North Valley Bancorp Reports Results for the Quarter and Nine Months Ended September 30, 2013
(firmenpresse) - REDDING, CA -- (Marketwired) -- 10/29/13 -- North Valley Bancorp (NASDAQ: NOVB), a bank holding company with approximately $912 million in assets, today reported results for the third quarter and nine months ended September 30, 2013. North Valley Bancorp ("the Company") is the parent company for North Valley Bank ("the Bank").
The Company reported net income for the third quarter ended September 30, 2013 of $580,000, or $0.08 per diluted share, compared to net income of $4,004,000, or $0.59 per diluted share for the same period in 2012. The Company reported net income for the nine months ended September 30, 2013 of $2,735,000, or $0.40 per diluted share, compared to net income of $5,745,000, or $0.84 per diluted share, for the same period in 2012. Net income for the three and nine months ended September 30, 2012 included a $2,930,000 benefit for income taxes as a result of the $4,277,000 release of the deferred tax asset valuation allowance that was established in the third quarter of 2010. "On October 29, 2013, the Bank was successful in selling eight OREO properties at their recorded value of $9,885,000. After considering this sale of OREO properties, our nonperforming assets, as a percentage of total assets on a pro forma basis as of September 30, 2013, equaled 1.14%. It has been six years since we have had this level of excellent credit quality. The Bank continues to be primarily focused on growth and profitability, which is achieved by delivering excellent service and products to new and existing customers," stated Michael J. Cushman, President and CEO.
Continued improvement in the overall credit quality of the Company's loan portfolio resulted in no provision for loan losses being recorded for the third quarter and nine months ended September 30, 2013 compared to provisions for loan losses of $700,000 and $2,100,000 for the third quarter and nine months ended September 30, 2012, respectively. The allowance for loan losses at September 30, 2013 was $9,312,000, or 1.83% of total loans, compared to $10,458,000, or 2.12% of total loans at December 31, 2012 and $11,427,000, or 2.33% of total loans at September 30, 2012.
At September 30, 2013, total assets were $912,447,000, an increase of $19,393,000, or 2.2%, from $893,054,000 at September 30, 2012. The loan portfolio totaled $509,092,000 at September 30, 2013, an increase of $19,192,000, or 3.9%, compared to $489,900,000 at September 30, 2012. The loan to deposit ratio at September 30, 2013 was 65.3% as compared to 64.6% at September 30, 2012, and 64.0% at December 31, 2012. Total deposits increased $21,294,000, or 2.8%, to $779,770,000 at September 30, 2013 compared to $758,476,000 at September 30, 2012. When compared to December 31, 2012, total assets at September 30, 2013 increased $10,104,000 from $902,343,000, loans increased by $16,881,000 from $492,211,000 and deposits increased by $11,190,000 from $768,580,000. Available-for-sale investment securities increased $7,812,000 while Federal funds sold decreased $13,520,000, from December 31, 2012 to September 30, 2013.
At September 30, 2013, the Company's Total Risk-based Capital was $117,597,000, and its risk-based capital ratios were: Total Risk-based Capital ratio - 18.6%; Tier 1 risk-based Capital ratio - 17.3%; and Tier 1 Leverage ratio - 12.2%. The Bank's Total Risk-based Capital at September 30, 2013 was $117,171,000, and its risk-based capital ratios were: Total Risk-based Capital ratio - 18.5%; Tier 1 risk-based Capital ratio - 17.3%; and Tier 1 Leverage ratio - 12.2%.
Nonperforming loans (defined as nonaccrual loans and loans 90 days or more past due and still accruing interest) decreased $6,363,000 to $5,216,000 at September 30, 2013 from $11,579,000 at September 30, 2012, and decreased $619,000 when compared to the December 31, 2012 balance of $5,835,000. Nonperforming loans as a percentage of total loans were 1.02% at September 30, 2013, compared to 2.36% at September 30, 2012, and 1.19% at December 31, 2012.
