Exhibit 99.114
North Valley Bancorp Reports Increased Second Quarter Earnings
July 26, 2006 - REDDING, CA - North Valley Bancorp (NASDAQ:NOVB) today reported net income for the second quarter of 2006 of $2,294,000, a 15.5% increase from $1,987,000 recorded during the second quarter of 2005. Diluted earnings per share were $0.30, a 15.4% increase over $0.26 per diluted share for the same period in 2005. Net income for the six months ended June 30, 2006 was $4,423,000, a 4.2% increase compared to $4,246,000 recorded for the six months ended June 30, 2005. Diluted earnings per share increased 3.6% to $0.57 from $0.55 diluted earnings per share recorded for the six months ended June 30, 2005.
Key Financial Highlights…
| · | Diluted earnings per share up 15.4% for second quarter 2006 compared to second quarter 2005. |
| · | Loan growth at 6.8%, year-over-year. |
| · | Net interest income grew $627,000, or 6.2%, in the second quarter of 2006 compared to the second quarter of 2005. |
| · | Net interest margin (tax equivalent basis) was 5.52% compared to 5.28% for year ago quarter and 5.34% linked quarter. |
| · | Nonperforming loans were 0.03% of total loans at June 30, 2006. |
| · | For the second quarter of 2006: Return on Average Equity was 12.82%; Return on Average Tangible Equity was 17.17%; Return on Average Assets was 1.03%. |
| · | Completed stock repurchase program announced on May 2, 2006 - 300,000 shares at an average price of $17.57. |
| · | Merged subsidiary Banks effective close of business June 30, 2006. |
The Company reported net income for the quarter ended June 30, 2006 of $2,294,000, or $0.30 per diluted share compared to $1,987,000 or $0.26 per diluted share for the quarter ended June 30, 2005. This represents an increase in net income of $307,000, or 15.5%, and an increase in diluted earnings per share of 15.4%, compared to the same period in 2005. The increase in net income for the second quarter of 2006 was driven by an increase in net interest income of $627,000, or 6.2%, to $10,695,000 over net interest income of $10,068,000 in the second quarter of 2005, and an increase in noninterest income of $552,000, or 22.4% for the same period. The increases were partially offset by an increase in noninterest expense of $417,000 or 4.4%, to $9,880,000 over noninterest expense of $9,463,000 in the second quarter of 2005.
Net interest income, which represents the Company’s largest component of revenues and is the difference between interest earned on loans and investments and interest paid on deposits and borrowings, increased $627,000, or 6.2%, for the quarter ended June 30, 2006 compared to the same period in 2005. This was due to an increase in interest income of $1,674,000, or 13.6%, which was partially offset by an increase in interest expense of $1,047,000. The increase in interest income was due to total average outstanding loans increasing from $581,858,000 in the second quarter of 2005 to $627,975,000 in the same period this year. This represents an increase of $46,117,000, or 7.9%. The Company’s net interest margin was 5.52%, which represents margin expansion of 24 basis points (“bps”) over the net interest margin of 5.28% reported for the second quarter of 2005, and expansion of 18 bps over 5.34% for the linked quarter. Average yields on earning assets increased 83 bps to 7.20% for the second quarter of 2006 and the average rate paid on interest-bearing liabilities increased by 75 bps to 2.11% from the second quarter of 2005. The increase in asset yields was primarily due to the increase in total loans relative to other earning assets coupled with an increase in average loan yields, which increased from 7.08% in 2005 to 7.80% in 2006. “Our net interest margin expanded 18 basis points over the linked quarter as earning asset yields increased and we continued to improve the mix of our earning assets. Looking forward, we anticipate that our cost of funds may incrementally increase more than our asset yields incrementally increase, thus resulting in some margin contraction,” commented Kevin Watson, Chief Financial Officer.
Noninterest income increased $552,000, or 22.4%, for the three months ended June 30, 2006 compared to the three months ended June 30, 2005. The increase was primarily driven by an increase in service charges on deposits which increased $417,000, or 35.1%. In addition, the Company is currently selling its fixed-rate mortgage production in order to maintain a loan portfolio with a shorter overall duration and recorded $85,000 in gains on mortgage loan sales in the second quarter of 2006. Other noninterest income increased $54,000 in the second quarter of 2006 from 2005 levels due mainly to increased fees received for sales of third-party nondeposit investment products.
