Exhibit 99.1
N O R T H B A Y B A N C O R P
PRESS RELEASE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
--------------------------------------------------------------------
NORTH BAY BANCORP
--------------------------------------------------------------------
For Immediate Release
Contact:
Terry L. Robinson
President & CEO
North Bay Bancorp
trobinson@northbaybancorp.com
707-259-2346
NEWS RELEASE
NORTH BAY BANCORP ANNOUNCES YEAR 2002 FINANCIAL RESULTS
ASSETS GROW 27%, NET INCOME INCREASES 23%
Napa, CA - February 18, 2003 - North Bay Bancorp (Nasdaq: NBAN), holding company
for The Vintage Bank and Solano Bank, today announced financial results for the
quarter and year ended December 31, 2002.
Net income for the quarter ended December 31, 2002 was $1,126,000, or $.49 per
share (diluted), as compared with net income of $928,000, or $.45 per share
(diluted), for the fourth quarter of 2001. Net income was $3,708,000, or $1.64
per share (diluted), for the year ended December 31, 2002 as compared with net
income of $3,022,000, or $1.39 per share (diluted), for year 2001. These results
represent a 21% increase in net income for the fourth quarter of 2002 compared
with the corresponding quarter of 2001 and a 23% increase for the year 2002
compared with 2001. Total assets were $416,458,000 as of December 31, 2002,
equating to growth of 27% for the year.
"North Bay Bancorp has effectively executed its business plan throughout 2002,"
stated Terry Robinson, President & CEO. "We opened two new offices in January of
2002, closed a $10 million trust preferred offering in June and completed our
Nasdaq National Market listing in September. We achieved our growth goals and
finished the year within 3% of meeting our net income targets. In the course of
the year, we absorbed some significant non-recurring legal and professional fees
related to our Nasdaq listing, the trust preferred offering, revised benefit
plans and new regulatory requirements for public companies. We completed the
year with only a nominal decline in our net interest margin and our asset
quality remains excellent, with no non-accrual or non-performing loans as of
December 31, 2002."
FINANCIAL HIGHLIGHTS
Earnings
Net interest income for year 2002 increased $3,068,000, or 21%, compared with
2001. The net interest margin decreased nominally during the year, from 5.36% in
2001 to 5.31% in 2002. A major factor in the declining margin was deposit growth
at The Vintage Bank outpacing loan growth, ending 2002 with a loan-to-deposit
ratio of 60%.
Noninterest income for year 2002 increased $347,000, or 15%, compared with 2001.
Most noninterest income derives from service charges on deposit accounts.
Service charge income increased proportionately less than growth in deposits
because the average balance of deposit accounts increased during the year,
resulting in fewer accounts generating service charges.
Gains on securities transactions were $399,000 in 2002 compared with $325,000 in
2001. These gains resulted from our established practice of selling selected
securities prior to maturity and reinvesting funds longer-term in order to
maintain yields; in a falling-rate environment this practice normally results in
recognized securities gains.
Noninterest expense for year 2002 increased $2,362,000, or 20%, compared with
2001. The largest component of the increase was in Salaries and Benefits, which
rose 24%, primarily due to increases in full-time equivalent (FTE) employees.
The FTE increases related to increasing sales activity, staffing new offices and
positioning for future growth. Other components of noninterest expense that
increased materially were insurance costs and legal and professional fees
associated with our Nasdaq listing, our trust preferred offering, revised
benefits plans, new corporate governance legislation and changes in regulatory
requirements.
Balance Sheet
Total assets grew $89.7 million to $416.5 million as of December 31, 2002, a 27%
increase from 2001. Deposits grew $75.4 million, or 26%, while loans grew $50.8
million, or 28%.
Liquidity levels significantly exceeded policy requirements throughout the year.
As of December 31, 2002 liquid assets represented 38% of total assets.
Asset quality remains excellent. As of December 31, 2002, the allowance for loan
losses was $3.3 million, or 1.38% of loans outstanding. During 2002, $576,000
was charged to expense for the provision for loan losses compared with $447,000
in 2001. There were no nonperforming or nonaccrual loans as of December 31,
2002. Net charge-offs for the year totaled $3,000.
OUTLOOK
Regarding the outlook for 2003, Robinson stated, "We have consistently predicted
that 2003 would be the year we would witness the initial financial payoff from
the aggressive growth strategy commenced in 1999 with the organization of Solano
Bank. We are now positioned to grow substantially with our existing
infrastructure while requiring only nominal increases in numbers of FTE
employees. We project another year of substantial asset growth for 2003 with our
increase in net income exceeding asset growth on a percentage basis."
ABOUT NORTH BAY BANCORP
North Bay Bancorp is the parent company of two community banks in the North Bay
Region of Northern California--The Vintage Bank based in Napa County and Solano
Bank based in Solano County. Both subsidiaries are full service commercial banks
offering a wide selection of deposit, loan and investment services to local
consumers and small business customers. Each bank has a separate board of
directors composed of local business and community leaders.
The Vintage Bank, which opened for business in 1985, currently operates four
banking offices in Napa County, Northern California's number one tourist
destination and the nation's premier wine producing region. The bank's main
office and two branch offices are located in the City of Napa with another
branch office in St. Helena. The bank will open its fifth office later this
quarter in the Gateway Industrial Park in Southern Napa County.
Solano Bank, which opened in July, 2000, operates four offices along the I-80
corridor of Solano County. The bank's main office is located in Vacaville, with
branch offices in Fairfield, Vallejo and Benicia. This
region, projected to be the fastest growing county in Northern California over
the next 20 years, is attracting growth with a quality lifestyle, affordable
housing and business-friendly cities.
