NEWBRIDGE BANCORP - FORM 8-K - February 29, 2016

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

Form 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) February 29, 2016

 

NEWBRIDGE BANCORP

(Exact Name of Registrant as Specified in Charter)

 

North Carolina 000-11448 56-1348147
State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation)   Identification No.)

 

1501 Highwoods Boulevard, Suite 400,
Greensboro North Carolina		 27410
(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code (336) 369-0900

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 2.02. Results of Operations and Financial Condition

 

Following December 31, 2015 and the Company’s January 28, 2016 press release announcing summary unaudited financial information for the fourth quarter and fiscal year ended December 31, 2015, but prior to the date the Company anticipates issuing its audited consolidated financial statements for the year ending December 31, 2015, the Company’s banking subsidiary, NewBridge Bank, reached an agreement to settle threatened litigation. As a result, the Company accrued a loss contingency, net of insurance coverage proceeds of $4.8 million, which results in an after tax reduction in net income of $3.0 million. The Company’s prior summary financial information included a loss contingency accrual of $350,000 relating to this threatened litigation. As a consequence:

 

·Net income available to common shareholders totaled $435,000, or $0.01 per diluted share, for the quarter and $15.8 million, or $0.40 per diluted share, for the year.
·Shareholders’ equity decreased to $257.0 million at December 31, 2015, down $4.4 million from $261.4 million at September 30, 2015.
·The Company’s tangible book value per share declined to $5.85 per share at December 31, 2015 from $5.96 at September 31, 2015.

 

Below is the Company’s updated summary unaudited financial information for the fourth quarter and fiscal year ended December 31, 2015.

 

   Three Months Ended December 31   Twelve Months Ended December 31 
   2015   2014   2015   2014 
Income Statement Data                    
(Dollars in thousands, except share data)                    
Interest income:                    
Loans  $20,855   $19,157   $81,811   $71,230 
Investment securities   4,282    4,055    17,347    14,468 
Other   25    38    136    118 
Total interest income   25,162    23,250    99,294    85,816 
Interest expense:                    
Deposits   1,298    1,060    5,141    4,000 
Borrowings from the FHLB   374    230    1,227    801 
Other   695    656    2,681    2,344 
Total interest expense   2,367    1,946    9,049    7,145 
Net interest income   22,795    21,304    90,245    78,671 
Provision for credit losses   -    50    120    883 
Net interest income after provision for credit losses   22,795    21,254    90,125    77,788 
Noninterest income:                    
Retail banking   2,358    2,515    9,062    10,424 
Mortgage banking services   422    217    1,749    870 
Wealth management services   609    771    2,859    2,919 
Gain on sale of investment securities   -    -    -    - 
Bank-owned life insurance   354    316    2,126    1,385 
Other   377    258    1,835    1,115 
Total noninterest income   4,120    4,077    17,631    16,713 
Noninterest expense:                    
Personnel   10,011    9,946    40,445    36,617 
Occupancy   1,431    1,218    5,614    4,910 
Furniture and equipment   923    1,003    3,912    3,806 
Technology and data processing   1,371    1,228    5,216    4,727 
Legal and professional   874    816    3,569    2,994 
FDIC insurance   393    382    1,634    1,602 
Other real estate owned   138    376    636    870 
Acquisition related expenses   2,074    171    4,608    5,081 
Other   8,658    3,468    17,564    12,099 
Total noninterest expense   25,873    18,608    83,198    72,706 
Income before income taxes   1,042    6,723    24,558    21,795 
Income tax expense   607    2,458    8,780    7,819 
Net income   435    4,265    15,778    13,976 
Dividends on preferred stock   -    -    -    (337)
Net income available to common shareholders  $435   $4,265   $15,778   $13,639 
Net income per share - basic  $0.01   $0.11   $0.41   $0.39 
Net income per share - diluted  $0.01   $0.11   $0.40   $0.38 
Cash dividends declared per share  $0.015   $-   $0.06   $- 

 

2
 

 

FINANCIAL SUMMARY

 

