NewBridge Bancorp ( NASDAQ: NBBC), parent of NewBridge Bank, today reported net income of $373,000 for the three months ended March 31, 2010 compared to a net loss of $3.6 million for the three months ended March 31, 2009. After payment of preferred dividends, the net loss to common shareholders was $357,000, or ($0.02) per diluted share, compared with a net loss to common shareholders of $4.3 million, or ($0.28) per diluted share, for the same quarter a year ago.

Pressley A. Ridgill, President and Chief Executive Officer of NewBridge Bancorp, commented: “Despite continuing economic challenges, we are beginning to see signs of an improving loan portfolio, which is leading to better financial performance. We achieved a first quarter improvement in pre-tax income of $7.0 million from the quarter ended March 31, 2009, to $476,000 from a loss of $6.5 million. This hard won improvement was due in large part to better trends in our nonperforming loan portfolio and improved operating efficiencies. Loan charge-offs continued to fall. Provision expense decreased from $8.5 million in the first quarter of 2009 to $3.7 million in the first quarter of 2010, a decline of 56%. We are increasingly confident that our disciplined approach to early recognition of problems and aggressive loan management has served us well. We are further encouraged as we achieved continued positive trends in rising net interest income and lower noninterest costs. Both of these are tracking closely to our 2010 profit plan. The increase in net interest income led to our higher net interest margin, to just under 4% in the quarter, and we expect it to continue at about that level for the balance of the year.”

Net interest income, net interest margin continued to grow

Net interest income increased $3.3 million to $17.2 million for the first quarter this year from $14.0 million for the same quarter last year. The gain was due primarily to lower interest expense paid on deposits which in addition to the decline in interest related expenses resulted in a wider net interest margin. For the first quarter, the Company’s net interest margin reached 3.97%, or 98 basis points higher than the same period a year ago, and 34 basis points higher than the three months ended December 31, 2009. The weighted average cost of deposits fell 127 basis points to 1.28% for the quarter ended March 31, 2010 compared to 2.55% for the same quarter the year before. Last year, the Company’s deposit prices were negatively impacted by irrational pricing pressure from competing financial institutions. That situation caused intense margin pressure during late 2008 and the first two quarters of 2009 until the higher rate time deposits began to mature. In mid 2009, the Company began shifting its marketing and strategic focus away from higher cost time deposits and towards checking accounts and other core deposit relationships. In addition, softening loan demand and reduced liquidity demands allowed the Company to significantly reduce its dependence on retail time deposits.

Core deposits, including noninterest bearing deposits, NOW, money market and savings accounts increased $61.4 million, or 7%, for the quarter just ended. Noninterest bearing balances accounted for 20%, or $12.4 million, of the growth. NOW balances increased 20%, or $55.5 million, for the quarter and remain the focus of the Company’s marketing campaign. Certificates of deposit declined $15.4 million for the quarter. The average balance of retail time deposits declined $251 million for the first quarter compared with the same period a year ago, while the average cost of retail time deposits declined to 1.82% from 3.59% for the same two periods.

Balance Sheet

Although the Company originated $112 million of new loans during the quarter, loan demand remained soft, which led to a $28 million decline in net loan balances. The lower balances were offset by increases in investment securities, which rose $27 million. Total assets increased $7.8 million at the end of the quarter to $1.95 billion. The growth in assets was due primarily to an increase in overnight investments. Total liabilities increased $7.6 million with total deposits increasing $45.9 million. The deposit growth allowed the Company to pay down Federal Home Loan Bank and other borrowings by approximately $38 million during the quarter. At March 31, 2010, the Company’s liquidity sources remained strong as unencumbered investments, available borrowing lines and access to wholesale deposits exceeded $400 million.

Shareholders’ equity increased $127,000 to $164.7 million during the first quarter. This was due to changes in accumulated other comprehensive income of $390,000, which exceeded other changes in equity including an increase in the retained deficit of $358,000. At March 31, 2010 the Company’s tier one capital as a percentage of average assets was 9.02% and total capital as a percentage of total risk weighted assets was 12.44%, well above the levels required to meet the “well capitalized” standards of 5% and 10%, respectively.

Noninterest Income

Noninterest income declined 14.6%, to $3.4 million, for this year’s first quarter compared with $4.0 million for the same quarter a year ago. Noninterest income declined due primarily to an increase of $298,000 in loss on sale of other real estate owned (OREO). Deposit service charge income also fell $211,000 for the quarter to $1.9 million, indicating consumers are being more cautious about managing their banking relationship. Revenue from mortgage related activities was soft, rising just $20,000 to $214,000 for the quarter compared to the same period a year ago.

Noninterest Expense

Noninterest expense increased $486,000 to $16.5 million due primarily to an increase in OREO write-down and expense, up $1.0 million to $1.2 million. Personnel expenses were also up modestly due in part to the addition of Bradford Mortgage employees and a new office location in downtown Greensboro. These expenses were largely offset by the closing of five offices. Mr. Ridgill commented, “We have made a substantial improvement in the cost management culture of this organization. We are closely tracking our efficiency and are pleased to report that, excluding the expense and loss related to OREO, our efficiency was improved at 70%, comparing favorably to 84% for the three months ended March 31, 2009.”

