North Bay Bancorp (Nasdaq:NBAN), parent of The Vintage Bank and its
Solano Bank Division, today announced quarterly earnings of
$1,876,000 for the quarter ended September 30, 2006. The results
equate to a 3.2% increase compared to earnings of $1,817,000 for
the quarter ended September 30, 2005. Earnings for the nine months
ended September 30, 2006 increased 7.7% to $5,242,000 from
$4,865,000 for the nine months ended September 30, 2005. Earnings
per diluted share for the quarter ended September 30, 2006 were
$.44 compared with $.43 for the quarter ended September 30, 2005, a
2.3% increase. Earnings per diluted share for the nine months ended
September 30, 2006 were $1.22, a 6.1% increase from $1.15 for the
same period a year previous. The year to date results equate to a
13.33% return on average equity and a 1.13% return on average
assets. Increases in cost of funds has resulted in a continuing
decrease in the tax-equivalent net interest margin to 4.89% for the
quarter ended September 30, 2006 as compared to 5.32% for the
quarter ended June 30, 2006 and 5.33% for the quarter ended
September 30, 2005. The tax-equivalent net interest margin for the
nine months ended September 30, 2006 was 5.24% compared to 5.39%
during the same period a year previous. Total net loans grew 19.4%
to $470 million at September 30, 2006 from $393 million at
September 30, 2005. Total deposits decreased 13.6% to $473 million
at September 30, 2006 from a year previous. �We are satisfied with
these results, particularly in light of the financial challenges
our industry is facing,� stated President and CEO Terry Robinson.
�Our deposit totals have stabilized following a runoff in
rate-sensitive deposits that commenced in the fourth quarter of
2005 and continued through the second quarter of 2006; in the face
of continued strong loan demand, this deposit runoff created a need
for increased wholesale borrowing. Going forward, we anticipate a
gradual improvement in our tax-equivalent net interest margin from
an increase in the average yield on our commercial real estate
portfolio as the loans cycle through their rate adjustment
intervals,� Robinson noted. Financial Review and Operating
Highlights (YTD ended 9/30/06 compared to 9/30/05) Net income
increased 7.7% to $5.2 million Earnings per diluted share increased
6.1% to $1.22 Net loans grew 19.4% to $470 million Total assets
grew 3.0% to $649 million Asset quality remained exemplary
Operating Results Year to date net interest income increased 3.0%
to $21.7 million, with interest income rising 15.1% and interest
expense increasing 85.3% from the same period of 2005. The
tax-equivalent net interest margin was 5.24% for the nine months
ended September 30, 2006 and 4.89% for the third quarter of 2006,
down 15 basis points from the first nine months of 2005 and down 44
basis points from the third quarter of 2005. Michael Wengel,
Executive Vice President and Chief Financial Officer, commented,
�We believe our third quarter 2006 tax-equivalent net interest
margin represents the trough of this interest rate cycle. The
margin is expected to remain consistent with the third quarter 2006
margin while we continue with a flat or inverted yield curve
environment.� The provision for loan losses of $200,000 for the
nine months ended September 30, 2006 compares with a $715,000
provision for the same period of 2005 as the allowance for loan and
lease losses was deemed adequate at September 30, 2006 and required
no further provision based upon a 24% decrease in classified assets
from June 30, 2006 to September 30, 2006. Year to date net interest
income after the provision for loan losses increased 5.6% to $21.5
million through September 30, 2006 compared to $20.3�million for
the same period of 2005. Non-interest income increased 15.8% to
$3.5 million during the first nine months of 2006 compared to $3.0
million during the same period of 2005. Gain on sale of loans as
well as increases in ATM fees, commissions received on sales of
investment products, earnings on the cash value of life insurance
and earnings on non-marketable equity securities all contributed to
the increase. The tax-equivalent efficiency ratio rose to 64.8% for
the first nine months of 2006 compared with 63.3% during the same
period a year previous, as some components of operating costs
increased more rapidly than revenues. The efficiency ratio,
calculated by dividing non-interest expense (not including $299,000
in amortization of an investment in an affordable housing bond that
generates tax credits) by net interest income adjusted for tax-free
interest and non-interest income, measures overhead costs as a
percentage of total revenues. Operating (non-interest) expense for
the first nine months of 2006 increased 9.9% to $16.9 million from
$15.4 million during the same period of 2005, primarily due to
increases in salaries and wages. Also, as of January 1, 2006, the
Company adopted Statement of Financial Accounting Standards No. 123
(revised 2004), Share-Based Payment (SFAS 123R), using the
modified-prospective transition method, and commenced expensing the
fair value (at the grant date) of all unvested stock options
outstanding as of December 31, 2005 over the remaining vesting
periods. Consequently, year to date 2006 salaries and benefits
expense includes $328,000 related to vesting of stock options while
no such expense was recorded during the same period of 2005.
