Newbridge Bancorp (NBBC) 8-K Newbridge Bancorp Reports Net Income of $1.4 Million for the Fourth Quarter

Exhibit 99.1

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

AND $4.7 MILLION FOR THE YEAR

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

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

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

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

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

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

• Provision expense declines $4.5 million for the year

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

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

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

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

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

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

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

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

Net interest income

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

Balance Sheet

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

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

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

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

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

Noninterest Income

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

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

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

Noninterest Expense

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

Asset Quality

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

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

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

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

Outlook

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

Non-GAAP Financial Information

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

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

About NewBridge Bancorp

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

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

Disclosures About Forward Looking Statements

The discussions included in this document and its exhibits may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements. Such statements are often characterized by the use of qualifying words such as “expects,” “anticipates,” “believes,” “estimates,” “plans,” “projects,” or other statements concerning opinions or judgments of NewBridge and its management about future events. The accuracy of such forward looking statements could be affected by factors including, but not limited to, the financial success or changing conditions or strategies of NewBridge’s customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel or general economic conditions. Additional factors that could cause actual results to differ materially from those anticipated by forward looking statements

are discussed in NewBridge’s filings with the Securities and Exchange Commission, including without limitation its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. NewBridge undertakes no obligation to revise or update these statements following the date of this release.

####

FINANCIAL SUMMARY

	Three Months ended December 31, 2011							Three Months ended December 31, 2010
	Average Balance		Interest Income/ expense		Average Yield/ Rate			Average Balance		Interest Income/ expense		Average Yield/ Rate
(Fully taxable equivalent basis, dollars in thousands)
Earning Assets
Loans receivable	$	1,220,133	$	15,820		5.14	%	$	1,358,187	$	17,869		5.22	%
Investment securities		315,519		3,444		4.33	%		292,321		3,423		4.65	%
Other earning assets		24,005		16		0.26	%		53,634		42		0.31	%
Total earning Assets		1,559,657		19,280		4.90	%		1,704,142		21,334		4.97	%
Non-earning Assets		153,218							134,826
Total Assets	$	1,712,875		19,280				$	1,838,968		21,334
Interest-Bearing Liabilities
Deposits	$	1,240,660		1,980		0.63	%	$	1,321,383		3,118		0.94	%
Borrowings		116,781		606		2.06	%		163,018		1,033		2.51	%
Total Interest-Bearing Liabilities		1,357,441		2,586		0.76	%		1,484,401		4,151		1.11	%
Noninterest-bearing deposits		171,909							167,879
Other liabilities		17,849							18,401
Shareholders’ equity		165,676							168,287
Total Liabilities and Shareholders’ equity	$	1,712,875		2,586				$	1,838,968		4,151
Net Interest Income			$	16,694						$	17,183
Net Interest Margin						4.25	%						4.00	%
Interest Rate Spread						4.15	%						3.86	%
	Twelve Months ended December 31, 2011							Twelve Months ended December 31, 2010
	Average Balance		Interest Income/ expense		Average Yield/ Rate			Average Balance		Interest Income/ expense		Average Yield/ Rate
(Fully taxable equivalent basis, dollars in thousands)
Earning Assets
Loans receivable	$	1,271,790	$	65,871		5.18	%	$	1,406,624	$	74,795		5.32	%
Investment securities		305,061		13,887		4.55	%		330,634		16,519		5.00	%
Other earning assets		24,270		60		0.25	%		34,496		96		0.28	%
Total earning Assets		1,601,121		79,818		4.99	%		1,771,754		91,410		5.16	%
Non-earning Assets		148,688							139,003
Total Assets	$	1,749,809		79,818				$	1,910,757		91,410
Interest-Bearing Liabilities
Deposits	$	1,258,551		9,493		0.75	%	$	1,359,593		14,960		1.10	%
Borrowings		141,935		2,826		1.99	%		199,429		5,494		2.75	%
Total Interest-Bearing Liabilities		1,400,486		12,319		0.88	%		1,559,022		20,454		1.31	%
Noninterest-bearing deposits		166,077							164,958
Other liabilities		16,909							17,591
Shareholders’ equity		166,337							169,186
Total Liabilities and Shareholders’ equity	$	1,749,809		12,319				$	1,910,757		20,454
Net Interest Income			$	67,499						$	70,956
Net Interest Margin						4.22	%						4.00	%
Interest Rate Spread						4.11	%						3.85	%

