Exhibit 99.1

 

Contact:

Ramsey Hamadi, SEVP and Chief Financial Officer

336-369-0900

 

 

NEWBRIDGE BANCORP ANNOUNCES PROBLEM ASSET DISPOSITION PLAN SUCCESSFUL

AND ENTERS AGREEMENTS TO RAISE $56 MILLION OF CAPITAL

 

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Company announces $56 million capital raise

 

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Company reports third quarter loss of $32 million due to the acceleration of the disposition of problem assets under its previously announced plan; as a result of the loss, the Company records an $11 million impairment on its deferred tax asset

 

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Total problem (classified) assets decline $46 million for the quarter and $74 million year to date

 

§

Nonperforming assets decline $21.0 million to $38.2 million, or 2.23% of assets, for the quarter

 

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Other real estate owned declines $14.0 million, or 57%, to $10.5 million for the quarter

 

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The allowance for credit losses increases $9.8 million to $35.0 million, or 126% of nonperforming loans from 73% the prior quarter

 

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Total risk based capital was 12.07% at quarter end and exceeded the 10.0% “well capitalized” minimum requirement

 

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Net interest margin averages 4.02% for the quarter and 4.11% year to date

 

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Cost of interest bearing deposits drops to 0.35% for the quarter

 

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Quarterly mortgage banking revenues increase 85% over same period a year ago

 

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Loans increase $6.1 million for the quarter despite the liquidation of $44.5 million of problem loans

 

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New commercial loan production climbs year to date to $178 million, increasing 59% from the prior year

 

GREENSBORO, N.C., November 1, 2012 – 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.

 

 

 

On November 1, 2012, the Company entered into securities purchase agreements with select investors and insiders pursuant to which it expects to raise $56 million of equity, subject to receipt of customary regulatory approvals and determinations. The capital raise will be executed through a private placement of two series of mandatorily convertible preferred stock at a price of $4.40 per share. The two series of preferred stock will automatically convert into shares of NBBC voting and nonvoting, respectively, common stock in the first quarter of 2013 after the Company has received shareholder approval at a Special Meeting of Shareholders expected to be held in the first quarter of 2013.

 

Pressley A. Ridgill, President and Chief Executive Officer of NewBridge Bancorp, commented: “I am pleased to share the news of our capital raise and to report the positive results from the problem asset disposition plan. Although the implementation of the Plan resulted in what we anticipate will be a temporary impairment of our deferred tax asset, we believe the resolution of our problem assets fortifies our balance sheet and will immediately result in stronger earnings and positions the Company for improved profitability in the coming years. In addition, the new capital enhances the Company’s ability to address the $52 million preferred equity held by the U.S. Treasury through the Troubled Asset Relief Program (TARP).”

 

Mr. Ridgill continued, “Our third quarter operating results remain strong but also reflect some of the challenges we face in this operating environment. The Company’s net interest margin declined for the second consecutive quarter on the purging of high risk and high yield loans as well as the ordinary repricing of loans and investments in the low rate environment; liability cost declined but is increasingly limited in its future benefit; personnel expense climbed as the Company expanded its investment in loan production professionals in Charlotte and Raleigh, and certain assets were written down as the Company plans for efficiency improvement over the coming year. The low rate environment and flattening yield curve present unique challenges to our industry. As always, we will meet these challenges thoughtfully by investing in people, reducing costs and planning for disciplined growth.”

 

Net interest income  

 

Net interest income declined $944,000, or 5.7%, to $15.7 million for the quarter compared to $16.6 million a year ago. Year to date net interest income declined 4.7%, or $2.4 million, to $48.2 million. The Company’s net interest margin declined to 4.02% for the quarter compared to 4.20% for the same period last year. The net interest margin for the nine month period ending September 30, 2012 was 4.11%, down from 4.21% for the first nine months of last year. For the nine month period, the average balance of loans declined $111.9 million from the prior year’s nine month average, and the average yield on loans declined 24 basis points to 4.95%, resulting in a $6.5 million year to date reduction in interest income from loans. This decline was partially offset by lower interest expense on interest bearing liabilities, which fell by $3.7 million primarily due to a decline in deposit rates, and a higher balance of investment securities, which increased $81 million over the prior year. Interest income on investments increased 3.9% for the year, or $398,000. Yield on the investment portfolio for the three months ending September 30, 2012 declined 92 basis points to 3.44% from 4.36% for the same period a year ago.