�Despite the modest increase during the past year, our Efficiency
Ratio has declined slightly during the third quarter� Robinson
stated. �Our moves to substantially improve our management team
along with requirements to expense stock options and grants have
increased our salaries and benefits expense from 2005. Going
forward, however, we expect lower audit and consulting fees,
particularly those relating to Sarbanes-Oxley Section 404
compliance.� Pre-tax income rose 1.1% during the first nine months
of 2006 to $8.0 million from $7.9 million during the same period of
2005. The tax provision decreased to 34.4% of pre-tax income during
the first nine months of 2006 from 38.4% for the same period of
2005. The lower tax rate in 2006 compared with 2005 was primarily
due to a $2 million investment in affordable housing bonds near
year-end 2005 that generate income tax credits. Earnings per
diluted share for the quarter ended September 30, 2006 were $.44, a
2.3% increase from $.43 at September 30, 2005. Earnings per diluted
share for the nine months ended September 30, 2006 were $1.22, a
6.1% increase from $1.15 for the same period a year previous.
Return on average equity for the first nine months of 2006
decreased to 13.33%, down 49 basis points from the same period a
year ago. Return on average assets increased 1 basis point to 1.13%
for the first nine months of 2006 from the same period of 2005. The
higher return on assets and lower return on equity reflect the
higher core capital ratio in 2006 compared with 2005. Balance Sheet
(at September 30, 2006 compared to September 30, 2005) Total assets
increased 3.0% to $649 million as of September 30, 2006 compared to
$630 million a year previous. Loans, net of the allowance for loan
losses, grew 19.4% to $470 million at September 30, 2006, up from
$393 million as of September 30, 2005. Commercial and industrial
loans increased 49.8% to $119 million while commercial real estate
loans grew a 12.4% to $279 million. Construction loans decreased
29.8% to $20 million while consumer loans increased 8.6% to $42
million. Asset quality remained excellent at September 30, 2006
with no non-performing loans. The allowance for loan and lease
losses was $5.1 million, or 1.06% of loans outstanding, compared to
$4.8 million or 1.21% of loans outstanding at September 30, 2005.
Net charge-offs were $48,000 in the third quarter of 2006 and
$60,000 for the first nine months of 2006. Total deposits as of
September 30, 2006 decreased 13.6% to $473 million from a year
previous. Non-interest bearing deposits decreased 7.0% to $155
million, representing 32.7% of total deposits. During the quarter,
the Bank secured $60 million in fixed rate borrowings with the
Federal Home Loan Bank. �Since obtaining the fixed rate borrowings,
the Bank has returned to a position of selling Fed Funds on a daily
basis,� Wengel stated. �Securing the fixed rate borrowings, at
rates lower than those currently available on overnight borrowings,
has stabilized our liquidity position and enabled us to limit our
exposure to further decline in the tax-equivalent net interest
margin,� Wengel noted. 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. Solano
Bank, 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. 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 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 (in $000's except per share data;
unaudited) � 3-Month Period Ended: 9-Month Period Ended: 9/30/2006�
