Exhibit 99.74
[GRAPHIC OMITTED] NVB
North Valley Bancorp
North Valley Bancorp Reports Results for 2004
o Full year diluted EPS of $1.17
o Organic loan growth of 24.6%
o Q4 Margin expansion to 4.90%
January 27, 2005 - REDDING, CA - North Valley Bancorp (NASDAQ:NOVB), a
multi-bank holding company with $866 million in assets, today reported results
for the three- and twelve- months ending December 31, 2004. North Valley Bancorp
("the Company") is the parent company for North Valley Bank ("NVB"), Six Rivers
Bank, a division of NVB, and Yolo Community Bank. ("YCB")
On August 31, 2004, the Company completed its acquisition of Woodland,
California-based YCB for approximately $23 million. Total consideration
consisted of $9.5 million in cash and 741,700 shares of NOVB common stock. The
transaction was accounted for under the purchase method of accounting and,
accordingly, the Company's results of operations only include YCB's results of
operations since consummation.
The Company reported net income for the year ended December 31, 2004 of
$8,379,000 or $1.17 per diluted share compared to $7,971,000 or $1.13 per
diluted share for 2003. This represents an increase in net income of $408,000 or
5.1% and an increase in diluted earnings per share of 3.5%. The increase in net
income for 2004 was due to an increase in net interest income of $3,857,000,
partially offset by a decrease in non-interest income of $1,809,000 and an
increase in non-interest expense of $1,396,000.
Quarterly Results
The Company reported net income for the three months ended December 31,
2004 of $2,255,000 or $0.29 per diluted share compared to $1,921,000 or $0.28
per diluted share for the same period in 2003. This represents an increase in
net income of $334,000 or 17.4% and is due mainly to net interest income which
increased by $2,507,000 compared to the fourth quarter of 2003. The increase in
net interest income was partially offset by non-interest expense, which
increased by $1,686,000 in the fourth quarter of 2004. Both of these variances
compared to the fourth quarter of 2003 were primarily due to the inclusion of
YCB's operations in the fourth quarter of 2004.
During the fourth quarter of 2004, the Company's net interest margin
grew to 4.90%, which is the highest level since the first quarter of 2003 and
favorably compares to the 4.55% net interest margin in the fourth quarter of
2003. The increase in the net interest margin was mainly due to loan growth of
$45,596,000 or 9.1% in the fourth quarter of 2004.
2004 Results
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 $3,857,000 or 14.0% for
the year ended December 31, 2004 compared to 2003. This was due to an increase
in interest income of $3,837,000 coupled with a decrease in interest expense of
$20,000. Of the $3,837,000 increase, $2,266,000 was due to the addition of YCB.
The remaining increase in interest income was primarily due to an increase in
average loans of $38,827,000 and an increase in average investment securities of
$85,734,000 for 2004 compared to 2003. Of the $38,827,000 increase in average
loans, $25,835,000 was due to the addition of YCB at August 31, 2004. The
increase in average total loans and investment securities was funded with excess
fed funds, an increase in average deposits of $69,960,000, and an increase in
average borrowings of $29,545,000. Average yields on earning assets decreased 25
basis points to 5.75% for 2004 and the average rate paid on interest-bearing
liabilities decreased by 20 basis points to 1.30%. The decrease in asset yields
was primarily due to average loan yields, which decreased from 7.16% in 2003 to
6.76% in 2004. The Company's net interest margin for the year was 4.67%,
slightly down from the 4.74% margin in 2003.
Non-interest income decreased to $9,456,000 for the year ended December
31, 2004 compared to $11,265,000 for 2003. The decrease is due to gains on sales
of loans and securities recorded in 2003 of $2,130,000 compared to just $42,000
in 2004. In 2003, the Company's strategy was to sell all newly originated,
fixed-rate mortgage loans in order to avoid excessive interest rate risk. As
long rates started to come back up at the end of 2003, management reverted back
to its original strategy of holding all mortgage loans originated. This strategy
resulted in recording significant gains on sales during 2003 but also had the
effect of decreasing the Company's loan totals and net interest margin. Service
charges on deposits increased by $415,000 and other fees increased $180,000 in
2004 compared to 2003 due to normal growth and a small benefit from the YCB
acquisition. Earnings on cash surrender value of life insurance policies
decreased from $1,342,000 in 2003 to $1,141,000 in 2004 due to lower market
rates associated with those policies. Other non-interest income decreased
$115,000 from 2003 levels due mainly to decreased sales of third-party
investments.
Non-interest expense totaled $28,658,000 for 2004 compared to
$27,262,000 for the same period in 2003 which is an increase of $1,396,000 or
5.1%. Salaries and benefits increased by $1,237,000 or 9.2% over 2003 levels,
$811,000 of which was due to the inclusion of YCB's operations for the final
four months of 2004. Equipment expense decreased from $2,614,000 in 2003 to
$2,199,000 in 2004 primarily due to some one-time expenses recognized in 2003
associated with the Company's new core operating system after the system
conversion in late 2002. Occupancy expense increased from $1,720,000 in 2003 to
$1,966,000 in 2004 due to YCB as well as the leasing of new office space in
Redding to house additional back-office operations. Other expense increased by
$328,000 or 3.5% in 2004 compared to 2003, $469,000 of which was due to YCB.
