NewBridge Bancorp ( NASDAQ: NBBC), parent of NewBridge Bank, today announced that it has accelerated its previously announced problem asset disposition plan (the “Plan”) and has entered into securities purchase agreements with select investors and insiders of the Company pursuant to which it expects to raise $56 million of convertible preferred equity. The Company also reported results for the three month and nine month periods ended September 30, 2012. For the three months then ended, the Company reported a net loss $32.5 million compared to net income of $1.1 million for the quarter ended September 30, 2011. After dividends and accretion on preferred stock, the Company reported net loss to common shareholders of $2.12 per diluted share. The results for the quarter included one-time items of an $11 million valuation allowance against the Company’s deferred tax asset and $1.9 million of expense to write down facilities and other assets. For the nine months ended September 30, 2012, the Company reported a net loss of $30.0 million compared to net income of $3.2 million for the same period a year ago. The prior year nine month period benefitted from a one-time gain of $2.0 million on the sale of investment securities.
The Company’s financial results were affected by its previously disclosed Plan to accelerate the disposition of problem assets. The Plan objective was to reduce classified assets by $71 million from $149.0 million as measured at March 31, 2012. As of September 30, 2012, the Company had substantially completed this objective. Classified assets declined $46 million during the quarter, totaling $85.0 million at September 30, 2012. Management estimates the Company will exceed the Plan objective by year end. This increase in credit costs is partially reflected through the reduction in problem assets under the Plan, as well as in the higher allowance for credit loss levels. The allowance for credit losses increased $9.8 million in the third quarter to $35.0 million and as a percentage of nonperforming loans from 73% to 126%. The increase in reserves was also attributed to higher general reserve levels principally for homogenous residential and home equity loans resulting from management’s review of these portfolios and the subsequent identification of pools of high risk performing loans.
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