by Items IV.A. & IV.B. is included in Footnote 3 of the
Notes to Consolidated  Financial Statements which appears on pages 23 through 25
of the  Registrant's  1998 Annual Report to  Shareholders  which is incorporated
herein by reference.

V. DEPOSITS
- -----------
The  information  required  by Item V. is included in Footnote 4 of the Notes to
Consolidated  Financial  Statements which appears on page 25 of the Registrant's
1998 Annual Report to Shareholders which
is incorporated  herein by reference.

VI.   RETURN ON EQUITY AND ASSETS
- ---------------------------------
The  information  required by Item VI. is included in the "Five Year  Summary of
Operations"  which appears on page 7 of the  Registrant's  1998 Annual Report to
Shareholders which is incorporated herein by reference.

VII.   SHORT-TERM BORROWINGS
- ----------------------------
The  Registrant's   average  balance  outstanding  during  the  period  for  all
categories  of  short  term   borrowings   was  less  than  thirty   percent  of
stockholders' equity at the end of the period.

Item 2. Properties
- ------------------
Facilities of the Registrant are located at 2200 Montauk Highway, Bridgehampton,
New York in the Bank's Main Office facility.  As such, the Registrant itself has
no physical properties.

The Bank's Main Office is owned in fee.  The Bank also owns the  building  which
houses its Southold Branch located at 54790 Main Road,  Southold,  New York. The
Bank leases five  additional  properties as branch  locations at 425 County Road
39,  Southampton,  New York; 26 Park Place,  East Hampton,  New York;  Main Road
Mattituck,  New York; 94 Main Street,  Southampton,  NY 11968;  and 1 The Plaza,
Montauk,  New York.  The Bank leases  additional  space at 184 Old Country Road,
Riverhead,  New York formerly used as a residential mortgage center. The Bank is
currently in the process of subletting this space.

It is the opinion of management of the Company that the current  facilities  are
suitable and adequate at the present time.

Item 3. Legal Proceedings
- -------------------------
The Bank, and two present executive  officers and one former executive  officer,
have been named as  defendants  in a lawsuit that was filed on February 18, 1999
by two former employees in Suffolk County Supreme Court.  The plaintiffs  assert
causes  of action in  connection  with  their  employment,  conduct  of loan and
banking transactions,  and subsequent termination or resignation. The plaintiffs
seek  compensatory  and punitive  damages.  In the opinion of  management at the
present time,  after  consultation  with legal  counsel,  the lawsuit is without
merit and the ultimate outcome of this matter is not expected to have a material
adverse effect on the Company's  results of operations,  business  operations or
consolidated financial condition.

Item 4. Submission of Matters to a Vote of Security Holders
- -----------------------------------------------------------
None

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
- -----------------------------------------------------------------------------
"Common  Stock  Information"  set  forth  on page  32 of the  Annual  Report  to
Shareholders  for the year ended  December  31, 1998 is  incorporated  herein by
reference.

Item 6. Selected Financial Data
- -------------------------------
"Five Year Summary of  Operations"  set forth on page 7 of the Annual  Report to
Shareholders  for the year ended  December  31, 1998 is  incorporated  herein by
reference.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
- -------------
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" set forth on pages 8 through 15 of the Annual Report to Shareholders
for the year ended December 31, 1998 is incorporated herein by reference.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
- --------------------------------------------------------------------
"Market  Risk" under Item 7.  Management's  Discussion  and  Analysis or Plan of
Operation set forth on pages 9 through 10 of the Annual  Report to  Shareholders
for the year ended December 31, 1998 is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data
- ---------------------------------------------------
The  Consolidated  Financial  Statements and notes,  together with the Report of
Independent  Public  Accountants  included  on pages 16 through 32 of the Annual
Report to  Shareholders  for the year ended  December  31, 1998 is  incorporated
herein by reference.

Item  9.  Changes  in and  disagreements  with  Accountants  on  Accounting  and
- --------------------------------------------------------------------------------
          Financial Disclosure
          --------------------
None

                                    PART III

Item 10. Directors and Executive Officers of the Registrant
- -----------------------------------------------------------
"Nominees for Director and Directors Continuing in Office", "Shares Beneficially
Owned by other  Executive  Officers  and All  Directors"  and  "Compliance  with
Section 16 (a) of the Exchange Act" set forth on pages 3 through 5 and 15 of the
Registrant's  Proxy  Statement dated March 16, 1999 are  incorporated  herein by
reference.

Item 11. Executive Compensation
- -------------------------------
"Compensation  of  Directors",   "Compensation  of  Executive   Officers",   and
"Employment  Contracts and Severance Agreements" set forth on pages 7 through 15
of the Registrant's Proxy Statement dated March 16, 1999 are incorporated herein
by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management
- -----------------------------------------------------------------------
"Beneficial  Ownership"  and "Nominees for Director and Directors  Continuing in
Office" set forth on pages 2 through 5 of the Registrant's Proxy Statement dated
March 16, 1999 are incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions
- -------------------------------------------------------
"Certain  Relationships  and Related  Transactions"  set forth on page 15 of the
Registrant's  Proxy  Statement  dated March 16, 1999 is  incorporated  herein by
reference.

"Related  party  loans"  set  forth  as  part  of  Footnote  3 of the  Notes  to
Consolidated  Financial Statements which appears on page 25 of the Annual Report
to Shareholders  for the year ended December 31, 1998 is incorporated  herein by
reference.

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

Exhibits

The Following Exhibits are incorporated herein by reference:

 3.1          Certificate of Incorporation of the Registrant
 3.2          By-laws of the Registrant
10.1          Employment Contract - Thomas J. Tobin, Dated January 27, 1997
10.2          Severance Agreement - Anthony Leone, Dated January 13, 1998
10.3          Annual Incentive Plan
10.4          Service Agreement - Fiserv Boston, Inc.
10.5          Equity Incentive Plan

The following Exhibits are filed with this Form 10-K:

10.6          Change in Control Agreement - Christopher Becker

13.1          Registrant's  Annual  Report to  Shareholders  for the year  ended
              December  31,  1998  (parts  not  incorporated  by  reference  are
              furnished for  information  purposes only and are not to be deemed
              filed herewith.)

23.1          Consent of Independent Public Accountants - Arthur Andersen, LLP
 
Reports on Form 8-K

There were no reports on Form 8K filed during the fourth quarter of 1998.

SIGNATURES

Pursuant  to the  requirements  of  Section 13 or 15 (d) of the  Securities  and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                              BRIDGE BANCORP, INC.
                                              --------------------
                                                  Registrant

Date:  March 31, 1999                        By  /s/ Thomas J. Tobin
     --------------------                      ---------------------
                                               Thomas J. Tobin, President/CEO

Date:  March 31, 1999                        By  /s/ Christopher Becker
     -------------------                       ------------------------
                                               Christopher Becker,
                                               Senior Vice President/Treasurer

Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

/s/ Raymond Wesnofske              Director             March 31, 1999
- ---------------------------------                    ---------------------
Raymond Wesnofske

/s/ Thomas J. Tobin                Director             March 31, 1999
- ---------------------------------                    ---------------------
Thomas J. Tobin

/s/ Thomas E. Halsey               Director             March 31, 1999
- ---------------------------------                    ---------------------
Thomas E. Halsey

/s/ Marcia Z. Hefter               Director             March 31, 1999
- ---------------------------------                    ---------------------
Marcia Z. Hefter

/s/ R. Timothy Maran               Director             March 31, 1999
- ---------------------------------                    ---------------------
R. Timothy Maran

/s/ Albert E. McCoy                Director             March 31, 1999
- ---------------------------------                    ---------------------
Albert E. McCoy

/s/ Walter A. Preische, Jr.        Director             March 31, 1999
- ---------------------------------                    ---------------------
Walter A. Preische, Jr.

/s/ L.H. Strickland                Director             March 31, 1999
- ---------------------------------                    ---------------------
L.H. Strickland

                                  EXHIBIT INDEX
                                  -------------

Exhibit Number       Description of Exhibit                          Exhibit
- --------------       ----------------------                          -------

 3.1                 Certificate of Incorporation of the               *
                     Registrant (incorporated by reference
                     to Registrant's amended Form 10, File
                     No. 0-18546, filed October 15, 1990)

 3.2                 By-laws of the Registrant (incorporated           *
                     by reference to Registrant's amended
                     Form 10, File No. 0-18546, filed
                     October 15, 1990)

10.1                 Employment Contract - Thomas J. Tobin
                     (incorporated by reference to Registrant's        *
                     Form 10-KSB, File No. 0-18546, filed
                     March 31, 1997)

10.2                 Severance Agreement - Anthony Leone               *
                     (incorporated by reference to Registrant's
                     Form 10-KSB, File No. 0-18546, filed
                     March 31, 1998)

10.3                 Annual Incentive Plan (incorporated by            *
                     reference to Registrant's Form 10-KSB,
                     File No. 0-18546, filed March 31, 1994)

10.4                 Service Agreement - Fiserv Boston, Inc.           *
                     (incorporated by reference to Registrant's
                     Form 10-KSB, File No 0-18546, filed
                     March 31, 1994)

10.5                 Equity Incentive Plan (incorporated by            *
                     reference to Registrant's Form 14A,
                     File No. 0-18546, filed April 1, 1996)

10.6                 Change in Control Agreement - Christopher         2
                     Becker, Dated January 19, 1999

13.1                 Registrant's Annual Report to Shareholders        1
                     for the year ended December 31, 1998

23.1                 Consent of Independent Public Accountants -       3
                     Arthur Andersen, LLP

                      * Denotes incorporated by reference

[PHOTOGRAPH-Brigdehampton National Bank's Headquarters building]

                               1998 Annual Report

                              Bridge Bancorp, Inc.
                                                         SM
                    [TRADEMARK - The Bank you can talk to.]

COMPANY PROFILE

Bridge  Bancorp,  Inc., a New York  corporation,  is a one-bank  holding company
engaged  in  commercial  banking  through  its  wholly  owned  subsidiary,   The
Bridgehampton National Bank.

Federally chartered in 1910, the Bank was founded by local farmers and merchants
to serve the needs of the agricultural based villages comprising the area. While
growing  and  expanding  over  the past  eighty-nine  years,  The  Bridgehampton
National  Bank has  continued to maintain its  community  orientation.  The Bank
offers a full range of deposit and loan  products  and  services,  geared to the
businesses  and consumers  within its primary  market area, the East End of Long
Island.

Bridgehampton  National  Bank  serves both the North and South Forks on the East
End through its branch  network,  operating  seven full service  banking offices
located  in  Bridgehampton,   East  Hampton,  Mattituck,  Montauk,  Southampton,
Southampton Village and Southold,  New York.  Residential  mortgage services are
available at all branch  locations.  In  addition,  twenty-four  hour  Automated
Teller  Machines  with access to the MAC and NYCE  networks  are  maintained  in
Bridgehampton,  Mattituck,  Southampton  Hospital and Southampton Town Hall. The
Bank is an Equal Housing  Lender and a member of the Federal  Deposit  Insurance
Corporation.

MISSION

The mission of the  employees of The  Bridgehampton  National Bank is to provide
the  Company's  shareholders  with an above  average  return on  investment  and
increased  shareholder  value.  We will  accomplish  our  mission by  profitably
providing financial services to all customers,  being particularly  cognizant of
providing  fair and  evenhanded  distribution  of credit to all  segments of our
marketplace  while  utilizing  safe  and  sound  banking  practices.  Critically
important to the success of our mission are superior  levels of  commitment  and
service to our  customers  by all of our  employees.  Equally  important  to the
success of our mission is the  selection  and  retention of the highest  quality
employees.  The Bank is dedicated to providing its employees  with the direction
and training necessary to achieve their mission.

BRIDGE BANCORP, INC.
- --------------------
Serving the East End through Four Market Areas

TEAMWORK

In 1998, The Bridgehampton  National Bank refined its management structure in an
effort to provide  unique  levels of service,  value and  responsiveness  to our
customers.  Each  market  area  within the East End region is ready to provide a
full range of business and  consumer  banking  services,  and is led by a Senior
Banking Officer.  We would like to take this opportunity to introduce you to our
Market Area Team Leaders.

[PHOTOGRAPH]
Bridgehampton

Ann Sweeney,  Vice  President,  Senior Banking Officer began her career with The
Bridgehampton National Bank in 1988 as a Cooperative Education student from Long
Island  University-Southampton  College.  She started off in our loan department
and  upon  graduation  began  working  for  Bridgehampton   National  full-time,
mastering  all aspects of consumer and  commercial  loan  processing  before her
promotion to a Loan Officer position. Ms. Sweeney was promoted to Assistant Vice
President,  Senior  Lending  Officer in 1995 and served as the Loan and Business
Development  Officer for the Main  Office  branch.  Ms.  Sweeney now directs and
manages the Bridgehampton  Market Area, which includes  business  development in
Bridgehampton,  Wainscott,  Water  Mill,  Sagaponack  and  Sag  Harbor.  Ann  is
currently  completing  her  thesis,  the  culmination  of the  American  Bankers
Association  (ABA) Stonier  Graduate  School of Banking.  Ms. Sweeney has earned
several ABA banking certificates, including Consumer Lending, Commercial Lending
and Advanced  Commercial  Lending.  Working with businesses and consumers in our
market area for more than ten years, Ann really knows her business.

[PHOTOGRAPH]
North Fork

Peter Coleman, Vice President, Senior Banking Officer has more than twenty years
in the banking  business and  provides  important  leadership  in our North Fork
region.  Mr. Coleman is a graduate of the State  University of New York at Delhi
after which he served in the U.S.  Army.  He has completed  numerous  credit and
banking   programs,   including  Dun  &   Bradstreet's   Credit   Administration
Certificate,  the ABA National  Mortgage  School,  and the ABA Stonier  Graduate
School of  Banking.  Pete  began  his  career  at BNB in 1993,  working  as Vice
President, Commercial Lending Officer. In November of 1997, Mr. Coleman moved to
the North Fork Market Area with the objective of  coordinating  and  solidifying
the  business  development  efforts  of BNB's  North Fork  branches.  A lifelong
resident of Mattituck,  Pete is well-known in the North Fork business community,
and his knowledge and  commitment to the North Fork have been a key asset to the
Bank's growth and  reputation in the region.  Peter has been involved in several
community  activities  on  the  North  Fork,  including  serving  as  Chief  and
Commissioner of the Mattituck Fire  Department,  where he was also voted Fireman
of the Year.  In addition,  Pete served as Director of the  Mattituck  Community
Fund, Inc., and is a member of the Mattituck Lions Club. Currently,  Mr. Coleman
is an active member of the Eastern Long Island Executive Roundtable.

[PHOTOGRAPH]

East Hampton / Montauk

Kevin Santacroce,  Assistant Vice President, Senior Banking Officer heads up the
team in the East Hampton/Montauk  Market Area. A graduate of Bryant College, Mr.
Santacroce  has been in banking since 1991. He has completed  several credit and
accounting  programs,  graduating  with top honors in Credit  Analyst and Senior
Credit  Analyst  course  work.  Kevin began the ABA Stonier  Graduate  School of
Banking  program  in 1998,  and  will be  working  on his  thesis  in 1999.  Mr.
Santacroce joined The Bridgehampton  National Bank in 1997 as Assistant Cashier,
Loan Officer, East Hampton/Montauk. Kevin came to our Company with several years
of  financial  and  credit  management  experience,   including  development  of
statistical financial projections,  asset and relationship pricing, risk rating,
budget development and analysis,  capital procurement and investment strategies,
financial  reporting  and  accounting  supervision.  Kevin was  promoted  to the
position of Assistant Vice  President,  Loan Officer,  East  Hampton/Montauk  in
December 1997. As Senior Banking Officer,  Kevin directs and manages all aspects
of banking  business in our East Hampton and Montauk Branch Offices,  and points
in between. Kevin participates in many community programs,  including serving on
the Volunteer Fire Department in his hometown of Southold.

[PHOTOGRAPH]

Southampton

Although Seamus Doyle,  Assistant Vice  President,  Senior Banking Officer hails
from  Dublin,  Ireland,  he is very much at home here on the East End. Mr. Doyle
began his career at The Bridgehampton National Bank as a Credit Analyst in 1992,
after which he  graduated  with honors from the  Bucknell  School of  Commercial
Credit and was  promoted to the  position of Loan  Officer.  Until 1997,  Seamus
served as BNB's Loan  Officer in  Montauk,  and then East  Hampton.  During this
period,  Mr. Doyle was  promoted to  Assistant  Vice  President,  completed  his
studies in accounting,  and passed the Certified Public Accountant examinations.
Still working to gain the experience required for the CPA designation, Mr. Doyle
left the Bank  temporarily,  for a position at a  prestigious  local  accounting
firm.  Seamus  returned  to BNB in 1998,  coming  back on  board as AVP,  Senior
Banking Officer for the Southampton Market Area. The Bridgehampton National Bank
maintains  two branch  offices in the  Southampton  marketplace,  including  the
County  Road 39  Branch  Office,  as well as the newly  established  Southampton
Village  Commercial  Branch Office.  Business  development in the Village Branch
Office represented a significant  challenge in 1998. Seamus has been recommended
to begin the ABA  Stonier  Graduate  School of Banking  program in Spring  1999.
Seamus serves as a Director of the East Hampton Chamber of Commerce.

                       Consolidated Financial Highlights
           (IN THOUSANDS, EXCEPT PER SHARE DATA AND FINANCIAL RATIOS)

At December 31,                                                             1998           1997
- -----------------------------------------------------------------------------------------------
                                                                              
FOR THE YEAR ENDED
Net income                                                           $     3,895    $     4,195
    Net income, excluding gain on sale of building                      --            3,366
    Cash dividends declared                                                1,482          1,972
                                                                     --------------------------
AT YEAR END
    Total assets                                                     $   266,984    $   233,112
    Total deposits                                                       241,531        203,697
    Total loans                                                          168,696        138,636
    Total stockholders' equity                                            22,232         19,451
                                                                     --------------------------
SIGNIFICANT RATIOS FOR THE YEAR ENDED
    Return on average equity                                               19.19%         23.08%
    Return on average assets                                                1.51           1.86
                                                                     --------------------------
SELECTED FINANCIAL RATIOS, EXCLUDING GAIN ON SALE OF BUILDING
    Return on average equity                                                --            18.52%
    Return on average assets                                                --             1.49
                                                                     --------------------------
PER SHARE DATA
    Diluted earnings per share                                       $      0.91    $      0.99
    Basic earnings per share                                                0.92           0.99
    Cash dividends declared                                                 0.35           0.47
    Book value                                                              5.25           4.60
                                                                     --------------------------
PER SHARE DATA, EXCLUDING GAIN ON SALE OF BUILDING IN 1997
    Diluted earnings per share                                       $      0.91    $      0.79
    Basic earnings per share                                                0.92           0.79
                                                                     --------------------------

On June 17, 1997, the Bank sold its former headquarters  building resulting in a
gain, net of taxes,  of  approximately  $829,000.  On December 15, 1997 the bank
declared a one time  special  dividend of  approximately  $845,000,  or $.20 per
share, paying out this gain to the shareholders.

On July 20, 1998, the Board of Directors declared a three-for-one stock split in
the form of a stock dividend  payable August 31, 1998 to  stockholders of record
as of August  19,  1998 . The stock  split  increased  outstanding  shares  from
1,411,599 to  4,234,797.  On April 15, 1997,  the Board of Directors  declared a
three-for-one  stock split in the form of a stock dividend  payable May 30, 1997
to  stockholders  of  record  as of May  1,  1997.  The  stock  split  increased
outstanding  shares from 469,333 to  1,407,999.  All per share amounts have been
adjusted to reflect these splits.

[BAR GRAPHS]
(In Thousands)               1998           1997        1996        1995        1994
- ------------------------------------------------------------------------------------
                                                             
TOTAL ASSETS             $266,951       $233,112    $204,614    $184,070    $171,953

(In Thousands)               1998           1997        1996        1995        1994
- ------------------------------------------------------------------------------------
                                                             
NET INCOME               $  3,895       $  4,195    $  3,006    $  2,383    $  1,933
                                           3,366*
(Percent)                    1998           1997        1996        1995        1994
- ------------------------------------------------------------------------------------
                                                                 
RETURN ON AVERAGE ASSETS     1.51%          1.86%       1.51%       1.27%       1.81%
                                            1.49%
(Percent)                    1998           1997        1996        1995        1994
- ------------------------------------------------------------------------------------
                                                                 
RETURN ON AVERAGE EQUITY    19.19%         23.08%       1.51%       1.27%       1.81%
                                           18.52%

1997, excluding gain on sale of building

p.1  BRIDGE BANCORP, INC. AND SUBSIDIARY

                               Dear Shareholders

It is with considerable  pride that I report our Company's results of operations
for fiscal year 1998.

We have set high financial performance goals for The Bridgehampton National Bank
and have met them in 1998 with  return on average  equity of 19.2% and return on
average  assets of 1.5%.  The Company  continued  its seven year trend of record
earnings  posting net income of  $3,895,000,  an increase of 15.7% over earnings
last  year,  excluding  the gain on the sale of the Bank's  former  headquarters
building. Our Company continues to be recognized among top performing U.S. banks
of our asset size.  Last year The  Bridgehampton  National Bank was ranked among
the  Sheshunoff  Highest Rated Banks and S&Ls in America,  as well as one of The
Ryan, Beck Report's small-cap financial elite peer group.

Financial highlights include a 21.7% increase in net loans, an 18.6% increase in
total  deposits,  14.5%  growth  in  total  assets,  and an  increase  in  total
shareholder  equity of  14.3%.  Total  dividends  declared  represented  a 31.5%
increase  over the total  dividends  declared in 1997,  excluding  the  one-time
special  dividend  resulting  from  the  gain on the  sale  of the  headquarters
building.

