Exhibit 99.1
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[GRAPHIC OMITTED] North Bay Logo
Contact: Terry L. Robinson, President & CEO
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trobinson@northbaybancorp.com
707-252-5024
North Bay Bancorp Announces 31% 2005 Profit Increase to $6.6 Million,
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Declares Cash and Stock Dividends
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Napa, CA -March 10, 2006 - North Bay Bancorp (Nasdaq: NBAN), parent of The
Vintage Bank and its Solano Bank Division, today reported net income of $6.6
million or $1.64 per diluted share for 2005, compared with $5.1 million or $1.29
per diluted share in 2004, a 31% increase in net income and a 27% increase in
diluted earnings per share for the year ended December 31, 2005. Fourth quarter
profits increased 13% to $1.8 million, or $0.44 per diluted share, compared to
$1.6 million, or $0.39 per diluted share in the fourth quarter of 2004. The net
interest margin increased 38 basis points to 5.38% for the year 2005. Return on
average equity for 2005 was 13.94% compared to 12.34% for 2004 and the return on
average assets was 1.11% for 2005 compared with .97% for 2004. The efficiency
ratio improved to 63.85% from 66.93% a year ago. Total assets increased 7.2% to
$603 million; deposits grew 6.6% to $516 million and net loans grew 9.6% to $410
million.
Additionally, North Bay declared a $.15 per share cash dividend and a 5% stock
dividend. Both dividends have a record date of March 22, 2006 and are payable on
April 12, 2006.
"2005 was a challenging, yet rewarding year for North Bay Bancorp. We were able
to improve financial returns while absorbing significant first-year expenses
associated with the Sarbanes-Oxley (SOX) Section 404 compliance process. We
executed successfully on our plan to place more emphasis on profitability versus
growth," stated President and CEO Terry Robinson. "We are pleased to announce
cash and stock dividends for another year following reporting of our record
profits."
2005 Financial Review and Operating Highlights (year ended 12/31/05 compared to
12/31/04)
o Net income increased 31% to $6.6 million.
o Pre-tax income rose 33% to $10.7 million.
o Earnings per diluted share increased 27% to $1.64.
o Revenues increased 21% to $32.7 million.
o Productivity improved with the efficiency ratio dropping 308 basis
points to 63.85%.
o Deposits grew 7% to $516 million.
o Net loans grew 10% to $410 million.
o Asset quality remained exemplary with six consecutive years of no
non-performing 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 21% to $32.7 million
in 2005 from $27.0 million in 2004. In the fourth quarter of 2005, revenues
increased 18% to $8.7 million from $7.3 million in 2004. The net interest margin
increased to 5.38% for the year from 5.00% in 2004. The net interest margin for
the fourth quarter of 2005 was 5.52% compared to 5.03% in 2004.
Net interest income increased 25% to $28.8 million in 2005, with interest income
rising 27% and interest expense increasing 43%. In the fourth quarter of 2005,
net interest income rose 22%, with interest income up 24% and interest expense
rising 40%. "Increasing the net interest margin was essential to improving our
financial performance in 2005 given the significant expenses associated with SOX
404 compliance. The increases in the Fed Funds rate and prime rate throughout
the year had a positive impact on the net interest margin as the increase in
yield on earning assets exceeded the increase in rates paid on interest bearing
liabilities," stated Executive Vice President and Chief Financial Officer Pat
Phelan.
The provision for loan losses increased 31% to $815,000 in 2005 from
$620,000 in 2004, reflecting growth in the loan portfolio. Net interest income
after the provision for loan losses increased 25% to $28.0 million compared to
$22.4 million in the previous year, and grew 22% to $7.7 million in the fourth
quarter of 2005 from $6.3 million in 2004.
Non-interest income decreased 6% in 2005 to $3.9 million from $4.2 million in
2004. In the fourth quarter, non-interest income declined 3% to $937,000 from
$969,000 in the fourth quarter a year ago. The decline reflects a decrease in
service charge income resulting from reduced non-sufficient funds (NSF) check
activity; also, there were no securities gains recorded in 2005 compared with
securities gains totaling $262,000 in 2004.
Operating (non-interest) expense in 2005 increased 14% to $21.2 million from
$18.5 million in 2004, reflecting significantly increased consulting and audit
fees associated with SOX 404 compliance. Operating expenses in the fourth
quarter increased 22% to $5.8 million from $4.7 million in the fourth quarter a
year ago. The tax equivalent efficiency ratio improved to 63.85% in 2005 from
66.93% in 2004. The efficiency ratio measures operating expenses as a percent of
revenues. "Consulting and Audit fees for the fourth quarter of 2005 were higher
primarily due to SOX compliance costs," CFO Phelan noted. Phelan added, "these
costs negatively impacted the fourth quarter 2005 efficiency ratio, which was
65.28% compared with 63.21% for the fourth quarter of 2004."
