Newbridge Bancorp (NBBC) 10-Q 2011 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarterly period ended:

March 31, 2011

Commission File Number: 000-11448

NewBridge Bancorp

(Exact name of Registrant as specified in its Charter)

North Carolina	56-1348147
(State of Incorporation)	(I.R.S. Employer Identification No.)
1501 Highwoods Boulevard, Suite 400
Greensboro, North Carolina	27410
(Address of principal executive offices)	(Zip Code)

(336) 369-0900
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesþ      Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One)

Large accelerated filer o Accelerated filer o  Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No þ

At May 9, 2011, 15,655,868 shares of the registrant’s common stock were outstanding.

NEWBRIDGE BANCORP

FORM 10-Q
TABLE OF CONTENTS

		Page
PART I Financial Information
Item 1	Financial Statements		3
	Consolidated Balance Sheets March 31, 2011 and December 31, 2010		3
	Consolidated Statements of Income Three Months Ended March 31, 2011 and 2010		4
	Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income Three Months Ended March 31, 2011 and 2010		5
	Consolidated Statements of Cash Flows Three Months Ended March 31, 2011 and 2010		6
	Notes to Consolidated Financial Statements		8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16
Item 3	Quantitative and Qualitative Disclosures About Market Risk		25
Item 4	Controls and Procedures		26
PART II Other Information
Item 1	Legal Proceedings		27
Item 1A	Risk Factors		27
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3	Defaults Upon Senior Securities		27
Item 4	Removed and Reserved		27
Item 5	Other Information		27
Item 6	Exhibits		29

2

PART I
FINANCIAL INFORMATION

Item 1. Financial Statements.

NewBridge Bancorp and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share data)

	March 31
	2011			December 31
	(Unaudited)			2010
Assets	$	42,871		$	23,479
Cash and due from banks
Interest-bearing bank balances		9,063			5,596
Loans held for sale		77,584			76,994
Investment securities		276,458			325,129
Loans		1,254,630			1,260,585
Less allowance for credit losses		(29,057	)		(28,752	)
Net loans		1,225,573			1,231,833
Premises and equipment		39,007			38,442
Real estate acquired in settlement of loans		26,329			26,718
Bank-owned life insurance		30,741			30,317
Deferred tax assets		28,877			27,089
Other assets		25,150			21,564
Total assets	$	1,781,653		$	1,807,161
Liabilities
Deposits:
Non-interest bearing	$	165,534		$	161,734
Savings, NOW and money market accounts		823,749			795,696
Time deposits		466,013			495,565
Total deposits		1,455,296			1,452,995
Borrowings from the Federal Home Loan Bank		87,700			112,700
Other borrowings		61,774			61,774
Accrued expenses and other liabilities		15,497			16,504
Total liabilities		1,620,267			1,643,973
Shareholders’ Equity
Preferred stock, par value $.01 per share:
Authorized 10,000,000 shares; issued and outstanding (liquidation preference $1,000 per share) — 52,372		51,565			51,490
Common stock, par value $5 per share:
Authorized 50,000,000 shares; issued and outstanding — 15,655,868		78,279			78,279
Paid-in capital		87,059			87,048
Directors’ deferred compensation plan		(575	)		(618	)
Retained deficit		(51,734	)		(52,016	)
Accumulated other comprehensive income (loss)		(3,208	)		(995	)
Total shareholders’ equity		161,386			163,188
Total liabilities and shareholders’ equity	$	1,781,653		$	1,807,161

See notes to consolidated financial statements

3

NewBridge Bancorp and Subsidiary
Consolidated Statements of Income
(Unaudited; dollars in thousands, except per share data)

	Three Months Ended
	March 31
	2011			2010
Interest Income
Interest and fees on loans	$	17,236		$	19,430
Interest on investment securities:
Taxable		3,474			2,680
Tax exempt		191			1,119
Interest-bearing bank balances and Federal funds sold		4			21
Total interest income		20,905			23,250
Interest Expense
Deposits		2,687			4,302
Borrowings from the Federal Home Loan Bank		348			1,101
Other borrowings		492			609
Total interest expense		3,527			6,012
Net interest income		17,378			17,238
Provision for credit losses		6,073			3,723
Net interest income after provision for credit losses		11,305			13,515
Noninterest Income
Service charges on deposit accounts		1,570			1,865
Fee income		980			987
Mortgage banking services		425			214
Gain on sale of investment securities		1,961			—
Writedowns and loss on sale of real estate acquired in settlement of loans		(1,486	)		(1,442	)
Other		1,084			889
Total noninterest income		4,534			2,513
Noninterest Expense
Personnel		7,290			7,814
Occupancy		1,043			1,135
Furniture and equipment		964			1,182
Technology and data processing		918			1,154
FDIC insurance		795			900
Other		3,384			3,367
Total noninterest expense		14,394			15,552
Income before income taxes		1,445			476
Income tax expense		433			103
Net Income		1,012			373
Dividends and accretion on preferred stock		(730	)		(730	)
Net Income (Loss) available to common shareholders	$	282		$	(357	)
Earnings (loss) per share:
Basic	$	0.02		$	(0.02	)
Diluted	$	0.02		$	(0.02	)
Weighted average shares outstanding:
Basic		15,655,868			15,655,868
Diluted		16,697,944			15,655,868

See notes to consolidated financial statements

4

NewBridge Bancorp and Subsidiary
Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income

Three months ended March 31, 2011 and 2010
(Unaudited; Dollars in thousands)

									Directors’						Accumulated
									Deferred			Retained			Other			Total
	Preferred		Common Stock				Paid-in		Compensation			Earnings			Comprehensive			Shareholders’
	Stock		Shares		Amount		Capital		Plan			(Deficit)			Income (Loss)			Equity
Balances at December 31, 2009	$	51,190		15,655,868	$	78,279	$	86,969	$	(634	)	$	(52,477	)	$	1,277		$	164,604
Net Income													373						373
Change in unrealized gain on securities available for sale, net of deferred income taxes																390			390
Comprehensive income (loss)																			763
Dividends and accretion on preferred stock		75											(730	)					(655	)
Stock-based compensation expense								20											20
Balances at March 31, 2010	$	51,265		15,655,868	$	78,279	$	86,989	$	(634	)	$	(52,834	)	$	1,667		$	164,732
Balances at December 31, 2010	$	51,490		15,655,868	$	78,279	$	87,048	$	(618	)	$	(52,016	)	$	(995	)	$	163,188
Net Income													1,012						1,012
Change in unrealized gain on securities available for sale, net of deferred income taxes																(2,213	)		(2,213	)
Comprehensive income (loss)																			(1,201	)
Dividends and accretion on preferred stock		75											(730	)					(655	)
Stock-based compensation expense								11											11
Common stock distributed										43									43
Balances at March 31, 2011	$	51,565		15,655,868	$	78,279	$	87,059	$	(575	)	$	(51,734	)	$	(3,208	)	$	161,386

See notes to consolidated financial statements

5

NewBridge Bancorp and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited; dollars in thousands)

	Three Months Ended
	March 31
	2011			2010
Cash Flow from operating activities
Net Income	$	1,012		$	373
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,454			1,626
Decrease in deferred income taxes		427			346
Decrease in income taxes receivable		—			2,728
Increase in income earned but not received		(258	)		(452	)
Decrease in interest accrued but not paid		(133	)		(228	)
Net increase in other assets		(3,300	)		(8	)
Net increase (decrease) in other liabilities		(874	)		1,562
Provision for credit losses		6,073			3,723
Gain on sale of loans held for sale		(425	)		(214	)
Originations of loans held for sale		(20,692	)		(31,697	)
Proceeds from sales of loans held for sale		20,528			29,763
Loss on sale of premises, equipment and real estate acquired in settlement of loans		72			593
Stock based compensation		11			20
Net cash provided by operating activities		3,895			8,135
Cash Flow from investing activities
Purchases of securities available for sale		(3,651	)		(21,149	)
Purchases of securities held to maturity		—			(23,160	)
Proceeds from sales/maturities of securities available for sale		50,494			18,281
Gain on sales of securities available for sale		(1,961	)		—
Net (increase) decrease in loans made to customers		(3,765	)		20,662
Proceeds from sale of premises, equipment and real estate acquired in settlement of loans		2,545			2,410
Expenditures for improvements to real estate acquired in settlement of loans, net of income received		16			42
Purchases of premises and equipment		(1,403	)		(1,515	)
Net cash provided by (used for) investing activities		42,275			(4,429	)
Cash Flow from financing activities
Net increase in demand deposits, NOW, money market and savings accounts		31,853			61,352
Net decrease in time deposits		(29,552	)		(15,410	)
Net decrease in other borrowings		—			(27,638	)
Net decrease in borrowings from Federal Home Loan Bank		(25,000	)		(12,000	)
Dividends paid		(655	)		(655	)
Common stock distributed (acquired)		43			—
Net cash provided by (used for) financing activities		(23,311	)		5,649
Increase in cash and cash equivalents		22,859			9,355
Cash and cash equivalents at the beginning of the period		29,075			44,840
Cash and cash equivalents at the end of the period	$	51,934		$	54,195

