SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2000
NORTH VALLEY BANCORP
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-10652 94-2751350
(State or other jurisdiction (File Number) (IRS Employer
of incorporation) Identification No.)
880 EAST CYPRESS AVENUE 96002
REDDING, CALIFORNIA
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (530) 221-8400
This Form 8-K consists of 8 pages. The Exhibit Index is on Page 4.
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ITEM 5. OTHER EVENTS
North Valley Bancorp (the "Registrant") is a California corporation and
the registered bank holding company for North Valley Bank, a California banking
corporation with its headquarters in Redding, California. The Registrant entered
into a certain Agreement and Plan of Reorganization and Merger dated October 3,
1999, as amended January 28, 2000 (the "Plan of Reorganization") with Six Rivers
National Bank, a national banking association with its headquarters in Eureka,
California ("Six Rivers"), and NVB Interim National Bank, an interim national
banking association to be formed at the direction of the Registrant to
facilitate the business combination contemplated by the parties. Under the terms
of the Plan of Reorganization, Six Rivers is expected to merge with and into NVB
Interim National Bank and the resulting national banking association will
continue operations with the national bank charter number of Six Rivers and the
name "Six Rivers National Bank" as a wholly owned subsidiary of the Registrant.
Upon consummation of the transactions described in the Plan of Reorganization,
currently expected to occur on or before July 31, 2000, unless extended by the
parties, the Registrant would have two banking subsidiaries: North Valley Bank
and Six Rivers National Bank. The closing of such transactions is subject to the
prior approval of the shareholders of the Registrant and Six Rivers,
respectively, plus the receipt of all applicable regulatory approvals.
Pursuant to the Plan of Reorganization, and with the cooperation of Six
Rivers, the Registrant has prepared and filed with the Commission a registration
statement on Form S-4 under and pursuant to the Securities Act of 1933
(registration number 333-93597) to serve as the joint proxy statement/prospectus
for the purpose of submitting the terms of the Plan of Reorganization to a vote
of the shareholders of the Registrant and to a vote of the shareholders of Six
Rivers at special meetings called for the purpose. As permitted by Form S-4, the
Registrant intends to incorporate by reference certain reports and other
information regarding the Registrant previously filed and to be filed with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The Common Stock of Six Rivers is registered pursuant to
Section 12(g) of the Exchange Act and the reports and other information required
of Six Rivers under the Exchange Act are filed with the Office of the
Comptroller of the Currency, the federal agency vested with the powers,
functions and duties of the Commission with respect to national banks under
Section 12(i) of the Exchange Act. Six Rivers and the Registrant have agreed
that certain reports and other information regarding Six Rivers, including
reports and other information previously filed and to be filed with the
Comptroller of the Currency pursuant to the Exchange Act, should be incorporated
by reference into the Form S-4 as filed with the Commission by the Registrant in
accordance with the Plan of Reorganization. To accomplish this end, Six Rivers
and the Registrant have also agreed that each such report or other information,
as and when filed by Six Rivers with the Comptroller of the Currency, shall be
filed with the Commission as an exhibit to a Form 8-K Current Report of the
Registrant.
In accordance with the above, certain information of Six Rivers is
filed as Exhibit 99.17 to this report and is incorporated herein by this
reference as if set forth in full. Such information consists of a News Release,
dated February 4, 2000, which announced the Six Rivers earnings for the year
ended December 31, 1999. Such information supplements the reports and other
information attached as exhibits to the Current Reports on Form 8-K previously
filed by the Registrant on December 23, 1999, and on February 1, 2000.
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<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
--------
99.17 News Release of Six Rivers National Bank dated
February 4, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NORTH VALLEY BANCORP
(Registrant)
Date: February 4, 2000. By: /s/ SHARON L. BENSON
-----------------------------
Sharon L. Benson
Senior Vice President and
Chief Financial Officer
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<PAGE>
EXHIBIT INDEX
NO. IDENTITY PAGE NOS.