   2015   2014 
   Fourth   Third   Second   First   Fourth 
   Quarter   Quarter   Quarter   Quarter   Quarter 
Period-End Balance Sheets                         
(Dollars in thousands)                         
Assets                         
Loans held for sale  $10,566   $10,562   $15,100   $11,739   $6,181 
Commercial loans   1,089,728    1,040,504    1,039,540    1,011,386    928,761 
Real estate - construction loans   240,539    227,016    192,142    189,792    168,109 
Real estate - mortgage loans   726,124    724,692    731,413    712,220    672,574 
Consumer loans   23,531    24,556    24,637    25,576    26,164 
Other loans   8,700    8,387    16,471    9,058    8,798 
Total loans held for investment   2,088,622    2,025,155    2,004,203    1,948,032    1,804,406 
Allowance for credit losses   (20,995)   (21,323)   (21,314)   (21,878)   (22,112)
Net loans held for investment   2,067,627    2,003,832    1,982,889    1,926,154(1)   1,782,294 
Investment securities   496,809    513,106    531,021    536,083    496,798 
Other earning assets   9,721    15,187    18,028    23,911    17,131 
Goodwill   24,480    24,480    24,480    24,480    22,063 
Core deposit intangible   3,780    4,215    4,677    5,148    4,616 
Other non-earning assets   197,757    201,062    202,490    207,528    191,149 
Total Assets  $2,810,740   $2,772,444   $2,778,685   $2,735,043   $2,520,232 
                          
Liabilities and Shareholders' Equity                         
Noninterest-bearing deposits  $401,121   $377,175   $363,036   $360,378   $319,327 
Savings deposits   70,295    69,234    69,364    69,510    67,639 
NOW accounts   591,376    569,570    548,109    543,149    509,450 
Money market accounts   443,325    478,380    470,186    473,671    386,733 
Time deposits   442,538    507,058    544,115    580,077    549,415 
Total deposits   1,948,655    2,001,417    1,994,810    2,026,785(2)   1,832,564 
Total borrowings   576,024    491,274    509,074    435,454    438,474 
Other liabilities   29,065    18,347    19,184    21,591    17,839 
Shareholders' equity (all common)   256,996    261,406    255,617    251,213    231,355 
Total Liabilities and Shareholders' Equity  $2,810,740   $2,772,444   $2,778,685   $2,735,043   $2,520,232 

 

(1)Includes $93.0 million from Premier Commercial Bank acquisition.
(2)Includes $125.2 million from Premier Commercial Bank acquisition.

 

COMMON STOCK DATA

 

   2015   2014 
   Fourth   Third   Second   First   Fourth 
   Quarter   Quarter   Quarter   Quarter   Quarter 
                     
Market value:                         
End of period  $12.18   $8.53   $8.93   $8.92   $8.71 
High   13.30    8.99    9.17    9.18    8.98 
Low   8.45    7.82    7.48    7.78    7.34 
Book value   6.57    6.69    6.54    6.44    6.22 
Tangible book value   5.85    5.96    5.80    5.68    5.50 
Average shares outstanding   39,098,354    39,076,883    39,046,498    37,844,273    37,195,303 
Average diluted shares outstanding   39,718,978    39,537,027    39,496,122    38,333,841    37,655,766 
Class A shares at end of period   37,395,458    37,353,883    35,890,135    35,815,135    34,008,795 
Class B shares at end of period   1,723,000    1,723,000    3,186,748    3,186,748    3,186,748 

 

3
 

 

ASSET QUALITY DATA

 

   2015   2014 
   Fourth   Third   Second   First   Fourth 
   Quarter   Quarter   Quarter   Quarter   Quarter 
(Dollars in thousands)                         
Loans identified as impaired  $4,379   $5,216   $3,648   $3,701   $4,227 
Other nonperforming loans   2,180    2,229    2,035    2,240    2,985 
Total nonperforming loans   6,559    7,445    5,683    5,941    7,212 
Other real estate owned   1,397    1,788    2,142    2,484    3,057 
Total nonperforming assets  $7,956   $9,233   $7,825   $8,425   $10,269 
                          