� 9/30/2005� � % Change� 9/30/2006� � 9/30/2005� � % Change�
Interest Income $ 9,901� $ 8,847� 11.9% $ 28,393� $ 24,668� 15.1%
Interest Expense 2,945� 1,415� 108.1% 6,742� 3,638� 85.3% Net
Interest Income 6,956� 7,432� -6.4% 21,651� 21,030� 3.0% Provision
for Loan & Lease Losses -� 300� -100.0% 200� 715� -72.0% Net
Interest Income after Loan Loss Provision 6,956� 7,132� -2.5%
21,451� 20,315� 5.6% Service Charges 534� 540� -1.1% 1,552� 1,579�
-1.7% Gain on Sale of Loans -� -� 0.0% 126� -� 0.0% Bank Owned Life
Insurance Income 185� 88� 110.2% 391� 263� 48.7% Other Non-Interest
Income 520� 399� 30.3% 1,410� 1,163� 21.2% Total Non-Interest
Income 1,239� 1,027� 20.6% 3,479� 3,005� 15.8% Salaries &
Benefits 3,069� 2,763� 11.1% 9,429� 8,221� 14.7% Occupancy Expense
454� 477� -4.8% 1,360� 1,317� 3.3% Equipment Expense 464� 487�
-4.7% 1,431� 1,566� -8.6% Other Non-Interest Expenses 1,401� 1,484�
-5.6% 4,723� 4,315� 9.5% Total Non-Interest Expenses 5,388� 5,211�
3.4% 16,943� 15,419� 9.9% Income Before Taxes 2,807� 2,948� -4.8%
7,987� 7,901� 1.1% Provision for Income Taxes 931� � 1,131� �
-17.7% � 2,745� � 3,036� � -9.6% Net Income $ 1,876� � $ 1,817� �
3.2% � $ 5,242� � $ 4,865� � 7.7% TAX DATA Tax-Exempt Muni Income $
218� $ 121� 80.2% $ 677� $ 340� 99.1% Tax-Exempt BOLI Income $ 185�
� $ 88� � 110.2% � $ 391� � $ 263� � 48.7% NET CHARGE-OFFS
(RECOVERIES) $ 48� � $ 9� � NM� � $ 60� � $ 19� � NM� PER SHARE
DATA 3-Month Period Ended: 9-Month Period Ended: 9/30/2006� �
9/30/2005� � % Change� � 9/30/2006� � 9/30/2005� � % Change� Basic
Earnings per Share $ 0.45� $ 0.44� 2.3% $ 1.27� $ 1.20� 5.8%
Diluted Earnings per Share $ 0.44� $ 0.43� 2.3% $ 1.22� $ 1.15�
6.1% Common Dividends Paid $ -� $ -� $ 0.14� $ 0.14� 0.0% Wtd. Avg.
Shares Outstanding 4,134,297� 4,083,448� 4,123,326� 4,067,824� Wtd.
Avg. Diluted Shares 4,296,066� 4,263,626� 4,283,871� 4,248,097�
Book Value per Basic Share (EOP) $ 13.44� $ 12.60� 6.7% $ 13.44� $
12.60� 6.7% Tangible Book Value per Share $ 13.28� $ 12.60� 5.4% $
13.28� $ 12.60� 5.4% Common Shares Outstanding. (EOP) 4,149,164� �
3,897,504� � � � 4,149,164� � 3,897,504� � � KEY FINANCIAL RATIOS
3-Month Period Ended: 9-Month Period Ended: 9/30/2006� � 9/30/2005�
� � � 9/30/2006� � 9/30/2005� Return on Average Equity 13.76%
14.92% 13.33% 13.82% Return on Average Assets 1.16% 1.17% 1.13%
1.12% Net Interest Margin (Tax-Equivalent) 4.89% 5.33% 5.24% 5.39%
Efficiency Ratio (Tax-Equivalent) 63.06% 60.83% 64.81% 63.33% � � �
� � � � � � � � � AVERAGE BALANCES 3-Month Period Ended: 9-Month
Period Ended: 9/30/2006� � 9/30/2005� � % Change� � 9/30/2006� �
9/30/2005� � % Change� Average Assets $ 638,943� $ 614,206� 4.0% $
617,958� $ 581,588� 6.3% Average Earning Assets $ 573,259� $
557,968� 2.7% $ 560,835� $ 525,632� 6.7% Average Gross Loans &
Leases $ 462,964� $ 403,212� 14.8% $ 442,406� $ 396,496� 11.6%
Average Deposits $ 467,543� $ 532,317� -12.2% $ 487,008� $ 501,226�
-2.8% Average Equity $ 54,077� � $ 48,312� � 11.9% � $ 52,577� � $
47,072� � 11.7% North Bay Bancorp STATEMENT OF CONDITION (in
$000's, unaudited) End of Period: 9/30/2006� � 12/31/2005� �
9/30/2005� � 9-Month chg Annual Chg ASSETS Cash and Due from Banks
$ 32,716� $ 28,274� $ 31,148� 15.7% 5.0% Securities and Fed Funds
Sold 110,267� 133,680� 177,486� -17.5% -37.9% � Commercial &
Industrial 118,725� 86,546� 79,246� 37.2% 49.8% Commercial Secured
by Real Estate 278,789� 249,773� 248,088� 11.6% 12.4% Real Estate
