Newbridge Bancorp (NBBC) 8-K Newbridge Reports Increased Earnings

Exhibit 99.1

July 24, 2013

Contact:

Ramsey Hamadi, SEVP and Chief Financial Officer

336-369-0900

NEWBRIDGE REPORTS INCREASED EARNINGS

FOR THE SECOND QUARTER OF 2013

GREENSBORO, N.C. – NewBridge Bancorp (Nasdaq: NBBC) today reported a sharp increase in earnings for the quarter ended June 30, 2013 over the quarter ended June 30, 2012. Net income available to common shareholders for the second quarter of 2013 totaled $10.9 million, compared to $192,000 reported in the second quarter of 2012. Earnings per diluted common share were $0.38, an increase from $0.01 per share a year ago. For the six-month period ended June 30, 2013, net income available to common shareholders totaled $14.9 million, compared to $1.0 million reported for the six-month period ended June 30, 2012. Earnings per diluted common share were $0.51, an increase of $0.45 from the $0.06 per share reported a year ago. The three- and six-month periods ended June 30, 2013 benefitted from a $6.6 million income tax benefit associated with the reversal of a previously recorded valuation allowance against the Company’s deferred tax asset.

“Our second quarter results show significantly improved earnings, enhanced asset quality, strong organic loan growth and the retirement of a substantial portion of the Company’s TARP obligation,” said Pressley A. Ridgill, President and Chief Executive Officer of NewBridge.

Second Quarter 2013 Highlights

· Net income for the quarter ended June 30, 2013 was $11.6 million, an increase of $10.7 million over second quarter ended June 30, 2012. Net income for six months was $16.4 million, an increase of $13.9 million from the prior year.

> Net interest income declined $913,000, or 5.6%, for the quarter and $2.0 million, or 6.2%, for the year.

> Provision for credit losses declined $1.3 million, or 56.1%, for the quarter and $3.8 million, or 65.3%, for the year.

> Noninterest income increased $3.8 million, or 378.3%, for the quarter and $5.6 million, or 140.1%, for the year.

> Noninterest expense increased $435,000, or 3.2%, for the quarter and $979,000, or 3.6%, for the year.

· Asset quality continued to improve.

> Nonperforming assets declined $8.4 million, or 31.3%, from December 31, 2012.

> Nonperforming assets to total assets declined to 1.06% from 1.56% at December 31, 2012.

· Core retained loans increased 10.6% on an annualized basis compared to December 31, 2012.

> Core retained loans increased $38.8 million for the quarter, or 13.8% annualized.

> Loan production offices in the Raleigh and Charlotte markets accounted for approximately 50% of the current year’s loan growth.

· Net interest margin declined 19 basis points to 3.97% for the quarter compared to the same period a year ago.

> Core deposits (excluding time deposits) for the first six months increased $46.2 million, or 9.3% annualized.

> Deposit costs declined to 0.26% for the quarter, down 20 basis points compared to the same period a year ago.

> Loan yields declined 32 basis points to 4.67% for the quarter compared to the same period a year ago.

· Capital levels remain high following the partial redemption of preferred shares and retirement of the warrant.

> Company redeemed $37.4 million of preferred stock, reducing future preferred dividends by 71.4%.

> Dilutive warrant issued to the Treasury under the TARP program was repurchased at a price of $7.8 million.

> Tier 1 risk-based capital was 12.22% at June 30, 2013.

> Leverage capital was 10.04% at June 30, 2013.

> Total capital was 13.50% at June 30, 2013.

· In June 2013, the Company announced the signing of a definitive agreement to acquire Security Savings Bank, SSB.

Net Interest Income

Net interest income shrank $913,000 to $15.4 million for the quarter ending June 30, 2013 compared to the quarter ending June 30, 2012. For the six-month period, net interest income declined $2.0 million to $30.5 million compared to the six-month period ended June 30, 2012. The reductions were due primarily to compression of the net interest margin, which declined 19 basis points to 3.97% for the three-month period and 21 basis points to 3.94% for the six-month period compared to the prior year. For the three-month period, liability costs fell 18 basis points; however, earning asset yields fell 37 basis points. The Bank’s investment portfolio experienced the greatest decline. Investment yields were 3.21% for the 2013 second quarter, a reduction of 63 basis points compared to the same period a year ago, due to the sustained low interest rate environment. The net interest margin increased five basis points from 3.92% in the 2013 first quarter to 3.97% for the 2013 second quarter due to a higher yield on loans from improved asset quality and a reduced reliance on the lower yielding investment portfolio.

