UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 
 Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 For the quarterly period ended:
 March 31, 2011
 Commission File Number: 000-11448
 NewBridge Bancorp
 (Exact name of Registrant as specified in its Charter)
 North Carolina
    
    56-1348147(State of Incorporation)
    
    (I.R.S. Employer Identification No.)1501 Highwoods Boulevard, Suite 400Greensboro, North Carolina
    
    27410(Address of principal executive offices)
    
    (Zip Code)
 (336) 369-0900
(Registrants telephone number, including area code)
 
 þ o
 þ o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o
(Do not check if a smaller reporting company)
Smaller reporting company þ
 o þ
 At
May 9, 2011, 15,655,868 shares of the registrants common stock were outstanding.




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##### 



PagePART I
Financial InformationItem 1
    
    Financial Statements
    
    
    3Consolidated Balance Sheets March 31, 2011 and December 31, 2010
    
    
    3Consolidated Statements of Income Three Months Ended March 31, 2011 and 2010
    
    
    4Consolidated Statements of Changes in Shareholders Equity and Comprehensive
Income Three Months Ended March 31, 2011 and 2010
    
    
    5Consolidated Statements of Cash Flows Three Months Ended March 31, 2011 and 2010
    
    
    6Notes to Consolidated Financial Statements
    
    
    8Item 2
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4
    
    Controls and Procedures
    
    
    26PART II
Other InformationItem 1
    
    Legal Proceedings
    
    
    27Item 1A
    
    Risk Factors
    
    
    27Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3
    
    Defaults Upon Senior Securities
    
    
    27Item 4
    
    Removed and Reserved
    
    
    27Item 5
    
    Other Information
    
    
    27Item 6
    
    Exhibits
    
    
    29
 2




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##### 



PART I
FINANCIAL INFORMATION
 
 Item 1.  Financial Statements.
 
 NewBridge Bancorp and Subsidiary
Consolidated Balance Sheets  (Dollars in thousands, except per share data)
 March 312011
    
    
    December 31(Unaudited)
    
    
    2010Assets
    
    $
    42,871
    
    
    $
    23,479Cash and due from banksInterest-bearing bank balances
    
    
    9,063
    
    
    
    5,596Loans held for sale
    
    
    77,584
    
    
    
    76,994Investment securities
    
    
    276,458
    
    
    
    325,129Loans
    
    
    1,254,630
    
    
    
    1,260,585Less allowance for credit losses
    
    
    (29,057
    )
    
    
    (28,752
    )Net loans
    
    
    1,225,573
    
    
    
    1,231,833Premises and equipment
    
    
    39,007
    
    
    
    38,442Real estate acquired in settlement of loans
    
    
    26,329
    
    
    
    26,718Bank-owned life insurance
    
    
    30,741
    
    
    
    30,317Deferred tax assets
    
    
    28,877
    
    
    
    27,089Other assets
    
    
    25,150
    
    
    
    21,564Total assets
    
    $
    1,781,653
    
    
    $
    1,807,161LiabilitiesDeposits:Non-interest bearing
    
    $
    165,534
    
    
    $
    161,734Savings, NOW and money market accounts
    
    
    823,749
    
    
    
    795,696Time deposits
    
    
    466,013
    
    
    
    495,565Total deposits
    
    
    1,455,296
    
    
    
    1,452,995Borrowings from the Federal Home Loan Bank
    
    
    87,700
    
    
    
    112,700Other borrowings
    
    
    61,774
    
    
    
    61,774Accrued expenses and other liabilities
    
    
    15,497
    
    
    
    16,504Total liabilities
    
    
    1,620,267
    
    
    
    1,643,973Shareholders EquityPreferred stock, par value $.01 per share:Authorized 10,000,000 shares; issued and outstanding
(liquidation preference $1,000 per share)  52,372
    
    
    51,565
    
    
    
    51,490Common stock, par value $5 per share:Authorized 50,000,000 shares; issued
and outstanding   15,655,868
    
    
    78,279
    
    
    
    78,279Paid-in capital
    
    
    87,059
    
    
    
    87,048Directors deferred compensation plan
    
    
    (575
    )
    
    
    (618
    )Retained deficit
    
    
    (51,734
    )
    
    
    (52,016
    )Accumulated other comprehensive income (loss)
    
    
    (3,208
    )
    
    
    (995
    )Total shareholders equity
    
    
    161,386
    
    
    
    163,188Total liabilities and shareholders equity
    
    $
    1,781,653
    
    
    $
    1,807,161
 See notes to consolidated financial statements
 3




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##### 



NewBridge Bancorp and Subsidiary  Consolidated Statements of Income  (Unaudited; dollars in thousands, except per share data)
 Three Months EndedMarch 312011
    
    
    2010Interest
IncomeInterest and fees on loans
    
    $
    17,236
    
    
    $
    19,430Interest on investment securities:Taxable
    
    
    3,474
    
    
    
    2,680Tax exempt
    
    
    191
    
    
    
    1,119Interest-bearing bank balances and Federal
funds sold
    
    
    4
    
    
    
    21Total interest income
    
    
    20,905
    
    
    
    23,250Interest ExpenseDeposits
    
    
    2,687
    
    
    
    4,302Borrowings from the Federal Home Loan Bank
    
    
    348
    
    
    
    1,101Other borrowings
    
    
    492
    
    
    
    609Total interest expense
    
    
    3,527
    
    
    
    6,012Net interest income
    
    
    17,378
    
    
    
    17,238Provision for credit losses
    
    
    6,073
    
    
    
    3,723Net interest income after provision for credit losses
    
    
    11,305
    
    
    
    13,515Noninterest IncomeService charges on deposit accounts
    
    
    1,570
    
    
    
    1,865Fee income
    
    
    980
    
    
    
    987Mortgage banking services
    
    
    425
    
    
    
    214Gain on sale of investment securities
    
    
    1,961
    
    
    
    Writedowns and loss on sale of real estate
acquired in settlement of loans
    
    
    (1,486
    )
    
    
    (1,442
    )Other
    
    
    1,084
    
    
    
    889Total noninterest income
    
    
    4,534
    
    
    
    2,513Noninterest ExpensePersonnel
    
    
    7,290
    
    
    
    7,814Occupancy
    
    
    1,043
    
    
    
    1,135Furniture and equipment
    
    
    964
    
    
    
    1,182Technology and data processing
    
    
    918
    
    
    
    1,154FDIC insurance
    
    
    795
    
    
    
    900Other
    
    
    3,384
    
    
    
    3,367Total noninterest expense
    
    
    14,394
    
    
    
    15,552Income before income taxes
    
    
    1,445
    
    
    
    476Income tax expense
    
    
    433
    
    
    
    103Net Income
    
    
    1,012
    
    
    
    373Dividends and accretion on preferred stock
    
    
    (730
    )
    
    
    (730
    )Net Income (Loss) available to common shareholders
    
    $
    282
    
    
    $
    (357
    )Earnings (loss) per share:Basic
    
    $
    0.02
    
    
    $
    (0.02
    )Diluted
    
    $
    0.02
    
    
    $
    (0.02
    )Weighted average shares outstanding:Basic
    
    
    15,655,868
    
    
    
    15,655,868Diluted
    
    
    16,697,944
    
    
    
    15,655,868
 See notes to consolidated financial statements
 4




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##### 



NewBridge Bancorp and Subsidiary
Consolidated Statements of Changes in Shareholders Equity and Comprehensive Income
 (Unaudited; Dollars in thousands)
 Directors
    
    
    
    
    
    
    AccumulatedDeferred
    
    
    Retained
    
    
    Other
    
    
    TotalPreferred
    
    
    Common Stock
    
    
    Paid-in
    
    
    Compensation
    
    
    Earnings
    
    
    Comprehensive
    
    
    ShareholdersStock
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Plan
    
    
    (Deficit)
    
    
    Income (Loss)
    
    
    EquityBalances at December 31, 2009
    
    $
    51,190
    
    
    
    15,655,868
    
    
    $
    78,279
    
    
    $
    86,969
    
    
    $
    (634
    )
    
    $
    (52,477
    )
    
    $
    1,277
    
    
    $
    164,604Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    373
    
    
    
    
    
    
    
    373Change in unrealized gain on securities
available for sale, net of deferred
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    390
    
    
    
    390Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    763Dividends and accretion on preferred stock
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (730
    )
    
    
    
    
    
    
    (655
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20Balances at March 31, 2010
    
    $
    51,265
    
    
    
    15,655,868
    
    
    $
    78,279
    
    
    $
    86,989
    
    
    $
    (634
    )
    
    $
    (52,834
    )
    
    $
    1,667
    
    
    $
    164,732Balances at December 31, 2010
    
    $
    51,490
    
    
    
    15,655,868
    
    
    $
    78,279
    
    
    $
    87,048
    
    
    $
    (618
    )
    
    $
    (52,016
    )
    
    $
    (995
    )
    
    $
    163,188Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,012
    
    
    
    
    
    
    
    1,012Change in unrealized gain on securities
available for sale, net of deferred
income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,213
    )
    
    
    (2,213
    )Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,201
    )Dividends and accretion on preferred stock
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (730
    )
    
    
    
    
    
    
    (655
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11Common stock distributed
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43
    
    
    
    
    
    
    
    
    
    
    
    43Balances at March 31, 2011
    
    $
    51,565
    
    
    
    15,655,868
    
    
    $
    78,279
    
    
    $
    87,059
    
    
    $
    (575
    )
    
    $
    (51,734
    )
    
    $
    (3,208
    )
    
    $
    161,386
 See notes to consolidated financial statements
 5




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##### 



NewBridge Bancorp and Subsidiary  Consolidated Statements of Cash Flows  (Unaudited; dollars in thousands)
 Three Months EndedMarch 312011
    
    
    2010Cash Flow from operating activitiesNet Income
    
    $
    1,012
    
    
    $
    373Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation and amortization
    
    
    1,454
    
    
    
    1,626Decrease in deferred income taxes
    
    
    427
    
    
    
    346Decrease in income taxes receivable
    
    
    
    
    
    
    2,728Increase in income earned but not received
    
    
    (258
    )
    
    
    (452
    )Decrease in interest accrued but not paid
    
    
    (133
    )
    
    
    (228
    )Net increase in other assets
    
    
    (3,300
    )
    
    
    (8
    )Net increase (decrease) in other liabilities
    
    
    (874
    )
    
    
    1,562Provision for credit losses
    
    
    6,073
    
    
    
    3,723Gain on sale of loans held for sale
    
    
    (425
    )
    
    
    (214
    )Originations of loans held for sale
    
    
    (20,692
    )
    
    
    (31,697
    )Proceeds from sales of loans held for sale
    
    
    20,528
    
    
    
    29,763Loss on sale of premises, equipment and real estate acquired
in settlement of loans
    
    
    72
    
    
    
    593Stock based compensation
    
    
    11
    
    
    
    20Net cash provided by operating activities
    
    
    3,895
    
    
    
    8,135Cash Flow from investing activitiesPurchases of securities available for sale
    
    
    (3,651
    )
    
    
    (21,149
    )Purchases of securities held to maturity
    
    
    
    
    
    
    (23,160
    )Proceeds from sales/maturities of securities available for sale
    
    
    50,494
    
    
    
    18,281Gain on sales of securities available for sale
    
    
    (1,961
    )
    
    
    Net (increase) decrease in loans made to customers
    
    
    (3,765
    )
    
    
    20,662Proceeds from sale of premises, equipment and real estate acquired
in settlement of loans
    
    
    2,545
    
    
    
    2,410Expenditures for improvements to real estate acquired
in settlement of loans, net of income received
    
    
    16
    
    
    
    42Purchases of premises and equipment
    
    
    (1,403
    )
    
    
    (1,515
    )Net cash provided by (used for) investing activities
    
    
    42,275
    
    
    
    (4,429
    )Cash Flow from financing activitiesNet increase in demand deposits, NOW, money
market and savings accounts
    
    
    31,853
    
    
    
    61,352Net decrease in time deposits
    
    
    (29,552
    )
    
    
    (15,410
    )Net decrease in other borrowings
    
    
    
    
    
    
    (27,638
    )Net decrease in borrowings from Federal
Home Loan Bank
    
    
    (25,000
    )
    
    
    (12,000
    )Dividends paid
    
    
    (655
    )
    
    
    (655
    )Common stock distributed (acquired)
    
    
    43
    
    
    
    Net cash provided by (used for) financing activities
    
    
    (23,311
    )
    
    
    5,649Increase in cash and cash equivalents
    
    
    22,859
    
    
    
    9,355Cash and cash equivalents at the beginning of the period
    
    
    29,075
    
    
    
    44,840Cash and cash equivalents at the end of the period
    
    $
    51,934
    
    
    $
    54,195
 See notes to consolidated financial statements
 6




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##### 



NewBridge Bancorp and Subsidiary  Consolidated Statements of Cash Flows (continued)  (Unaudited; dollars in thousands)
 Three Months EndedMarch 312011
    
    2010Supplemental disclosures of cash flow informationCash paid during the periods for:Interest
    
    $
    3,660
    
    
    $
    6,240Income Taxes
    
    
    
    
    
    
    Supplemental disclosures of noncash transactionsTransfer of loans to real estate acquired
in settlement of loans
    
    $
    3,658
    
    
    $
    5,872Accretion on U.S. Treasury preferred stock
    
    
    75
    
    
    
    75Unrealized gains/(losses) on securities available for sale:Change in securities available for sale
    
    
    (3,640
    )
    
    
    1,184Change in deferred income taxes
    
    
    1,427
    
    
    
    (794
    )Change in shareholders equity
    
    
    (2,213
    )
    
    
    390
 See notes to consolidated financial statements
 7




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##### 



Notes to Consolidated Financial Statements  (Unaudited)
 Note 1  Basis of Presentation
      Recent accounting pronouncements
  8




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##### 



Reclassification
  Note 2  Net Income (Loss) Per Share
  For the three months ended March 312011
    
    
    2010Basic:Net income (loss) available to common shareholders
    
    $
    282
    
    
    $
    (357
    )Weighted average shares outstanding
    
    
    15,655,868
    
    
    
    15,655,868Net income (loss) per share, basic
    
    $
    0.02
    
    
    $
    (0.02
    )Diluted:Net income (loss) available to common shareholders
    
    $
    282
    
    
    $
    (357
    )Weighted average shares outstanding
    
    
    15,655,868
    
    
    
    15,655,868Effect of dilutive securities:Stock options
    
    
    
    
    
    
    Restricted stock units
    
    
    13,442
    
    
    
    Warrant
    
    
    1,028,634
    
    
    
    Weighted average shares outstanding and dilutive
potential shares outstanding
    
    
    16,697,944
    
    
    
    15,655,868Net income (loss) per share, diluted
    
    $
    0.02
    
    
    $
    (0.02
    )
 9




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##### 



Note 3  Investment Securities
  March 31, 2011Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. government agency securities
    
    $
    96,274
    
    
    $
    21
    
    
    $
    (2,770
    )
    
    $
    93,525Mortgage backed securities
    
    
    33,682
    
    
    
    2,508
    
    
    
    
    
    
    
    36,190State and municipal obligations
    
    
    17,384
    
    
    
    16
    
    
    
    (1,575
    )
    
    
    15,825Corporate bonds
    
    
    82,891
    
    
    
    1,601
    
    
    
    (598
    )
    
    
    83,894Collateralized mortgage obligations
    
    
    29,876
    
    
    
    844
    
    
    
    (68
    )
    
    
    30,652Federal Home Loan Bank stock
    
    
    10,399
    
    
    
    
    
    
    
    
    
    
    
    10,399Other equity securities
    
    
    5,775
    
    
    
    198
    
    
    
    
    
    
    
    5,973Total
    
    $
    276,281
    
    
    $
    5,188
    
    
    $
    (5,011
    )
    
    $
    276,458
 December 31, 2010Amortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. government agency securities
    
    $
    109,274
    
    
    $
    267
    
    
    $
    (2,017
    )
    
    $
    107,524Mortgage backed securities
    
    
    55,989
    
    
    
    4,320
    
    
    
    
    
    
    
    60,309State and municipal obligations
    
    
    17,380
    
    
    
    13
    
    
    
    (1,982
    )
    
    
    15,411Corporate bonds
    
    
    82,816
    
    
    
    2,309
    
    
    
    (612
    )
    
    
    84,513Collateralized mortgage obligations
    
    
    39,679
    
    
    
    823
    
    
    
    (90
    )
    
    
    40,412Federal Home Loan Bank stock
    
    
    10,399
    
    
    
    
    
    
    
    
    
    
    
    10,399Other equity securities
    
    
    5,775
    
    
    
    786
    
    
    
    
    
    
    
    6,561Total
    
    $
    321,312
    
    
    $
    8,518
    
    
    $
    (4,701
    )
    
    $
    325,129
   Less than 1 year
    
    
    1 Year or More
    
    
    TotalMarket
    
    
    Unrealized
    
    
    Market
    
    
    Unrealized
    
    
    Market
    
    
    UnrealizedValue
    
    
    Loss
    
    
    Value
    
    
    Loss
    
    
    Value
    
    
    LossU.S. government agency securities
    
    $
    89,504
    
    
    $
    (2,770
    )
    
    $
    
    
    
    $
    
    
    
    $
    89,504
    
    
    $
    (2,770
    )State and municipal obligations
    
    
    8,986
    
    
    
    (714
    )
    
    
    5,257
    
    
    
    (861
    )
    
    
    14,243
    
    
    
    (1,575
    )Corporate bonds
    
    
    28,040
    
    
    
    (598
    )
    
    
    
    
    
    
    
    
    
    
    28,040
    
    
    
    (598
    )Collateralized mortgage obligations
    
    
    
    
    
    
    
    
    
    
    2,822
    
    
    
    (68
    )
    
    
    2,822
    
    
    
    (68
    )Other equity securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total securities
    
    $
    126,530
    
    
    $
    (4,082
    )
    
    $
    8,079
    
    
    $
    (929
    )
    
    $
    134,609
    
    
    $
    (5,011
    )
   10




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##### 



Note 4  Loans and Allowance for Credit Losses
  March 31,
    
    
    December 312011
    
    
    2010Secured by owner-occupied nonfarm nonresidential properties
    
    $
    233,012
    
    
    $
    222,889Secured by other nonfarm nonresidential properties
    
    
    158,531
    
    
    
    159,086Other commercial and industrial
    
    
    139,420
    
    
    
    134,011Total Commercial
    
    
    530,963
    
    
    
    515,986Construction loans  1 to 4 family residential
    
    
    16,451
    
    
    
    16,736Other construction and land development
    
    
    111,914
    
    
    
    122,382Total Real estate  construction
    
    
    128,365
    
    
    
    139,118Closed-end loans secured by 1 to 4 family residential properties
    
    
    299,303
    
    
    
    304,640Lines of credit secured by 1 to 4 family residential properties
    
    
    217,509
    
    
    
    219,557Loans secured by 5 or more family residential properties
    
    
    24,821
    
    
    
    20,207Total Real estate  mortgage
    
    
    541,633
    
    
    
    544,404Credit cards
    
    
    7,575
    
    
    
    7,749Other revolving credit plans
    
    
    9,266
    
    
    
    9,042Other consumer loans
    
    
    32,148
    
    
    
    36,224Total Consumer
    
    
    48,989
    
    
    
    53,015Loans to other depository institutions
    
    
    
    
    
    
    3,800All other loans
    
    
    4,680
    
    
    
    4,262Total Other
    
    
    4,680
    
    
    
    8,062Total loans
    
    
    1,254,630
    
    
    
    1,260,585Loans held for sale
    
    
    77,584
    
    
    
    76,994Total loans and loans held for sale
    
    $
    1,332,214
    
    
    $
    1,337,579
  March 31
    
    
    December 312011
    
    
    2010Commercial nonaccrual loans, not restructured
    
    $
    18,528
    
    
    $
    23,453Commercial nonaccrual loans, restructured
    
    
    12,215
    
    
    
    11,190Non-commercial nonaccrual loans
    
    
    11,680
    
    
    
    8,537Total nonaccrual loans
    
    
    42,423
    
    
    
    43,180Troubled debt restructured, accruing
    
    
    7,531
    
    
    
    7,378Accruing loans which are contractually
past due 90 days or more
    
    
    32
    
    
    
    27Total nonperforming loans
    
    
    49,986
    
    
    
    50,585Real estate acquired in settlement of loans
    
    
    26,329
    
    
    
    26,718Total nonperforming assets
    
    $
    76,315
    
    
    $
    77,303Nonperforming loans to loans outstanding at
end of period
    
    
    3.98
    %
    
    
    4.01
    %Nonperforming assets to total assets at end of period
    
    
    4.28
    %
    
    
    4.28
    %Allowance for credit losses to non-performing loans
    
    
    58.13
    %
    
    
    56.84
    %
 11




---



##### 



30-89 days
    
    
    90 + days
    
    
    Nonaccrual
    
    
    Total past due
    
    
    
    
    
    
    Total loansPast due
    
    
    Past due
    
    
    Loans
    
    
    + nonaccrual
    
    
    Current
    
    
    ReceivableMarch 31, 2011Secured by owner-occupied nonfarm nonresidential properties
    
    $
    1,610
    
    
    $
    
    
    
    $
    6,963
    
    
    $
    8,573
    
    
    $
    224,439
    
    
    $
    233,012Secured by other nonfarm nonresidential properties
    
    
    
    
    
    
    
    
    
    
    1,929
    
    
    
    1,929
    
    
    
    156,602
    
    
    
    158,531Other commercial and industrial
    
    
    1,335
    
    
    
    
    
    
    
    601
    
    
    
    1,936
    
    
    
    137,484
    
    
    
    139,420Total Commercial
    
    
    2,945
    
    
    
    
    
    
    
    9,493
    
    
    
    12,438
    
    
    
    518,525
    
    
    
    530,963Construction loans  1 to 4 family residential
    
    
    107
    
    
    
    
    
    
    
    2,359
    
    
    
    2,466
    
    
    
    13,985
    
    
    
    16,451Other construction and land development
    
    
    1,688
    
    
    
    
    
    
    
    14,033
    
    
    
    15,721
    
    
    
    96,193
    
    
    
    111,914Total Real estate  construction
    
    
    1,795
    
    
    
    
    
    
    
    16,392
    
    
    
    18,187
    
    
    
    110,178
    
    
    
    128,365Closed-end loans secured by 1 to 4 family residential properties
    
    
    8,253
    
    
    
    
    
    
    
    13,288
    
    
    
    21,541
    
    
    
    277,762
    
    
    
    299,303Lines of credit secured by 1 to 4 family residential properties
    
    
    3,027
    
    
    
    
    
    
    
    2,254
    
    
    
    5,281
    
    
    
    212,228
    
    
    
    217,509Loans secured by 5 or more family residential properties
    
    
    2,927
    
    
    
    
    
    
    
    558
    
    
    
    3,485
    
    
    
    21,336
    
    
    
    24,821Total Real estate  mortgage
    
    
    14,207
    
    
    
    
    
    
    
    16,100
    
    
    
    31,037
    
    
    
    511,326
    
    
    
    541,633Credit cards
    
    
    93
    
    
    
    32
    
    
    
    
    
    
    
    125
    
    
    
    7,450
    
    
    
    7,575Other revolving credit plans
    
    
    157
    
    
    
    
    
    
    
    21
    
    
    
    178
    
    
    
    9,088
    
    
    
    9,266Other consumer loans
    
    
    635
    
    
    
    
    
    
    
    417
    
    
    
    1,052
    
    
    
    31,096
    
    
    
    32,148Total Consumer
    
    
    885
    
    
    
    32
    
    
    
    438
    
    
    
    1,355
    
    
    
    47,634
    
    
    
    48,989Loans to other depository institutions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    All other loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,680
    
    
    
    4,680Total Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,680
    
    
    
    4,680Total loans
    
    
    19,832
    
    
    
    32
    
    
    
    42,423
    
    
    
    62,287
    
    
    
    1,192,343
    
    
    
    1,254,630Loans held for sale
    
    
    730
    
    
    
    
    
    
    
    
    
    
    
    730
    
    
    
    76,854
    
    
    
    77,584Total loans and loans held for sale
    
    $
    20,562
    
    
    $
    32
    
    
    $
    42,423
    
    
    $
    63,017
    
    
    $
    1,269,197
    
    
    $
    1,332,214December 31, 2010Secured by owner-occupied nonfarm nonresidential properties
    
    $
    2,619
    
    
    $
    
    
    
    $
    5,953
    
    
    $
    8,572
    
    
    $
    214,317
    
    
    $
    222,889Secured by other nonfarm nonresidential properties
    
    
    1,767
    
    
    
    
    
    
    
    1,076
    
    
    
    2,843
    
    
    
    156,243
    
    
    
    159,086Other commercial and industrial
    
    
    2,641
    
    
    
    
    
    
    
    1,875
    
    
    
    4,516
    
    
    
    129,495
    
    
    
    134,011Total Commercial
    
    
    7,027
    
    
    
    
    
    
    
    8,904
    
    
    
    15,931
    
    
    
    500,055
    
    
    
    515,986Construction loans  1 to 4 family residential
    
    
    1,166
    
    
    
    
    
    
    
    2,666
    
    
    
    3,832
    
    
    
    12,904
    
    
    
    16,736Other construction and land development
    
    
    3,354
    
    
    
    
    
    
    
    13,925
    
    
    
    17,279
    
    
    
    105,103
    
    
    
    122,382Total Real estate  construction
    
    
    4,520
    
    
    
    
    
    
    
    16,591
    
    
    
    21,111
    
    
    
    118,007
    
    
    
    139,118Closed-end loans secured by 1 to 4 family residential
properties
    
    
    10,444
    
    
    
    
    
    
    
    10,830
    
    
    
    21,274
    
    
    
    283,366
    
    
    
    304,640Lines of credit secured by 1 to 4 family residential
properties
    
    
    4,549
    
    
    
    
    
    
    
    1,611
    
    
    
    6,160
    
    
    
    213,397
    
    
    
    219,557Loans secured by 5 or more family residential properties
    
    
    147
    
    
    
    
    
    
    
    1,004
    
    
    
    1,151
    
    
    
    19,056
    
    
    
    20,207Total Real estate  mortgage
    
    
    15,140
    
    
    
    
    
    
    
    13,445
    
    
    
    28,585
    
    
    
    515,819
    
    
    
    544,404Credit cards
    
    
    122
    
    
    
    27
    
    
    
    
    
    
    
    149
    
    
    
    7,600
    
    
    
    7,749Other revolving credit plans
    
    
    226
    
    
    
    
    
    
    
    11
    
    
    
    237
    
    
    
    8,805
    
    
    
    9,042Other consumer loans
    
    
    847
    
    
    
    
    
    
    
    429
    
    
    
    1,276
    
    
    
    34,948
    
    
    
    36,224Total Consumer
    
    
    1,195
    
    
    
    27
    
    
    
    440
    
    
    
    1,662
    
    
    
    51,353
    
    
    
    53,015Loans to other depository institutions
    
    
    
    
    
    
    
    
    
    
    3,800
    
    
    
    3,800
    
    
    
    
    
    
    
    3,800All other loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,262
    
    
    
    4,262Total Other
    
    
    
    
    
    
    
    
    
    
    3,800
    
    
    
    3,800
    
    
    
    4,262
    
    
    
    8,062Total loans
    
    
    27,882
    
    
    
    27
    
    
    
    43,180
    
    
    
    71,089
    
    
    
    1,189,496
    
    
    
    1,260,585Loans held for sale
    
    
    359
    
    
    
    
    
    
    
    
    
    
    
    359
    
    
    
    76,635
    
    
    
    76,994Total loans and loans held for sale
    
    $
    28,241
    
    
    $
    27
    
    
    $
    43,180
    
    
    $
    71,448
    
    
    $
    1,266,131
    
    
    $
    1,337,579
 12




---



##### 



March 31
    
    
    December 312011
    
    
    2010Loans identified as impaired
    
    $
    36,497
    
    
    $
    38,303Other nonperforming loans
    
    
    13,489
    
    
    
    12,282Total nonperforming loans
    
    
    49,986
    
    
    
    50,585Other potential problem loans
    
    
    96,509
    
    
    
    110,924Total impaired and potential problem loans
    
    $
    146,495
    
    
    $
    161,509
 Impaired LoansRecorded
    
    
    Unpaid principal
    
    
    SpecificBalance
    
    
    Balance
    
    
    AllowanceMarch 31, 2011Loans without a specific valuation allowanceCommercial
    
    
    3,838
    
    
    
    3,977
    
    
    
    Real estate
 construction
    
    
    10,813
    
    
    
    15,343
    
    
    
    Real estate  mortgage
    
    
    7,753
    
    
    
    8,279
    
    
    
    Consumer
    
    
    111
    
    
    
    111
    
    
    
    Loans with a specific valuation allowanceCommercial
    
    
    3,709
    
    
    
    3,905
    
    
    
    1,111Real estate
 construction
    
    
    3,616
    
    
    
    3,941
    
    
    
    210Real estate  mortgage
    
    
    6,548
    
    
    
    6,548
    
    
    
    753Consumer
    
    
    109
    
    
    
    109
    
    
    
    109Total impaired loansCommercial
    
    
    7,547
    
    
    
    7,882
    
    
    
    1,111Real estate  construction
    
    
    14,429
    
    
    
    19,284
    
    
    
    210Real estate  mortgage
    
    
    14,301
    
    
    
    14,827
    
    
    
    753Consumer
    
    
    220
    
    
    
    220
    
    
    
    109December 31, 2010Loans without a specific valuation allowanceCommercial
    
    
    4,651
    
    
    
    5,437
    
    
    
    Real estate
 construction
    
    
    12,489
    
    
    
    17,165
    
    
    
    Real estate  mortgage
    
    
    6,633
    
    
    
    7,676
    
    
    
    Consumer
    
    
    112
    
    
    
    112
    
    
    
    Other
    
    
    3,800
    
    
    
    10,000
    
    
    
    Loans with a specific valuation allowanceCommercial
    
    
    1,375
    
    
    
    1,482
    
    
    
    578Real estate
 construction
    
    
    1,606
    
    
    
    2,577
    
    
    
    251Real estate  mortgage
    
    
    7,290
    
    
    
    7,290
    
    
    
    976Consumer
    
    
    347
    
    
    
    347
    
    
    
    122Other
    
    
    
    
    
    
    
    
    
    
    Total impaired loansCommercial
    
    
    6,026
    
    
    
    6,919
    
    
    
    578Real estate  construction
    
    
    14,095
    
    
    
    19,742
    
    
    
    251Real estate  mortgage
    
    
    13,923
    
    
    
    14,966
    
    
    
    976Consumer
    
    
    459
    
    
    
    459
    
    
    
    122Other
    
    
    3,800
    
    
    
    10,000
    
    
    
    
   March 31
    
    
    December 312011
    
    
    2010Special
    
    
    Sub-
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Special
    
    
    Sub-Pass
    
    
    Mention
    
    
    standard
    
    
    Doubtful
    
    
    Total
    
    
    Pass
    
    
    Mention
    
    
    standard
    
    
    Doubtful
    
    
    TotalCommercial
    
    $
    405,996
    
    
    $
    48,966
    
    
    $
    76,194
    
    
    $
    401
    
    
    $
    531,557
    
    
    $
    423,474
    
    
    $
    48,651
    
    
    $
    75,682
    
    
    $
    1,121
    
    
    $
    548,928Real estate  construction
    
    
    60,789
    
    
    
    18,589
    
    
    
    32,787
    
    
    
    576
    
    
    
    112,741
    
    
    
    66,766
    
    
    
    13,673
    
    
    
    47,319
    
    
    
    630
    
    
    
    128,388Real estate  mortgage
    
    
    79,688
    
    
    
    6,817
    
    
    
    23,431
    
    
    
    1,023
    
    
    
    110,959
    
    
    
    92,610
    
    
    
    7,898
    
    
    
    20,288
    
    
    
    798
    
    
    
    121,594Consumer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Other
    
    
    4,084
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,084
    
    
    
    3,448
    
    
    
    
    
    
    
    3,903
    
    
    
    
    
    
    
    7,351Total
    
    $
    550,557
    
    
    $
    74,372
    
    
    $
    132,412
    
    
    $
    2,000
    
    
    $
    759,341
    
    
    $
    586,300
    
    
    $
    70,222
    
    
    $
    147,192
    
    
    $
    2,549
    
    
    $
    806,263
  Three Months EndedMarch 312011
    
    
    2010Balance, beginning of period
    
    $
    28,752
    
    
    $
    35,843Loans charged off:Commercial
    
    
    1,200
    
    
    
    1,210Real estate  construction
    
    
    1,134
    
    
    
    856Real estate  mortgage
    
    
    2,197
    
    
    
    1,690Consumer
    
    
    380
    
    
    
    762Other
    
    
    1,300
    
    
    
    Total chargeoffs
    
    
    6,211
    
    
    
    4,518Recoveries of loans previously charged off:Commercial
    
    
    137
    
    
    
    193Real estate  construction
    
    
    86
    
    
    
    47Real estate  mortgage
    
    
    113
    
    
    
    55Consumer
    
    
    103
    
    
    
    181Other
    
    
    4
    
    
    
    Total recoveries
    
    
    443
    
    
    
    476Net loans charged off
    
    
    5,768
    
    
    
    4,042Provision for loan losses
    
    
    6,073
    
    
    
    3,723Balance, end of period
    
    $
    29,057
    
    
    $
    35,524
  13




---



##### 



Note 5  Stock Compensation Plans
   Note 6  Fair Value of Financial Instruments
  Quoted pricesin active markets
    
    Significant other
    
    Significantfor identical
    
    observable inputs
    
    unobservable inputsassets (Level 1)
    
    (Level 2)
    
    (Level 3)Available for sale securities at March 31, 2011
    
    $
    
    
    
    $
    266,059
    
    
    $
    10,399Available for sale securities at December 31, 2010
    
    
    
    
    
    
    314,730
    
    
    
    10,399
  Quoted pricesin active markets
    
    Significant other
    
    Significantfor identical
    
    observable inputs
    
    unobservable inputsassets (Level 1)
    
    (Level 2)
    
    (Level 3)Loans held for sale at March 31, 2011
    
    $
    
    
    
    $
    77,584
    
    
    $
    Loans held for sale at December 31, 2010
    
    
    
    
    
    
    76,994
    
    
    
    Real estate acquired in settlement of loans at March 31, 2011
    
    
    
    
    
    
    
    
    
    
    26,329Real estate acquired in settlement of loans at December 31, 2010
    
    
    
    
    
    
    
    
    
    
    26,718Core deposit intangible at March 31, 2011
    
    
    
    
    
    
    
    
    
    
    4,345Core deposit intangible at December 31, 2010
    
    
    
    
    
    
    
    
    
    
    4,526Impaired loans, net of allowance at March 31, 2011
    
    
    
    
    
    
    
    
    
    
    34,313Impaired loans, net of allowance at December 31, 2010
    
    
    
    
    
    
    
    
    
    
    36,368
 14




---



##### 



Note 7  U.S. Treasury Capital Purchase Program
  15




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
    16




---



##### 



Introduction
     Application of Critical Accounting Policies
  17




---



##### 



Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010
 Net Interest Income
    18




---



##### 



1
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2011
    
    
    March 31, 2010Interest
    
    
    Annualized
    
    
    
    
    
    
    Interest
    
    
    AnnualizedAverage
    
    
    Income/
    
    
    Average
    
    
    Average
    
    
    Income/
    
    
    AverageBalance
    
    
    Expense
    
    
    Yield/Rate
    
    
    Balance
    
    
    Expense
    
    
    Yield/RateEarning assets:Loans receivable2
    
    $
    1,335,001
    
    
    $
    17,236
    
    
    
    5.24
    %
    
    $
    1,452,707
    
    
    $
    19,430
    
    
    
    5.42
    %Taxable securities
    
    
    288,312
    
    
    
    3,453
    
    
    
    4.86
    
    
    
    224,486
    
    
    
    2,672
    
    
    
    4.83Tax exempt securities
    
    
    15,683
    
    
    
    282
    
    
    
    7.30
    
    
    
    104,284
    
    
    
    1,629
    
    
    
    6.34FHLB stock
    
    
    10,399
    
    
    
    21
    
    
    
    0.83
    
    
    
    11,627
    
    
    
    8
    
    
    
    0.27Interest-bearing bank balances
    
    
    7,579
    
    
    
    4
    
    
    
    0.21
    
    
    
    21,450
    
    
    
    21
    
    
    
    0.40Federal funds sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total earning assets
    
    
    1,656,974
    
    
    
    20,996
    
    
    
    5.14
    
    
    
    1,814,554
    
    
    
    23,760
    
    
    
    5.31Non-earning assets:Cash and due from banks
    
    
    27,999
    
    
    
    
    
    
    
    
    
    
    
    26,985Premises and equipment
    
    
    38,649
    
    
    
    
    
    
    
    
    
    
    
    40,612Other assets
    
    
    107,225
    
    
    
    
    
    
    
    
    
    
    
    108,799Allowance for credit losses
    
    
    (29,894
    )
    
    
    
    
    
    
    
    
    
    
    (36,705
    )Total assets
    
    $
    1,800,953
    
    
    $
    20,996
    
    
    
    
    
    
    $
    1,954,244
    
    
    $
    23,760Interest-bearing liabilities:Savings deposits
    
    $
    40,190
    
    
    $
    10
    
    
    
    0.10
    %
    
    $
    40,433
    
    
    $
    10
    
    
    
    0.10
    %NOW deposits
    
    
    440,366
    
    
    
    751
    
    
    
    0.69
    
    
    
    290,123
    
    
    
    588
    
    
    
    0.82Money market deposits
    
    
    317,761
    
    
    
    552
    
    
    
    0.70
    
    
    
    354,494
    
    
    
    807
    
    
    
    0.92Time deposits
    
    
    472,488
    
    
    
    1,374
    
    
    
    1.18
    
    
    
    681,715
    
    
    
    2,897
    
    
    
    1.72Other borrowings
    
    
    62,252
    
    
    
    492
    
    
    
    3.21
    
    
    
    90,346
    
    
    
    609
    
    
    
    2.73Borrowings from Federal
Home Loan Bank
    
    
    124,634
    
    
    
    348
    
    
    
    1.13
    
    
    
    153,811
    
    
    
    1,101
    
    
    
    2.90Total interest-bearing liabilities
    
    
    1,457,691
    
    
    
    3,527
    
    
    
    0.98
    
    
    
    1,610,922
    
    
    
    6,012
    
    
    
    1.51Other liabilities and shareholders
equity:Demand deposits
    
    
    163,633
    
    
    
    
    
    
    
    
    
    
    
    159,568Other liabilities
    
    
    17,121
    
    
    
    
    
    
    
    
    
    
    
    19,185Shareholders equity
    
    
    162,508
    
    
    
    
    
    
    
    
    
    
    
    164,569Total liabilities and shareholders
equity
    
    $
    1,800,953
    
    
    
    3,527
    
    
    
    
    
    
    $
    1,954,244
    
    
    
    6,012Net interest income and net
interest margin3
    
    
    
    
    
    $
    17,469
    
    
    
    4.28
    %
    
    
    
    
    
    $
    17,748
    
    
    
    3.97
    %Interest rate spread4
    
    
    
    
    
    
    
    
    
    
    4.16
    %
    
    
    
    
    
    
    
    
    
    
    3.80
    %
 
 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. The adjustments made to convert to a fully
taxable equivalent basis were $91 for 2011 and $510 for 2010.2
    
    The average loans receivable balances include non-accruing loans. Amortization of
loan fees, net of deferred costs, of $209 and $268 for the three months ended March 31, 2011
and 2010, respectively, are included in interest income.3
    
    Net interest margin is computed by dividing net interest income by average earning
assets.4
    
    Earning assets yield minus interest-bearing liability rate. 19




---



##### 



Noninterest Income and Expense
    Other Noninterest Income and Expense (in thousands)
 Three Months EndedMarch 31,
    
    
    Percentage2011
    
    
    2010
    
    
    VarianceOther operating income:Bankcard income
    
    $
    156
    
    
    $
    183
    
    
    
    (14.8
    )%Investment services commissions
    
    
    352
    
    
    
    380
    
    
    
    (7.4
    )Insurance commissions
    
    
    20
    
    
    
    20
    
    
    
    0.0Trust income
    
    
    194
    
    
    
    143
    
    
    
    35.7Income on bank-owned life insurance
    
    
    408
    
    
    
    191
    
    
    
    43.5Other income
    
    
    (46
    )
    
    
    (28
    )
    
    
    113.6$
    1,084
    
    
    
    889
    
    
    
    21.9Other operating expenses:Advertising
    
    $
    437
    
    
    $
    390
    
    
    
    12.1
    %Bankcard expense
    
    
    107
    
    
    
    163
    
    
    
    (34.4
    )Legal and professional fees
    
    
    625
    
    
    
    724
    
    
    
    (13.7
    )Postage
    
    
    214
    
    
    
    211
    
    
    
    1.4Telephone
    
    
    150
    
    
    
    189
    
    
    
    (20.6
    )Amortization of core deposit intangible
    
    
    182
    
    
    
    182
    
    
    
    0.0OREO expense
    
    
    389
    
    
    
    332
    
    
    
    17.2Stationery, printing and supplies
    
    
    146
    
    
    
    139
    
    
    
    5.0Other expense
    
    
    1,134
    
    
    
    1,037
    
    
    
    9.4$
    3,384
    
    
    $
    3,367
    
    
    
    0.5
 Asset Quality and Allowance for Credit losses
  20




---



##### 



21




---



##### 



Three Months Ended
    
    
    Year Ended
    
    
    Three Months EndedAsset Quality Analysis
    
    March 31
    
    
    December 31
    
    
    March 31(Dollars in thousands)
    
    2011
    
    
    2010
    
    
    2010Allowance for credit losses:Balance, beginning of period
    
    $
    28,752
    
    
    $
    35,843
    
    
    $
    35,843Loans charged offCommercial
    
    
    1,200
    
    
    
    9,052
    
    
    
    1,210Real estate  construction
    
    
    1,134
    
    
    
    5,379
    
    
    
    856Real estate  mortgage
    
    
    2,197
    
    
    
    7,260
    
    
    
    1,690Consumer
    
    
    380
    
    
    
    2,829
    
    
    
    762Other
    
    
    1,300
    
    
    
    6,200
    
    
    
    Total chargeoffs
    
    
    6,211
    
    
    
    30,720
    
    
    
    4,518Recoveries of loans previously charged off:Commercial
    
    
    137
    
    
    
    1,370
    
    
    
    193Real estate  construction
    
    
    86
    
    
    
    80
    
    
    
    47Real estate  mortgage
    
    
    113
    
    
    
    270
    
    
    
    55Consumer
    
    
    103
    
    
    
    647
    
    
    
    181Other
    
    
    4
    
    
    
    10
    
    
    
    Total recoveries
    
    
    443
    
    
    
    2,377
    
    
    
    476Net loans charged off
    
    
    5,768
    
    
    
    28,343
    
    
    
    4,042Provision for loan losses
    
    
    6,073
    
    
    
    21,252
    
    
    
    3,723Balance, end of period
    
    $
    29,057
    
    
    $
    28,752
    
    
    $
    35,524Nonperforming Assets:Commercial nonaccrual loans, not restructured
    
    $
    18,528
    
    
    $
    23,453
    
    
    $
    42,869Commercial nonaccrual loans, restructured
    
    
    12,215
    
    
    
    11,190
    
    
    
    4,406Non-commercial nonaccrual loans
    
    
    11,680
    
    
    
    8,537
    
    
    
    4,566Total nonaccrual loans
    
    
    42,423
    
    
    
    43,180
    
    
    
    51,841Troubled debt restructured, accruing
    
    
    31
    
    
    
    27
    
    
    
    2,300Loans 90 days or more past due and
still accruing
    
    
    7,532
    
    
    
    7,378
    
    
    
    2,571Total non-performing loans
    
    
    49,986
    
    
    
    50,585
    
    
    
    56,712Real estate acquired in settlement of loans
    
    
    26,329
    
    
    
    26,718
    
    
    
    29,316Total nonperforming assets
    
    $
    76,315
    
    
    $
    77,303
    
    
    $
    86,028Asset Quality Ratios:Nonperforming loans to total loans outstanding
at end of period
    
    
    3.75
    %
    
    
    3.78
    %
    
    
    3.95
    %Nonperforming assets to total assets
at end of period
    
    
    4.28
    
    
    
    4.28
    
    
    
    4.40Allowance for credit losses as a percentage
of total loans outstanding at end of period
    
    
    2.18
    
    
    
    2.15
    
    
    
    2.48Allowance for credit losses to nonperforming loans
    
    
    58.13
    
    
    
    56.84
    
    
    
    62.64Net charge-offs as a percentage of
average loans outstanding during the period
    
    
    1.86
    *
    
    
    2.01
    
    
    
    1.15
    *
 
 *
    
    Denotes annualized Income Taxes
  22




---



##### 



Interest Rate Risk Management
    Liquidity Management
     23




---



##### 



Capital Resources and Shareholders Equity
     Regulatory CapitalWell
    
    AdequatelyCapitalized
    
    Capitalized
    
    Company
    
    BankTotal Capital
    
    
    10.0
    %
    
    
    8.0
    %
    
    
    14.02
    %
    
    
    13.62
    %Tier 1 Capital
    
    
    6.0
    
    
    
    4.0
    
    
    
    12.75
    
    
    
    12.36Leverage Capital
    
    
    5.0
    
    
    
    4.0
    
    
    
    9.91
    
    
    
    9.61
 24




---



##### 



Item 3. Quantitative and Qualitative Disclosures about Market Risk
    25




---



##### 



Item 4. Controls and Procedures
 Evaluation of disclosure controls and procedures
  Changes in internal control over financial reporting
  26




---



##### 



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Removed and Reserved
 
 Item 5. Other Information
 Item 5.07 Submission of Matters to a Vote of Security Holders
  Proposal 1
  Against orNominee
    
    For
    
    Withheld
    
    Abstentions
    
    Broker Non-VotesMichael S. Albert
    
    
    7,072,151
    
    
    
    245,123
    
    
    
    98,867
    
    
    
    4,738,319J. David Branch
    
    
    6,993,221
    
    
    
    284,232
    
    
    
    138,688
    
    
    
    4,738,319C. Arnold Britt
    
    
    6,981,378
    
    
    
    288,203
    
    
    
    146,560
    
    
    
    4,738,319Robert C. Clark
    
    
    7,007,479
    
    
    
    292,937
    
    
    
    115,725
    
    
    
    4,738,319Alex A. Diffey, Jr.
    
    
    6,824,530
    
    
    
    409,866
    
    
    
    181,745
    
    
    
    4,738,319Barry Z. Dodson
    
    
    6,885,399
    
    
    
    424,498
    
    
    
    106,244
    
    
    
    4,738,319Joseph H. Kinnarney
    
    
    6,926,693
    
    
    
    383,799
    
    
    
    105,649
    
    
    
    4,738,319Robert F. Lowe
    
    
    6,962,537
    
    
    
    373,392
    
    
    
    80,212
    
    
    
    4,738,319Robert V. Perkins
    
    
    6,967,424
    
    
    
    328,814
    
    
    
    119,903
    
    
    
    4,738,319Pressley A. Ridgill
    
    
    6,982,307
    
    
    
    307,272
    
    
    
    126,562
    
    
    
    4,738,319Mary E. Rittling
    
    
    7,017,893
    
    
    
    299,083
    
    
    
    99,165
    
    
    
    4,738,319E. Reid Teague
    
    
    6,928,903
    
    
    
    335,219
    
    
    
    152,019
    
    
    
    4,738,319John F. Watts
    
    
    5,558,346
    
    
    
    1,742,744
    
    
    
    115,051
    
    
    
    4,738,319G. Alfred Webster
    
    
    6,983,306
    
    
    
    315,579
    
    
    
    117,526
    
    
    
    4,738,319Kenan C. Wright
    
    
    6,940,069
    
    
    
    322,852
    
    
    
    153,220
    
    
    
    4,738,319Julius S. Young
    
    
    7,100,104
    
    
    
    211,047
    
    
    
    104,990
    
    
    
    4,738,319
  27




---



##### 



Proposal 2
  Against orFor
    
    Withheld
    
    Abstentions
    
    Broker Non-Votes11,785,661
    
    
    
    151,314
    
    
    
    217,485
    
    
    
    0
 Proposal 3
  Against orFor
    
    Withheld
    
    Abstentions
    
    Broker Non-Votes6,717,746
    
    
    
    515,623
    
    
    
    182,772
    
    
    
    4,738,319
 28




---



##### 



Item 6. Exhibits
 ExhibitNo.
    
    Description3.1
    
    Articles of Incorporation, and amendments thereto, incorporated by reference
to Exhibit 4.1 of the Registration Statement on Form S-8, filed with the SEC
on May 16, 2001 (SEC File No. 333-61046).3.2
    
    Articles of Merger of FNB with and into LSB, including amendments to the
Articles of Incorporation, as amended, incorporated by reference to Exhibit
3.4 of the Quarterly Report on Form 10-Q for the quarter ended September 30,
2007, filed with the SEC on November 9, 2007 (SEC File No. 000-11448).3.3
    
    Amended and Restated Bylaws adopted by the Board of Directors on August 17,
2004 and amended on July 23, 2008 (with identified Bylaw approved by the
shareholders) incorporated by reference to Exhibit 3.3 of the Quarterly Report
on Form 10-Q for the quarter ended March 31, 2009, filed with the SEC on May
8, 2009 (SEC File No. 000-11448).4.1
    
    Specimen certificate of common stock, $5.00 par value, incorporated by
reference to Exhibit 4.1 of the Quarterly Report on Form 10-Q for the quarter
ended September 30, 2007, filed with the SEC on November 9, 2007 (SEC File No.
000-11448).4.2
    
    Amended and Restated Trust Agreement, regarding Trust Preferred Securities,
dated August 23, 2005, incorporated herein by reference to Exhibit 4.02 of the
Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, filed
with the SEC (SEC File No. 000-13086).4.3
    
    Guarantee Agreement, regarding Trust Preferred Securities, dated August 23,
2005, incorporated herein by reference to Exhibit 4.03 of the Quarterly Report
on Form 10-Q for the quarter ended September 30, 2005, filed with the SEC (SEC
File No. 000-13086).4.4
    
    Indenture, regarding Trust Preferred Securities, dated August 23, 2005,
incorporated herein by reference to Exhibit 4.04 of the Quarterly Report on
Form 10-Q for the quarter ended September 30, 2005, filed with the SEC (SEC
File No. 000-13086).4.5
    
    Articles of Amendment, filed with the North Carolina Department of the
Secretary of State on December 12, 2008, incorporated herein by reference to
Exhibit 4.1 of the Current Report on Form 8-K filed with the SEC on December
12, 2008 (SEC File No. 000-11448).4.6
    
    Form of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock,
Series A, incorporated herein by reference to Exhibit 4.2 of the Current
Report on Form 8-K filed with the SEC on December 12, 2008 (SEC File No.
000-11448).4.7
    
    Warrant for Purchase of Shares of Common Stock issued by Bancorp to the United
States Department of the Treasury on December 12, 2008, incorporated herein by
reference to Exhibit 4.3 of the Current Report on Form 8-K filed with the SEC
on December 12, 2008 (SEC File No. 000-11448).10.1
    
    Benefit Equivalency Plan of FNB Southeast, effective January 1, 1994
incorporated herein by reference to Exhibit 10 of the Quarterly Report on Form
10-QSB for the fiscal quarter ended June 30, 1995, filed with the SEC (SEC
File No. 000-13086).10.2
    
    1994 Director Stock Option Plan, incorporated herein by reference to Exhibit 4
of the Registration Statement on Form S-8 filed with the SEC on July 15, 1994
(SEC File No. 33-81664).
 29




---



##### 



ExhibitNo.
    
    Description10.3
    
    1996 Omnibus Stock Incentive Plan, incorporated herein by reference to Exhibit
10.2 of the Annual Report on Form 10-K for the year ended December 31, 1995
filed with the SEC on March 28, 1996 (SEC File No. 000-11448).10.4
    
    Omnibus Equity Compensation Plan, incorporated herein by reference to Exhibit
10(B) of the Annual Report on Form 10-KSB40 for the fiscal year ended December
31, 1996, filed with the SEC on March 31, 1997 (SEC File No. 000-13086).10.5
    
    Amendment to Benefit Equivalency Plan of FNB Southeast, effective January 1,
1998., incorporated herein by reference to Exhibit 10.16 of the Annual Report
on Form 10-K for the fiscal year ended December 31, 1998, filed with the SEC
on March 25, 1999 (SEC File No. 000-13086)10.6
    
    Amendment Number 1 to 1996 Omnibus Stock Incentive Plan, incorporated herein
by reference to Exhibit 4.5 of the Registration Statement on Form S-8, filed
with the SEC on May 16, 2001 (SEC File No. 333-61046).10.7
    
    Long Term Stock Incentive Plan for certain senior management employees of FNB
Southeast incorporated herein by reference to Exhibit 10.10 of the Annual
Report on Form 10-K for the fiscal year ended December 31, 2002, filed with
the SEC on March 27, 2003 (SEC File No. 000-13086).10.8
    
    Form of Employment Continuity Agreement effective as of January 1, 2004
between LSB and Robert E. Lineback, Jr. and Philip G. Gibson with a Schedule
setting forth the material details in which such documents differ from the
document a copy of which is filed, incorporated herein by reference to Exhibit
10.10 of the Annual Report on Form 10-K for the year ended December 31, 2003
filed with the SEC on March 15, 2004 (SEC File No. 000-11448).10.9
    
    Form of Stock Option Award Agreement for a Director adopted under LSB
Comprehensive Equity Compensation Plan for Directors and Employees,
incorporated herein by reference to Exhibit 10.1 of the Current Report on Form
8-K filed with the SEC on December 23, 2004 (SEC File No. 000-11448).10.10
    
    Form of Incentive Stock Option Award Agreement for an Employee adopted under
LSB Comprehensive Equity Compensation Plan for Directors and Employees,
incorporated herein by reference to Exhibit 10.2 of the Current Report on Form
8-K filed with the SEC on December 23, 2004 (SEC File No. 000-11448).10.11
    
    Form of Amendment to the applicable Grant Agreements under the 1996 Omnibus
Stock Incentive Plan, incorporated herein by reference to Exhibit 10.2 of the
Current Report on Form 8-K filed with the SEC on April 15, 2005 (SEC File No.
000-11448).10.12
    
    Form of Amendment to the Incentive Stock Option Award Agreement for an
Employee adopted under LSB Comprehensive Equity Compensation Plan for
Directors and Employees, incorporated herein by reference to Exhibit 10.3 of
the Current Report on Form 8-K filed with the SEC on April 15, 2005 (SEC File
No. 000-11448).10.13
    
    Restated Form of Director Fee Deferral Agreement adopted under LSB
Comprehensive Equity Compensation Plan for Directors and Employees,
incorporated herein by reference to Exhibit 99.1 of the Current Report on Form
8-K filed with the SEC on December 23, 2005 (SEC File No. 000-11448).10.14
    
    Form of Stock Appreciation Rights Award Agreement adopted under LSB
Comprehensive Equity Compensation Plan for Directors and Employees,
incorporated herein by reference to Exhibit 99.2 of the Current Report on Form
8-K filed with the SEC on December 23, 2005 (SEC File No. 000-11448).10.15
    
    FNB Amended and Restated Directors Retirement Policy, incorporated herein by
reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the
SEC on August 3, 2007 (SEC File No. 000-11448).
 30




---



##### 



ExhibitNo.
    
    Description10.16
    
    Amendment to the FNB Directors and Senior Management Deferred Compensation
Plan Trust Agreement among Regions Bank d/b/a/ Regions Morgan Keegan Trust,
FNB Southeast and FNB, dated July 31, 2007, incorporated herein by reference
to Exhibit 99.2 of the Current Report on Form 8-K, filed with the SEC on
August 3, 2007 (SEC File No. 000-11448).10.17
    
    Employment and Change of Control Agreement with William W. Budd, Jr.
incorporated herein by reference to Exhibit 99.1 of the Current Report on Form
8-K, filed with the SEC on March 11, 2010 (SEC File No. 000-11448).10.18
    
    Employment and Change of Control Agreement with Jerry W. Beasley, incorporated
herein by reference to Exhibit 99.3 of the Current Report on Form 8-K, filed
with the SEC on March 14, 2008 (SEC File No. 000-11448).10.19
    
    Employment and Change of Control Agreement with Robin S. Hager, incorporated
herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed
with the SEC on August 3, 2010 (SEC File No. 000-11448).10.20
    
    Employment and Change of Control Agreement with Paul McCombie, incorporated
herein by reference to Exhibit 99.5 of the Current Report on Form 8-K, filed
with the SEC on March 14, 2008 (SEC File No. 000-11448).10.21
    
    Directors and Senior Management Deferred Compensation Plan Trust Agreement
between FNB Southeast and Morgan Trust Company, incorporated herein by
reference to Exhibit 99.7 of the Current Report on Form 8-K, filed with the
SEC on March 14, 2008 (SEC File No. 000-11448).10.22
    
    Bancorp Non-Qualified Deferred Compensation Plan for Directors and Senior
Management, incorporated herein by reference to Exhibit 99.9 of the Current
Report on Form 8-K, filed with the SEC on March 14, 2008 (SEC File No.
000-11448).10.23
    
    First Amendment to the Bancorp Non-Qualified Deferred Compensation Plan for
Directors and Senior Management, incorporated herein by reference to Exhibit
99.10 of the Current Report on Form 8-K, filed with the SEC on March 14, 2008
(SEC File No. 000-11448).10.24
    
    Bancorp Amended and Restated Long Term Stock Incentive Plan, formerly the FNB
Long Term Stock Incentive Plan (the 2006 Omnibus Plan), incorporated herein
by reference to Exhibit 10.27 of the Quarterly Report on Form 10-Q filed with
the SEC on May 9, 2008 (SEC File No. 000-11448).10.25
    
    Amended and Restated Comprehensive Equity Compensation Plan for Directors and
Employees, incorporated herein by reference to Exhibit 10.44 of the Quarterly
Report on Form 10-Q, filed with the SEC on August 11, 2008 (SEC File No.
000-11448).10.26
    
    Form of Restricted Stock Award Agreement adopted under the Amended and
Restated Comprehensive Equity Compensation Plan for Directors and Employees,
incorporated herein by reference to Exhibit 10.45 of the Quarterly Report on
Form 10-Q, filed with the SEC on August 11, 2008 (SEC File No. 000-11448).10.27
    
    Employment and Change of Control Agreement with David P. Barksdale,
incorporated herein by reference to Exhibit 99.1 of the Current Report on Form
8-K, filed with the SEC on October 17, 2008 (SEC File No. 000-11448).10.28
    
    Letter Agreement, dated December 12, 2008, between Bancorp and the United
States Department of the Treasury, with respect to the issuance and sale of
the Fixed Rate Cumulative Perpetual Preferred Stock, Series A and the Warrant,
incorporated herein by reference to Exhibit 10.1 of the Current Report on Form
8-K filed with the SEC on December 12, 2008 (SEC File No. 000-11448).
 31




---



##### 



ExhibitNo.
    
    Description10.29
    
    Form of Employment Agreement Amendment, dated December 12, 2008 among Bancorp,
the Bank and the senior executive officers of Bancorp, incorporated herein by
reference to Exhibit 10.2 of the Current Report on Form 8-K filed with the SEC
on December 12, 2008 (SEC File No. 000-11448).10.30
    
    Bancorp Management Incentive Plan, dated February 18, 2008, incorporated
herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed
with the SEC on March 6, 2009 (SEC File No. 000-11448).10.31
    
    Employment and Change of Control Agreement with Ramsey K. Hamadi, incorporated
herein by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed
with the SEC on March 30, 2009 (SEC File No. 000-11448).10.32
    
    Promissory Note by Ramsey K. Hamadi in favor of the Bank incorporated herein
by reference to Exhibit 99.1 of the Current Report on Form 8-K, filed with the
SEC on April 21, 2009 (SEC File No. 000-11448).10.33
    
    Excessive and Luxury Expenditure Policy of Bancorp and the Bank, incorporated
herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed
with the SEC on September 9, 2009 (SEC File No. 000-11448).10.34
    
    Employment and Change of Control Agreement among Bancorp, the Bank and
Pressley A. Ridgill, executed September 9, 2009, and effective January 1,
2010, incorporated herein by reference to Exhibit 99.1 of the Current Report
on Form 8-K filed with the SEC on September 11, 2009 (SEC File No. 000-11448).10.35
    
    Form of Amendment to Employment and Change of Control Agreement, dated
September 16, 2009, among Bancorp, the Bank and the senior executive officers
of Bancorp, incorporated herein by reference to Exhibit 99.1 of the Current
Report on Form 8-K filed with the SEC on September 16, 2009 (SEC File No.
000-11448).31.01
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.02
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.01
    
    Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 32




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##### 



SIGNATURES
  Date: May 13, 2011
    NEWBRIDGE BANCORP
(Registrant)By:
    /s/ Ramsey K. HamadiName:
    Ramsey K. HamadiTitle:
    Executive Vice President and Chief Financial Officer (Authorized Officer) 33




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##### 



EXHIBIT INDEX
 ExhibitNo.
    
    Description31.01
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.02
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.01
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 34