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): January 21, 2000
NORTH VALLEY BANCORP
(Exact name of registrant as specified in its charter)
Commission File Number: 0-10652
CALIFORNIA 94-2751350
(State of incorporation) (I.R.S. Employer
identification number)
880 E. Cypress Avenue, Redding, CA 96002
(Address of principal executive offices and zip code)
(530) 221-8400
(Registrant's area code and telephone number)
Item 5: Other Events
On January 21, 2000, the Registrant issued a Press Release
which announced earnings for the year ended December 31, 1999.
Attached hereto as Exhibit 99 is said Press Release dated
January 21, 2000.
As previously reported, the Registrant has entered into an Agreement
and Plan of Reorganization and Merger dated as of October 3, 1999, with
Six Rivers National Bank, a national banking association headquartered in
Eureka, California. On January 28, 2000, the Registrant and Six Rivers
National Bank agreed to extend the "termination date" for the closing of
the transactions contemplated by such Agreement from March 31, 2000, to
July 31, 2000. Based on current expectations, the parties anticipate
that all conditions to the closing will not occur until the second quarter
of the year 2000. Therefore, an extension of the termination date to
July 31, 2000, is intended to accommodate this revised schedule.
Item 7: Financial Statements and Exhibits
Listed below is the Exhibit filed as part of this report.
(99) Press Release dated January 21, 2000.
SIGNATURE
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
By
Sharon Benson
Senior Vice President &
Dated: January 31, 2000 Chief Financial Officer
Press Release
January 21, 2000
North Valley Bancorp Reports Increased Earnings for Year End 1999
Redding, California - (Business Wire) - January 20, 2000 -
North Valley Bancorp (NASDAQ/NOVB), parent company of North
Valley Bank, today reported net income for the year ended
December 31, 1999 of $4,528,000, compared to $4,085,000 for
the year ended December 31, 1998. Earnings per share on a
diluted basis were $1.21 for the year, compared to $1.10 for
the year ended 1998. Return on average assets was 1.49% and
return on average equity was 14.21% for the year ended
December 31, 1999, compared to 1.46% and 13.73%
respectively, for the same period in 1998.
Mike Cushman, President & CEO, stated: "North Valley's
management team has focused on achieving key goals and
objectives identified in the Company's strategic plan.
Those primary goals and objectives are to maintain the high
level of credit quality at North Valley Bank, to increase
and develop new sources of non-interest income, and to
maximize shareholder value by producing above-peer operating
results. The plan also includes increasing market share by
offering diverse products and services, and developing
activities such as the pending merger transaction with Six
Rivers National Bank."
"We continue to look for opportunities to better leverage
our capital and increase market share in the communities we
serve. Market share growth is expected to continue as
enhanced products and services are made available. We are
streamlining deposit and loan products and full service
Internet banking will be available within the next few
weeks. Management has created a highly centralized Company
in an effort to maximize efficiency.
Maintaining credit quality has always been important to NVB.
As of December 31, 1999, the non-performing loans to total
loans ratio has been reduced to .26%, the ratio of charge-
offs to average total loans decreased to .33% and the loan
loss reserve as a percentage of total loans increased to
1.04%.
Service charges and fee income increased 20%. The increase
is the result of account growth, increased revenue generated
through the investment services department, and fees
produced by loan activity.
Focusing on shareholder value will be a priority in 2000.
An Investors Relations Strategic Plan was recently adopted
by the Board which includes goals and objectives relative to
how the Company's stock is priced and is a key component in
evaluating the executive management team's overall
performance."
Cushman further stated, "The pending merger with Six Rivers
National Bank is proceeding as planned and the closing is
projected for the second quarter of 2000, subject to
shareholder and regulatory approvals and satisfaction of
certain conditions of the merger agreement. Our transition
team has been working closely with the Six Rivers team to
insure a smooth and efficient integration."
Sharon L. Benson, Chief Financial Officer of North Valley
Bancorp and North Valley Bank, reported the following:
Net Interest Income
Net interest income increased by $1,526,000 to $13,411,000,
a 13% increase for the year ended 1999 compared to
$11,885,000 for the year ended 1998. The increase was
primarily the result of increased loans outstanding, and a
decrease in rates paid on interest bearing deposits.
Press Release - North Valley Bancorp
January 21, 2000
Page 2
Non Interest Income
Non interest income was $3,737,000 in 1999 compared to
$4,095,000 the previous year. 1998 includes $979,000 in
gains on the sale of securities compared to $33,000 in 1999.
Service charges and fees increased 20% in 1999 from
$2,637,000 in 1998 to $3,152,000.
Non Interest Expense
Non interest expense increased from $8,886,000 in 1998 to
$10,105,000 in 1999. The increase was primarily a result
of $333,000 in losses resulting from the sale of OREO
properties and $149,000 in costs associated with the pending
merger with Six Rivers National Bank.
Loan Losses
The provision for loan losses decreased $388,000 to
$1,042,000 for the year ended December 31, 1999 compared to
$1,430,000 for the year ended December 31, 1998. Net
charge-offs decreased significantly from $1,230,000 in 1998
to $684,000 in 1999.
At December 31, 1999, the allowance for loan loss reserve
was $2,260,000 or 1.04% of total loans compared to
$1,902,000 or .95% at December 31, 1998.
