North Bay Bancorp (NASDAQ:NBAN)
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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)
- Net income increased 31% to $6.6 million.
- Pre-tax income rose 33% to $10.7 million.
- Earnings per diluted share increased 27% to $1.64.
- Revenues increased 21% to $32.7 million.
- Productivity improved with the efficiency ratio dropping 308
basis points to 63.85%.
- Deposits grew 7% to $516 million.
- Net loans grew 10% to $410 million.
- 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)
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.
-0-
*T
NORTH BAY BANCORP
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CONSOLIDATED
INCOME
STATEMENT
(in $000's, 3-Month Period Ended: 12-Month Period Ended:
unaudited) 12/31/05 12/31/04 % Change 12/31/05 12/31/04 % Change
-------------------------- --------------------------
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%
------ ------ ------- -------
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%
------ ------ ------- -------
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%
------ ------ ------- -------
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%
------ ------ ------- -------
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%
------ ------ ------- -------
----------------------------------------------------------------------
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
----------------------------------------------------------------------
PER SHARE DATA 3-Month Period Ended: 12-Month Period Ended:
(unaudited) 12/31/05 12/31/04 % Change 12/31/05 12/31/04 % Change
-------------------------------------------------------
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) 12/31/05 12/31/04 12/31/05 12/31/04
--------------------------------------------------------
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%
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AVERAGE
BALANCES
(in $000's, 3-Month Period Ended: 12-Month Period Ended:
unaudited) 12/31/05 12/31/04 % Change 12/31/05 12/31/04 % Change
--------------------------------------------------------
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%
----------- -----------
Gross Loans & Leases 415,876 379,251 9.7%
Deferred Loan Fees (1,448) (1,485) -2.5%
----------- -----------
Loans & Leases Net of
Deferred Fees 414,428 377,766 9.7%
Allowance for Loan &
Lease Losses (4,924) (4,136) 19.1%
----------- -----------
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%
----------- -----------
Total Assets $602,697 $562,063 7.2%
=========== ===========
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%
----------- -----------
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%
----------- -----------
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%
----------- -----------
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
--------------------------
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 1.18% 1.09%
----------------------------------------------------------------------
OTHER PERIOD-END STATISTICS End of Period:
(unaudited) 12/31/2005 12/31/2004
Shareholders' Equity /
Total Assets 8.3% 7.9%
Loans / Deposits 80.5% 78.3%
Non-Interest Bearing Deposits /
Total Deposits 30.1% 26.3%
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*T