Noninterest Income

Noninterest income totaled $4.8 million during the second quarter, a $3.8 million improvement over the prior year’s second quarter. In the most recent quarter, the Company had $70,000 of gains from sales of investment securities and $611,000 in gains from sales of other real estate owned (“OREO”), compared to a loss of $3.0 million a year ago. For the six-month period, the Company had noninterest income of $9.6 million, compared to $4.0 million a year ago. For the current year, sales of investment securities resulted in gains of $278,000, compared to no gain or loss a year ago, and gains on sales of OREO totaled $736,000, compared to a loss of $4.0 million a year ago. Retail banking revenue increased $228,000 for the three-month period and $399,000 for the year.

Noninterest Expense & Taxes

Noninterest expense totaled $14.2 million for the second quarter and $28.3 million for the six-month period. Compared to the prior year, noninterest expense increased $435,000, or 3.2%, for the quarter and $979,000, or 3.6%, year to date. The increases in expense were due primarily to growth in compensation expense related to the hiring of commercial lenders in the Raleigh and Charlotte markets and the addition of key lending personnel in the Triad market. In the 2013 second quarter, the Company reversed $8,371,000 of the valuation allowance previously established against its deferred tax asset as management determined it was more likely than not that the Company would be able to fully utilize the assets associated with previous net operating losses. A key factor in the decision was the Company’s financial performance since the completion of the Company’s asset disposition plan in 2012.

Balance Sheet

Total assets increased $18.0 million for the quarter and $21.4 million for the year to $1.73 billion at June 30, 2013. Loans held for investment increased 2.5% for the quarter but was offset by declines in investment securities and cash and cash equivalents. For the quarter, total deposits increased $12.5 million to $1.4 billion, while core deposits, excluding time deposits, increased $32.8 million, or 3.2%, and totaled 76.5% of total deposits at June 30, 2013. Tangible common equity decreased $1.7 million for the quarter but increased $58.7 million for the year. This change in equity was due primarily to $14.8 million of retained earnings and the addition of $56.3 million of common equity for the year from the conversion of preferred stock, which were partially offset by a $7.8 million reduction in equity from the repurchase of the TARP warrant and a $5.2 million decline in accumulated other comprehensive income.

Core Retained Loan Growth

For the first six months of 2013, core retained loans increased $58.2 million, an annualized growth rate of 10.6%. Likewise, for the trailing twelve months, core retained loans increased $109.5 million, a 10.4% growth rate. Total loans including classified loans increased $44.3 million for the six months ended June 30, 2013. In 2012, the Company aggressively purged adversely classified loans (loans that were either problem loans or potential problem loans) while simultaneously investing in growing performing loans. Opening the Raleigh and Charlotte loan production offices and investing further in the Piedmont Triad were important strategic decisions that are beginning to result in increased earning assets. Approximately 50% of this year’s loan growth has occurred in the new markets in Raleigh and Charlotte.

	2013			2012		2012
	Second			Fourth		Second
	Quarter			Quarter		Quarter
Core Retained Loan Growth
(dollars in thousands)
Loans held for investment	$	1,199,711		$	1,155,421	$	1,162,630
Less classified loans		33,918			47,858		106,353
Core retained loans	$	1,165,793		$	1,107,563	$	1,056,277
Core retained loan growth:
Trailing twelve months	$	109,516
		10.4	%
Six months year to date annualized	$	117,425
		10.6	%

Asset Quality

In the second quarter of 2013, asset quality continued to improve. Nonperforming assets as a percentage of total assets declined to 1.06% from 1.56% at December 31, 2012. Nonperforming loans totaled $13.8 million and OREO was $4.5 million at June 30, 2013. The allowance for credit losses was $26.4 million at June 30, 2013, or 190.8% of nonperforming loans, compared to $26.6 million, or 124.7%, at December 31, 2012. Total classified assets, which includes nonperforming assets and other potential problem assets, totaled $38.4 million, or 20.6% of total Bank capital, at June 30, 2013. Classified assets totaled 30.5% of total Bank capital at December 31, 2012.

Outlook

We anticipate continued asset growth in the remainder of 2013. We also believe that the Company’s prior three quarters are indicators of our future core earnings potential. For the remainder of 2013, the Company expects to have a more normalized tax expense. The low interest rate environment and intense competition for quality loans remain as our key challenges. Consequently, margin pressure is likely to continue. We intend to meet these challenges by growing the loan portfolio, remaining disciplined with our cost controls and continuing to maximize fee income opportunities. We will consider growth through acquisitions that are consistent with our disciplined strategic vision and present realistic opportunities for quality earnings enhancement.In June 2013, the Bank announced a definitive agreement to acquire Security Savings Bank, SSB, headquartered in Southport, North Carolina.  This acquisition, which is subject to regulatory approval, will expand the Bank’s coastal North Carolina presence with six offices in Brunswick County.  We anticipate the merger will be consummated in the third quarter.