Noninterest expense totaled $9.9 million for the three months ended June 30, 2006 compared to $9.5 million for the same period in 2005, which is an increase of $417,000 or 4.4%. Salaries and benefits increased by $722,000, or 15.4%, over the second quarter of 2005. Occupancy expense increased from $692,000 in the second quarter of 2005 to $776,000 in the same period in 2006 while other expenses decreased from $3,667,000 in 2005 to $3,146,000 in 2006. The increases in salaries and benefits were due to the hiring of seasoned lending teams that specialize in business lending, as well as the Company’s decision made in 2005 to enhance its infrastructure, most notably in accounting and compliance, to enhance capacity for current and planned future growth.
The loan portfolio increased 6.8% from a year ago to $639,617,000 outstanding at June 30, 2006. Year-over-year and year-to-date loan growth at June 30, 2006 was $40,528,000 and $15,105,000, respectively. The majority of the loan growth was in Commercial Real Estate and Commercial Real Estate Construction generated out of our new Business Banking centers and reflects the benefit of expanding into these new markets.
Nonperforming loans (defined as nonaccrual loans and loans 90 days or more past due and still accruing interest) decreased $1,217,000 to $223,000, or 0.03% of total loans, at June 30, 2006 from $1,440,000, or 0.24% of total loans, at June 30, 2005. The allowance for loan and lease losses at June 30, 2006 was $8,292,000, or 1.30% of total loans, compared to $7,612,000, or 1.27% of total loans, at June 30, 2005. The increase reflects growth in the loan portfolio and management’s concern for current economic uncertainty in the real estate market and business conditions generally. The allowance for loan and lease losses as a percentage of nonperforming loans was 3718.4% as of June 30, 2006 compared to 528.6% as of June 30, 2005. Other real estate owned at June 30, 2006 was $902,000, consisting of land originally purchased for branch expansion in Yolo County which management has listed for sale due to the acquisition of Yolo Community Bank.
Total deposits decreased $6,660,000 at June 30, 2006 to $722,411,000 compared to $729,071,000 at June 30, 2005. The decrease in deposits was concentrated in DDA and Money Market accounts due in part by a reduction in deposit balances in some sectors, i.e. construction and title company accounts. The Company continues to maintain a strong deposit mix with 26% in noninterest bearing demand deposits, 23% in interest bearing demand deposits, 27% in savings and money market accounts, and 24% in time deposits. “Our industry is facing a very competitive and challenging landscape in which growth has been made difficult. Notwithstanding, we will continue to be disciplined on both sides of the Balance Sheet. We have not compromised our credit standards or terms on loan deals and have not disregarded our pricing discipline on our deposit products just for the sake of growth. We are confident that our fundamental strategy on lending and deposit gathering will further enhance the value of our franchise,” remarked Kevin Watson.
Summary
“We continue to focus on gaining efficiencies by reducing costs while still delivering excellent customer service to our clients. During the second quarter, we strengthened our Company by the merger of our two subsidiary banks and we are pleased with our overall results. We want to thank our shareholders, customers, and employees for their continued support,” stated Michael Cushman, President and CEO.
North Valley Bancorp is a bank holding company headquartered in Redding, California. Its subsidiary, North Valley Bank ("NVB"), operates twenty-six commercial banking offices in Shasta, Humboldt, Del Norte, Mendocino, Yolo, Solano, Sonoma, Placer and Trinity Counties in Northern California, including two in-store supermarket branches and seven 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.
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, 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.