 

The sustained low interest rate environment continues to impact loan yields. The annualized average yield on loans decreased to 4.81% for the three months ended September 30, 2012 compared to 5.18% for the three months ended September 30, 2011. The continuing implementation of the Plan adversely impacted loan yields in two ways: the impairment of performing loans reversed previously accrued interest in prior periods, and the $35.6 million of accruing loans disposed of in the September quarter had a 6.2% average yield, whereas new loans added during the quarter had an average yield of 4.2%.

 

 

 

Balance Sheet

 

Total assets decreased $34.5 million during the third quarter and $20.7 million for the year to $1.71 billion at September 30, 2012. Loans held for investment increased $6.1 million for the quarter, but declined $31.3 million for the year. Under the Plan, approximately $35.6 million of loans were sold or paid out, and $4.5 million were moved to other real estate owned (“OREO”). During the quarter, $19.1 million of net chargeoffs were recorded. Separately, $25.9 million of loans were purchased, and internal loan growth was $12.5 million during the quarter. During the past nine months, the Company has been actively building its commercial and private banking sales teams in the largest metropolitan areas of North Carolina, including the Piedmont Triad, Wilmington, Raleigh and Charlotte markets. Commercial loan production totaled $178 million for the year to date, an increase of 59% from the prior year period. Cash and cash equivalents decreased $19.2 million for the quarter and $11.3 million for the nine months. Investment securities decreased $1.6 million for the quarter to $387.4 million but have increased $49.6 million since the beginning of the year.

 

Total deposits declined $59.5 million to $1.39 billion at quarter end. Core deposits, excluding time deposits, declined $33.1 million to $1.01 billion. This decline in core deposits resulted from changes in fee structures targeted at simplifying product offerings and growing fee income and from lower rates being offered to certain deposit customers. The weighted average rate on core deposits declined from 0.26% at June 30, 2012 to 0.17% at September 30, 2012. Time deposit balances decreased $26.3 million during the quarter. For the quarter, the weighted average cost of time deposits declined from 0.62% to 0.55%.

 

Shareholders’ equity decreased $30.2 million during the quarter due primarily to credit related costs of approximately $40 million and the $11 million partial impairment of the Company’s deferred tax asset. Comprehensive income increased $2.9 million. Tangible book value declined $1.92 to $5.35.

 

Noninterest Income

 

Operating noninterest income, which excludes gains and losses on sales of securities and OREO, totaled $4.2 million for the third quarter of 2012 compared to $4.1 million for the third quarter of 2011. Mortgage revenues increased $337,000, or 85%, to $732,000 for the quarter. The growth in mortgage revenue was partially offset by lower retail banking revenue and a $57,000 decline in wealth management services revenue. While top line wealth management fee income declined, overall year to date profitability increased by $379,000 over 2011. For the respective nine month periods, operating noninterest income totaled $12.2 million and $14.1 million.

 

Losses on sales and writedowns of OREO totaled $10.6 million for the quarter and $14.6 million for the year to date compared to $799,000 and $3.9 million for the same periods in 2011.

 

Securities gains totaled $3,000 during the nine months ended September 30, 2012, compared to $2.0 million in gains during the nine months ended September 30, 2011.

 

Noninterest Expense

 

Noninterest expense increased $1.7 million from the prior year quarter to $16.5 million, and included $1.9 million of one-time occupancy and other noninterest expense that related to future planned efficiency initiatives. Personnel expense was $344,000 below the prior year level despite the addition of 11 commercial and private bankers during the current year to staff expansion of Raleigh and Charlotte operations.

 

Asset Quality

 

Total classified loans decreased 30%, or $32 million, during the quarter. Total classified loans crested later than many of the Company’s other credit metrics, rising until the third quarter of 2010. Since then, classified loans have declined 56%, or $93 million. As a percentage of the Bank’s tier one capital plus reserves, classified assets declined to 48% from 78% at December 31, 2011 and 93% at September 30, 2010. Nonperforming loans declined 20.1%, or $7.0 million, during the quarter. Nonperforming loans peaked at June 30, 2009 at $64.1 million. Since then, they have declined 56.8%, or $36.4 million. Nonperforming loans represent 2.37% of total loans held for investment. OREO decreased $14.0 million during the quarter to $10.5 million at September 30, 2012, primarily resulting from additional writedowns to estimated liquidation values, which is 43% of the previous carrying value of the properties.

