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8-K - FORM 8-K - NEWBRIDGE BANCORPd287994d8k.htm

Exhibit 99.1

NEWBRIDGE BANCORP REPORTS NET INCOME OF $1.4 MILLION FOR THE FOURTH QUARTER

AND $4.7 MILLION FOR THE YEAR

 

   

Net income climbs 38% for the year and 29% for the quarter compared to the same periods a year ago

 

   

Net interest margin improves, and averages 4.25% for the quarter and 4.22% for the year, 25 basis points and 22 basis points higher than the year ago periods, respectively

 

   

Pre-tax, pre-securities gains and pre-credit related operating income totals $8.0 million for the quarter and $28.0 million for the year

 

   

Non-accruing loans decline 9% for the quarter, 23% for the year and 41% from the peak level

 

   

Total classified loans decline 6% for the quarter, 20% for the year and 24% from the peak level

 

   

Net loan charge-offs decline 41% for the year, or $11.6 million

 

   

Provision expense declines $4.5 million for the year

 

   

Allowance for credit losses as a percentage of loans increases from 2.15% to 2.39% year over year

 

   

Core deposits increase $67.9 million, or 7.1%, for the year to $1.03 billion and represent 72% of total deposits

 

   

Cost of interest bearing deposits declines to 0.63% for the quarter and 0.75% for the year

 

   

Noninterest expense declines $1.2 million for the quarter and $3.5 million for the year

GREENSBORO, N.C., January 26, 2012 – NewBridge Bancorp (NASDAQ: NBBC), parent of NewBridge Bank, today reported results for the three and twelve month periods ended December 31, 2011. 

For the three months ended December 31, 2011, net income totaled $1.4 million compared to $1.1 million for the quarter ended December 31, 2010. After dividends and accretion on preferred stock, the Company reported net income available to common shareholders of $714,000, or $0.04 per diluted share for the quarter ended December 31, 2011. For the prior year fourth quarter, net income available to common shareholders totaled $391,000, or $0.02 per diluted share. For the twelve months ended December 31, 2011, net income totaled $4.7 million, which compares to net income of $3.4 million for the prior year. After dividends and accretion on preferred stock, the Company reported net income available to common shareholders of $1.8 million, or $0.11 per diluted share, compared to $461,000, or $0.03 per diluted share in 2010.

Pressley A. Ridgill, President and Chief Executive Officer of NewBridge Bancorp, commented: “Our operating results for the December quarter and year were excellent considering the difficult economic environment. Our credit trends continued to improve, our efficiency initiatives were effective and our net interest margin climbed to a robust 4.25%. We have been profitable for nine consecutive quarters, and for the second consecutive year. Our operating results closely tracked our profit plan, both before and after credit related costs. Excluding credit costs and securities gains, pre-tax operating income totaled $28.0 million, which is $138,000 higher than prior year results, even though average earning assets fell $170.6 million from the prior year. Our return on average assets before tax and credit costs climbed from 1.45% in 2010 to 1.60% in 2011. For the December quarter, our income before tax, securities gains and credit costs was $8.0 million, or a 1.85% annualized return on average assets.”

Mr. Ridgill continued, “During the second half of 2011, we announced the opening of three new loan production offices in Raleigh, Asheboro and Morganton, North Carolina in order to bolster the Company’s lending opportunities. I am pleased to announce that the early returns from these offices are encouraging. At December 31, these offices had $11.0 million in loan balances and over $40.0 million of loans in various stages of approval. We believe this strategy plays an important role in reversing the Company’s trends in loan production.”


Net interest income

Net interest income declined $525,000 or 3.1%, to $16.6 million for the quarter compared to $17.1 million a year ago. For the twelve-month period ending December 31, 2011, net interest income declined $2.3 million to $67.1 million. The Company’s average earning assets for the year declined $170.6 million from the prior year, primarily in loans, which declined $134.8 million to an average balance of $1.27 billion. The average balance of investment securities also fell $25.6 million to $305.1 million for the year. The net interest margin improved 22 basis points over the prior year to 4.22%, which partially offset the decline in net interest income due to fewer earning assets. For the three month period ended December 31, 2011, the net interest margin climbed to 4.25%, which compares favorably to the prior year three-month period margin of 4.00%. The improved margin for the three and twelve month periods is due primarily to lower cost on deposits.

