North Valley Bancorp Reports Results for the Quarter Ended March 31, 2014

North Valley Bancorp Reports Results for the Quarter Ended March 31, 2014 
REDDING, CA -- (Marketwired) -- 04/30/14 --  North Valley Bancorp
(NASDAQ: NOVB), a bank holding company with $919 million in assets,
today reported results for the quarter ended March 31, 2014. North
Valley Bancorp ("the Company") is the parent company for North Valley
Bank ("NVB"). 
The Company reported net income for the quarter ended March 31, 2014
of $919,000, or $0.13 per diluted share compared to net income for
the quarter ended March 31, 2013 of $1,261,000, or $0.18 per diluted
share. "We are pleased with the results from the first quarter as we
move forward with our planned merger with TriCo Bancshares," stated
Mike Cushman, President and CEO.  
As announced by the Company on January 21, 2014 and reported in the
Company's Current Report on Form 8-K, filed with the Securities and
Exchange Commission ("SEC") on January 22, 2014 (the "Current
Report"), the Company entered into an Agreement and Plan of Merger
and Reorganization dated January 21, 2014 (the "Merger Agreement"),
pursuant to which the Company would merge with and into TriCo
Bancshares, a California corporation ("TriCo"), with TriCo being the
surviving corporation. Immediately thereafter, the Company's
subsidiary bank, North Valley Bank, would be merged with and into
TriCo's subsidiary bank, Tri Counties Bank. The transactions
contemplated by the Merger Agreement are expected to close in the
second or third quarter of 2014, pending approvals of the Company
shareholders and the TriCo shareholders, the receipt of all necessary
regulatory approvals, and the satisfaction of other closing
conditions which are customary for such transactions.  
The Company did not record a provision for loan losses for the
quarters ended March 31, 2014 and 2013. The allowance for loan losses
at March 31, 2014 was $9,058,000, or 1.78% of total loans, compared
to $9,301,000, or 1.83% of total loans, at December 31, 2013 and
$9,651,000, or 1.98% of total loans, at March 31, 2013. 
At March 31, 2014, total assets were $918,972,000, an increase of
$8,238,000, or 0.9%, from $910,734,000 at March 31, 2013. The loan
portfolio totaled $508,056,000 at March 31, 2014, an increase of
$19,450,000, or 4.0%, compared to $488,606,000 at March 31, 2013. The
loan to deposit ratio at March 31, 2014 was 64.7% as compared to
63.0% at March 31, 2013, and 64.6% at December 31, 2013. Total
deposits increased $9,897,000, or 1.3%, to $785,817,000 at March 31,
2014 compared to $775,920,000 at March 31, 2013. Available-for-sale
investment securities totaled $273,143,000 at March 31, 2014, a
decrease of $10,578,000 from the total at March 31, 2013. When
compared to December 31, 2013, total assets increased $1,208,000 from
$917,764,000, while loans decreased by $1,188,000 from $509,244,000,
and deposits decreased $2,032,000 from $787,849,000.
Available-for-sale investment securities decreased $6,336,000 from
December 31, 2013 to March 31, 2014, while Federal funds sold
increased $6,615,000 from December 31, 2013 to March 31, 2014.  
At March 31, 2014, the Company's Total Risk-based Capital was
$120,196,000, and its capital ratios were: Total Risk-based Capital
ratio -- 19.3%; Tier 1 risk-based Capital ratio -- 18.1%; and Tier 1
Leverage ratio -- 12.3%. At March 31, 2014, the Bank's Total
Risk-based Capital was $118,348,000, and its capital ratios were:
Total Risk-based Capital ratio -- 19.1%; Tier 1 risk-based Capital
ratio -- 17.8%; and Tier 1 Leverage ratio -- 12.1%.  
Credit Quality 
Nonperforming loans (defined as nonaccrual loans and loans 90 days or
more past due and still accruing interest) decreased $1,644,000, or
25.5%, to $4,805,000 at March 31, 2014 from $6,449,000 at March 31,
2013, and decreased $288,000 from the December 31, 2013 balance of
$5,093,000. Nonperforming loans as a percentage of total loans were
0.95% at March 31, 2014, as compared to 1.00% at December 31, 2013
and 1.32% at March 31, 2013. 
During the first quarter of 2014, the Company identified five loans
totaling $1,669,000 as additional nonperforming loans. The additions
were offset by reductions in nonperforming loans totaling $1,957,000
due primarily to the transfer of one property to Other Real Estate
Owned ("OREO") totaling $1,231,000, and secondarily to collections
received on certain loans and charge-offs. Of the five loans totaling
$1,669,000 identified as nonperforming loans during the first quarter
of 2014, two relationships make up $1,526,000 of the balance. The
first relationship is for a commercial real estate loan totaling
$865,000 located in Stanislaus County. There is no specific reserve
required for this loan. The second relationship consists of two loans
totaling $661,000 for residential income property located in Solano
County. The Company has recorded a $215,000 charge-off for these
loans and there is no specific reserve required. The remaining two
loans of the five identified as nonperforming loans in the first
