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 RECORD EARNINGS
THIRD QUARTER 2003 NET INCOME INCREASES 26% OVER 2002
Napa, CA - October 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 nine months ended September 30, 2003.
Net income for the three months ended September 30, 2003 was $1,164,000, or $.50
per share (diluted), as compared with net income of $927,000, or $.41 per share
(diluted), for the third quarter of 2002, representing a 26% increase in net
income and a 22% increase in earnings per share. Net income for the nine months
ended September 30, 2003 was $3,071,000, or $1.32 per share (diluted), compared
with net income of $2,582,000, or $1.15 per share (diluted), for the first nine
months of 2002, representing a 19% increase in net income and a 15% increase in
earnings per share. Total assets were $451,316,000 as of September 30, 2003,
equating to growth of 14% over the preceding twelve months. Total assets grew by
approximately $16 million from June 30, 2003.
"We believe the increased profits reported for the third quarter represent
sustainable returns for North Bay Bancorp. Earnings for the first half of 2003
were negatively impacted by a narrowing of our net interest margin and booking
of certain expenses related to litigation and professional services. Strong loan
growth is improving our net interest margin and noninterest expenses as a
percentage of assets are declining significantly", stated Terry Robinson,
President and CEO.
FINANCIAL HIGHLIGHTS
Earnings
Net interest income for the third quarter of 2003 increased $390,000 or 9%
compared with the third quarter of 2002. Year-to-date net interest income
increased $1,243,000 or 10%. The net interest margin
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has decreased to 4.94% during the first nine months of 2003 from 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. The net interest margin for the third quarter of 2003 was
4.98%, slightly higher than the year-to-date average, reflecting the impact of
an increasing loan-to-deposit ratio.
Noninterest income for the third quarter of 2003 increased $117,000 or 16%
compared with the third quarter of 2002. Year-to-date noninterest income
increased $276,000, or 14%, compared with the first nine months of 2002. Most
noninterest income was derived from service charges on deposit accounts. The
percentage increase in service charge income in 2003 is consistent with the
general increase in numbers of deposit accounts. Effective September 15, 2003,
the subsidiary banks implemented an Overdraft Privilege Program that is expected
to increase service charge income commencing with the fourth quarter of 2003.
Gains on securities transactions were $207,000 during the third quarter of 2003
compared with no securities gains during the third quarter of 2002. Year-to-date
securities gains were $637,000 compared to $66,000 for the first nine months of
2002. The securities gains recognized thus far in 2003 have resulted primarily
from the sale of specific securities within a year of their respective
maturities. Proceeds from the sales have provided funding for loans in process.
Noninterest expense for the third quarter of 2003 increased $570,000 or 15%
compared with the third quarter of 2002. Year-to-date noninterest expense for
2003 increased $2,074,000 or 20% compared with the first nine months of 2002.
The disproportionate increase in expenses during the first half of 2003 was
primarily due to legal fees incurred in connection with litigation with our
former host system provider settled in June, 2003 and various professional fees.
The year-to-date increase was due primarily to a combination of the
litigation-related legal fees, an 18% increase in salaries and employee benefits
resulting from increased staffing and a 37% increase in occupancy expense
resulting from the addition of The Vintage Bank's Gateway Office, relocation of
Solano Bank's Fairfield Office and leasing of new holding company administrative
office space.
Balance Sheet
Total assets were $451.3 million as of September 30, 2003, a 14% increase from
September 30, 2002. Deposits grew $51 million or 15% during the previous twelve
months. Loans, net of the allowance for loan losses, grew $55 million or 25%
during the twelve months ended September 30, 2003. The strong loan growth
resulted primarily from aggressive business development activity.
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Liquidity levels significantly exceeded policy requirements throughout the year.
As of September 30, 2003 liquid assets represented 30% of total assets.
Asset quality remains excellent. As of September 30, 2003, the allowance for
loan losses was $3.4 million, or 1.23% of loans outstanding. No loan loss
provision was accrued for The Vintage Bank during the first nine months of 2003
based upon our revised loan loss reserve analysis; $135,000 was expensed for the
provision at Solano Bank. Net charge-offs were a nominal $4,000 for the first
nine months of 2003. There were no nonperforming loans as of September 30, 2003.
OUTLOOK
Regarding the longer-term outlook, Robinson stated, "These third quarter results
bode well for the fourth quarter of 2003 and the year 2004. While we anticipate
ending 2003 slightly below our ambitious growth and earnings goals for the year,
we anticipate 2003 will be recognized as a year of solid growth and improved
profitability. More importantly, we are optimistic regarding our growth and
earnings prospects for 2004, given the age and position of our six offices
opened since July of 2000 and our anticipated increasing noninterest income and
improved management of noninterest expense.