 

 

 

Including OREO, total nonperforming assets decreased $21.0 million to $38.2 million, or 2.23% of total assets, at September 30, 2012. For the third quarter, troubled debt restructured loans totaled $10.9 million of the $27.7 million of nonperforming loans. Accruing restructured loans totaled $4.8 million, and nonaccruing restructured loans totaled $6.1 million.

 

The allowance for credit losses totaled $35.0 million at September 30, 2012, or 3.00% of loans held for investment. The Company’s allowance for credit losses as a percentage of nonperforming loans totaled 126% at September 30, 2012, compared to 73% at June 30, 2012 and 71% at December 31, 2011. The allowance consists of general reserves (93.4%) and specific reserves (6.6%). The confirmed losses from the Company’s nonperforming loans have been previously recognized through chargeoffs. Consequently, the Company’s allowance for credit losses is generally applicable to inherent losses within the Company’s watch list and other performing loans portfolio. Since the current adverse credit cycle began in 2007, the Company has charged off $183.8 million of loans and OREO, or 11.3% of our highest/peak level of loan balances of $1.627 billion at September 30, 2008. The annualized average quarterly net loss percentages over this 23 quarter period for commercial loans, mortgage loans, credit reserves and home equity lines, retail loans and credit cards were 2.16%, 0.77%, 1.67%, 1.91% and 1.44%, respectively.

 

The Bank is well within the regulatory commercial real estate high concentration guidelines in land acquisition, development and construction (the “AD&C portfolio”) loans, as well as total commercial real estate loans. At September 30, 2012, the Bank’s concentration levels were 39.61% and 178.96%, respectively, of total regulatory capital, which compares favorably to the interagency regulatory guidance maximum concentrations of 100% and 300%, respectively. The AD&C portfolio totaled $63 million at September 30, 2012, including $23 million of speculative residential construction and residential acquisition and development. This portfolio is largely graded as classified loans.

 

Outlook

 

Mr. Ridgill stated that “as previously discussed, we believe that our decision to accelerate the resolution of our remaining problem assets will result in earnings largely unencumbered by credit costs beginning in the fourth quarter of 2012. We believe there will be continued pressure on the margin in coming quarters, although we believe this will be largely offset by a recently implemented deposit account revenue enhancement strategy, further cost reductions and modest growth in earning assets.”

 

About NewBridge Bancorp

 

NewBridge Bancorp is the parent company of 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 of “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 in 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, successful completion of the capital raise described above, receipt of customary regulatory approvals and determinations referenced above, receipt of the shareholder approval referenced above, the financial success or changing conditions or strategies of NewBridge Bancorp’s clients 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.

 

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FINANCIAL SUMMARY

 

		Three Months Ended September 30, 2012												Three Months Ended September 30, 2011
		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		$	1,165,080			$	14,084				4.81%			$	1,234,861			$	16,121				5.18%
Investment securities			385,750				3,340				3.44%				312,356				3,430				4.36%
Other earning assets			10,430				10				0.38%				32,709				20				0.24%
Total Earning Assets			1,561,260				17,434				4.44%				1,579,926				19,571				4.91%
Non-Earning Assets			153,353												138,492
Total Assets		$	1,714,613				17,434							$	1,718,418				19,571
Interest-Bearing Liabilities
Deposits		$	1,226,510				1,088				0.35%			$	1,254,513				2,252				0.71%
Borrowings			109,185				575				2.10%				117,535				604				2.04%
Total Interest-Bearing Liabilities			1,335,695				1,663				0.50%				1,372,048				2,856				0.83%
Noninterest-bearing deposits			189,979												163,440
Other liabilities			18,442												17,849
Shareholders' equity			170,497												165,081
Total Liabilities and
Shareholders' Equity		$	1,714,613				1,663							$	1,718,418				2,856
Net Interest Income						$	15,771											$	16,715
Net Interest Margin											4.02%												4.20%
Interest Rate Spread											3.94%												4.08%

 

 

