Exhibit 99.1
[North Bay Bancorp Logo]
Contact: Terry L. Robinson, President & CEO
trobinson@northbaybancorp.com
707-252-5024
[THE GEREGHINO GROUP LOGO]
corporate investor relations
5333 15TH AVENUE SOUTH, SUITE 1500
SEATTLE, WA 98108
206.762.0993
North Bay Bancorp's 2004 Profits Increase 16% to $5.1 Million,
Loan Portfolio Grows 23% and Core Deposits Increase 22%
Napa, CA -February 14, 2005 - North Bay Bancorp (Nasdaq: NBAN), parent of The
Vintage Bank and its Solano Bank Division, today reported 2004 profits grew 16%.
Strong loan demand, excellent deposit growth, a stable interest margin and
improving productivity contributed to higher profitability. In 2004, loans grew
23%, core deposits increased 22%, net interest margin was virtually unchanged,
return on equity increased 64 basis points and the efficiency ratio improved by
217 basis points from a year ago. Net income increased to $5.1 million, or $1.29
per diluted share, in 2004 compared to $4.4 million, or $1.14 per diluted share
in 2003. Fourth quarter profits increased 21% to $1.6 million, or $0.39 per
diluted share, compared to $1.3 million, or $0.33 per diluted share in the
fourth quarter of 2003. All per share results reflect the 3-for-2 stock split in
December 2004 and the 5% dividend payable on March 31, 2005.
"In many ways, 2004 was a remarkable year for North Bay Bancorp. We produced our
fourth consecutive year of record earnings and our 19 out of 20 years of
increased earnings. We also launched a number of initiatives during 2004 to
consolidate and streamline our operations, including merging our subsidiary
banks into one legal entity," said Terry Robinson, President and CEO. "We have
invested heavily to build a solid franchise with sufficient locations and
infrastructure to fully serve our markets. We are now focusing on improving our
efficiency and profitability throughout 2005; our goal is to end the year with
financial returns that exceed our peers on a going-forward basis".
2004 Financial Review and Operating Highlights (ended 12/31/04 compared to
12/31/03)
o Net income increased 16% to $5.1 million.
o Pre-tax income rose 23% to $8.1 million.
o Earnings per diluted share increased 13% to $1.29.
o Revenues increased 20% to $27.0 million.
o Productivity improved with the efficiency ratio dropping 217 basis
points to 66.93%.
o Deposits grew 19% to $484 million.
o Net loans grew 23% to $374 million.
o Asset quality remained exemplary with six consecutive years of no
nonperforming assets at year- end.
Operating Results
Total revenues, (net interest income before the provision for loan losses and
non-interest income, excluding securities gains) increased 20% to $27.0 million
in 2004 from $22.5 million in 2003. In the fourth quarter of 2004, revenues
increased 20% to $7.3 million from $6.1 million in the fourth quarter of 2003.
Net interest margin was stable in 2004 at 5.00%, compared to 4.99% in 2003. In
the fourth quarter net interest margin was 5.03% compared to 5.14% in the fourth
quarter of 2003.
Net interest income increased 20% to $23.0 million in 2004, with interest income
rising 20% and interest expense increasing 18%. In the fourth quarter of 2004,
net interest income rose 23%, with interest income up 27% and interest expense
rising 55%. "Growth in the loan portfolio plus income from the conservative
leverage strategy implemented in the second quarter drove the strong increase in
net interest income. Increased income from the additional securities purchased
in the leverage transaction more than offset the additional interest expense,"
said Lee-Ann Cimino, Chief Financial Officer.
The provision for loan losses rose to $620,000 in 2004 from $238,000 in 2003,
reflecting the double-digit growth in the loan portfolio. Net interest income
after the provision for loan losses increased 18% to $22.4 million compared to
$19.0 million in the previous year, and grew 24% to $6.3 million in the fourth
quarter from $5.1 million in the fourth quarter of 2003.
Non-interest income benefited from higher fee income for checking services,
which more than offset lower gains from sale of investments and reduced income
from bank owned life insurance. In 2004, non-interest income increased 9% to
$4.2 million from $3.8 million in 2003. In the fourth quarter, non interest
income grew 5% to $969,000 from $925,000 in the fourth quarter a year ago.