Use of Non-GAAP Measures

Tangible common shareholders’ equity percentages have become a focus of some investors. Because tangible common shareholders’ equity is not formally defined by GAAP, this measure is considered to be a non-GAAP financial measure, and other entities may calculate it differently. Since analysts and banking regulators may assess our capital adequacy using tangible common shareholders’ equity, management believes that it is useful to provide investors with the ability to assess the Company’s capital adequacy on the same basis.

About NewBridge Bancorp

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

NewBridge Bank is the largest community bank headquartered in the 12-county Piedmont Triad Region of North Carolina and one of the largest community banks in the state. NewBridge Bank serves small to midsize businesses, professionals and consumers with a comprehensive array of financial services, including retail and commercial banking, private banking, wealth management and mortgage banking. NewBridge Bank has assets of approximately $1.7 billion with 30 branches throughout North Carolina.

Disclosures About Forward Looking Statements  

The discussions included in this document and its exhibits may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements. Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” or other statements concerning opinions or judgments of NewBridge and its management about future events. The accuracy of such forward looking statements could be affected by factors including, but not limited to, the financial success or changing conditions or strategies of NewBridge’s customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel or general economic conditions. Additional factors that could cause actual results to differ materially from those anticipated by forward looking statements are discussed in NewBridge’s filings with the Securities and Exchange Commission, including without limitation its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. NewBridge undertakes no obligation to revise or update these statements following the date of this press release.

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FINANCIAL SUMMARY

	Three Months Ended June 30						Six Months Ended June 30
	2013			2012			2013			2012
Income Statement Data
(Dollars in thousands, except share data)
Interest income:
Loans	$	13,740		$	14,581		$	27,166		$	29,503
Investment securities		2,960			3,733			5,951			7,318
Other		6			5			13			20
Total interest income		16,706			18,319			33,130			36,841
Interest expense:
Deposits		722			1,385			1,510			3,129
Borrowings from the FHLB		244			269			497			528
Other		330			342			656			689
Total interest expense		1,296			1,996			2,663			4,346
Net interest income		15,410			16,323			30,467			32,495
Provision for credit losses		1,037			2,360			2,016			5,803
Net interest income after provision for credit losses		14,373			13,963			28,451			26,692
Noninterest income:
Retail banking		2,553			2,325			4,978			4,579
Mortgage banking services		487			553			1,045			1,116
Wealth management services		608			561			1,250			1,155
Gain on sale of investment securities		70			-			278			-
Writedowns and gain (loss) on sale of real estate
acquired in settlement of loans, net		611			(2,976	)		736			(3,984	)
Bank-owned life insurance		330			378			790			845
Other		167			168			547			298
Total noninterest income		4,826			1,009			9,624			4,009
Noninterest expense:
Personnel		7,508			7,226			15,335			14,287
Occupancy		1,024			1,024			2,039			2,028
Furniture and equipment		852			885			1,670			1,663
Technology and data processing		1,053			1,015			2,039			2,035
Legal and professional		755			690			1,428			1,361
FDIC insurance		432			441			885			882
Real estate acquired in settlement of loans		138			205			299			523
Other		2,412			2,253			4,624			4,561
Total noninterest expense	��	14,174			13,739			28,319			27,340
Income before income taxes		5,025			1,233			9,756			3,361
Income tax (benefit) expense		(6,601	)		312			(6,601	)		929
Net income		11,626			921			16,357			2,432
Dividends and accretion on preferred stock		(679	)		(729	)		(1,408	)		(1,459	)
Net income available to common shareholders	$	10,947		$	192		$	14,949		$	973
Net income per share - basic	$	0.38		$	0.01		$	0.60		$	0.06
Net income per share - diluted	$	0.38		$	0.01		$	0.51		$	0.06