Asset Quality

Asset quality trends remain favorable and continue to show signs of improvement following the peak in nonperforming loans in June of 2009. The Company’s most closely monitored nonperforming assets are non-accruing loans excluding troubled debt restructures. These loans totaled $47.4 million at March 31, 2010, down $4.1 million since December 31, 2009 and down $8.8 million since their peak at June 30, 2009.

Total nonperforming assets increased $462,000 to $86.0 million, or 4.40% of total assets, at March 31, 2010, from $85.6 million, or 4.40% of total assets, at December 31, 2009. The increase was primarily the result of an added $2 million in real estate acquired in settlement of loans and a $3.5 million addition in troubled debt restructured loans, partially offset by a $4.1 million decrease in nonaccruing loans that have not been restructured.

At the end of the first quarter, the allowance for credit losses totaled $35.5 million, 2.48% of total loans, or 63% of nonperforming loans. Excluding loans for which the full anticipated loss has been charged off, the allowance for credit losses totaled 108% of nonperforming loans, compared to 105% at December 31, 2009. Mr. Ridgill reported, “Our current results are improved as a result of the substantial write-downs we absorbed earlier in this credit cycle.” Since the adverse credit cycle began in late 2007, charged-off loans have totaled more than 5% of the Company’s gross loans as measured from the peak loan balance. In the first quarter, net charged-off loans totaled $4.0 million, or an annualized rate of 1.13%.

Outlook

Mr. Ridgill discussed the outlook, “Through the first three months of this year our financial results have closely tracked our 2010 profit plan. We are optimistic we will have a profitable year that will reward our shareholders. Tough actions we took early in this credit cycle are resulting in improvements thus far this year. We made realistic mark-to-market adjustments on our problem assets and established strategies to reduce expenses and improve our operating margins. These factors should benefit us for the rest of the year. While our net interest margin has steadily grown over the last four quarters, the benefits of lowering deposit costs has largely been realized; therefore, we anticipate a flattening but stable net interest margin in the range of 4%. NewBridge Bank maintains a largely neutral interest rate risk position and would generally be unaffected by most rising interest rate scenarios. The strong expense controls demonstrated throughout 2009 are continuing in 2010 as we maintain our disciplined cost management culture. We are actively exploring opportunities to grow noninterest income through acquisitions such as Bradford Mortgage, although organic recruitment of talent is likely to remain our best opportunity for growth in the near future.”

About NewBridge Bancorp

NewBridge Bancorp is the parent company of NewBridge Bank, a full service state chartered community bank with headquarters in Greensboro, North Carolina. NewBridge Bank also offers financial planning and investment alternatives, such as mutual funds and annuities, through Raymond James Financial Services, Inc., a registered broker dealer.

With approximately $2.0 billion of total assets, NewBridge Bank is one of the largest community banks in North Carolina, and based on deposit market share is the largest community bank in the Piedmont Triad Region of North Carolina. The Bank has 33 offices in the Piedmont Triad Region of North Carolina, the Wilmington, NC area and Harrisonburg, VA.

Disclosures About Forward Looking Statements

The discussions included in this document and its exhibits may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements. Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” or other statements concerning opinions or judgments of NewBridge and its management about future events. The accuracy of such forward looking statements could be affected by factors including, but not limited to, the financial success or changing conditions or strategies of NewBridge’s customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel or general economic conditions. Additional factors that could cause actual results to differ materially from those anticipated by forward looking statements are discussed in NewBridge’s filings with the Securities and Exchange Commission, including without limitation its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. NewBridge undertakes no obligation to revise or update these statements following the date of this press release.
FINANCIAL SUMMARY            
 
 
Three Months Ended March 31, 2010 Three Months Ended March 31, 2009
Average Interest Income/ Average Yield/ Average Interest Income/ Average Yield/
Balance Expense Rate Balance Expense Rate
(Fully taxable equivalent basis, dollars in thousands)
Earning Assets
Loans receivable $ 1,452,707 $ 19,431 5.42 % $ 1,597,154 $ 22,080 5.61 %
Investment securities 340,397 4,309 5.13 % 294,295 3,705 5.11 %
Other earning assets   21,450     20   0.38 %   69,014     67   0.39 %
Total Earning Assets 1,814,554 23,760 5.31 % 1,960,463 25,852 5.35 %
Non-Earning Assets   139,690     151,982  
Total Assets $ 1,954,244   23,760 $ 2,112,445   25,852
 
Interest-Bearing Liabilities
Deposits $ 1,366,765 4,302 1.28 % $ 1,520,520 9,568 2.55 %
Borrowings   244,157     1,711   2.84 %   242,609     1,827   3.05 %
Total Interest-Bearing Liabilities 1,610,922 6,013 1.51 % 1,763,129 11,395 2.62 %
Demand deposits 159,568 153,520
Other liabilities 18,108 18,915
Shareholders' equity   165,646     176,881  
Total Liabilities and
Shareholders' Equity $ 1,954,244     6,013   $ 2,112,445     11,395  
Net Interest Income $ 17,747   $ 14,457  
Net Interest Margin 3.97 % 2.99 %
Interest Rate Spread 3.80 % 2.73 %
 