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. Vintage also has
a branch in the City of St. Helena and a branch on Airport Road in the Southern
industrial area of Napa County.
Solano Bank, which opened in July, 2000, operates offices in the primary cities
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 attitudes. Solano Bank's Fairfield Office was relocated to an
upgraded location during the third quarter of 2003 in accordance with a
long-standing plan; ATM and night depository service were retained at the prior
location.
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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)
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Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
INTEREST INCOME:
Loans (including fees) $4,853,000 $4,290,000 $13,780,000 $12,187,000
Federal funds sold 38,000 135,000 157,000 291,000
Investment securities taxable 482,000 906,000 1,999,000 2,561,000
Investment securities tax exempt 181,000 164,000 473,000 502,000
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Total Interest income 5,554,000 5,495,000 16,409,000 15,541,000
INTEREST EXPENSE:
Deposits 550,000 859,000 1,907,000 2,511,000
Short term borrowings 2,000 0 10,000 0
Long term borrowings 129,000 153,000 411,000 192,000
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Total Interest Expense 681,000 1,012,000 2,328,000 2,703,000
Net interest income 4,873,000 4,483,000 14,081,000 12,838,000
PROVISION FOR LOAN LOSSES 45,000 144,000 135,000 432,000
Net interest income after
provision for loan losses 4,828,000 4,339,000 13,946,000 12,406,000
NONINTEREST INCOME: 848,000 731,000 2,285,000 2,009,000
Gains on securities transactions, net 207,000 0 637,000 66,000
NONINTEREST EXPENSE:
Salaries and employee benefits 2,338,000 1,978,000 6,896,000 5,858,000
Occupancy 356,000 228,000 931,000 680,000
Equipment 485,000 450,000 1,230,000 1,392,000
Other 1,088,000 1,041,000 3,536,000 2,589,000
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Total nonInterest expense 4,267,000 3,697,000 12,593,000 10,519,000
Income before provision for
income taxes 1,616,000 1,373,000 4,275,000 3,962,000
PROVISION FOR INCOME TAXES 452,000 446,000 1,204,000 1,380,000
NET INCOME $1,164,000 $ 927,000 $ 3,071,000 $ 2,582,000
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BASIC EARNINGS PER SHARE: $ 0.51 $ 0.42 $ 1.36 $ 1.18
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DILUTED EARNINGS PER SHARE: $ 0.50 $ 0.41 $ 1.32 $ 1.15
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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)
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September September December
30, 30, 31,
ASSETS 2003 2002 2002
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CASH AND DUE FROM BANKS $ 34,777,000 $ 20,091,000 $ 23,785,000
FEDERAL FUNDS SOLD 21,750,000 25,154,000 28,525,000
TIME DEPOSITS WITH OTHER FINANCIAL INSTITUTIONS 100,000 100,000 100,000
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Total cash and cash equivalents 56,627,000 45,345,000 52,410,000
INVESTMENT SECURITIES:
Held-to-maturity 1,250,000 1,272,000 1,272,000
Available-for-sale 83,177,000 106,280,000 104,473,000
Equity securities 1,349,000 1,352,000 1,349,000
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TOTAL INVESTMENT SECURITIES 85,776,000 108,904,000 107,094,000
LOANS, net of allowance for loan losses of $3,421,000 in September 2003,
$3,143,000 in September 2002 and $3,290,000 in December 2002 274,491,000 219,245,000 234,337,000
LOANS HELD-FOR-SALE 10,786,000 0 0
BANK PREMISES AND EQUIPMENT, net 11,137,000 10,691,000 10,800,000
ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 12,499,000 11,743,000 11,817,000
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Total assets $451,316,000 $395,928,000 $416,458,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Non-interest bearing $104,594,000 $ 94,833,000 $104,142,000
Interest bearing 294,827,000 253,266,000 263,661,000
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Total deposits 399,421,000 348,099,000 367,803,000
Floating rate subordinated
debenture (trust preferred securities) 10,000,000 10,000,000 10,000,000
Accrued interest payable and other liabilities 3,836,000 3,377,000 3,312,000
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Total liabilities 413,257,000 361,476,000 381,115,000
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 - 2,285,646 shares in September 2003,
2,123,687 shares in September 2002 and 2,130,288 in December 2002 29,209,000 25,269,000 25,387,000
Retained earnings 8,324,000 7,487,000 8,612,000
Accumulated other comprehensive income 526,000 1,696,000 1,344,000
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Total shareholders' equity 38,059,000 34,452,000 35,343,000
Total liabilities and shareholders' equity $451,316,000 $395,928,000 $416,458,000
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