We have been gratified by the positive  recognition  that ownership of shares of
Bridge Bancorp, Inc. has received.  Over the past four years, our efforts toward
our  performance  goals have  translated  into  significant  growth in our stock
price. As we continue our efforts to provide  shareholder value, we look forward
to the Company's new policy of  considering  quarterly  rather than  semi-annual
dividends.

While banking industry mergers and increased competition not only from financial
institutions but also from nonbank  entities have made headlines  throughout the
year,  our Company  has  continued  to stay on course.  Last year we began a sea
change,  put in place to enhance our strengths in the East End  marketplace.  We
recognized  that in order to maintain our  competitive  advantage,  our focus on
customer  service  and  uncommon  levels of  responsiveness  were key.  As such,
throughout  1998 we have  continued to refine our  management  structure and our
focus in an effort to improve our level of  responsiveness  to our customers and
the  marketplace.  We have  developed an  innovative  team approach so that each
market area within the East End is served by a complete management team led by a
Senior Banking Officer.  Each team is able to provide the full breadth of credit
and deposit  services to both  businesses  and consumers  with a unique level of
responsiveness.  Market area teams are experts  regarding  their specific region
and our officers understand the nuances of the communities that they serve.

A glance at our cover and the  highlights  pages gives a glimpse of our Company,
both inside and out. The five year  financial  summary  that  follows  tells our
Company's story of steady incremental growth in our core business.

We have  positioned  our Company well to leverage the recent  positive  economic
environment.  However, equally important, we have structured our Company to face
the challenges of the future. While we have set our course through our knowledge
of our  strengths  and our  marketplace,  we are also  ready and able to tack as
necessary  as  economic  winds  shift.  We look  toward our  opportunities  with
confidence in the abilities of our dynamic  management  team,  all our employees
and the essential leadership of our Board of Directors.

Thank you, our valued shareholders,  for your confidence and for your support of
Bridge Bancorp, Inc.

Sincerely,

/s/ Thomas J. Tobin
Thomas J. Tobin
President and Chief Executive Officer

                                                         1998 ANNUAL REPORT  p.2

[PHOTOGRAPH]
Wendy Engel, Retired, East Hampton.
Wendy Engel,  longtime BNB customer,  participated in our advertising  launch of
select advantage banking.

The Bridgehampton  National Bank is committed to growth through the expansion of
existing   customer   relationships   while   also   developing   new   business
opportunities.  Our Bank is  differentiated  in our  marketplace  by its clearly
defined focus on the East End of Long Island,  our  development of products that
specifically meet the needs of businesses and consumers in our market areas, our
community orientation, and the accessibility of our management.

SEVERAL   HIGHLIGHTS   OF  EVENTS   IN  1998   SHOWCASE   THESE   DISTINGUISHING
CHARACTERISTICS.

Select Advantage Banking: At The Bridgehampton National Bank, maturity does have
its  rewards.  In 1998,  BNB  developed  a new package of banking  products  for
consumers fifty years of age and older.  The Senior market on the East End is an
important consumer segment. However, equally important are the Baby Boomers, who
are beginning to reach their early fifties.  Select  Advantage  Banking offers a
highly competitive  "advantage" package that includes checking,  certificates of
deposit,  savings,  and a variety of  related  benefits.  At the same time,  the
package   effectively  serves  as  an  introduction  to  our  Bank  within  this
increasingly affluent market sector.

Electronic  Delivery  Systems:  Our customers like to do their banking  business
through various delivery channels. In 1997, Teller*Fone, BNB's telephone banking
system,  was  introduced.  Teller*Fone  put account  information  as well as the
opportunity to conduct transactions,  at our customers'  fingertips.  This was a
start;  however,  it was determined  that the provision of alternative  delivery
channels was becoming an increasingly  important aspect of customer service.  In
1998,  the  Bank  devoted  a  member  of its  senior  management  team,  Michael
Kochanasz,  to the development of electronic  delivery systems that make banking
easier,  and add value to  banking  with  BNB.  PC  banking  for  businesses  is
currently being tested through  selected  customer  sites.  This service will be
available to our business  customers  during the second  quarter of 1999.  Other
projects that are underway include the introduction of a Debit Card program; the
exploration of  opportunity  for a Call Center;  improvements  to the Bank's ATM
program;  and  enhancement  and active  marketing of the Bank's cash  management
services for businesses,  which include ACH origination,  check  reconciliation,
and direct deposit of payroll  systems.  We look toward  expanded  importance of
alternative delivery channels in facilitating our customers' daily banking.

Year  2000:  Are we ready?  The  Bridgehampton  National  Bank has been  working
diligently  for the past two years to provide as seamless a transition  into the
next  millennium as possible.  The Federal  Financial  Institutions  Examination
Council  has  identified  six phases for  readiness:  awareness,  inventory  and
assessment, renovation, validation, implementation, and post-implementation. The
Bridgehampton  National Bank has met or exceeded all  governmental  requirements
for  readiness.  In addition,  the Bank has served as a test site for  community
banks in the Northeast U.S.

As the East End's  community bank, The  Bridgehampton  National Bank has taken a
leadership  position with regard to education  pertaining to Y2K issues. On June
9, 1998, the Bank sponsored a Year 2000 Breakfast  Seminar for our customers and
others  among  the  local  business  community.  The  program  consisted  of  an
educational  segment  which was presented by our Chief  Information  Officer and
business technology  specialists,  followed by a question and answer period. The
program was attended by  approximately  sixty  participants.  Additionally,  our
Chief  Information  Officer  and  Chief  Financial  Officer  have  made  similar
presentations  at  business  meetings  throughout  the East End  community.  Our
efforts to educate and  provide  appropriate  information  will be stepped up in
1999. Further, a communication program for our customer base regarding BNB's Y2K
readiness and tips on readiness for businesses and consumers is underway.

p.3  BRIDGE BANCORP, INC. AND SUBSIDIARY

Bridging the Gap

[PHOTOGRAPH]
Southern Cross, Christening.

Over on  Shelter  Island,  BNB helps  bridge  the gap with  financing  for South
Ferry's Southern Cross.

[PHOTOGRAPH]
Stuart Lowrie,  Director of Conservation Programs and Government Relations,  The
Nature Conservancy.

The  Bridgehampton  National  Bank  helped to  galvanize  the East End  business
community in support of the Community  Preservation  Fund.  Stuart Lowrie joined
our celebration on November 10, 1998

Residential  Mortgage  Operations:  In June of 1998,  the Bank made an important
step toward the level of customer service to which our Company is committed.  We
moved our residential mortgage processing department from the Riverhead location
into our headquarters  facility in Bridgehampton,  and relocated our residential
mortgage  originators to our branch  offices.  Now, our customers in each of our
market areas have access to all of our Bank's products. Each market area team is
comprised  of  professional  staff  members  who are  experts in their  areas of
specialization.

At the same time all of our loan operations processes,  commercial and consumer,
were  streamlined.  Management and support staff were placed with the objectives
of increasing processing efficiencies, reducing turnaround time, and providing a
greater level of support to our customers,  as well as our loan originators.  We
made  several key steps  towards our  customer  service  goals in 1998,  and our
efforts to improve loan operations processes will be ongoing.

Stock Split:  On July 20, 1998, the Board of Directors  declared a three-for-one
stock  split  in the  form  of a  stock  dividend  payable  August  31,  1998 to
stockholders  of record as of August 19, 1998. The stock split was the second in
two years.

U.S.  Trust:  Wealth  management  is a financial  service  required by a growing
number of consumers in our  marketplace.  Key to the Bank's  strategic  plan has
been the provision of the highest level of banking  services  backed by state of
the art  technology.  The Board of  Directors  unanimously  approved an alliance
between BNB and United States Trust Company of New York, which puts the ultimate
in consultative  wealth management  services at the fingertips of BNB customers.
Through this  agreement,  Bridgehampton  National  customers  now have access to
investment  management  and  consulting,  trust  services,  financial and estate
planning,  and  private  banking  through  U.S.  Trust,  which has been  serving
affluent individuals and their families since 1853.

South  Ferry's  Southern  Cross:  Anyone who has traveled  between the North and
South Forks of Long Island on the East End via ferry  understands  how this mode
of transportation,  while serving to connect the Forks and Shelter Island,  also
reminds us of the  uniqueness of our region,  and our connection to our maritime
history.

On  October  24,  1998 a new ferry  boat,  South  Ferry's  Southern  Cross,  was
christened.  The  addition of a new boat to the fleet was a momentous  occasion,
and represented a considerable  undertaking for the owners,  the Clark family of
Shelter Island.  The Bridgehampton  National Bank was recognized at the official
christening  ceremony as an essential  partner in bringing  the  Southern  Cross
project to fruition,  through the Bank's funding of the  construction of the new
vessel.  Just as the ferry takes  residents and travelers from the South Fork to
Shelter  Island and beyond to the North Fork,  Bridgehampton  National  has been
noted as the community bank which also bridges the gap,  serving  businesses and
consumers on the South Fork, North Fork and Shelter Island.

Community  Preservation  Fund:  On November  10, 1998,  approximately  150 local
residents joined a celebration at The  Bridgehampton  National Bank headquarters
facility.  Voters  on the East End had  clearly  rallied  behind  Proposal  4 on
election day, establishing the Community  Preservation Fund in all five East End
towns. The Fund is a land bank established to finance the purchase of properties
for open space and farmland  preservation.  The Bridgehampton  National Bank was
recognized  as the  only  bank  on the  East  End  which  consistently  supports
environmental  and  preservation  programs.  The Bank  remains  committed to the
support of  programs  throughout  the  region  that  protect  and  preserve  the
environment,  quality of life, rural character and the unique beauty of the East
End.

                                                         1998 ANNUAL REPORT  p.4

                      Dedicated to the East End Community

Our  dedication  to the East End community is reflected by our  reinvestment  of
deposits  into all of our market areas,  in the form of commercial  and consumer
loans,  and  community   programs.   We  welcome  you  to  review  some  of  the
"investments" made by The Bridgehampton National Bank in 1998.

BANK-WIDE  * Peconic  Community  Council * North  Fork  Housing  Alliance  * Y2K
Information  Seminars * Ellen's Run * Central Suffolk  Hospital's Polo Panache *
March of Dimes * Family  Service  League * East End Hospice *  Salvation  Army *
Muscular  Dystrophy  Foundation * East End Alternatives  Counseling Center * The
Retreat * Have a Heart  Charities  * Eastern  Long  Island  Hospital  * American
Cancer Society * Make a Wish  Foundation * Habitat for Humanity * Choral Society
of the  Hamptons * Group for the South Fork * American Red Cross * Cancer Care *
South  Fork  Breast  Coalition  * Fish  Unlimited  * Suffolk  County  Girl Scout
Council,  Inc. * Suffolk  County Boy Scouts of America * Sloan  Kettering * East
End Arts Council * Charity in Action  Family Health  Services,  Inc. * Dominican
Sisters  Family  Health  Promotion * Coat off Your Back * Local Food  Pantries *
Ducks Unlimited * Spanish Community Project * American Heart Association * Small
Business  Development  Center Research  Foundation * South Fork Community Health
Initiative * The Hampton  Classic * Americas'  Sail  Greenport  Rendezvous '98 *
Juvenile Diabetes Foundation * U.S. Equestrian Team Bridgehampton/Sag Harbor *
Bridgehampton Child Care Center * Bay Street Theatre * Bridgehampton  Historical
Society * Bridgehampton Road Rallye * Bridgehampton  School * Madoo Conservatory
* Sag  Harbor  Elementary  School * Stella  Maris  School *  Hayground  School *
Bridgehampton Lions Club * Bridgehampton Community House * Bridgehampton Village
Improvement  Society *  Bridgehampton  Fire  Department  and  Ambulance  Company
Southampton * Southampton Senior Services * Southampton Hospital

[PHOTOGRAPH]
Sag Pond Vineyard,  Sagaponack. With the wine industry firmly rooted on the East
End, The Bridgehampton National Bank cultivates business opportunities.

[PHOTOGRAPH]
Ruby  Beets,  Bridgehampton.  When  it's time to move or  expand,  Bridgehampton
National Bank is prepared to help East End businesses grow.

[PHOTOGRAPH]
Eastland Farms,  Water Mill. From  agriculture to technology,  BNB has developed
products and services that meet the needs of local business customers.

[PHOTOGRAPH]
Peter's Back Street,  Southampton.  Over in Southampton  Village,  Bridgehampton
National has established a commercial branch to meet the banking requirements of
merchants and professional entities in the Village.

[PHOTOGRAPH]
Southampton Home. Bridgehampton National Bank makes home ownership a reality for
East Enders every day. When it comes to financing a home sweet home,  folks here
know that BNB has more than 50 residential mortgage programs available.

p.5  BRIDGE BANCORP, INC. AND SUBSIDIARY

[PHOTOGRAPH]
Newly completed residential  construction,  East Hampton. Builders and consumers
throughout our market areas know that  Bridgehampton  National Bank stands ready
with financing for land and new construction.

[PHOTOGRAPH]
Gansett  Green  Manor,  Amagansett.   Improvements  and  expansions  help  local
businesses flourish.

[PHOTOGRAPH]
Montauk  Lighthouse,  Montauk Point, a beacon to the East End. The Bridgehampton
National Bank supports the region's historical treasures.

[PHOTOGRAPH]
Simon  Bolivar.  In 1998,  The  Bridgehampton  National  Bank signed on as Title
Sponsor of The Bridgehampton  National Bank Americas' Sail Greenport Rendezvous,
bringing  national and  international  attention to the East End's rich maritime
history.  Simon Bolivar. In  1998, The Bridgehampton  National Bank signed on as
Title  Sponsor of The  Bridgehampton  National  Bank  Americas'  Sail  Greenport
Rendezvous, bringing national and international attention to the East End's rich
maritime history.

[PHOTOGRAPH]
Shelley Scoggin, owner, The Market, Greenport. Shelley Scoggin told her story in
BNB's testimonial  advertising campaign.  The Bridgehampton National Bank helped
her make her business dreams come true in 1998

Community Health Services * Southampton AARP * Shinnecock Nation Cultural
Center & Museum * Southampton Hospital Lyme Disease Research * Southampton
Hospital Quarterbackers Club * Hampton Bays Beautification Association, Inc.
* Sacred Heart CYO Basketball * Southampton Day Care * Southampton Chamber
of Commerce * Southampton College Career Development Center * Parrish Art
Museum * Cultural Center of Southampton * PBA of Southampton * Southampton
Elks Ladies of the 1574 Club * Southampton Lions Club * Southampton Business
Alliance * North Sea Fire Department East Hampton/Montauk * The ReCenter *
East Hampton Seniors Center * Town of East Hampton 350th Anniversary
Celebration Lecture Series * Guild Hall * Kidfest * East Hampton Youth
Alliance * Montauk Historical Society * Montauk Friends of Erin * Montauk
Chamber of Commerce * East Hampton Christmas Tree Lighting * East Hampton
Youth Football * Youth Hoops of East Hampton * East Hampton Presbyterian
Church * Community Council of East Hampton * Montauk Downtown Association
Street Lighting Fund * East Hampton Day Care Center * St. Luke's Church
Beach Walk * East Hampton Lions Club North Fork * First Night Greenport *
Mattituck Senior Nutrition Center * Mattituck Lionesses * Shelter Island
Senior Center * East End Seaport Museum * North Fork Lions Club
* Town of Southold Haunted House * North Fork Women's Resource Center *
Southold Rotary * Greenport-Southold Chamber of Commerce * North Fork Reform 
Synagogue * Mattituck Chamber of Commerce * Our Lady of Mercy School
* San Simeon by the Sound * Peconic Landing * Southold Fire Department *
Southold Schools * Southold Summer Showcase Concert Series * Arts in
Southold Town * Greenport Music Festival

We invite you to learn more about our Company through the financial pages
that follow.

                                                         1998 ANNUAL REPORT  p.6

                        Five Year Summary of Operations
           (IN THOUSANDS, EXCEPT PER SHARE DATA AND FINANCIAL RATIOS)

Set forth  below  are  selected  consolidated  financial  and other  data of the
Company.  The  Company's  business is primarily  the  business of the Bank.  The
financial data is derived in part from, and should be read in conjunction  with,
the consolidated financial statements of the Company.

December 31,                                        1998       1997          1996       1995       1994
- -------------------------------------------------------------------------------------------------------
                                                                                
SELECTED FINANCIAL DATA:
Securities available for sale               $ 69,443   $ 60,190      $ 57,779   $ 52,689   $ 26,413
Securities held to maturity/for investment     5,052     11,812         6,262      6,425     37,166
Loans, net                                       166,983    137,243       117,643    110,442     93,817
Total assets                                      26,651    233,112       204,614    184,070    171,953
Total deposits                                   241,531    203,697       184,847    166,144    155,891
Total stockholders' equity                        22,232     19,451        16,926     15,420     12,807

Year Ended December 31,
- -------------------------------------------------------------------------------------------------------
                                                                                
SELECTED OPERATING DATA:
Total interest income (including fee income)    $ 19,019   $ 17,224      $ 15,501   $ 14,384   $ 11,187
Total interest expense                             5,978      5,543         5,072      5,258      3,270
                                                -------------------------------------------------------
Net interest income                               13,041     11,681        10,429      9,126      7,917
Provision for loan losses                            425        410           330        268        333
                                                -------------------------------------------------------
Net interest income after provision
 for possible loan losses                         12,616     11,271        10,099      8,858      7,584
Total other income                                 3,005      4,323(3)      2,422      1,697      1,512
Total other expenses                               9,637      9,067         7,960      7,024      6,318
                                                -------------------------------------------------------
Income before income taxes                         5,984      6,527(3)      4,561      3,531      2,778
Provision for income taxes                         2,089      2,332         1,555      1,148        845
                                                -------------------------------------------------------
Net income                                      $  3,895   $  4,195(3)   $  3,006   $  2,383   $  1,933
                                                =======================================================

December 31,
- -------------------------------------------------------------------------------------------------------
                                                                                
SELECTED FINANCIAL RATIOS AND OTHER DATA:
Return on average equity                       19.19%     23.08%    18.84%     16.29%     15.36%
Return on average assets                        1.51%      1.86%     1.51%      1.27%      1.18%
Equity to assets                                    8.00%      8.00%         8.07%      8.20%      7.79%
Dividend payout ratio                              38.05%     47.00%    32.87%     32.23%     32.28%
Diluted earnings per share                  $   0.91   $    .99      --         --         --
Basic earnings per share                    $   0.92   $    .99  $   0.70   $   0.55   $   0.45
Cash dividends declared per common share    $   0.35   $    .47  $   0.23   $   0.18   $   0.14

On November 15,1995, the FASB issued "A Guide to Implementation of Statement No.
115 on  Accounting  for  Certain  Investments  in Debt  and  Equity  Securities,
Questions and Answers" which resulted in a reclassification  of a portion of the
held to maturity portfolio to available for sale stated at fair value.

For purposes of these calculations,  average  stockholders'  equity excludes the
effect of changes in the unrealized  appreciation  (depreciation)  on securities
available for sale, net of taxes.

On June 17, 1997, the Bank sold its former headquarters  building resulting in a
gain,  net of  taxes,  of  approximately  $829,000.  Return  on  average  equity
excluding  this  gain,  net of  taxes,  was  18.52%.  Return on  average  assets
excluding  this gain,  net of taxes,  was 1.49%.  On December  15, 1997 the Bank
declared a one time  special  dividend of  approximately  $845,000,  or $.20 per
share, paying out this gain to the shareholders.

On July 20, 1998, the Board of Directors declared a three-for-one stock split in
the form of a stock dividend  payable August 31, 1998, to stockholders of record
as of August 19,  1998.  The par value of the  Company's  common  stock  remains
unchanged.  As a result,  $14,439,990 was transferred from Undivided Profits and
Capital  Surplus at August 19, 1998 to reflect the issuance.  On April 15, 1997,
the Board of  Directors  declared a  three-for-one  stock split in the form of a
stock dividend  payable on May 30, 1997 to  stockholders  of record as of May 1,
1997.  The par value per share of the  Company's  common  stock  again  remained
unchanged. As a result, $4,801,000 was transferred from Undivided Profits at May
1, 1997 to reflect the  issuance.  All per share  amounts have been  adjusted to
reflect the effects of these splits.

p.7 BRIDGE BANCORP, INC. AND SUBSIDIARY

        Managements's Discussion and Analysis of Financial Condition and
                             Results of Operations

GENERAL.  Bridge  Bancorp,  Inc. (the  Company),  a New York  corporation,  is a
one-bank  holding company formed  effective March 31, 1989, and on a parent only
basis,  had minimal  results of operations for 1998, 1997 and 1996. In the event
the Company subsequently expands its current operations, it will be dependent on
dividends from its wholly owned subsidiary, The Bridgehampton National Bank (the
Bank), its own earnings,  additional capital raised and borrowings as sources of
funds. The information  below reflects  principally the financial  condition and
results  of  operations  of the Bank.  The  Bank's  results  of  operations  are
primarily  dependent on its net interest income,  which is mainly the difference
between  interest  income on loans  and  investments  and  interest  expense  on
deposits.  Interest income on loans and investments is a function of the average
balances  outstanding  and the average  rates earned  during a period.  Interest
expense is a function of the average amount of interest-bearing deposits and the
average rates paid on such  deposits  during a period.  The Bank also  generates
other  income,  such as fee income on deposit  accounts and income from mortgage
banking operations and merchant credit card processing programs.  The Bank's net
income  is  further  affected  by the  level  of its  other  expenses,  such  as
employees'  salaries and benefits  and  occupancy  costs.  This  discussion  and
analysis  should  be  read  in  conjunction  with  the  consolidated   financial
statements,  the notes  thereto  and the other  financial  information  included
elsewhere in this annual report.