quarter total $143,000. Charge-offs of $34,000 were recorded against
one of the loans and there were no specific reserves required.  
Gross loan charge offs for the first quarter of 2014 were $298,000
and recoveries totaled $55,000 resulting in net charge offs of
$243,000. Gross loan charge offs for the first quarter of 2013 were
$1,056,000 and recoveries totaled $249,000 resulting in net charge
offs of $807,000. 
Nonperforming assets (nonperforming loans and OREO) totaled
$7,438,000 at March 31, 2014, a decrease of $20,376,000 from the
March 31, 2013 balance of $27,814,000, and a $1,109,000 decrease from
the December 31, 2013 balance of $8,547,000. Nonperforming assets as
a percentage of total assets were 0.81% at March 31, 2014 compared to
3.05% at March 31, 2013 and 0.93% at December 31, 2013.  
The Company's OREO properties decreased $821,000 to $2,633,000 at
March 31, 2014 from $3,454,000 at December 31, 2013. The decrease in
OREO was due to the sale of three properties totaling $2,227,000 (a
gain of $175,000 was recorded on the sale), which was partially
offset by the transfer of one property to OREO totaling $1,231,000.
Subsequent to March 31, 2014, the Company sold an OREO property
located in Shasta County at its recorded value of $2,154,000
resulting in no loss on the sale. The transaction closed on April 4,
2014. 
Operating Results 
Net interest income, which represents the Company's largest component
of revenues and is the difference between interest earned on loans,
investments and other earning assets and interest paid on deposits
and borrowings, increased $326,000, or 4.4%, for the three months
ended March 31, 2014 compared to the same period in 2013. Interest
income increased by $251,000, or 3.2%, primarily due to an increase
in average earning asset balances. The Company had foregone interest
income of $10,000 and $85,000 for the loans on nonaccrual status for
the three months ended March 31, 2014 and 2013, respectively. Average
loans increased $22,734,000 in the first quarter of 2014 compared to
the first quarter of 2013, while the yield on the loan portfolio
decreased 22 basis points to 5.11% for the quarter ended March 31,
2014. Interest expense decreased $75,000, or 17.4%, due primarily to
a decrease in the rates paid on deposits for the quarter ended March
31, 2014 compared to the same period in 2013. Overall, average
earning assets increased $41,029,000 to $838,890,000 in the first
quarter of 2014 compared to the first quarter of 2013. Average yields
on earning assets decreased 9 basis points from the quarter ended
March 31, 2013, to 3.94% for the quarter ended March 31, 2014 while
the average rate paid on interest-bearing liabilities decreased by 5
basis points to 0.23%. The Company's net interest margin for the
quarter ended March 31, 2014 was 3.77%, a decrease of 4 basis points
from the margin of 3.81% for the first quarter in 2013 and an
increase of 6 basis points from the 3.71% net interest margin for the
linked quarter ended December 31, 2013. 
Noninterest income for the quarter ended March 31, 2014 decreased
$1,899,000, or 43.9%, to $2,430,000 compared to $4,329,000 for the
same period in 2013. Service charges on deposits decreased by
$254,000 to $698,000 for the first quarter of 2014 compared to
$952,000 for the same period in 2013. Other fees and charges
decreased by $108,000 to $1,012,000 for the first quarter of 2014
compared to $1,120,000 for the first quarter of 2013. The Company
recorded gains on the sale of mortgage loans of $184,000, and gains
on the sale of SBA loans of $45,000 for the first quarter of 2014
compared to gains of $757,000 and $168,000, respectively, for the
same period in 2013. The Company did not record a gain on the sale of
investment securities for the first quarter of 2014 compared to gains
on the sale of investment securities of $543,000 for the same period
in 2013. Other noninterest income decreased $298,000, to $491,000 for
the quarter ended March 31, 2014 compared to $789,000 for the same
period in 2013.  
Noninterest expense decreased $1,132,000, or 11.5%, to $8,756,000 for
the first quarter of 2014 from $9,888,000 for the first quarter in
2013. Salaries and employee benefits decreased $139,000, for the
first quarter of 2014 compared to the first quarter of 2013.
Occupancy and furniture and equipment expense decreased $14,000 for
the first quarter of 2014 compared to the first quarter of 2013, OREO
expense decreased $366,000 to $10,000, for the first quarter of 2014
compared to $376,000 for the same period in 2013, and FDIC and state
assessments decreased $77,000 to $141,000 for the first quarter of
2014, compared to $218,000 for the same period in 2013. Other expense
decreased $536,000 to $2,743,000 for the first quarter of 2014
compared to $3,279,000 for the same period in 2013. For the three
months ended March 31, 2014, the Company had approximately $290,000
of merger related expenses resulting from the pending merger with
TriCo Bancshares, included in other noninterest expenses.  