		Nine Months Ended September 30, 2012												Nine Months Ended September 30, 2011
		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		$	1,177,334			$	43,587				4.95%			$	1,289,198			$	50,052				5.19%
Investment securities			382,365				10,846				3.79%				301,537				10,443				4.63%
Other earning assets			15,462				30				0.26%				24,359				44				0.24%
Total Earning Assets			1,575,161				54,463				4.62%				1,615,094				60,539				5.01%
Non-Earning Assets			156,290												144,431
Total Assets		$	1,731,451				54,463							$	1,759,525				60,539
Interest-Bearing Liabilities
Deposits		$	1,229,965				4,217				0.46%			$	1,264,579				7,513				0.79%
Borrowings			121,548				1,792				1.97%				150,413				2,220				1.97%
Total Interest-Bearing Liabilities			1,351,513				6,009				0.59%				1,414,992				9,733				0.92%
Noninterest-bearing deposits			192,100												164,047
Other liabilities			19,372												16,657
Shareholders' equity			168,466												163,829
Total Liabilities and
Shareholders' Equity		$	1,731,451				6,009							$	1,759,525				9,733
Net Interest Income						$	48,454											$	50,806
Net Interest Margin											4.11%												4.21%
Interest Rate Spread											4.03%												4.09%

 

 

 

 

FINANCIAL SUMMARY

 

		2012												2011
		Third				Second				First				Fourth				Third
		Quarter				Quarter				Quarter				Quarter				Quarter
Period-End Balances (Dollars in thousands)
Assets		$	1,713,909			$	1,748,436			$	1,745,968			$	1,734,564			$	1,702,660
Loans held for investment			1,168,747				1,162,630				1,173,671				1,200,070				1,217,058
Loans held for sale			7,074				5,741				7,676				7,851				6,894
Investment securities			387,376				388,968				394,904				337,811				295,461
Earning assets			1,573,843				1,593,275				1,581,981				1,572,095				1,549,932
Noninterest-bearing deposits			184,942				192,066				211,246				172,351				167,689
Savings deposits			44,990				45,371				44,118				40,876				40,097
NOW accounts			429,792				431,390				444,439				441,292				423,258
Money market accounts			350,189				374,217				383,256				370,773				363,340
Time deposits			379,823				406,153				366,135				393,384				401,287
Interest-bearing liabilities			1,368,768				1,367,905				1,348,722				1,379,799				1,347,756
Shareholders' equity			139,365				169,551				167,046				163,387				167,278
Asset Quality Data (Dollars in thousands)
Nonperforming loans:
Commercial nonaccrual loans, not restructured		$	12,411			$	10,331			$	17,905			$	15,773			$	17,477
Commercial nonaccrual loans which
have been restructured			5,092				8,243				8,116				7,489				9,870
Non-commercial nonaccrual loans, not restructured			4,418				8,195				10,038				9,569				8,789
Non-commercial nonaccrual loans which
have been restructured			1,007				2,616				990				283				133
Total nonaccrual loans			22,928				29,385				37,049				33,114				36,269
Loans past due 90 days or more and
still accruing			6				65				29				14				26
Accruing restructured loans			4,760				5,230				6,633				7,406				7,167
Total nonperforming loans			27,694				34,680				43,711				40,534				43,462
Other real estate owned			10,465				24,491				30,032				30,587				26,469
Total nonperforming assets		$	38,159			$	59,171			$	73,743			$	71,121			$	69,931
Restructured loans, performing			1,296				2,443				3,101				4,888				4,577
Net chargeoffs			19,096				5,047				4,369				3,153				3,736
Allowance for credit losses			35,016				25,231				27,918				28,844				27,750
Allowance for credit losses to loans held for investment			3.00	%			2.17	%			2.38	%			2.40	%			2.28	%
Nonperforming loans to loans held for investment			2.37				2.98				3.72				3.38				3.57
Nonperforming assets to total assets			2.23				3.38				4.22				4.10				4.11
Nonperforming loans to total assets			1.62				1.98				2.50				2.34				2.55
Net chargeoff percentage (annualized)			6.52				1.73				1.48				1.03				1.20
Allowance for credit losses to nonperforming loans			126.44				72.75				63.87				71.16				63.85
Loans identified as impaired		$	22,644			$	32,955			$	35,043			$	32,591			$	33,827
Other nonperforming loans			5,050				1,725				8,668				7,943				9,635
Total nonperforming loans			27,694				34,680				43,711				40,534				43,462
Performing classified loans			46,842				71,673				75,282				87,959				92,327
Total classified loans		$	74,536			$	106,353			$	118,993			$	128,493			$	135,789
Other real estate owned			10,465				24,491				30,032				30,587				26,469
Total classified assets		$	85,001			$	130,844			$	149,025			$	159,080			$	162,258
Classified ratio			48.10	%			63.24	%			72.09	%			77.59	%			79.89	%
Total capital (bank)		$	176,729			$	206,901			$	206,723			$	205,019			$	203,109