FINANCIAL CONDITION.  The assets of the Company totaled $266,951,000 at December
31, 1998, an increase of  $33,839,000  or 14.5% from the previous year end. This
increase mainly results from the increase in gross loans of $30,060,000 or 21.7%
and an increase in  investments  in debt and equity  securities of $2,493,000 or
3.46%. The source of funds for the increase in assets was derived from increased
deposits  of  $37,834,000  or 18.6%,  offset  primarily  by a decrease  in other
borrowings of $6,500,000.  Demand deposits  increased  $10,828,000 or 17.0%, and
all other deposits  increased  $27,006,000 or 19.3% over December 31, 1997. This
increase  is mainly  attributed  to efforts  to  increase  market  share and the
introduction  of a new money market  deposit  product which targets high balance
accounts.

Total stockholders'  equity was $22,232,000 at December 31, 1998, an increase of
14.3% over  December 31,  1997.  The  increase of  $2,781,000  was the result of
undistributed  net income for the year ended  December 31, 1998, of  $3,895,000;
plus the  proceeds of $109,000  from the  exercise of  incentive  stock  options
pursuant to the equity  incentive plan; plus the tax benefit of $51,000 from the
exercise of nonqualified  stock options  pursuant to the equity  incentive plan;
less  cash  dividends  declared  of  $1,482,000;  and plus the net  increase  in
unrealized  appreciation  in  securities  available  for  sale,  net of tax,  of
$208,000.  The net increase in unrealized  appreciation in securities  available
for sale is attributable to  appreciation  due to changes in market  conditions.
Management has determined such appreciation to be temporary, and does not expect
future sales of such  securities to result in material gains and thus a material
impact on results of operations.

STOCK SPLITS. On July 20, 1998, the Board of Directors  declared a three-for-one
stock  split  in the  form  of a  stock  dividend  payable  August  31,  1998 to
stockholders  of  record as of  August  19,  1998.  The  stock  split  increased
outstanding  common shares from  1,411,599 to 4,234,797.  On April 15, 1997, the
Board of Directors  declared a three-for-one  stock split in the form of a stock
dividend  payable May 30, 1997 to  stockholders of record as of May 1, 1997. The
stock split  increased  outstanding  common  shares from  469,333 to  1,407,999.
Stockholders'  equity has been restated to give  retroactive  recognition to the
stock splits for all periods  presented by reclassifying  from undivided profits
and capital surplus to common stock the par value of additional shares resulting
from the stock splits. In addition, all references in the Consolidated Financial
Statements  and Notes  thereto to number of  shares,  per share  amounts,  stock
option  data and market  prices of the common  stock have been  restated  giving
retroactive recognition to the stock splits.

ASSET/LIABILITY  MANAGEMENT.  The  Company's  primary  earnings  source  is  net
interest  income,  which is affected by changes in the level of interest  rates,
the  relationship  between rates,  the impact of interest rate  fluctuations  on
asset prepayments, the level and composition of deposits, and the credit quality
of the  portfolio.  Management's  asset/liability  objectives  are to maintain a
strong,  stable net interest margin, to utilize its capital  effectively without
taking undue risks and to maintain adequate liquidity.

The  Company's  Asset/  Liability  Committee,  comprised  of  members  of senior
management and the Board,  meets  periodically to evaluate the impact of changes
in market interest rates on assets and liabilities, net interest margin, capital
and liquidity.  Risk assessments are governed by policies and limits established
by senior  management  which are  reviewed  and  approved  by the full  Board of
Directors.

As measured by the Interest  Sensitivity Gap Table, the Company's  estimated one
year cumulative  interest  sensitivity  gap (the  difference  between assets and
liabilities   that  reprice  or  mature  within  such  period)  was  a  negative
$14,894,000,  or (5.58)% of total  assets.  A gap is  considered  negative  when
interest rate  sensitive  liabilities  maturing or repricing  within a specified
time period exceed the amount of interest  rate  sensitive  assets  repricing or
maturing  within that same time period.  A gap is  considered  positive when the
amount  of  interest  rate  sensitive  assets  maturing  or  repricing  within a
specified time frame exceeds the amount of interest rate  sensitive  liabilities
repricing  or  maturing  within  that  same  time  period.   In  a  rising  rate
environment,  an  institution  with a negative gap would  generally be expected,
absent the effects of other  factors,  to  experience a greater  increase in the
costs  of its  liabilities  relative  to the  yields  of its  assets  and thus a
decrease in the institution's net interest income, whereas an institution with a
positive gap would  generally be expected to  experience  the opposite  results.
Conversely,  during a period of  falling  rates,  a  negative  gap would tend to
result in an increase in net interest  income while a positive gap would tend to
adversely affect net interest income.

                                                        1998  ANNUAL REPORT  P.8

The  economic  environment  continually  presents  uncertainties  as  to  future
interest  rate trends.  The  Asset/Liability  Committee  regularly  monitors the
cumulative  gap  position,  in addition to  utilizing a model that  projects net
interest income based on increasing or decreasing interest rates, in order to be
able to respond to changes in interest rates by adjusting the gap position.

INTEREST RATE SENSITIVITY  ANALYSIS.  The following table sets forth the amounts
of interest  earning  assets and  interest-bearing  liabilities  outstanding  at
December 31, 1998, which are anticipated by the Bank, using certain  assumptions
based on  historical  experience  and other data  available  to  management,  to
reprice or mature in each of the future time periods shown.  This table does not
necessarily indicate the impact of general interest rate movements on the Bank's
net interest  income because actual  repricing of various assets and liabilities
is subject to customer  discretion  and  competitive  and other  pressures  and,
therefore, actual experience may vary from that indicated.

                                                             Over Three      Over Six      Over One
                                                    Three        Months        Months          Year          Over
Year ended December 31, 1998                       Months       Through       Through       Through          Five
(Dollars in thousands, except financial ratios)   or Less    Six Months      One Year    Five Years         Years         Total
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                                     
Interest Earning Assets:
Investment in debt and equity securities     $  2,732      $  3,089      $  7,518      $ 40,329      $ 19,449      $ 73,117
Total loans                                    63,199         6,340        11,196        58,702        29,259       168,696
Federal funds sold                                  3,150          --            --            --            --           3,150
                                                 ------------------------------------------------------------------------------
Total Interest Earning Assets                    $ 69,081      $  9,429      $ 18,714      $ 99,031      $ 48,708      $244,963

Interest Bearing Liabilities:
Savings, N.O.W., and money
market accounts                              $ 56,245      $   --        $   --        $   --        $ 46,771      $103,016
Certificates of deposit                            29,507        17,763         8,603         8,185          --          64,058
                                                 ------------------------------------------------------------------------------
Total Interest Bearing Liabilities               $ 85,752      $ 17,763      $  8,603      $  8,185      $ 46,771      $167,074
                                                 ------------------------------------------------------------------------------
Interest Sensitivity Gap Per Period              $(16,671)     $( 8,334)     $ 10,111      $ 90,846      $  1,937      $ 77,889
                                                 ------------------------------------------------------------------------------
Cumulative Interest Sensitivity Gap              $ 96,671)     $(25,005)     $(14,894)     $ 75,952      $ 77,889
                                                 ------------------------------------------------------------------------------
Gap to Total Assets                                 -6.24%        -9.37%        -5.58%        28.45%        29.18%
                                                 ------------------------------------------------------------------------------

Investment  in debt and  equity  securities  is shown  excluding  the fair value
appreciation of $1,629,000,  before tax, due to the application of SFAS No. 115.
Investment in debt and equity securities includes interest earning deposits with
banks of $251,000.

For the purpose of this table, nonaccrual loans of approximately $1,208,000 have
been included.

Statement  savings,  N.O.W.  and money market accounts have been included in the
"Three  Months or Less"  category.  Passbook  savings have been  included in the
"Over Five Years" category.

Certain  shortcomings  are  inherent  in the method of analysis  presented.  For
example,  although certain assets and liabilities may have similar maturities or
periods to repricing,  they may react in different  degrees to changes in market
interest  rates.  Also,  the  interest  rates on  certain  types of  assets  and
liabilities may fluctuate in advance of changes in market interest rates,  while
interest rates on other types may lag behind changes in market  interest  rates.
The table  reflects the  estimates of  management  as to periods to repricing at
particular  points in time. Among the factors  considered,  management  monitors
both current  trends and its  historical  repricing  experience  with respect to
particular or similar  products.  For example,  the Bank has a number of deposit
accounts,  including  passbook  savings,  NOW accounts and money market accounts
which may be withdrawn at any time.  The Bank,  based on historical  experience,
assumes that while all  customers in these  account  categories  could  withdraw
their funds on any given day,  they will not do so, even if the market  interest
rates  were  to  change.  As a  result,  different  assumptions  may be  used at
different points in time.

MARKET RISK.  Significant  increases in the level of market  interest rates also
may adversely  affect the fair value of securities  and other  interest  earning
assets.  At December 31, 1998,  $74,495,000 or 100% of the Company's  securities
had  fixed  interest  rates.  Generally,  the  value of fixed  rate  instruments
fluctuates inversely with the changes in interest rates. As a result,  increases
in interest  rates could  result in  decreases  in the market  value of interest
earning assets which could adversely affect the Company's  results of operations
if sold or, in the case of interest  earning assets  classified as available for
sale,  the  Company's  stockholders'  equity if  retained.  Increases  in market
interest rates also could affect the type  (fixed-rate or  adjustable-rate)  and
amount of loans  originated  by the Company  and the  average  life of loans and
securities,  which can adversely impact the yields earned on the Company's loans
and securities.  In periods of decreasing  interest  rates,  the average life of
loans held by the Company may be  shortened to the extent  increased  prepayment
activity  occurs during such period which,  in turn, may result in the investing
of funds from such prepayments in lower yielding assets.

The Company's  interest rate sensitivity is monitored by management  through the
use of a quarterly  interest  rate risk analysis  model which  evaluates (i) the
potential  change in the net interest  income over the  succeeding  four quarter
period and (ii) the  potential  change in the fair market  value of the Company,
the "Net Economic  Value of Equity of the  Company",  which would result from an
instantaneous  and  sustained  interest  rate  change of plus or minus 200 basis
points, in 100 basis point increments.

p.9 BRIDGE BANCORP, INC. AND SUBSIDIARY

        Managements's Discussion and Analysis of Financial Condition and
                              Results of Operations
                                  (CONTINUED)

At December  31,  1998,  net interest  income over the  succeeding  four quarter
periods  would be  effected  as follows  given an  instantaneous  and  sustained
interest rate change of:

Change                                                   Potential Change in
in Interest                                               Net Economic Value
Rates in                        Potential                     of Equity as a
Basis Points                Change in Net                      Percentage of
(RATE SHOCK)              Interest Income                    of Total Assets
- ----------------------------------------------------------------------------
                   $ Change       % Change          $ Change        % Change
                  ----------------------------------------------------------
                                                         
      200         $ 481,000          3.43%        $(313,000 )        (0.12)%
      100         $ 244,000          1.74%               *              *
   Static               --            --                --             --
     (100)        ($347,000)        (2.48)%              *              *
     (200)        ($751,000)        (5.36)%       $(295,000)         (0.11)%

* The information on the potential  effect of a 100 basis point change in market
interest  rates on the net economic  value of equity is not  available.  The 200
basis  point rate shock  estimates  the  potential  effect of a change in market
interest rates,  and the Company does not view the lack of information for a 100
basis point rate shock as meaningful.

As in the  case of the gap  table,  certain  shortcomings  are  inherent  in the
methodology  used  in  the  above  interest  rate  risk  measurements.  Modeling
potential  changes in the net interest  income and net economic  value of equity
requires  the making of certain  assumptions  which may or may not  reflect  the
manner in which actual  yields and costs  respond to changes in market  interest
rates. In this regard,  the model presented  assumes that the composition of the
Company's interest sensitive assets and liabilities existing at the beginning of
a period remains constant over the period being measured and also assumes that a
particular  change in interest  rates is  reflected  uniformly  across the yield
curve regardless of the duration to maturity or repricing of specific assets and
liabilities.  Accordingly,  although  the net  interest  income  models  and net
economic  value of equity  measurements  provide an  indication of the Company's
interest rate exposure at a particular point in time, such  measurements are not
intended  to and do not  provide a precise  forecast of the effect of changes in
market  interest rates on the Company's net interest income and will differ from
actual results.

ANALYSIS OF NET INTEREST INCOME. Net interest income, the primary contributor to
earnings,  represents the difference  between income on interest  earning assets
and expenses on interest bearing liabilities.

The  following  table  sets forth  certain  information  relating  to the Bank's
average  consolidated  statements of condition and reflects the average yield on
assets and average cost of liabilities  for the periods  indicated.  Such yields
and costs are  derived by dividing  income or expense by the average  balance of
assets or liabilities, respectively, for the periods shown. Average balances are
derived from daily  average  balances.  Interest on  nonaccruing  loans has been
included only to the extent reflected in the consolidated  statements of income.
However, the loan balances are included in the average amounts outstanding. Loan
fee income totaled $322,000 in 1998, $649,000 in 1997 and $598,000 in 1996. For
purpose of this table the average  balances  for  investment  in debt and equity
securities exclude unrealized  appreciation/depreciation  due to the application
of SFAS No.115.

Year Ended December 31,                                         1998                            1997                            1996
- ------------------------------------------------------------------------------------------------------------------------------------
                                                             Average                         Average                         Average
                                         Average              Yield/     Average              Yield/     Average              Yield/
(Dollars in thousands)                   Balance   Interest     Cost     Balance   Interest     Cost     Balance   Interest     Cost
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     
Interest earning assets:
  Loans (including fee income)          $156,268   $ 14,461     9.3%    $125,780   $ 12,400     9.9%    $114,220   $ 11,261     9.9%
  Deposits with banks                      2,963        155     5.2%       1,320         73     5.5%       1,941         99     5.1%
  Federal funds sold                       3,721        202     5.4%       4,787        267     5.6%       4,422        243     5.5%
  Taxable investment securities           14,034        916     6.5%      19,736      1,295     6.6%      19,703      1,286     6.5%
  Tax exempt investment securities        26,055      1,177     4.5%      23,790      1,115     4.7%      17,474        907     5.2%
  Other securities                         1,083         78     7.2%       1,083         71     6.6%         736         48     6.5%
  Mortgage backed securities              29,822      2,030     6.8%      28,395      2,003     7.1%      24,670      1,657     6.7%
                                        --------------------------------------------------------------------------------------------
Total interest earning assets           $233,946   $ 19,019     8.1%    $204,891   $ 17,224     8.4%    $183,166   $ 15,501     8.5%

Interest bearing liabilities:
  Savings, N.O.W. and
    money market deposits               $ 90,522   $  2,095     2.3%    $ 71,703   $  1,632     2.3%    $ 68,342   $  1,598     2.3%
  Certificates of deposit of $100,000
     or more                              29,412      1,574     5.4%      28,601      1,560     5.5%      18,718      1,000     5.3%
  Other time deposits                     43,428      2,242     5.2%      42,456      2,230     5.3%      44,848      2,410     5.4%
  Federal funds purchased                   --         --       --            20          1     5.0%          22          1     4.5%
  Other borrowings                         1,230         67     5.4%       2,127        120     5.6%       1,143         63     5.5%
                                        --------------------------------------------------------------------------------------------
Total interest bearing liabilities      $164,592   $  5,978     3.6%    $144,907   $  5,543     3.8%    $133,073   $  5,072     3.8%
                                        --------------------------------------------------------------------------------------------
Net interest income/interest
  rate spread                                      $ 13,041     4.5%              $  11,681     4.6%               $ 10,429     4.7%
                                                   --------     ---               ---------     ---                --------     ---
Net earning assets/net yield on
  average interest earning assets       $ 69,354                5.6%   $  59,984                5.7%    $ 50,093                5.7%
                                        --------                ---    ---------                ---     --------                ---
Ratio of interest earning assets to
  interest bearing liabilities                                142.1%                          141.4%                          137.6%
                                                              -----                           -----                           -----

                                                        1998 ANNUAL REPORT  p.10

RATE/VOLUME  ANALYSIS.  Net interest income can also be analyzed in terms of the
impact of changing rates and changing volumes. The following table describes the
extent to which changes in interest  rates and changes in the volume of interest
earning  assets  and  interest  bearing  liabilities  have  affected  the Bank's
interest income and interest expense during the periods  indicated.  Information
is provided in each category with respect to (i) changes attributable to changes
in  volume  (changes  in  volume   multiplied  by  prior  rate),   (ii)  changes
attributable to changes in rates (changes in rates  multiplied by prior volume),
and (iii) the net changes. For purposes of this table, changes which are not due
solely to volume changes or rate changes have been allocated to these categories
based on the respective percentage changes in average volume and average rate as
they compare to each other.

Year Ended December 31,                                    1998 Over 1997                   1997 Over 1996
(In thousands)                                     Changes Due To                   Changes Due To
- ------------------------------------------------------------------------------------------------------------------
                                                  Volume      Rate   Net Change     Volume      Rate   Net Change
                                                                                        
Interest Income on Interest Earning Assets:
Federal funds sold                                $  (58)   $   (7)      $  (65)   $    20   $     4      $    24
Deposits with banks                                   98       (16)          82        (34)        8          (26)
Taxable investment securities                       (372)       (7)        (379)         2         7            9
Tax exempt investment securities                     103       (41)          62        303       (95)         208
Other securities                                      --         7            7         23        --           23
Mortgage-backed securities                            99       (72)          27        260        86          346
Loans (including loan fee income*)                 2,858      (797)       2,061      1,140        (1)       1,139
                                                  ---------------------------------------------------------------
   Total interest earning assets                   2,728      (933)       1,795      1,714         9        1,723
                                                  ---------------------------------------------------------------

Interest expense on interest bearing liabilities:
Savings, NOW and money market deposits               435        28          463         77       (43)          34
Certificates of deposits of $100,000 or more          43       (29)          14        539        21          560
Other time deposits                                   50       (38)          12       (126)      (54)        (180)
Federal funds purchased                               (1)       --           (1)        --        --           --
Other borrowings                                     (49)       (4)         (53)        56         1           57
                                                  ---------------------------------------------------------------
   Total interest bearing liabilities                478       (43)         435        546       (75)         471
                                                  ---------------------------------------------------------------
Net interest income                                2,250      (890)       1,360      1,168        84        1,252
                                                  ===============================================================

* The net change in interest  income relating to loan fee income was an decrease
of $327,000 in 1998 over 1997 and an increase of $51,000 in 1997 over 1996.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

GENERAL. Net income for 1998 totaled $3,895,000,  or $.91 per share, as compared
to net income of  $4,195,000  or $.99 per share for the year ended  December 31,
1997. Net income  increased  15.7%,  compared to $3,366,000 or $.79 per share in
1997, excluding the gain on the sale of the Bank's former headquarters  building
totaling $829,000 net of applicable taxes of $575,000. Highlights include: (i) a
$1,360,000 or 11.6% increase in net interest income;  (ii) a $1,318,000 or 30.5%
decrease in total other  income;  and (iii) a $570,000 or 6.3% increase in total
other  expenses  over the same period in 1997.  The  provision  for income taxes
decreased $243,000 or 10.4%.

NET INTEREST  INCOME.  Net interest income increased from $11,681,000 in 1997 to
$13,041,000  in 1998.  The  increase  of 11.6%  reflects  an increase in average
earning assets from  $204,891,000  in 1997 to $233,946,000 or 14.2% in 1998. The
net yield on average  earning  assets for 1998  decreased  to 5.6% from 5.7% for
1997.

INTEREST INCOME. Total interest income (including loan fee income of $322,000 in
1998 and $649,000 in 1997) increased from  $17,224,000 in 1997 to $19,019,000 in
1998, an increase of 10.4%.  The yield on average  interest  earning  assets for
1998 decreased to 8.1% from 8.4% for 1997.

Interest income on loans (including fee income) increased $2,061,000 during 1998
the result of an increase in average loans of 24.2% from $125,780,000 in 1997 to
$156,268,000 in 1998. The yield on average loans for 1998 decreased to 9.3% from
9.9% for 1997.

Interest on investment in debt and equity securities decreased $283,000 or 6.7%.
The decrease  resulted from a decrease in average  investment in debt and equity
securities  from  $73,004,000 in 1997 to  $70,994,000 in 1998. In addition,  the
average yield on debt and equity securities  decreased from 6.1% in 1997 to 5.9%
in 1998.

INTEREST EXPENSE. Interest expense increased $435,000 to $5,978,000 in 1998 from
$5,543,000 in 1997.  The increase in interest  expense was caused by an increase
in average  interest-bearing  liabilities of 13.6% from  $144,907,000 in 1997 to
$164,592,000 in 1998. The cost of average interest bearing liabilities decreased
to 3.6% from 3.8% during 1998.

PROVISION FOR LOAN LOSSES.  The provision for loan losses  increased  $15,000 in
1998 to $425,000.  The  allowance  for loan losses  increased to  $1,713,000  at
December  31, 1998 as compared  with $ 1,393,000  at  December  31,  1997.  As a
percentage of loans,  the allowance was 1.02% at December 31, 1998 in comparison
to 1.01% at December 31, 1997. A specific  reserve was  established in the third
quarter  of the year  primarily  as a result of one loan 

p.11 BRIDGE BANCORP, INC. AND SUBSIDIARY

        Managements's Discussion and Analysis of Financial Condition and
                              Results of Operations
                                  (CONTINUED)

relationship becoming nonperforming. Management is negotiating with the borrower
to minimize any losses and does not expect such losses to materially  effect the
results of operations going forward.

The allowance as a percentage of  nonperforming  loans (including loans past due
90 days or more and still  accruing) was 141.3% at December 31, 1998 compared to
142.6% at December 31, 1997. The allowance reflects  management's  evaluation of
classified  loans,  charge-off  trends,   concentrations  of  credit  and  other
pertinent  factors.  It also reflects  input from the Bank's outside loan review
consultants.  While management uses available information in estimating possible
loan losses,  future additions to the allowance may be necessary based on future
changes in economic conditions.