(CONTINUED)
Press Release - North Valley Bancorp
January 21, 2000
Page 3
Statements of Income
(unaudited)
For the year ended For the three months ended
December 31, December 31,
1999 1998 1999 1998
(dollars in thousands)
INTEREST INCOME
Loans including fees $17,613 $15,860 $ 4,773 $ 4,235
Securities
Taxable 1,066 1,416 266 311
Exempt from federal taxes 1,926 2,173 445 519
Federal funds sold 1,040 1,019 335 251
Total interest income 21,645 20,468 5,819 5,316
INTEREST EXPENSE - DEPOSITS 8,234 8,583 2,178 2,108
NET INTEREST INCOME 13,411 11,885 3,641 3,208
PROVISION FOR LOAN LOSSES 1,042 1,430 207 270
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 12,369 10,455 3,434 2,938
NON INTEREST INCOME:
Service charges on
deposit accounts 2,143 1,786 562 498
Other fees and charges 1,009 851 207 216
Gain (loss) on sale of loans (71) 130 17 24
Gain on sale of available
for sale securities 33 979 8 251
Other 623 349 77 97
Total other operating income 3,737 4,095 871 1,086
NONINTEREST EXPENSES:
Salaries and employee
benefits 4,814 4,679 1,308 1,344
Occupancy expense 641 557 159 140
Furniture and
equipment expense 675 666 160 179
Merger & acquisition expense 149 - 149
Other 3,826 2,984 1,109 750
Total noninterest expenses 10,105 8,886 2,885 2,413
INCOME BEFORE PROVISION FOR
INCOME TAXES 6,001 5,664 1,420 1,611
PROVISION FOR INCOME TAXES 1,473 1,579 247 444
NET INCOME $ 4,528 $ 4,085 $ 1,173 $ 1,167
EARNINGS PER SHARE:
Basic $ 1.22 $ 1.11 $ 0.31 $ 0.32
Diluted $ 1.21 $ 1.10 $ 0.31 $ 0.32
Press Release - North Valley
Bancorp
January 21, 2000
Page 4
Balance Sheet
(unaudited)
ASSETS December 31,1999 December 31, 1998
Cash and due from banks $ 12,783 $ 7,052
Federal funds sold 14,600 18,300
Cash held in trust 282 873
Securities:
Available for sale, at fair value 25,569 22,842
Held to maturity, at amortized cost 28,146 33,914
Loans receivable net of allowance for
loan losses and deferred loan fees 215,397 197,434
Premises and equipment, net of accumulated
Depreciation and amortization 5,060 5,028
Other real estate owned 80 575
FHLB stock 911 841
Accrued interest receivable 2,035 1,770
Other assets 7,947 7,733
TOTAL ASSETS $ 312,810 $ 296,362
LIABILITIES AND STOCKHOLDERS'
EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand deposits $ 40,071 $ 37,372
Interest-bearing deposits 235,190 222,509
Total deposits 275,261 259,881
Accrued interest and other liabilities 4,340 6,301
Total liabilities 279,601 266,182
STOCKHOLDERS' EQUITY:
Preferred stock, no par value: authorized 5,000,000
Shares, none outstanding
Common stock, no par value: authorized 20,000,000
shares, outstanding 3,714,418 and 3,690,220
at December 31, 1999 and 1998 10,390 10,237
Retained Earnings 22,970 19,890
Accumulated other comprehensive income,
net of tax (151) 53
Total stockholders' equity 33,209 30,180
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 312,810 $ 296,362
Press Release - North Valley Bancorp
January 21, 2000
Page 5
FINANCIAL RATIOS:
As of and for the year ended December 31,
1999 1998
Return on average assets 1.49% 1.46%
Return on average equity 14.21% 13.73%
Efficiency ratio 58.93% 55.61%
Net interest margin 5.16% 5.02%
Average equity to average assets 10.50% 10.64%
Balance beginning of year $ 1,902 $ 1,702
Provision for loan losses 1,042 1,430
Net charge offs (net recoveries) 684 1,230
Balance end of period $ 2,260 $ 1,902
Allowance for loan losses to nonaccrual loans 649.43% 82.44%
Allowance for loan losses to nonperforming
loans 395.80% 71.21%
Allowance for loan losses to total
gross loans 1.04% .95%
Allowance for loan losses to nonperforming
assets 347.16% 58.60%
Ratio of net charge-offs to
average loans outstanding 0.33% 0.70%
NON-PERFORMING ASSETS:
December 31, December 31,
1999 1998
Total nonaccrual loans $ 348 2,307
Troubled debt restructuring
Loans 90 days past due and still accruing 223 364
Total nonperforming loans 571 2,671
Other real estate owned 80 575
Total nonperforming assets $ 651 $ 3,246
Nonaccrual loans to total gross loans 0.16% 1.16%
Nonperforming loans to total gross loans 0.26% 1.34%
Total nonperforming aassets to total assets 0.21% 1.10%
(Cautionary Statement: This release contains certain forward-
looking statements that are subject to risks and
uncertainties that could cause actual results to differ
materially from those stated herein. Management's
assumptions and projections are based on their anticipation
of future events and actual performance may differ
materially from those projected. Risks and uncertainties
which could impact future financial performance include,
among others, (a) competitive pressures in the banking
industry; (b) changes in the interest rate environment; (c)
general economic conditions, either nationally or
regionally; (d) changes in the regulatory environment; and
(e) changes in business conditions or the securities markets
and inflation. Therefore, the information set forth herein,
together with other information contained in the periodic
reports filed by the company with the Securities and
Exchange Commission, should be carefully considered when
evaluating the business prospects of the company. North
Valley Bancorp undertakes no obligation to update any
forward-looking statements contained in this release).
For Further Information, Please Contact: Michael J.
Cushman, President & C.E.O. or
Sharon L. Benson, Senior Vice President & C.F.O. -
(530) 221-8400; FAX (530) 222-1768