Net chargeoffs  $328   $(9)  $580   $338   $439 
Allowance for credit losses   20,995    21,323    21,314    21,878    22,112 
Allowance for credit losses to loans held for investment   1.01%   1.05%   1.06%   1.12%   1.23%
Allowance for credit losses to loans held for investment excluding acquired loans   1.13    1.20    1.23    1.35    1.43 
Nonperforming loans to loans held for investment   0.31    0.37    0.28    0.30    0.40 
Nonperforming assets to total assets   0.28    0.33    0.28    0.31    0.41 
Nonperforming loans to total assets   0.23    0.27    0.20    0.22    0.29 
Net chargeoff percentage (annualized)   0.06    (0.00)   0.12    0.07    0.10 
Allowance for credit losses to nonperforming loans   320.09    286.41    375.05    368.25    306.60 

 

Allowance for credit losses rollforward  Three Months Ended December 31   Twelve Months Ended December 31 
   2015   2014   2015   2014 
                 
Beginning balance  $21,323   $22,501   $22,112   $24,550 
Chargeoffs   1,424    1,344    4,097    7,408 
Recoveries   1,096    905    2,860    4,087 
Net chargeoffs   328    439    1,237    3,321 
Provision for credit losses   -    50    120    883 
Ending balance  $20,995   $22,112   $20,995   $22,112 

 

INVESTMENT PORTFOLIO

 

(Dollars in thousands)  As of December 31, 2015 
   Amortized   Gross   Gross   Estimated   Average   Average 
   Cost   Unrealized Gain   Unrealized Loss   Fair Value   Yield (%)   Duration (years) 
                         
Debt Securities(1)                              
Available for sale debt securities  $322,758   $6,008   $(2,202)  $326,564    3.46(2)   3.10 
Held to maturity debt securities   131,948    2,173    (511)   133,610    3.26(2)   5.02 
Total debt securities   454,706    8,181    (2,713)   460,174    3.40(2)   3.75 
                               
Equity Securities(1)                              
Available for sale equity securities   37,978    328    (9)   38,297          
                               
Total Investment Portfolio(1)  $492,684   $8,509   $(2,722)  $498,471           

 

(Dollars in thousands)  As of December 31, 2014 
   Amortized   Gross   Gross   Estimated   Average   Average 
   Cost   Unrealized Gain   Unrealized Loss   Fair Value   Yield (%)   Duration (years) 
                         
Debt Securities(1)                              
Available for sale debt securities  $325,755   $9,484   $(2,097)  $333,142    3.58(2)   3.71 
Held to maturity debt securities   130,701    1,711    (497)   131,915    2.89(2)   5.00 
Total debt securities   456,456    11,195    (2,594)   465,057    3.38(2)   4.08 
                               
Equity Securities(1)                              
Available for sale equity securities   32,750    361    (156)   32,955           
                               
Total Investment Portfolio(1)  $489,206   $11,556   $(2,750)  $498,012           

 

(1)Available for sale securities are carried at fair value on the balance sheet while held to maturity securities are carried at amortized cost.
(2)Fully taxable equivalent basis.

 

4
 

 

ANALYSIS OF YIELDS AND RATES

 

   Three Months Ended December 31, 2015   Three Months Ended December 31, 2014 
   Average   Interest Income/   Average Yield/   Average   Interest Income/   Average Yield/ 
   Balance   Expense(1)   Rate   Balance   Expense(1)   Rate 
(Fully taxable equivalent basis, dollars in thousands)                              
Earning Assets                              
Loans receivable  $2,062,643   $20,855    4.01%  $1,786,411   $19,157    4.25%
Investment securities   504,297    4,399    3.49%   499,265    4,193    3.36%
Other earning assets   12,848    25    0.77%   18,430    38    0.82%
Total Earning Assets   2,579,788    25,279    3.89%   2,304,106    23,388    4.03%
Non-Earning Assets   200,595              194,708           
Total Assets  $2,780,383    25,279        $2,498,814    23,388      
                               