The overall level of nonperforming loans decreased $655,000 to $5,216,000 at September 30, 2013 from $5,871,000 at June 30, 2013. During the third quarter of 2013, the Company identified seven loans totaling $863,000 as additional nonperforming loans. The additions were offset by reductions in nonperforming loans totaling $1,518,000 due primarily to charge-offs and collections received on certain loans and the transfer of one property to OREO totaling $41,000. Of the seven loans totaling $863,000 identified as nonaccrual loans and added to nonperforming loans during the third quarter of 2013, the largest loan was a $639,000 commercial real estate loan secured by property in Shasta County. No specific reserve has been established for this loan. The remaining six loans in this group of nonperforming loans total $224,000 and specific reserves totaling $16,000 have been established.
Gross loan charge-offs for the third quarter of 2013 were $290,000 and recoveries totaled $75,000 resulting in net charge-offs of $215,000 compared to gross loan charge-offs for the third quarter of 2012 of $1,094,000 and recoveries of $89,000 resulting in net charge-offs of $1,005,000. Gross charge-offs for the nine months ended September 30, 2013 were $1,491,000 and recoveries totaled $345,000 resulting in net charge-offs of $1,146,000, compared to gross charge-offs for the nine months ended September 30, 2012 of $3,651,000 and recoveries of $322,000 resulting in net charge-offs of $3,329,000. These continued improvement trends in credit quality, partially offset by growth in the loan portfolio, resulted in management's determination that the allowance for loan losses of $9,312,000 or 1.83% of total loans at September 30, 2013 was adequate as an estimate of the probable incurred losses in the portfolio. The allowance for loan losses at December 31, 2012 was $10,458,000 or 2.12% of total loans compared to the September 30, 2012 balance of $11,427,000 or 2.33% of total loans.
Nonperforming assets (nonperforming loans and OREO) totaled $20,261,000 at September 30, 2013, a decrease of $13,007,000 from the September 30, 2012 balance of $33,268,000, and a $7,997,000 decrease from the December 31, 2012 balance of $28,258,000. Nonperforming assets as a percentage of total assets were 2.22% at September 30, 2013 compared to 3.72% at September 30, 2012 and 3.13% at December 31, 2012.
The Company's OREO properties decreased $1,279,000 to $15,045,000 at September 30, 2013 from $16,324,000 at June 30, 2013. The decrease in OREO was due to the sale of two properties totaling $179,000, loss on sale of OREO of $2,000, and a net write-down of certain other OREO properties during the quarter ended September 30, 2013 of $1,139,000 as a result of recent offers for purchase received on those properties and their anticipated sale in the fourth quarter of 2013. The decrease in OREO was partially offset by the transfer of one property into OREO totaling $41,000. Subsequent to September 30, 2013, the Company sold eight OREO properties located in Sonoma County at their recorded value of $9,885,000 which resulted in no additional gain or loss. The transaction closed on October 29, 2013.
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 $61,000, or 0.8%, for the three months ended September 30, 2013 compared to the same period in 2012. Interest income decreased by $261,000, primarily due to the decrease in interest income on loans due to the decrease in yield on average loan balances. The Company had foregone interest income of $36,000 related to loans currently on nonaccrual status for the three months ended September 30, 2013 compared to $138,000 for the same period in 2012. Average loans increased $24,320,000 in the third quarter of 2013 compared to the third quarter of 2012, while the yield on the loan portfolio decreased 43 basis points to 5.13% for the third quarter of 2013. Offsetting this decrease in interest income was a decrease in interest expense of $322,000, or 45.2%, primarily due to a decrease in the rates paid on deposits and secondarily to a decrease in interest expense on the Company's subordinated debentures. Overall, average earning assets decreased $4,654,000 in the third quarter of 2013 compared to the third quarter of 2012. Average yields on earning assets decreased 12 basis points from the quarter ended September 30, 2012, to 4.01% for the quarter ended September 30, 2013 while the average rate paid on interest-bearing liabilities decreased by 20 basis points to 0.25%. The Company's net interest margin for the quarter ended September 30, 2013 was 3.82%, an increase of 4 basis points from the margin of 3.78% for the third quarter in 2012 and an increase of 5 basis points from the 3.77% net interest margin for the quarter ended June 30, 2013. Net interest income increased $354,000 for the nine months ended September 30, 2013 compared to the same period in 2012. Total interest income decreased by $1,441,000 for the nine months ended September 30, 2013 compared to the same period in 2012, primarily due to a decrease in interest income on investment securities of $1,207,000 as a result of a decrease in the average balance of investment securities. Interest expense decreased $1,795,000 due primarily to both a decrease on rates paid on deposits and a decrease in interest expense on the Company's subordinated debentures for the nine months ended September 30, 2013 compared to the same period in 2012. The net interest margin for the nine months ended September 30, 2013 increased 9 basis points to 3.79% from the net interest margin of 3.70% for the nine months ended September 30, 2012.
