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BRIDGEHAMPTON, N.Y. ( TheStreet) -- If the financial crisis has taught investors anything, it's that proximity between debtors and creditors is important in lending. With that in mind, here's a regional bank stock to consider.

Bridge Bancorp ( BDGE) of Bridgehampton, N.Y., increased earnings every quarter last year while larger rivals such as Citigroup ( C) and Bank of America ( BAC) wrote down the value of bad assets and posted losses.

Despite a 10% dip in second-quarter profit, Bridge's operating performance was strong. Revenue jumped 15% to $13 million, net interest income advanced 22% to $8.9 million and its net interest margin hovered at 4.8%. Annualized loan growth hit 12%, a sign the bank is actively lending despite the recession. The company recently opened its 15th branch.

A debt-to-equity ratio of 0.4 indicates modest leverage. The company holds $16 million of cash reserves on its balance sheet and had a tier-1 capital ratio of 10.7% as of June 30, meaning it has adequate reserves. We rate Bridge Bancorp "buy" and give it a financial strength score of 7.4 out of 10.

During the latest quarter, provisions for loan losses quadrupled to $1.4 million, a sign that defaults might be on the horizon. Total loan loss reserves also increased 51% to $5 million. However, the added capital is more a sign of caution than an omen of losses, especially if you consider the company's past performance.

Bridge Bancorp shares have surged 54% this year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 19, a premium to the market, and offers a dividend yield of 3.3%. Management began paying dividends in 2008, when other financial institutions were cutting theirs.

Investors looking for a financial sector investment and stable dividends should consider this stock.

-- Reported by Jake Lynch in Boston.

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