Operating (non-interest) expense in 2004 increased 14% to $18.5 million from
$16.3 million in 2003, reflecting costs associated with opening a new branch and
higher legal and consulting fees associated with consolidation of the bank
charters and compliance with Sarbanes-Oxley Act. Operating expenses in the
fourth quarter increased 26% to $4.7 million from $3.7 million in the fourth
quarter a year ago, but were consistent with third quarter 2004's operating
expenses. "Most of the higher legal and consulting fees fell into the fourth
quarter this year while salaries and benefits in the fourth quarter of last year
were lower than normal because the accrual for management bonuses was adjusted
downward," Robinson noted. The tax equivalent efficiency ratio improved to
66.93% compared to 69.10% in 2003. The fourth quarter efficiency ratio was
63.21% compared to 59.82% in the fourth quarter of 2003. The ratio in 2003 was
abnormally low primarily due to a reduction in incentive accruals reflected
during the year's fourth quarter. The efficiency ratio measures operating
expenses as a percent of revenues.
Pre-tax income rose 23% in 2004 to $8.1 million from $6.6 million in 2003.
Pre-tax Income increased 12% in the fourth quarter of 2004 to $2.6 million from
$2.3 million in the fourth quarter of 2003.
Income taxes increased in 2004 reflecting higher earnings. The tax provision
increased 38% to $3.0 million, or 37% of pre-tax income in 2004, compared to
$2.2 million, or 33% of pre-tax income in 2003. The lower tax rate in 2003 was
primarily due to a non-recurring tax accrual adjustment.
Profitability in 2004 continued to improve driven by strong growth in loans,
deposits and earnings. Return on average equity improved to 14.42% in the fourth
quarter, up 116 basis points from the year ago quarter, and grew 64 basis points
for the year to 12.34%. Return on average assets was 1.09% in the fourth quarter
and 0.97% for the year, compared to 1.12% and 1.00% in the respective periods of
2003. "With the charter consolidation and the fulfillment of our branch
expansion plans this year, we anticipate profitability will accelerate in the
coming years," commented Robinson.
Balance Sheet (at December 31, 2004 compared to December 31, 2003)
Total assets increased 22% to $562 million compared to $459 million a year ago.
Deposits grew 19% during the year to $484 million, with growth in both average
balances and the number of new checking accounts. Loans, net of the allowance
for loan losses, grew 23% to $374 million, up from $303 million. In addition to
a 46% increase in commercial and industrial loans, commercial loans secured by
real estate grew 26% fueled by strength in the sales of owner-occupied
commercial and industrial buildings, particularly commercial condominiums.
Consumer loans grew 26% to $36 million assisted by the new automated program
implemented to better serve individuals. Construction loans dropped 22% to $28
million due to some large projects reaching completion and a general slow-down
in construction activity. Book value per share was $12.12 compared to $11.50 a
year ago.
Asset quality remains excellent with no nonperforming loans at year-end. The
allowance for loan and lease losses was $4.1 million, or 1.09% of loans
outstanding, compared to $3.5 million or 1.14% of loans outstanding a year ago.
Strong loan growth and excellent credit quality contributed to the drop in the
ratio of allowance for loan losses to total loans. Net charge-offs were $8,000,
which included $16,000 in recoveries in the fourth quarter compared to $4,000 of
net charge-offs in 2003, including $3,000 in net recoveries during the fourth
quarter of 2003.
ABOUT NORTH BAY BANCORP
North Bay Bancorp is the holding company for The Vintage Bank in Napa County and
Solano Bank, a Division of The Vintage Bank, in Solano County. This full-service
commercial bank offers a wide selection of deposit, loan and investment services
to local consumers and small business customers. The Vintage Bank opened in 1985
and now operates six banking offices in Napa County, Northern California's
number one tourist destination and the nation's premier wine producing region.
The main office and two branch offices are located in the City of Napa. Vintage
also has branches in the City of St. Helena, American Canyon and the Southern
industrial area of Napa County as well as an off-site ATM facility in
Yountville. Solano Bank, now a Division of The Vintage Bank, launched in July
2000, has offices in the primary cities along the I-80 corridor of Solano
County, including Vacaville, Fairfield, Vallejo and Benicia and an off-site ATM
facility in downtown Fairfield. The North Bay region is projected to be the
fastest growing county in Northern California through year 2020, and is
attracting businesses and residents with a quality lifestyle, affordable housing
and business-friendly attitudes.