Noninterest income for the quarter ended September 30, 2013 decreased $995,000, or 23.7%, to $3,209,000 from $4,204,000 for the same period in 2012. Service charges on deposits decreased $127,000 to $959,000 for the third quarter of 2013 compared to $1,086,000 for the third quarter of 2012, while other fees and charges increased by $50,000 to $1,152,000 for the third quarter of 2013 compared to $1,102,000 for the same period in 2012. The Company recorded gains on the sale of mortgage loans of $574,000 for the third quarter of 2013, a decrease of $159,000 from $733,000 for the same period in 2012 as the activity of the Company's real estate mortgage department, consistent with industry trends, slowed at the end of the third quarter of 2013. The Company recorded a gain on the sale of securities of $5,000 for the third quarter ended September 30, 2013, a decrease of $692,000 from $697,000 for the same period in 2012. Noninterest income for the nine months ended September 30, 2013 decreased $961,000 to $11,189,000 from $12,150,000 for the same period in 2012. Service charges on deposits decreased $392,000 to $2,882,000 for the nine months ended September 30, 2013 compared to $3,274,000 for the same period in 2012, and other fees and charges decreased by $240,000 to $3,380,000 for the nine months ended September 30, 2013 compared to $3,620,000 for the same period in 2012. The Company recorded gains on the sale of mortgage loans of $2,031,000 for the nine months ended September 30, 2013, an increase of $315,000 from $1,716,000 for the same period in 2012, and the Company recorded gains on the sale of SBA loans of $410,000 for the nine months ended September 30, 2013, an increase of $268,000 from $142,000 for the same period in 2012. The Company recorded a gain on the sale of securities of $548,000 for the nine months ended September 30, 2013, a decrease of $1,108,000 from $1,656,000 for the same period in 2012.
Noninterest expense increased $277,000 to $10,036,000 for the third quarter of 2013 from $9,759,000 for the third quarter of 2012. Salaries and employee benefits increased $79,000 to $5,084,000 for the third quarter of 2013 compared to the third quarter of 2012, and other real estate owned expense increased $409,000 to $1,226,000 for the third quarter of 2013 compared to the third quarter of 2012. These increases were partially offset by a decrease in occupancy and equipment expense of $36,000, a decrease in FDIC insurance premiums and state assessments of $5,000, and a decrease in other expenses of $170,000. Noninterest expense for the nine months ended September 30, 2013 was $29,860,000, an increase of $1,217,000 compared to $28,643,000 for the same period in 2012. For the nine months ended September 30, 2013, salaries and employee benefits increased $210,000 and other real estate owned expense increased by $799,000, while occupancy and equipment expense decreased $98,000, and FDIC insurance premiums and state assessments decreased by $63,000 compared to the first nine months of 2012. Other expenses increased by $369,000 to $8,785,000 for the first nine months of 2013 compared to $8,416,000 for the first nine months of 2012.
The Company recorded provisions for income taxes for the quarter and nine months ended September 30, 2013 of $367,000 and $1,382,000, respectively, resulting in an effective tax rate of 38.7% for the quarter ended September 30, 2013, and an effective tax rate of 33.5% for the nine months ended September 30, 2013. The Company recorded a benefit for income taxes for the quarter and nine months ended September 30, 2012 of $2,546,000 and $1,904,000, respectively, which was the result of the reversal of the $4,277,000 deferred tax asset valuation established in 2010.
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 for more information.
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, 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.
For further information contact:
Michael J. Cushman
President & Chief Executive Officer
(530) 226-2900
Fax: (530) 221-4877
or
Kevin R. Watson
Executive Vice President & Chief Financial Officer
(530) 226-2900
Fax: (530) 221-4877
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Datum: 30.10.2013 - 00:00 Uhr
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News-ID 310605
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