North Bay Bancorp (Nasdaq:NBAN), holding company for The Vintage
Bank and its Solano Bank division, today announced profits grew 45%
in the third quarter of 2005. Total assets grew 14% compared with
the third quarter of 2004, with 11% growth in the loan portfolio
and a 16% increase in core deposits from previous year levels. Net
income totaled $1.8 million, or $0.45 per diluted share in the
third quarter, compared to $1.3 million, or $0.32 per diluted share
in the third quarter of 2004. For the first nine months of 2005,
net income grew 39% to $4.9 million, or $1.23 per diluted share,
compared to $3.5 million, or $0.89 per diluted share in the first
nine months of 2004. "Our third quarter results evidence the
success of our plan to improve efficiency and profitability. We are
exceeding our goal for profit growth despite significant costs
being incurred in association with SOX Section 404 compliance. Our
strong net interest margin, reflecting our outstanding core deposit
base, is key to this growth in profitability," commented Terry
Robinson, President and CEO. Robinson added, "Non-recurring costs
of services associated with implementing Sarbanes-Oxley Section 404
compliance will continue to adversely impact earnings through the
remainder of 2005." Third Quarter 2005 Financial Review and
Operating Highlights (quarter ended 9/30/05 compared to 9/30/04) --
Net income increased 45% to $1.8 million. -- Pre-tax income rose
47% to $2.9 million. -- Earnings per diluted share increased 41% to
$0.45. -- Revenues, excluding securities gains, increased 24% to
$8.5 million. -- Total loans grew 11% to $400 million. -- Asset
quality remained exemplary with no nonperforming assets at quarter
end. Operating Results Revenues, consisting of net interest income
before the provision for loan losses and non-interest income
excluding securities gains, increased 24% to $8.5 million in the
third quarter of 2005 from $6.8 million in the third quarter of
2004. In the first nine months of 2005, revenues increased 22% to
$24.0 million from $19.6 million in the like period of 2004. Net
interest income increased 27% to $7.4 million in the third quarter
of 2005 compared to $5.8 million in the third quarter of 2004, with
interest income growing 30% and interest expense up 47%. In the
first nine months of 2005, net interest income rose 26% to $21.0
million from $16.7 million in the first nine months of 2004.
Although there are no nonperforming loans, the third quarter
provision for loan losses increased to $300,000 from $180,000 in
the third quarter of last year to support growth in the overall
loan portfolio. Year-to-date, the loan loss provision increased to
$715,000 from $540,000 in the first nine months of 2004. Third
quarter net interest income after the provision for loan losses
increased 26% to $7.1 million compared to $5.7 million in the third
quarter of 2004 and grew 26% to $20.3 million in the first nine
months of the year from $16.1 million in the like period of 2004.
The net interest margin increased to 5.30% in the third quarter
from 4.95% in the third quarter of 2004. In the first nine months
of 2005, the net interest margin was 5.43% compared with 4.9% in
2004. The improved margin is attributed to a higher loan-to-deposit
ratio, increased yields from variable rate loans, an improved
deposit mix and prudent management of rates paid on deposits.
Non-interest income, excluding securities gains, increased 4% to
$1.0 million in the third quarter of 2005 from the previous year's
third quarter. Year-to-date, non-interest income decreased 6.9% to
$3.0 million from $3.2 million in 2004. Non-interest expenses in
the third quarter of 2005 increased 12% to $5.2 million from $4.7
million in the third quarter of 2004. In the first nine months of
2005, operating expenses increased 11% to $15.4 million from $13.8
million in the like period of 2004. The percentage increase in
expenses is significantly less than the comparable increase in
revenues primarily due to a modest percentage increase in salaries
and benefits resulting from maintaining full-time equivalent
employee levels very close to previous year levels. This benefit
was partially offset by significant increases in consulting and
audit fees relating to the Company's requirement for Sarbanes-Oxley
Section 404 compliance in 2005. The tax equivalent efficiency ratio
in the third quarter improved to 60.83% compared to 67.15% in the
third quarter last year, while the year-to-date ratio improved to
63.33% from 68.30% in the first nine months of 2004. The efficiency
ratio measures non-interest expenses as a percent of revenues.