16,299� 8,557� 4,422� 90.5% 268.6% Construction 20,494� 32,593�
29,200� -37.1% -29.8% Consumer 41,948� 38,859� 38,643� 7.9% 8.6%
Gross Loans & Leases 476,255� 416,328� 399,599� 14.4% 19.2%
Deferred Loan Fees (1,410) (1,448) (1,473) -2.6% -4.3% Loans &
Leases Net of Deferred Fees 474,845� 414,880� 398,126� 14.5% 19.3%
Allowance for Loan & Lease Losses (5,064) (4,924) (4,832) 2.8%
4.8% Net Loans & Leases 469,781� 409,956� 393,294� 14.6% 19.4%
Bank Premises & Equipment 9,763� 9,475� 9,542� 3.0% 2.3% Other
Assets 26,457� 21,312� 18,573� 24.1% 42.4% Total Assets $ 648,984�
$ 602,697� $ 630,043� 7.7% 3.0% � LIABILITIES & CAPITAL
Non-interest Bearing Deposits $ 154,533� $ 155,320� $ 166,239�
-0.5% -7.0% NOW / Savings Deposits 133,216� 148,336� 146,963�
-10.2% -9.4% Money Market Deposits 102,439� 128,684� 148,938�
-20.4% -31.2% Time Certificates of Deposit 82,314� 84,053� 84,710�
-2.1% -2.8% Total Deposits 472,502� 516,393� 546,850� -8.5% -13.6%
� Federal Funds Purchased -� -� -� Other Borrowings 104,000�
19,000� 19,000� 447.4% 447.4% Subordinated Debentures 10,310�
10,310� 10,310� 0.0% 0.0% Total Deposits & Interest Bearing
Liabilities 586,812� 545,703� 576,160� 7.5% 1.8% � Other
Liabilities 6,405� 6,941� 4,763� -7.7% 34.5% Total Capital 55,767�
50,053� 49,120� 11.4% 13.5% Total Liabilities & Capital $
648,984� $ 602,697� $ 630,043� 7.7% 3.0% � � � � � � � � � � CREDIT
QUALITY DATA End of Period: 9/30/2006� � 12/31/2005� � 9/30/2005�
Non-Accruing Loans $ -� $ -� $ -� Over 90 Days PD and Still
Accruing -� -� -� Other Real Estate Owned -� -� -� Total
Non-Performing Assets $ -� � $ -� � $ -� � � Non-Performing Loans
to Total Loans 0.00% 0.00% 0.00% Non-Performing Assets to Total
Assets 0.00% 0.00% 0.00% Allowance for Loan Losses to Loans 1.06%
1.18% 1.21% � � � � � � � � � � OTHER PERIOD-END STATISTICS End of
Period: 9/30/2006� 12/31/2005� 9/30/2005� Shareholders' Equity /
Total Assets 8.6% 8.3% 7.8% Net Loans / Deposits 99.4% 79.4% 71.9%
Non-Interest Bearing Deposits / Total Deposits 32.7% � 30.1% �
30.4% � � � � North Bay Bancorp (Nasdaq:NBAN), parent of The
Vintage Bank and its Solano Bank Division, today announced
quarterly earnings of $1,876,000 for the quarter ended September
30, 2006. The results equate to a 3.2% increase compared to
earnings of $1,817,000 for the quarter ended September 30, 2005.
Earnings for the nine months ended September 30, 2006 increased
7.7% to $5,242,000 from $4,865,000 for the nine months ended
September 30, 2005. Earnings per diluted share for the quarter
ended September 30, 2006 were $.44 compared with $.43 for the
quarter ended September 30, 2005, a 2.3% increase. Earnings per
diluted share for the nine months ended September 30, 2006 were
$1.22, a 6.1% increase from $1.15 for the same period a year
previous. The year to date results equate to a 13.33% return on
average equity and a 1.13% return on average assets. Increases in
cost of funds has resulted in a continuing decrease in the
tax-equivalent net interest margin to 4.89% for the quarter ended
September 30, 2006 as compared to 5.32% for the quarter ended June
30, 2006 and 5.33% for the quarter ended September 30, 2005. The
tax-equivalent net interest margin for the nine months ended
September 30, 2006 was 5.24% compared to 5.39% during the same
period a year previous. Total net loans grew 19.4% to $470 million
at September 30, 2006 from $393 million at September 30, 2005.
