This past year will long be regarded as one of the most challenging years in the history of banking and NewBridge Bancorp ("NewBridge" or the "Company"). Financial institutions with almost legendary reputations failed as a result of a subprime crisis that was built upon greed and the excessive granting of credit. Money was too easy, and it fueled an onslaught of speculative investment, often by borrowers whose perceptions of risk had been distorted by a meteoric rise in real estate values. Those high returns prompted additional speculation, creating a cycle that continued to grow until it simply became unsustainable.

We now find ourselves operating in an environment of reaction. Asset values - not just in real estate but in almost every category - are slipping. Credit availability - a key driver of the economy - has contracted, as many capital-constrained institutions have been forced to shrink their balance sheets or tighten underwriting criteria to the point that lending activity has been greatly curtailed. Delinquencies have increased, consumers have pulled back, and businesses have retrenched by terminating employees, further frightening already highly traumatized consumers and investors.

Our Financial Results Reflected the Turmoil in the Economy

In this environment, it is not surprising that we struggled from a financial standpoint in 2008. Including a non-cash, after-tax charge of approximately $50.4 million for impairment of goodwill, our net loss available to common shareholders for 2008 was $57.1 million, or $3.64 per diluted share. Excluding the impairment charge, the Company's net loss available to common shareholders was $6.6 million, or $0.42 per diluted share, in 2008, which was only modestly worse than a corresponding figure of $5.7 million, or $0.49 per diluted share, for 2007. Apart from the impairment charge, the primary cause of our net loss in 2008 was the unusually high provision for credit losses, which was $25.3 million in 2008 versus $19.0 million in 2007. Another contributing factor was a tighter net interest margin, largely the result of the Federal Reserve's lowering of interest rates during the year. Earnings before the impairment charge and the provision for loan losses would have been positive, and an improvement from the comparable figure in 2007. A more detailed discussion of our financial results can be found on pages 27 to 46 of our Annual Report on Form 10-K under Management's Discussion and Analysis of Financial Condition and Results of Operations.

We Have Positioned Our Bank to Emerge From this Recession Stronger than Before

Succeeding in this challenging environment requires that we maintain a strong capital position, contain costs, continue to lend and increase our communication with our borrowers, both those who are current in their loan repayments and those who are not. We are doing all of these. For example, as is discussed more fully below, we recently strengthened the Company's capital position by participating in the U.S.Treasury's Troubled Assets Relief Program ("TARP"), solidifying the Bank's "well capitalized" regulatory standing.We also made tremendous strides in cutting costs by reducing full time equivalent employees from 594 at the end of 2007 to 520 at the end of 2008.We expanded our loan portfolio, and met with many borrowers throughout the year to better ensure that their loans remain current.We believe these steps will allow us to come out of this recession even stronger than before.

Our Capital Position Was Significantly Strengthened in 2008

One of the most significant achievements of the year was the strengthening of our capital position. In the fourth quarter of 2008, we issued $52,372,000 of Fixed Rate Cumulative Perpetual Preferred Stock and a related common stock warrant to the U.S. Treasury Department under its TARP Capital Purchase Program. The Treasury only allowed institutions it expects to be survivors of this crisis to participate in the Program, and we consider it a vote of confidence to have been one of the recipients of the Treasury's investments.

Including the approximately $52 million in TARP funds, tangible shareholders' equity grew to $173.2 million at December 31, 2008, a 27% increase from $136.4 million at December 31, 2007. NewBridge Bank's (the "Bank") capital ratios remain quite strong. At December 31, 2008, the Bank had a leverage ratio of 8.0%, a Tier 1 risk-based ratio of 9.5%, and a total risk-based ratio of 10.8%, versus minimum required ratios of 5%, 6%, and 10%, respectively, to meet the "well capitalized" regulatory classification. Additionally, as of year end 2008, the Bank had unused lines of credit exceeding $190 million. Moreover, at year end the Company had $26.4 million in funds from the Treasury's investment which could be used to further enhance the Bank's capital ratios.

We Took a Bold Step By Charging Off Goodwill

Another positive step we took in terms of capitalization was to eliminate goodwill from our financial statements. This goodwill, which was primarily associated with the July 2007 merger of FNB Financial Services Corporation into LSB Bancshares, Inc., was an intangible asset that was "tested" periodically to ensure that its value had not fallen below its original amount. After carefully considering numerous factors, including a valuation by an independent third party, we concluded that there were several advantages to proactively taking the step to write off this non-cash asset. Doing so more conservatively portrays our financial position, which remains quite strong, substantially eliminating the difference between stated book value and tangible book value. This non-cash accounting charge better aligns professional investors' perspectives of book value with what is reflected on our financial statements, and removes the uncertainty relating to the timing of such an impairment charge.

We Maintained Our Commitment to Growth, Particularly in Loans

While some banks participating in the TARP have been criticized for not making loans, we continue to finance sound projects of borrowers who have the credit worthiness, capacity to repay and character to justify our confidence in them. In fact, despite rapid paydowns, our total loan portfolio grew 8% to $1.60 billion at December 31, 2008 from $1.49 billion at December 31, 2007. We also achieved growth in other key areas of the balance sheet, such as deposits and total assets.