See notes to consolidated financial statements

6

NewBridge Bancorp and Subsidiary
Consolidated Statements of Cash Flows (continued)
(Unaudited; dollars in thousands)

	Three Months Ended
	March 31
	2011			2010
Supplemental disclosures of cash flow information
Cash paid during the periods for:
Interest	$	3,660		$	6,240
Income Taxes		—			—
Supplemental disclosures of noncash transactions
Transfer of loans to real estate acquired in settlement of loans	$	3,658		$	5,872
Accretion on U.S. Treasury preferred stock		75			75
Unrealized gains/(losses) on securities available for sale:
Change in securities available for sale		(3,640	)		1,184
Change in deferred income taxes		1,427			(794	)
Change in shareholders’ equity		(2,213	)		390

See notes to consolidated financial statements

7

NewBridge Bancorp and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)

Note 1 — Basis of Presentation

The accompanying interim unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and provisions for credit losses considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

NewBridge Bancorp (“Bancorp” or the “Company”) is a bank holding company incorporated under the laws of North Carolina (“NC”) and registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”). Bancorp’s principal asset is stock of its banking subsidiary, NewBridge Bank (the “Bank”). Accordingly, throughout this Quarterly Report on Form 10-Q, there are frequent references to the Bank.

Through its branch network, the Bank provides a wide range of banking products to individuals, small to medium-sized businesses and other organizations in its market areas, including interest bearing and non-interest bearing checking accounts, certificates of deposit, individual retirement accounts, overdraft protection, personal and corporate trust services, safe deposit boxes, online banking, corporate cash management, brokerage, financial planning and asset management, mortgage loans and secured and unsecured loans.

As of March 31, 2011, the Bank operated four active non-bank subsidiaries: Peoples Finance Company of Lexington, Inc. (“Peoples Finance”), LSB Properties, Inc. (“LSB Properties”), Henry Properties, LLC (“Henry Properties”) and Prince George Court Holdings, Inc. (“Prince George”). Peoples Finance, a NC licensed finance company, with approximately $0.6 million of loans outstanding as of March 31, 2011, is no longer actively soliciting loans. LSB Properties, Henry Properties and Prince George together own the real estate acquired in settlement of loans of the Bank.

The organization and business of the Company, accounting policies followed by the Company and other relevant information are contained in the notes to the consolidated financial statements in Bancorp’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, filed with the Securities and Exchange Commission (the “SEC”) on March 24, 2011 (SEC File No. 000-11448) (the “Annual Report”). This Quarterly Report should be read in conjunction with the Annual Report.

Recent accounting pronouncements

In July 2010, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2010-20, Receivables (ASC 310) — “Disclosure about the Credit Quality of Financing Receivables and the Allowance for Credit Losses.” This ASU requires new disclosures and clarifies existing disclosure requirements about the nature of credit risk inherent in an entity’s loan portfolio; how that risk is analyzed and assessed in arriving at the allowance for loan losses; and the changes and reasons for those changes in the allowance for loan losses. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting, as well as clarify the requirements for existing disclosures. ASU 2010-20 became effective for interim and annual reporting periods ending on or after December 15, 2010. The disclosures about activity during a reporting period are effective for interim and annual reporting periods beginning on or after December 15, 2010. In January 2011, the FASB delayed the effective date of the portion of ASU 2010-20 related to troubled debt restructurings to June 2011. The Company adopted the required portions of ASU-

8

2010-20 as of December 31, 2010, which only impacted disclosures. The Company does not expect the adoption of the remainder of ASU 2010-20 to have a material impact on its financial condition or results of operations.

In April 2011, the FASB issued Update ASU No. 2011-02 Receivables (ASC 310) — “A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring.” The amendments clarify guidance on whether a restructuring constitutes a troubled debt restructuring. The creditor must separately conclude that both of the following exist 1) the restructuring constitutes a concession, and 2) the debtor is experiencing financial difficulties. The amendments are effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. For purposes of measuring impairment of those receivables, an entity should apply the amendments prospectively for the first interim or annual period beginning on or after June 15, 2011. Management is currently evaluating the impact that this accounting standard may have on the Company’s consolidated financial statements.

Reclassification

Certain items for 2010 have been reclassified to conform to the 2011 presentation. Such reclassifications had no effect on net income, total assets or shareholders’ equity as previously reported.

Note 2 — Net Income (Loss) Per Share

Basic and diluted net income (loss) per share is computed based on the weighted average number of shares outstanding during each period. Diluted net income per share reflects the potential dilution that could occur if stock options or warrants were exercised, or restricted stock vested, resulting in the issuance of common stock sharing in the net income of the Company. A summary of basic and diluted net income (loss) per share follows (in thousands, except per share data):

	For the three months ended March 31
	2011		2010
Basic:
Net income (loss) available to common shareholders	$	282	$	(357	)
Weighted average shares outstanding		15,655,868		15,655,868
Net income (loss) per share, basic	$	0.02	$	(0.02	)
Diluted:
Net income (loss) available to common shareholders	$	282	$	(357	)
Weighted average shares outstanding		15,655,868		15,655,868
Effect of dilutive securities:
Stock options		—		—
Restricted stock units		13,442		—
Warrant		1,028,634		—
Weighted average shares outstanding and dilutive potential shares outstanding		16,697,944		15,655,868
Net income (loss) per share, diluted	$	0.02	$	(0.02	)

9

Note 3 — Investment Securities

Investment securities consist of the following (in thousands):

	March 31, 2011
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
U.S. government agency securities	$	96,274	$	21	$	(2,770	)	$	93,525
Mortgage backed securities		33,682		2,508		—			36,190
State and municipal obligations		17,384		16		(1,575	)		15,825
Corporate bonds		82,891		1,601		(598	)		83,894
Collateralized mortgage obligations		29,876		844		(68	)		30,652
Federal Home Loan Bank stock		10,399		—		—			10,399
Other equity securities		5,775		198		—			5,973
Total	$	276,281	$	5,188	$	(5,011	)	$	276,458

	December 31, 2010
	Amortized		Unrealized		Unrealized			Market
	Cost		Gains		Losses			Value
U.S. government agency securities	$	109,274	$	267	$	(2,017	)	$	107,524
Mortgage backed securities		55,989		4,320		—			60,309
State and municipal obligations		17,380		13		(1,982	)		15,411
Corporate bonds		82,816		2,309		(612	)		84,513
Collateralized mortgage obligations		39,679		823		(90	)		40,412
Federal Home Loan Bank stock		10,399		—		—			10,399
Other equity securities		5,775		786		—			6,561
Total	$	321,312	$	8,518	$	(4,701	)	$	325,129

All securities were classified as available for sale as of each date presented.

The following is a schedule of securities in a loss position as of March 31, 2011 (in thousands):

	Less than 1 year					1 Year or More					Total
	Market		Unrealized			Market		Unrealized			Market		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. government agency securities	$	89,504	$	(2,770	)	$	—	$	—		$	89,504	$	(2,770	)
State and municipal obligations		8,986		(714	)		5,257		(861	)		14,243		(1,575	)
Corporate bonds		28,040		(598	)		—		—			28,040		(598	)
Collateralized mortgage obligations		—		—			2,822		(68	)		2,822		(68	)
Other equity securities		—		—			—		—			—		—
Total securities	$	126,530	$	(4,082	)	$	8,079	$	(929	)	$	134,609	$	(5,011	)

Investment securities with an amortized cost of $100,170,000 and $98,111,000, as of March 31, 2011, and December 31, 2010, respectively, were pledged to secure public deposits and for other purposes. The Bank has obtained $50,000,000 in letters of credit, which are used in lieu of securities to pledge against public deposits.

Investment securities with a book value of $31,510,000 were sold during the three months ended March 31, 2011 to dispose of agency mortgage backed securities with an average life of 1 year or less that had significant gain positions and to reduce the Company’s exposure to corporate debt securities and certain types of collateralized mortgage obligations. The Company recognized a gain of $1,961,000 on the sale of those securities. No investment securities were sold during the three months ended March 31, 2010.

