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NewBridge Bancorp (NBBC): Conservative Approach to Banking in Tough Financial Times

NewBridge Bancorp (NBBC) is a bank holding company offering traditional banking services to customers in North Carolina and Virginia. NewBridge generates deposit products, including noninterest-bearing checking accounts, interest-bearing checking accounts, money market accounts, certificates of deposit, and individual retirement accounts. The company’s loan portfolio is comprised of commercial, consumer and real estate loans, and according to a recent news release, the company holds no mortgage-backed securities issued by the tarnished Fannie Mae and Freddie Mac.

Additionally, NewBridge offers mortgage production, brokerage, and financial planning and asset management, as well as equity and fixed income investments through third party broker dealers. Formerly known as LSB Bancshares, Inc., the company changed its name to NewBridge in 2007 and has 40 branches and six loan centers in North Carolina and Virginia. As has been the case with many of America’s financial institutions recently, NewBridge experienced a sharp decline in second quarter profits, reporting net income of $260,000 compared with $3 million in the year ago period.

Although the company attributed most of the decline in profits to merger expenses, potential investors should be aware that NewBridge did slash its dividend from 17 cents a share to five cents a share. The company competes with banking behemoths Bank of America Corp., BB&T Corp. and Wachovia Corp., which was recently acquired by Citigroup.

Despite tough times in the banking industry, insiders apparently believe NewBridge’s stock is undervalued and have gobbled up close to 20,000 shares in the past two months. Insiders now own four percent of the company’s shares and 35 institutions own another 19 percent. Mutual fund owners include First Financial Fund, Vanguard and Wells Fargo.

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