Balance Sheet

Total deposits increased $19.8 million for the year to $1.42 billion after considering the $54.1 million of deposits sold in May as part of our Harrisonburg, VA sale of operations. Core deposits, defined as noninterest bearing demand accounts, savings, NOW and money market deposit accounts, increased 7.1%, or $67.9 million, during the year. Growth in core deposits would have been greater during the year had the Company not transferred $24.9 million of core deposits in its sale of the Harrisonburg operations. At December 31, 2011, core deposit accounts totaled 72% of the Company’s total deposits, or $1.025 billion, and had a weighted average interest rate of 0.40%, down 20 basis points from the prior year end. The Company continues to focus on growing profitable, low-cost core deposits. Time deposits declined $102.2 million for the year to $393.4 million at December 31, 2011. Brokered and wholesale deposits were $43.6 million at December 31, 2011. For the fourth quarter, the weighted average cost of interest bearing deposits was 0.63%.

Loans held for investment declined $17.0 million to $1.20 billion during the fourth quarter of 2011. For the year, loan balances have declined $60.5 million. New portfolio loan production totaled $65.4 million for the three-months and $219.3 million for the twelve-months ended December 31, 2011.

Investment securities increased $42.4 million to $337.8 million during the fourth quarter. The Company had a net unrealized gain in its investment portfolio at December 31, 2011 of $808,000. As of that date, the weighted average duration was 3.21 years and the weighted average yield was 4.23%.

The Company’s available liquidity was extensive during the fourth quarter due primarily to the Company’s strong core deposit mix, coupled with modest lending opportunities. Available borrowings, unencumbered investments and access to wholesale deposits exceeded $500 million at December 31, 2011. Brokered and wholesale deposits totaled 3.1% of deposits at December 31, 2011.

Shareholders’ equity declined $2.5 million for the year to $163.4 million, due primarily to a $4.8 million decrease in comprehensive income resulting from a fair market value actuarial change in the Company’s pension obligation as well as changes in the fair market value of the Company’s investment portfolio. The Company’s pension plan was frozen in 2007, so no new obligations are being formed under the plan. A precipitous drop in long term interest rates, however, changed actuarial estimates about the funding status of the plan. The change in the value of the funding status was reflected as a charge against the Company’s comprehensive income. In addition, during the fourth quarter of 2011, the Company made an adjustment to deferred tax assets and retained earnings to correct an immaterial misstatement of deferred tax assets arising from the Company’s merger in 2007. Prior period amounts have been restated accordingly. The correction increased deferred taxes and retained earnings by $2.7 million in all periods.


Noninterest Income

Excluding gains and losses on sales of securities and other real estate owned (“OREO”), noninterest income declined $339,000 to $4.3 million for the three months ending December 31, 2011, and declined $1.3 million for the year. Retail and mortgage revenue totaled $3.1 million for the quarter, but was a combined $598,000 lower than the prior year quarter. For the year, mortgage banking and retail banking revenue was lower by $2.4 million or approximately 20%. This revenue stream was negatively impacted by ongoing regulatory changes, changes in consumer behavior, and a lower level of mortgage production.

Losses on sales and writedowns of OREO declined by $418,000 for the quarter ended December 31, 2011 to $1.4 million from $1.8 million for the quarter ended December 31, 2010. For the year, OREO losses and writedowns totaled $5.2 million, compared to $5.5 million in 2010.

Security gains totaled $2.0 million for the twelve-month period ending December 31, 2011, a decline of $1.6 million from the prior year.

Noninterest Expense

Noninterest expense declined $1.2 million, or 8%, to $13.5 million for the fourth quarter compared to $14.7 million for the prior year’s fourth quarter, and declined $1.4 million from the third quarter of 2011, which included non-recurring expense of $435,000, principally severance-related. The quarter ended December 31, 2011 benefitted from a reduction in the Company’s actuarial estimate of employee health care liability and other one-time items that netted to approximately $400,000. The lower noninterest expense in the December quarter was due in large part to lower personnel costs related to the efficiency study initiative conducted earlier this year. Excluding OREO cost, the operating efficiency percentage improved to 61.80% for the December quarter from 66.11% for the same period a year ago. FDIC insurance premiums declined in the December quarter due to an improvement in the FDIC’s assessment rating for our Company.

