GREENSBORO, NC - NewBridge Bancorp (NASDAQ: NBBC ) ("NewBridge" or the "Company"), the parent company of NewBridge Bank, today reported in its Annual Report on Form 10-K filed with the U. S. Securities and Exchange Commission that it recorded a non-cash charge of approximately $50.4 million for impairment of goodwill, in accordance with Statement of Financial Accounting Standards 142 "Goodwill and Other Intangible Assets," effective December 31, 2008. The goodwill was primarily associated with the July 2007 merger of FNB Financial Services Corporation into LSB Bancshares, Inc., which created NewBridge Bancorp.

The charge will result in a revision of 2008's fourth quarter and full year earnings, as well as certain balance sheet items. This non-cash write-off has no effect on liquidity, cash flows, operations, or regulatory capital ratios, all of which remain in excess of the minimum levels to qualify for "well capitalized" status.

Whereas NewBridge's net loss available to common shareholders for 2008 had originally been reported as $6.6 million, or $0.42 per diluted share, the Company's revised net loss available to common shareholders after recognition of the impairment charge is $57.1 million, or $3.64 per diluted share. Total assets had originally been reported as totaling $2.13 billion at December 31, 2008, while shareholders' equity had been reported as $229.7 million. Revised total assets and shareholders' equity as of year-end 2008 were $2.08 billion and $179.2 million, respectively.

Pressley A. Ridgill, President and Chief Executive Officer of NewBridge, commented: "After carefully considering numerous factors, including a valuation by an independent third party and similar action by other banks, we concluded that there were several advantages to proactively taking the step to write off the goodwill arising primarily from our 2007 merger. First, the weakness in NewBridge's stock price and resulting market valuation is indicative of goodwill impairment. Second, this non-cash charge will better align professional investors' perspective of book value with what is reflected on our financial statements. Specifically, many sophisticated market participants focus on tangible book value, which excludes goodwill, as opposed to stated book value. This action essentially eliminates the difference between stated book value and tangible book value, and more conservatively portrays the Company's strength from a financial standpoint. We also believe the expectation of a future write-off of goodwill was a likely subject of uncertainty to the investment community. Taking this step removes a potential impediment to a higher long-term market valuation for our stock."

Mr. Ridgill concluded, "We did not enter into this decision lightly, and fervently believe it is a positive step for us to get this non-cash charge out of the way. We remain well capitalized and I believe that we are in an excellent position to continue to operate from a position of financial strength."

About NewBridge Bancorp

NewBridge Bancorp is the parent company of NewBridge Bank, which is a full service state chartered community bank with headquarters in Greensboro, North Carolina. NewBridge Bank also offers financial planning and investment alternatives such as mutual funds and annuities through Raymond James Financial Services, Inc., a registered broker dealer.

NewBridge Bank ranks among the 10 largest banks in North Carolina with assets of approximately $2.1 billion, and based on deposit market share is the largest community bank in the Piedmont Triad region of North Carolina. The Bank has 37 banking offices in the Piedmont Triad region of North Carolina, the Wilmington, NC area and the area surrounding Harrisonburg, VA. The stock of NewBridge Bancorp trades on the NASDAQ Global Select Market under the symbol "NBBC."

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 financial success or changing conditions or strategies of NewBridge Bancorp's customers or vendors, fluctuations in interest rates, actions of government regulators, the availability of capital and personnel or general economic conditions. 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, including without limitation its annual report on Form 10- K, quarterly reports of 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 press release.

Contact

NewBridge Bancorp
Michael W. Shelton
EVP and CFO
(336) 369-0900

Frequently Asked Questions (FAQs)        

Is NewBridge in financial difficulty?
No, this particular non-cash charge eliminates a non-earning asset. The elimination of the goodwill asset is done as an expense which then reduces the total equity on the financial statements. This event does not impact NewBridge's income from operations either in the past or future and our regulatory capital ratios remain substantially above the "well capitalized" level.  

Are my deposit accounts still safe?
Yes, this event does not change NewBridge's regulatory capital which is substantially above levels that define an institution as "well capitalized." Of course, all insured deposits continue to be fully guaranteed by the full faith and credit of the United States Government.

Did NewBridge make bad loans and is that the reason for the loss?
This issue is not   related to bad loans or other ongoing operations of NewBridge.  

What is goodwill?
Goodwill is an intangible asset that results from a merger or business acquisition. Goodwill represents the difference between the negotiated price for a business enterprise and the market value of the assets and liabilities of the acquired business. The goodwill that is being written off was primarily created from the 2007 merger of FNB Financial Services Corporation into LSB Bancshares, Inc., which created NewBridge Bancorp.  

Will this loss curtail NewBridge's ability to make new loans?
No, NewBridge remains well capitalized and has ample liquidity to support existing and new customers' requests for credit.  

Are other banks dealing with this same issue?
Each publicly traded company is required to comply with generally accepted accounting principles and as such would be required to test their goodwill on at least an annual basis. If their analysis indicates impairment, they would be required to expense the impaired amount of goodwill.  

Why is this impairment being recorded now?
During 2008 the value of NewBridge's common stock, like most banks' common stocks, was significantly impacted by the deteriorating economy. The decline in value of NewBridge's common stock must be given significant weight in analyzing the current value of previous mergers and acquisitions. Based upon the significant decline in the value of NewBridge's common stock and the economic outlook, it is prudent that NewBridge write-down its goodwill asset to zero.  

What is "mark-to-market" accounting?
"Mark-to-market" accounting utilizes current market values to determine the carrying value of financial assets. By utilizing the current market value, it is assumed that the reader of a company's financial statement will have a better understanding of the financial health of that company.  

How will this impairment impact the stock price?
That is difficult to say, but from a financial and economic point of view, this impairment has no impact on the financial outlook for NewBridge. However, the price of any publicly traded company's stock will be dependent on the demand to purchase shares compared to the amount of shares that are available to be purchased.  

What do we tell customers who ask us why we changed our earnings for 2008?
With the increased focus on mark-to-market accounting, we changed the methodology under which we tested the goodwill on our balance sheet. Under mark-to-market accounting, the goodwill carried on our balance sheet was determined to be impaired, or overstated, when compared to our current stock price. Therefore, management made the decision to write-down the goodwill to zero. This is purely an accounting adjustment and has no impact on our ongoing operations. We continue to be well capitalized, which means that we have the ability to continue lending money to our customers, and our depositors can be confident that their money is safe with NewBridge.  

Does this accounting change impact our jobs in any way?
No, our operating plan for 2009 does not change. Our profit plan for 2009 has been approved and at this time, we continue to execute our current operating plan and business strategy.