Total deposits decreased 13.6% to $473 million at September 30,
2006 from a year previous. "We are satisfied with these results,
particularly in light of the financial challenges our industry is
facing," stated President and CEO Terry Robinson. "Our deposit
totals have stabilized following a runoff in rate-sensitive
deposits that commenced in the fourth quarter of 2005 and continued
through the second quarter of 2006; in the face of continued strong
loan demand, this deposit runoff created a need for increased
wholesale borrowing. Going forward, we anticipate a gradual
improvement in our tax-equivalent net interest margin from an
increase in the average yield on our commercial real estate
portfolio as the loans cycle through their rate adjustment
intervals," Robinson noted. Financial Review and Operating
Highlights (YTD ended 9/30/06 compared to 9/30/05) -- Net income
increased 7.7% to $5.2 million -- Earnings per diluted share
increased 6.1% to $1.22 -- Net loans grew 19.4% to $470 million --
Total assets grew 3.0% to $649 million -- Asset quality remained
exemplary Operating Results Year to date net interest income
increased 3.0% to $21.7 million, with interest income rising 15.1%
and interest expense increasing 85.3% from the same period of 2005.
The tax-equivalent net interest margin was 5.24% for the nine
months ended September 30, 2006 and 4.89% for the third quarter of
2006, down 15 basis points from the first nine months of 2005 and
down 44 basis points from the third quarter of 2005. Michael
Wengel, Executive Vice President and Chief Financial Officer,
commented, "We believe our third quarter 2006 tax-equivalent net
interest margin represents the trough of this interest rate cycle.
The margin is expected to remain consistent with the third quarter
2006 margin while we continue with a flat or inverted yield curve
environment." The provision for loan losses of $200,000 for the
nine months ended September 30, 2006 compares with a $715,000
provision for the same period of 2005 as the allowance for loan and
lease losses was deemed adequate at September 30, 2006 and required
no further provision based upon a 24% decrease in classified assets
from June 30, 2006 to September 30, 2006. Year to date net interest
income after the provision for loan losses increased 5.6% to $21.5
million through September 30, 2006 compared to $20.3 million for
the same period of 2005. Non-interest income increased 15.8% to
$3.5 million during the first nine months of 2006 compared to $3.0
million during the same period of 2005. Gain on sale of loans as
well as increases in ATM fees, commissions received on sales of
investment products, earnings on the cash value of life insurance
and earnings on non-marketable equity securities all contributed to
the increase. The tax-equivalent efficiency ratio rose to 64.8% for
the first nine months of 2006 compared with 63.3% during the same
period a year previous, as some components of operating costs
increased more rapidly than revenues. The efficiency ratio,
calculated by dividing non-interest expense (not including $299,000
in amortization of an investment in an affordable housing bond that
generates tax credits) by net interest income adjusted for tax-free
interest and non-interest income, measures overhead costs as a
percentage of total revenues. Operating (non-interest) expense for
the first nine months of 2006 increased 9.9% to $16.9 million from
$15.4 million during the same period of 2005, primarily due to
increases in salaries and wages. Also, as of January 1, 2006, the
Company adopted Statement of Financial Accounting Standards No. 123
(revised 2004), Share-Based Payment (SFAS 123R), using the
modified-prospective transition method, and commenced expensing the
fair value (at the grant date) of all unvested stock options
outstanding as of December 31, 2005 over the remaining vesting
periods. Consequently, year to date 2006 salaries and benefits
expense includes $328,000 related to vesting of stock options while
no such expense was recorded during the same period of 2005.