 

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				2012				TOTAL
Gross loan chargeoffs
Commercial		$	5,052			$	5,046			$	11,232			$	9,052			$	5,045			$	11,698			$	47,125
Real estate - construction			825				7,339				12,227				5,379				3,985				7,014				36,769
Real estate - mortgage			1,300				5,012				10,110				7,260				6,822				10,411				40,915
Consumer			2,235				5,071				4,925				2,829				1,358				848				17,266
Other			—				—				—				6,200				1,387				3				7,590
Total gross loan chargeoffs		$	9,412			$	22,468			$	38,494			$	30,720			$	18,597			$	29,974			$	149,665
Other real estate owned writedowns and losses			4,001				3,571				1,294				5,508				5,238				14,571				34,183
Total chargeoffs, writedowns and losses		$	13,413			$	26,039			$	39,788			$	36,228			$	23,835			$	44,545			$	183,848
Peak loans at September 30, 2008																										$	1,626,504
Chargeoffs, writedowns and losses to peak loans																											11.30	%

 

 

 

 

FINANCIAL SUMMARY

 

		Three Months Ended September 30								Nine Months Ended September 30
		2012				2011				2012				2011
Income Statement Data
(Dollars in thousands, except share data)
Interest income:
Loans		$	14,084			$	16,121			$	43,587			$	50,052
Investment securities			3,247				3,337				10,565				10,167
Other			10				20				30				44
Total interest income			17,341				19,478				54,182				60,263
Interest expense:
Deposits			1,088				2,252				4,217				7,513
Borrowings from the FHLB			232				275				760				907
Other			343				329				1,032				1,313
Total interest expense			1,663				2,856				6,009				9,733
Net interest income			15,678				16,622				48,173				50,530
Provision for credit losses			28,881				3,445				34,684				12,539
Net interest income after provision for credit losses			(13,203	)			13,177				13,489				37,991
Noninterest income:
Retail banking			2,308				2,457				6,888				7,511
Mortgage banking services			732				395				1,848				1,088
Wealth management services			645				702				1,800				1,873
Gain on sale of investment securities			3				65				3				2,026
Writedowns and loss on sale of real estate
acquired in settlement of loans			(10,587	)			(799	)			(14,571	)			(3,871	)
Bank-owned life insurance			326				303				1,171				1,015
Other			171				177				468				592
Total noninterest income			(6,402	)			3,300				(2,393	)			10,234
Noninterest expense
Personnel			7,513				7,857				21,800				22,498
Occupancy			2,155				983				4,183				3,043
Furniture and equipment			832				896				2,495				2,784
Technology and data processing			1,039				960				3,074				2,970
Legal and professional			858				664				2,219				2,032
FDIC insurance			444				600				1,326				2,027
Real estate acquired in settlement of loans			479				451				1,002				1,233
Other			3,225				2,482				7,786				7,278
Total noninterest expense			16,545				14,893				43,885				43,865
Income (loss) before income taxes			(36,150	)			1,584				(32,789	)			4,360
Income tax expense (benefit)			(3,700	)			501				(2,771	)			1,125
Net income (loss)			(32,450	)			1,083				(30,018	)			3,235
Dividends and accretion on preferred stock			(729	)			(730	)			(2,188	)			(2,189	)
Net income (loss) available to common shareholders		$	(33,179	)		$	353			$	(32,206	)		$	1,046
Net income (loss) per share - basic		$	(2.12	)		$	0.02			$	(2.06	)		$	0.07
Net income (loss) per share - diluted		$	(2.12	)		$	0.02			$	(2.06	)		$	0.06
Other Data
Return on average assets			(7.53	)%			0.25	%			(2.32	)%			0.25
Return on average equity			(75.72	)			2.60				(23.80	)			2.64
Net yield on earning assets			4.02				4.20				4.11				4.21
Efficiency (excluding OREO items and securities gains)			71.08				69.92				67.83				68.09
Average loans to assets			67.95				71.86				68.00				73.27
Average loans to deposits			82.25				87.09				82.79				90.24
Average noninterest - bearing deposits
to total deposits			13.41				11.53				13.51				11.48
Average equity to assets			9.94				9.61				9.73				9.31
Total capital as a percentage of total risk weighted assets			12.07				14.66				12.07				14.66
Tangible common equity as a percentage
of total risk weighted assets			6.28				8.07				6.28				8.07