10

Note 4 — Loans and Allowance for Credit Losses

Loans are summarized as follows (in thousands):

	March 31,		December 31
	2011		2010
Secured by owner-occupied nonfarm nonresidential properties	$	233,012	$	222,889
Secured by other nonfarm nonresidential properties		158,531		159,086
Other commercial and industrial		139,420		134,011
Total Commercial		530,963		515,986
Construction loans — 1 to 4 family residential		16,451		16,736
Other construction and land development		111,914		122,382
Total Real estate — construction		128,365		139,118
Closed-end loans secured by 1 to 4 family residential properties		299,303		304,640
Lines of credit secured by 1 to 4 family residential properties		217,509		219,557
Loans secured by 5 or more family residential properties		24,821		20,207
Total Real estate — mortgage		541,633		544,404
Credit cards		7,575		7,749
Other revolving credit plans		9,266		9,042
Other consumer loans		32,148		36,224
Total Consumer		48,989		53,015
Loans to other depository institutions		—		3,800
All other loans		4,680		4,262
Total Other		4,680		8,062
Total loans		1,254,630		1,260,585
Loans held for sale		77,584		76,994
Total loans and loans held for sale	$	1,332,214	$	1,337,579

Nonperforming assets are summarized as follows (in thousands):

	March 31			December 31
	2011			2010
Commercial nonaccrual loans, not restructured	$	18,528		$	23,453
Commercial nonaccrual loans, restructured		12,215			11,190
Non-commercial nonaccrual loans		11,680			8,537
Total nonaccrual loans		42,423			43,180
Troubled debt restructured, accruing		7,531			7,378
Accruing loans which are contractually past due 90 days or more		32			27
Total nonperforming loans		49,986			50,585
Real estate acquired in settlement of loans		26,329			26,718
Total nonperforming assets	$	76,315		$	77,303
Nonperforming loans to loans outstanding at end of period		3.98	%		4.01	%
Nonperforming assets to total assets at end of period		4.28	%		4.28	%
Allowance for credit losses to non-performing loans		58.13	%		56.84	%

11

The aging of loans is summarized in the following table (in thousands):

	30-89 days		90 + days		Nonaccrual		Total past due				Total loans
	Past due		Past due		Loans		+ nonaccrual		Current		Receivable
March 31, 2011
Secured by owner-occupied nonfarm nonresidential properties	$	1,610	$	—	$	6,963	$	8,573	$	224,439	$	233,012
Secured by other nonfarm nonresidential properties		—		—		1,929		1,929		156,602		158,531
Other commercial and industrial		1,335		—		601		1,936		137,484		139,420
Total Commercial		2,945		—		9,493		12,438		518,525		530,963
Construction loans — 1 to 4 family residential		107		—		2,359		2,466		13,985		16,451
Other construction and land development		1,688		—		14,033		15,721		96,193		111,914
Total Real estate — construction		1,795		—		16,392		18,187		110,178		128,365
Closed-end loans secured by 1 to 4 family residential properties		8,253		—		13,288		21,541		277,762		299,303
Lines of credit secured by 1 to 4 family residential properties		3,027		—		2,254		5,281		212,228		217,509
Loans secured by 5 or more family residential properties		2,927		—		558		3,485		21,336		24,821
Total Real estate — mortgage		14,207		—		16,100		31,037		511,326		541,633
Credit cards		93		32		—		125		7,450		7,575
Other revolving credit plans		157		—		21		178		9,088		9,266
Other consumer loans		635		—		417		1,052		31,096		32,148
Total Consumer		885		32		438		1,355		47,634		48,989
Loans to other depository institutions		—		—		—		—		—		—
All other loans		—		—		—		—		4,680		4,680
Total Other		—		—		—		—		4,680		4,680
Total loans		19,832		32		42,423		62,287		1,192,343		1,254,630
Loans held for sale		730		—		—		730		76,854		77,584
Total loans and loans held for sale	$	20,562	$	32	$	42,423	$	63,017	$	1,269,197	$	1,332,214
December 31, 2010
Secured by owner-occupied nonfarm nonresidential properties	$	2,619	$	—	$	5,953	$	8,572	$	214,317	$	222,889
Secured by other nonfarm nonresidential properties		1,767		—		1,076		2,843		156,243		159,086
Other commercial and industrial		2,641		—		1,875		4,516		129,495		134,011
Total Commercial		7,027		—		8,904		15,931		500,055		515,986
Construction loans — 1 to 4 family residential		1,166		—		2,666		3,832		12,904		16,736
Other construction and land development		3,354		—		13,925		17,279		105,103		122,382
Total Real estate — construction		4,520		—		16,591		21,111		118,007		139,118
Closed-end loans secured by 1 to 4 family residential properties		10,444		—		10,830		21,274		283,366		304,640
Lines of credit secured by 1 to 4 family residential properties		4,549		—		1,611		6,160		213,397		219,557
Loans secured by 5 or more family residential properties		147		—		1,004		1,151		19,056		20,207
Total Real estate — mortgage		15,140		—		13,445		28,585		515,819		544,404
Credit cards		122		27		—		149		7,600		7,749
Other revolving credit plans		226		—		11		237		8,805		9,042
Other consumer loans		847		—		429		1,276		34,948		36,224
Total Consumer		1,195		27		440		1,662		51,353		53,015
Loans to other depository institutions		—		—		3,800		3,800		—		3,800
All other loans		—		—		—		—		4,262		4,262
Total Other		—		—		3,800		3,800		4,262		8,062
Total loans		27,882		27		43,180		71,089		1,189,496		1,260,585
Loans held for sale		359		—		—		359		76,635		76,994
Total loans and loans held for sale	$	28,241	$	27	$	43,180	$	71,448	$	1,266,131	$	1,337,579

12

Impaired loans and related information are summarized in the following tables (in thousands):

	March 31		December 31
	2011		2010
Loans identified as impaired	$	36,497	$	38,303
Other nonperforming loans		13,489		12,282
Total nonperforming loans		49,986		50,585
Other potential problem loans		96,509		110,924
Total impaired and potential problem loans	$	146,495	$	161,509

			Impaired Loans
	Recorded		Unpaid principal		Specific
	Balance		Balance		Allowance
March 31, 2011
Loans without a specific valuation allowance
Commercial		3,838		3,977		—
Real estate — construction		10,813		15,343		—
Real estate — mortgage		7,753		8,279		—
Consumer		111		111		—
Loans with a specific valuation allowance
Commercial		3,709		3,905		1,111
Real estate — construction		3,616		3,941		210
Real estate — mortgage		6,548		6,548		753
Consumer		109		109		109
Total impaired loans
Commercial		7,547		7,882		1,111
Real estate — construction		14,429		19,284		210
Real estate — mortgage		14,301		14,827		753
Consumer		220		220		109
December 31, 2010
Loans without a specific valuation allowance
Commercial		4,651		5,437		—
Real estate — construction		12,489		17,165		—
Real estate — mortgage		6,633		7,676		—
Consumer		112		112		—
Other		3,800		10,000		—
Loans with a specific valuation allowance
Commercial		1,375		1,482		578
Real estate — construction		1,606		2,577		251
Real estate — mortgage		7,290		7,290		976
Consumer		347		347		122
Other		—		—		—
Total impaired loans
Commercial		6,026		6,919		578
Real estate — construction		14,095		19,742		251
Real estate — mortgage		13,923		14,966		976
Consumer		459		459		122
Other		3,800		10,000		—

The Bank’s policy for impaired loan accounting subjects all loans to impairment recognition except for large groups of smaller balance homogeneous loans such as credit card, residential mortgage and consumer loans. The Bank generally considers loans 90 days or more past due and all nonaccrual loans to be impaired.

The following table summarizes, by internally assigned risk grade, the risk grade for loans for which the bank has assigned a risk grade (in thousands).

	March 31										December 31
	2011										2010
			Special		Sub-								Special		Sub-
	Pass		Mention		standard		Doubtful		Total		Pass		Mention		standard		Doubtful		Total
Commercial	$	405,996	$	48,966	$	76,194	$	401	$	531,557	$	423,474	$	48,651	$	75,682	$	1,121	$	548,928
Real estate — construction		60,789		18,589		32,787		576		112,741		66,766		13,673		47,319		630		128,388
Real estate — mortgage		79,688		6,817		23,431		1,023		110,959		92,610		7,898		20,288		798		121,594
Consumer		—		—		—		—		—		2		—		—		—		2
Other		4,084		—		—		—		4,084		3,448		—		3,903		—		7,351
Total	$	550,557	$	74,372	$	132,412	$	2,000	$	759,341	$	586,300	$	70,222	$	147,192	$	2,549	$	806,263

An analysis of the changes in the allowance for credit losses follows (in thousands):

	Three Months Ended
	March 31
	2011		2010
Balance, beginning of period	$	28,752	$	35,843
Loans charged off:
Commercial		1,200		1,210
Real estate — construction		1,134		856
Real estate — mortgage		2,197		1,690
Consumer		380		762
Other		1,300		—
Total chargeoffs		6,211		4,518
Recoveries of loans previously charged off:
Commercial		137		193
Real estate — construction		86		47
Real estate — mortgage		113		55
Consumer		103		181
Other		4		—
Total recoveries		443		476
Net loans charged off		5,768		4,042
Provision for loan losses		6,073		3,723
Balance, end of period	$	29,057	$	35,524

Loans totaling $77,584,000 and $76,994,000, as of March 31, 2011 and December 31, 2010, respectively, were held for sale, and stated at the lower of cost or market on an individual basis.