The Company recorded a provision for income taxes for the quarter
ended March 31, 2014 of $517,000, resulting in an effective tax rate
of 36.0%, compared to a provision for income taxes of $616,000, or an
effective tax rate of 32.8%, for the quarter ended March 31, 2013.  
North Valley Bancorp is a bank holding company headquartered in
Redding, California. Its subsidiary, North Valley Bank ("NVB"),
operates twenty-two commercial banking offices in Shasta, Humboldt,
Del Norte, Mendocino, Yolo, Sonoma, Placer and Trinity Counties in
Northern California, including two in-store supermarket branches and
six Business Banking Centers. North Valley Bancorp, through NVB,
offers a wide range of consumer and business banking deposit products
and services including internet banking and cash management services.
In addition to these depository services, NVB engages in a full
complement of lending activities including consumer, commercial and
real estate loans. Additionally, NVB has SBA Preferred Lender status
and provides investment services to its customers. Visit the
Company's website address at www.novb.com for more information. 
ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER
 AND WHERE TO FIND
IT 
Investors and shareholders are urged to carefully review and consider
the public documents filed with the SEC by each of North Valley and
TriCo, including but not limited to their Annual Reports on Form 10-K
(including any amendments to Form 10-K), their Quarterly Reports on
Form 10-Q, their Current Reports on Form 8-K and their proxy
statements. Investors and shareholders may obtain free copies of
these documents through the website maintained by the SEC at
www.sec.gov (or from TriCo or North Valley as indicated below). In
connection with the proposed merger, TriCo will file with the SEC a
registration statement on Form S-4 to register the shares of TriCo
common stock to be issued to the shareholders of North Valley. The
registration statement will include a proxy statement/prospectus
which will be sent to the shareholders of North Valley and TriCo,
seeking their approval of the proposed merger and related matters. In
addition, TriCo and North Valley may file other relevant documents
concerning the proposed merger with the SEC. Before making any voting
or investment decision, investors and shareholders of North Valley
and TriCo are urged to carefully read the entire registration
statement on Form S-4 and the proxy statement/prospectus included
within the registration statement and any other relevant documents to
be filed with the SEC in connection with the proposed merger, when
they become available, as well as any amendments or supplements to
these documents, because they will contain important information
about TriCo, North Valley and the proposed transaction.  
Free copies of public documents filed with the SEC, including the
proxy statement/prospectus when it becomes available, may be obtained
by directing a request by telephone or mail to TriCo Bancshares, 63
Constitution Drive, Chico, California 95973, Attn: Investor
Relations, telephone (530) 898-0300, or by accessing TriCo's website
at www.tcbk.com under "Investor Relations," or by directing a request
by telephone or mail to North Valley Bancorp, 300 Park Marina Circle,
Redding, California 96001, Attn: Corporate Secretary, telephone
530-226-2900, or by accessing North Valley's website at www.novb.com
under "Investor Relations." Information on Trico's website or North
Valley's website is not, and shall not be deemed to be, a part of
this filing or incorporated into other filings made with the SEC. 
TriCo, North Valley, their directors, executive officers and certain
other persons may be deemed to be participants in the solicitation of
proxies from the TriCo and North Valley shareholders in favor of the
approval of the transaction. Information about TriCo directors and
executive officers will be included in TriCo's Form 10-K Annual
Report to be filed with the SEC and information about North Valley's
directors and executive officers will be included in North Valley's
Form 10-K Annual Report to be filed with the SEC. Additional
information regarding the interests of these participants and other
persons who may be deemed participants in the proposed merger will be
set forth in the proxy statement/prospectus and other relevant
documents filed with the SEC (when they become available).  
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 th
e
interest rate environment; (c) general economic conditions, either
nationally, regionally or locally, including fluctuations in real
estate values; (d) changes in the regulatory environment; (e) changes
in business conditions or the securities markets and inflation; (f)
possible shortages of gas and electricity at utility companies
operating in the State of California, and (g) the effects of
terrorism, including the events of September 11, 2001, and
thereafter, and the conduct of the war on terrorism by the United
States and its allies. 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,
except as required by law. 