Asset Quality

Nonperforming loans declined 6.7% or $2.9 million during the quarter and 19.9% or $10.1 million for the year to $40.5 million at December 31, 2011. Since the peak level at June 30, 2009, nonperforming loans have declined 37% or $23.5 million. Nonperforming loans represent 3.38% of total loans held for investment. Including OREO), which increased $4.1 million during the quarter, total nonperforming assets increased $1.2 million to $71.1 million, or 4.10% of total assets, at December 31, 2011. The duration of property held in OREO averaged 14 months at year end. During 2011, $11.6 million of OREO was sold, the Company recorded $5.1 million in writedowns and $122,000 was realized as a net loss on sales. Troubled debt restructured loans totaled $14.9 million of the $40.5 million of nonperforming loans. Accruing restructured loans totaled $7.4 million and non-accruing restructured loans totaled $7.5 million. The Company evaluates all troubled debt restructured loans at the time of the restructure for impairment, which typically results in the asset being moved to non-accrual. The Company’s highest risk and most closely monitored non-performing assets are non-accruing loans excluding troubled debt restructures. These loans totaled $25.6 million at December 31, 2011, down $34.4 million, or 57%, since June 30, 2009. Impaired and potential problem loans (or total classified loans) continued to rise until the September quarter of 2010. Over the last five quarters, potential problem credits have declined 24.5%, or $41.6 million. In the fourth quarter of 2011, the classified loan balances declined 7%, or $8.4 million, from $136.9 million. The expected default rates and the anticipated loss given default experience remains around 4% of the potential problem portfolio.

The allowance for credit losses totaled $28.8 million at December 31, 2011, or 2.39% of loans held for investment, an increase of approximately $1.1 million from the previous quarter end. The increase in reserves was due primarily to an increase in specific reserves. The Company’s allowance for loan loss consists of general reserves totaling 86% and specific reserves totaling 14%, compared to 93% general and 7% specific at September 30, 2011. The Company’s allowance for credit loss as a percentage of


nonperforming loans (“the coverage percentage”) increased to 71.16% at the December 2011 quarter end, compared to 63.9% at September 30, 2011 and 56.8% at December 31, 2010. The majority of estimated losses from the Company’s $40.5 million of non-performing loans have been previously recognized through charge-offs. Consequently, the Company’s allowance for loan loss is generally applicable to the inherent losses within the Company’s watch list and other performing loans. Since the current adverse credit cycle began in 2007, the Company has charged off $139.3 million of loans and OREO, or 8.6% of our highest/peak level of loan balances.

The Company is materially below the FFIEC high CRE concentration guidelines in land acquisition, development and construction (the “AD&C portfolio”) loans as well as total commercial real estate loans. At December 31, 2011, the Company’s concentrations were 39% of tier 1 regulatory capital and 134% of total regulatory capital, respectively, which compares favorably to the published interagency regulatory guidance of 100% and 300%, respectively. The AD&C portfolio totaled $65.4 million at December 31, 2011 and includes only $30.9 million of speculative residential construction and residential acquisition and development loans. This portfolio is largely graded as impaired or potential problem loans.

Outlook

Mr. Ridgill stated “Our financial results for 2011 and 2010 closely tracked our profit plan, both before and after credit related costs. This gives me great confidence in stating that our 2012 plan is conservative and achievable. We anticipate solid core earnings enhancement primarily from a continued decline in credit related costs and a lower base of operating expenses. While the margin will be under pressure in the coming year due to assets maturing and repricing, we anticipate higher earning assets from an increase in the investment portfolio and some positive momentum in loan growth. While the current strategy to progress organically is a priority; we believe it is also likely that other paths will be available to us in the coming year. The Company’s capital levels are strong and provide us with many options. We are excited by the opportunity of the coming year and look forward to providing you with timely progress reports.”