OTHER  INCOME.  Other income  decreased by  $1,318,000 or 30.5% to $3,005,000 in
1998 compared to $4,323,000 in 1997. Other income increased  $87,000 or 29.8% in
1998, excluding the gain on the sale of the Bank's former headquarters  building
totaling  $1,405,000.  Income from mortgage banking  activities for 1998 totaled
$1,306,000,  an increase of $81,000 or 6.6% over 1997. The Bank's practice is to
originate and sell these mortgages in the secondary market. During 1998 the Bank
reorganized  mortgage banking  operations into their headquarter  building.  The
Bank expects to continue to penetrate the mortgage  market,  taking advantage of
the low interest rate environment  fueling the refinance and  construction  loan
market.  Net gains on  securities  were $47,000 in 1998  compared to $106,000 in
1997.  Other  operating  income for the year ended  December  31,  1998  totaled
$813,000,  an  increase  of  $31,000  or 4.0% over the last  year.  This  change
primarily  results from a decrease in merchant  processing  fees  resulting from
increased  interchange costs that took effect in Spring 1998 partially offset by
increased fee income  including new  surcharges  imposed on non-bank  customers'
transactions at automatic teller machines.

OTHER  EXPENSES.  Other expenses  increased by $570,000 or 6.3% to $9,637,000 in
1998 from $9,067,000 in 1997. The components of this change included an increase
in salaries and employee  benefits of $175,000 or 3.8%; an increase in furniture
and fixture  expense of $122,000  or 21.2%;  and an increase in other  operating
expenses of $243,000 or 7.7%.  Increases in salaries and benefits in the current
year,   partially   attributed  to  increased  staffing  primarily  at  the  new
Southampton  Village branch opened in the fall of 1997, were partially offset by
reduction  of staff in mortgage  banking  operations.  Increased  furniture  and
fixture expense primarily results from increased  depreciation expenses relative
to equipment  upgrades in preparation for Year 2000  readiness.  The increase in
other operating  expenses primarily results from increased  personnel  education
costs from the  development  of training  programs;  increased  advertising  and
promotion expenses;  increased data and item processing expenses to an outsource
provider;   and  increased   telephone  costs   attributable  to  improved  data
communication lines between the Bank headquarters and the remote branches. These
expenses were partially offset by savings relative to servicing certain consumer
loans in house thereby eliminating an outside servicer.

PROVISION  FOR INCOME  TAXES.  The  provision  for  income  taxes  decreased  to
$2,089,000 for 1998 from  $2,332,000  for 1997.  This decrease was due to income
before income taxes  decreasing  from  $6,527,000 in 1997 to $5,984,000 in 1998.
The decrease also reflects the decrease in the effective tax rate to 35% in 1998
from 36% in 1997.  The decrease in the effective tax rate resulted from a slight
decline in the effective state tax rate, net of the federal income tax benefit.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

GENERAL. Net income for 1997 was $4,195,000,  an increase of $1,189,000 or 39.6%
from 1996 net income of  $3,006,000.  Net income  includes a gain on the sale of
the Bank's  former  headquarters  building  totaling  $829,000 net of applicable
taxes of $575,000. Highlights include: (i) a $1,252,000 or 12.0% increase in net
interest income;  (ii) a $1,901,000 or 78.5% increase in total other income; and
(iii) a $1,107,000 or 13.9% increase in other expenses. The provision for income
taxes increased $777,000 or 50.0%.

NET INTEREST  INCOME.  Net interest income increased from $10,429,000 in 1996 to
$11,681,000  in 1997.  The increase of 12.0% reflects an increase in average net
interest  earning assets from  $50,093,000 in 1996 to $59,984,000,  or 19.7%, in
1997.

INTEREST INCOME. Total interest income (including loan fee income of $649,000 in
1997 and $598,000 in 1996) increased from  $15,501,000 in 1996 to $17,224,000 in
1997, an increase of 11.1%.  The increase from 1996 to 1997 was the result of an
increase in the average  interest  earning assets from  $183,166,000  in 1996 to
$204,891,000  in 1997. The average yield on interest  earning  assets  decreased
from 8.5% in 1996 to 8.4% in 1997.

Interest income on loans (including fee income) increased $1,139,000 during 1997
the result of an increase in average loans of 10.1% from $114,220,000 in 1996 to
$125,780,000 in 1997. The yield on average loans remained constant at 9.9%.

Interest  on  investment  in debt and equity  securities  increased  $586,000 or
15.0%. The increase resulted from an increase in average  investment in debt and
equity  securities  from  $62,583,000 in 1996 to $73,004,000 in 1997 offset by a
decrease in the average yield from 6.2% in 1996 to 6.1% in 1997.

INTEREST EXPENSE. Interest expense increased $471,000 to $5,543,000 in 1997 from
$5,072,000 in 1996.  The increase in interest  expense was caused by an increase
in  average   interest-bearing   liabilities   from   $133,073,000  in  1996  to
$144,907,000 in 1997. The cost of average interest-bearing  liabilities remained
the same at 3.8%.

                                                        1998 ANNUAL REPORT  P.12

PROVISION FOR LOAN LOSSES.  The provision for loan losses  increased  $80,000 in
1997 to $410,000.  The  allowance  for loan losses  increased to  $1,393,000  at
December 31, 1997 as compared with $1,238,000 at December 31, 1996. The increase
in the  allowance for loan losses was the result of an increase in average loans
from 1996 to 1997 of 10.1%.  The  allowance as a percentage  of loans  decreased
slightly,  being 1.01% at year end 1997 in comparison to 1.04% at year end 1996.
The allowance as a percentage of  nonperforming  loans (including loans past due
90 days or more and still  accruing)  was  142.6% at year end 1997  compared  to
460.2%  at year  end  1996.  This  decrease  primarily  results  from  one  loan
relationship becoming  nonperforming  although management believes the borrowing
relationship in question is adequately  collateralized.  The allowance  reflects
management's   evaluation  of  classified  loans,  charge-off  trends,  economic
conditions,  past due  trends,  concentrations  of credit  and  other  pertinent
factors. It also reflects input from the Bank's 1997 examination from the Office
of the Comptroller of the Currency (O.C.C.) and outside loan review consultants.

OTHER  INCOME.  Other income  increased by  $1,901,000 or 78.5% to $4,323,000 in
1997 compared to $2,422,000  in 1996.  The increase  resulted from a gain on the
sale  of  assets,  principally  the  sale  of the  Bank's  former  headquarter's
building, of $1,405,000; and mortgage banking activities totaling $1,225,000, an
increase of $413,000 or 50.9% over the previous year  resulting  from the Bank's
efforts to further  penetrate  the mortgage  market.  The Bank's  practice is to
originate and sell these mortgages in the secondary  market.  Service charges on
deposit accounts  increased  $107,000 or 15.3% to $805,000 from $698,000 in 1996
as a result of increased demand deposit  accounts.  Net gains on securities were
$106,000 in 1997 compared to $68,000 in 1996.

OTHER EXPENSES. Other expenses increased by $1,107,000 or 13.9% to $9,067,000 in
1997 from $7,960,000 in 1996. The components of this change included an increase
in salaries and  employee  benefits of $609,000 or 15.1%  reflecting  salary and
benefit increases and increased  staffing;  an increase in net occupancy expense
of $161,000 or 29.5%; and an increase in other operating expenses of $287,000 or
10.0%.  Increased  occupancy  costs  reflect  the costs of the new  headquarters
occupied  in May of  1997,  increased  rental  space in the  Bank's  residential
mortgage center and costs of opening an additional  branch office in the Village
of Southampton in November  1997.  Increased  other  operating  costs  primarily
result from increased loan processing expenses incurred by the Bank as part of a
product  promotion,  and from increased  advertising  and promotion  expenses of
approximately  $56,000 or 16.5% relative to the opening of the new  headquarters
building.

PROVISION  FOR INCOME  TAXES.  The  provision  for  income  taxes  increased  to
$2,332,000 for 1997 from  $1,555,000  for 1996.  This increase was due to income
before income taxes  increasing  from  $4,561,000 in 1996 to $6,527,000 in 1997.
The increase  reflects the growth in income before income taxes and the increase
in the effective  tax rate to 36% in 1997 from 34% in 1996.  The increase in the
effective  tax rate  resulted  from  decreased  benefits of tax exempt income in
1997.

LIQUIDITY.  The objective of liquidity  management is to ensure the availability
of sufficient resources to meet all financial commitments.  Liquidity management
addresses  the  ability  to  meet  deposit   withdrawals  either  on  demand  or
contractual  maturity,  to repay other borrowings as they mature and to make new
loans and investments as opportunities arise.

The Company's  principal  source of liquidity is dividends from the Bank. Due to
regulatory  restrictions (see note 1k to the consolidated financial statements),
dividends  from the Bank to the  Company at December  31,  1998 were  limited to
$6,034,000  which  represents  the Bank's 1998  retained  net income and the net
undivided  profits from the previous two years. The dividends  received from the
Bank are used  primarily  for  dividends to the  shareholders.  In the event the
Company  subsequently  expands its current operations,  in addition to dividends
from the Bank,  it will  need to rely on its own  earnings,  additional  capital
raised and other borrowings to meet liquidity needs.

The  Company's  most  liquid  assets are cash and cash  equivalents,  securities
available  for sale and  securities  held to maturity  due within one year.  The
levels of these assets are dependent  upon the Company's  operating,  financing,
lending and  investing  activities  during any given  period.  Other  sources of
liquidity include loan and security principal  repayments and maturities,  lines
of credit with other  financial  institutions,  the sale of securities  from the
available  for sale  portfolio,  and  growth  in the core  deposit  base.  While
scheduled loan amortization,  maturing securities and short term investments are
a relatively predictable source of funds, deposit flows and loan prepayments are
greatly   influenced  by  general  interest  rates,   economic   conditions  and
competition.  The Bank  adjusts  its  liquidity  levels as  appropriate  to meet
funding needs such as deposit outflows,  loans,  asset/liability  objectives and
suggested O.C.C.  measurements  such as loans to capital ratios. At December 31,
1998, the Company had aggregate lines of credit of $8,000,000 with correspondent
banks to provide short term credit for liquidity requirements.  The Company also
has the ability,  as a member of the Federal Home Loan Bank ("FHLB") system,  to
borrow approximately $12,171,800 in the form of an overnight line of credit, and
an additional $12,171,800 in the form of a one month line of credit. At December
31, 1998, the Company had no such borrowings outstanding.

p.13  BRIDGE BANCORP, INC. AND SUBSIDIARY

        Managements's Discussion and Analysis of Financial Condition and
                              Results of Operations
                                  (CONTINUED)

The Company's  liquidity positions are monitored daily to ensure the maintenance
of an optimum level and efficient use of available  funds.  Management  believes
the Company has sufficient liquidity to meet its operating requirements.

CAPITAL RESOURCES.  As a result of undistributed net income,  plus the change in
net unrealized  appreciation  in securities  available for sale, net of tax, and
the  issuance  of common  stock  pursuant  to the  equity  incentive  plan,  the
Company's  stockholders'  equity  increased to  $22,232,000 at December 31, 1998
from  $19,451,000  at December 31, 1997.  The ratio of  stockholders'  equity to
total assets decreased to 8.33% at year end 1998 from 8.34% at year end 1997.

The loan commitments  outstanding as of December 31, 1998 totaled  approximately
$39,719,000. The funding of such commitments is derived from the primary sources
of  liquidity  stated  previously.  See  note 9B to the  consolidated  financial
statements for a discussion of loan commitments.

The Company exceeds the risk-based capital adequacy ratio levels required by the
regulatory  agencies.  Management believes that the current capital levels along
with  future  retained  earnings  will  allow the Bank to  maintain  a  position
exceeding required levels which will be more than adequate to meet the growth of
the Bank or any higher  ratios  required by the  discretionary  authority of the
regulators.  The Company is prepared to issue additional common stock should the
need arise.

The Company had return on average equity of 19.19%, 23.08% and 18.84% and return
on average  assets of 1.51%,  1.86%,  and 1.51% for the years ended December 31,
1998,  1997 and 1996,  respectively.  Return on  average  equity  and  return on
average  assets  before  the  gain on the sale of  assets,  chiefly  the  former
headquarters, were 18.52% and 1.49%, respectively, for the year ended 1997.

IMPACT OF INFLATION AND CHANGING PRICES. The consolidated  financial  statements
and notes  thereto  presented  herein  have been  prepared  in  accordance  with
generally  accepted   accounting   principles   ("GAAP"),   which  requires  the
measurements of financial  position and operating results in historical  dollars
without  considering the changes in the relative  purchasing power of money over
time due to  inflation.  The impact of inflation  is reflected in the  increased
costs of the Company's operations.  Unlike industrial companies,  nearly all the
assets and  liabilities  of the  Company are  monetary  in nature.  As a result,
interest  rates have a greater impact on the Company's  performance  than do the
effects of general levels of inflation.  Interest rates do not necessarily  move
in the same direction or, to the same extent, as the price of goods or services.

IMPACT  OF  PROSPECTIVE  ACCOUNTING  STANDARDS.  In  June  1998,  the  Financial
Accounting  Standards Board issued Statement of Financial  Accounting  Standards
No. 133 "Accounting for Derivative  Instruments and Hedging  Activities"  ("SFAS
No. 133").  This Statement  establishes  accounting and reporting  standards for
derivative  instruments,  including certain derivative  instruments  embedded in
other  contracts,  and for  hedging  activities.  It  requires  that  an  entity
recognize all  derivatives  as either assets or  liabilities in the statement of
financial  position and measure those  instruments at fair value. The accounting
for changes in the fair value of a  derivative  depends on the intended use of a
derivative and the resulting  designation.  SFAS No. 133, which is effective for
all fiscal  quarters of fiscal years  beginning  after June 15,  1999,  will not
impact the Company's accounting or disclosures.

IMPACT OF THE YEAR 2000 ISSUE. The Bank is working diligently to assure a smooth
transition into the new millennium. To accomplish Year 2000 compliance, the Bank
has  implemented  a  project  plan  as  established  by the  banking  regulatory
authorities.  The established  timetable breaks the plan into seven phases;  the
awareness phase, inventory phase, assessment phase, renovation phase, validation
phase,  implementation phase, and post implementation  phase.  Completion of the
plan through the implementation phase is targeted for the spring of 1999.

The Bank uses software  purchased  from third party  vendors for all  processing
applications;  therefore,  no significant  internal  program  renovation by Bank
staff is necessary to prepare these systems to handle  transactions  in the Year
2000. The majority of the Bank's efforts in preparation for Year 2000 processing
relate to replacing or upgrading  noncompliant  software and hardware as well as
testing purchased and outsourced processing systems.

                                                       1998 ANNUAL REPORT  p. 14

The Bank has  established  formal  processes  for  identifying,  assessing,  and
managing the Year 2000 risks posed by internal  bank  activities,  vendors,  and
customers. By the end of the first quarter 1999, the Bank expects to complete an
initial  assessment  of the  risks  posed by its  customers.  The Bank has begun
evaluating  Year 2000  readiness of  commercial  loan  applicants as part of the
underwriting  process,  and is calling upon  significant  existing  borrowers to
assess their  readiness for Year 2000.  Seminars have been offered to the Bank's
commercial and municipal customers, and the Bank has presented these seminars to
different  community  groups to  educate  the local  public  about the Year 2000
matter and the Bank's preparedness to address the issue.

Testing of internal  systems was  substantially  completed by December 31, 1998.
Testing with  significant  third party  vendors is expected to be  substantially
completed  by June 30, 1999.  During 1999 the Bank will  continue to monitor its
own internal  activities  and the plans of its vendors and  customers to address
the Year 2000 issue.

The Bank utilizes Fiserv, Inc., one of the largest data processing providers for
banks and savings  institutions  to perform its core  systems  data  processing.
Fiserv  runs  software  from  Information  Technology  Inc.  (ITI) to  perform a
significant portion of its data processing activities.  This application,  which
handles  processing  of  loans,  deposits,  general  ledger,  accounts  payable,
stockholder ledger, fixed assets, and other ancillary applications,  is believed
to be Year 2000 ready according to the vendor. However, the Bank has embarked on
a project to thoroughly test the system for Year 2000  compliance.  If Year 2000
processing  problems are uncovered during the testing phase, ITI is committed to
correct  those  problems.  In addition,  the Bank is currently in the process of
developing   contingency  plans  with  respect  to  all  critical  services  and
operations  regardless if performed  internally or by external sources including
outside  vendors.  This plan is a  coordinated  effort with a three fold goal of
ensuring that the century date change occurs with minimal,  if any,  disruptions
of service to both the institution and its customers, minimizing any possibility
of  financial  losses,  and  ensuring  a timely  resumption  of  normal  banking
operations.

Monitoring  and managing the Year 2000 project will result in additional  direct
and indirect costs to the Bank.  Direct costs include potential charges by third
party  software  vendors for  product  enhancements,  costs  involved in testing
software  products  for  Year  2000  compliance,  and any  resulting  costs  for
developing and implementing  contingency  plans for critical  software  products
that are not enhanced.  Indirect costs will principally  consist of time devoted
by existing employees in monitoring  software vendor progress,  testing enhanced
software products and implementing any necessary  contingency plans. These costs
will be charged to earnings as incurred.

The Bank is also  currently  upgrading  equipment  in its branch and back office
systems  to  better  serve its  customers  and  improve  the  efficiency  of its
operations.  The timing of the upgrades was  accelerated as a result of the Year
2000 issue.  The total cost of the  upgrades  is  expected  to be  approximately
$332,000 of which approximately  $132,000 remains to be placed in service by the
early part of 1999.  Based on current  information,  management  does not expect
these  costs  when taken  together  with  other  Year 2000  compliance  costs to
materially  impact  the  Company's  future  results  of  operations,   financial
condition, or liquidity.

PRIVATE SECURITIES  LITIGATION REFORM ACT SAFE HARBOR STATEMENT.  In addition to
historical  information,  this Annual Report  includes  certain  forward-looking
statements based on current management  expectations.  The Bank's annual results
could differ materially from those management  expectations  contemplated by the
forward-looking statements. Factors that could cause future results to vary from
current  management  expectations  include,  but are  not  limited  to,  general
economic  conditions,  legislative and regulatory  changes,  monetary and fiscal
policies  of  the  federal  government,  changes  in  tax  policies,  rates  and
regulations  of federal,  state and local tax  authorities,  changes in interest
rates,  deposit flows, the cost of funds,  demand for loan products,  demand for
financial services,  competition,  changes in the quality and composition of the
Bank's  loan  and  investment  portfolios,  changes  in  accounting  principles,
policies  or  guidelines,  and other  economic,  competitive,  governmental  and
technological  factors  affecting  the  Bank's  operations,  markets,  products,
services  and  prices.  In  addition,   the  Bank  assumes  no  duty  to  update
forward-looking statements.

p. 15  BRIDGE BANCORP, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CONDITION
               (In thousands, except share and per share amounts)

December 31,                                                      1998             1997
- ---------------------------------------------------------------------------------------
                                                                         
ASSETS
Cash and due from banks                                       $ 10,881         $ 12,740
Interest earning deposits with banks                               251               89
Federal funds sold                                               3,150             --
                                                              -------------------------
       Total cash and cash equivalents                          14,282           12,829
Investment in debt and equity securities, net:
   Securities available for sale, at fair value                 69,443           60,190
   Securities held to maturity (fair value of $5,067
   and $11,823 respectively)                                     5,052           11,812
                                                              -------------------------
       Total investment in debt and equity securities, net      74,495           72,002
Loans                                                          168,696          138,636
Less:
  Allowance for loan losses                                     (1,713)          (1,393)
                                                              -------------------------
       Loans, net                                              166,983          137,243
Banking premises and equipment, net                              8,583            8,728
Accrued interest receivable                                      1,525            1,460
Other assets                                                     1,083              850
                                                              -------------------------
TOTAL ASSETS                                                  $266,951         $233,112
                                                              =========================

LIABILITIES AND STOCKHOLDERS' EQUITY
Demand deposits                                               $ 74,457         $ 63,629
Savings, NOW, and money market deposits                        103,016           76,740
Certificates of deposit of $100,000 or more                     21,177           20,872
Other time deposits                                             42,881           42,456
                                                              -------------------------
        Total deposits                                         241,531          203,697
Overnight borrowings                                              --              6,500
Accrued interest on depositors' accounts                         1,439            1,244
Deferred income taxes                                               91               94
Other liabilities and accrued expenses                           1,658            2,126
                                                              -------------------------
        Total Liabilities                                      244,719          213,661
                                                              -------------------------
Stockholders' equity:
  Common stock, par value $5.00 per share:
   Authorized: 6,500,000 shares; issued and outstanding
   4,234,797 shares at 12/31/98 and 4,223,997 at 12/31/97       21,660            7,202
  Surplus                                                           51              607
  Undivided profits                                                180           11,509
 Less:  Treasury Stock at cost, 97,200 shares                     (621)            (621)
                                                              -------------------------
                                                                21,270           18,697
  Accumulated other comprehensive income, net of taxes             962              754
                                                              -------------------------
        Total Stockholders' Equity                              22,232           19,451
  Commitments and contingencies (Note 9)
                                                              -------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    $266,951         $233,112
                                                              =========================

See accompanying notes to the consolidated financial statements.