13

Loans totaling $563,282,000 and $569,896,000, as of March 31, 2011 and December 31, 2010, respectively, were pledged to secure lines of the credit with the Federal Home Loan Bank and Federal Reserve Bank.

Note 5 — Stock Compensation Plans

The Company recorded $11,000, or less than $0.01 per diluted share and $20,000, or less than $0.01 per diluted share, of total stock-based compensation expense for the three-month periods ended March 31, 2011 and March 31, 2010, respectively. The stock-based compensation expense is calculated on a ratable basis over the vesting periods of the related stock options or restricted stock grants and is reported under personnel expense. This expense had no impact on the Company’s reported cash flows. As of March 31, 2011, there was $79,000 of total unrecognized stock-based compensation expense. This expense will be fully recognized by March of 2013.

For purposes of determining estimated fair value of the stock options and restricted stock grants, the Company has computed the estimated fair values of all stock-based compensation using the Black-Scholes option pricing model and, for stock options and restricted stock grants granted prior to December 31, 2010, has applied the assumptions set forth in the Annual Report. During the first quarter of 2011, no stock options or restricted stock grants were granted to employees or directors.

Note 6 — Fair Value of Financial Instruments

The table below presents the assets measured at fair value on a recurring basis categorized by the level of inputs used in the valuation of each asset (in thousands):

	Quoted prices
	in active markets		Significant other		Significant
	for identical		observable inputs		unobservable inputs
	assets (Level 1)		(Level 2)		(Level 3)
Available for sale securities at March 31, 2011	$	—	$	266,059	$	10,399
Available for sale securities at December 31, 2010		—		314,730		10,399

The table below presents the assets measured at fair value on a non-recurring basis categorized by the level of inputs used in the valuation of each asset (in thousands):

	Quoted prices
	in active markets		Significant other		Significant
	for identical		observable inputs		unobservable inputs
	assets (Level 1)		(Level 2)		(Level 3)
Loans held for sale at March 31, 2011	$	—	$	77,584	$	—
Loans held for sale at December 31, 2010		—		76,994		—
Real estate acquired in settlement of loans at March 31, 2011		—		—		26,329
Real estate acquired in settlement of loans at December 31, 2010		—		—		26,718
Core deposit intangible at March 31, 2011		—		—		4,345
Core deposit intangible at December 31, 2010		—		—		4,526
Impaired loans, net of allowance at March 31, 2011		—		—		34,313
Impaired loans, net of allowance at December 31, 2010		—		—		36,368

14

Note 7 — U.S. Treasury Capital Purchase Program

Pursuant to the U.S. Department of the Treasury (the “U.S. Treasury”) Capital Purchase Program (the “CPP”), on December 12, 2008, the Company issued and sold to the U.S. Treasury (i) 52,372 shares of Bancorp’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”) and (ii) a warrant (the “Warrant”) to purchase 2,567,255 shares of the Company’s common stock at an exercise price of $3.06 per share, for an aggregate purchase price of $52,372,000 in cash. The Warrant may be exercised by U.S. Treasury at any time before it expires on December 12, 2018. The fair value of the Warrant of $1,497,000 was estimated on the date of the grant using the Black-Scholes option-pricing model. The Series A Preferred Stock pays cumulative dividends of five percent for the first five years and nine percent thereafter, unless the Company redeems the shares.

15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The discussion presented herein is intended to provide an overview of the changes in financial condition and results of operations during the time periods required by Item 303 of Regulation S-K for NewBridge Bancorp (“Bancorp” or the “Company”) and its wholly-owned subsidiary NewBridge Bank (the “Bank”).

The consolidated financial statements also include the accounts and results of operations of the Bank’s wholly-owned subsidiaries. This discussion and analysis is intended to complement the unaudited financial statements, notes and supplemental financial data in this Quarterly Report on Form 10-Q, and should be read in conjunction therewith.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent expectations and beliefs of Bancorp including but not limited to Bancorp’s operations, performance, financial condition, growth or strategies. These forward-looking statements are identified by words such as “expects”, “anticipates”, “should”, “estimates”, “believes” and variations of these words and other similar statements. For this purpose, any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements involve estimates, assumptions, risks and uncertainties that could cause actual results to differ materially from current projections depending on a variety of important factors, including without limitation: (1) recently enacted legislation, or legislation enacted in the future, or any proposed federal programs may subject Bancorp to increased regulation and may adversely affect Bancorp; (2) the strength of the United States economy generally, and the strength of the local economies in which Bancorp conducts operations, may be different than expected, resulting in, among other things, a continued deterioration in credit quality, including the resultant effect on Bancorp’s loan portfolio and allowance for credit losses; (3) the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System (the “Federal Reserve”); (4) inflation, deflation, interest rate, market and monetary fluctuations; (5) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate and market liquidity conditions) and the impact of such conditions on Bancorp’s capital markets and capital management activities; (6) the timely development of competitive new products and services by Bancorp and the acceptance of these products and services by new and existing customers; (7) the willingness of customers to accept third party products marketed by Bancorp; (8) the willingness of customers to substitute competitors’ products and services for Bancorp’s products and services and vice versa; (9) the impact of changes in financial services’ laws and regulations (including laws concerning taxes, banking and securities); (10) technological changes; (11) changes in consumer spending and saving habits; (12) the effect of corporate restructurings, acquisitions and/or dispositions, and the failure to achieve the expected revenue growth and/or expense savings from such corporate restructurings, acquisitions and/or dispositions; (13) the current stresses in the financial and real estate markets, including possible continued deterioration in property values; (14) unanticipated regulatory or judicial proceedings; (15) the impact of changes in accounting policies by the Securities and Exchange Commission (the “SEC”); (16) adverse changes in financial performance and/or condition of Bancorp’s borrowers which could impact repayment of such borrowers’ outstanding loans; and (17) Bancorp’s success at managing the risks involved in the foregoing. Bancorp cautions that the foregoing list of important factors is not exhaustive. See also those risk factors identified in the section headed “Risk Factors”, beginning on page 14 of Bancorp’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010, filed with the Securities and Exchange Commission (the “SEC”) on March 24, 2011 (the “Annual Report”). Bancorp undertakes no obligation to update any forward-looking statement, whether written or oral, which may be made from time to time by or on behalf of Bancorp.

16

Introduction

Bancorp is a bank holding company incorporated under the laws of North Carolina (“NC”) and registered under the Bank Holding Company Act of 1956, as amended (the “BHCA”). Bancorp’s principal asset is the stock of its banking subsidiary, the Bank.

The Company’s results of operations are dependent primarily on the results of operations of the Bank and thus are dependent to a significant extent on net interest income, which is the difference between the income earned on the Bank’s loan and investment portfolios and cost of funds, consisting of interest paid on deposits and borrowings. Results of operations are also affected by the Company’s provision for credit losses, mortgage loan sales activities, service charges and other fee income, and noninterest expense. The Company’s noninterest expense principally consists of compensation and employee benefits, office occupancy and equipment expense, data processing, professional fees, and advertising and business promotion expenses. The Company’s results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities.

Commercial banking in North Carolina is extremely competitive, due in large part to intrastate and interstate branching laws. Many of the Company’s competitors are significantly larger and have greater resources. The Company continues to encounter significant competition from a number of sources, including bank holding companies, financial holding companies, commercial banks, thrift institutions, credit unions and other financial institutions and financial intermediaries. The Company competes in its market areas with some of the largest banking organizations in the Southeast and nationally, almost all of which have numerous branches in NC. The Company’s competition is not limited to financial institutions based in NC. The enactment of federal legislation authorizing nationwide interstate banking has greatly increased the size and financial resources of some of the Company’s competitors. Many of its competitors have substantially higher lending limits due to their greater total capitalization, and many perform functions for their customers that the Company generally does not offer. The Company primarily relies on providing quality products and services at a competitive price within its market areas. As a result of interstate banking legislation, the Company’s market is open to future penetration by banks located in other states.