Non-GAAP Financial Information

In addition to results presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release includes non-GAAP financial measures such as the operating efficiency percentage and pre-tax, pre-securities gains and pre-credit related operating income. The Company believes these non-GAAP financial measures provide additional information that is useful to investors in understanding its underlying performance, business, and performance trends and such measures help facilitate performance comparisons with others in the banking industry. Non-GAAP measures have inherent limitations, are not required to be uniformly applied, and are not audited. Readers should be aware of these limitations and should be cautious to their use of such measures. To mitigate these limitations, the Company has procedures in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and to ensure that its performance is properly reflected to facilitate consistent period-to-period comparisons. Although management believes the above non-GAAP financial measures enhance investors’ understanding of the Company’s business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.

Please refer to the Non-GAAP Measures section later in this release for additional information.

About NewBridge Bancorp

NewBridge Bancorp is the bank holding company for NewBridge Bank, a full service, state-chartered community bank headquartered in Greensboro, North Carolina. The stock of NewBridge Bancorp trades on the NASDAQ Global Select Market under the symbol “NBBC.”

As one of the largest community banks in the state, NewBridge Bank serves small to midsize businesses, professionals and consumers with a comprehensive array of financial services, including retail and commercial banking, private banking, wealth management, and mortgage banking. NewBridge Bank has assets of approximately $1.7 billion with 30 banking offices throughout North Carolina.

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 release.

####


FINANCIAL SUMMARY

 

     Three Months ended December 31, 2011     Three Months ended December 31, 2010  
     Average
Balance
     Interest Income/
expense
     Average Yield/
Rate
    Average
Balance
     Interest Income/
expense
     Average Yield/
Rate
 

(Fully taxable equivalent basis, dollars in thousands)

                

Earning Assets

                

Loans receivable

   $ 1,220,133       $ 15,820         5.14   $ 1,358,187       $ 17,869         5.22

Investment securities

     315,519         3,444         4.33     292,321         3,423         4.65

Other earning assets

     24,005         16         0.26     53,634         42         0.31
  

 

 

    

 

 

      

 

 

    

 

 

    

Total earning Assets

     1,559,657         19,280         4.90     1,704,142         21,334         4.97

Non-earning Assets

     153,218              134,826         
  

 

 

         

 

 

       

Total Assets

   $ 1,712,875         19,280         $ 1,838,968         21,334      
  

 

 

         

 

 

       

Interest-Bearing Liabilities

                

Deposits

   $ 1,240,660         1,980         0.63   $ 1,321,383         3,118         0.94

Borrowings

     116,781         606         2.06     163,018         1,033         2.51
  

 

 

    

 

 

      

 

 

    

 

 

    

Total Interest-Bearing Liabilities

     1,357,441         2,586         0.76     1,484,401         4,151         1.11

Noninterest-bearing deposits

     171,909              167,879         

Other liabilities

     17,849              18,401         

Shareholders’ equity

     165,676              168,287         
  

 

 

         

 

 

       

Total Liabilities and Shareholders’ equity

   $ 1,712,875         2,586         $ 1,838,968         4,151      
  

 

 

    

 

 

      

 

 

    

 

 

    

Net Interest Income

      $ 16,694            $ 17,183      
     

 

 

         

 

 

    

Net Interest Margin

           4.25           4.00

Interest Rate Spread

           4.15           3.86
     Twelve Months ended December 31, 2011     Twelve Months ended December 31, 2010  
     Average
Balance
     Interest Income/
expense
     Average Yield/
Rate
    Average
Balance
     Interest Income/
expense
     Average Yield/
Rate
 

(Fully taxable equivalent basis, dollars in thousands)

                

Earning Assets

                

Loans receivable

   $ 1,271,790       $ 65,871         5.18   $ 1,406,624       $ 74,795         5.32

Investment securities

     305,061         13,887         4.55     330,634         16,519         5.00

Other earning assets

     24,270         60         0.25     34,496         96         0.28
  

 

 

    

 

 

      

 

 

    

 

 

    

Total earning Assets

     1,601,121         79,818         4.99     1,771,754         91,410         5.16

Non-earning Assets

     148,688              139,003         
  

 

 

         

 

 

       