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. All financial results are unaudited and therefore subject to
change. 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 its Solano Bank Division. 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 on 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; (5) finalization of the year-end audit results and
(6) other risks detailed in the North Bay Bancorp reports filed with the
Securities and Exchange Commission.
NORTH BAY BANCORP
CONSOLIDATED INCOME STATEMENT 3-Month Period Ended: 12-Month Period Ended:
(in $000's, unaudited) 12/31/2004 12/31/2003 % Change 12/31/2004 12/31/2003 % Change
- ---------------------- ---------- ---------- -------- ---------- ---------- --------
Interest Income $ 7,405 $ 5,842 26.8% $ 26,585 $ 22,251 19.5%
Interest Expense 1,035 667 55.2% 3,543 2,995 18.3%
-------- -------- -------- --------
Net Interest Income 6,370 5,175 23.1% 23,042 19,256 19.7%
Provision for Loan & Lease Losses 80 103 -22.3% 620 238 160.5%
-------- -------- -------- --------
Net Interest Income after Loan Loss Provision 6,290 5,072 24.0% 22,422 19,018 17.9%
Service Charges 565 577 -2.1% 2,249 1,645 36.7%
Loan Sale & Servicing Income 10 47 -78.7% 45 232 -80.6%
Bank Owned Life Insurance Income 77 64 20.3% 357 338 5.6%
Other Non-Interest Income 317 237 33.8% 1,285 995 29.1%
Gain on Investments - - NM 262 637 -58.9%
-------- -------- -------- --------
Total Non-Interest Income 969 925 4.8% 4,198 3,847 9.1%
Salaries & Benefits 2,360 1,899 24.3% 9,993 8,795 13.6%
Occupancy Expense 407 358 13.7% 1,487 1,289 15.4%
Equipment Expense 509 496 2.6% 2,018 1,703 18.5%
Other Non-Interest Expenses 1,425 969 47.1% 5,038 4,528 11.3%
-------- -------- -------- --------
Total Non-Interest Expenses 4,701 3,722 26.3% 18,536 16,315 13.6%
Income Before Taxes 2,558 2,275 12.4% 8,084 6,550 23.4%
Provision for Income Taxes 986 975 1.1% 3,020 2,179 38.6%
-------- -------- ------ ------
Net Income $ 1,572 $ 1,300 20.9% $ 5,064 $ 4,371 15.9%
======== ======== ======== ========
TAX DATA
Tax-Exempt Muni Income $ 113 $ 173 -34.7% $ 522 $ 647 -19.3%
Tax-Exempt BOLI Income $ 77 $ 64 20.3% $ 357 $ 338 5.6%
Interest Income - Fully Tax Equivalent $ 7,441 $ 5,899 26.1% $ 26,754 $ 22,484 19.0%
-------- -------- -------- --------
NET CHARGE-OFFS (RECOVERIES) $ (16) $ (3) NM $ 8 $ 4 NM
PER SHARE DATA 3-Month Period Ended: 12-Month Period Ended:
(unaudited) 12/31/2004 12/31/2003 % Change 12/31/2004 12/31/2003 % Change
- ----------- ---------- ---------- -------- ---------- ---------- --------
Basic Earnings per Share $ 0.41 $ 0.34 20.6% $ 1.33 $ 1.16 14.7%
Diluted Earnings per Share $ 0.39 $ 0.33 18.2% $ 1.29 $ 1.14 13.2%
Common Dividends $ 0.00 $ 0.00 NM $ 0.13 $ 0.13 0.0%
Wtd. Avg. Shares Outstanding 3,821,986 3,779,887 3,820,386 3,751,796
Wtd. Avg. Diluted Shares 3,984,105 3,889,029 3,920,160 3,842,376
Book Value per Share (EOP) $ 12.12 $ 11.50 5.4% $ 12.12 $ 11.50 5.4%
Common Shares Outstanding (EOP) 3,641,289 3,428,469 3,641,289 3,428,469
KEY FINANCIAL RATIOS 3-Month Period Ended: 12-Month Period Ended:
(unaudited) 12/31/2004 12/31/2003 12/31/2004 12/31/2003