 
                                                                            
                                                                            
                           NORTH VALLEY BANCORP                             
                   CONDENSED CONSOLIDATED FINANCIAL DATA                    
                                (Unaudited)                                 
               (Dollars in thousands, except per share data)                
                                                                            
                                 Three Months Ended                         
                                     March 31,                              
Statement of Income               2014       2013     $ Change    % Change  
                               ---------- ---------- ----------  ---------  
Interest income                                                             
  Loans (including fees)       $    6,395 $    6,366 $       29       0.46% 
  Investment securities             1,698      1,483        215      14.50% 
  Federal funds sold and other         26         19          7      36.84% 
                               ---------- ---------- ----------  ---------  
    Total interest income           8,119      7,868        251       3.19% 
                               ---------- ---------- ----------  ---------  
Interest expense                                                            
  Interest on deposits                226        299        (73)    (24.41%)
  Subordinated debentures             131        133         (2)     (1.50%)
                               ---------- ---------- ----------  ---------  
    Total interest expense            357        432        (75)    (17.36%)
                               ---------- ---------- ----------  ---------  
Net interest income                 7,762      7,436        326       4.38% 
Provision for loan losses               -          -          -          -  
                               ---------- ---------- ----------  ---------  
Net interest income after                                                   
 provision for loan losses          7,762      7,436        326       4.38% 
                               ---------- ---------- ----------  ---------  
                                                                            
Noninterest income                                                          
  Service charges on deposit                                                
   accounts                           698        952       (254)    (26.68%)
  Other fees and charges            1,012      1,120       (108)     (9.64%)
  Gain on sales of mortgage                                                 
   loans                              184        757       (573)    (75.69%)
  Gain on sales of SBA loans           45        168       (123)    (73.21%)
  Gain on sales of securities,                                              
   net                                  -        543       (543)   (100.00%)
  Other                               491        789       (298)    (37.77%)
                               ---------- ---------- ----------  ---------  
    Total noninterest income        2,430      4,329     (1,899)    (43.87%)
                               ---------- ---------- ----------  ---------  
                                                                            