Pre-tax income rose 33% in 2005 to $10.7 million from $8.1 million in 2004.
Pre-tax Income increased 11% in the fourth quarter of 2005 to $2.8 million from
$2.6 million in the fourth quarter of 2004.
Income taxes increased in 2005 in correlation with the higher earnings. The tax
provision increased 36% to $4.1 million, or 38% of pre-tax income in 2005,
compared to $3.0 million, or 37% of pre-tax income in 2004.
Return on average equity increased 160 basis points to 13.94% for the year.
Return on average equity for the 2005 fourth quarter was 14.04%, down 38 basis
points from the 2004 fourth quarter due to the previously noted SOX related
expenses. Return on average assets was 1.11% for the year 2005 compared to 0.97%
in 2004. For the fourth quarter, return on average assets equated to 1.12% and
1.09% for 2005 and 2004, respectively. "Given that many of the costs associated
with SOX 404 compliance are non-recurring, the prospects for continued
productivity improvement are promising," commented Robinson.
Balance Sheet (at December 31, 2005 compared to December 31, 2004)
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Total assets increased 7% to $603 million from $562 million a year ago. Deposits
grew 7% from $484 million in 2004 to $516 million, with growth in both average
balances and the number of new checking accounts. Loans, net of the allowance
for loan losses and deferred fees, grew 10% to $410 million, up from $374
million. Commercial and industrial loans increased 28% from a year previous
while commercial real estate loans grew 4% and construction loans grew 17% to
$33 million. Consumer loans grew 7% to $39 million. Book value per share as of
December 31, 2005 was $12.82 compared to $12.12 a year ago.
Asset quality remains excellent with no non-performing loans at year-end. The
allowance for loan and lease losses was $4.9 million, or 1.18% of loans
outstanding, compared to $4.1 million or 1.09% of loans outstanding a year ago.
Net charge-offs for 2005 were $27,000, which includes $8,000 charged-off in the
fourth quarter, compared to $8,000 of net charge-offs in year 2004, including
$16,000 in net recoveries during the fourth quarter of 2004.
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 Cities of St. Helena and American Canyon and the
Southern industrial area of Napa County. Solano Bank, a Division of The Vintage
Bank, opened in July 2000 and 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. Solano County is projected
to be the fastest growing county in Northern California through year 2030 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 subsidiary. 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;
(6) the ability to satisfy the requirements of the Sarbanes-Oxley Act and other
regulations governing internal control and (7) 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) 12/31/2005 12/31/2004 % Change 12/31/2005 12/31/2004 % Change
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Interest Income $ 9,197 $ 7,405 24.2% $33,865 $26,585 27.4%
Interest Expense 1,444 1,035 39.5% 5,082 3,543 43.4%
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Net Interest Income 7,753 6,370 21.7% 28,783 23,042 24.9%
Provision for Loan & Lease Losses 100 80 25.0% 815 620 31.5%
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Net Interest Income after Loan
Loss Provision 7,653 6,290 21.7% 27,968 22,422 24.7%
Service Charges 495 565 -12.4% 2,073 2,249 -7.8%
Loan Sale & Servicing Income 7 10 -30.0% 31 45 -31.1%
Bank Owned Life Insurance Income 35 77 -54.5% 298 357 -16.5%
Other Non-Interest Income 400 317 26.2% 1,539 1,285 19.8%
Gain on Investments -- -- NM -- 262 -100.0%
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Total Non-Interest Income 937 969 -3.3% 3,941 4,198 -6.1%
Salaries & Benefits 2,950 2,360 25.0% 11,171 9,993 11.8%
Occupancy Expense 470 407 15.5% 1,787 1,487 20.2%
Equipment Expense 471 509 -7.5% 2,037 2,018 0.9%
Other Non-Interest Expenses 1,861 1,425 30.6% 6,176 5,038 22.6%
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Total Non-Interest Expenses 5,752 4,701 22.4% 21,171 18,536 14.2%
Income Before Taxes 2,838 2,558 10.9% 10,738 8,084 32.8%
Provision for Income Taxes 1,069 986 8.4% 4,105 3,020 35.9%
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Net Income $ 1,769 $ 1,572 12.5% $ 6,633 $ 5,064 31.0%
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TAX DATA
Tax-Exempt Muni Income $ 201 $ 113 77.9% $ 541 $ 522 3.6%