Pre-tax Income increased 47% in the third quarter of 2005 to $2.9
million from $2.0 million the third quarter of 2004. Pre-tax income
rose 43% in the first nine months of the year to $7.9 million from
$5.5 million in the like period of 2004. Income taxes increased in
the third quarter of 2005 reflecting higher earnings. The tax
provision increased to $1.1 million, or 38% of third quarter
pre-tax income, compared to $750,000, or 37.5% of third quarter
pre-tax income a year ago. For the first nine months of 2005, the
provision for income tax was $3.0 million, or 38% of pre-tax
income, compared to $2.0 million, or 37% of pre-tax income in the
first nine months of 2004. The increase in the effective tax rate
in 2005 compared with 2004 was due to a declining level of
municipal bonds earning interest exempt from federal income tax.
Earnings ratios improved with return on equity and return on assets
up for the third quarter and first nine months of 2005. North Bay
generated a return on average equity of 14.96% and 13.88% in the
third quarter and first nine months 2005, respectively, compared
with 11.86% and 11.58%, respectively, in the comparable periods of
2004. Return on average assets was 1.17% in the third quarter and
1.11% in the first nine months of 2005 compared with 0.92% in both
corresponding periods of 2004. Balance Sheet Total assets were $630
million as of September 30, 2005, a 14% increase from September 30,
2004 and a 12% increase from December 31, 2004. Deposits grew 15%
during the previous twelve months to $547 million and 13% from
year-end 2004, with demand deposits growing 30% from September 30,
2004 and 31% from year-end 2004. Loans, net of the allowance for
loan losses, were $393 million as of September 30, 2005, an 11%
increase from September 30, 2004 and a 5% increase from year-end
2004. Book value per share at the end of the third quarter was
$12.60 compared to $11.18 per share as of September 30, 2004, an
increase of 12.7%. Asset quality remains excellent with no
nonperforming loans as of September 30, 2005. The allowance for
loan and lease losses was $4.8 million, or 1.22% of loans
outstanding at quarter end, compared to $4.0 million or 1.13% of
loans outstanding at the end of the third quarter of 2004. Net
charge-offs year-to-date were $19,000 compared to $24,000 charged
off in the like period of 2004. ABOUT NORTH BAY BANCORP North Bay
Bancorp is the holding company for The Vintage Bank in Napa County
and its Solano Bank division in Solano County. This full service
commercial bank offers a wide selection of deposit, loan and
investment services to local consumers and small business
customers. The Vintage Bank opened for business in 1985 and
operates six banking offices in Napa County, Northern California's
number one tourist destination and the nation's premier wine
producing region. The main office and two branch offices are
located in the City of Napa. The Vintage Bank also has branches in
the cities of St. Helena and American Canyon and on Airport Road in
the Southern industrial area of Napa County as well as an off-site
ATM facility in Yountville. Solano Bank, a division of The Vintage
Bank, launched in July 2000, has offices in the primary cities
along the I-80 corridor of Solano County, including Vacaville,
Fairfield, Vallejo and Benicia and an off-site ATM facility in
downtown Fairfield. Solano County is projected to be the fastest
growing county in Northern California through year 2020 and is
attracting people with a quality lifestyle, affordable housing and
business-friendly attitudes. This news release contains