- -- -------- --------
99.17 News Release of Six Rivers National Bank dated February 4, 2000 5
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Len Cereghino & Co. CLIENT: SIX RIVERS NATIONAL BANK
CORPORATE INVESTOR RELATIONS CONTACT: Michael Martinez, CEO
2605 Western Avenue, Seattle, WA 98121 (707) 443-8400
(206) 448-1996
NEWS RELEASE
================================================================================
SIX RIVERS NATIONAL BANK EARNINGS TOP $1.2 MILLION IN 1999
Eureka, CA - February 4, 2000 - Six Rivers National Bank (Nasdaq: SIXR) today
reported that improvements in asset quality led to continued profits in the
fourth quarter. During the year ended December 31, 1999, tightened underwriting
standards and effective lending procedures resulted in improved credit quality.
Net income was $277,000, or $0.19 per diluted share, in the fourth quarter and
$1.2 million, or $0.82 per diluted share for the full year. These results
include pretax costs related to the pending agreement with North Valley Bancorp
of $110,000 for the fourth quarter ($.04 per share after tax), and $176,000 for
the year ($.07 per share after tax). Six Rivers posted a net loss of $695,000,
or $(.46) per diluted share in the fourth quarter of 1998, and a loss of $1.1
million, or $(.77) per share for 1998.
In October, Six Rivers announced the signing of a definitive merger agreement
with Redding-based North Valley Bancorp (Nasdaq: NOVB). The combined institution
will have 20 branch offices and over $500 million in total assets. The
transaction is expected to close in the second quarter of 2000, following
shareholder and regulatory approval.
Six Rivers continued to strengthen and improve its balance sheet throughout the
year. At December 31, 1999, non-performing assets totaled $3.0 million, or 1.44%
of total assets, compared to $3.5 million, or 1.72% of assets a year ago.
Non-performing loans were $2.4 million at year-end 1999, compared to $3.1
million last year.
"We were focused internally during 1999. We had to rebuild our lending team and
improve lending policy and controls. These efforts have resulted in the
reduction of problem assets and a disciplined credit culture. Perhaps more
importantly, we have eliminated many external distractions and will be able to
once again focus on prudent growth and efficiency of our operation," stated
Michael Martinez, CEO. "The balance sheet numbers reflect that we were in a
clean up mode during the year. We achieved our primary goals for the year which
were to strengthen our asset base, improve our lending operation and return this
organization to profitability. One of the keys to profitability was to reduce
our provision for loan losses. We were able to get that done as well, and that
has transferred directly to the bottom line."
"Our internal procedures were vigorously evaluated by external auditors and
regulators. This process gives us confidence in our portfolio's improved
condition," stated Shelton Francis, Chief Lending Officer. Loans on nonaccrual
status improved 38% to $1.8 million from $2.9 million a year ago. "We also had
loan recoveries of $179,000 this year, which accounted for 81% of our provision
for loan losses in the year, bolstering reserves and increasing profits." Loans
totaling $855,000 were charged off during 1999, with $718,000 of that total
charged off in the fourth quarter. "The charge offs in the fourth quarter were
comprised primarily of two loans, both of which are in workout and some recovery
is expected."
Net interest income before the provision for loan losses was $2.4 million in the
fourth quarter of 1999, compared to $2.3 million a year ago, and totaled $8.8
million for each of the twelve month periods. Net interest income after the
provision for loan losses improved 169% for the quarter to $2.4 million,
compared to $899,000 in the quarter last year. For the full year, net interest
income after provision increased 74% to $8.6 million, compared to $4.9 million
in 1998.
Noninterest income was $358,000 in the fourth quarter of 1999, compared to
$408,000 a year ago. For each of the years noninterest income totaled $1.6
million. Operating (non-interest) expenses decreased slightly for both the
quarter and the year, reflecting the bank's decreased professional fees
associated with problem assets. In the fourth quarter of 1999, non-interest
expense was $2.3 million, compared to $2.5 million in the quarter last year. For
1999, operating expenses improved to $8.2 million, from $8.4 million in 1998.
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<PAGE>
SIXR -1999 Profits
February 4, 2000
Page Two
The efficiency ratio improved dramatically in the quarter to 83.4%, compared to
91.1% a year ago. For the year, the efficiency ratio improved by 250 basis
points to 78.1%. The return on average equity (ROE) was 5.9% for the quarter and
6.5% for the year, and the return on average assets (ROA) was 0.53% for the
quarter and 0.59% for the year. Both ROE and ROA were negative in the fourth
quarter and the year in 1998 after Six Rivers posted losses in both periods.