                                                        1998 ANNUAL REPORT  p.16

                       CONSOLIDATED STATEMENTS OF INCOME
               (In thousands, except share and per share amounts)

Year ended December 31,                                 1998        1997        1996
- ------------------------------------------------------------------------------------
                                                                    
Interest income:
  Loans (including fee income)                       $14,461     $12,400     $11,261
  Mortgage-backed securities                           2,030       2,003       1,657
  Obligations of NY State & political subdivisions     1,177       1,115         907
  U.S. Treasury and government agency securities         916       1,295       1,286
  Federal funds sold                                     202         267         243
  Other                                                  233         144         147
                                                     -------------------------------
    Total interest income                             19,019      17,224      15,501
                                                     -------------------------------
Interest expense:
  Savings, N.O.W. and money market deposits            2,095       1,632       1,598
  Certificates of deposit of $100,000 or more          1,574       1,560       1,000
  Other time deposits                                  2,242       2,230       2,410
  Other borrowings                                        67         121          64
                                                     -------------------------------
    Total interest expense                             5,978       5,543       5,072
                                                     -------------------------------
Net interest income                                   13,041      11,681      10,429
Provision for loan losses                                425         410         330
                                                     -------------------------------
Net interest income after provision for
   loan losses                                        12,616      11,271      10,099
                                                     -------------------------------
Other income:
  Mortgage banking activities                          1,306       1,225         812
  Service charges on deposit accounts                    839         805         698
  Gain on sale of building                               --         1,405        --
  Net securities gains                                    47         106          68
  Other operating income                                 813         782         844
                                                     -------------------------------
    Total other income                                 3,005       4,323       2,422
                                                     -------------------------------
Other expenses:
  Salaries and employee benefits                       4,801       4,626       4,017
  Net occupancy expense                                  737         707         546
  Furniture and fixture expense                          698         576         526
  Other operating expenses                             3,401       3,158       2,871
                                                     -------------------------------
    Total other expenses                               9,637       9,067       7,960
                                                     -------------------------------
Income before provision for income taxes               5,984       6,527       4,561
Provision for income taxes                             2,089       2,332       1,555
                                                     -------------------------------
Net income                                           $ 3,895     $ 4,195     $ 3,006
                                                     ===============================
Basic earnings per share                             $  0.92     $  0.99     $  0.70
                                                     ===============================
Diluted earnings per share                           $  0.91     $  0.99     $  --
                                                     ===============================

See accompanying notes to the consolidated  financial statements.  All per share
amounts have been adjusted to reflect the effects of the split.

p.17  BRIDGE BANCORP, INC. AND SUBSIDIARY

                Consolidated Statements of Stockholders' Equity
                    (In thousands, except per share amounts)

                                                                                                               Accumulated 
                                                                                                                  Other
                                                      Common Stock          Comprehensive Undivided  Treasury Comprehensive
                                                     Shares   Amount Surplus       Income   profits     Stock     Income      Total
                                                   --------------------------------------------------------------------------------
                                                                                                    
Balance at December 31, 1995                        480,000  $ 2,400    $600       $  --    $12,068     $ --        $352    $15,420
Net income                                               --       --      --        3,006     3,006       --         --       3,006
Cash dividends declared, $.23 per share                                                        (987)                           (987)
Net change in unrealized appreciation in
 securities available for sale, net of tax           --       --      --          108        --       --         108        108
                                                                                   ------
Purchase of 10,800 shares to be held
 in treasury, at cost                               (10,800)      --      --                             (621)                 (621)
Comprehensive Income                                     --       --      --       $3,114        --       --         --
                                                  ---------------------------------======------------------------------------------
Balance at December 31, 1996                        469,200    2,400     600                 14,087      (621)       460     16,926
                                                  ---------------------------------       -----------------------------------------
Net income                                               --       --      --       $4,195     4,195       --                  4,195
Issuance of restricted common stock                     133        1       7                                                      8
Effect of stock split (in the form of a
 stock dividend)                                    938,666    4,801      --                 (4,801)                             --
Cash dividends declared, $.47 per share                                                      (1,972)                         (1,972)
Net change in unrealized appreciation in
 securities available for sale, net of tax           --       --      --          294        --       --         294        294
                                                                                   ------
Comprehensive Income                                     --       --      --       $4,489        --       --         --
                                                  ---------------------------------======------------------------------------------
Balance at December 31, 1997                      1,407,999    7,202     607                 11,509      (621)       754     19,451
                                                  =================================      ==========================================
Net income                                               --       --      --       $3,895     3,895       --         --       3,895
Exercise of stock options                             3,600       18     142                                                    160
Effect of stock split (in the form of a
 stock dividend)                                  2,823,198   14,440    (698)               (13,742)                             --
Cash dividends declared, $.35 per share                                                      (1,482)                         (1,482)
Net change in unrealized appreciation in
 securities available for sale, net of tax           --       --      --          208        --       --         208        208
                                                                                   ------
Comprehensive Income                                     --       --      --       $4,103        --       --         --
                                                  ---------------------------------======------------------------------------------
Balance at December 31, 1998                      4,234,797  $21,660    $ 51                $    180    $(621)      $962    $22,232
                                                  =================================      ==========================================

Disclosure of reclassification amount:
December 31,                                       1998      1997     1996
- --------------------------------------------------------------------------
Comprehensive Income Items
Unrealized gain arising during the period          $236      $356     $148
  Less: reclassification adjustments for 
  gains included in income                          (28)      (62)     (40)
                                                   -----------------------
Net unrealized appreciation                        $208      $294     $108

See accompanying notes to the consolidated financial statements.

                                                       1998 ANNUAL REPORT  p. 18

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

Twelve months ended December 31,                                        1998        1997        1996
- ----------------------------------------------------------------------------------------------------
                                                                                   
Operating activities:
  Net Income                                                        $  3,895    $  4,195    $  3,006
  Adjustments to reconcile net income to net cash provided by
    operating activities:
      Provision for loan losses                                          425         410         330
      Depreciation and amortization                                      698         564         415
      Accretion of discounts                                             (85)        (64)        (96)
      Amortization of premiums                                           143         126         329
      Gain on sale of assets                                              (1)     (1,405)         --
      Gain on sale of other real estate owned                             --          --          (4)
      Net securities gains                                               (47)       (106)        (68)
      (Increase) Decrease in accrued interest receivable                 (65)       (117)        181
       Benefit for deferred income taxes                                (144)        (60)        (56)
      (Increase) Decrease in other assets                               (233)        348         235
      Increase (Decrease) in accrued and other liabilities               289        (411)        183
                                                                    --------------------------------
Net cash provided by operating activities                              4,875       3,480       4,455
                                                                    --------------------------------
Investing activities:
  Purchases of securities available for sale                         (21,955)    (32,464)    (58,901)
  Purchases of securities held to maturity                            (3,969)    (10,729)     (5,599)
  Proceeds from sales of securities available for sale                 2,052      24,239      38,473
  Proceeds from maturing securities available for sale                 2,870       2,060       8,810
  Proceeds from maturing securities held to maturity                  10,729       5,179       5,761
  Proceeds from principal payments on mortgage-backed securities       8,118       4,297       6,544
  Proceeds from sale of building                                        --         1,554        --
  Net increase in loans                                              (30,165)    (20,010)     (7,531)
  Proceeds from sale of other real estate owned                         --          --           239
  Purchases of banking premises and equipment, net of retirements       (553)     (2,668)     (3,413)
                                                                    --------------------------------
Net cash used by investing activities                                (32,873)    (28,542)    (15,617)
                                                                    --------------------------------
Financing activities:
  Net increase in deposits                                            37,834      18,850      18,703
  (Decrease) Increase in other borrowings                             (6,500)      6,500          --
  Payment for purchase of treasury stock                                  --          --        (621)
  Net proceeds from issuance of restricted common stock
         issued pursuant to equity incentive plan                         --           8          --
  Net proceeds from exercise of stock options
         issued pursuant to equity incentive plan                        160          --          --
  Cash dividends paid                                                 (2,043)     (1,032)       (835)
                                                                    --------------------------------
Net cash provided by financing activities                             29,451      24,326      17,247
                                                                    --------------------------------
Increase (Decrease) in cash and cash equivalents                       1,453        (736)      6,085
Cash and cash equivalents beginning of period                         12,829      13,565       7,480
                                                                    --------------------------------
Cash and cash equivalents end of period                             $ 14,282    $ 12,829    $ 13,565
                                                                    ================================
Supplemental information-Cash Flows:
  Cash paid for:
    Interest                                                        $  5,782    $  5,835    $  5,016
    Income taxes                                                    $  2,149    $  2,493    $  1,474
 Noncash investing and financing activities:
     Dividends declared and unpaid                                  $  1,059    $  1,620    $    680

See accompanying notes to the consolidated financial statements.

p. 19  BRIDGE BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1998, 1997 and 1996

1. Summary of Significant Accounting Policies

Bridge  Bancorp,  Inc.  (the Company) is chartered by the State of New York as a
one bank holding  company.  The  Company's  business  currently  consists of the
operations of its wholly-owned subsidiary,  The Bridgehampton National Bank (the
Bank).  The accounting  and reporting  policies of the Bank conform to generally
accepted  accounting  principles and to general  practices  within the financial
institution  industry.  The following is a description  of the more  significant
accounting  policies  that the Company  follows in  preparing  its  consolidated
financial statements.

a) Basis of Financial Statement Presentation
The accompanying  consolidated  financial statements are prepared on the accrual
basis of accounting and include the accounts of the Company and its wholly-owned
subsidiary,  the Bank. All material intercompany  transactions and balances have
been eliminated.

In preparing the consolidated  financial  statements,  management is required to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities as of the date of each  consolidated  statement of condition and the
related consolidated statement of income for the year then ended. Actual results
could differ from those estimates.

Certain reclassifications have been made to prior year amounts to conform to the
current year presentation.

b) Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents  include cash on
hand, amounts due from banks and federal funds sold which mature overnight.

c) Investment in Debt and Equity Securities 
The Company has adopted  Statement of Financial  Accounting  Standard (SFAS) No.
115 "Accounting for Certain  investments in Debt and Equity  Securities".  Under
SFAS No. 115,  the Company is required to report  readily-marketable  equity and
debt  securities  in one of the  following  categories:  (i)  "held-to-maturity"
(management  has a positive intent and ability to hold to maturity) which are to
be reported at amortized  cost;  (ii) "trading"  (held for current resale) which
are to be reported at fair value,  with unrealized  gains and losses included in
earnings;  and (iii) "available for sale" (all other debt and marketable  equity
securities)  which are to be reported at fair value,  with unrealized  gains and
losses excluded from earnings and reported,  net of tax, as a separate component
of stockholder's equity.

Included in investment securities are mortgage-backed  securities that represent
participating  interests in pools of long term  mortgage  loans  originated  and
serviced by the issuers of the  securities and real estate  mortgage  investment
conduit (REMIC)  certificates which represent  beneficial interests in a pool of
mortgage-backed securities held in a trust. These securities are carried at fair
value.

Premiums and discounts on investment in debt and equity securities are amortized
to expense  and  accreted to income over the  estimated  life of the  respective
securities using a method which  approximates the level yield method.  Gains and
losses on the sales of securities are recognized upon  realization  based on the
specific identification method.

d) Loans and Loan Interest Income Recognition
Loans are  stated at the  principal  amount  outstanding,  interest  on loans is
credited to income based on the principal  outstanding during the period.  Loans
that are 90 days past due are placed on a nonaccrual  basis.  Exceptions to this
policy are loans that are fully and adequately secured and are in the process of
collection.

Mortgage  loans  held for sale are  carried  at the  lower of cost or  estimated
market value,  determined on an aggregate  basis.  Mortgage  loans are primarily
sold with the servicing released. Any retained servicing rights are packaged and
sold  periodically.  Retained  servicing  rights at year end were immaterial and
therefore are not reflected in the Bank's financial statements.

All of the Bank's  nonaccruing loans are considered  impaired under SFAS No. 114
"Accounting by Creditors for Impairmenet of a Loan." In accordance with SFAS No.
114, a valuation  allowance  is  established  on  impaired  loans to reflect the
difference,  if any,  between  face amount of the loan and the present  value of
expected future cash flow discounted at the loan's  effective  interest rate, or
as a practical  expedient,  at the loan's  observable  market  price or the fair
value of the collateral.

During 1998, the Bank began deferring non refundable loan  origination  fees and
amortizing  these fees as yield  adjustments over the life of the related loans.
In prior  years loan  origination  costs and  commitment  fees were  recorded as
income when received.  The effect of this change in accounting treatment reduced
income before provision for income taxes, by  approximately  $284,000 and is not
considered material. Direct loan origination costs are expensed as incurred.

e) Allowance for Loan Losses
The  adequacy  of  the  allowance  for  loan  losses  is  determined   based  on
management's  detailed  analysis  of  classified  loans,  past loss  experience,
current economic  conditions,  delinquency  trends and other pertinent  factors.
Additions to the  allowance are charged to expense and realized  losses,  net of
recoveries, are charged to the allowance.

Management  believes  that the  allowance  for loan  losses is  adequate.  While
management  uses  available  information  to recognize  losses on loans,  future
additions to the allowance may be necessary  based on changes in conditions.  In
addition,  various regulatory  agencies,  as an integral part of the examination
process, periodically review the Bank's allowance for loan losses. Such agencies
may require the Bank to  recognize  additions  to the  allowance  based on their
judgments about information available to them at the time of their examination.

f) Banking Premises and Equipment
Banking premises and equipment are stated at cost less accumulated  depreciation
and amortization.  Depreciation on banking premises and equipment is computed on
the straight-line method over the estimated useful lives of the assets (50 years
for  buildings  and  2 to  10  years  for  furniture  and  fixtures).  Leasehold
improvements  are  amortized  on a  straight-line  method  over the terms of the
related leases.

g) Other Real Estate Owned
Other real estate owned consists of real estate  acquired by foreclosure or deed
in lieu of foreclosure and is recorded at the lower of the net unpaid  principal
balance at the foreclosure date plus acquisition costs or fair value. Subsequent
valuation  adjustments  are made if fair value less estimated  costs to sell the
property falls below the carrying amount.

                                                        1998 ANNUAL REPORT  p.20

h) Income Taxes
The Company follows SFAS No. 109 which requires an asset and liability  approach
for accounting for income taxes. The asset and liability  approach  requires the
recognition of deferred tax assets and  liabilities  for the expected future tax
consequences of temporary  differences  between the carrying amounts and the tax
bases of assets and  liabilities.  Under SFAS No.  109  deferred  tax assets are
recognized if it is more likely than not that a future benefit will be realized.
It  is  management's   position,   as  currently  supported  by  the  facts  and
circumstances,  that no  valuation  allowance  is  necessary  against any of the
Company's deferred tax assets.

i) Treasury Stock
Repurchases of common stock are recorded as treasury stock at cost.

j) Earnings Per Share
Earnings per share is computed by dividing  net income by the  weighted  average
number  of  shares  of  common  stock  and  dilutive  common  stock  equivalents
outstanding.  For the year  ended  December  31,  1998,  1997 and 1996,  diluted
weighted average common stock and common stock equivalent shares outstanding for
the  diluted  earnings  per  share  were  4,270,991,  4,234,866  and  4,264,497,
respectively.  For the year ended  December 31, 1998,  1997 and 1996,  the total
weighted  average  number of shares of common  stock  outstanding  for the basic
earnings  per  share  calculation  were  4,229,307,   4,223,703  and  4,264,497,
respectively.

k) Dividends
Cash available for dividend  distribution  to  shareholders  of the Company must
initially come from  dividends paid by the Bank to the Company.  The approval of
the  Regional  Administrator  of National  Banks is required if the total of all
dividends  declared by the Bank in any  calendar  year  exceeds the total of the
Bank's  net income of that year  combined  with its  retained  net income of the
preceding  two years.  The Bank had  approximately  $6,034,000  available  as of
December 31, 1998 which may be paid to the Company as a dividend.

l) Stock Splits
On July 20, 1998, the Board of Directors declared a three-for-one stock split in
the form of a stock dividend  payable August 31, 1998 to  stockholders of record
as of August 19, 1998. The stock split increased  outstanding common shares from
1,411,599 to  4,234,797.  On April 15, 1997,  the Board of Directors  declared a
three-for-one  stock split in the form of a stock dividend  payable May 30, 1997
to  stockholders  of  record  as of May  1,  1997.  The  stock  split  increased
outstanding  common shares from 469,333 to 1,407,999.  Stockholders'  equity has
been  reclassified to give  retroactive  recognition to the stock splits for all
periods presented by reclassifying from undivided profits and capital surplus to
common stock the par value of additional shares resulting from the stock splits.
In addition,  all references in the Consolidated  Financial Statements and Notes
thereto to number of shares,  per share  amounts,  stock  option data and market
prices of the common stock have been restated giving retroactive  recognition to
the stock splits.

m) Stock Based Compensation Plans
SFAS No. 123 "Accounting for Stock-Based Compensation," encourages, but does not
require companies to record compensation cost for stock-based compensation plans
at fair value.  The Company  continues  to account for stock based  compensation
using the intrinsic value method prescribed in Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees" .

n) Report of Independent Public Accountants
The notes to the consolidated  financial statements include selected information
as of December 31,  1996,  1995,  and 1994 and for the years ended  December 31,
1996 and 1995.  Such  information  is not  covered by the Report of  Independent
Public Accountants.

IMPACT OF NEW  ACCOUNTING  STANDARDS.  In June 1996,  the  Financial  Accounting
Standards  Board  (FASB)  issued  SFAS No. 125  "Accounting  for  Transfers  and
Servicing of Financial Assets and Extinguishment of Liabilities". This statement
is effective for transfers and servicing of financial assets and  extinguishment
of liabilities occurring after December 31, 1996.

In March 1997, the FASB issued SFAS No. 128 "Earnings per Share," superseding
APB Opinion No. 15.  The main goal of the Statement is to harmonize the
earnings per share calculation in the United States with those common in other
countries and with International Accounting Standard No. 33.

In March 1997, the FASB issued SFAS No. 129,  "Disclosures of Information  about
Capital Structure." SFAS No. 129 continues the existing requirements to disclose
the pertinent  rights and privileges of all  securities  other than the ordinary
common  stock but  expands  the number of  companies  subject to portions of its
requirements.

SFAS Nos.  125, 128 and 129 were adopted in 1997 without any material  effect on
the Company's financial statements.

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No.  130
"Reporting  Comprehensive  Income" in 1998. All comparative financial statements
provided for earlier periods have been  reclassified  to reflect  application of
the provisions of this Statement.

Comprehensive  income includes net income and all other changes in equity during
a period except those resulting from investments by owners and  distributions to
owners. Other comprehensive income includes revenues, expenses, gains and losses
that  under   generally   accepted   accounting   principles   are  included  in
comprehensive income but excluded from net income.

Comprehensive income and accumulated other comprehensive income are reported net
of related income taxes.  Accumulated other comprehensive income for the Company
consists  solely of  unrealized  holding  gains or losses on available  for sale
securities.  Such gains or losses are net of  reclassification  adjustments  for
realized gains (losses) on sales of available for sale securities.

In July 1997,  the FASB issued SFAS No. 131  "Disclosures  About  Segments of an
Enterprise and Related Information."  Statement No. 131 requires disclosures for
each  segment  that are  similar  to those  required  under  standards  with the
addition  of  quarterly  disclosure  requirements  and a finer  partitioning  of
geographic  disclosures.  The Statement is effective for fiscal years  beginning
after December 15, 1997 with earlier application permitted.

In February 1998,  the FASB issued SFAS No. 132  "Employers'  Disclosures  about
Pensions  and  Other  Post-Retirement  Benefits."  This  statement  revises  the
previously  required  disclosures  related  to  employers'  pensions  and  other
post-retirement benefits, but does

p. 21 BRIDGE BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1998, 1997 and 1996
                                  (CONTINUED)

not  change  the  measurement  or  recognition  of those  plans.  The prior year
disclosures  related to employee  benefit  plans have been revised to conform to
the new format required by SFAS No. 132.

In  management's  opinion,  the  adoption of SFAS No. 131 and 132 did not have a
material effect on the Company's financial statements.

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards NO. 133 "Accounting for Derivative  Instruments
and Hedging  Activities" (SFAS No. 133). This Statement  established  accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measures  those  instruments at fair value.
The  accounting  for  changes in the fair value of a  derivative  depends on the
intended use of a derivative an the resulting  designation.  SFAS No. 133, which
is effective for all fiscal  quarters of fiscal years  beginning  after June 15,
1999, will not effect the company's accounting or disclosures.

2. Investment in Debt and Equity Securities

A summary of the amortized cost, gross unrealized gains, gross unrealized losses
and estimated fair value of investment securities is as follows:

December 31,                                                   1998                           1997                              1996
- ------------------------------------------------------------------------------------------------------------------------------------
                                             Gross   Gross    Esti-           Gross   Gross  Esti-            Gross   Gross    Esti-
                                     Amor- Unreal- Unreal-    mated   Amor- Unreal- Unreal-  mated    Amor- Unreal- Unreal-    mated
                                     tized    ized    ized     Fair   tized    ized    ized   Fair    tized    ized    ized     Fair
(In thousands)                        Cost   Gains  Losses    Value    Cost   Gains  Losses  Value     Cost   Gains  Losses    Value
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Available for sale:
  U.S. Treasury securities         $12,065 $   484      --  $12,549 $14,084 $   325     -  $14,409  $16,102   $ 244     --   $16,346
  Oblig. of U.S. Government
    agencies                            --      --      --       --      --      --     -       --    1,985      24     --   $ 2,009
  Oblig. of NY State & pol.subs     21,395     627      --   22,022  18,636     427     -   19,063   15,567     303     --    15,870
  Mortgage-backed securities        34,354     533     (15)  34,902  26,190     528     -   26,718   23,344     218     (8)   23,570
                                   -------------------------------------------------------------------------------------------------
    Total available for sale       $67,814 $ 1,644     (15) $69,473 $58,910 $ 1,280     -  $60,190  $56,998   $ 789     (8)  $57,795
                                   -------------------------------------------------------------------------------------------------
Held to maturity:
  Oblig. of NY State & pol.subs    $ 3,969 $    15      --  $ 3,984 $10,729 $    11     -  $10,740  $ 5,179   $  11     --   $ 5,190
Non marketable Equity securities:
  Federal Reserve Bank Stock       $    36      --      --  $    36 $    36      --     -  $    36  $    36      --     --   $    36
  Federal Home Loan Bank Stock       1,047      --      --    1,047   1,047      --     -    1,047    1,047      --     --     1,047
                                   -------------------------------------------------------------------------------------------------
    Total held to maturity         $ 5,052 $    15      --  $ 5,067 $11,812 $    11     -  $11,823  $ 6,262   $  11     --   $ 6,273
                                   -------------------------------------------------------------------------------------------------
Total debt and equity securities   $72,866 $ 1,659    $(15) $74,540 $70,722 $ 1,291     -  $72,013  $63,260   $ 800    $(8)  $64,068
                                   =================================================================================================

The  following  table sets forth the book  value,  maturities  and  approximated
weighted  average  yield (based on the estimated  annual  income  divided by the
average book value) at December  31,1998.  Expected  maturities will differ from
contractual  maturities  because  borrowers may have the right to call or prepay
obligations with or without call or prepayment  penalties.  Yields on tax-exempt
obligations have not been computed on a tax-equivalent basis.