forward-looking statements with respect to the financial condition,
results of operation and business of North Bay Bancorp and its
subsidiaries. These include, but are not limited to, statements
that relate to or are dependent on estimates or assumptions
relating to the prospects of loan growth, credit quality and
certain operating efficiencies resulting from the operations of The
Vintage Bank and its Solano Bank division. These forward-looking
statements involve certain risks and uncertainties. Factors that
may cause actual results to differ materially from those
contemplated by such forward-looking statements include, among
others, the following possibilities: (1) competitive pressure among
financial services companies increases significantly; (2) changes
in the interest rate environment reduce interest margins; (3)
general economic conditions, internationally, nationally or in the
State of California are less favorable than expected; (4)
legislation or regulatory requirements or changes adversely affect
the business in which the combined organization will be engaged;
and (5) other risks detailed in the North Bay Bancorp reports filed
with the Securities and Exchange Commission. -0- *T NORTH BAY
BANCORP
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CONSOLIDATED INCOME STATEMENT 3-Month Period Ended: (in $000's,
unaudited) 9/30/2005 9/30/2004 % Change ----------- ----------
--------- Interest Income $ 8,847 $ 6,822 29.7% Interest Expense
1,415 961 47.2% ---------- ---------- Net Interest Income 7,432
5,861 26.8% Provision for Loan & Lease Losses 300 180 66.7%
---------- ---------- Net Interest Income after Loan Loss Provision
7,132 5,681 25.5% Service Charges 540 564 -4.3% Loan Sale &
Servicing Income 11 16 -31.3% Bank Owned Life Insurance Income 88
88 0.0% Other Non-Interest Income 388 318 22.0% Gain on Investments
- - ---------- ---------- Total Non-Interest Income 1,027 986 4.2%
Salaries & Benefits 2,763 2,566 7.7% Occupancy Expense 477 369
29.3% Equipment Expense 487 502 -3.0% Other Non-Interest Expenses
1,484 1,230 20.7% ---------- ---------- Total Non-Interest Expenses
5,211 4,667 11.7% Income Before Taxes 2,948 2,000 47.4% Provision
for Income Taxes 1,131 750 50.8%
----------------------------------------------------------------------
Net Income $ 1,817 $ 1,250 45.4%
----------------------------------------------------------------------
TAX DATA Tax-Exempt Muni Income $ 121 $ 113 7.1% Tax-Exempt BOLI
Income $ 88 $ 88 0.0% Interest Income - Fully Tax Equivalent $
8,885 $ 6,859 29.5%
----------------------------------------------------------------------
NET CHARGE-OFFS (RECOVERIES) $ 9 $ (78) NM
----------------------------------------------------------------------
PER SHARE DATA 3-Month Period Ended: (unaudited) 9/30/2005
9/30/2004 % Change ----------- ---------- --------- Basic Earnings
per Share $ 0.47 $ 0.33 42.4% Diluted Earnings per Share $ 0.45 $
0.32 40.6% Common Dividends $ 0.00 $ 0.00 Wtd. Avg. Shares
Outstanding 3,888,998 3,820,591 Wtd. Avg. Diluted Shares 4,060,596
3,924,053 Book Value per Share (EOP) $ 12.60 $ 11.18 12.7% Common
Shares Outstanding. (EOP) 3,897,504 3,822,150
----------------------------------------------------------------------
KEY FINANCIAL RATIOS 3-Month Period Ended: (unaudited) 9/30/2005
9/30/2004 ----------- ---------- Return on Average Equity 14.96%
11.86% Return on Average Assets 1.17% 0.92% Net Interest Margin
(Tax-Equivalent) 5.30% 4.95% Efficiency Ratio (Tax-Equivalent)
60.83% 67.15%
----------------------------------------------------------------------