At December 31, 1999, net loans were $110.4 million, up from $104.2 million a
year ago. The bank's total assets were $208.2 million at year-end, compared to
$203.2 million at December 31, 1998. Deposits declined slightly and the bank
significantly increased its borrowings from other institutions to fund the loan
and investment growth. Deposits were $177.4 million at the end of December,
compared to $182.9 million a year ago.
Including the bank's $220,000 provision for loan losses the total reserve now
stands at $2.3 million. The loan loss allowance represents 2.09% of total gross
loans, and 78% of non-performing assets. At year-end 1998, the loan loss
allowance represented 3.12% of total loans, and 89% of non-performing assets.
"We have completely changed the lending culture at Six Rivers over the last year
and believe that we are adequately reserved," Martinez said.
Shareholders' equity was $18.6 million and tangible book value was $9.49 per
share at year-end, compared to $18.5 million and $9.32 per share a year ago.
SIXR stock closed trading yesterday, February 3, 2000, at $12.50.
Since its formation in 1989, Six Rivers has concentrated on providing a high
level of personal service and provides traditional deposit products to local
customers and offers primarily commercial, consumer, and real estate loans.
After making significant changes to upper management and the lending culture,
Six Rivers has returned to profitability with a strengthened balance sheet.
Headquartered in Eureka, California, Six Rivers is a full-service commercial
bank with eight branch offices in Northern California.
NOTE: EXCEPT FOR THE HISTORICAL INFORMATION IN THIS NEWS RELEASE, MATTERS
DESCRIBED HEREIN ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND ARE SUBJECT TO RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY. SUCH RISKS
AND UNCERTAINTIES INCLUDE THE PENDING MERGER WITH NORTH VALLEY BANCORP, THE
ECONOMIC ENVIRONMENT IN NORTHERN CALIFORNIA AND GLOBALLY, COMPETITIVE PRODUCTS
AND PRICING, THE ABILITY TO CONTROL COSTS, GENERAL INTEREST RATE CHANGES, CREDIT
RISK MANAGEMENT, AND OTHER RISKS AND UNCERTAINTIES DISCUSSED FROM IN SIX RIVER'S
OCC SECURITIES FILINGS. SIX RIVERS NATIONAL BANK DISCLAIMS ANY OBLIGATION TO
PUBLICLY ANNOUNCE FUTURE EVENTS OR DEVELOPMENTS THAT AFFECT THE FORWARD-LOOKING
STATEMENTS HEREIN.
FINANCIAL HIGHLIGHTS
(Unaudited) ($ in millions, except per share)
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For the Period Ended
Percentage --------------------------------
Change 12/31/1999 12/31/1998
---------- ---------- ----------
BALANCE SHEET
Total Assets 2% $ 208,260 $ 203,236
Loans Receivable, Net 6% 110,426 104,151
Investments 6% 64,965 61,277
Intangible Assets -6% 4,588 4,891
Deposits -3% 177,436 182,932
Borrowings 1460% 10,565 677
Shareholders Equity 0% 18,592 18,520
Stated Book Value Per Share -1% $ 12.60 $ 12.67
Tangible Book Value Per Share 2% $ 9.49 $ 9.32
Tangible Equity/Assets 0% 6.72% 6.71%
Quarterly:
Average Assets 2% 205,194 201,323
Average Total Equity -4% 18,733 19,567
Average Earning Assets 3% 187,494 182,132
Shares Outstanding 1% 1,476,128 1,461,642
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SIXR -1999 Profits
February 4, 2000
Page Three
<TABLE>
<CAPTION>
3 MONTHS 3 MONTHS 12 MONTHS 12 MONTHS
INCOME STATEMENT (UNAUDITED) ENDED ENDED ENDED ENDED
