-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IcyUyxmZMgUTQMuyReSPaNdNykhBznkFawVemvW1LXOWenp77MgTC89VlyKlrmF8 TgWe6KJnftGERb3F9LTJyQ== 0000950005-03-001233.txt : 20031217 0000950005-03-001233.hdr.sgml : 20031217 20031216190237 ACCESSION NUMBER: 0000950005-03-001233 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031124 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH BAY BANCORP/CA CENTRAL INDEX KEY: 0001102595 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 680434802 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-31080 FILM NUMBER: 031058414 BUSINESS ADDRESS: STREET 1: 1500 SOSCOL AVE CITY: NAPA STATE: CA ZIP: 94559 BUSINESS PHONE: 7072578500 MAIL ADDRESS: STREET 1: 1500 SOSCOL AVE CITY: NAPA STATE: CA ZIP: 94559 8-K 1 p18020_8k.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 F O R M 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) November 24 , 2003 ------------------------ NORTH BAY BANCORP - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 0-31080 68-0434802 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (IRS Employer incorporation) File Number) Identification No.) 1180 Airport Road, Suite 101, Napa, California 94558 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (707) 257-8585 ------------------------------ N/A - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits. (b) Exhibits 99.1 Quarterly Letter to Shareholders Item 9. Regulation FD Disclosure Quarterly Letter to Shareholders. On November 24, 2003, North Bay Bancorp mailed its Quarterly Letter to Shareholders. A copy of the Shareholder Letter is attached to this Current Report as Exhibit 99.1. The Shareholders Letter included North Bay Bancorp's Third Quarter Earnings Release previously filed with the SEC on October 31, 2003 on a Current Report on Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: December 12, 2003 NORTH BAY BANCORP /s/ Terry L. Robinson ----------------------------------------------- Terry L. Robinson, President and Chief Executive Officer (Principal Executive Officer) EX-99.1 3 ex99-1.txt QUARTERLY LETTER TO SHAREHOLDERS [Photo Omitted] Terry Robinson President and CEO The Vintage Bank Main 1500 Soscol Avenue Napa, CA 94559 Bel-Aire 3636 Bel-Aire Plaza Napa, CA 94558 St. Helena 1065 Main Street St. Helena, CA 94558 Gateway 1190 Airport Rd. Suite #100 Napa, CA 94558 Solano Bank Vacaville 403 Davis Street Vacaville, CA 95688 Fairfield 1411 Oliver Rd. Suite #100 Fairfield, CA 94553 Vallejo 976 Admiral Calaghan Lane Vallejo, CA 94590 Benicia 1395 E. Second Street Benicia, CA 94510 For More Information: North Bay Bancorp P.O. Box 2200 Napa, CA 94558 Phone: (707) 252-5026 Toll Free: (800) 888-4682 Fax: (707) 252-5027 www.NorthBayBancorp.com [LOGO OMITTED] Nb North Bay Investor BANCORP News Volume 2, Issue 2 Third Quarter 2003 PRESIDENT'S LETTER This issue marks the resumption of our quarterly communications to shareholders. Henceforth, you will receive these newsletters following release of financial results for the first, second and third quarters of each year. We will not produce a newsletter following the fourth quarter as shareholders will receive our Annual Report in lieu. The months since our last shareholders' newsletter have been challenging ones. The first half of the year was notable for some key management changes followed by a significant reorganization of the holding company and resolution of litigation with our former host system provider. Also during the first half of 2003, we felt the negative financial effects of unprecedented low interest rates. As the fed funds rate approached zero, a narrowing net interest margin was unavoidable. This lower margin impacted us at the same time we were absorbing non-recurring expenses related to the litigation, new regulations, our internal reorganization, opening of our ninth branch office and relocation of holding company administrative offices. As reported elsewhere in this newsletter, we announced record profits for the third quarter 2003 and a return to what I described as "normalized" earnings. While the first half of 2003 was impacted by non-recurring events, we view the second half of the year as being more representative of ongoing profitability. I am bullish on our prospects for year 2004. We have our key positions filled with outstanding people, our Banks have effective sales program to help sustain our growth, we will continue our tradition of high asset quality and our overhead performance will improve through a combination of growth and improved expense management. I would like to acknowledge and thank the management team that has carried us through this challenging period and will help us capitalize on the great opportunities ahead. Our two Bank Presidents and Chief Executive Officers, Glen Terry (The Vintage Bank) and John Nerland (Solano Bank) have strengthened their organizations in key areas and instilled a "sales and service" culture within their respective Banks. Executive Vice President Kathi Metro, who started with The Vintage Bank in 1985, now handles Credit Administration from the holding company; Kathi deserves a great deal of the credit for the Company's exceptional asset quality. Senior Vice President & Chief Financial Officer Lee-Ann