AVERAGE BALANCES 3-Month Period Ended: (in $000's, unaudited)
9/30/2005 9/30/2004 % Change ----------- ---------- ---------
Average Assets $ 619,442 $ 539,578 14.8% Average Earning Assets $
565,561 $ 477,054 18.6% Average Gross Loans & Leases $ 407,741
$ 369,384 10.4% Average Deposits $ 537,539 $ 464,629 15.7% Average
Equity $ 48,319 $ 41,936 15.2%
----------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT 9-Month Period Ended: (in $000's,
unaudited) 9/30/2005 9/30/2004 % Change ----------- ----------
--------- Interest Income $ 24,668 $ 19,180 28.6% Interest Expense
3,638 2,508 45.1% ---------- ---------- Net Interest Income 21,030
16,672 26.1% Provision for Loan & Lease Losses 715 540 32.4%
---------- ---------- Net Interest Income after Loan Loss Provision
20,315 16,132 25.9% Service Charges 1,579 1,684 -6.2% Loan Sale
& Servicing Income 23 35 -34.3% Bank Owned Life Insurance
Income 263 280 -6.1% Other Non-Interest Income 1,140 968 17.8% Gain
on Investments - 262 -100.0% ---------- ---------- Total
Non-Interest Income 3,005 3,229 -6.9% Salaries & Benefits 8,221
7,633 7.7% Occupancy Expense 1,317 1,080 21.9% Equipment Expense
1,566 1,509 3.8% Other Non-Interest Expenses 4,315 3,613 19.4%
---------- ---------- Total Non-Interest Expenses 15,419 13,835
11.4% Income Before Taxes 7,901 5,526 43.0% Provision for Income
Taxes 3,036 2,034 49.3%
----------------------------------------------------------------------
Net Income $ 4,865 $ 3,492 39.3%
----------------------------------------------------------------------
TAX DATA Tax-Exempt Muni Income $ 340 $ 409 -16.9% Tax-Exempt BOLI
Income $ 263 $ 280 -6.1% Interest Income - Fully Tax Equivalent $
24,783 $ 19,313 28.3%
----------------------------------------------------------------------
NET CHARGE-OFFS (RECOVERIES) $ 19 $ 24 NM
----------------------------------------------------------------------
PER SHARE DATA 9-Month Period Ended: (unaudited) 9/30/2005
9/30/2004 % Change ----------- -------------------- Basic Earnings
per Share $ 1.26 $ 0.92 37.0% Diluted Earnings per Share $ 1.21 $
0.89 36.0% Common Dividends $ 0.15 $ 0.13 15.4% Wtd. Avg. Shares
Outstanding 3,854,216 3,796,906 Wtd. Avg. Diluted Shares 4,025,905
3,915,404 Book Value per Share (EOP) $ 12.60 $ 11.18 12.7% Common
Shares Outstanding. (EOP) 3,897,504 3,822,150
----------------------------------------------------------------------
KEY FINANCIAL RATIOS 9-Month Period Ended: (unaudited) 9/30/2005
9/30/2004 ----------- ---------- Return on Average Equity 13.88%
11.58% Return on Average Assets 1.11% 0.92% Net Interest Margin
(Tax-Equivalent) 5.43% 4.98% Efficiency Ratio (Tax-Equivalent)
63.33% 68.30%
----------------------------------------------------------------------
AVERAGE BALANCES 9-Month Period Ended: (in $000's, unaudited)
9/30/2005 9/30/2004 % Change ----------- ---------- ---------
Average Assets $ 586,794 $ 506,018 16.0% Average Earning Assets $
532,593 $ 449,495 18.5% Average Gross Loans & Leases $ 400,634
$ 342,515 17.0% Average Deposits $ 506,409 $ 439,995 15.1% Average
Equity $ 46,809 $ 40,278 16.2%
----------------------------------------------------------------------
STATEMENT OF CONDITION End of Period: (in $000's, unaudited)
9/30/2005 12/31/2004 9/30/2004 ---------------------------------
ASSETS Cash and Due from Banks $ 31,048 $ 27,342 $ 42,626
Securities and Fed Funds Sold 180,248 132,348 110,856
----------------------------------------------------------------------
Commercial & Industrial 78,829 67,172 60,828 Commercial Secured
by Real Estate 251,872 241,361 230,610 Real Estate 4,422 6,613