Noninterest expenses                                                        
  Salaries and employee                                                     
   benefits                         5,023      5,162       (139)     (2.69%)
  Occupancy                           623        633        (10)     (1.58%)
  Furniture and equipment             216        220         (4)     (1.82%)
  Other real estate owned                                                   
   expense                             10        376       (366)    (97.34%)
  FDIC and state assessments          141        218        (77)    (35.32%)
  Other                             2,743      3,279       (536)    (16.35%)
                               ---------- ---------- ----------  ---------  
    Total noninterest expenses      8,756      9,888     (1,132)    (11.45%)
                               ---------- ---------- ----------  ---------  
    Income before provision                                                 
     for income taxes               1,436      1,877       (441)    (23.49%)
Provision for income taxes            517        616        (99)    (16.07%)
                               ---------- ---------- ----------  ---------  
    Net income                 $      919 $    1,261 $     (342)    (27.12%)
                               ========== ========== ==========  =========  
                                                                            
                                                                            
Common Share Data                                                           
  Earnings per share                                                        
    Basic                      $     0.13 $     0.18 $    (0.05)    (27.78%)
    Diluted                    $     0.13 $     0.18 $    (0.05)    (27.78%)
                                                                            
  Weighted average shares                                                   
   outstanding                  6,836,463  6,835,192                        
  Weighted average shares                                                   
   outstanding - diluted        6,889,040  6,845,484                        
  Book value per share         $    13.99 $    14.18                        
  Tangible book value per                                                   
   share                       $    13.97 $    14.15                        
  Shares outstanding            6,836,463  6,835,192                        
                                                                            
                                                                            
                                                                            
                                                                            
                            NORTH VALLEY BANCORP                            
                   CONDENSED CONSOLIDATED FINANCIAL DATA                    
                                (Unaudited)                                 
                           (Dollars in thousands)                           
                                                                            
                                          March 31, December 31,  March 31, 
Balance Sheet Data                          2014        2013        2013    
                                         ----------  ----------  ---------- 
Assets                                                                      
  Cash and due from banks                $   22,718  $   19,348  $   15,890 
  Federal funds sold                       
  44,750      38,135      35,925 
  Time deposits at other financial                                          
   institutions                               2,226       2,226       2,219 
  Available-for-sale securities - at                                        
   fair value                               273,143     279,479     283,721 
  Held-to-maturity securities - at                                          
   amortized cost                                 2           2           6 
                                                                            
  Loans                                     508,056     509,244     488,606 
  Allowance for loan losses                  (9,058)     (9,301)     (9,651)
                                         ----------  ----------  ---------- 
    Net loans                               498,998     499,943     478,955 
                                                                            
  Premises and equipment, net                 7,583       7,833       8,978 
  Other real estate owned                     2,633       3,454      21,365 
  Core deposit intangibles, net                  73         109         219 
  Accrued interest receivable and other                                     
   assets                                    66,846      67,235      63,456 
                                         ----------  ----------  ---------- 
Total assets                             $  918,972  $  917,764  $  910,734 
                                         ==========  ==========  ========== 
                                                                            
Liabilities and Shareholders' Equity                                        
 Deposits:                                                                  
  Demand, noninterest bearing            $  176,951  $  184,971  $  174,495 
  Demand, interest bearing                  210,207     202,508     193,846 
  Savings and money market                  255,245     250,633     245,094 
  Time                                      143,414     149,737     162,485 
                                         ----------  ----------  ---------- 
    Total deposits                          785,817     787,849     775,920 
                                                                            
  Accrued interest payable and other                                        
   liabilities                               15,893      14,835      16,217 
  Subordinated debentures                    21,651      21,651      21,651 
                                         ----------  ----------  ---------- 
Total liabilities                           823,361     824,335     813,788 
  Shareholders' equity                       95,611      93,429      96,946 
                                         ----------  ----------  ---------- 
Total liabilities and shareholders'                                         
 equity                                  $  918,972  $  917,764  $  910,734 
                                         ==========  ==========  ========== 
                                                                            
Asset Quality                                                               
  Nonaccrual loans                       $    4,805  $    5,093  $    6,449 
  Loans past due 90 days and accruing                                       
   interest                                       -           -           - 
  Other real estate owned                     2,633       3,454      21,365 
                                         ----------  ----------  ---------- 
    Total nonperforming assets           $    7,438  $    8,547  $   27,814 
                                         ==========  ==========  ========== 
                                                                            
