NewBridge Bancorp (NBBC) in Greensboro, N.C., is planning to raise $56 million after liquidating $45 million in bad loans and reporting a large quarterly loss.
The company lost $32.5 million in the third quarter after recording an $11 million impairment charge tied to an accelerated disposition strategy for problem loans. NewBridge earned $1.1 million a year earlier, the company said in a press release.
The $1.7 billion-asset company said it had entered into agreements with select investors and insiders to sell $56 million of convertible preferred stock. The raise will also help NewBridge repay its $52 million in funds from the Treasury Department’s Troubled Asset Relief Program.
“I am pleased to share the news of our capital raise and to report the positive results from the problem asset disposition plan,” Pressley Ridgill, NewBridge’s president and chief executive, said in the release. “We believe the resolution of our problem assets fortifies our balance sheet and will immediately result in stronger earnings and positions the company for improved profitability in the coming years.”
NewBridge remains well-capitalized with a 12% total risk-based capital ratio at Sept. 30, but it took several hits as it pursued a more aggressive disposition strategy. This included higher reserves, an $11 million valuation allowance against its deferred tax asset and $1.9 million in write downs.
The liquidation did improve credit quality, as nonperforming assets fell 45% from a year earlier, to $38.2 million, or 2.2% of total assets.