Cimino, another employee with us since the early days of The Vintage Bank, has effectively handled the many challenges presented by new legislation and audit standards required of public companies. Under the guidance of Senior Vice President and Human Resources Manager Susan Fonseca, we have upgraded our recruitment and hiring practices and are rapidly improving our quality and quantity of employee training. Senior Vice President & Manager of Information Services Suzette Junier has effectively directed her department's daily activities while overseeing projects that enhance the quality of management information. Vice President Lynn Tuttle has effectively managed Loan Operations during a year when volumes nearly doubled, all the while retaining responsibility for Compliance and Internal Audit. Jaime Buffington, Vice President and Operations Administrator, has implemented changes that have improved the service quality and efficiencies of our Call Center, Merchant Bankcard and Internet Banking programs. Recently, our management team has been strengthened with the addition of Vice President & Marketing Manager Stacey Heater-Divine and the return of Stephanie Rode, who is assuming responsibility as Vice President for Compliance and Internal Audit. Continued on page 6 - -------------------------------------------------------------------------------- North Bay Bancorp Investor News Page 1 Vol. 2 No.2 (LOGO Omitted) North Bay Bancorp Income Statements (Unaudited) - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 ---- ---- ---- ---- INTEREST INCOME: Loans (including fees) $4,853,000 $4,290,000 $13,780,000 $12,187,000 Federal funds sold 38,000 135,000 157,000 291,000 Investment securities taxable 482,000 906,000 1,999,000 2,561,000 Investment securities tax exempt 181,000 164,000 473,000 502,000 ---------- ---------- ----------- ----------- Total Interest income 5,554,000 5,495,000 16,409,000 15,541,000 INTEREST EXPENSE: Deposits 550,000 859,000 1,907,000 2,511,000 Short term borrowings 2,000 0 10,000 0 Long term borrowings 129,000 153,000 411,000 192,000 ---------- ---------- ----------- ----------- Total Interest Expense 681,000 1,012,000 2,328,000 2,703,000 Net interest income 4,873,000 4,483,000 14,081,000 12,838,000 PROVISION FOR LOAN LOSSES 45,000 144,000 135,000 432,000 Net interest income after provision for loan losses 4,828,000 4,339,000 13,946,000 12,406,000 NONINTEREST INCOME: 848,000 731,000 2,285,000 2,009,000 Gains on securities transactions, net 207,000 0 637,000 66,000 NONINTEREST EXPENSE: Salaries and employee benefits 2,338,000 1,978,000 6,896,000 5,858,000 Occupancy 356,000 228,000 931,000 680,000 Equipment 485,000 450,000 1,230,000 1,392,000 Other 1,088,000 1,041,000 3,536,000 2,589,000 ---------- ---------- ----------- ----------- Total nonInterest expense 4,267,000 3,697,000 12,593,000 10,519,000 Income before provision for income taxes 1,616,000 1,373,000 4,275,000 3,962,000 PROVISION FOR INCOME TAXES 452,000 446,000 1,204,000 1,380,000 NET INCOME $1,164,000 $ 927,000 $ 3,071,000 $ 2,582,000 ========== ========== =========== =========== BASIC EARNINGS PER SHARE: $ 0.51 $ 0.42 $ 1.36 $ 1.18 ========== ========== =========== =========== DILUTED EARNINGS PER SHARE: $ 0.50 $ 0.41 $ 1.32 $ 1.15 ========== ========== =========== =========== DIVIDENDS PAID PER SHARE: $ 0.00 $ 0.00 $ 0.20 $ 0.20 ========== ========== =========== ===========
- -------------------------------------------------------------------------------- North Bay Bancorp Investor News Page 2 Vol. 2 No. 2 (LOGO Omitted) North Bay Bancorp Consolidated Balance Sheets (Unaudited) - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
September September December 30, 30, 31, ASSETS 2003 2002 2002 ---- ---- ---- CASH AND DUE FROM BANKS $ 34,777,000 $ 20,091,000 $ 23,785,000 FEDERAL FUNDS SOLD 21,750,000 25,154,000 28,525,000 TIME DEPOSITS WITH OTHER FINANCIAL INSTITUTIONS 100,000 100,000 100,000 ------------ ------------ ------------ Total cash and cash equivalents 56,627,000 45,345,000 52,410,000 INVESTMENT SECURITIES: Held-to-maturity 1,250,000 1,272,000 1,272,000 Available-for-sale 83,177,000 106,280,000 104,473,000 Equity securities 1,349,000 1,352,000 1,349,000 ------------ ------------ ------------ TOTAL INVESTMENT SECURITIES 85,776,000 108,904,000 107,094,000 LOANS, net of allowance for loan losses of $3,421,000 in September 2003, $3,143,000 in September 2002 and $3,290,000 in December 2002 274,491,000 219,245,000 234,337,000 LOANS HELD-FOR-SALE 10,786,000 0 0 BANK PREMISES AND EQUIPMENT, net 11,137,000 10,691,000 10,800,000 ACCRUED INTEREST RECEIVABLE AND OTHER ASSETS 12,499,000 11,743,000 11,817,000 ------------ ------------ ------------ Total assets $451,316,000 $395,928,000 $416,458,000 ============ ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY DEPOSITS: Non-interest bearing $104,594,000 $ 94,833,000 $104,142,000 Interest bearing 294,827,000 253,266,000 263,661,000 ------------ ------------ ------------ Total deposits 399,421,000 348,099,000 367,803,000 Floating rate subordinated debenture (trust preferred securities) 10,000,000 10,000,000 10,000,000 Accrued interest payable and other liabilities 3,836,000 3,377,000 3,312,000 ------------ ------------ ------------ Total liabilities 413,257,000 361,476,000 381,115,000 SHAREHOLDERS' EQUITY: Preferred stock no par value - Authorized, 500,000 shares; Issued and outstanding - None Common stock - no par value - Authorized 10,000,000 shares; Issued and outstanding - 2,285,646 shares in September 2003, 2,123,687 shares in September 2002 and 2,130,288 in December 2002 29,209,000 25,269,000 25,387,000 Retained earnings 8,324,000 7,487,000 8,612,000 Accumulated other comprehensive income 526,000 1,696,000 1,344,000 ------------ ------------ ------------ Total shareholders' equity 38,059,000 34,452,000 35,343,000 Total liabilities and shareholders' equity $451,316,000 $395,928,000 $416,458,000 ============ ============ ============