"Despite the modest increase during the past year, our Efficiency
Ratio has declined slightly during the third quarter" Robinson
stated. "Our moves to substantially improve our management team
along with requirements to expense stock options and grants have
increased our salaries and benefits expense from 2005. Going
forward, however, we expect lower audit and consulting fees,
particularly those relating to Sarbanes-Oxley Section 404
compliance." Pre-tax income rose 1.1% during the first nine months
of 2006 to $8.0 million from $7.9 million during the same period of
2005. The tax provision decreased to 34.4% of pre-tax income during
the first nine months of 2006 from 38.4% for the same period of
2005. The lower tax rate in 2006 compared with 2005 was primarily
due to a $2 million investment in affordable housing bonds near
year-end 2005 that generate income tax credits. Earnings per
diluted share for the quarter ended September 30, 2006 were $.44, a
2.3% increase from $.43 at September 30, 2005. Earnings per diluted
share for the nine months ended September 30, 2006 were $1.22, a
6.1% increase from $1.15 for the same period a year previous.
Return on average equity for the first nine months of 2006
decreased to 13.33%, down 49 basis points from the same period a
year ago. Return on average assets increased 1 basis point to 1.13%
for the first nine months of 2006 from the same period of 2005. The
higher return on assets and lower return on equity reflect the
higher core capital ratio in 2006 compared with 2005. Balance Sheet
(at September 30, 2006 compared to September 30, 2005) Total assets
increased 3.0% to $649 million as of September 30, 2006 compared to
$630 million a year previous. Loans, net of the allowance for loan
losses, grew 19.4% to $470 million at September 30, 2006, up from
$393 million as of September 30, 2005. Commercial and industrial
loans increased 49.8% to $119 million while commercial real estate
loans grew a 12.4% to $279 million. Construction loans decreased
29.8% to $20 million while consumer loans increased 8.6% to $42
million. Asset quality remained excellent at September 30, 2006
with no non-performing loans. The allowance for loan and lease
losses was $5.1 million, or 1.06% of loans outstanding, compared to
$4.8 million or 1.21% of loans outstanding at September 30, 2005.
Net charge-offs were $48,000 in the third quarter of 2006 and
$60,000 for the first nine months of 2006. Total deposits as of
September 30, 2006 decreased 13.6% to $473 million from a year
previous. Non-interest bearing deposits decreased 7.0% to $155
million, representing 32.7% of total deposits. During the quarter,
the Bank secured $60 million in fixed rate borrowings with the
Federal Home Loan Bank. "Since obtaining the fixed rate borrowings,
the Bank has returned to a position of selling Fed Funds on a daily
basis," Wengel stated. "Securing the fixed rate borrowings, at
rates lower than those currently available on overnight borrowings,
has stabilized our liquidity position and enabled us to limit our
exposure to further decline in the tax-equivalent net interest
margin," Wengel noted. 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. Solano
Bank, 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. 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 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. -0- *T North Bay
Bancorp CONSOLIDATED INCOME STATEMENT (in $000's except per share
data; unaudited)
----------------------------------------------------------------------
3-Month Period Ended: 9/30/2006 9/30/2005 % Change
------------------------------- Interest Income $9,901 $8,847 11.9%
Interest Expense 2,945 1,415 108.1% ---------- ---------- Net
Interest Income 6,956 7,432 -6.4% Provision for Loan & Lease
Losses - 300 -100.0% ---------- ---------- Net Interest Income
after Loan Loss Provision 6,956 7,132 -2.5% ---------- ----------
Service Charges 534 540 -1.1% Gain on Sale of Loans - - 0.0% Bank
Owned Life Insurance Income 185 88 110.2% Other Non-Interest Income