Improving Asset Quality Remains a Top Priority

While we continue to adhere to strict underwriting standards, we have not been immune to economic pressures affecting asset quality. Nonperforming assets, which include nonaccrual loans, accruing loans more than 90 days past due, OREO and renegotiated debt, totaled $48.6 million at December 31, 2008, versus $42.1 million at September 30, 2008 and $17.2 million at December 31, 2007. Although we are disappointed with this increase, one of our advantages in working through these credits, particularly relative to many of the larger banks, is the strength of our customer relationships, which allows us greater flexibility in structuring workouts. Furthermore, we have acted aggressively to boost reserves. At the end of 2008, the allowance for credit losses was $35.8 million, or 2.23% of outstanding loans, compared to $30.4 million, or 2.04% of outstanding loans, at December 31, 2007.

Our Outlook is One of Cautious Optimism

From a macroeconomic standpoint, there are still many challenges before us. As I write these words, unemployment continues to rise, consumer confidence is at an all time low and stock market valuations remain severely depressed. However, some good things are occurring as well. As a nation, we are beginning to save, and as consumer debt is paid down, emergency funds are being replenished. Spending will eventually recover, and when it does, it is likely to be at a more sustainable level. And we have also learned an important lesson about the dangers of a frenzy of speculation and the loss of perspective that often accompanies market bubbles. These are lessons that need to be learned and remembered.

As for NewBridge, we are positioned to succeed. We expect to emerge from this crisis in a stronger position and confronted by a less crowded market of competitors. A number of our competitors - particularly some of the larger banks - have been acquired or are no longer aggressively expanding in our markets. While banking will undoubtedly remain competitive, the exit of certain players is likely to result in a more rational assessment of risk and therefore, a healthier pricing environment for our products and services.

In closing, please know that I am fully aware of the erosion in the value of your investment. As a fellow shareholder, I have suffered just as many of you have.Your Board and Management are focused on returning our Company to profitability, regaining our earnings momentum and restoring the value of your investment.

We appreciate your support and look forward, as we hope you do, to 2009 as a year of recovery and success.

Very truly yours,

• Robert F. Lowe
  Chairman, NewBridge Bancorp
  and NewBridge Bank.

  Barry Z. Dodson
  Vice Chairman, NewBridge
  Bancorp and NewBridge Bank;
  certified public accountant and
  owner of Barry Z. Dodson,
  CPA, PLLC.

  Pressley A. Ridgill
  President, Chief Executive Officer
  and Director, NewBridge Bancorp
  and NewBridge Bank.

  Michael S. Albert
  Vice President-Marketing/
  Consultant, Stanley Benefit
  Services, Inc.

  Gary G. Blosser
  President and co-owner,
  Shenandoah Landscape Services,
  Inc.; President and owner of
  Glen-Gary, Inc.

• J. David Branch
  Ophthalmologist in private practice.

  C. Arnold Britt
  President and owner, Carolina
  Apothecary, Inc., Belmont
  Pharmacy, Inc. and RxCare, Inc.

  Robert C. Clark
  President and owner,
  FTS/Leesona Corporation
  (manufacturer, textile machinery);
  member, Winston-Salem
  City Council.

  Alex A. Diffey, Jr.
  Independent banking consultant;
  previously Interim Chief Credit
  Officer of FNB Southeast between
  October 2005 and January 2007.

  Joseph H. Kinnarney
  Doctor of Veterinary Medicine;
  President and owner, Reidsville
  Veterinary Hospital, Inc., Bel-Air
  Veterinary Hospital, Mebane
  Veterinary Hospital and
  Greensboro Pet Spa & Resort, Inc.

• Robert V. Perkins
  President and co-owner, NAI
  Piedmont Triad (commercial real
  estate services); member,
  Greensboro City Council.

  Mary E. Rittling
  President, Davidson County
  Community College.

  Burr W. Sullivan
  Retired; former consultant, Graphic
  Printing Services; former President
  and owner, Dorsett Printing and
  Lithograph Corporation.

  E. Reid Teague
  President and owner,
  Eden Oil Co., Inc.

  John W. Thomas, III
  President, Riverwood, Inc.
  (specialty furniture manufacturer);
  former President and Chief
  Executive Officer, Thomas Built
  Buses, Inc.

• Elizabeth S. Ward
  Chief Financial Officer and
  Treasurer, The Moses H. Cone
  Memorial Hospital.

  John F. Watts
  Owner, Watts Realty.

  G. Alfred Webster
  Retired; Director and Chair of the
  Executive Committee, Unifi, Inc.;
  former Executive Vice President,
  Unifi, Inc.

  Kenan C. Wright
  President, The Wright Co. of N.C.,
  Inc. (general contractor).

  Julius S. Young, Jr.
  President, Jay Young Management,
  Inc. (asset management).

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, changes in economic conditions, the financial condition of our customers, interest rate fluctuations, competitive product and pricing pressures within our markets, acquisitions and integrations of acquired businesses, technological changes, changes in law and regulations, changes in fiscal, monetary, regulatory and tax policies, monetary fluctuations, actions of government regulators, and the availability of capital and personnel. 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 on 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 document.

Annual Report on Form 10-K

Copies of the Company's Annual Report to the Securities and Exchange Commission on Form 10-K will be provided at no charge.

Contact: Angelika I. Gambetta,Vice President, Investor and Shareholder Relations, NewBridge Bank.

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NASDAQ: NBBC