Total Assets

   $ 1,749,809         79,818         $ 1,910,757         91,410      
  

 

 

         

 

 

       

Interest-Bearing Liabilities

                

Deposits

   $ 1,258,551         9,493         0.75   $ 1,359,593         14,960         1.10

Borrowings

     141,935         2,826         1.99     199,429         5,494         2.75
  

 

 

    

 

 

      

 

 

    

 

 

    

Total Interest-Bearing Liabilities

     1,400,486         12,319         0.88     1,559,022         20,454         1.31

Noninterest-bearing deposits

     166,077              164,958         

Other liabilities

     16,909              17,591         

Shareholders’ equity

     166,337              169,186         
  

 

 

         

 

 

       

Total Liabilities and Shareholders’ equity

   $ 1,749,809         12,319         $ 1,910,757         20,454      
  

 

 

    

 

 

      

 

 

    

 

 

    

Net Interest Income

      $ 67,499            $ 70,956      
     

 

 

         

 

 

    

Net Interest Margin

           4.22           4.00

Interest Rate Spread

           4.11           3.85


FINANCIAL SUMMARY

 

     2011     2010  
     Fourth
Quarter
    Third
Quarter
    Second
Quarter
    First
Quarter
    Fourth
Quarter
 

Period-end Balances

          

(Dollars in thousands)

          

Assets

   $ 1,734,564      $ 1,702,660      $ 1,738,559      $ 1,784,383      $ 1,809,891   

Loans held for investment

     1,199,998        1,217,058        1,244,288        1,254,630        1,260,585   

Loans held for sale

     7,922        6,894        2,754        77,584        76,994   

Investment securities

     337,811        295,461        292,898        276,458        325,129   

Earning assets

     1,572,094        1,549,932        1,593,857        1,617,735        1,668,303   

Noninterest-bearing deposits

     172,351        167,689        161,703        165,534        161,734   

Savings deposits

     40,876        40,097        40,937        41,510        38,898   

NOW accounts

     441,292        423,258        423,445        445,455        440,190   

Money market accounts

     370,773        363,340        365,109        336,784        316,608   

Time deposits

     393,384        401,287        435,895        466,013        495,565   

Interest-bearing liabilities

     1,379,799        1,347,756        1,354,956        1,439,236        1,465,735   

Shareholders’ equity

     163,386        167,278        166,701        164,116        165,918   

Asset Quality Data

          

(Dollars in thousands)

          

Nonperforming loans:

          

Commercial nonaccrual loans, not restructured

   $ 15,773      $ 17,477      $ 17,839      $ 18,528      $ 23,453   

Commercial nonaccrual loans, which have been restructured

     7,489        9,870        11,042        12,215        11,190   

Non-commercial nonaccrual loans

     9,852        8,922        10,383        11,680        8,537   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonaccrual loans

     33,114        36,269        39,264        42,423        43,180   

Loans past due 90 days or more and still accruing

     14        26        65        31        27   

Accruing restructured loans

     7,406        7,167        8,351        7,532        7,378   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     40,534        43,462        47,680        49,986        50,585   

Other real estate owned

     30,587        26,469        25,729        26,329        26,718   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming assets

   $ 71,121      $ 69,931      $ 73,409      $ 76,315      $ 77,303   

Restructured loans, performing

     4,888        4,577        0        0        0   

Net chargeoffs

     3,153        3,736        4,037        5,768        11,438   

Allowance for credit losses

     28,844        27,750        28,040        29,057        28,752   

Allowance for credit losses to total loans

     2.39     2.27     2.25     2.18     2.15

Nonperforming loans to loans held for investment

     3.38        3.57        3.83        3.98        4.01   

Nonperforming assets to total assets

     4.10        4.11        4.22        4.28        4.27   

Nonperforming loans to total assets

     2.34        2.55        2.74        2.80        2.79   

Net charge-off percentage (annualized)

     1.03        1.20        1.23        1.84        3.63   

Allowance for credit losses to nonperforming loans

     71.16        63.85        58.81        58.13        56.84   

Loans identified as impaired

   $ 32,591      $ 33,827      $ 37,483      $ 36,497      $ 38,303   

Other nonperforming loans

     7,943        9,635        10,197        13,489        12,282   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total nonperforming loans