FINANCIAL SUMMARY

	2011												2010
	Fourth Quarter			Third Quarter			Second Quarter			First Quarter			Fourth Quarter
Period-end Balances
(Dollars in thousands)
Assets	$	1,734,564		$	1,702,660		$	1,738,559		$	1,784,383		$	1,809,891
Loans held for investment		1,199,998			1,217,058			1,244,288			1,254,630			1,260,585
Loans held for sale		7,922			6,894			2,754			77,584			76,994
Investment securities		337,811			295,461			292,898			276,458			325,129
Earning assets		1,572,094			1,549,932			1,593,857			1,617,735			1,668,303
Noninterest-bearing deposits		172,351			167,689			161,703			165,534			161,734
Savings deposits		40,876			40,097			40,937			41,510			38,898
NOW accounts		441,292			423,258			423,445			445,455			440,190
Money market accounts		370,773			363,340			365,109			336,784			316,608
Time deposits		393,384			401,287			435,895			466,013			495,565
Interest-bearing liabilities		1,379,799			1,347,756			1,354,956			1,439,236			1,465,735
Shareholders’ equity		163,386			167,278			166,701			164,116			165,918
Asset Quality Data
(Dollars in thousands)
Nonperforming loans:
Commercial nonaccrual loans, not restructured	$	15,773		$	17,477		$	17,839		$	18,528		$	23,453
Commercial nonaccrual loans, which have been restructured		7,489			9,870			11,042			12,215			11,190
Non-commercial nonaccrual loans		9,852			8,922			10,383			11,680			8,537
Total nonaccrual loans		33,114			36,269			39,264			42,423			43,180
Loans past due 90 days or more and still accruing		14			26			65			31			27
Accruing restructured loans		7,406			7,167			8,351			7,532			7,378
Total nonperforming loans		40,534			43,462			47,680			49,986			50,585
Other real estate owned		30,587			26,469			25,729			26,329			26,718
Total nonperforming assets	$	71,121		$	69,931		$	73,409		$	76,315		$	77,303
Restructured loans, performing		4,888			4,577			0			0			0
Net chargeoffs		3,153			3,736			4,037			5,768			11,438
Allowance for credit losses		28,844			27,750			28,040			29,057			28,752
Allowance for credit losses to total loans		2.39	%		2.27	%		2.25	%		2.18	%		2.15	%
Nonperforming loans to loans held for investment		3.38			3.57			3.83			3.98			4.01
Nonperforming assets to total assets		4.10			4.11			4.22			4.28			4.27
Nonperforming loans to total assets		2.34			2.55			2.74			2.80			2.79
Net charge-off percentage (annualized)		1.03			1.20			1.23			1.84			3.63
Allowance for credit losses to nonperforming loans		71.16			63.85			58.81			58.13			56.84
Loans identified as impaired	$	32,591		$	33,827		$	37,483		$	36,497		$	38,303
Other nonperforming loans		7,943			9,635			10,197			13,489			12,282
Total nonperforming loans		40,534			43,462			47,680			49,986			50,585
Other potential problem loans		87,959			93,459			97,141			96,509			110,924
Total impaired and potential problem loans	$	128,493		$	136,921		$	144,821		$	146,495		$	161,509

Gross loan chargeoffs, and writedowns and losses on other real estate owned to peak loans during the credit cycle beginning January 1, 2007:		2007		2008		2009		2010		2011		TOTAL
Gross loan chargeoffs
Commercial	$	5,052	$	5,046	$	11,232	$	9,052	$	5,821	$	36,203
Real estate - construction		825		7,339		12,227		5,379		3,985		29,755
Real estate - mortgage		1,300		5,012		10,110		7,260		6,046		29,728
Consumer		2,235		5,071		4,925		2,829		1,358		16,418
Other		0		0		0		6,200		1,387		7,587
Total gross loan chargeoffs	$	9,412	$	22,468	$	38,494	$	30,720	$	18,597	$	119,691
Other real estate owned writedowns and losses		4,001		3,571		1,294		5,508		5,238		19,612
Total chargeoffs, writedowns and losses	$	13,413	$	26,039	$	39,788	$	36,228	$	23,835	$	139,303
Peak loans at September 30, 2008											$	1,626,504
Chargeoffs, writedowns and losses to peak loans												8.56	%