6,743 Construction 25,416 27,762 25,841 Consumer 38,643 36,343
35,889 --------- --------- --------- Gross Loans & Leases
399,182 379,251 359,911 Deferred Loan Fees (1,473) (1,485) (1,468)
--------- --------- --------- Loans & Leases Net of Deferred
Fees 397,709 377,766 358,443 Allowance for Loan & Lease Losses
(4,832) (4,136) (4,040) --------- --------- --------- Net Loans
& Leases 392,877 373,630 354,403 Loans Held-for-Sale - 4,604
20,232 Investment in Subsidiary 310 310 310 Bank Premises &
Equipment 9,542 10,336 10,657 Other Assets 16,018 13,493 13,415
--------- --------- --------- Total Assets $630,043 $562,063
$552,499 ========= ========= ========= LIABILITIES & CAPITAL
Demand Deposits $166,239 $127,250 $127,768 NOW / Savings Deposits
146,963 151,053 144,267 Money Market Deposits 148,938 128,884
125,994 Time Certificates of Deposit 84,710 77,306 78,763 ---------
--------- --------- Total Deposits 546,850 484,493 476,792 Long
Term Borrowings 19,000 19,000 19,000 Trust Preferred Securities
10,310 10,310 10,310 --------- --------- --------- Total Deposits
& Interest Bearing Liab. 576,160 513,803 506,102 Other
Liabilities 4,763 4,126 3,667 Total Capital 49,120 44,134 42,730
--------- --------- --------- Total Liabilities & Capital
$630,043 $562,063 $552,499 ========= ========= =========
----------------------------------------------------------------------
STATEMENT OF CONDITION (in $000's, unaudited) 9-Month Chg Annual
Chg --------------- ----------- ASSETS Cash and Due from Banks
13.6% -27.2% Securities and Fed Funds Sold 36.2% 62.6%
----------------------------------------------------------------------
Commercial & Industrial 17.4% 29.6% Commercial Secured by Real
Estate 4.4% 9.2% Real Estate -33.1% -34.4% Construction -8.5% -1.6%
Consumer 6.3% 7.7% Gross Loans & Leases 5.3% 10.9% Deferred
Loan Fees -0.8% 0.3% Loans & Leases Net of Deferred Fees 5.3%
11.0% Allowance for Loan & Lease Losses 16.8% 19.6% Net Loans
& Leases 5.2% 10.9% Loans Held-for-Sale -100.0% -100.0%
Investment in Subsidiary 0.0% 0.0% Bank Premises & Equipment
-7.7% -10.5% Other Assets 18.7% 19.4% Total Assets 12.1% 14.0%
LIABILITIES & CAPITAL Demand Deposits 30.6% 30.1% NOW / Savings
Deposits -2.7% 1.9% Money Market Deposits 15.6% 18.2% Time
Certificates of Deposit 9.6% 7.6% Total Deposits 12.9% 14.7% Long
Term Borrowings 0.0% 0.0% Trust Preferred Securities 0.0% 0.0%
Total Deposits & Interest Bearing Liab. 12.1% 13.8% Other
Liabilities 15.4% 29.9% Total Capital 11.3% 15.0% Total Liabilities
& Capital 12.1% 14.0%
----------------------------------------------------------------------
CREDIT QUALITY DATA End of Period: (in $000's, unaudited) 9/30/2005
12/31/2004 9/30/2004 -------------------------------------------
Non-Accruing Loans $ - $ - $ - Over 90 Days PD and Still Accruing 0
0 0 Other Real Estate Owned 0 0 0 ------ ------ ------ Total
Non-Performing Assets $ - $ - $ - ------ ------ ------
----------------------------------------------------------------------
Non-Performing Loans to Total Loans 0.00% 0.00% 0.00%
Non-Performing Assets to Total Assets 0.00% 0.00% 0.00% Allowance
for Loan Losses to Loans 1.21% 1.09% 1.12%
----------------------------------------------------------------------
OTHER PERIOD-END STATISTICS End of Period: (unaudited) 9/30/2005
12/31/2004 9/30/2004 Shareholders' Equity / Total Assets 7.8% 7.9%
7.7% Loans / Deposits 73.0% 78.3% 75.5% Non-Interest Bearing
Deposits / Total Deposits 30.4% 26.3% 26.8%
----------------------------------------------------------------------
*T
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