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 SECOND QUARTER 2003 FINANCIAL RESULTS EARNINGS
INCREASE 15%
Napa, CA - July 28, 2003 - North Bay Bancorp (Nasdaq: NBAN), holding company for
The Vintage Bank and Solano Bank, today announced financial results for the
three months and six months ended June 30, 2003.
Net income for the three months ended June 30, 2003 was $1,012,000, or $.44 per
share (diluted), as compared with net income of $877,000, or $.39 per share
(diluted), for the second quarter of 2002, representing a 15% increase. Net
income for the six months ended June 30, 2003 was $1,907,000, or $.82 per share
(diluted), compared with net income of $1,655,000. or $.74 per share (diluted),
for the first six months of 2002, also representing a 15% increase. Total assets
were $435,444,000 as of June 30, 2003, equating to growth of 20% over the
preceding twelve months. Total assets grew by approximately $16 million from
March 31, 2003.
"North Bay Bancorp continues on track with its business plan despite the
challenges presented by our unprecedented interest rate environment," stated
Terry Robinson, President & CEO. "We remain optimistic regarding the earnings
prospects for the remainder of the year given our current strong loan volume."
FINANCIAL HIGHLIGHTS
Earnings
Net interest income for the second quarter of 2003 increased $343,000, or 8%,
compared with the second quarter of 2002. Year-to-date net interest income
increased $853,000, or 10%. The net interest margin has decreased to 4.91%
during the first half of 2003 from an average of 5.31% for the year 2002. The
major factor contributing to the declining margin was lower yields on
investments and loans; rates paid on deposits did not reflect a corresponding
decline.
Noninterest income for the second quarter of 2003 increased $83,000, or 13%,
compared with the second quarter of 2002. Year-to-date noninterest income
increased $159,000, or 12%, compared with the first half of 2002. Most
noninterest income was derived from service charges on deposit accounts. Service
charge income increased proportionately less than the growth in deposits, as
deposit growth was attributed primarily to an increase in the average balance of
deposit accounts during the previous twelve months rather than an increase in
the number of new accounts. Also, a restructuring of the checking account
product line during the first quarter
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of 2003 resulted in a higher portion of checking accounts which do not generate
service charges.
Gains on securities transactions were $331,000 during the second quarter of 2003
compared with no securities gains during the second quarter of 2002.
Year-to-date securities gains were $430,000 compared to $66,000 for the first
half of 2002. The securities gains recognized during the 2003 second quarter
resulted primarily from the sale of securities within a year of maturity to
provide funding for loans in process.
Noninterest expense for the second quarter of 2003 increased $856,00, or 25%,
compared with the second quarter of 2002. Year-to-date noninterest expense for
2003 increased $1,504,000, or 22%, from 2002. The disproportionate increase
during the second quarter was primarily due to legal fees incurred in connection
with litigation with our former host system provider; the case was settled in
June, 2003. The year-to-date increase was due primarily to a combination of the
litigation-related legal fees, a 17% increase in salaries and employee benefits
resulting from increased staffing and a 27% increase in occupancy expense
resulting from the addition of a bank branch office and new administrative
offices both of which were occupied in March, 2003.
Balance Sheet
Total assets were $435.4 million as of June 30, 2003, a 20% increase from June
30, 2002. Deposits grew $67 million, or 21% while loans, net of the allowance
for loan losses, grew $49.5 million, or 24%, during the twelve months ended June
30, 2003.
Liquidity levels significantly exceeded policy requirements throughout the year.
As of June 30, 2003 liquid assets represented 31% of total assets.
Asset quality remains excellent. As of June 30, 2003, the allowance for loan
losses was $3.4 million, or 1.3% of loans outstanding. No loan loss provision
was accrued for The Vintage Bank during the first half of 2003 based upon our
revised loan loss reserve analysis; $90,000 was expensed for the provision at
Solano Bank. Net charge-offs were a nominal $7,000 for the first half of 2003.
There were no nonperforming loans as of June 30, 2003.
OUTLOOK
Regarding the outlook for 2003, Robinson stated, "We are optimistic that a
strong second half will enable us to meet our net income projections for 2003.
Elements of noninterest expense, particularly legal and professional fees,
should decline significantly the remainder of the year. We are currently adding
quality loans to our balance sheet at a rate outpacing deposit growth, which is
the best antidote for our current difficult rate environment."
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 additional
branch offices in St. Helena and on Airport Road in the Southern area of Napa
County.
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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. Solano Bank will be relocating its Fairfield Office to
a more modern and visible facility during third quarter of 2003.