For further information contact:
| Michael J. Cushman | or | Kevin R. Watson |
| President & Chief Executive Officer | Executive Vice President & Chief Financial Officer | |
| (530) 226-2900 Fax: (530) 221-4877 | (530) 226-2900 Fax: (530) 221-4877 |
NORTH VALLEY BANCORP
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
Three Months Ended June 30, | |||||||||||||
Statement of Income Data | 2006 | 2005 | $ Change | % Change | |||||||||
| Interest income | |||||||||||||
| Loans and leases (including fees) | $ | 12,217 | $ | 10,249 | $ | 1,968 | 19.2 | % | |||||
| Investment securities | 1,722 | 1,997 | (275 | ) | -13.8 | % | |||||||
| Federal funds sold and other | 71 | 90 | (19 | ) | -21.1 | % | |||||||
| Total interest income | 14,010 | 12,336 | 1,674 | 13.6 | % | ||||||||
| Interest expense | |||||||||||||
| Interest on deposits | 2,121 | 1,467 | 654 | 44.6 | % | ||||||||
| Subordinated debentures | 605 | 411 | 194 | 47.2 | % | ||||||||
| Other borrowings | 589 | 390 | 199 | 51.0 | % | ||||||||
| Total interest expense | 3,315 | 2,268 | 1,047 | 46.2 | % | ||||||||
| Net interest income | 10,695 | 10,068 | 627 | 6.2 | % | ||||||||
| Provision for loan and lease losses | 370 | 180 | 190 | 105.6 | % | ||||||||
Net interest income after provision for loan and lease losses | 10,325 | 9,888 | 437 | 4.4 | % | ||||||||
| Noninterest income | |||||||||||||
| Service charges on deposit accounts | 1,606 | 1,189 | 417 | 35.1 | % | ||||||||
| Other fees and charges | 730 | 649 | 81 | 12.5 | % | ||||||||
| Other | 679 | 625 | 54 | 8.6 | % | ||||||||
| Total noninterest income | 3,015 | 2,463 | 552 | 22.4 | % | ||||||||
| Noninterest expenses | |||||||||||||
| Salaries and employee benefits | 5,414 | 4,692 | 722 | 15.4 | % | ||||||||
| Occupancy | 776 | 692 | 84 | 12.1 | % | ||||||||
| Furniture and equipment | 544 | 412 | 132 | 32.0 | % | ||||||||
| Other | 3,146 | 3,667 | (521 | ) | -14.2 | % | |||||||
| Total noninterest expenses | 9,880 | 9,463 | 417 | 4.4 | % | ||||||||
| Income before provision for income taxes | 3,460 | 2,888 | 572 | 19.8 | % | ||||||||
| Provision for income taxes | 1,166 | 901 | 265 | 29.4 | % | ||||||||
| Net income | $ | 2,294 | $ | 1,987 | $ | 307 | 15.5 | % | |||||
Common Share Data | |||||||||||||
| Earnings per share | |||||||||||||
| Basic | $ | 0.31 | $ | 0.27 | $ | 0.04 | 14.8 | % | |||||
| Diluted | $ | 0.30 | $ | 0.26 | $ | 0.04 | 15.4 | % | |||||
| Weighted average shares outstanding | 7,449,989 | 7,411,013 | |||||||||||
Weighted average shares outstanding - diluted | 7,719,934 | 7,771,277 | |||||||||||
| Book value per share | $ | 9.44 | $ | 9.31 | |||||||||
| Tangible book value | $ | 7.04 | $ | 6.81 | |||||||||
| Shares outstanding | 7,258,154 | 7,411,075 | |||||||||||
NORTH VALLEY BANCORP
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
Six Months Ended June 30, | |||||||||||||
Statement of Income Data | 2006 | 2005 | $ Change | % Change | |||||||||
| Interest income | |||||||||||||
| Loans and leases (including fees) | $ | 23,963 | $ | 19,706 | $ | 4,257 | 21.6 | % | |||||
| Investment securities | 3,498 | 3,996 | (498 | ) | -12.5 | % | |||||||
| Federal funds sold and other | 176 | 261 | (85 | ) | -32.6 | % | |||||||
| Total interest income | 27,637 | 23,963 | 3,674 | 15.3 | % | ||||||||
| Interest expense | |||||||||||||
| Interest on deposits | 4,131 | 2,719 | 1,412 | 51.9 | % | ||||||||
| Subordinated debentures | 1,232 | 822 | 410 | 49.9 | % | ||||||||