  Classified assets                      $   14,665  $   17,973  $   39,113 
  Bank Tier 1 Capital + ALLL             $  119,621  $  118,248  $  117,245 
  Classified assets ratio                     12.26%      15.20%      33.36%
                                                                            
  Allowance for loan losses to total                                        
   loans                                       1.78%       1.83%       1.98%
  Allowance for loan losses to NPL's         188.51%     182.62%     149.65%
                                                                            
                                                                            
                                                                            
                                                                            
                            NORTH VALLEY BANCORP                            
                   CONDENSED CONSOLIDATED FINANCIAL DATA                    
                                (Unaudited)                                 
                           (Dollars in thousands)                           
                                                                            
                                                                            
                                                   Three Months Ended       
Selected Financial Ratios                              March 31,            
                                                  2014            2013      
                                             --------------  -------------- 
  Return on average total assets                       0.41%           0.57%
  Return on average shareholders' equity               3.92%           5.30%
  Net interest margin (tax equivalent basis)           3.77%           3.81%
  Efficiency ratio                                    85.91%          84.05%
                                                                            
Selected Average Balances                                                   
  Loans                                      $      507,149  $      484,415 
  Taxable investments                               281,290         270,493 
  Tax-exempt investments                              4,964           9,840 
  Federal funds sold and other                       45,487          33,113 
                                             --------------  -------------- 
    Total earning assets                     $      838,890  $      797,861 
                                             --------------  -------------- 
    Total assets                             $      919,629  $      897,178 
                                             --------------  -------------- 
                                                                            
  Demand deposits - interest bearing         $      206,635  $      188,138 
  Savings and money market                          254,360         238,785 
  Time deposits                                     146,404         166,198 
  Other borrowings                                   21,651          21,651 
                                             --------------  -------------- 
    Total interest bearing liabilities       $      629,050  $      614,772 
                                             --------------  -------------- 
  Demand deposits - noninterest bearing      $      180,295  $      169,080 
                                             --------------  -------------- 
  Shareholders' equity                       $       95,001  $       96,483 
                                             --------------  -------------- 
                                                                            
                                                                            
                                                                            
                                                                            
                            NORTH VALLEY BANCORP                            
                    CONDENSED CONSOLIDATED FINANCIAL DATA                   
                                 (Unaudited)                                
                (Dollars in thousands, except per share data)               
                                            For the Quarter Ended           
                                 -------------------------------------------
                                    March    December   September    June   
                                    2014       2013       2013       2013   
                                 ---------- ---------- ---------- ----------
Interest income                  $    8,119 $    8,199 $    8,165 $    7,981
Interest expense                        357        392        391        403
                                 ---------- ---------- ---------- ----------
  Net interest income                 7,762      7,807      7,774      7,578
                                                                            
Provision for loan losses                 -          -          -          -
Noninterest income                    2,430      2,948 
     3,209      3,651
Noninterest expense                   8,756      9,653     10,036      9,936
                                 ---------- ---------- ---------- ----------
                                                                            
Income before provision for                                                 
 income taxes                         1,436      1,102        947      1,293
Provision for income taxes              517        212        367        399
                                 ---------- ---------- ---------- ----------
  Net income                     $      919 $      890 $      580 $      894
                                 ========== ========== ========== ==========
                                                                            
Earnings per common share:                                                  
  Basic                          $     0.13 $     0.13 $     0.08 $     0.13
                                 ========== ========== ========== ==========
  Diluted                        $     0.13 $     0.13 $     0.08 $     0.13
                                 ========== ========== ========== ==========

  
For further information contact:
Michael J. Cushman or
President & Chief Executive Officer 
(530) 226-2900 
Fax: (530) 221-4877 
Kevin R. Watson
Executive Vice President & Chief Financial Officer
(530) 226-2900 
Fax: (530) 221-4877 
 
 
Press spacebar to pause and continue. Press esc to stop.