FINANCIAL SUMMARY

	Three Months ended December 31						Twelve Months Ended December 31
	2011			2010			2011			2010
Income Statement Data
(Dollars in thousands, except share data)
Interest income:
Loans	$	15,819		$	17,869		$	65,871		$	74,795
Investment securities		3,347			3,361			13,514			15,022
Other		16			42			60			96
Total interest income		19,182			21,272			79,445			89,913
Interest expense:
Deposits		1,980			3,118			9,493			14,960
Borrowings from the FHLB		271			448			1,178			3,087
Other		335			585			1,648			2,407
Total interest expense		2,586			4,151			12,319			20,454
Net interest income		16,596			17,121			67,126			69,459
Provision for credit losses		4,247			4,636			16,785			21,252
Net interest income after provision for credit losses		12,349			12,485			50,341			48,207
Noninterest income:
Retail banking		2,414			2,667			9,925			11,592
Mortgage banking services		640			985			1,728			2,438
Wealth management services		625			592			2,499			2,133
Gain on sale of investment securities		—			—			2,026			3,637
Writedowns and loss on sale of real estate acquired in settlement of loans		(1,368	)		(1,786	)		(5,238	)		(5,508	)
Bank-owned life insurance		370			218			1,385			865
Other		239			165			830			658
Total noninterest income		2,920			2,841			13,155			15,815
Noninterest expense
Personnel		6,308			7,152			28,806			29,897
Occupancy		944			979			3,987			4,189
Furniture and equipment		860			1,134			3,644			4,644
Technology and data processing		972			1,100			3,942			4,501
Legal and professional		860			705			2,892			3,028
FDIC insurance		372			858			2,399			3,491
Real estate acquired in settlement of loans		596			327			1,830			1,426
Other		2,590			2,449			9,869			9,713
Total noninterest expense		13,502			14,704			57,369			60,889
Income before income taxes		1,767			622			6,127			3,133
Income taxes		323			(498	)		1,449			(247	)
Net income		1,444			1,120			4,678			3,380
Dividends and accretion on preferred stock		(730	)		(729	)		(2,918	)		(2,919	)
Net income (loss) available to common shareholders	$	714		$	391		$	1,760		$	461
Net income (loss) per share - basic	$	0.05		$	0.02		$	0.11		$	0.03
Net income (loss) per share - diluted	$	0.04		$	0.02		$	0.11		$	0.03
Other Data
Return on average assets		0.33	%		0.24	%		0.36	%		0.24	%
Return on average equity		3.46			2.64			3.76			2.67
Net yield on earning assets		4.25			4.00			4.22			4.00
Efficiency (excluding OREO items and securities gains)		55.02			65.80			63.84			66.74
Average loans to assets		71.23			73.86			72.68			73.62
Average loans to deposits		86.38			91.20			89.27			92.26
Average noninterest - bearing deposits to total deposits		12.17			11.27			11.66			10.82
Average equity to assets		9.67			9.15			9.51			8.85
Total capital as a percentage of total risk weighted assets		14.55			13.13			14.55			13.13
Tangible common equity as a percentage of total risk weighted assets		8.28			7.27			8.28			7.27

INVESTMENT PORTFOLIO

(Dollars in thousands)	As of December 31, 2011
	Amortized Cost		Gross Unrealized gain		Gross Unrealized loss			Estimated Fair value		Average Yield (%)			Average Duration (years)
US Agency	$	39,000	$	147	$	—		$	39,147		2.79	%		1.06
Mortgage backed securities		31,917		2,926		—			34,843		5.21			3.55
Collateralized mortgage obligations		23,599		168		(332	)		23,435		4.69			2.03
Commercial mortgage backed securities		30,169		153		(33	)		30,289		3.47			4.43
Covered bonds		61,414		1,243		(131	)		62,526		5.25			2.12
Corporate bonds		118,573		385		(4,282	)		114,676		3.77			3.98
Municipal obligations		19,371		425		(288	)		19,508		5.76	*		5.37
Federal Home Loan Bank stock		7,185		—		—			7,185
Other		5,775		427		—			6,202
Total		337,003		5,874		(5,066	)		337,811		4.23			3.21

* Fully taxable equivalent basis

COMMON STOCK DATA

	2011									2010
	Fourth Quarter			Third Quarter		Second Quarter		First Quarter		Fourth Quarter
Market value:
End of period	$	3.87		$	3.90	$	4.58	$	4.96	$	4.70
High		4.20			4.99		5.13		5.50		5.00
Low		3.30			3.53		4.21		4.54		3.40
Book value		7.09			7.34		7.30		7.14		7.25
Tangible book value		6.85			7.09		7.04		6.86		6.96
Average shares outstanding		15,655,868	��		15,655,868		15,655,868		15,655,868		15,655,868
Average diluted shares outstanding		16,163,509			16,467,550		16,521,391		16,697,944		16,252,427

NON-GAAP MEASURES

Pre-tax, pre-securities gains and pre-credit-related operating income
	Three Months ended December 31, 2011				Twelve Months Ended December 31, 2011
Net income		$	1,444			$	4,678
Income taxes			323				1,449
Real estate acquired in settlement of loans expense			596				1,830
Writedowns and loss on sale of real estate
acquired in settlement of loans			1,368				5,238
Less gain on sale of investment securities			—				(2,026	)
Provision for credit losses			4,247				16,785
Pre-tax and pre-credit related operating income		$	7,978			$	27,954
Operating efficiency percentage
	Three Months ended December 31, 2011				Three Months Ended December 31, 2010
Total noninterest expense		$	13,502			$	14,704
Less real estate acquired in settlement of loans expense			(596	)			(327	)
Numerator for calculation of operating efficiency (A)		$	12,906			$	14,377
Net interest income		$	16,596			$	17,121
Total noninterest income			2,920				2,841
Writedowns and loss on sale of real estate
acquired in settlement of loans			1,368				1,786
Denominator for calculation of operating efficiency (B)		$	20,884			$	21,748
Operating efficiency percentage (A/B)			61.80	%			66.11	%