| Other borrowings | 1,186 | 756 | 430 | 56.9 | % | ||||||||
| Total interest expense | 6,549 | 4,297 | 2,252 | 52.4 | % | ||||||||
| Net interest income | 21,088 | 19,666 | 1,422 | 7.2 | % | ||||||||
| Provision for loan and lease losses | 370 | 450 | (80 | ) | -17.8 | % | |||||||
Net interest income after provision for loan and lease losses | 20,718 | 19,216 | 1,502 | 7.8 | % | ||||||||
| Noninterest income | |||||||||||||
| Service charges on deposit accounts | 3,083 | 2,322 | 761 | 32.8 | % | ||||||||
| Other fees and charges | 1,432 | 1,217 | 215 | 17.7 | % | ||||||||
| Other | 1,298 | 1,374 | (76 | ) | -5.5 | % | |||||||
| Total noninterest income | 5,813 | 4,913 | 900 | 18.3 | % | ||||||||
| Noninterest expenses | |||||||||||||
| Salaries and employee benefits | 11,051 | 9,374 | 1,677 | 17.9 | % | ||||||||
| Occupancy | 1,483 | 1,319 | 164 | 12.4 | % | ||||||||
| Furniture and equipment | 1,077 | 973 | 104 | 10.7 | % | ||||||||
| Other | 6,285 | 6,231 | 54 | 0.9 | % | ||||||||
| Total noninterest expenses | 19,896 | 17,897 | 1,999 | 11.2 | % | ||||||||
| Income before provision for income taxes | 6,635 | 6,232 | 403 | 6.5 | % | ||||||||
| Provision for income taxes | 2,212 | 1,986 | 226 | 11.4 | % | ||||||||
| Net income | $ | 4,423 | $ | 4,246 | $ | 177 | 4.2 | % | |||||
Common Share Data | |||||||||||||
| Earnings per share | |||||||||||||
| Basic | $ | 0.59 | $ | 0.58 | $ | 0.01 | 1.7 | % | |||||
| Diluted | $ | 0.57 | $ | 0.55 | $ | 0.02 | 3.6 | % | |||||
| Weighted average shares outstanding | 7,478,453 | 7,375,074 | |||||||||||
Weighted average shares outstanding - diluted | 7,772,037 | 7,787,013 | |||||||||||
| Book value per share | $ | 9.44 | $ | 9.31 | |||||||||
| Tangible book value | $ | 7.04 | $ | 6.81 | |||||||||
| Shares outstanding | 7,258,154 | 7,411,075 | |||||||||||
NORTH VALLEY BANCORP
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
Balance Sheet Data | June 30, 2006 | December 31, 2005 | June 30, 2005 | |||||||
| Assets | ||||||||||
| Cash and due from banks | $ | 33,901 | $ | 48,294 | $ | 36,110 | ||||
| Federal funds sold and other | 750 | 7,800 | 4,200 | |||||||
| Available-for-sale securities - at fair value | 145,225 | 164,258 | 184,704 | |||||||
| Held-to-maturity securities - at amortized cost | 88 | 91 | 126 | |||||||
| Loans and leases net of deferred loan fees | 639,617 | 624,512 | 599,089 | |||||||
| Allowance for loan and lease losses | (8,292 | ) | (7,864 | ) | (7,612 | ) | ||||
| Net loans and leases | 631,325 | 616,648 | 591,477 | |||||||
| Premises and equipment, net | 14,678 | 14,946 | 15,291 | |||||||
| Other real estate owned | 902 | 902 | - | |||||||
| Goodwill and core deposit intangibles, net | 17,399 | 17,690 | 18,474 | |||||||
| Accrued interest receivable and other assets | 46,998 | 47,786 | 44,794 | |||||||
| Total assets | $ | 891,266 | $ | 918,415 | $ | 895,176 | ||||
| Liabilities and Shareholders' Equity | ||||||||||
| Deposits: | ||||||||||
| Demand, noninterest bearing | $ | 186,392 | $ | 186,555 | $ | 187,255 | ||||
| Demand, interest bearing | 166,918 | 194,735 | 191,662 | |||||||
| Savings and money market | 191,763 | 195,866 | 197,282 | |||||||
| Time | 177,338 | 169,534 | 152,872 | |||||||
| Total deposits | 722,411 | 746,690 | 729,071 | |||||||
| Other borrowed funds | 58,500 | 56,500 | 66,538 | |||||||
| Accrued interest payable and other liabilities | 9,863 | 11,463 | 8,950 | |||||||
