Exhibit 99.1
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NORTH BAY BANCORP
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For Immediate Release
Contact:
Terry L. Robinson
President & CEO
North Bay Bancorp
trobinson@northbaybancorp.com
707-252-5024
NEWS RELEASE
NORTH BAY BANCORP ANNOUNCES FIRST QUARTER 2003 FINANCIAL RESULTS
Napa, CA - May 2, 2003 - North Bay Bancorp (Nasdaq: NBAN), holding company for
The Vintage Bank and Solano Bank, today announced financial results for the
three months ended March 31, 2003.
Net income for the first quarter of 2003 was $895,000 , or $.39 per share
(diluted), as compared with net income of $778,000, or $.35 per share (diluted),
for the first quarter of 2002, representing a 15% increase in net income for the
first quarter of 2003 compared with the first quarter of 2002. Total assets were
$419,594,000 as of March 31, 2003, equating to growth of 24% over the preceding
twelve months. Total assets grew by approximately $3 million from year-end 2002.
"North Bay Bancorp continues on schedule with our business plan," stated Terry
Robinson, President & CEO. "We opened our ninth office in March 2003--the new
Gateway Office of The Vintage Bank, located on Airport Road in Southern Napa
County. Total assets grew during the first quarter despite the normal seasonal
runoff in deposits. Our asset quality remains excellent, and our earnings
outlook remains positive despite a slow economy and intense price competition."
FINANCIAL HIGHLIGHTS
Earnings
Net interest income for the first quarter of 2003 increased $510,000, or 13%,
compared with the first quarter of 2002. The net interest margin decreased
during the first quarter of 2003, to 4.98% from an average of 5.31% for year
2002. The major factor in the declining margin was lower yields on investments
and loans; rates paid on deposits did not reflect a corresponding decline.
Noninterest income for the first quarter of 2003 increased $76,000, or 12%,
compared with the first quarter of 2002. Most noninterest income derives from
service charges on deposit accounts. Service charge income increased
proportionately less than the growth in deposits due to the average balance of
deposit accounts increasing during the previous twelve months,
resulting in fewer accounts generating service charges. Also, a recent
restructuring of the checking account product line resulted in a higher portion
of checking accounts generating no service charges.
Gains on securities transactions were $99,000 during the first quarter of 2003
compared with $66,000 during the first quarter of 2002. These gains resulted
from our established practice of selling selected securities prior to maturity
and reinvesting funds longer-term in order to maintain yields; this practice
normally results in recognized securities gains when the yield curve is
"positive".
Noninterest expense for the first quarter of 2003 increased $648,000 , or 19%,
compared with the first quarter of 2002. The largest component of the increase
was in Salaries and Benefits, which rose 21%, primarily due to increases in
full-time equivalent (FTE) employees. The FTE increases related to increasing
sales activity and staffing new offices. Other components of noninterest expense
that increased materially were legal and professional fees. Legal fees increased
primarily due to ongoing litigation with our former host system provider while
professional fee increases were primarily related to outsourced information
technology services.
Balance Sheet
Total assets were $419.6 million as of March 2003, a 24% increase from 2002.
Deposits grew $67 million, or 22%, while loans grew $58.5 million, or 30%,
during the twelve months ended March 31, 2003.
Liquidity levels significantly exceeded policy requirements throughout the year.
As of March 31, 2003 liquid assets represented 32% of total assets.
Asset quality remains excellent. As of March 31, 2003, the allowance for loan
losses was $3.3 million, or 1.3% of loans outstanding. No loan loss provision
was accrued for The Vintage Bank during the quarter based upon our revised loan
loss reserve analysis; $45,000 was expensed for the provision at Solano Bank.
Net charge-offs were a nominal $8,000 for the first quarter of 2003, and
non-performing loans totaled $312,000 as of March 31, 2003.
OUTLOOK
Regarding the outlook for 2003, Robinson stated, "We believe we are on track to
meet our net income projections for 2003. We anticipate that elements of
noninterest expense will decline the remainder of the year. The extent of our
earnings growth will be impacted by our ability to continue to add quality
assets and maintain yields in the face of a slow economy and increasing pricing
competition."