     40,534        43,462        47,680        49,986        50,585   

Other potential problem loans

     87,959        93,459        97,141        96,509        110,924   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total impaired and potential problem loans

   $ 128,493      $ 136,921      $ 144,821      $ 146,495      $ 161,509   

 

Gross loan chargeoffs, and writedowns and losses on other real estate owned to peak loans during the credit cycle beginning January 1, 2007:

     2007         2008         2009         2010         2011         TOTAL   

Gross loan chargeoffs

                 

Commercial

   $ 5,052       $ 5,046       $ 11,232       $ 9,052       $ 5,821       $ 36,203   

Real estate - construction

     825         7,339         12,227         5,379         3,985         29,755   

Real estate - mortgage

     1,300         5,012         10,110         7,260         6,046         29,728   

Consumer

     2,235         5,071         4,925         2,829         1,358         16,418   

Other

     0         0         0         6,200         1,387         7,587   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total gross loan chargeoffs

   $ 9,412       $ 22,468       $ 38,494       $ 30,720       $ 18,597       $ 119,691   

Other real estate owned writedowns and losses

     4,001         3,571         1,294         5,508         5,238         19,612   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total chargeoffs, writedowns and losses

   $ 13,413       $ 26,039       $ 39,788       $ 36,228       $ 23,835       $ 139,303   

Peak loans at September 30, 2008

                  $ 1,626,504   

Chargeoffs, writedowns and losses to peak loans

                    8.56


FINANCIAL SUMMARY

 

     Three Months ended December 31     Twelve Months Ended December 31  
     2011     2010     2011     2010  

Income Statement Data

        

(Dollars in thousands, except share data)

        

Interest income:

        

Loans

   $ 15,819      $ 17,869      $ 65,871      $ 74,795   

Investment securities

     3,347        3,361        13,514        15,022   

Other

     16        42        60        96   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest income

     19,182        21,272        79,445        89,913   

Interest expense:

        

Deposits

     1,980        3,118        9,493        14,960   

Borrowings from the FHLB

     271        448        1,178        3,087   

Other

     335        585        1,648        2,407   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total interest expense

     2,586        4,151        12,319        20,454   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income

     16,596        17,121        67,126        69,459   

Provision for credit losses

     4,247        4,636        16,785        21,252   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net interest income after provision for credit losses

     12,349        12,485        50,341        48,207   

Noninterest income:

        

Retail banking

     2,414        2,667        9,925        11,592   

Mortgage banking services

     640        985        1,728        2,438   

Wealth management services

     625        592        2,499        2,133   

Gain on sale of investment securities

     —          —          2,026        3,637   

Writedowns and loss on sale of real estate acquired in settlement of loans

     (1,368     (1,786     (5,238     (5,508

Bank-owned life insurance

     370        218        1,385        865   

Other

     239        165        830        658   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest income

     2,920        2,841        13,155        15,815   

Noninterest expense

        

Personnel

     6,308        7,152        28,806        29,897   

Occupancy

     944        979        3,987        4,189   

Furniture and equipment

     860        1,134        3,644        4,644   

Technology and data processing

     972        1,100        3,942        4,501   

Legal and professional

     860        705        2,892        3,028   

FDIC insurance

     372        858        2,399        3,491   

Real estate acquired in settlement of loans

     596        327        1,830        1,426   

Other

     2,590        2,449        9,869        9,713   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total noninterest expense

     13,502        14,704        57,369        60,889   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     1,767        622        6,127        3,133   

Income taxes

     323        (498     1,449        (247
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     1,444        1,120        4,678        3,380   

Dividends and accretion on preferred stock

     (730     (729     (2,918     (2,919
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) available to common shareholders

   $ 714      $ 391      $ 1,760      $ 461   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share - basic

   $ 0.05      $ 0.02      $ 0.11      $ 0.03   

Net income (loss) per share - diluted

   $ 0.04      $ 0.02      $ 0.11      $ 0.03   

Other Data

        