North Bay Bancorp stock trades on the Nasdaq National Market 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.
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North Bay Bancorp
Income Statements
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
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INTEREST INCOME:
Loans (including fees) $ 4,571,000 $ 4,096,000 $ 8,927,000 $ 7,897,000
Federal funds sold 56,000 98,000 119,000 156,000
Investment securities taxable 735,000 790,000 1,517,000 1,655,000
Investment securities tax exempt 132,000 189,000 292,000 338,000
----------- ----------- ----------- -----------
Total Interest income 5,494,000 5,173,000 10,855,000 10,046,000
INTEREST EXPENSE:
Deposits 670,000 817,000 1,357,000 1,652,000
Short term borrowings 8,000 0 8,000 0
Long term borrowings 141,000 24,000 282,000 39,000
----------- ----------- ----------- -----------
Total Interest Expense 819,000 841,000 1,647,000 1,691,000
Net interest income 4,675,000 4,332,000 9,208,000 8,355,000
PROVISION FOR LOAN LOSSES 45,000 144,000 90,000 288,000
Net interest income after
provision for loan losses 4,630,000 4,188,000 9,118,000 8,067,000
NONINTEREST INCOME: 728,000 645,000 1,437,000 1,278,000
Gains on securities transactions, net 331,000 0 430,000 66,000
NONINTEREST EXPENSE:
Salaries and employee benefits 2,252,000 1,976,000 4,558,000 3,880,000
Occupancy 318,000 218,000 575,000 452,000
Equipment 295,000 466,000 745,000 942,000
Other 1,446,000 795,000 2,448,000 1,548,000
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Total nonInterest expense 4,311,000 3,455,000 8,326,000 6,822,000
Income before provision for
income taxes 1,378,000 1,378,000 2,659,000 2,589,000
PROVISION FOR INCOME TAXES 366,000 501,000 752,000 934,000
NET INCOME $ 1,012,000 $ 877,000 $ 1,907,000 $ 1,655,000
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BASIC EARNINGS PER SHARE: $ 0.45 $ 0.40 $ 0.85 $ 0.76
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DILUTED EARNINGS PER SHARE: $ 0.44 $ 0.39 $ 0.82 $ 0.74
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DIVIDENDS PAID PER SHARE: $ 0.00 $ 0.00 $ 0.20 $ 0.20
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North Bay Bancorp
Consolidated Balance Sheets
(Unaudited)
June 30, June 30, December 31,
2003 2002 2002
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ASSETS
CASH AND DUE FROM BANKS $ 27,559,000 $ 14,135,000 $ 23,785,000
FEDERAL FUNDS SOLD 20,670,000 26,648,000 28,525,000
TIME DEPOSITS WITH OTHER FINANCIAL INSTITUTIONS 100,000 100,000 100,000
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Total cash and cash equivalents 48,329,000 40,883,000 52,410,000
INVESTMENT SECURITIES:
Held-to-maturity 1,250,000 1,293,000 1,272,000
Available-for-sale 85,839,000 88,713,000 104,473,000
Equity securities 1,398,000 1,267,000 1,349,000
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TOTAL INVESTMENT SECURITIES 88,487,000 91,273,000 107,094,000
LOANS, net of allowance for loan losses of $3,373,000 in June
2003,
$3,005,000 in June 2002 and $3,290,000 in December 2002 256,440,000 206,899,000 234,337,000
LOANS HELD-FOR-SALE 19,538,000 0 0
BANK PREMISES AND EQUIPMENT, net 11,166,000 10,647,000 10,800,000
ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 11,484,000 12,989,000 11,817,000
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Total assets $435,444,000 $362,691,000 $416,458,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non-interest bearing $102,107,000 $ 86,419,000 $104,142,000
Interest bearing 282,332,000 231,153,000 263,661,000
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Total deposits 384,439,000 317,572,000 367,803,000
ACCRUED INTEREST PAYABLE AND OTHER LIABILITIES 3,300,000 2,724,000 3,312,000
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Total liabilities 387,739,000 320,296,000 371,115,000
Floating rate subordinated
debenture (trust preferred securities) 10,000,000 10,000,000 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 - 2,282,521 shares in June 2003,
2,098,313 shares in June 2002 and 2,130,288 in December 2002 29,145,000 24,833,000 25,387,000
Retained earnings 7,160,000 6,560,000 8,612,000
Accumulated other comprehensive income 1,400,000 1,002,000 1,344,000
------------ ------------ ------------
Total shareholders' equity 37,705,000 32,395,000 35,343,000
Total liabilities and shareholders' equity $435,444,000 $362,691,000 $416,458,000
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