- ----------- ---------- ---------- ---------- ----------
Return on Average Equity 14.42% 13.26% 12.34% 11.70%
Return on Average Assets 1.09% 1.12% 0.97% 1.00%
Net Interest Margin (Tax-Equivalent) 5.03% 5.14% 5.00% 4.99%
Efficiency Ratio (Tax-Equivalent) 63.21% 59.82% 66.93% 69.10%
AVERAGE BALANCES 3-Month Period Ended: 12-Month Period Ended:
(in $000's, unaudited) 12/31/2004 12/31/2003 % Change 12/31/2004 12/31/2003 % Change
- ---------------------- ---------- ---------- -------- ---------- ---------- --------
Average Assets $ 575,261 $ 460,089 25.0% $ 523,328 $ 438,924 19.2%
Average Earning Assets $ 509,118 $ 409,068 24.5% $ 464,399 $ 390,829 18.8%
Average Gross Loans & Leases $ 383,907 $ 300,654 27.7% $ 352,863 $ 277,220 27.3%
Average Deposits $ 498,426 $ 406,944 22.5% $ 454,603 $ 386,942 17.5%
Average Equity $ 43,378 $ 38,899 11.5% $ 41,053 $ 37,356 9.9%
STATEMENT OF CONDITION End of Period:
--------------------------------------------------
(in $000's, unaudited) 12/31/2004 12/31/2003 Annual Chg
ASSETS
Cash and Due from Banks $ 27,342 $ 28,756 -4.9%
Securities and Fed Funds Sold 132,348 101,301 30.6%
---------- ----------
Commercial & Industrial 67,172 46,066 45.8%
Commercial Secured by Real Estate 241,361 191,408 26.1%
Real Estate 6,613 6,157 7.4%
Construction 27,762 35,417 -21.6%
Consumer 36,343 28,863 25.9%
---------- ----------
Gross Loans & Leases 379,251 307,911 23.2%
Deferred Loan Fees (1,485) (1,248) 19.0%
---------- ----------
Loans & Leases Net of Deferred Fees 377,766 306,663 23.2%
Allowance for Loan & Lease Losses (4,136) (3,524) 17.4%
---------- ----------
Net Loans & Leases 373,630 303,139 23.3%
Loans Held-for-Sale 4,604 3,095 48.8%
Investment in Subsidiary 310 - NM
Bank Premises & Equipment 10,336 10,909 -5.3%
Other Assets 13,493 12,282 9.9%
---------- ----------
Total Assets $ 562,063 $ 459,482 22.3%
========== ==========
LIABILITIES & CAPITAL
Demand Deposits $ 127,250 $ 103,401 23.1%
NOW / Savings Deposits 151,053 132,570 13.9%
Money Market Deposits 128,884 98,074 31.4%
Time Certificates of Deposit 77,306 72,400 6.8%
---------- ----------
Total Deposits 484,493 406,445 19.2%
Long Term Borrowings 19,000 - NM
Trust Preferred Securities 10,310 10,000 3.1%
---------- ----------
Total Deposits & Interest Bearing Liab. 513,803 416,445 23.4%
Other Liabilities 4,126 3,596 14.7%
Total Capital 44,134 39,441 11.9%
---------- ----------
Total Liabilities & Capital $ 562,063 $ 459,482 22.3%
========== ==========
CREDIT QUALITY DATA End of Period:
(in $000's, unaudited) 12/31/2004 12/31/2003
- ---------------------- ---------- ----------
Non-Accruing Loans $ - $ -
Over 90 Days PD and Still Accruing 0 0
Other Real Estate Owned 0 0
---------- ----------
Total Non-Performing Assets $ - $ -
---------- ----------
Non-Performing Loans to Total Loans 0.00% 0.00%
Non-Performing Assets to Total Assets 0.00% 0.00%
Allowance for Loan Losses to Loans 1.09% 1.14%
OTHER PERIOD-END STATISTICS End of Period:
(unaudited) 12/31/2004 12/31/2003
- ----------- ---------- ----------
Shareholders' Equity / Total Assets 7.9% 8.6%
Loans / Deposits 78.3% 75.8%
Non-Interest Bearing Deposits / Total Deposits 26.3% 25.4%