NORTH BAY BANCORP
May 17, 2006
"On the mark"
PRESIDENT'S REPORT
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Safe Harbor Statement
o This presentation contain forward-looking statements that are.
- Subject to contingencies & uncertainties,
- Not a guarantee of future performance,
- Based on assumptions that may change,
- Not to be relied on unduly.
o Many factors are beyond our ability to control or predict, including
factors such as:
- Interest rate volatility.
- Economic conditions.
- Asset performance.
- Ability to control costs.
- Successful acquisition assimilation.
o We assume no obligation to update this data.
o Please see risk factors in NBAN's SEC filings.
FINANCIAL REVIEW
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ASSETS
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NET INCOME
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RETURN ON AVERAGE ASSETS
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RETURN ON AVERAGE EQUITY
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EARNINGS PER SHARE
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MARKET CAPITALIZATION
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MARKET POSITION
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NAPA COUNTY DEPOSIT MARKET SHARE
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SOLANO COUNTY DEPOSIT MARKET SHARE
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WHAT DETERMINES STOCK VALUE?
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STOCK VALUE MEASURES
o Multiple of last 12 month's earnings (LTM)
o Multiple of Estimated Future Earnings
o Multiple of Book Value
(Total Book Value & Tangible Book Value)
HOW NBAN COMPARES
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WHAT PROFESSIONALS LIKE ABOUT NBAN
o Location
- Northern California viewed as a vibrant, growing market
- Premier wine relationships provide a "Halo" effect
o Low Cost of Funds
o Asset Quality
o Positive Financial Trends
CONCERNS
o General
- Flat yield curve (cost of funds/net interest margin impact)
- Impact of a real estate/credit cycle
o Specific to NBAN
- Efficiency
THE BOTTOM LINE
o Stock prices track most closely with earnings
o Issues such as Asset Quality, Cost of Funds and Credit Concentrations
primarily serve as predictors of earnings stability (or vulnerability)
o Stock value "premiums" are based primarily on the anticipated growth rate
of Earnings per Share (EPS)
MILESTONES SINCE 5/12/05
o Sarbanes-Oxley Section 404 Compliance
- Documentation of financial controls
- Significantly increased consulting and audit fees
- Upgraded and expanded internal resources
o Strengthened Management
- Chief Financial Officer (CFO)
- Chief Operating Officer (COO)
o Implemented Management Reorganization
WHY REORGANIZE?
o Structure appropriately for $1 Billion + Company
o Define functions; avoid duplication
o Improve communications; clarify roles & responsibilities
o Enable NBAN to execute on its Strategic Plan
Executive Management Team
o Terry Robinson, Chief Executive Officer
o Glen Terry, President, The Vintage Bank
o John Nerland, Senior Executive Vice President/Chief Credit Officer
o Pat Phelan, Executive Vice President/Chief Financial Officer
o Virginia Robbins, Executive Vice President/Chief Operating Officer
o Stephanie Rode, Senior Vice President/Compliance and Risk Management
STRATEGIC PLAN
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MISSION STATEMENT
Integrity, Responsiveness, Value.
Every Day, Every Way!
VISION
o Double Asset size by year-end 2010
o Premier community business bank in Napa, Solano and Contra Costa Counties
o High performance financial returns
SHORT-TERM GOALS
o Implement revised organizational structure
o Implement performance-based compensation
o Generate ROAE > 15% in 2006
o Enhance compliance training & effectiveness
o Capitalize on capabilities of existing software
LONG-TERM GOALS
o Build The Vintage Bank Brand
o Establish presence in Contra Costa County
o Implement Private Banking program
o Sustain EPS growth between 12% and 16% through year 2010
o Adopt "Best Practices" wherever practical
o Build a value-added foundation to provide superior customer service and
differentiate NBAN from competitors
CHAIRMAN'S REMARKS
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Where We Have Been
Where We Are Going
A Little Bit of History of
Your Organization and The
People Who Built It
VISION EQUALS CHANGE
o Time
o Determination
o Courage
o Soul Searching
CONCEPTION
o A Savings and Loan
VS.
o A Bank
o The Idea of TVB - Vision of Frank Rowley
o Period of Organization and Raising Capital
TVB OPENS JANUARY 25, 1985
o $3,100,000 Capitalization
o 11 Directors
o Ace Cleaner's Location on Soscol Avenue
Within the first month, Kathi Metro
joined the team in the Credit area
and is still with us.
Times were trying...
Struggled first two and a half
years without a profit which
tested the character of the organization....including
the survival of the 1986 flood!
1988
o Five Directors stepped down
o Four new Directors elected
o Terry Robinson arrived as our new President (barely)
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And yes, we had our first year of profit in 1988.
o Every year our profit and deposits grew over the previous year for 10-11
straight years.
o TVB moved into its main branch on Soscol Avenue during this period of time.
o Raised $2,000,000 capital with issuance of new stock in 1994.
We were successful, but:
it was time to move our vision beyond Napa county.
NOVEMBER 1, 1999
o The holding company NBAN was formed.
o Added two new independent Directors.
DE NOVO BANK - SOLANO BANK
Opened July 2000
o 13 Directors
o $5,000,000 Capital raised from sale of stock
o Three branches
o Glen Terry President of Solano Bank
After a period of growth for two
years, it was a time to transition
to a new level.
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Goal of Organization
The Board and Management determine
to grow institution to one billion dollars
and be dominant in the North Bay.
Were we prepared for such growth?
What did we need to go forward?
People
Structure
Skills
o Terry Robinson moves full time into Role as CEO of holding corporation.
o Glen Terry becomes President of TVB.
o John Nerland becomes President of SB.
o The whole organization needed to step up to a higher level.
o Some long-time employees needed to leave.
o Internal controls and procedures needed improvement.
o Revisions to controls and procedures completed.
o Compliance with SOX, after spending over a million dollars with the
dedication and thoroughness of Stephanie Rode and her team.
o New members of the team brought in
o New roles for other members of the team.
o Board consolidation and organizational changes in 2004
o One charter under TVB
o Same directors for TVB and NBAN
Structure Board
to 11 Directors
The organization has transitioned
into a stronger financial
institution?
Outstanding Financial Results for
2005 & First Quarter of 2006
given our circumstances.
What about the future?
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FUTURE IS BRIGHT
o Strong Management team
o Strong Board
o The organization is structured for the future.
o Dedication to Shareholder value
LET'S NOT FORGET OUR HISTORY
o Vision of Frank Rowley
o Leadership of Terry Robinson
o Incredible credit performance led by Kathi Metro
o Guidance of TVB and SB by Glen Terry and John Nerland
o Contributions of the past and present board members
o Contributions of current and former employees
Shareholder Value
Every dollar originally invested in
this institution is now worth
$19- $20 dollars.
It's been a good ride and the best
is yet to come.
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