Interest-Bearing Liabilities                              
Deposits  $1,590,252    1,298    0.32%  $1,522,435    1,060    0.28%
Borrowings   510,364    1,069    0.83%   407,593    886    0.86%
Total Interest-Bearing Liabilities   2,100,616    2,367    0.45%   1,930,028    1,946    0.40%
Noninterest-bearing deposits   398,933              322,123           
Other liabilities   19,309              15,840           
Shareholders' equity   261,525              230,823           
Total Liabilities and Shareholders' Equity  $2,780,383    2,367        $2,498,814    1,946      
Net Interest Income       $22,912             $21,442      
Net Interest Margin             3.52%             3.69%
Interest Rate Spread             3.44%             3.63%

 

   Twelve Months Ended December 31, 2015   Twelve Months Ended December 31, 2014 
   Average   Interest Income/   Average Yield/   Average   Interest Income/   Average Yield/ 
   Balance   Expense(1)   Rate   Balance   Expense(1)   Rate 
(Fully taxable equivalent basis, dollars in thousands)                              
Earning Assets                              
Loans receivable  $1,981,276   $81,811    4.13%  $1,670,113   $71,230    4.26%
Investment securities   520,972    17,885    3.43%   455,262    14,965    3.29%
Other earning assets   18,158    136    0.75%   14,763    118    0.80%
Total Earning Assets   2,520,406    99,832    3.96%   2,140,138    86,313    4.04%
Non-Earning Assets   201,608              192,412           
Total Assets  $2,722,014    99,832        $2,332,550    86,313      
                               
Interest-Bearing Liabilities                              
Deposits  $1,604,888    5,141    0.32%  $1,489,293    4,000    0.27%
Borrowings   478,968    3,908    0.82%   318,858    3,145    0.99%
Total Interest-Bearing Liabilities   2,083,856    9,049    0.43%   1,808,151    7,145    0.40%
Noninterest-bearing deposits   366,558              294,704           
Other liabilities   19,435              15,537           
Shareholders' equity   252,165              214,158           
Total Liabilities and Shareholders' Equity  $2,722,014    9,049        $2,332,550    7,145      
Net Interest Income       $90,783             $79,168      
Net Interest Margin             3.60%             3.70%
Interest Rate Spread             3.53%             3.64%

 

(1)Income related to securities exempt from federal income taxes is stated on a fully taxable-equivalent basis, assuming a federal income tax rate of 35%, and is then reduced by the non-deductible portion of interest expense. For the three months ended December 31, the adjustments made to convert to a fully taxable-equivalent basis were $117 for 2015 and $138 for 2014. For the twelve months ended December 31, the adjustments made to convert to a fully taxable-equivalent basis were $538 for 2015 and $497 for 2014.

 

5
 

 

OTHER DATA

 

   Three Months Ended December 31   Twelve Months Ended December 31 
   2015   2014   2015   2014 
                 
Tangible common equity  $228,736   $204,676   $228,736   $204,676 
Return on average assets   0.06%   0.68%   0.58%   0.60%
Return on average equity   0.66    7.33    6.26    6.53 
Net yield on earning assets   3.52    3.69    3.60    3.70 
Average loans to assets   74.19    71.49    72.79    71.60 
Average loans to deposits   103.69    96.85    100.50    93.62 
Average noninterest - bearing deposits to total deposits   20.06    17.46    18.59    16.52 
Average equity to assets   9.41    9.24    9.26    9.18 
Common equity tier 1 capital as a percentage of total risk weighted assets   9.75    N/A    9.75    N/A 
Total capital as a percentage of total risk weighted assets   11.96    12.23    11.96    12.23 
Tangible common equity as a percentage of tangible assets   8.22    8.21    8.22    8.21 
Tangible common equity as a percentage of total risk weighted assets   9.62    10.13    9.62    10.13 

 

NON-GAAP MEASURES

 

Operating net income, net income less acquisition related expenses

(Dollars in thousands)

 

   Three Months Ended December 31   Twelve Months Ended December 31 
   2015   2014   2015   2014 
                 
Net income available to common shareholders  $435   $4,265   $15,778   $13,639 
Add acquisition related expenses adjusted for tax   1,325    202    3,259    3,350 
Tax rate change - DTA adjustment   231    -    231    - 
Operating net income  $1,991   $4,467   $19,268   $16,989 
                     