                                                                        Principal Maturing
                                     -----------------------------------------------------------------------------------------------
                                              Within      After One But     After Five But           After        No Stated
                                            One Year  Within Five Years   Within Ten Years       Ten Years         Maturity
                                     -----------------------------------------------------------------------------------------------
(In thousands)                       Amount    Yield    Amount    Yield   Amount     Yield    Amount Yield   Amount   Yield    Total
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                            
Available for sale:
U.S.Treasury securities                  --       --   $12,066     6.50%      --        --        --    --       --      --  $12,066
Mortgage-backed securities               --       --        --       --  $ 5,813      7.13%  $28,540  6.57%      --      --   34,353
Oblig.of state and pol.subs          $  126     5.17%   10,914     4.68%  10,355      4.32%       --    --       --      --   21,395
                                     -----------------------------------------------------------------------------------------------
Total available for sale                126     5.17%   22,980     5.64%  16,168      5.33%   28,540  6.57%      --      --   67,814
                                     -----------------------------------------------------------------------------------------------
Held to maturity:
Oblig.of state and pol.subs           3,969     3.63%       --       --       --        --        --    --       --      --    3,969
                                     -----------------------------------------------------------------------------------------------
                                      3,969     3.63%       --       --       --        --        --    --       --      --    3,969
Non marketable equity securities:
Federal Reserve Bank Stock               --       --        --       --       --        --        --    --       36    6.00%      36
Federal Home Loan Bank Stock             --       --        --       --       --        --        --    --    1,047    7.25%   1,047
                                     -----------------------------------------------------------------------------------------------
Total non marketable equity
  securities                             --       --        --       --       --        --        --    --    1,083    7.21%   1,083
                                     -----------------------------------------------------------------------------------------------
Total held to maturity                3,969     3.63%       --       --       --        --        --    --    1,083    7.21%   5,052
                                     -----------------------------------------------------------------------------------------------
Total debt and equity
  securities                         $4,095     3.68%  $22,980     5.64% $16,168      5.33%  $28,540  6.57%$  1,083    7.21% $72,866
                                     ===============================================================================================

                                                       1998 ANNUAL REPORT  p. 22

Proceeds  from  sales  of  available  for  sale  securities  were  approximately
$2,052,000,  $24,239,000 and  $38,473,000 in 1998, 1997 and 1996,  respectively.
Gross gains of  approximately  $47,000,  $114,000 and $257,000  were realized on
sales of available for sale securities during 1998, 1997 and 1996, respectively.
During 1998 there were no gross losses recognized on sales of available for sale
securities.  Gross losses of approximately  $8,000 and $189,000 were realized on
sales of available for sale securities during 1997 and 1996, respectively. There
were no sales of held to maturity securities during 1998, 1997 and 1996.

Investment securities having an amortized cost of approximately  $50,125,000 and
$62,429,000 at December 31, 1998 and 1997, respectively,  were pledged to secure
public deposits.

Investments  in debt and equity  securities  which  exceed 10% of  stockholders'
equity  for any one  issuer  (other  than  U.S.  Government  securities)  are as
follows:

December 31,                                                 1998
- -----------------------------------------------------------------
                                        Amortized       Estimated
(In thousands)                               Cost      Fair Value
- -----------------------------------------------------------------
                                                     
Springs Union Free School District         $2,400          $2,409
- -----------------------------------------------------------------

3. LOANS

The following table sets forth the major classifications of loans:

                                             1998         1997         1996         1995         1994
- -----------------------------------------------------------------------------------------------------
(In thousands)
                                                                             
Real estate loans                       $ 141,625    $ 114,357    $  93,639    $  81,394    $  67,291
Unsecured business and personal loans      23,639       17,638       13,211       11,798       10,094
Secured business and personal loans         2,534          725          317          654          973
Installment/consumer loans                  1,182        5,916       11,714       17,634       15,773
                                        -------------------------------------------------------------
Total Loans                             $ 168,980    $ 138,636    $ 118,881    $ 111,480    $  94,131
Unearned Income                              (284)          --           --           --           --
                                        -------------------------------------------------------------
                                        $ 168,696    $ 138,636    $ 118,881    $ 111,480    $  94,131
Allowance For Loan Losses                  (1,713)      (1,393)      (1,238)      (1,038)        (944)
                                        -------------------------------------------------------------
Net Loans                               $ 166,983    $ 137,243    $ 117,643    $ 110,442    $  93,187
                                        =============================================================

LENDING  RISK.  The  principal  business  of the Bank is lending,  primarily  in
commercial real estate loans,  construction  loan mortgages,  home equity loans,
land loans,  consumer loans,  home advantage  loans,  residential  mortgages and
commercial  loans.  The Bank considers its primary lending area as the five East
End towns of Suffolk  County,  New York.  Since the primary  lending area of the
Bank is the two forks of the eastern end of Long Island, the loan portfolio as a
whole is dependant on the economic conditions of the geographic market served by
the Bank.

ALLOWANCE FOR LOAN LOSSES.  Management uses criteria set forth by the OCC in its
classification  and  review  of the loan  portfolio  which  includes  a  general
allocation  reserve  for each loan type.  Reserves  are  reviewed on a quarterly
basis to determine if any  adjustments are necessary.  The information  reviewed
includes  past  due  trends,   charge-off   trends,   economic   conditions  and
concentrations  of credit.  The  provisions  for loan losses in 1998 was used to
bring the allowance for loan losses to an adequate  reserve level to support the
Bank's asset  quality as well as to reflect the  increase in loan growth  during
the year. Based on the loan classification  committee's review of the classified
loans  and the  overall  reserve  levels  as they  relates  to the  entire  loan
portfolio,  management  believes  the  allowance  for loan  losses is  adequate.
However,  future additions to the allowance may be necessary based on changes in
conditions.

p.23  BRIDGE BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1998, 1997 and 1996
                                  (CONTINUED)

   The  following  table sets forth  changes in the  allowance for possible loan
losses.

December 31,                               1998      1997      1996      1995      1994
- ---------------------------------------------------------------------------------------
(In thousands)
                                                                  
Allowance for loan losses
  balance at beginning of period         $1,393    $1,238    $1,038    $  944    $  747
Charge-offs:
Real estate loans                            --        --        --         2        26
Unsecured business & personal loans          31        87        11        64        27
Installment/consumer loans                  165       229       264       164       123
                                         ----------------------------------------------
   Total                                    196       316       275       230       176
Recoveries:
Real estate loans                            --        --        --         1        --
Unsecured business & personal loans          32         6        79        23        12
Installment/consumer loans                   59        55        66        32        28
                                         ----------------------------------------------
   Total                                     91        61       145        56        40
                                         ----------------------------------------------
Net charge-offs                             105       255       130       174       136
Provision for loan losses
 charged to operations                      425       410       330       268       333
                                         ----------------------------------------------
Balance at end of period                 $1,713    $1,393    $1,238    $1,038    $  944
                                         ==============================================
Ratio of net charge-offs during period
  to average loans outstanding             0.07%     0.20%     0.11%     0.16%     0.17%
                                         ==============================================

ALLOCATION  OF ALLOWANCE  FOR LOAN LOSSES.  The  following  table sets forth the
allocation of the total allowance for loan losses by loan type.

Year Ended December 31,                             1998              1997              1996              1995              1994
- --------------------------------------------------------------------------------------------------------------------------------
(In thousands, except for percentages)        Percentage        Percentage        Percentage        Percentage        Percentage
                                                of Loans          of Loans          of Loans          of Loans          of Loans
                                                to Total          to Total          to Total          to Total          to Total
                                        Amount     Loans  Amount     Loans  Amount     Loans  Amount     Loans  Amount     Loans
                                        ----------------------------------------------------------------------------------------
                                                                                              
Real estate loans                       $1,122      83.8% $  868      82.5% $  685      78.8% $  576      73.0% $  517      71.5%
Unsecured business and personal loans       38      14.0%    336      12.7%    301      11.1%    179      10.6%    165      10.7%
Secured business and personal loans        507       1.5%      1       0.5%      1       0.3%      1       0.6%      5       1.0%
Installment/consumer loans                  46       0.7%    188       4.3%    251       9.8%    282      15.8%    257      16.8%
                                        ----------------------------------------------------------------------------------------
     Total                              $1,713     100.0% $1,393     100.0% $1,238     100.0% $1,038     100.0% $  944     100.0%
                                        ========================================================================================

SELECTED  LOAN  MATURITY  INFORMATION.   The  following  table  sets  forth  the
approximate  maturities and  sensitivity to changes in interest rates of certain
loans,  exclusive of non-commercial  real estate mortgages and consumer loans to
individuals as of December 31, 1998.

                                                 After One
                                    Within One  But Within        After
                                          Year  Five Years   Five Years    Total
- --------------------------------------------------------------------------------
(In thousands)
                                                             
Commercial loans                       $ 1,456     $ 2,064      $69,346  $72,866
Construction loans                      17,058       4,353        4,877   26,288
                                       -----------------------------------------
      Total loans                      $18,514     $ 6,417      $74,223  $99,154
                                       =========================================
Rate provisions:

Amounts with fixed interest rates      $   229     $   290      $ 6,546  $ 7,065
Amounts with variable interest rates    18,285       6,127       67,677   92,089
                                       -----------------------------------------
Total                                  $18,514     $ 6,417      $74,223  $99,154
                                       =========================================

                                                        1998 ANNUAL REPORT  p.24

PAST DUE,  NONACCRUAL AND  RESTRUCTURED  LOANS.  The following  table sets forth
selected information about past due, nonaccrual and restructured loans.

December 31,                                            1998     1997     1996     1995     1994
- ------------------------------------------------------------------------------------------------
(In thousands)
                                                                           
Loans 90 days or more past due
  and still accruing                                  $    4   $    1   $    1       --       --
Nonaccrual loans                                       1,208      975      269   $  507   $  422
Restructured loans                                        --       --       --       --       --
Other real estate owned, net                              --       --       --      235      782
                                                      ------------------------------------------
Total                                                 $1,212   $  976   $  270   $  742   $1,204
                                                      ==========================================
Year Ended December 31,
Gross  interest income that would have been 
 recorded  during the year under
 original terms:
Nonaccrual loans                                      $  128   $  163   $   50   $   58   $   19
Restructured loans                                        --       --       --       --       --
Gross interest income recorded during the year:
Nonaccrual loans                                      $   37   $  151   $   42   $   12   $   22
Restructured loans                                        --       --       --       --       --
Commitments for additional funds                          --       --       --       --       --

As of December 31, 1998,  the Bank did not have any impaired loans as defined in
SFAS No. 114 except for the  restructured  and nonaccrual  loans noted above. No
valuation  allowance  has been  recorded.  The average  recorded  investment  in
impaired loans for the years ended December 31, 1998 and 1997 was  approximately
$1,101,000 in each year.

RELATED PARTY LOANS.  Certain  directors and related  parties,  including  their
immediate  families and companies in which they are principal owners,  were loan
customers  of the Bank during 1998,  1997 and 1996.  Such loans were made in the
ordinary course of business on substantially the same terms,  including interest
rate and security,  as those prevailing at the time for comparable  transactions
with other persons,  and do not represent more than normal risk of collection or
present other  unfavorable  features.  The  aggregate  amount of these loans was
approximately  $201,000,  $256,000,  and $192,000 at December 31, 1998, 1997 and
1996, respectively.  During 1998, $70,000 of new loans to such persons were made
and repayments  totaled  $125,000.  There were no loans to directors  which were
nonaccruing at December 31, 1998, 1997 or 1996.

4. DEPOSITS

The following  table sets forth major  classifications  of average  deposits and
average rates paid on these deposits for the periods indicated.

Year Ended December 31,                                        1998                     1997                      1996
- ----------------------------------------------------------------------------------------------------------------------
                                               Average      Average      Average     Average       Average     Average
(In thousands, except for percentages)        Deposits   Rates Paid     Deposits  Rates Paid      Deposits  Rates Paid
- ----------------------------------------------------------------------------------------------------------------------
                                                                                                 
Demand deposits                               $ 70,352          --      $ 58,571          --      $ 47,829          --
Savings, NOW and money market deposits          90,522         2.3%       71,703         2.3%       68,342         2.3%
Certificates of deposit of $100,000 or more     29,412         5.4%       28,601         5.5%       18,718         5.3%
Other time deposits                             43,428         5.2%       42,456         5.3%       44,848         5.4%
                                              ------------------------------------------------------------------------
     Total                                    $233,714         2.7%     $201,331         2.7%     $179,737         2.8%
                                              ========================================================================

TIME DEPOSITS OF $100,000 OR MORE. The following  table sets forth the remaining
maturities of the Bank's time  certificates of deposit in amounts of $100,000 or
more.

(In thousands)
- --------------------------------------
                            
3 months or less               $16,076
Over 3 thru 6 months             2,831
Over 6 thru 12 months            1,269
Over 12 months                   1,001
                               -------
Total                          $21,177
                               =======

p.25  BRIDGE BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1998, 1997 and 1996
                                  (CONTINUED)

5.Banking Premises and Equipment

Banking premises and equipment consist of:

December 31,                        1998      1997
- --------------------------------------------------
(In thousands)
                                     
Land                             $ 1,496   $ 1,496
Building and improvements          5,545     5,530
Furniture and fixtures             3,350     2,889
Leasehold improvements               376       371
                                 -----------------
                                  10,767    10,286
Less accumulated
 depreciation and amortization     2,184     1,558
                                 -----------------
                                 $ 8,583   $ 8,728
                                 =================

6. Income Taxes

The components of the provision for income taxes are as follows:

Year ended December 31,    1998       1997       1996
- -----------------------------------------------------
(In thousands)
                                     
Current:
  Federal               $ 1,606    $ 1,732    $ 1,152
  State                     627        660        459
                        -----------------------------
                          2,233      2,392      1,611
                        -----------------------------
Deferred:
  Federal                  (106)       (45)       (43)
  State                     (38)       (15)       (13)
                        -----------------------------
                           (144)       (60)       (56)
                        -----------------------------
    Total               $ 2,089    $ 2,332    $ 1,555
                        =============================

The  reconciliation  of the expected Federal income tax expense at the statutory
tax rate to the actual provision follows:

- -----------------------------------------------------------------------------------------------
Year ended December 31,                      1998                   1997                   1996
                                       Percentage             Percentage             Percentage
                                       of Pre-tax             of Pre-tax             of Pre-tax
(In thousands)                 Amount    Earnings     Amount    Earnings     Amount    Earnings
- -----------------------------------------------------------------------------------------------
                                                                          
Federal income tax expense
computed by applying the
statutory rate to income
before income taxes           $ 2,034         34%    $ 2,219         34%    $ 1,551         34%
Tax exempt interest              (381)        (6)       (361)        (6)       (330)        (7)
State taxes, net of Federal
  income tax benefit              388          6         425          7         294          6
Interest disallowed                40          1          40          1          32          1
Other                               8         --           9         --           8         --
                              ----------------------------------------------------------------
Provision for income taxes    $ 2,089         35%    $ 2,332         36%    $ 1,555         34%
                              ================================================================

                                                        1998 ANNUAL REPORT  p.26

Deferred tax assets and liabilities are comprised of the following:

December 31,                          1998       1997       1996
- ----------------------------------------------------------------
(In thousands) Deferred tax assets:
                                                  
Allowance for loan losses            $ 603      $ 479      $ 414
Depreciation                            --          7         --
Deferred loan fees                     116         --         --
Other                                    1          1          1
                                     ---------------------------
  Total                              $ 720      $ 487      $ 415
                                     ---------------------------
Deferred tax liabilities:
Pension expense                      $ (32)     $ (55)     $  (1)
Depreciation                          (112)        --        (42)
Securities available for sale         (667)      (526)      (321)
                                     ---------------------------
  Total                              $(811)     $(581)     $(364)
                                     ---------------------------
Net deferred tax liability assets    $ (91)     $ (94)     $  51
                                     ===========================

7. Employee Benefits

a. Pension Plan
The Bank  maintains a  non-contributory  pension plan through the New York State
Bankers  Association  Retirement  System  covering all eligible  employees.  The
following  table sets forth the plan's funded status  projected to September 30,
1998 and 1997 (measurement dates).

Pension Benefits                                       1998       1997
- ----------------------------------------------------------------------
(In thousands)
                                                         
Change in projected benefit obligation
Projected benefit obligation at beginning of year   $ 1,249    $ 1,049
Service cost                                            160        133
Expenses                                                (27)       (24)
Interest cost                                            98         82
Benefits paid                                           (38)       (45)
Assumption changes and other                             15         54
- ----------------------------------------------------------------------
Projected benefit obligation at end of year         $ 1,457    $ 1,249
- ----------------------------------------------------------------------
Change in plan assets
Fair value of plan assets at beginning of year      $ 1,668    $ 1,239
Actual return on plan assets                             75        298
Employer contribution                                    68        200
Benefit paid                                            (38)       (45)
Expenses                                                (27)       (24)
- ----------------------------------------------------------------------
Fair value of plan assets at end of year            $ 1,746    $ 1,668
- ----------------------------------------------------------------------
Funded Status                                       $   289    $   420
Unrecognized net actuarial loss (gain)                 (136)      (220)
Unrecognized prior service cost                         (19)       (21)
Unrecognized transition asset                           (65)       (74)
- ----------------------------------------------------------------------
Prepaid benefit cost                                $    69    $   105
======================================================================

                                                      1998       1997       1996
- --------------------------------------------------------------------------------
                                                                
Components of net periodic benefit cost
Service cost                                       $   160    $   133    $   114
Interest cost                                           98         82         74
Expected return on plan assets                        (141)      (108)       (96)
Amortization of net(gain)/loss                          (3)        --         --
Amortization of unrecognized prior service cost         (1)        (1)        (1)
Amortization of unrecognized transition asset           (9)        (9)        (9)
                                                   -----------------------------
Net periodic benefit cost                          $   104    $    97    $    82
                                                   =============================

At December 31, 1998,  1997, and 1996 a weighted  average  discount rate of 7.0%
and 8.0%, and 7.75%, respectively, and a rate of increase in future compensation
levels  of 4.0%,  5.0%,  and 5.0%  respectively,  were used in  determining  the
actuarial  present  value of the  projected  benefit  obligation.  The  expected
long-term  rate of return on assets was 8.5% at  September  30,  1998,  1997 and
1996.

b. Equity Incentive Plan
During  1996,  an equity  incentive  plan was  approved by the  stockholders  to
provide for the grant of options to purchase up to a total of 432,000  shares of
common  stock of the  Company  and for the award of shares of common  stock as a
bonus. Such shares may be subject to restrictions  based on continued service or
performance as employees of the Company or subsidiaries of the Company.  Options
awarded under the plan are determined by the Incentive Compensation Committee of
the Board of Directors. The Company accounts for this plan under APB Opinion No.
25,  under which no  compensation  cost has been  recognized  for stock  options
granted.   Had  compensation  cost  for  these  stock  options  been  determined
consistent  with SFAS No. 123, the  Company's  net income and earnings per share
would have been reduced to the following pro forma amounts:

                                                         1998
- -------------------------------------------------------------
                                                 
Net Income:           As Reported:                     $3,895
                      Pro Forma:                        3,702
Basic EPS:            As Reported:                     $ 0.92
                      Pro Forma:                         0.88
Diluted EPS:          As Reported:                     $ 0.91
                      Pro Forma:                         0.87

                                                         1997
- -------------------------------------------------------------
Net Income:           As Reported:                     $4,195
                      Pro Forma:                        4,128
Basic EPS:            As Reported:                     $ 0.99
                      Pro Forma:                         0.98
Diluted EPS:          As Reported:                     $ 0.99
                      Pro Forma:                         0.98

         SFAS No. 123 was not applicable in 1996 since there were no stock
options outstanding.

p.27  BRIDGE BANCORP, INC AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1998, 1997 and 1996
                                  (CONTINUED)

The fair  value of each  option  granted is  estimated  on the date of the grant
using the Black-Scholes option pricing model with the following weighted average
assumptions  used for grants in 1998:  a risk-free  interest  rate of 5.11%;  an
expected  dividend  yield of 2.4%;  expected  lives of five years;  and expected
volatility of 32.0%.