FINANCIAL SUMMARY

	2013						2012
	Second			First			Fourth			Third			Second
	Quarter			Quarter			Quarter			Quarter			Quarter
Period-End Balance Sheet
(Dollars in thousands)
Assets
Loans held for sale	$	5,908		$	2,439		$	9,464		$	7,074		$	5,741
Loans held for investment		1,199,711			1,169,887			1,155,421			1,168,747			1,162,630
Allowance for credit losses		(26,395	)		(26,067	)		(26,630	)		(35,016	)		(25,231	)
Net loans held for investment		1,173,316			1,143,820			1,128,791			1,133,731			1,137,399
Investment securities		378,011			398,382			393,815			387,376			388,968
Other earning assets		2,109			11,752			9,006			10,646			35,936
Non-earning assets		170,751			155,686			167,631			175,082			180,392
Total Assets	$	1,730,095		$	1,712,079		$	1,708,707		$	1,713,909		$	1,748,436
Liabilities and Shareholders' Equity
Noninterest-bearing deposits	$	225,089		$	214,642		$	206,023		$	184,942		$	192,066
Savings deposits		49,008			47,050			44,450			44,990			45,371
NOW accounts		425,129			425,307			424,720			429,792			431,390
Money market accounts		345,482			324,864			323,326			350,189			374,217
Time deposits		320,759			341,091			333,974			379,823			406,153
Total deposits		1,365,467			1,352,954			1,332,493			1,389,736			1,449,197
Total borrowings		185,074			138,774			159,774			163,974			110,774
Other liabilities		18,856			20,393			20,426			20,834			18,914
Shareholders' equity		160,698			199,958			196,014			139,365			169,551
Total Liabilities and Shareholders' Equity	$	1,730,095		$	1,712,079		$	1,708,707		$	1,713,909		$	1,748,436

ASSET QUALITY DATA

(Dollars in thousands)
Total nonperforming loans	$	13,832		$	19,414		$	21,360		$	27,694		$	34,680
Other real estate owned		4,508			4,781			5,355			10,465			24,491
Total nonperforming assets	$	18,340		$	24,195		$	26,715		$	38,159		$	59,171
Loans identified as impaired	$	10,610		$	15,772		$	16,400		$	22,644		$	32,955
Other nonperforming loans		3,222			3,642			4,960			5,050			1,725
Total nonperforming loans		13,832			19,414			21,360			27,694			34,680
Performing classified loans		20,086			23,521			26,498			46,842			71,673
Total classified loans	$	33,918		$	42,935		$	47,858		$	74,536		$	106,353
Other real estate owned		4,508			4,781			5,355			10,465			24,491
Total classified assets	$	38,426		$	47,716		$	53,213		$	85,001		$	130,844
Classified percentage		20.56	%		26.59	%		30.53	%		48.10	%		63.24	%
Tier 1 capital (Bank) and reserves	$	186,892		$	179,428		$	174,320		$	176,729		$	206,901
Net chargeoffs		709			1,542			9,595			19,096			5,047
Allowance for credit losses		26,395			26,067			26,630			35,016			25,231
Allowance for credit losses to loans held for investment		2.20	%		2.23	%		2.30	%		3.00	%		2.17	%
Nonperforming loans to loans held for investment		1.15			1.66			1.85			2.37			2.98
Nonperforming assets to total assets		1.06			1.41			1.56			2.23			3.38
Nonperforming loans to total assets		0.80			1.13			1.25			1.62			1.98
Net chargeoff percentage (annualized)		0.24			0.54			3.26			6.52			1.73
Allowance for credit losses to nonperforming loans		190.83			134.27			124.67			126.44			72.75

INVESTMENT PORTFOLIO

(Dollars in thousands)	As of June 30, 2013
			Gross		Gross			Estimated		Average			Average
	Amortized Cost		Unrealized gain		Unrealized loss			Fair value		Yield (%)			Duration (years)
US Agency*	$	76,847	$	-	$	(2,736	)	$	74,111		2.08	%		7.60
Agency mortgage backed securities		17,270		1,495		-			18,765		5.27			2.39
Collateralized mortgage obligations		8,345		239		-			8,584		5.63			2.26
Commercial mortgage backed securities		39,786		1,114		(132	)		40,768		3.33			3.70
Covered bonds		49,918		3,052		(265	)		52,705		3.49			3.35
Corporate bonds		145,750		3,406		(489	)		148,667		3.52			3.84
Municipal obligations*		18,081		163		(309	)		17,935		6.28	**		7.55
Federal Home Loan Bank stock		8,272		-		-			8,272
Other		7,672		687		(155	)		8,204
Total	$	371,941	$	10,156	$	(4,086	)	$	378,011		3.47	**		4.63

*	Includes held-to-maturity securities carried at cost with no gains or losses shown in the table above
**	Fully taxable equivalent basis