520 399 30.3% ---------- ---------- Total Non-Interest Income 1,239
1,027 20.6% ---------- ---------- Salaries & Benefits 3,069
2,763 11.1% Occupancy Expense 454 477 -4.8% Equipment Expense 464
487 -4.7% Other Non-Interest Expenses 1,401 1,484 -5.6% ----------
---------- Total Non-Interest Expenses 5,388 5,211 3.4% ----------
---------- Income Before Taxes 2,807 2,948 -4.8% Provision for
Income Taxes 931 1,131 -17.7%
---------------------------------------==========-==========----------
Net Income $1,876 $1,817 3.2%
---------------------------------------==========-==========----------
TAX DATA Tax-Exempt Muni Income $218 $121 80.2% Tax-Exempt BOLI
Income $185 $88 110.2%
----------------------------------------------------------------------
NET CHARGE-OFFS (RECOVERIES) $48 $9 NM
----------------------------------------------------------------------
PER SHARE DATA 3-Month Period Ended: 9/30/2006 9/30/2005 % Change
------------------------------- Basic Earnings per Share $0.45
$0.44 2.3% Diluted Earnings per Share $0.44 $0.43 2.3% Common
Dividends Paid $- $- Wtd. Avg. Shares Outstanding 4,134,297
4,083,448 Wtd. Avg. Diluted Shares 4,296,066 4,263,626 Book Value
per Basic Share (EOP) $13.44 $12.60 6.7% Tangible Book Value per
Share $13.28 $12.60 5.4% Common Shares Outstanding. (EOP) 4,149,164
3,897,504
----------------------------------------------------------------------
KEY FINANCIAL RATIOS 3-Month Period Ended: 9/30/2006 9/30/2005
------------------------------- Return on Average Equity 13.76%
14.92% Return on Average Assets 1.16% 1.17% Net Interest Margin
(Tax-Equivalent) 4.89% 5.33% Efficiency Ratio (Tax-Equivalent)
63.06% 60.83%
----------------------------------------------------------------------
AVERAGE BALANCES 3-Month Period Ended: 9/30/2006 9/30/2005 % Change
------------------------------- Average Assets $638,943 $614,206
4.0% Average Earning Assets $573,259 $557,968 2.7% Average Gross
Loans & Leases $462,964 $403,212 14.8% Average Deposits
$467,543 $532,317 -12.2% Average Equity $54,077 $48,312 11.9%
----------------------------------------------------------------------
North Bay Bancorp CONSOLIDATED INCOME STATEMENT (in $000's except
per share data; unaudited)
----------------------------------------------------------------------
9-Month Period Ended: 9/30/2006 9/30/2005 % Change
------------------------------- Interest Income $28,393 $24,668
15.1% Interest Expense 6,742 3,638 85.3% ---------- ---------- Net
Interest Income 21,651 21,030 3.0% Provision for Loan & Lease
Losses 200 715 -72.0% ---------- ---------- Net Interest Income
after Loan Loss Provision 21,451 20,315 5.6% ---------- ----------
Service Charges 1,552 1,579 -1.7% Gain on Sale of Loans 126 - 0.0%
Bank Owned Life Insurance Income 391 263 48.7% Other Non-Interest
Income 1,410 1,163 21.2% ---------- ---------- Total Non-Interest
Income 3,479 3,005 15.8% ---------- ---------- Salaries &
Benefits 9,429 8,221 14.7% Occupancy Expense 1,360 1,317 3.3%
Equipment Expense 1,431 1,566 -8.6% Other Non-Interest Expenses
4,723 4,315 9.5% ---------- ---------- Total Non-Interest Expenses
16,943 15,419 9.9% ---------- ---------- Income Before Taxes 7,987
7,901 1.1% Provision for Income Taxes 2,745 3,036 -9.6%
---------------------------------------==========-==========----------
Net Income $5,242 $4,865 7.7%
---------------------------------------==========-==========----------
TAX DATA Tax-Exempt Muni Income $677 $340 99.1% Tax-Exempt BOLI
Income $391 $263 48.7%
----------------------------------------------------------------------
NET CHARGE-OFFS (RECOVERIES) $60 $19 NM
----------------------------------------------------------------------
PER SHARE DATA 9-Month Period Ended: 9/30/2006 9/30/2005 % Change
--------------------------------- Basic Earnings per Share $1.27
$1.20 5.8% Diluted Earnings per Share $1.22 $1.15 6.1% Common
Dividends Paid $0.14 $0.14 0.0% Wtd. Avg. Shares Outstanding
4,123,326 4,067,824 Wtd. Avg. Diluted Shares 4,283,871 4,248,097