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 five
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 a branch office in St. Helena and a new branch on Airport Road in the
Southern area of Napa County, which opened in March 2003.
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 through year 2020, is
attracting growth with a quality lifestyle, affordable housing and
business-friendly cities.
North Bay Bancorp stock trades on the Nasdaq National Exchange under the symbol
NBAN.
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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.
Income Statements
(Unaudited)
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Three Months Ended
March 31,
2003 2002
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INTEREST INCOME:
Loans (including fees) $4,356,000 $3,801,000
Federal funds sold 63,000 58,000
Investment securities taxable 782,000 865,000
Investment securities tax exempt 160,000 149,000
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Total Interest income 5,361,000 4,873,000
INTEREST EXPENSE:
Deposits 687,000 835,000
Long term borrowings 141,000 15,000
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Total Interest Expense 828,000 850,000
Net interest income 4,533,000 4,023,000
PROVISION FOR LOAN LOSSES 45,000 144,000
Net interest income after
provision for loan losses 4,488,000 3,879,000
NONINTEREST INCOME: 709,000 633,000
Gains on securities transactions, net 99,000 66,000
NONINTEREST EXPENSE:
Salaries and employee benefits 2,306,000 1,904,000
Occupancy 257,000 234,000
Equipment 450,000 476,000
Other 1,002,000 753,000
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Total nonInterest expense 4,015,000 3,367,000
Income before provision for
income taxes 1,281,000 1,211,000
PROVISION FOR INCOME TAXES 386,000 433,000
NET INCOME $ 895,000 $ 778,000
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BASIC EARNINGS PER SHARE: $ 0.40 $ 0.36
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DILUTED EARNINGS PER SHARE: $ 0.39 $ 0.35
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North Bay Bancorp
Consolidated Balance Sheets
(Unaudited)
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March 31, March 31, December 31,
ASSETS 2003 2002 2002
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CASH AND DUE FROM BANKS $ 28,995,000 $ 17,023,000 $ 23,786,000
FEDERAL FUNDS SOLD 14,729,000 30,533,000 28,525,000
TIME DEPOSITS WITH OTHER FINANCIAL INSTITUTIONS 100,000 100,000 100,000
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Total cash and cash equivalents 43,824,000 47,656,000 52,411,000
INVESTMENT SECURITIES:
Held-to-maturity 1,250,000 1,293,000 1,272,000
Available-for-sale 98,337,000 73,341,000 104,473,000
Equity securities 1,349,000 1,268,000 1,349,000
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TOTAL INVESTMENT SECURITIES 100,936,000 75,902,000 107,094,000
LOANS, net of allowance for loan losses of $3,327,000
in March 2003, $2,861,000 in March 2002 and $3,290,000
in December 2002 251,835,000 193,334,000 234,337,000
BANK PREMISES AND EQUIPMENT, net 11,320,000 10,216,000 10,800,000
ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 11,679,000 10,889,000 11,816,000
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Total assets $419,594,000 $337,997,000 $416,458,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non-interest bearing $ 93,903,000 $ 81,355,000 $104,142,000
Interest bearing 276,746,000 222,274,000 263,661,000
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Total deposits 370,649,000 303,629,000 367,803,000
LONG-TERM DEBT 0 1,615,000 0
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Total borrowings 0 1,615,000 0
ACCRUED INTEREST PAYABLE AND OTHER LIABILITIES 3,083,000 2,466,000 3,312,000
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Total liabilities 373,732,000 307,710,000 371,115,000
Floating rate subordinated
debenture (trust preferred securities) 10,000,000 0 10,000,000
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 - 2,244,793 shares in
March 2003, 2,069,989 shares in March 2002 and
2,130,288 in December 2002 28,460,000 24,247,000 25,387,000
Retained earnings 6,148,000 5,683,000 8,612,000
Accumulated other comprehensive income 1,254,000 357,000 1,344,000
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Total shareholders' equity 35,862,000 30,287,000 35,343,000
Total liabilities and shareholders' equity $419,594,000 $337,997,000 $416,458,000
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