Return on average assets

     0.33     0.24     0.36     0.24

Return on average equity

     3.46        2.64        3.76        2.67   

Net yield on earning assets

     4.25        4.00        4.22        4.00   

Efficiency (excluding OREO items and securities gains)

     55.02        65.80        63.84        66.74   

Average loans to assets

     71.23        73.86        72.68        73.62   

Average loans to deposits

     86.38        91.20        89.27        92.26   

Average noninterest - bearing deposits to total deposits

     12.17        11.27        11.66        10.82   

Average equity to assets

     9.67        9.15        9.51        8.85   

Total capital as a percentage of total risk weighted assets

     14.55        13.13        14.55        13.13   

Tangible common equity as a percentage of total risk weighted assets

     8.28        7.27        8.28        7.27   


INVESTMENT PORTFOLIO

 

(Dollars in thousands)    As of December 31, 2011  
     Amortized
Cost
     Gross
Unrealized gain
     Gross
Unrealized loss
    Estimated
Fair value
     Average
Yield (%)
    Average
Duration (years)
 

US Agency

   $ 39,000       $ 147       $ —        $ 39,147         2.79     1.06   

Mortgage backed securities

     31,917         2,926         —          34,843         5.21        3.55   

Collateralized mortgage obligations

     23,599         168         (332     23,435         4.69        2.03   

Commercial mortgage backed securities

     30,169         153         (33     30,289         3.47        4.43   

Covered bonds

     61,414         1,243         (131     62,526         5.25        2.12   

Corporate bonds

     118,573         385         (4,282     114,676         3.77        3.98   

Municipal obligations

     19,371         425         (288     19,508         5.76     5.37   

Federal Home Loan Bank stock

     7,185         —           —          7,185        

Other

     5,775         427         —          6,202        
  

 

 

    

 

 

    

 

 

   

 

 

      

Total

     337,003         5,874         (5,066     337,811         4.23        3.21   

 

* Fully taxable equivalent basis

COMMON STOCK DATA

 

     2011      2010  
     Fourth
Quarter
     Third
Quarter
     Second
Quarter
     First
Quarter
     Fourth
Quarter
 

Market value:

              

End of period

   $ 3.87       $ 3.90       $ 4.58       $ 4.96       $ 4.70   

High

     4.20         4.99         5.13         5.50         5.00   

Low

     3.30         3.53         4.21         4.54         3.40   

Book value

     7.09         7.34         7.30         7.14         7.25   

Tangible book value

     6.85         7.09         7.04         6.86         6.96   

Average shares outstanding

     15,655,868         15,655,868         15,655,868         15,655,868         15,655,868   

Average diluted shares outstanding

     16,163,509         16,467,550         16,521,391         16,697,944         16,252,427   

NON-GAAP MEASURES

 

Pre-tax, pre-securities gains and pre-credit-related
operating income
                               
    

Three Months ended

December 31, 2011

  

Twelve Months Ended

December 31, 2011

Net income

      $ 1,444            $ 4,678     

Income taxes

        323              1,449     

Real estate acquired in settlement of loans expense

        596              1,830     

Writedowns and loss on sale of real estate

               

acquired in settlement of loans

        1,368              5,238     

Less gain on sale of investment securities

        —                (2,026  

Provision for credit losses

        4,247              16,785     
     

 

 

         

 

 

   

Pre-tax and pre-credit related operating income

      $ 7,978            $ 27,954     
     

 

 

         

 

 

   
Operating efficiency percentage                
    

Three Months ended

December 31, 2011

  

Three Months Ended

December 31, 2010

Total noninterest expense

      $ 13,502            $ 14,704     

Less real estate acquired in settlement of loans expense

        (596           (327  
     

 

 

         

 

 

   

Numerator for calculation of operating efficiency (A)

      $ 12,906            $ 14,377     
     

 

 

         

 

 

   

Net interest income

      $ 16,596            $ 17,121     

Total noninterest income

        2,920              2,841     

Writedowns and loss on sale of real estate

               

acquired in settlement of loans

        1,368              1,786     
     

 

 

         

 

 

   

Denominator for calculation of operating efficiency (B)

      $ 20,884            $ 21,748     
     

 

 

         

 

 

   

Operating efficiency percentage (A/B)

        61.80           66.11