Operating net income per share - diluted  $0.05   $0.12   $0.49   $0.48 

 

Core efficiency percentage, efficiency percentage excluding acquisition related expenses

(Dollars in thousands)

 

   Three Months Ended December 31   Twelve Months Ended December 31 
   2015   2014   2015   2014 
                 
Total noninterest expense (A)  $25,873   $18,608   $83,198   $72,706 
Less acquisition related expenses   (2,074)   (171)   (4,608)   (5,081)
Numerator for calculation of core efficiency (B)  $23,799   $18,437   $78,590   $67,625 
                     
Net interest income  $22,795   $21,304   $90,245   $78,671 
Total noninterest income   4,120    4,077    17,631    16,713 
Denominator for calculations (C)  $26,915   $25,381   $107,876   $95,384 
                     
Efficiency percentage (A/C)   96.13%   73.31%   77.12%   76.22%
Core efficiency percentage (B/C)   88.42%   72.64%   72.85%   70.90%

 

Item 8.01. Other Events

 

On February 29, 2016, the Company disclosed updated summary unaudited financial information for the fourth quarter and fiscal year ended December 31, 2015. See Item 2.02. - Results of Operations and Financial Condition, above, incorporated herein by reference.

 

6
 

 

About NewBridge Bancorp

 

NewBridge Bancorp (NASDAQ: NBBC) is the holding company for NewBridge Bank, a $2.8 billion community focused bank headquartered in Greensboro, North Carolina.  Through 42 branches, NewBridge Bank provides a comprehensive array of personal financial solutions including banking, lending, and wealth management services. The Bank’s commercial teams provide customized lending services, including SBA loans, along with sophisticated deposit and treasury management solutions to small businesses and middle market corporations. With continuous operations dating back to 1910 in the Piedmont Triad Region of North Carolina (Greensboro-Winston-Salem-High Point), NewBridge Bank’s served markets have expanded to also include Charlotte-Gastonia-Concord, Raleigh-Durham-Chapel Hill, and Wilmington in North Carolina, and Greenville-Spartanburg and Charleston in South Carolina. To make NewBridge Bank your preferred financial partner, please visit us in our offices or online at www.newbridgebank.com.

  

Disclosures About Forward Looking Statements

 

The discussions included in this document and its exhibits may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933.  Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially.  For the purposes of these discussions, any statements that are not statements of historical fact may be deemed to be forward looking statements.  Such statements are often characterized by the use of qualifying words such as "expects," "anticipates," "believes," "estimates," "plans," "projects," or other statements concerning opinions or judgments of NewBridge and its management about future events.  The accuracy of such forward looking statements could be affected by factors including, but not limited to: the ability to meet the closing conditions to the proposed merger with Yadkin Financial Corporation (“Yadkin”) on the expected terms and schedule; delay in closing the merger; difficulties and delays in integrating the Yadkin and NewBridge businesses or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets; inflation; client borrowing, repayment, investment and deposit practices; client disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; the reaction to the merger of the companies’ clients, employees and counterparties; and the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms. These forward looking statements express management's current expectations, plans or forecasts of future events, results and condition, including financial and other estimates and expectations regarding recently completed or proposed acquisitions and the general business strategy of engaging in bank acquisitions. Additional factors that could cause actual results to differ materially from those anticipated by forward looking statements are discussed in NewBridge's filings with the Securities and Exchange Commission (“SEC”), including without limitation its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.  NewBridge undertakes no obligation to revise or update these statements following the date of this release.

 

Additional Information About the Proposed Merger and Where to Find It

 

In connection with the proposed merger, Yadkin filed with the SEC a Registration Statement on Form S-4 as amended, which included a joint proxy statement of Yadkin and NewBridge and a prospectus of Yadkin, as well as other relevant documents concerning the proposed merger. Investors and shareholders are also urged to carefully review and consider each of Yadkin’s and NewBridge’s public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q.

 

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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.

 

Dated:  February 29, 2016 NEWBRIDGE BANCORP
   
  By: /s/ Ramsey K. Hamadi
    Ramey K. Hamadi, Senior Executive Vice President and Chief Financial Officer

 

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