| Subordinated debentures | 31,961 | 31,961 | 21,651 | |||||||
| Total liabilities | 822,735 | 846,614 | 826,210 | |||||||
| Shareholders' equity | 68,531 | 71,801 | 68,966 | |||||||
| Total liabilities and shareholders' equity | $ | 891,266 | $ | 918,415 | $ | 895,176 | ||||
Asset Quality | ||||||||||
| Nonaccrual loans and leases | $ | 30 | $ | 686 | $ | 1,032 | ||||
| Loans and leases past due 90 days and accruing interest | 193 | 67 | 408 | |||||||
| Other real estate owned | 902 | 902 | - | |||||||
| Total nonperforming assets | $ | 1,125 | $ | 1,655 | $ | 1,440 | ||||
| Allowance for loan and lease losses to total loans | 1.30 | % | 1.26 | % | 1.27 | % | ||||
| Allowance for loan and lease losses to NPL's | 3718.39 | % | 1044.36 | % | 528.61 | % | ||||
| Allowance for loan and lease losses to NPA's | 737.07 | % | 475.17 | % | 528.61 | % | ||||
NORTH VALLEY BANCORP
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
Selected Financial Ratios | 2006 | 2005 | $ Change | % Change | |||||||||
| Return on average total assets | 1.03 | % | 0.89 | % | 0.99 | % | 0.96 | % | |||||
| Return on average shareholders' equity | 12.82 | % | 11.91 | % | 12.39 | % | 12.80 | % | |||||
| Net interest margin (tax equivalent basis) | 5.52 | % | 5.28 | % | 5.44 | % | 5.12 | % | |||||
| Efficiency ratio | 72.06 | % | 75.52 | % | 73.96 | % | 72.81 | % | |||||
Selected Average Balances | |||||||||||||
| Loans | $ | 627,975 | $ | 581,858 | $ | 626,436 | $ | 569,727 | |||||
| Taxable investments | 133,848 | 171,529 | 138,392 | 174,809 | |||||||||
| Tax-exempt investments | 23,386 | 24,370 | 23,434 | 25,405 | |||||||||
| Federal funds sold and other | 5,837 | 12,480 | 7,295 | 20,277 | |||||||||
| Total earning assets | $ | 791,046 | $ | 790,237 | $ | 795,557 | $ | 790,218 | |||||
| Total assets | $ | 891,933 | $ | 892,154 | $ | 897,473 | $ | 893,933 | |||||
| Demand deposits - interest bearing | $ | 195,005 | $ | 196,689 | $ | 193,894 | $ | 195,462 | |||||
| Savings and money market | 172,777 | 205,852 | 178,801 | 206,726 | |||||||||
| Time deposits | 172,251 | 154,626 | 171,351 | 155,432 | |||||||||
| Other borrowings | 88,808 | 77,112 | 90,183 | 76,063 | |||||||||
| Total interest bearing liabilities | $ | 628,841 | $ | 634,279 | $ | 634,229 | $ | 633,683 | |||||
| Demand deposits - noninterest bearing | $ | 181,143 | $ | 180,692 | $ | 180,793 | $ | 180,590 | |||||
| Shareholders' equity | $ | 71,784 | $ | 66,917 | $ | 71,997 | $ | 66,899 | |||||
NORTH VALLEY BANCORP
CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except per share data)
For the Quarter Ended | |||||||||||||
June 2006 | March 2006 | December 2005 | September 2005 | ||||||||||
| Interest income | $ | 14,010 | $ | 13,627 | $ | 13,750 | $ | 12,965 | |||||
| Interest expense | 3,315 | 3,234 | 2,825 | 2,581 | |||||||||
| Net interest income | 10,695 | 10,393 | 10,925 | 10,384 | |||||||||
| Provision for loan and lease losses | 370 | - | 200 | 280 | |||||||||
| Noninterest income | 3,015 | 2,798 | 3,234 | 3,067 | |||||||||
| Noninterest expense | 9,880 | 10,016 | 10,171 | 9,524 | |||||||||
| Income before provision for income taxes | 3,460 | 3,175 | 3,788 | 3,647 | |||||||||
| Provision for income taxes | 1,166 | 1,046 | 1,318 | 1,214 | |||||||||
| Net Income | $ | 2,294 | $ | 2,129 | $ | 2,470 | $ | 2,433 | |||||
| Earnings per share: | |||||||||||||
| Basic | $ | 0.31 | $ | 0.28 | $ | 0.33 | $ | 0.33 | |||||
| Diluted | $ | 0.30 | $ | 0.27 | $ | 0.32 | $ | 0.31 | |||||