The following discussion and analysis is presented on a consolidated basis and focuses on the major components of the Company’s operations and significant changes in its results of operations for the periods presented. For further information, refer to the Consolidated Financial Statements and notes thereto included in the Annual Report.

Application of Critical Accounting Policies

The accounting and reporting policies of the Company and its subsidiary comply with accounting principles generally accepted in the United States and conform to standards within the banking industry. The preparation of the financial information contained in this Quarterly Report on Form 10-Q requires the Company’s management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The Company’s management evaluates these estimates on an ongoing basis. A summary of the allowance for credit losses, one of the most complex and subjective accounting policies of the Company, is discussed under the heading “Asset Quality and Allowance for Credit losses.”

17

Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010

Net Interest Income

The primary source of earnings for the Bank is net interest income, which represents the dollar amount by which interest generated from earning assets exceeds the cost of funds. Earning assets consist primarily of loans and investment securities. Cost of funds is the interest paid on interest-bearing deposits and borrowed funds.

Net interest income for the first quarter of 2011, on a taxable equivalent basis, was $17.5 million, a decrease of $278,000 million or 1.6%, from $17.7 million for the first quarter of 2010. Average earning assets in the first quarter of 2011 decreased $157.6 million, or 8.7%, to $1.66 billion, compared to $1.81 billion in the first quarter of 2010. Average interest-bearing liabilities for the first quarter of 2011 decreased $153.2 million, or 9.5%, to $1.46 billion, compared to $1.61 billion for the first quarter of 2010. The impact on net interest income caused by the decrease in earning assets was largely offset by an increase in taxable-equivalent net interest margin, which increased to 4.28% for the first quarter of 2011, compared to 3.97% for the first quarter of 2010, an increase of 31 basis points.

The increase in net interest margin was due to the Company’s continued shift in focus away from higher cost time deposits and towards checking accounts and other core deposit relationships. The total balances in the Company’s “FastForward Checking” product grew from $128.3 million at March 31, 2010 to $215.1 million at March 31, 2011. The average yield on earning assets during the first quarter of 2011 was 17 basis points lower than the average yield on earning assets during the comparable period in 2010, while the average rate on interest-bearing liabilities decreased by 53 basis points during the same time period, which resulted in an increase in the interest rate spread in the first quarter of 2011 of 36 basis points compared to the first quarter of 2010. The following table provides an analysis of average volumes, yields and rates and net interest income on a tax-equivalent basis for the three months ended March 31, 2011 and 2010.

18

(Fully taxable equivalent basis¹, in thousands)

	Three Months Ended								Three Months Ended
	March 31, 2011								March 31, 2010
				Interest		Annualized						Interest		Annualized
	Average			Income/		Average			Average			Income/		Average
	Balance			Expense		Yield/Rate			Balance			Expense		Yield/Rate
Earning assets:
Loans receivable2	$	1,335,001		$	17,236		5.24	%	$	1,452,707		$	19,430		5.42	%
Taxable securities		288,312			3,453		4.86			224,486			2,672		4.83
Tax exempt securities		15,683			282		7.30			104,284			1,629		6.34
FHLB stock		10,399			21		0.83			11,627			8		0.27
Interest-bearing bank balances		7,579			4		0.21			21,450			21		0.40
Federal funds sold		—			—		—			—			—		—
Total earning assets		1,656,974			20,996		5.14			1,814,554			23,760		5.31
Non-earning assets:
Cash and due from banks		27,999								26,985
Premises and equipment		38,649								40,612
Other assets		107,225								108,799
Allowance for credit losses		(29,894	)							(36,705	)
Total assets	$	1,800,953		$	20,996				$	1,954,244		$	23,760
Interest-bearing liabilities:
Savings deposits	$	40,190		$	10		0.10	%	$	40,433		$	10		0.10	%
NOW deposits		440,366			751		0.69			290,123			588		0.82
Money market deposits		317,761			552		0.70			354,494			807		0.92
Time deposits		472,488			1,374		1.18			681,715			2,897		1.72
Other borrowings		62,252			492		3.21			90,346			609		2.73
Borrowings from Federal Home Loan Bank		124,634			348		1.13			153,811			1,101		2.90
Total interest-bearing liabilities		1,457,691			3,527		0.98			1,610,922			6,012		1.51
Other liabilities and shareholders’ equity:
Demand deposits		163,633								159,568
Other liabilities		17,121								19,185
Shareholders’ equity		162,508								164,569
Total liabilities and shareholders’ equity	$	1,800,953			3,527				$	1,954,244			6,012
Net interest income and net interest margin3				$	17,469		4.28	%				$	17,748		3.97	%
Interest rate spread4							4.16	%							3.80	%

1	Income related to securities exempt from federal income taxes is stated on a fully taxable-equivalent basis, assuming a federal income tax rate of 35%, and is then reduced by the non-deductible portion of interest expense. The adjustments made to convert to a fully taxable equivalent basis were $91 for 2011 and $510 for 2010.
2	The average loans receivable balances include non-accruing loans. Amortization of loan fees, net of deferred costs, of $209 and $268 for the three months ended March 31, 2011 and 2010, respectively, are included in interest income.
3	Net interest margin is computed by dividing net interest income by average earning assets.
4	Earning assets yield minus interest-bearing liability rate.

19

Noninterest Income and Expense

In the first quarter of 2011, noninterest income increased to $4.5 million, from $2.5 million during the same period in 2010. The Company recognized gains on the sale of investment securities of $2.0 million during the first quarter of 2011. No investment securities were sold during the three months ended March 31, 2010. Service charge income decreased 15.8% to $1.6 million in the first quarter of 2011 from $1.9 million in the first quarter of 2010, due primarily to ongoing regulatory changes in the industry and changes in consumer behavior. Mortgage revenue increased to $425,000 in the first quarter of 2011, compared to $214,000 in the first quarter of 2010.

In the first quarter of 2011, noninterest expense decreased to $14.4 million from $15.6 million in the first quarter of 2010. Personnel expense decreased to $7.3 million in the first quarter of 2011 from $7.8 million in the first quarter of 2010, primarily as a result of headcount reductions from branches closed in 2010. In addition, the Company recorded decreases in automated services expense, occupancy costs, furniture and equipment expenses and legal and professional fees as a result of the Company’s continued focus on a disciplined cost management culture.

The following table presents the details of Other Noninterest Income and Expense.

Other Noninterest Income and Expense (in thousands)

	Three Months Ended
	March 31,						Percentage
	2011			2010			Variance
Other operating income:
Bankcard income	$	156		$	183			(14.8	)%
Investment services commissions		352			380			(7.4	)
Insurance commissions		20			20			0.0
Trust income		194			143			35.7
Income on bank-owned life insurance		408			191			43.5
Other income		(46	)		(28	)		113.6
	$	1,084			889			21.9
Other operating expenses:
Advertising	$	437		$	390			12.1	%
Bankcard expense		107			163			(34.4	)
Legal and professional fees		625			724			(13.7	)
Postage		214			211			1.4
Telephone		150			189			(20.6	)
Amortization of core deposit intangible		182			182			0.0
OREO expense		389			332			17.2
Stationery, printing and supplies		146			139			5.0
Other expense		1,134			1,037			9.4
	$	3,384		$	3,367			0.5

Asset Quality and Allowance for Credit losses

The Company’s allowance for credit losses is analyzed monthly by management. This analysis includes a methodology that segments the loan portfolio into homogeneous loan classifications and considers the current status of the portfolio, historical charge-off experience, current levels of delinquent, impaired and non-performing loans and their underlying collateral values, as well as economic and other risk factors. It is also subject to regulatory examinations and determinations as to adequacy, which may take into account such factors as the methodology employed and other analytical measures in comparison to a group of peer banks. Management believes the allowance for credit losses is sufficient to absorb known risk in the

20

portfolio. The Company, like many financial institutions, has recently and will likely continue to face a challenging credit environment in the coming months, as a result of the overall economic slowdown in the region and the nation. The majority of the Bank’s loan portfolio is comprised of loans secured by real estate, and is therefore subject to risk as a result of the weakening real estate market. No assurances can be given that future economic conditions will not adversely affect borrowers and result in increases in credit losses and non-performing asset levels.

The allowance for credit losses, which is utilized to absorb actual losses in the loan portfolio, is maintained at a level consistent with management’s best estimate of probable credit losses incurred as of the balance sheet date. Major loan portfolio subgroups include: risk graded commercial loans, mortgage loans, home equity loans, retail loans and retail credit lines. Management also analyzes the loan portfolio on an ongoing basis to evaluate current risk levels, and risk grades are adjusted accordingly. While management uses the best information to make evaluations, future adjustments may be needed if economic or other conditions differ substantially from the assumptions used.