- -------------------------------------------------------------------------------- North Bay Bancorp Investor News Page 3 Vol. 2 No. 2 Third Quarter Earnings (News Release dated October 28, 2003) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- NAPA, Calif.--(BUSINESS WIRE)--Oct. 28, 2003--North Bay Bancorp (Nasdaq:NBAN), holding company for The Vintage Bank and Solano Bank, today announced financial results for the three months and nine months ended September 30, 2003. Net income for the three months ended September 30, 2003 was $1,164,000, or $.50 per share (diluted), as compared with net income of $927,000, or $.41 per share (diluted), for the third quarter of 2002, representing a 26% increase in net income and a 22% increase in earnings per share. Net income for the nine months ended September 30, 2003 was $3,071,000, or $1.32 per share (diluted), compared with net income of $2,582,000, or $1.15 per share (diluted), for the first nine months of 2002, representing a 19% increase in net income and a 15% increase in earnings per share. Total assets were $451,316,000 as of September 30, 2003, equating to growth of 14% over the preceding twelve months. Total assets grew by approximately $16 million from June 30, 2003. "We believe the increased profits reported for the third quarter represent sustainable returns for North Bay Bancorp. Earnings for the first half of 2003 were negatively impacted by a narrowing of our net interest margin and booking of certain expenses related to litigation and professional services. Strong loan growth is improving our net interest margin and noninterest expenses as a percentage of assets are declining significantly," stated Terry Robinson, President and CEO. FINANCIAL HIGHLIGHTS - -------------------- Earnings Net interest income for the third quarter of 2003 increased $390,000 or 9% compared with the third quarter of 2002. Year-to-date net interest income increased $1,243,000 or 10%. The net interest margin has decreased to 4.94% during the first nine months of 2003 from 5.31% for the year 2002. The major factor contributing to the declining margin was lower yields on investments and loans; rates paid on deposits did not reflect a corresponding decline. The net interest margin for the third quarter of 2003 was 4.98%, slightly higher than the year-to-date average, reflecting the impact of an increasing loan-to-deposit ratio. Noninterest income for the third quarter of 2003 increased $117,000 or 16% compared with the third quarter of 2002. Year-to-date noninterest income increased $276,000, or 14%, compared with the first nine months of 2002. Most noninterest income was derived from service charges on deposit accounts. The percentage increase in service charge income in 2003 is consistent with the general increase in numbers of deposit accounts. Effective September 15, 2003, the subsidiary banks implemented an Overdraft Privilege Program that is expected to increase service charge income commencing with the fourth quarter of 2003. Gains on securities transactions were $207,000 during the third quarter of 2003 compared with no securities gains during the third quarter of 2002. Year-to-date securities gains were $637,000 compared to $66,000 for the first nine months of 2002. The securities gains recognized thus far in 2003 have resulted primarily from the sale of specific securities within a year of their respective maturities. Proceeds from the sales have provided funding for loans in process. Noninterest expense for the third quarter of 2003 increased $570,000 or 15% compared with the third quarter of 2002. Year-to-date noninterest expense for 2003 increased $2,074,000 or 20% compared with the first nine months of 2002. The disproportionate increase in expenses during the first half of 2003 was primarily due to legal fees incurred in connection with litigation with our former host system provider settled in June 2003 and various professional fees. The year-to-date increase was due primarily to a combination of the litigation-related legal fees, an 18% increase in salaries and employee benefits resulting from increased staffing and a 37% increase in occupancy expense resulting from the addition of The Vintage Bank's Gateway Office, relocation of Solano Bank's Fairfield Office and leasing of new holding company administrative office space. Continued on page 5 - -------------------------------------------------------------------------------- North Bay Bancorp Investor News Page 4 Vol. 2 No. 2 Continued