Tax-Exempt BOLI Income $ 35 $ 77 -54.5% $ 298 $ 357 -16.5%
Interest Income - Fully
Tax Equivalent $ 9,301 $ 7,441 25.0% $34,144 $26,754 27.6%
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NET CHARGE-OFFS (RECOVERIES) $ 8 $ (16) NM $ 27 $ 8 NM
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PER SHARE DATA 3-Month Period Ended: 12-Month Period Ended:
(unaudited) 12/31/2005 12/31/2004 % Change 12/31/2005 12/31/2004 % Change
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Basic Earnings per Share $ 0.45 $ 0.41 9.8% $ 1.71 $ 1.33 28.6%
Diluted Earnings per Share $ 0.44 $ 0.39 12.8% $ 1.64 $ 1.29 27.1%
Common Dividends $ 0.00 $ 0.00 NM $ 0.15 $ 0.12 25.0%
Wtd. Avg. Shares Outstanding 3,899,756 3,821,986 3,880,155 3,820,386
Wtd. Avg. Diluted Shares 4,062,226 3,984,105 4,051,524 3,920,160
Book Value per Share (EOP) $ 12.82 $ 12.12 5.8% $ 12.82 $ 12.12 5.8%
Common Shares Outstanding (EOP) 3,904,651 3,641,289 3,904,651 3,641,289
KEY FINANCIAL RATIOS 3-Month Period Ended: 12-Month Period Ended:
(unaudited) 12/31/2005 12/31/2004 12/31/2005 12/31/2004
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Return on Average Equity 14.04% 14.42% 13.94% 12.34%
Return on Average Assets 1.12% 1.09% 1.11% 0.97%
Net Interest Margin
(Tax-Equivalent) 5.52% 5.03% 5.38% 5.00%
Efficiency Ratio
(Tax-Equivalent) 65.28% 63.21% 63.85% 66.93%
AVERAGE BALANCES 3-Month Period Ended: 12-Month Period Ended:
(in $000's, unaudited) 12/31/2005 12/31/2004 % Change 12/31/2005 12/31/2004 % Change
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Average Assets $ 624,224 $ 575,261 8.5% $ 595,905 $ 523,328 13.9%
Average Earning Assets $ 564,787 $ 509,118 10.9% $ 540,644 $ 464,399 16.4%
Average Gross Loans & Leases $ 409,219 $ 383,907 6.6% $ 402,770 $ 352,863 14.1%
Average Deposits $ 538,380 $ 498,426 8.0% $ 514,454 $ 454,603 13.2%
Average Equity $ 49,998 $ 43,378 15.3% $ 47,594 $ 41,053 15.9%
STATEMENT OF CONDITION End of Period:
(in $000's, unaudited) 12/31/2005 12/31/2004 Annual Chg
- ---------------------- ---------- ---------- ----------
ASSETS
Cash and Due from Banks $ 28,174 $ 27,342 3.0%
Securities and Fed Funds Sold 136,548 132,348 3.2%
Commercial & Industrial 86,094 67,172 28.2%
Commercial Secured by Real Estate 249,773 241,361 3.5%
Residential Real Estate 8,557 6,613 29.4%
Construction 32,593 27,762 17.4%
Consumer 38,859 36,343 6.9%
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Gross Loans & Leases 415,876 379,251 9.7%
Deferred Loan Fees (1,448) (1,485) - 2.5%
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Loans & Leases Net of Deferred Fees 414,428 377,766 9.7%
Allowance for Loan & Lease Losses (4,924) (4,136) 19.1%
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Net Loans & Leases 409,504 373,630 9.6%
Loans Held-for-Sale -- 4,604 -100.0%
Bank Premises & Equipment 9,475 10,336 -8.3%
Other Assets 18,996 13,803 37.6%
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Total Assets $ 602,697 $562,063 7.2%
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LIABILITIES & CAPITAL
Demand Deposits $ 155,320 $127,250 22.1%
NOW / Savings Deposits 148,336 151,053 -1.8%
Money Market Deposits 128,684 128,884 -0.2%
Time Certificates of Deposit 84,053 77,306 8.7%
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Total Deposits 516,393 484,493 6.6%
Long Term Borrowings 19,000 19,000 NM
Trust Preferred Securities 10,310 10,310 0.0%
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Total Deposits & Interest Bearing Liab 545,703 513,803 6.2%
Other Liabilities 6,941 4,126 68.2%
Total Capital 50,053 44,134 13.4%
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Total Liabilities & Capital $ 602,697 $562,063 7.2%
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CREDIT QUALITY DATA End of Period:
(in $000's, unaudited) 12/31/2005 12/31/2004
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Non-Accruing Loans $ -- $ --
Over 90 Days PD and Still Accruing 0 0
Other Real Estate Owned 0 0
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Total Non-Performing Assets $ -- $ --
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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 1.18% 1.09%
OTHER PERIOD-END STATISTICS End of Period:
(unaudited) 12/31/2005 12/31/2004
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Shareholders' Equity / Total Assets 8.3% 7.9%
Loans / Deposits 80.5% 78.3%
Non-Interest Bearing Deposits / Total Deposits 30.1% 26.3%