Book Value per Basic Share (EOP) $13.44 $12.60 6.7% Tangible Book
Value per Share $13.28 $12.60 5.4% Common Shares Outstanding. (EOP)
4,149,164 3,897,504
----------------------------------------------------------------------
KEY FINANCIAL RATIOS 9-Month Period Ended: 9/30/2006 9/30/2005
----------------------- Return on Average Equity 13.33% 13.82%
Return on Average Assets 1.13% 1.12% Net Interest Margin
(Tax-Equivalent) 5.24% 5.39% Efficiency Ratio (Tax-Equivalent)
64.81% 63.33%
----------------------------------------------------------------------
AVERAGE BALANCES 9-Month Period Ended: 9/30/2006 9/30/2005 % Change
--------------------------------- Average Assets $617,958 $581,588
6.3% Average Earning Assets $560,835 $525,632 6.7% Average Gross
Loans & Leases $442,406 $396,496 11.6% Average Deposits
$487,008 $501,226 -2.8% Average Equity $52,577 $47,072 11.7%
----------------------------------------------------------------------
*T -0- *T North Bay Bancorp STATEMENT OF CONDITION (in $000's,
unaudited)
----------------------------------------------------------------------
End of Period: 9- Annual Month Chg 9/30/2006 12/31/2005 9/30/2005
chg ---------------------------------------- ------ ASSETS Cash and
Due from Banks $32,716 $28,274 $31,148 15.7% 5.0% Securities and
Fed Funds Sold 110,267 133,680 177,486 -17.5% -37.9% ----------
----------- ---------- Commercial & Industrial 118,725 86,546
79,246 37.2% 49.8% Commercial Secured by Real Estate 278,789
249,773 248,088 11.6% 12.4% Real Estate 16,299 8,557 4,422 90.5%
268.6% Construction 20,494 32,593 29,200 -37.1% -29.8% Consumer
41,948 38,859 38,643 7.9% 8.6% ---------- ----------- ----------
Gross Loans & Leases 476,255 416,328 399,599 14.4% 19.2%
Deferred Loan Fees (1,410) (1,448) (1,473) -2.6% -4.3% ----------
----------- ---------- Loans & Leases Net of Deferred Fees
474,845 414,880 398,126 14.5% 19.3% Allowance for Loan & Lease
Losses (5,064) (4,924) (4,832) 2.8% 4.8% ---------- -----------
---------- Net Loans & Leases 469,781 409,956 393,294 14.6%
19.4% Bank Premises & Equipment 9,763 9,475 9,542 3.0% 2.3%
Other Assets 26,457 21,312 18,573 24.1% 42.4% ----------
----------- ---------- Total Assets $648,984 $602,697 $630,043 7.7%
3.0% ========== =========== ========== LIABILITIES & CAPITAL
Non-interest Bearing Deposits $154,533 $155,320 $166,239 -0.5%
-7.0% NOW / Savings Deposits 133,216 148,336 146,963 -10.2% -9.4%
Money Market Deposits 102,439 128,684 148,938 -20.4% -31.2% Time
Certificates of Deposit 82,314 84,053 84,710 -2.1% -2.8% ----------
----------- ---------- Total Deposits 472,502 516,393 546,850 -8.5%
-13.6% Federal Funds Purchased - - - Other Borrowings 104,000
19,000 19,000 447.4% 447.4% Subordinated Debentures 10,310 10,310
10,310 0.0% 0.0% ---------- ----------- ---------- Total Deposits
& Interest Bearing Liabilities 586,812 545,703 576,160 7.5%
1.8% Other Liabilities 6,405 6,941 4,763 -7.7% 34.5% Total Capital
55,767 50,053 49,120 11.4% 13.5% ---------- ----------- ----------
Total Liabilities & Capital $648,984 $602,697 $630,043 7.7%
3.0% ========== =========== ==========
----------------------------------------------------------------------
CREDIT QUALITY DATA End of Period: 9/30/2006 12/31/2005 9/30/2005
--------------------------------- Non-Accruing Loans $- $- $- Over
90 Days PD and Still Accruing - - - Other Real Estate Owned - - -
---------- ----------- ---------- Total Non- Performing Assets $-
$- $- --------------------------------- Non-Performing Loans to
Total Loans 0.00% 0.00% 0.00% Non-Performing Assets to Total Assets
0.00% 0.00% 0.00% Allowance for Loan Losses to Loans 1.06% 1.18%
1.21%
----------------------------------------------------------------------
OTHER PERIOD-END End of STATISTICS Period: 9/30/2006 12/31/2005
9/30/2005 Shareholders' Equity / Total Assets 8.6% 8.3% 7.8% Net
Loans / Deposits 99.4% 79.4% 71.9% Non-Interest Bearing Deposits /
Total Deposits 32.7% 30.1% 30.4%
----------------------------------------------------------------------
*T
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