 

 

 

 

INVESTMENT PORTFOLIO

 

(Dollars in thousands)		As of September 30, 2012
						Gross				Gross												Average
		Amortized				Unrealized				Unrealized				Estimated				Average				Duration
		Cost				gain				loss				Fair value				Yield (%)				(years)
US Treasury		$	19,999			$	—			$	—			$	19,999				0.05	%			0.06
US Agency			36,996				135				—				37,131				1.74				0.41
Mortgage backed securities			23,963				2,569				—				26,532				5.28				2.40
Collateralized mortgage obligations			11,579				252				(1	)			11,830				5.66				1.70
Commercial mortgage backed securities			53,960				2,196				(126	)			56,030				3.34				3.54
Covered bonds			44,915				3,853				—				48,768				3.68				3.71
Corporate bonds			150,578				4,978				(1,807	)			153,749				3.26				3.51
Municipal obligations			18,048				779				—				18,827				6.21	*			4.27
Federal Home Loan Bank stock			7,874				—				—				7,874
Other			5,775				861				—				6,636
Total		$	373,687			$	15,623			$	(1,934	)		$	387,376				3.35	*			2.93

 

*	Fully taxable equivalent basis

 

 

COMMON STOCK DATA

 

		2012												2011
		Third				Second				First				Fourth				Third
		Quarter				Quarter				Quarter				Quarter				Quarter
Market value:
End of period		$	4.84			$	4.38			$	4.79			$	3.87			$	3.90
High			5.00				4.94				4.91				4.20				4.99
Low			3.74				3.88				3.71				3.30				3.53
Book value			5.56				7.48				7.32				7.09				7.34
Tangible book value			5.35				7.27				7.09				6.85				7.09
Average shares outstanding			15,655,868				15,655,868				15,655,868				15,655,868				15,655,868
Average diluted shares outstanding			15,655,868				16,465,346				16,299,152				16,163,509				16,467,550

 

 

 

 

NON-GAAP MEASURES

 

Pre-tax, pre-securities gains and

pre-credit related operating income

(also excludes one-time adjustments)

		Three Months Ended September 30								Nine Months Ended September 30
		2012				2011				2012				2011
Net income		$	(32,450	)		$	1,083			$	(30,018	)		$	3,235
Income taxes			(3,700	)			501				(2,771	)			1,125
Less gain on sale of investment securities			(3	)			(65	)			(3	)			(2,026	)
Less one-time expense adjustments			1,949				—				1,949				—
Real estate acquired in settlement of loans expense			479				451				1,002				1,233
Writedowns and loss on sale of real estate
acquired in settlement of loans			10,587				799				14,571				3,871
Provision for credit losses			28,881				3,445				34,684				12,539
Pre-tax, pre-securities gains and
pre-credit related operating income		$	5,743			$	6,214			$	19,414			$	19,977

 

Operating efficiency percentage

		Three Months Ended September 30								Nine Months Ended September 30
		2012				2011				2012				2011
Total noninterest expense		$	16,545			$	14,893			$	43,885			$	43,865
Less one-time expense adjustments			(1,949	)			—				(1,949	)			—
Less real estate acquired in settlement of loans expense			(479	)			(451	)			(1,002	)			(1,233	)
Numerator for calculation of operating efficiency (A)		$	14,117			$	14,442			$	40,934			$	42,632
Net interest income		$	15,678			$	16,622			$	48,173			$	50,530
Total noninterest income			(6,402	)			3,300				(2,393	)			10,234
Less gain on sale of investment securities			(3	)			(65	)			(3	)			(2,026	)
Writedowns and loss on sale of real estate
acquired in settlement of loans			10,587				799				14,571				3,871
Denominator for calculation of operating efficiency (B)		$	19,860			$	20,656			$	60,348			$	62,609
Operating efficiency percentage (A/B)			71.08	%			69.92	%			67.83	%			68.09	%