12/31/1999 12/31/1998 12/31/1999 12/31/1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest Income $ 3,921 $ 3,797 $ 14,635 $ 14,915
Interest Expense 1,494 1,499 5,796 6,067
----------- ----------- ----------- -----------
Net Interest Income (Before Provision For Loan Losses) 2,427 2,298 8,839 8,848
Provision for Loan Losses 0 1,400 220 3,904
----------- ----------- ----------- -----------
Net Interest Income (After Provision For Loan Losses) 2,427 898 8,619 4,944
Non-Interest Income:
Gain/(loss) on Sale of Loans (40) 2 12 37
Services Charges 278 320 1,172 1,185
Other 120 86 447 373
----------- ----------- ----------- -----------
Total noninterest income 358 408 1,631 1,595
Non-Interest Expense:
Personnel 866 936 3,687 3,512
Premises/Equipment 329 341 1,226 1,197
Other 1,127 1,188 3,263 3,706
----------- ----------- ----------- -----------
Total non-interest expense 2,322 2,465 8,176 8,415
----------- ----------- ----------- -----------
Income/(loss) Before Taxes 463 (1,159) 2,074 (1,876)
Income Tax Expense (Benefit) 186 (464) 858 (751)
----------- ----------- ----------- -----------
Net Income (loss) $ 277 $ (695) $ 1,216 $ (1,125)
=========== =========== =========== ===========
Basic Earnings Per Share $ 0.19 $ (0.48) $ 0.83 $ (0.77)
Diluted Earnings Per Share $ 0.19 $ (0.48) $ 0.82 $ (0.77)
Basic Weighted Average Shares Outstanding 1,476,128 1,461,642 1,467,507 1,453,094
Diluted Weighted Average Shares Outstanding 1,492,747 1,461,642 1,475,885 1,453,094
3 MONTHS 3 MONTHS 12 MONTHS 12 MONTHS
ADDITIONAL FINANCIAL HIGHLIGHTS ENDED ENDED ENDED ENDED
(Unaudited) 12/31/1999 12/31/1998 12/31/1999 12/31/1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Return on Average Assets 0.53% -1.35% 0.59% -0.56%
Return on Average Equity 5.90% -14.52% 6.49% -5.74%
Efficiency Ratio * 83.4% 91.1% 78.1% 80.6%
Operating Expense / Average Assets 4.40% 4.78% 3.98% 4.18%
Net Interest Margin ** 5.14% 4.91% 4.71% 4.86%
Interest Bearing Assets / Interest Bearing Liabilities 121% 121% 121% 119%
Average Equity / Average Assets 8.98% 9.29% 9.13% 9.72%
</TABLE>
* Non-Interest Expense / (Net Interest Income + Non-Interest Income)
** (Interest Income - Interest Expense) / Average Earning Assets
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<PAGE>
SIXR -Third Quarter Earnings
February 4, 2000
Page Four
<TABLE>
<CAPTION>
CHANGE IN THE ALLOWANCE 12 MONTHS 12 MONTHS
FOR LOAN LOSSES ENDED ENDED
12/31/1999 12/31/1998
---------- ----------
<S> <C> <C>
Balance at Beginning of Period $ 2,802 $ 1,159
Charge-Offs (855) (2,350)
Recoveries 179 89
Provision for Loan Losses 220 3,904
-------- --------
Balance at End of Period $ 2,347 $ 2,802
======== ========
Loan Loss Allowance / Total Loans 2.09% 3.12%
Loan Loss Allowance / Non-performing Assets 77.7% 80.2%
12 MONTHS 12 MONTHS
NON-PERFORMING ASSETS ENDED ENDED
12/31/1999 12/31/1998
---------- ----------
<S> <C> <C>
Accruing Loans - 90 Days Past Due $ -- $ 4
Non-Accrual Loans 1,799 2,896
Restructured Loans on Accrual 601 242
-------- --------
Total Non-Performing Loans 2,400 3,142
OREO (Net) 619 354
-------- --------
Total Non-Performing Assets $ 3,019 $ 3,496
======== ========
Total Assets $208,260 $203,236
Total Non-Performing Assets / Total Assets 1.45% 1.72%
</TABLE>
NOTE: Transmitted on PR Newswire at 9:01 a.m. EST, February 4, 2000.