COMMON STOCK DATA

	2013				2012
	Second		First		Fourth		Third		Second
	Quarter		Quarter		Quarter		Quarter		Quarter
Market value:
End of period	$	5.99	$	5.89	$	4.63	$	4.84	$	4.38
High		6.41		6.48		4.95		5.00		4.94
Low		5.55		4.50		3.92		3.74		3.88
Book value		5.12		5.19		5.58		5.56		7.48
Tangible book value		5.02		5.09		5.38		5.35		7.27
Average shares outstanding		28,461,665		21,055,250		15,655,868		15,655,868		15,655,868
Average diluted shares outstanding		29,139,456		29,699,040		20,978,610		15,655,868		16,465,346

OTHER DATA

	Three Months Ended June 30						Six Months Ended June 30
	2013			2012			2013			2012
Tangible common equity	$	142,987		$	113,742		$	142,987		$	113,742
Return on average assets		2.74	%		0.21	%		1.94	%		0.28	%
Return on average equity		25.15			2.20			17.25			2.92
Net yield on earning assets		3.97			4.16			3.94			4.15
Average loans to assets		69.37			67.44			69.01			68.02
Average loans to deposits		87.04			82.75			87.21			83.06
Average noninterest-bearing deposits
to total deposits		16.38			14.21			16.03			13.56
Average equity to assets		10.89			9.67			11.23			9.62
Total capital as a percentage of total risk weighted assets		13.50			14.73			13.50			14.73
Tangible common equity as a percentage
of tangible assets		8.28			6.52			8.28			6.52
Tangible common equity as a percentage
of total risk weighted assets		10.44			8.33			10.44			8.33

ANALYSIS OF YIELDS AND RATES

	Three Months Ended June 30, 2013						Three Months Ended June 30, 2012
	Average		Interest Income/		Average Yield/		Average		Interest Income/		Average Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
(Fully taxable equivalent basis, dollars in thousands)
Earning Assets
Loans receivable	$	1,180,844	$	13,740		4.67%	$	1,176,015	$	14,581		4.99%
Investment securities		380,109		3,050		3.21%		398,541		3,825		3.84%
Other earning assets		6,317		6		0.38%		12,033		5		0.17%
Total Earning Assets		1,567,270		16,796		4.30%		1,586,589		18,411		4.67%
Non-Earning Assets		134,981						157,153
Total Assets	$	1,702,251		16,796			$	1,743,742		18,411
Interest-Bearing Liabilities
Deposits	$	1,134,479		722		0.26%	$	1,219,190		1,385		0.46%
Borrowings		141,839		574		1.62%		134,787		611		1.82%
Total Interest-Bearing Liabilities		1,276,318		1,296		0.41%		1,353,977		1,996		0.59%
Noninterest-bearing deposits		222,243						201,997
Other liabilities		18,271						19,154
Shareholders' equity		185,419						168,614
Total Liabilities and
Shareholders' Equity	$	1,702,251		1,296			$	1,743,742		1,996
Net Interest Income			$	15,500					$	16,415
Net Interest Margin						3.97%						4.16%
Interest Rate Spread						3.89%						4.07%

	Six Months Ended June 30, 2013						Six Months Ended June 30, 2012
	Average		Interest Income/		Average Yield/		Average		Interest Income/		Average Yield/
	Balance		Expense		Rate		Balance		Expense		Rate
(Fully taxable equivalent basis, dollars in thousands)
Earning Assets
Loans receivable	$	1,174,877	$	27,166		4.66%	$	1,183,528	$	29,503		5.01%
Investment securities		384,304		6,141		3.20%		380,653		7,506		3.94%
Other earning assets		9,143		13		0.29%		18,005		20		0.22%
Total Earning Assets		1,568,324		33,320		4.28%		1,582,186		37,029		4.71%
Non-Earning Assets		134,112						157,776
Total Assets	$	1,702,436		33,320			$	1,739,962		37,029
Interest-Bearing Liabilities
Deposits	$	1,131,317		1,510		0.27%	$	1,231,711		3,129		0.51%
Borrowings		144,689		1,153		1.61%		127,798		1,217		1.92%
Total Interest-Bearing Liabilities		1,276,006		2,663		0.42%		1,359,509		4,346		0.64%
Noninterest-bearing deposits		215,918						193,172
Other liabilities		19,307						19,841
Shareholders' equity		191,205						167,440
Total Liabilities and
Shareholders' Equity	$	1,702,436		2,663			$	1,739,962		4,346
Net Interest Income			$	30,657					$	32,683
Net Interest Margin						3.94%						4.15%
Interest Rate Spread						3.86%						4.06%