At March 31, 2011, the allowance for credit losses was $29.1 million or 2.18% of total loans outstanding compared to $28.8 million or 2.15% of loans outstanding at December 31, 2010, and $35.5 million or 2.28% of loans outstanding at March 31, 2010. At March 31, 2011, the allowance for credit losses was 58.13% of nonperforming loans compared to 56.84% at December 31, 2010 and 62.64% at March 31, 2010. Based on analysis of the current loan portfolio and levels of current problem assets and potential problem loans, management believes the allowance for credit losses to be adequate. Additional information regarding the allowance for credit losses is presented in the table headed “Asset Quality Analysis”, on the following page.

Nonperforming loans totaled $50.0 million at March 31, 2011, compared to $50.6 million at December 31, 2010 and $56.7 million at March 31, 2010. The decrease from the 2010 year end and from the prior year is primarily driven by decreases in non-accrual loans. Real estate acquired in settlement of loans (“OREO”) was $26.3 million at March 31, 2011, $26.7 million at December 31, 2010, and $29.3 million at March 31, 2010. Approximately $3.7 million was transferred from loans into OREO and approximately $2.5 million of such assets were disposed of during the first three months of 2011. A net loss of $1.5 million has been recorded on disposition and writedowns of OREO in the current year, compared to a net loss of $1.4 million in the first quarter of 2010. The Company recorded $389,000 of expenses on OREO during the first three months of 2011, compared to $332,000 million in the first quarter of 2010. Nonperforming assets (comprised of nonaccrual loans, restructured loans and OREO) totaled $76.3 million, or 4.28% of total assets, at March 31, 2011, compared to $77.3 million, or 4.28% of total assets, at December 31, 2010 and $86.0 million, or 4.40% of total assets, a year ago.

The provision for credit losses charged to operations for the three months ended March 31, 2011 totaled $6.1 million, compared to $3.7 million for the three months ended March 31, 2010. Net charge-offs for the three months ended March 31, 2011 were $5.8 million, or 1.86% of average loans held for investment on an annualized basis, compared to net charge-offs of $4.0 million, or 1.15% of average loans held for investment on an annualized basis, for the three months ended March 31, 2010.

21

	Three Months Ended			Year Ended			Three Months Ended
Asset Quality Analysis	March 31			December 31			March 31
(Dollars in thousands)	2011			2010			2010
Allowance for credit losses:
Balance, beginning of period	$	28,752		$	35,843		$	35,843
Loans charged off
Commercial		1,200			9,052			1,210
Real estate — construction		1,134			5,379			856
Real estate — mortgage		2,197			7,260			1,690
Consumer		380			2,829			762
Other		1,300			6,200			—
Total chargeoffs		6,211			30,720			4,518
Recoveries of loans previously charged off:
Commercial		137			1,370			193
Real estate — construction		86			80			47
Real estate — mortgage		113			270			55
Consumer		103			647			181
Other		4			10			—
Total recoveries		443			2,377			476
Net loans charged off		5,768			28,343			4,042
Provision for loan losses		6,073			21,252			3,723
Balance, end of period	$	29,057		$	28,752		$	35,524
Nonperforming Assets:
Commercial nonaccrual loans, not restructured	$	18,528		$	23,453		$	42,869
Commercial nonaccrual loans, restructured		12,215			11,190			4,406
Non-commercial nonaccrual loans		11,680			8,537			4,566
Total nonaccrual loans		42,423			43,180			51,841
Troubled debt restructured, accruing		31			27			2,300
Loans 90 days or more past due and still accruing		7,532			7,378			2,571
Total non-performing loans		49,986			50,585			56,712
Real estate acquired in settlement of loans		26,329			26,718			29,316
Total nonperforming assets	$	76,315		$	77,303		$	86,028
Asset Quality Ratios:
Nonperforming loans to total loans outstanding at end of period		3.75	%		3.78	%		3.95	%
Nonperforming assets to total assets at end of period		4.28			4.28			4.40
Allowance for credit losses as a percentage of total loans outstanding at end of period		2.18			2.15			2.48
Allowance for credit losses to nonperforming loans		58.13			56.84			62.64
Net charge-offs as a percentage of average loans outstanding during the period		1.86	*		2.01			1.15	*

* Denotes annualized

Income Taxes

The Company recorded income tax expense of $433,000 for the first quarter of 2011, compared to income tax expense of $103,000 for the first quarter of 2010. The Company’s effective tax rate was 30.0% for the three-month period ended March 31, 2011, compared to 21.6% for the first quarter of 2010. The change in the effective rate is primarily as a result of the reduction in tax exempt income from 2010 to 2011.

22

Interest Rate Risk Management

Interest rate risk management is a part of the Bank’s overall asset/liability management process. The primary oversight of asset/liability management rests with the Bank’s Asset and Liability Committee, which is comprised of the Bank’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and other senior executives. The Committee meets on a monthly basis to review the asset/liability management activities of the Bank and monitor compliance with established policies. Activities of the Asset and Liability Committee are reported to the Audit and Risk Management Committee of the Company’s Board of Directors.

A primary objective of interest rate risk management is to ensure the stability and quality of the Company’s primary earnings component, net interest income. This process involves monitoring the Company’s balance sheet in order to determine the potential impact that changes in the interest rate environment may have on net interest income. Rate sensitive assets and liabilities have interest rates that are subject to change within a specific time period, due to either maturity or to contractual agreements which allow the instruments to reprice prior to maturity. Interest rate sensitivity management seeks to ensure that both assets and liabilities react to changes in interest rates within a similar time period, thereby minimizing the risk to net interest income.

The Bank utilizes a computer based interest rate risk simulation model prepared by an independent consultant. This comprehensive model includes rate sensitivity gap analysis, net interest income analysis, and present value of equity analysis, under various rate scenarios. The Bank uses this model to monitor interest rate risk on a quarterly basis and to detect trends that may affect the overall net interest income of the Bank. This simulation incorporates the dynamics of balance sheet and interest rate changes and calculates the related effect on net interest income. The Bank’s asset/liability policy provides guidance for levels of interest rate risk and potential remediations, if necessary, to mitigate excessive levels of risk. The modeling results indicate the Bank is subject to an acceptable level of interest rate risk. The Bank is not subject to other types of market risk, such as foreign currency exchange rate risk, commodity or equity price risk.

Liquidity Management

Liquidity management refers to the policies and practices that ensure the Bank has the ability to meet day-to-day cash flow requirements based primarily on activity in loan and deposit accounts of the Bank’s customers. Deposit withdrawals, loan funding and general corporate activity create the primary needs for liquidity for the Bank. Liquidity is derived from sources such as deposit growth; maturity, calls or sales of investment securities; principal and interest payments on loans; access to borrowed funds or lines of credit; and profits.

During the first three months of 2011, the Company had net cash provided by operating activities of $3.9 million, compared to $8.1 million of net cash provided by operating activities in the first three months of 2010. The decrease was primarily the result of the Company’s $2.7 million decrease in income taxes receivable in the first quarter of 2010 and a $3.6 million increase in other assets during the first quarter of 2011.

Net cash provided by investing activities for the first three months of 2011 was $42.3 million, compared to net cash used for investing activities in the first three months of 2010 of $4.4 million. This change is primarily attributable to proceeds from the sale of securities exceeding purchases of securities by $44.9 million during the first quarter of 2011. During the first quarter of 2010, purchases of securities exceeded proceeds from sales of securities by $26.0 million

During the three months ended March 31, 2011, financing activities used $23.3 million, compared to net cash provided by financing activities of $5.6 million during the same period of 2010. The change was primarily the result of the Company increasing its total deposits by $45.9 million, while total deposits increased by $2.3 million during the first quarter of 2011.

23

Cash and cash equivalents totaled $51.9 million at March 31, 2011, compared to $29.1 million at December 31, 2010 and $54.2 million at March 31, 2010.

The Bank has borrowing capacity of approximately $288.0 million with the FHLB, of which approximately $150.0 million was available at March 31, 2011. These borrowings are collateralized by FHLB stock, investment securities, qualifying 1 to 4 family residential mortgage loans, and qualifying commercial real estate loans. The Bank provides various reports to the FHLB on a regular basis to maintain the availability of the credit line. Each borrowing request to the FHLB is initiated through an advance application that is subject to approval by the FHLB before funds are advanced under the line of credit. The Bank also has $26.2 million of borrowing capacity through the Federal Reserve Bank System, of which none was used as of March 31, 2011. The line with the Federal Reserve Bank of Richmond is collateralized using investment securities and qualified loans.