 
FINANCIAL SUMMARY
 
2010   2009
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
Period-End Balances
(Dollars in thousands)
Assets $ 1,954,292 $ 1,946,526 $ 2,009,544 $ 2,065,297 $ 2,136,621
Loans 1,434,443 1,463,094 1,495,966 1,526,550 1,575,452
Investment securities 352,582 325,339 344,268 314,999 305,280
Earning assets 1,806,625 1,799,472 1,857,677 1,927,843 1,949,362
Noninterest-bearing deposits 168,414 156,040 159,725 160,827 159,440
Savings deposits 41,565 39,502 40,365 41,091 40,960
NOW accounts 326,751 271,208 211,570 180,555 185,418
Money market accounts 349,538 358,165 376,982 401,211 397,979
Time deposits 658,985 674,395 823,916 877,770 921,331
Interest-bearing liabilities 1,603,813 1,607,844 1,662,807 1,713,320 1,783,521
Shareholders' equity 164,732 164,604 166,397 167,248 173,727
 
Asset Quality Data
(Dollars in thousands)
Nonperforming loans:
Commercial nonaccrual loans, not restructured $ 42,869 $ 46,788 $ 44,889 $ 47,621 $ 43,919
Commercial nonaccrual loans which
have been restructured 4,406 1,777 1,747 2,893 158
Non-commercial nonaccrual loans   4,566     4,772     6,443     8,589     9,103  
Total nonaccrual loans 51,841 53,337 53,079 59,103 53,180
Loans past due 90 days or more and
still accruing $ 2,571 $ 3,450 $ 3,354 $ 3,792 $ 3,038
Troubled debt restructured, accruing   2,300     1,442     1,260     1,169     3,920  
Total nonperforming loans 56,712 58,229 57,693 64,064 60,138
Other real estate owned   29,316     27,337     19,031     16,030     12,345  
Total nonperforming assets $ 86,028 $ 85,566 $ 76,724 $ 80,094 $ 72,483
Net chargeoffs 4,042 8,629 16,010 7,783 3,290
Allowance for credit losses 35,524 35,843 38,902 44,104 41,034
Allowance for credit losses
to total loans 2.48

%

 
2.45

%

 
2.60

%

 
2.89

%

 
2.60

%

 
Nonperforming loans to total loans 3.95 3.98 3.86 4.20 3.82
Nonperforming assets to total assets 4.40 4.40 3.82 3.88 3.39
Nonperforming loans to total assets 2.90 2.99 2.87 3.10 2.81
Net charge-off percentage (annualized) 1.13 2.34 4.25 2.04 0.84
Allowance for credit losses to nonperforming loans 62.64 % 61.56 % 67.43 % 68.84 % 68.23 %
Allowance for credit losses to nonperforming loans, net of non-performing loans for which the full anticipated loss has been charged off
 
108.38 % 104.52 %
FINANCIAL SUMMARY      
 
Three Months Ended March 31
  2010     2009  
Income Statement Data
(Dollars in thousands, except share data)
Interest income:
Loans $ 19,430 $ 22,080
Other   3,820     3,291  
Total interest income 23,250 25,371
Interest expense   6,012     11,395  
Net interest income 17,238 13,976
Provision for credit losses   3,723     8,518  
Net interest income after
provision for credit losses 13,515 5,458
Noninterest income 3,430 4,014
Noninterest expense   16,469     15,983  
Income (loss) before income taxes 476 (6,511 )
Income taxes   103     (2,933 )
Net income (loss) 373 (3,578 )
Dividends and accretion on preferred stock   (730 )   (730 )
Net income (loss) available to common shareholders
  ($357 )   ($4,308 )
 
Net income (loss) per share:
Basic ($0.02 ) ($0.28 )
Diluted ($0.02 ) ($0.28 )
 
Other Data
 
Return on average assets 0.08

%

 
(0.69

)%

 
Return on average equity 0.90 (8.29 )
Net yield on earning assets 3.97 2.99
Efficiency 77.52 85.89
Average loans to assets 74.34 75.61
Average loans to deposits 95.18 95.41
Average noninterest - bearing deposits
to total deposits 10.45 9.17
Average equity to assets 8.48 8.28
Total capital as a percentage of total risk weighted assets 12.44 12.24
COMMON STOCK DATA          
 
 
2010 2009
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
 
Market value:
End of period $ 3.56 $ 2.22 $ 2.74 $ 2.07 $ 2.11
High 4.34 2.78 3.11 2.70 3.04
Low 2.08 1.89 1.82 1.39 0.94
Book value 7.18 7.17 7.28 7.34 7.75
Tangible book value 6.85 6.83 6.94 6.98 7.38
Shares outstanding at period-end 15,655,868 15,655,868 15,655,868 15,655,868 15,655,868
Average shares outstanding 15,655,868 15,655,868 15,655,868 15,655,868 15,655,868

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX