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Today we are seeing that while some new problems continue to emerge, they are generally less frequent, less severe and easier to identify. Consequently, as we look forward, we believe lower credit related costs and stronger operating efficiencies will result in continued improvements in our profitability -CEO Pressley Ridgill

Banking earnings season is back, while the concerns continue to move from credit issues to the sustainability of a recovery and the potential impact of a low interest rate environment on future revenues. I have yet to encounter any signs of commercial real estate problems.

Continuing with this trend, Newbridge Bancorp (NASDAQ:NBBC) also reported substantial improvement in credit conditions. This improvement however has not shown its full impact in the bottom line as it is still aggressively provisioning while conservatively charging off a large part of its non performing loans to their expected recovery.

  • Equity Increased: Tangible book value per common share increased $0.14 for the quarter and $0.16 for the year to $6.99
  • Slightly Profitable: After dividends and accretion on preferred stock, the Company reported a return to positive net income available to common shareholders of $124,000, or $0.01 per diluted share.
  • Core Deposits Increasing: 7% in the quarter and 14% year to date to $944 million. As a percentage of total deposits increased from 55% at December 31, 2009 to 61% at June 30, 2010
  • Nonperforming Assets Stable: Declined from the first quarter despite workouts that resulted in a $7.6 million increase in troubled debt restructured loans. As a percentage they were flat at a 4.4%.
  • Well Capitalized: Tier 1 capital as a percentage of average assets was 9.09% and total capital as a percentage of total risk weighted assets was 12.62%, well above the levels required to meet the “well capitalized” standards of 5% and 10%, respectively.

Regarding commercial real estate Pressley Ridgill was optimistic:

Our results are improved because of the substantial write-downs we absorbed earlier in this credit cycle. We are also encouraged that there is greater liquidity in the commercial real estate markets. Values have dropped significantly; however, more and more buyers are pursuing options to purchase commercial real estate

For more information you can check the introductory post

Disclosure: Long NBBC

Source: Update: NewBridge Bancorp