For the Year Ended,                                             1998                 1997
- -----------------------------------------------------------------------------------------
                                                            Weighted             Weighted
                                                             Average              Average
                                                            Exercise             Exercise
(In thousands)                                    Shares       Price     Shares     Price
- -----------------------------------------------------------------------------------------
                                                                       
Outstanding, beginning of the year                43,200     $  6.78         --        --
Granted                                           45,000     $ 14.67     43,200    $ 6.78
Exercised                                        (10,800)    $ 10.06         --        --
Forfeited                                             --          --         --        --
Outstanding and exercisable, end of the year      77,400     $ 10.91     43,200    $ 6.78

Weighted average fair value of options granted               $  4.29               $ 1.56

8.  Other Income and Expenses

a)  Components  of other  operating  income  which  exceed  one  percent  of the
aggregate of total interest income and other income are as follows:

December 31,                   1998      1997     1996
- ------------------------------------------------------
(In thousands)
                                         
Checkbook charges              $210      $194     $187
Credit card processing         $438      $445     $369

b)  Components  of other  operating  expenses  which  exceed one  percent of the
aggregate of total interest income and other income are as follows:

December 31,                   1998      1997     1996
- ------------------------------------------------------
(In thousands)
                                         
Data\Item processing           $413      $363     $336
Check printing                 $183      $167     $160
Credit card processing         $151      $140     $122
Loan Servicing                  $62      $133     $222
Advertising                    $294      $227     $225

9. Commitments and Contingencies and Other Matters

a. Leases
The  Company  is  obligated  to  make  minimum  annual  rental   payments  under
non-cancellable  operating leases on its premises. The projected minimum rentals
under existing leases at December 31, 1998 are as follows (in thousands):

1999                      $268
2000                      $215
2001                      $205
2002                      $167
2003                      $149
Thereafter                 $98

Certain leases contain renewal options and rent escalation clauses. In addition,
certain  leases  provide for  additional  payments based upon real estate taxes,
interest and other  charges.  Rental  expenses  under these leases for the years
ended  December  31,  1998,  1997 and 1996  approximated  $286,000  $263,000 and
$243,000, respectively.

b. Loans
In the normal course of business,  there are various outstanding commitments and
contingent  liabilities,  such as guarantees  and  commitments to extend credit,
which are not reflected in the accompanying  financial  statements.  No material
losses are anticipated as a result of these transactions.

The following represents commitments outstanding:

December 31,                              1998           1997
- -------------------------------------------------------------
(In thousands)
                                                
Standby letters of credit              $   209        $ 2,205
Loan commitments outstanding             9,905         15,663
Unused equity lines                     10,735          8,551
Unused construction lines                6,992         12,457
Unused lines of credit                   8,462          7,184
Unused overdraft lines                   3,416          2,868
                                       ----------------------
Total commitments outstanding          $39,719        $48,928
                                       ======================

c. Other
During 1998, the Bank was required to maintain certain cash balances with the
Federal Reserve Bank of New York for reserve and clearing requirements. These
balances averaged $3,893,000 in 1998.

During 1998, 1997 and 1996, the Bank maintained an overnight line of credit with
the Federal Home Loan Bank of New York.  At year end 1998 and 1997,  the line of
credit  available was $12,171,800 and  $10,785,850,  respectively.  There was no
amount outstanding at year end 1998. The amount outstanding at year end 1997 was
$6,500,000.

10. Estimated Fair Value of Financial Instruments

Fair  value  estimates  are made at a  specific  point in time and are  based on
existing on and off balance  sheet  financial  instruments.  Such  estimates are
generally  subjective  in nature  and  dependent  upon a number  of  significant
assumptions  associated  with each  financial  instrument  or group of financial
instruments,  including  estimates  of discount  rates,  risks  associated  with
specific  financial  instruments,  estimates of future cash flows,  and relevant
available

                                                        1998 ANNUAL REPORT  p.28

market  information.  Changes  in  assumptions  could  significantly  affect the
estimates.  In  addition,  fair  value  estimates  do not  reflect  the value of
anticipated  future  business,  premiums  or  discounts  that could  result from
offering  for  sale at one time  the  Bank's  entire  holdings  of a  particular
financial  instrument,  or the tax  consequences of realizing gains or losses on
the sale of financial instruments.

The significant assumptions utilized by the Company in estimating the fair value
of its financial instruments are as follows:

CASH AND CASH EQUIVALENTS. For these short term instruments, the carrying amount
is a reasonable estimate of fair value.

INVESTMENT SECURITIES. For investment securities,  fair value is based on quoted
market prices.

LOANS.  Fair values are estimated for portfolios of loans with similar financial
characteristics.  The total loan portfolio is first divided into  adjustable and
fixed rate terms.  Adjustable  rate loans are then  divided  into those that can
reprice immediately with changes in interest rates and those that are subject to
repricing over time. Adjustable rate loans that reprice over time and fixed rate
loans are further segmented by type such as residential  mortgages,  home equity
loans, consumer loans, commercial mortgages, commercial loans and land loans.

Fair value is calculated by discounting  anticipated future repricing amounts or
cash flows using  discount  rates  equivalent  to the rates at which the Company
would currently make loans which are similar with regard to collateral, maturity
and type of borrower.  The  discounted  value of the repricing  amounts and cash
flows  is  reduced  by  a  credit  risk   adjustment   based  on  internal  loan
classifications.

DEPOSIT LIABILITIES. The fair value of deposits with no stated maturity, such as
noninterest- bearing demand deposits, money market accounts and savings accounts
is equal to the amount  payable on demand at the reporting  date.  Time deposits
are  segregated  by type,  size and remaining  maturity.  The fair value of time
deposits  is based  on the  discounted  value of  contractual  cash  flows.  The
discount  rate is  equivalent  to the rate  currently  offered  for  deposits of
similar size, type and maturity.

ACCRUED INTEREST RECEIVABLE AND PAYABLE.  For these short term instruments,  the
carrying amount is a reasonable estimate of the fair value.

OFF BALANCE SHEET ASSETS AND  LIABILITIES.  The fair value of off-balance  sheet
commitments  to extend credit and letters of credit listed in the preceding Note
11  "Commitments  and  Contingencies  and Other  Matters"  were  estimated to be
insignificant as of December 31, 1998 and 1997.

The estimated fair values and recorded  carrying values of the Bank's  financial
instruments are as follows:

December 31,                                            1998                  1997
- ----------------------------------------------------------------------------------
                                         Carrying       Fair   Carrying       Fair
(In thousands)                             Amount      Value     Amount      Value
- ----------------------------------------------------------------------------------
                                                              
Financial Assets:
  Cash and due from banks                $ 10,881   $ 10,881   $ 12,740   $ 12,740
  Interest bearing deposits with banks        251        251         89         89
  Securities available-for-sale            69,443     69,443     60,190     60,190
  Securities held-to-maturity               5,052      5,067     11,812     11,823
  Loans                                   166,983    167,115    137,243    136,567
  Accrued interest receivable               1,525      1,525      1,460      1,460

Financial Liabilities:
  Demand and other deposits               241,531    241,534    203,697    203,693
  Accrued interest payable                  1,439      1,439      1,244      1,244
Overnight borrowings                           --         --      6,500      6,500

11. Regulatory Matters

The Bank is subject to various regulatory capital  requirements  administered by
the federal banking agencies.  Failure to meet minimum capital  requirements can
initiate  certain  mandatory and possibly  additional  discretionary  actions by
regulators that, if undertaken, could have a direct material effect on the
Bank's  financial   statements.   Under  capital  adequacy  guidelines  and  the
regulatory  framework for prompt corrective  action, the Bank must meet specific
capital  guidelines  that involve  quantitative  measures of the Bank's  assets,
liabilities,  and certain  off-balance  sheet items  calculated under regulatory
accounting  practices.  The Bank's capital amounts and  classification  are also
subject to  qualitative  judgments  by the  regulators  about  components,  risk
weightings, and other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require the Bank to maintain  minimum amounts and ratios (set forth in the table
below) of total and Tier 1  capital  (as  defined  in the  regulations)  to risk
weighted  assets (as  defined),  and of Tier 1 capital  (as  defined) to average
assets (as defined). Management believes, as of December 31, 1998, that the Bank
meets all capital adequacy requirements to which it is subject.

As of December 31, 1998, the most recent  notification  from the Federal Deposit
Insurance  Corporation  categorized  the  Bank as  well  capitalized  under  the
regulatory  framework for prompt  corrective  action.  To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based,
Tier 1 leverage ratios as set forth in the table. Since that notification, there
are  no  conditions  or  events  that  management   believes  have  changed  the
institution's category.

p.29  BRIDGE BANCORP, INC. AND SUBSIDIARY

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        December 31, 1998, 1997 and 1996
                                  (CONTINUED)

The Bank's actual capital amounts and ratios are also presented in the following
table:

As of December 31,                                                                           1998
- -------------------------------------------------------------------------------------------------
                                                                                       To Be Well
                                                                 For Capital    Capitalized Under
                                                                    Adequacy    Prompt Corrective
(In thousands)                                       Actual         Purposes    Action Provisions
- -------------------------------------------------------------------------------------------------
                                           Amount    Ratio     Amount  Ratio       Amount   Ratio
                                           ------------------------------------------------------
                                                                           
Total Capital (to risk weighted assets)    22,983     12.0%    15,372   >8.0%      19,215   >10.0%
Tier 1 Capital (to risk weighted assets)   21,270     11.1%     7,686   >4.0       11,529   >6.0
Tier 1 Capital (to average assets)         21,270      8.2%    10,319   >4.0       12,899   >5.0

As of December 31,                                                                           1997
- -------------------------------------------------------------------------------------------------
                                                                                       To Be Well
                                                                 For Capital    Capitalized Under
                                                                    Adequacy    Prompt Corrective
(In thousands)                                       Actual         Purposes    Action Provisions
- -------------------------------------------------------------------------------------------------
                                           Amount    Ratio     Amount  Ratio       Amount   Ratio
                                           ------------------------------------------------------
                                                                           
Total Capital (to risk weighted assets)    20,090     12.3%    13,104   >8.0%      16,381   >10.0%
Tier 1 Capital (to risk weighted assets)   18,697     11.4%     6,552   >4.0        9,828   >6.0
Tier 1 Capital (to average assets)         18,697      8.3%     9,037   >4.0       11,296   >5.0

12. Bridge Bancorp Inc. (Parent Company Only)

Condensed Statements of Financial Condition
December 31,                                        1998        1997        1996
- --------------------------------------------------------------------------------
(In thousands)
                                                               
Assets
Cash and cash equivalents                       $    116    $     11    $      3
Dividend receivable                                1,059       1,620         680
Other assets                                          58           5          --
Investment in the Bank                            22,058      19,435      16,923
                                                --------------------------------
     Total Assets                               $ 23,291    $ 21,071    $ 17,606
                                                ================================
Liabilities
Dividends payable                                  1,059       1,620         680
                                                --------------------------------
     Total Liabilities                          $  1,059    $  1,620    $    680
                                                ================================
Stockholders' Equity
Stockholders' Equity                              22,853      20,072    $ 17,547
     Treasury stock at cost, 10,800 shares          (621)       (621)   ($   621)
                                                --------------------------------
    Total Stockholders' Equity                  $ 22,232    $ 19,451    $ 16,926
                                                ================================
 Total Liabilities and Stockholders' Equity     $ 23,291    $ 21,071    $ 17,606
                                                ================================

Condensed Statements of Income
Year ended December 31,                            1998        1997        1996
- -------------------------------------------------------------------------------
(In Thousands)
                                                               
Dividend income from the Bank                   $ 1,482     $ 1,984     $ 1,608
Other operating expenses                              4          13     $     1
                                                -------------------------------
Income before income taxes and equity in
  undistributed earnings of the Bank              1,478       1,971       1,607
Income tax provision                                 (2)         (5)       --
                                                -------------------------------
Income before equity in undistributed
  earnings of the Bank                            1,480       1,976       1,607
Equity in undistributed earnings of the Bank      2,415       2,219       1,399
                                                -------------------------------
Net income                                      $ 3,895     $ 4,195     $ 3,006
                                                ===============================

                                                        1998 ANNUAL REPORT  p.30

Condensed Statements of Cash Flows
Year ended December 31,                                                            1998       1997      1996
- ------------------------------------------------------------------------------------------------------------
(In thousands)
                                                                                             
Cash flows used by operations:
Other operating expenses                                                        $    (4)   $   (13)   $    (1)
Net cash used by operating activities                                                (4)       (13)        (1)

Cash flows from investing activities:
Dividends received                                                                2,043      1,045      1,456
                                                                                -----------------------------
Net cash provided by investing activities                                         2,043      1,045      1,456

Cash flows used by financing activities:
Net proceeds from issuance of restricted common stock
issued pursuant to equity incentive plan                                             --         8         --
Net proceeds from issuance of common stock
  upon exercise of stock options                                                    109         --        --
Payment for the purchase of treasury stock                                           --         --       (621)
Dividends paid                                                                   (2,043)    (1,032)      (835)
                                                                                -----------------------------
Net cash used by financing activities                                            (1,934)    (1,024)    (1,456)
Net increase (decrease) in cash and cash
  equivalents                                                                       105          8         (1)
Cash and cash equivalents at beginning of
  year                                                                               11          3          4
                                                                                -----------------------------
Cash and cash equivalents at end of year                                        $   116    $    11    $     3
                                                                                =============================
Reconciliation of net income to net cash used by operating activities:
Net income                                                                      $ 3,895    $ 4,195    $ 3,006
Adjustments to reconcile net income to net cash used by operating activities:
Equity in undistributed earnings
  of the Bank                                                                    (2,415)    (2,219)    (1,399)
Dividend income                                                                  (1,482)    (1,984)    (1,608)
Income tax benefit from exercise of employee stock options                           51         --        --
Increase in other assets                                                            (53)        (5)       --
                                                                                -----------------------------
Net cash used by operating activities                                           $    (4)   $   (13)   $    (1)
                                                                                =============================

13. Quarterly Financial Data (Unaudited)

Selected Consolidated Quarterly Financial Data
1998 Quarter ended,
- ------------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share amounts)          March 31,  June 30,  Sept. 30,   Dec. 31,  March 31,  June 30,  Sept. 30, Dec. 31,
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
Interest income                                      $4,399    $4,728     $5,033     $4,859     $4,012    $4,166     $4,353   $4,693
Interest expense                                      1,414     1,483      1,633      1,448      1,338     1,370      1,419    1,416
                                                     -------------------------------------------------------------------------------
Net interest income                                   2,985     3,245      3,400      3,411      2,674     2,796      2,934    3,277
Provision for loan losses                                90       100        160         75         60        60         60      230
                                                     -------------------------------------------------------------------------------
Net interest income after provision for loan losses   2,895     3,145      3,240      3,336      2,614     2,736      2,874    3,047
Other income                                            712       794        810        689        538     2,054        883      848
Other expenses                                        2,392     2,502      2,347      2,396      2,021     2,220      2,399    2,427
                                                     -------------------------------------------------------------------------------
Income before income taxes                            1,215     1,437      1,703      1,629      1,131     2,570      1,358    1,468
Provision for income taxes                              395       492        620        582        374       960        498      500
                                                     -------------------------------------------------------------------------------
Net income                                           $  820    $  945     $1,083     $1,047     $  757    $1,610     $  860   $  968
                                                     ===============================================================================
Basic earnings per share                             $ 0.19    $ 0.22     $ 0.26     $ 0.25     $ 0.18    $ 0.38     $ 0.20   $ 0.23
Diluted earnings per share                           $ 0.19    $ 0.22     $ 0.26     $ 0.24     $ 0.18    $ 0.38     $ 0.20   $ 0.23
                                                     ===============================================================================

p.31  BRIDGE BANCORP, INC. AND SUBSIDIARY

                    Report of Independent Public Accountants

The Board of Directors and Stockholders
Bridge Bancorp, Inc.:

     We have audited the  accompanying  consolidated  statements of condition of
Bridge  Bancorp,  Inc. and  subsidiary as of December 31, 1998 and 1997, and the
related consolidated  statements of income,  stockholders' equity and cash flows
for each of the years in the three year period ended  December  31, 1998.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the financial  position of Bridge Bancorp,  Inc. and
subsidiary as of December 31, 1998 and 1997, and the results of their operations
and  their  cash  flows for each of the years in the  three  year  period  ended
December 31, 1998, in conformity with generally accepted accounting principles.

/s/ Arthur Andersen LLP

New York, New York
January 22, 1999

                            Common Stock Information

The  Company's  common  stock is traded on the NASDAQ over the counter  bulletin
board market under the symbol "BDGE".  The following table details the quarterly
high and low prices of the Company's common stock and the dividends declared for
such periods.

At December  31, 1998 the  Company had  approximately  721 holders of its common
stock.  The number of  stockholders of record includes banks and brokers who act
as nominees,  each of whom may represent more than one  stockholder.  All prices
have been  adjusted to reflect the 3-for-1  stock splits  declared in April 1997
and August 1998 and rounded to the nearest dollar.

                                            Stock Price      Dividends
                                         High           Low   Declared
- ----------------------------------------------------------------------
By Quarter 1998
- ----------------------------------------------------------------------
First                                     $24            $14        --
Second                                    $23            $21     $0.10
Third                                     $24            $20        --
Fourth                                    $25            $21     $0.25

- ----------------------------------------------------------------------
By Quarter 1997
- ----------------------------------------------------------------------
First                                     $ 7            $ 7        --
Second                                    $ 9            $ 7     $0.08
Third                                     $12            $ 9        --
Fourth                                    $17            $12     $0.38*

* On June 17, 1997, the Bank sold its former headquarters  building resulting in
a gain, net of taxes, of approximately  $829,000. On December 15, 1997, the Bank
declared a one time  special  dividend of  approximately  $845,000,  or $.20 per
share, paying out this gain to the shareholders.

                                                       1998 ANNUAL REPORT  p.32

Bridge Bancorp, Inc.
- --------------------

                                                                                    
BOARD OF DIRECTORS                             BANK OFFICERS                              NOTICE OF ANNUAL MEETING
AND AFFILIATIONS                               Thomas J. Tobin                            The Annual Meeting of Shareholders
                                                President and Chief Executive Officer     is scheduled for 3:30 p.m.,Monday,
Raymond Wesnofske                                                                         April 19, 1999 in the Community
 Chairman                                      Christopher Becker                         Room, Bridgehampton National Bank,
 Bridge Bancorp, Inc. and                       Executive Vice President and              2200 Montauk Highway,
 The Bridgehampton National Bank                Chief Financial Officer                   Bridgehampton, NY 11932.

Thomas J. Tobin                                VICE PRESIDENTS                            BANKING OFFICES
 President and Chief Executive Officer
 Bridge Bancorp, Inc. and                      Peter M. Coleman                           MAIN OFFICE
 The Bridgehampton National Bank                Senior Banking Officer                    2200 Montauk Highway,
                                                North Fork Market Area                    Bridgehampton, NY 11932
Thomas E. Halsey                               Carol Kennedy                              (516) 537-1000 Fax (516) 537-1835
 Holly Hill Nursery                             Credit Administration
 Water Mill, NY                                                                           SOUTHAMPTON
                                               Michael P. Kochanasz                       425 County Road 39
Marcia Z. Hefter                                Electronic Delivery Systems               Southampton, NY 11968
 Esseks, Hefter & Angel                                                                   (516) 283-1286 Fax (516) 287-3309
 Counselor of Law                              Diane Reutershan
 Riverhead, NY                                  Community Development Officer             SOUTHAMPTON VILLAGE
                                                                                          COMMERCIAL BRANCH
R. Timothy Maran                               Thomas H. Simson                           94 Main Street
 Maran, DeBaun, Cruise & Simonson               Chief Information Officer                 Southampton, NY 11968
 Southampton, Westhampton, NY                                                             (516) 287-5880 Fax (516) 287-5882
                                               Ann K. Sweeney
Albert E. McCoy                                 Senior Banking Officer                    EAST HAMPTON
 W.F. McCoy Petroleum Products, Inc.            Bridgehampton Market Area                 26 Park Place
 McCoy Bus Co., Inc.                                                                      East Hampton, NY 11937
 Bridgehampton, NY                             Janet T. Verneuille, C.P.A.                (516) 324-8480 Fax (516) 329-1485
                                                Comptroller
Walter A. Preische, Jr.                                                                   SOUTHOLD
 Certified Public Accountant                   ASSISTANT VICE PRESIDENTS                  54970 Main Road
 East Hampton, NY                                                                         Southold, NY 11971
                                               Michelle Dosch                             (516) 765-1500 Fax (516) 765-1605
Lawrence H. Strickland                          Financial Operations
 Vice Chairman                                                                            MATTITUCK
 Peter Lyle, Inc. Financial Services           Seamus Doyle                               Mattituck Shopping Center, Main Road
 Bridgehampton, NY                              Senior Banking Officer                    Mattituck, NY 11952
                                                Southampton Market Area                   (516) 298-0190 Fax (516) 298-0194
COMPANY OFFICERS
                                               Maureen P. Mougios                         MONTAUK
Thomas J. Tobin                                 Director of Internal Audit                1 The Plaza
 President and Chief Executive Officer                                                    Montauk, NY 11954
Christopher Becker                             Sandra Novick                              (516) 668-6400 Fax (516) 668-6412
 Executive Vice President and Treasurer         Director of Marketing and Advertising
                                                                                          RESIDENTIAL MORTGAGE SERVICES
                                               Kevin L. Santacroce                        All branch locations
                                                Senior Banking Officer
                                                East Hampton/Montauk Market Area          10-K REPORT
                                                                                          A copy of the Annual Report
                                               Aidan Wood                                 on Form 10-K, filed with the
                                                Senior Mortgage Officer                   Securities and Exchange Commission,
                                                                                          is available upon request by any share-
                                               ASSISTANT CASHIERS                         holder of the Company at no charge.
                                                                                          Write to Christopher Becker,
                                               Patricia L. Brennan                        Executive Vice President and Treasurer,
                                                Loan Processing                           Bridge Bancorp, Inc., P.O. Box 3005,
                                                                                          Bridgehampton, NY 11932.
                                               Caroline Kalish
                                                Systems Analyst                           INTERNET WEBSITE ADDRESS
                                                                                          http://www.bridgenb.com
                                               Lorraine LaRosa
                                                Branch Manager                            Designed by
                                                Mattituck and Southold                    Curran & Connors, Inc.