North Bay Bancorp has approximately 1,100 shareholders of record. Effective
September 3, 2002, the stock began trading on the Nasdaq National Exchange under
the symbol NBAN.
- --------------------------------------------------------------------------------
This news release contains forward-looking statements with respect to the
financial condition, results of operation and business of North Bay Bancorp and
its subsidiaries. These include, but are not limited to, statements that relate
to or are dependent on estimates or assumptions relating to the prospects of
loan growth, credit quality and certain operating efficiencies resulting from
the operations of The Vintage Bank and Solano Bank. These forward-looking
statements involve certain risks and uncertainties. Factors that may cause
actual results to differ materially from those contemplated by such
forward-looking statements include, among others, the following possibilities:
(1) competitive pressure among financial services companies increases
significantly; (2) changes in the interest rate environment reduce interest
margins; (3) general economic conditions, internationally, nationally or in the
State of California are less favorable than expected; (4) legislation or
regulatory requirements or changes adversely affect the business in which the
combined organization will be engaged; and (5) other risks detailed in the North
Bay Bancorp reports filed with the Securities and Exchange Commission.
North Bay Bancorp
Income Statements
- --------------------------------------------------------------------------------
(Unaudited)
- --------------------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
2002 2001 2002 2001
---- ---- ---- ----
INTEREST INCOME:
Loans (including fees) $ 4,415,000 $ 3,945,000 $16,602,000 $15,319,000
Federal funds sold 127,000 109,000 418,000 1,012,000
Investment securities taxable 934,000 1,009,000 3,495,000 3,401,000
Investment securities tax exempt 162,000 79,000 664,000 575,000
----------- ----------- ----------- -----------
Total Interest income 5,638,000 5,142,000 21,179,000 20,307,000
INTEREST EXPENSE:
Deposits 841,000 1,066,000 3,352,000 5,716,000
Short term borrowings 0 1,000 0 3,000
Long term borrowings 147,000 27,000 339,000 168,000
----------- ----------- ----------- -----------
Total Interest Expense 988,000 1,094,000 3,691,000 5,887,000
Net interest income 4,650,000 4,048,000 17,488,000 14,420,000
PROVISION FOR LOAN LOSSES 144,000 114,000 576,000 447,000
Net interest income after
provision for loan losses 4,506,000 3,934,000 16,912,000 13,973,000
NONINTEREST INCOME: 703,000 707,000 2,712,000 2,365,000
Gains on securities transactions, net 333,000 325,000 399,000 325,000
NONINTEREST EXPENSE:
Salaries and employee benefits 2,035,000 1,728,000 7,893,000 6,349,000
Occupancy 236,000 205,000 916,000 854,000
Equipment 222,000 470,000 1,614,000 1,451,000
Other 1,304,000 1,060,000 3,893,000 3,300,000
----------- ----------- ----------- -----------
Total nonInterest expense 3,797,000 3,463,000 14,316,000 11,954,000
Income before provision for
income taxes 1,745,000 1,503,000 5,707,000 4,709,000
PROVISION FOR INCOME TAXES 619,000 575,000 1,999,000 1,687,000
NET INCOME $ 1,126,000 $ 928,000 $ 3,708,000 $ 3,022,000
=========== =========== =========== ===========
BASIC EARNINGS PER SHARE: $ 0.50 $ 0.45 $ 1.68 $ 1.40
=========== =========== =========== ===========
DILUTED EARNINGS PER SHARE: $ 0.49 $ 0.45 $ 1.64 $ 1.39
=========== =========== =========== ===========
North Bay Bancorp
Consolidated Balance Sheets
(Unaudited)
December 31, December 31,
ASSETS 2002 2001
---- ----
CASH AND DUE FROM BANKS $ 23,786,000 $ 19,311,000
FEDERAL FUNDS SOLD 28,525,000 18,000,000
TIME DEPOSITS WITH OTHER FINANCIAL INSTITUTIONS 100,000 100,000
------------ ------------
Total cash and cash equivalents 52,411,000 37,411,000
INVESTMENT SECURITIES:
Held-to-maturity 1,272,000 1,314,000
Available-for-sale 104,473,000 83,565,000
Equity securities 1,349,000 1,241,000
------------ ------------
TOTAL INVESTMENT SECURITIES 107,094,000 86,120,000
LOANS, net of allowance for loan losses of $3,290,000 in December, 2002
and $2,717,000 in December, 2001 234,337,000 183,548,000
BANK PREMISES AND EQUIPMENT, net 10,800,000 9,329,000
ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 11,816,000 10,398,000
------------ ------------
Total assets $416,458,000 $326,806,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non-interest bearing $104,142,000 $ 77,117,000
Interest bearing 263,661,000 215,324,000
------------ ------------
Total deposits 367,803,000 292,441,000
LONG-TERM DEBT 0 1,846,000
SHORT TERM BORROWINGS 0 0
Total borrowings 0 1,846,000
ACCRUED INTEREST PAYABLE AND OTHER LIABILITIES 3,312,000 2,539,000
------------ ------------
Total liabilities 371,115,000 296,826,000
Floating rate subordinated
debenture (trust preferred securities) 10,000,000 0
SHAREHOLDERS' EQUITY:
Preferred stock no par value - Authorized, 500,000 shares;
Issued and outstanding - None
Common stock - no par value - Authorized 10,000,000 shares;
Issued and outstanding - 2,130,288 shares in December 2002,
and 1,960,902 in December, 2001 25,387,000 21,973,000
Retained earnings 8,612,000 7,454,000
Accumulated other comprehensive income 1,344,000 553,000
------------ ------------
Total shareholders' equity 35,343,000 29,980,000
Total liabilities and shareholders' equity $416,458,000 $326,806,000
============ ============