Capital Resources and Shareholders’ Equity

Pursuant to the U.S. Department of the Treasury (the “U.S. Treasury”) Capital Purchase Program (the “CPP”), on December 12, 2008, Bancorp issued and sold to the U.S. Treasury (i) 52,372 shares of Bancorp’s Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”) and (ii) a warrant (the “Warrant”) to purchase 2,567,255 shares of Bancorp’s common stock, par value $5.00 per share, for an aggregate purchase price of $52,372,000 in cash. The Securities Purchase Agreement, dated December 12, 2008, pursuant to which the securities issued to the U.S. Treasury under the CPP were sold, restricts Bancorp, without the prior approval of the U.S. Treasury, from increasing dividends payable on its common stock from the last quarterly cash dividend per share ($0.05) declared on the common stock prior to October 14, 2008, limits Bancorp’s ability to repurchase shares of its common stock (with certain exceptions, including the repurchase of its common stock to offset share dilution from equity-based compensation awards), grants the holders of the Series A Preferred Stock, the Warrant and the common stock of Bancorp to be issued under the Warrant, certain registration rights, and subjects Bancorp to certain of the executive compensation limitations included in the EESA, the ARRA and related regulations. Additionally, the Company’s Board of Directors has resolved not to declare or pay any dividend, common or preferred, or make any payments on trust preferred securities without the prior approval of the Federal Reserve Bank.

Bancorp did not repurchase any of its equity securities during 2010 or the first quarter of 2011.

Banks and bank holding companies, as regulated institutions, must meet required levels of capital. The Commissioner of Banks in North Carolina, the Federal Reserve and the FDIC, which are the primary banking regulatory agencies for the Bank and the Company, have adopted minimum capital regulations or guidelines that categorize components and the level of risk associated with various types of assets. Financial institutions are required to maintain a level of capital commensurate with the risk profile assigned to their assets in accordance with the guidelines.

As shown in the accompanying table, the Company and the Bank have capital levels exceeding the minimum levels for “well capitalized” banks and bank holding companies as of March 31, 2011.

	Regulatory Capital
	Well			Adequately
	Capitalized			Capitalized			Company			Bank
Total Capital		10.0	%		8.0	%		14.02	%		13.62	%
Tier 1 Capital		6.0			4.0			12.75			12.36
Leverage Capital		5.0			4.0			9.91			9.61

24

The Company holds $5.3 million of the $52.4 million received from the U.S. Treasury under the CPP, which may be invested in the Bank to increase the Bank’s total risk based capital ratio from the present level of 13.62%.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the possible chance of loss from unfavorable changes in market prices and rates. These changes may result in a reduction of current and future period net interest income, which is the favorable spread earned from the excess of interest income on interest-earning assets, over interest expense on interest-bearing liabilities.

The Company considers interest rate risk to be its most significant market risk, which could potentially have the greatest impact on operating earnings. The primary oversight of asset/liability management rests with the Bank’s Asset and Liability Committee. The Committee meets on a monthly basis to review the asset/liability management activities of the Bank and monitor compliance with established policies. Activities of the Asset and Liability Committee are reported to the Audit and Risk Management Committee of the Company’s Board of Directors.

The Company has not experienced any material changes in interest rate risk since the end of the fiscal year ended December 31, 2010.

25

Item 4. Controls and Procedures

Evaluation of disclosure controls and procedures

The Company’s management, including its CEO, CFO and Chief Accounting Officer (“CAO”) evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of March 31, 2011. Based upon that evaluation, the Company’s CEO, CFO and CAO each concluded that as of March 31, 2011, the end of the period covered by this Quarterly Report on Form 10-Q, the Company maintained effective disclosure controls and procedures.

Changes in internal control over financial reporting

There have been no changes to the Company’s internal controls over financial reporting that occurred during the quarter ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

26

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 1A. Risk Factors

There have been no material changes to the Company’s Risk Factors as previously disclosed in Bancorp’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

There were no sales of equity securities during the first quarter of 2011 which were not registered under the Securities Act of 1933, as amended. The Company did not repurchase any of its equity securities during the first quarter of 2011.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Removed and Reserved

Item 5. Other Information

Item 5.07 Submission of Matters to a Vote of Security Holders

On May 11, 2011, at the Annual Meeting of the Company’s shareholders, a total of 12,154,460 shares, or 77.64 percent of the eligible voting shares, were voted. The following proposals were voted on by shareholders:

Proposal 1

To elect sixteen persons who will serve as members of the Board of Directors until the 2012 annual meeting of shareholders or until their successors are duly elected and qualified:

			Against or
Nominee	For		Withheld		Abstentions		Broker Non-Votes
Michael S. Albert		7,072,151		245,123		98,867		4,738,319
J. David Branch		6,993,221		284,232		138,688		4,738,319
C. Arnold Britt		6,981,378		288,203		146,560		4,738,319
Robert C. Clark		7,007,479		292,937		115,725		4,738,319
Alex A. Diffey, Jr.		6,824,530		409,866		181,745		4,738,319
Barry Z. Dodson		6,885,399		424,498		106,244		4,738,319
Joseph H. Kinnarney		6,926,693		383,799		105,649		4,738,319
Robert F. Lowe		6,962,537		373,392		80,212		4,738,319
Robert V. Perkins		6,967,424		328,814		119,903		4,738,319
Pressley A. Ridgill		6,982,307		307,272		126,562		4,738,319
Mary E. Rittling		7,017,893		299,083		99,165		4,738,319
E. Reid Teague		6,928,903		335,219		152,019		4,738,319
John F. Watts		5,558,346		1,742,744		115,051		4,738,319
G. Alfred Webster		6,983,306		315,579		117,526		4,738,319
Kenan C. Wright		6,940,069		322,852		153,220		4,738,319
Julius S. Young		7,100,104		211,047		104,990		4,738,319

All of the above-named nominees were duly elected.

27

Proposal 2

To ratify the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2011:

		Against or
For		Withheld		Abstentions		Broker Non-Votes
	11,785,661		151,314		217,485		0

Proposal 3

To consider and approve an advisory (non-binding) proposal on executive compensation:

		Against or
For		Withheld		Abstentions		Broker Non-Votes
	6,717,746		515,623		182,772		4,738,319

28

Item 6. Exhibits

Exhibit
No.	Description
3.1	Articles of Incorporation, and amendments thereto, incorporated by reference to Exhibit 4.1 of the Registration Statement on Form S-8, filed with the SEC on May 16, 2001 (SEC File No. 333-61046).
3.2	Articles of Merger of FNB with and into LSB, including amendments to the Articles of Incorporation, as amended, incorporated by reference to Exhibit 3.4 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, filed with the SEC on November 9, 2007 (SEC File No. 000-11448).
3.3	Amended and Restated Bylaws adopted by the Board of Directors on August 17, 2004 and amended on July 23, 2008 (with identified Bylaw approved by the shareholders) incorporated by reference to Exhibit 3.3 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, filed with the SEC on May 8, 2009 (SEC File No. 000-11448).
4.1	Specimen certificate of common stock, $5.00 par value, incorporated by reference to Exhibit 4.1 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, filed with the SEC on November 9, 2007 (SEC File No. 000-11448).
4.2	Amended and Restated Trust Agreement, regarding Trust Preferred Securities, dated August 23, 2005, incorporated herein by reference to Exhibit 4.02 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed with the SEC (SEC File No. 000-13086).
4.3	Guarantee Agreement, regarding Trust Preferred Securities, dated August 23, 2005, incorporated herein by reference to Exhibit 4.03 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed with the SEC (SEC File No. 000-13086).
4.4	Indenture, regarding Trust Preferred Securities, dated August 23, 2005, incorporated herein by reference to Exhibit 4.04 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed with the SEC (SEC File No. 000-13086).
4.5	Articles of Amendment, filed with the North Carolina Department of the Secretary of State on December 12, 2008, incorporated herein by reference to Exhibit 4.1 of the Current Report on Form 8-K filed with the SEC on December 12, 2008 (SEC File No. 000-11448).
4.6	Form of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock, Series A, incorporated herein by reference to Exhibit 4.2 of the Current Report on Form 8-K filed with the SEC on December 12, 2008 (SEC File No. 000-11448).
4.7	Warrant for Purchase of Shares of Common Stock issued by Bancorp to the United States Department of the Treasury on December 12, 2008, incorporated herein by reference to Exhibit 4.3 of the Current Report on Form 8-K filed with the SEC on December 12, 2008 (SEC File No. 000-11448).
10.1	Benefit Equivalency Plan of FNB Southeast, effective January 1, 1994 incorporated herein by reference to Exhibit 10 of the Quarterly Report on Form 10-QSB for the fiscal quarter ended June 30, 1995, filed with the SEC (SEC File No. 000-13086).
10.2	1994 Director Stock Option Plan, incorporated herein by reference to Exhibit 4 of the Registration Statement on Form S-8 filed with the SEC on July 15, 1994 (SEC File No. 33-81664).