from page 4 Balance Sheet Total assets were $451.3 million as of September 30, 2003, a 14% increase from September 30, 2002. Deposits grew $51 million or 15% during the previous twelve months. Loans, net of the allowance for loan losses, grew $55 million or 25% during the twelve months ended September 30, 2003. The strong loan growth resulted primarily from aggressive business development activity. Liquidity levels significantly exceeded policy requirements throughout the year. As of September 30, 2003 liquid assets represented 30% of total assets. Asset quality remains excellent. As of September 30, 2003, the allowance for loan losses was $3.4 million, or 1.23% of loans outstanding. No loan loss provision was accrued for The Vintage Bank during the first nine months of 2003 based upon our revised loan loss reserve analysis; $135,000 was expensed for the provision at Solano Bank. Net charge-offs were a nominal $4,000 for the first nine months of 2003. There were no nonperforming loans as of September 30, 2003. OUTLOOK - ------- Regarding the longer-term outlook, Robinson stated, "These third quarter results bode well for the fourth quarter of 2003 and the year 2004. While we anticipate ending 2003 slightly below our ambitious growth and earnings goals for the year, we anticipate 2003 will be recognized as a year of solid growth and improved profitability. More importantly, we are optimistic regarding our growth and earnings prospects for 2004, given the age and position of our six offices opened since July of 2000 and our anticipated increasing noninterest income and improved management of noninterest expense." ABOUT NORTH BAY BANCORP - ----------------------- North Bay Bancorp is the parent company of two community banks in the North Bay Region of Northern California -- The Vintage Bank based in Napa County and Solano Bank based in Solano County. Both subsidiaries are full service commercial banks offering a wide selection of deposit, loan and investment services to local consumers and small business customers. Each bank has a separate board of directors composed of local business and community leaders. The Vintage Bank, which opened for business in 1985, currently operates five banking offices in Napa County, Northern California's number one tourist destination and the nation's premier wine producing region. The Bank's main office and two branch offices are located in the City of Napa. Vintage also has a branch in the City of St. Helena and a branch on Airport Road in the Southern industrial area of Napa County. Solano Bank, which opened in July 2000, operates offices in the primary cities along the I-80 corridor of Solano County. The Bank's main office is located in Vacaville, with branch offices in Fairfield, Vallejo and Benicia. This region, projected to be the fastest growing county in Northern California through year 2020, is attracting growth with a quality lifestyle, affordable housing and business-friendly attitudes. Solano Bank's Fairfield Office was relocated to an upgraded location during the third quarter of 2003 in accordance with a long-standing plan; ATM and night depository service were retained at the prior location. North Bay Bancorp stock trades on the Nasdaq National Market under the symbol NBAN. - -------------------------------------------------------------------------------- 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. 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 Solano Bank. 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 reduce 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; and (5) other risks detailed in the North Bay Bancorp reports filed with the Securities and Exchange Commission. - -------------------------------------------------------------------------------- North Bay Bancorp Investor News Page 5 Vol. 2 No. 2 Continued from page 1 In summary, our management team is competent, engaged and committed to seeing North Bay Bancorp realize its vision of growing our Company beyond $1 billion in total assets while generating above-peer financial returns. I have every confidence we will succeed in tins endeavor. I would like to thank our shareholders for supporting all the proposals as recommended by your Board. Also, I appreciate any feedback our shareholders may have regarding these investor newsletters. Please feel free to call (707) 252-5024 or e-mail me (trobinson@northbaybancorp.com) with your questions or comments. Sincerely. /s/ Terry L. Robinson - ------------------------------ Terry L. Robinson President & CEO FORWARD-LOOKING STATEMENTS -------------------------- This letter contains forward-looking statements with respect to the financial condition, results of operation and business of North Bay Bancorp and its subsidiaries. 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 Solano Bank. 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 reduce 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; and (5) other risks detailed in the North Bay Bancorp reports filed with the Securities and Exchange Commission. - -------------------------------------------------------------------------------- North Bay Bancorp Investor News Page 6 Vol. 2 No.2 -----END PRIVACY-ENHANCED MESSAGE-----