                                               John J. McDonald
                                                Branch Manager
                                                Montauk

                                               Kimberly Romano
                                                Deputy Comptroller

                                               Amy Turza
                                                Branch Manager
                                                Main Office

                           CHANGE IN CONTROL AGREEMENT
                                   (two years)

         This  CHANGE IN CONTROL  AGREEMENT  (this  "Agreement")  is dated as of
January 19, 1999, by and among BRIDGEHAMPTON NATIONAL BANK (the "Bank"),  BRIDGE
BANCORP,  INC.  (the  "Company")  (the Bank and the Company,  collectively,  the
"Employers") and Christopher Becker (the "Employee").

     WHEREAS,   the  Employee  is  currently   serving  as  the  Executive  Vice
President/Chief Financial Officer;

     WHEREAS, the Company and the Employee have entered into a Change in Control
Agreement dated as of January 13, 1998 (the "Prior Agreement");

     WHEREAS,  the respective Board of Directors of the Employers (the "Boards")
have approved and authorized the entry into this Agreement with the Employee;

     WHEREAS,  the  Boards  believe  that  it is in the  best  interests  of the
Employers to encourage the Employee's  continued  employment with and dedication
to the Bank in the face of potentially  distracting  circumstances  arising from
the possibility of a change in control of the Company or the Bank; and

     WHEREAS,  the parties desire to enter into this Agreement setting forth the
terms and conditions for the payment of special  compensation to the Employee in
the event of a termination of the Employee's employment in connection with or as
the result of a change in  control of the  Company or of the Bank and to replace
and supersede the Prior Agreement;

     NOW, THEREFORE, it is AGREED as follows:

          1. Term.

               The  initial  term  of  this  Agreement  shall  be  for a  period
               commencing  on the date hereof and ending on December  31,  2003.
               The Employers may renew this  Agreement by written  notice to the
               Employee  for one  additional  year on  January  1, 2000 and each
               subsequent January 1 during the term of this Agreement unless the
               Employee  gives contrary  written notice to the Employers  before
               any such  renewal  date.  If at any time  during the term of this
               Agreement,  there is a "Change in  Control" as defined in Section
               2(b) hereof,  the provisions of this Agreement  shall continue to
               apply  for two  years  from the date of such  Change  in  Control
               regardless of whether the term of this Agreement is  subsequently
               renewed under this Section 1.  References  herein to the "Term of
               this Agreement" shall include the initial term and any additional
               years for which this Agreement is renewed.

          2. Change in Control.

               (a)(i) If during the term of this Agreement  there is a Change in
               Control (as defined below) and the  Employee's  employment by the
               Employers is terminated in accordance with Section 2(a)(iv),  the
               Employee shall be entitled to receive as a severance  payment for
               services

                                       -1-

               previously  rendered  to the  Employers  a lump sum cash  payment
               equal to 2.99  times  the sum of the  Employee's  base  salary in
               effect  as of  date  of the  Change  in  Control  or the  date of
               termination,  whichever  is  greater,  plus the amount of bonuses
               paid to the Employee during the 12 months preceding the Change in
               Control.  (Subject to Section 2(c) and 2(d) below). Payment under
               this Section 2(a) shall not be reduced by any  compensation  that
               the  Employee  may receive  from other  employment  with  another
               employer after termination of the Employee's employment.  Payment
               to the  Employee of  severance  under this  Section 2(a) shall be
               made on or before the Employee's  last day of employment with the
               Employers.

               (ii) In addition to the  liquidated  damages  that are payable to
               the  Employee,  the  following  shall  apply in the  event of any
               termination  without  Cause or in the  event  of any  termination
               subject  to  Section  2(a)(i)  hereof:  (1)  the  Employee  shall
               continue  to  participate  in, and  accrue  benefits  under,  all
               retirement,  pension,  profit-sharing,  employee stock ownership,
               and other deferred  compensation plans of the Company or the Bank
               for the remaining  term of this Agreement (or following a "Change
               in Control" as defined below,  if longer,  three years) as if the
               termination  of employment of the Employee had not occurred (with
               the Employee being deemed to receive annually for the purposes of
               such  plans  the  Employee's  base  salary  as  of  the  date  of
               termination  or, if applicable,  Change in Control,  whichever is
               greater),  except to the extent that such continued participation
               and accrual is expressly prohibited by law, or to the extend such
               plan  constitutes  a  "qualified  plan" under  Section 401 of the
               Internal Revenue Code of 1986, as amended (the "Code"),  in which
               case  the  Employers  shall  provide   substantially   equivalent
               benefits to the  Employee  under a  non-qualified  plan;  (2) the
               Employee  shall be  entitled  to  continue  to receive  all other
               employee  benefits for the remaining  term of this  Agreement (or
               following a "Change in  Control,"  if longer,  three years) as if
               the  termination  of  employment  had not  occurred;  and (3) all
               insurance or other  provisions  for  indemnification,  defense or
               hold-harmless of officers or directors of the Company or the Bank
               that are in effect on the date the notice of  termination is sent
               to the  Employee  shall  continue for the benefit of the Employee
               with respect to all of his acts and omissions while an officer as
               fully and completely as if such termination had not occurred, and
               until  the  final   expiration  or  running  of  all  periods  of
               limitation  against action that may be applicable to such acts or
               omissions;  provided,  however,  that the Employers  shall not be
               required to provide the  benefits  described in clause (1) or (2)
               of this Section  2(a)(ii) to the extent that the Employee has the
               right to receive  substantially  identical  benefits by reason of
               his employment by another  employer  following the termination of
               his employment hereunder.

               (iii) In the event the  employment  of the Employee is terminated
               by the Employers in accordance  with Section  2(a)(ii) hereof and
               the Bank fails to make timely  payment of any amount then payable
               to or for the benefit of the Employee  under this  Agreement  and
               such failure  continues for more than 30 days, the Employee shall
               be entitled to reimbursement for all reasonable costs,  including
               attorneys'  fees,  incurred by the  Employee in taking  action to
               collect such amounts or otherwise to enforce this Agreement, plus
               interest on such  amounts at the prime rate  (defined as the base
               rate on corporate  loans at large U.S.  money  center  commercial
               banks  as  published  by The  Wall  Street  Journal),  compounded
               monthly,  for the period  from the date the  payment is due until
               the payment is made. Such  reimbursement and interest shall be in
               addition to all rights that the Employee is otherwise entitled to
               under this Agreement.

                                       -2-

               (iv) For purposes of this Agreement, the Employee's employment by
               the Employers shall be considered  terminated "in accordance with
               Section  2(a)(iv)"  if a Change in Control  shall  occur,  and in
               connection  with such  Change  in  Control  or  within  two years
               thereafter   either  (x)  the  Employee's   employment  with  the
               Employers   shall  be   terminated  as  a  result  of  an  Actual
               Termination (as defined below), or (y) the Employee's  employment
               with the  Employers  shall  terminate  after an event  that would
               constitute  Good Reason (as  defined  below);  and the  following
               terms shall have the meanings set out below:

          (A)  "Actual   Termination"  means  involuntary   termination  of  the
               Employee's  employment  with the  Employers  for any reason other
               than Willful Misconduct, Disability, death or Retirement.

          (B)  "Willful  Misconduct"  means (I) the continued willful failure by
               the  Employee  to  substantially  perform  his  duties  with  the
               Employers  or  either  of  them  (other  than  any  such  failure
               resulting  from the  Employee's  incapacity  due to  physical  or
               mental   illness)   after  a  written   demand  for   substantial
               performance is delivered to the Employee by the Boards (or either
               of the Boards) that  specifically  identifies the manner in which
               the Employee has not substantially performed his duties and after
               a  reasonable  time  period  has run to  allow  the  Employee  to
               perform, (II) willful conduct that is a material violation of the
               Bank's  written  ethics  policy  or  applicable  law and  that is
               materially  injurious to the  Employers or either of them,  (III)
               other  willful and wrongful  conduct by the Employee  that causes
               substantial and material injury to the business and operations of
               the Employers or either of them, the  continuation  of which,  in
               the reasonable  judgment of the Boards (or either of the Boards),
               will continue to substantially and materially injure the business
               and  operations  of the  Employers  (or  either  of  them) in the
               future,  or (IV) conviction of the Employee of a felony involving
               moral  turpitude;  provided,  that an act or failure to act shall
               not be considered  "willful"  unless done, or omitted to be done,
               in bad faith and without  reasonable  belief that the  Employee's
               action or omission was in the best interests of the Employers;

          (C)  "Good Reason" For purposes of this  Agreement,  a termination  of
               employment  by the Employee for "Good Reason" shall be treated as
               an involuntary  termination  of the Employee's  employment by the
               Employers without Cause. "Good Reason" shall mean: (A) a material
               breach by the  Employers  or either of them of this  Agreement or
               (B) a  reduction,  without  the  prior  written  consent  of  the
               Employee,  in his base salary under  Section 2 hereof or benefits
               provided to him under Section 3 hereof (or both).

          (D)  "Retirement"  means  termination  of the  Employee  based  on the
               Employee's  having  reached  the  earlier of age 65 or the normal
               retirement age as defined under Bank's  employee's  pension plan,
               if permissible under applicable law.

          (E)  "Date of  Termination"  means the date specified in the notice of
               termination.

               (b) For purposes of this  Agreement,  a "Change in Control" shall
               be deemed to have  taken  place if: (i) any  person  becomes  the
               beneficial  owner of more that 50 percent of the total  number of
               voting  shares of the  Company;  (ii) any person  (other than the
               persons  named as  proxies  solicited  on  behalf of the Board of
               Directors of the Company) holds revocable or irrevocable  proxies
               as to  the  election  or  removal  of  members  of the  board  of
               directors of the  Company,  for more than 50 percent of the total
               number of voting shares of the Company; (iii) any person

                                       -3-

               (other than a person  controlled  directly or  indirectly  by the
               Company)  becomes the beneficial owner of more than 50 percent of
               the total  number of voting  shares of the Bank;  (iv) any person
               has  received all required  approvals  of  applicable  regulatory
               authorities to acquire control of the Company or the Bank; or (v)
               as the  result  of, or in  connection  with,  any cash  tender or
               exchange offer,  merger, or other business  combination,  sale of
               assets or contested election, or any combination of the foregoing
               transactions,  the  persons  who were  directors  of the  Company
               immediately  before such transaction shall cease to constitute at
               least  one-half of the members of the Board of  Directors  of the
               Company  or any  successor  corporation.  For  purposes  of  this
               Section  2(b), a "person"  includes an  individual,  corporation,
               partnership,  trust, association, joint venture, pool, syndicate,
               unincorporated  organization,   joint-stock  company  or  similar
               organization  or group  acting  in  concert.  A person  for these
               purposes shall be deemed to be a beneficial owner as that term is
               used in Rule 13d-3 under the Securities Exchange Act of 1934.

               (c)  Notwithstanding any other provisions of this Agreement or of
               any other agreement,  contract,  or  understanding  heretofore or
               hereafter entered into by the Employee with the Company, the Bank
               or  any  other  entity  controlled  by  the  Company,  except  an
               agreement, contract, or understanding hereafter entered into that
               expressly  modifies or excludes  application of this Section 2(c)
               (the  "Other  Agreements"),  and  notwithstanding  any  formal or
               informal  plan  or  other  arrangement  heretofore  or  hereafter
               adopted by the  Company  or the Bank for the  direct or  indirect
               provision of compensation  to the Employee is a member),  whether
               or not such  compensation  is deferred,  is in cash, or is in the
               form of a benefit to or for the Employee (a "Benefit Plan"),  the
               Employee shall not have any right to receive any payment or other
               benefit under this Agreement, any Other Agreement, or any Benefit
               Plan if such  payment or benefit,  taking into  account all other
               payments or benefits to or for the Employee under this Agreement,
               all Other  Agreement,  and all  Benefit  Plans,  would  cause any
               payment to the Employee  under this  Agreement to be considered a
               "parachute  payment" within the meaning of Section  280G(b)(2) of
               the Code (a "Parachute  Payment").  In the event that the receipt
               of any such payment or benefit  under this  Agreement,  any Other
               Agreement,  or any Benefit  Plan would  cause the  Employee to be
               considered  to have  received  a  Parachute  Payment  under  this
               Agreement,  then  the  Employee  shall  have  the  right,  in the
               Employee's  sole  discretion,  to  designate  those  payments  or
               benefits under this Agreement,  any Other Agreements,  and/or any
               Benefit  Plans,  that  should be reduced or  eliminated  so as to
               avoid having the payment to the employee  under this Agreement be
               deemed to be a Parachute Payment.

               (d)  Notwithstanding  any other provision in this Agreement,  (i)
               the  Employers  may  terminate or suspend this  Agreement and the
               employment of the Employee hereunder, as if such termination were
               for Cause under Section 7(a)(i) hereof and for Willful Misconduct
               under Section 8(a)(ii) hereof, to the extent required by the laws
               of the  State of New  York  related  to  banking,  by  applicable
               federal  law  relating  to  deposit  insurance  or  bank  holding
               companies  or by  regulations  or orders  issued  by the  Banking
               Commissioner  of the  State  of New  York,  the  Federal  Deposit
               Insurance  Corporation  or the Board of  Governors of the Federal
               Reserve  System and (ii) no payment  shall be required to be made
               to the Employee  under this  Agreement to the extent such payment
               is prohibited by applicable law,  regulation or order issued by a
               banking  agency or a court of competent  jurisdiction;  provided,
               that it shall be the  Employers'  burden  to prove  that any such
               action was so required.

                                       -4-

          3. Confidentially and Noninterference with Customers and Employees.

               (a)  Except as  authorized  or  directed  by the  Employers,  the
               Employee shall not at any time during or subsequent to employment
               with the Employers,  directly or indirectly,  publish or disclose
               to any  person  or entity  any  confidential  information  of the
               Employers  or  confidential  information  of others that has come
               into the Employers'  possession or the  Employee's  possession in
               the course of employment  with  Employers,  and the Employee will
               not use such information for the Employee's personal gain or make
               it available for others to use. All information,  whether written
               or not, regarding the business and finances of the Employers,  or
               their customers and contractors,  including,  without limitation,
               information  relating  to  existing  and  contemplated  products,
               services,   software,   systems,  methods,  business  procedures,
               construction,  operational  and  marketing  plans  and  programs,
               prices,  costs and revenues,  prospective and existing contracts,
               prospective and existing customers or other business arrangements
               and  any   additional   information   acquired  only  because  of
               employment   with  the   Employers,   shall  be  presumed  to  be
               confidential,  except  to the  extent  the same  shall  have been
               lawfully and without  breach of obligation  made available to the
               general  public  without  restriction.  All papers and records of
               every  kind,  including  all  memoranda,   notes,  lists,  plans,
               reports,  data  (written  or  recorded)  and  documents,  whether
               originals  or copies and whether  prepared by the  Employee or by
               others, relating to the business and finances of the Employers or
               their customers or  contractors,  shall be the sole and exclusive
               property  of the  Employers.  The  Employee  will  return  to the
               Employers  all  of  the  above  materials  upon   termination  of
               employment  and  will  not at any  time  give  or  disclose  such
               materials to any unauthorized person or entity.

               (b)  The  Employee   acknowledges   and  agrees   that,   because
               relationships  with  customers  and  prospective   customers  are
               expected to  constitute  a large  portion of the  goodwill of the
               Bank's business,  it is of great importance to the Employers that
               the Employee  not solicit the Bank's  customers  and  prospective
               customers (other than on behalf of the Bank) during the period of
               employment,  and that the Employee not solicit such customers and
               prospective   customers  after   termination  of  the  Employee's
               employment  while the Employee is receiving  salary  continuation
               payments  under Section 2(a) hereof,  with respect to business or
               contracts  for any  products  or  service  of the type  provided,
               developed or under  development by the Bank during the Employee's
               employment by the Bank, so that another employee of the Bank will
               have an  opportunity to develop  relationships  with such clients
               and  prospective  clients.  The Employee  agrees that,  while the
               Employee  is  employed  by the Bank and  while  the  Employee  is
               receiving salary continuation payments under Section 2(a) hereof,
               the Employee shall not, within the area comprised of the Towns of
               Southampton,   East  Hampton,   Shelter   Island,   Southold  and
               Riverhead,  New York,  and any other  town in which the  Employee
               performed material services for the Bank,  directly or indirectly
               solicit  (other than on behalf of the Bank) business or contracts
               for any products or services of the type  provided,  developed or
               under development by the Bank during the Employee's employment by
               the  Bank,  from or with  (i) any  person  or  entity  that was a
               customer  of the Bank for such  products  or  services  as of, or
               within one year before, the date of termination of the Employee's
               employment with the Bank (the  "Termination  Date"),  or (ii) any
               prospective customer that the Bank was actively soliciting as of,
               or within one year before, the Termination Date.

               (c)  While  the  Employee  is  employed  by  the   Employers  and
               thereafter while the Employee is

                                       -5-

               receiving salary continuation payments under Section 2(a) hereof,
               the Employee shall not solicit any person who is then employed by
               the Company,  the Bank or any subsidiary of either of them or who
               within 90 days before the Termination  Date had been so employed,
               to leave such  employment or to become  employed by any person or
               entity other than the company, the Bank or any such subsidiary.

               (d) The Employee acknowledges that the restrictions  contained in
               this  Section 3 are  reasonable  and  necessary  to  protect  the
               business and interest of the  Employers and that any violation of
               these  restrictions would cause substantial  irreparable  injury.
               Accordingly,  the  Employee  agrees  that a remedy at law for any
               breach of the foregoing  covenants  would be inadequate  and that
               the Employers, in addition to any other remedies available, shall
               be entitled to obtain preliminary and permanent injunctive relief
               to secure specific performance of such covenants and to prevent a
               breach  or  contemplated  breach  of  this  Section  without  the
               necessity of proving actual damage. The Employee will provide the
               Employers a full accounting of all proceeds and profits  received
               by the Employee as a result of or in connection  with a breach of
               this Section.  Unless prohibited by law, the Employers shall have
               the right to retain any amounts otherwise payable to the Employee
               to satisfy  any  obligations  of the  Employee as a result of any
               breach of this Section.  The Employee  hereby agrees to indemnify
               and hold  harmless the  Employers  from and against any costs and
               expenses  incurred by the  Employers as a result of any breach of
               this Section by the Employee and in enforcing and  preserving the
               Employers' rights under this Section.

          4.   No Assignments. This Agreement is personal to each of the parties
               hereto. No party may assign or delegate any rights or obligations
               hereunder  without  first  obtaining  the written  consent of the
               other  party  hereto.  However,  in the event of the death of the
               Employee,  all rights to receive payments  hereunder shall become
               rights of the Employee's estate.

          5.   Prior Agreement  Superseded;  Entire Agreement;  Amendments.  The
               Prior  Agreement is hereby  replaced and superseded and the Prior
               Agreement  shall be of no further  force or effect after the date
               of  this  Agreement.   This  Agreement   constitutes  the  entire
               agreement  among the parties  hereto with  respect to the matters
               contemplated  herein, and it supersedes all prior oral or written
               agreements,  commitments  or  understandings  with respect to the
               matters  provided  for  herein.  No  amendment,  modification  or
               discharge of this Agreement  shall be valid or binding unless set
               forth in writing and duly  executed  and  delivered  by the party
               against  whom  enforcement  of the  amendment,  modification,  or
               discharge is sought.

          6.   Section Headings. The section headings used in this Agreement are
               included solely for convenience and shall not affect,  or be used
               in connection with, the interpretation of this Agreement.

          7.   Governing  Law. This  Agreement  shall be governed by the laws of
               the United States to the extent  applicable  and otherwise by the
               laws of the State of New York,  excluding the choice of law rules
               thereof.

                                       -6-

Attest:                                                     BRIDGE BANCORP, INC.

/s/ Raymond Wesnofske                     By /s/ Thomas J. Tobin
- ------------------------------------       -------------------------------------
Chairman of the Board                     President and Chief Executive Officer

Attest:                                              BRIDGEHAMPTON NATIONAL BANK

/s/ Raymond Wesnofske                     By /s/ Thomas J. Tobin
- ------------------------------------       -------------------------------------
Chairman of the Board                      President and Chief Executive Officer

                                           EMPLOYEE

                                           /s/ Christopher Becker
                                           -------------------------------------
                                           Christopher Becker

                                       -7-
                              ARTHUR ANDERSEN LLP

                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     As independent public  accountants,  we hereby consent the incorporation of
our report dated January 22, 1999,  incorporated by reference in this form 10-K,
into the Company's previously filed Registration Statement No. 333-50933.

                                                         /s/ Arthur Andersen LLP

New York, New York
March 30, 1999

                                                                    9
                                                0000846617
                                               Bridge Bancorp, Inc.
                                                              1000

                                                        12-MOS
                                                    Dec-31-1998
                                                         Dec-31-1998
                                                                    10,881
                                                       251
                                                           3,150
                                                               0
                                               69,443
                                                     5,052
                                                       5,067
                                                                  168,696
                                                                1,713
                                                           266,951
                                                               241,531
                                                               1,439
                                                        1,749
                                                                    0
                                                          0
                                                                    0
                                                                  21,660
                                                                   621
                                           266,951
                                                           14,461
                                                          4,123
                                                             435
                                                          19,019
                                                         5,911
                                                         5,978
                                                     13,041
                                                                425
                                                            47
                                                            9,637
                                                            5,984
                                                 5,984
                                                                0
                                                                      0
                                                               3,895
                                                               0.92
                                                               0.91
                                                              5.60
                                                                1,208
                                                                   4
                                                               0
                                                            4,439
                                                           1,393
                                                                196
                                                                  91
                                                          1,713
                                                       1,713
                                                            0
                                                        0