29

Exhibit
No.	Description
10.3	1996 Omnibus Stock Incentive Plan, incorporated herein by reference to Exhibit 10.2 of the Annual Report on Form 10-K for the year ended December 31, 1995 filed with the SEC on March 28, 1996 (SEC File No. 000-11448).
10.4	Omnibus Equity Compensation Plan, incorporated herein by reference to Exhibit 10(B) of the Annual Report on Form 10-KSB40 for the fiscal year ended December 31, 1996, filed with the SEC on March 31, 1997 (SEC File No. 000-13086).
10.5	Amendment to Benefit Equivalency Plan of FNB Southeast, effective January 1, 1998., incorporated herein by reference to Exhibit 10.16 of the Annual Report on Form 10-K for the fiscal year ended December 31, 1998, filed with the SEC on March 25, 1999 (SEC File No. 000-13086)
10.6	Amendment Number 1 to 1996 Omnibus Stock Incentive Plan, incorporated herein by reference to Exhibit 4.5 of the Registration Statement on Form S-8, filed with the SEC on May 16, 2001 (SEC File No. 333-61046).
10.7	Long Term Stock Incentive Plan for certain senior management employees of FNB Southeast incorporated herein by reference to Exhibit 10.10 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2002, filed with the SEC on March 27, 2003 (SEC File No. 000-13086).
10.8	Form of Employment Continuity Agreement effective as of January 1, 2004 between LSB and Robert E. Lineback, Jr. and Philip G. Gibson with a Schedule setting forth the material details in which such documents differ from the document a copy of which is filed, incorporated herein by reference to Exhibit 10.10 of the Annual Report on Form 10-K for the year ended December 31, 2003 filed with the SEC on March 15, 2004 (SEC File No. 000-11448).
10.9	Form of Stock Option Award Agreement for a Director adopted under LSB Comprehensive Equity Compensation Plan for Directors and Employees, incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC on December 23, 2004 (SEC File No. 000-11448).
10.10	Form of Incentive Stock Option Award Agreement for an Employee adopted under LSB Comprehensive Equity Compensation Plan for Directors and Employees, incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC on December 23, 2004 (SEC File No. 000-11448).
10.11	Form of Amendment to the applicable Grant Agreements under the 1996 Omnibus Stock Incentive Plan, incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC on April 15, 2005 (SEC File No. 000-11448).
10.12	Form of Amendment to the Incentive Stock Option Award Agreement for an Employee adopted under LSB Comprehensive Equity Compensation Plan for Directors and Employees, incorporated herein by reference to Exhibit 10.3 of the Current Report on Form 8-K filed with the SEC on April 15, 2005 (SEC File No. 000-11448).
10.13	Restated Form of Director Fee Deferral Agreement adopted under LSB Comprehensive Equity Compensation Plan for Directors and Employees, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed with the SEC on December 23, 2005 (SEC File No. 000-11448).
10.14	Form of Stock Appreciation Rights Award Agreement adopted under LSB Comprehensive Equity Compensation Plan for Directors and Employees, incorporated herein by reference to Exhibit 99.2 of the Current Report on Form 8-K filed with the SEC on December 23, 2005 (SEC File No. 000-11448).
10.15	FNB Amended and Restated Directors Retirement Policy, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the SEC on August 3, 2007 (SEC File No. 000-11448).

30

Exhibit
No.	Description
10.16	Amendment to the FNB Directors and Senior Management Deferred Compensation Plan Trust Agreement among Regions Bank d/b/a/ Regions Morgan Keegan Trust, FNB Southeast and FNB, dated July 31, 2007, incorporated herein by reference to Exhibit 99.2 of the Current Report on Form 8-K, filed with the SEC on August 3, 2007 (SEC File No. 000-11448).
10.17	Employment and Change of Control Agreement with William W. Budd, Jr. incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the SEC on March 11, 2010 (SEC File No. 000-11448).
10.18	Employment and Change of Control Agreement with Jerry W. Beasley, incorporated herein by reference to Exhibit 99.3 of the Current Report on Form 8-K, filed with the SEC on March 14, 2008 (SEC File No. 000-11448).
10.19	Employment and Change of Control Agreement with Robin S. Hager, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the SEC on August 3, 2010 (SEC File No. 000-11448).
10.20	Employment and Change of Control Agreement with Paul McCombie, incorporated herein by reference to Exhibit 99.5 of the Current Report on Form 8-K, filed with the SEC on March 14, 2008 (SEC File No. 000-11448).
10.21	Directors and Senior Management Deferred Compensation Plan Trust Agreement between FNB Southeast and Morgan Trust Company, incorporated herein by reference to Exhibit 99.7 of the Current Report on Form 8-K, filed with the SEC on March 14, 2008 (SEC File No. 000-11448).
10.22	Bancorp Non-Qualified Deferred Compensation Plan for Directors and Senior Management, incorporated herein by reference to Exhibit 99.9 of the Current Report on Form 8-K, filed with the SEC on March 14, 2008 (SEC File No. 000-11448).
10.23	First Amendment to the Bancorp Non-Qualified Deferred Compensation Plan for Directors and Senior Management, incorporated herein by reference to Exhibit 99.10 of the Current Report on Form 8-K, filed with the SEC on March 14, 2008 (SEC File No. 000-11448).
10.24	Bancorp Amended and Restated Long Term Stock Incentive Plan, formerly the “FNB Long Term Stock Incentive Plan” (the “2006 Omnibus Plan”), incorporated herein by reference to Exhibit 10.27 of the Quarterly Report on Form 10-Q filed with the SEC on May 9, 2008 (SEC File No. 000-11448).
10.25	Amended and Restated Comprehensive Equity Compensation Plan for Directors and Employees, incorporated herein by reference to Exhibit 10.44 of the Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2008 (SEC File No. 000-11448).
10.26	Form of Restricted Stock Award Agreement adopted under the Amended and Restated Comprehensive Equity Compensation Plan for Directors and Employees, incorporated herein by reference to Exhibit 10.45 of the Quarterly Report on Form 10-Q, filed with the SEC on August 11, 2008 (SEC File No. 000-11448).
10.27	Employment and Change of Control Agreement with David P. Barksdale, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the SEC on October 17, 2008 (SEC File No. 000-11448).
10.28	Letter Agreement, dated December 12, 2008, between Bancorp and the United States Department of the Treasury, with respect to the issuance and sale of the Fixed Rate Cumulative Perpetual Preferred Stock, Series A and the Warrant, incorporated herein by reference to Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC on December 12, 2008 (SEC File No. 000-11448).

31

Exhibit
No.	Description
10.29	Form of Employment Agreement Amendment, dated December 12, 2008 among Bancorp, the Bank and the senior executive officers of Bancorp, incorporated herein by reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC on December 12, 2008 (SEC File No. 000-11448).
10.30	Bancorp Management Incentive Plan, dated February 18, 2008, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the SEC on March 6, 2009 (SEC File No. 000-11448).
10.31	Employment and Change of Control Agreement with Ramsey K. Hamadi, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the SEC on March 30, 2009 (SEC File No. 000-11448).
10.32	Promissory Note by Ramsey K. Hamadi in favor of the Bank incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the SEC on April 21, 2009 (SEC File No. 000-11448).
10.33	Excessive and Luxury Expenditure Policy of Bancorp and the Bank, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed with the SEC on September 9, 2009 (SEC File No. 000-11448).
10.34	Employment and Change of Control Agreement among Bancorp, the Bank and Pressley A. Ridgill, executed September 9, 2009, and effective January 1, 2010, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed with the SEC on September 11, 2009 (SEC File No. 000-11448).
10.35	Form of Amendment to Employment and Change of Control Agreement, dated September 16, 2009, among Bancorp, the Bank and the senior executive officers of Bancorp, incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed with the SEC on September 16, 2009 (SEC File No. 000-11448).
31.01	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 13, 2011	NEWBRIDGE BANCORP (Registrant)
	By:	/s/ Ramsey K. Hamadi
		Name:	Ramsey K. Hamadi
		Title:	Executive Vice President and Chief Financial Officer (Authorized Officer)

33

EXHIBIT INDEX

Exhibit
No.	Description
31.01	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

34