Credit Quality
Non-Performing loans (defined as non-accrual loans and loans 90 days or
more past due and still accruing interest) decreased $840,000 to $2,170,000 or
0.39% of total loans at December 31, 2004 from $3,010,000 or 0.79% of total
loans at December 31, 2003. Of the $2,170,000 in non-performing loans as of
December 31, 2004, $1,271,000 are secured by first deeds of trust on real
property and the SBA guaranteed portion of total nonperforming loans was
$866,000. The allowance for loan and lease losses at December 31, 2004 was
$7,217,000 or 1.30% of total loans compared to $6,493,000 or 1.71% of total
loans at December 31, 2003. The ratio of net charge-offs to average loans
outstanding for the twelve months ended December 31, 2004 was 0.13% compared to
0.06% for 2003. The allowance for loan and lease losses as a percentage of
nonperforming loans was 332.58% as of December 31, 2004 compared to 215.71% as
of December 31, 2003.
Summary
"What an exciting and busy year it has been for North Valley Bancorp. We
closed the YCB acquisition in August, converted their core processing system in
November and we implemented all provisions of Sarbanes-Oxley, including section
404. Fourth quarter EPS was relatively flat compared to the prior year, but
several exciting trends are emerging: our loan production out of the Santa Rosa
and Ukiah markets is beginning to accelerate, all back-office redundancies with
YCB are now eliminated and our overall loan growth is very strong. This loan
growth helped push our net interest margin up to 4.90% in the fourth quarter. In
addition, our non-interest expense has been held in check as evidenced by the
fact that without YCB, non-interest expense actually decreased by $145,000 in
2004 compared to 2003. As we previously stated, our goal in 2004 relative to the
income statement has been to replace income from gains on mortgage sales (in
2003) with growth in net interest income and maintain control of non-interest
expenses. We believe we have been successful in these two areas of our Company's
performance," stated Michael J. Cushman, President & CEO.
North Valley Bancorp is a multi-bank holding company headquartered in
Redding, California. NVB operates thirteen commercial banking offices in Shasta
and Trinity Counties in Northern California including two in-store supermarket
branches and a Business Banking Center. Six Rivers Bank, a division of NVB,
operates seven commercial banking offices in Humboldt, Del Norte, and Mendocino
Counties. YCB operates three commercial banking offices in Yolo, Solano, and
Placer Counties in Northern California. North Valley Bancorp, through its
subsidiary banks, 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, North Valley Bank engages in a full
complement of lending activities including consumer, commercial and real estate
loans, with particular emphasis on short and medium term loans and installment
loans through the Dealer Finance Division. NVB has SBA Preferred Lender status
and provides investment services to its customers through an affiliated
relationship. Visit the Company's website address at www.nvbancorp.com.
-----------------
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 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 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 Edward J. Czajka
President & Chief Executive Officer Executive Vice President & Chief
(530) 226-2900 Fax: (530) 221-4877 Financial Officer
North Valley Bancorp & Subsidiaries
Statements of Income
Dollars in thousands except per share amounts (unaudited)
For the year ended December 31,
2004 2003 $ Change % Change
---------- ---------- ---------- ----------
INTEREST INCOME:
Loans and leases including fees $ 29,602 $ 28,595 $ 1,007 3.5%
Investment Securities
Taxable 7,570 4,627 2,943 63.6%
Exempt from federal taxes 1,442 1,282 160 12.5%
Federal funds sold 323 596 (273) -45.8%
---------- ---------- ---------- ----------
Total interest income 38,937 35,100 3,837 10.9%
INTEREST EXPENSE:
Deposits 4,677 5,553 (876) -15.8%
Subordinated debentures 1,564 1,306 258 19.8%
Other borrowings 1,266 668 598 89.5%
---------- ---------- ---------- ----------
Total interest expense 7,507 7,527 (20) -0.3%
Net Interest Income 31,430 27,573 3,857 14.0%
Provision for loan and lease losses 271 -- 271 0.0%
Net interest income after provision for loan
and lease losses 31,159 27,573 3,586 13.0%
NONINTEREST INCOME:
Service charges on deposit accounts 5,183 4,768 415 8.7%
Other fees and charges 2,264 2,084 180 8.6%
Earnings on cash surrender value of life insurance policies 1,141 1,342 (201) -15.0%
Gain on sale of loans 20 1,917 (1,897) -99.0%
Gains on sales or calls of securities 22 213 (191) -89.7%
Other 826 941 (115) -12.2%
---------- ---------- ---------- ----------
Total noninterest income 9,456 11,265 (1,809) -16.1%
NONINTEREST EXPENSES:
Salaries and employee benefits 14,741 13,504 1,237 9.2%
Occupancy expense 1,966 1,720 246 14.3%
Furniture and equipment expense 2,199 2,614 (415) -15.9%
Other 9,752 9,424 328 3.5%
---------- ---------- ---------- ----------
Total noninterest expenses 28,658 27,262 1,396 5.1%
Income before Provision for Income Taxes 11,957 11,576 381 3.3%
Provision for Income Taxes 3,578 3,605 (27) -0.7%
Net Income $ 8,379 $ 7,971 408 5.1%
Earnings per Share:
Basic $ 1.24 $ 1.19 $ 0.05 4.2%
Diluted $ 1.17 $ 1.13 $ 0.04 3.5%
North Valley Bancorp & Subsidiaries
Statements of Income
Dollars in thousands except per share amounts (unaudited)
For the quarter ended December 31,
2004 2003 $ Change % Change
---------- ---------- ---------- ----------
INTEREST INCOME:
Loans and leases including fees $ 8,981 $ 6,576 $ 2,405 36.6%
Investment Securities
Taxable 1,856 1,485 371 25.0%
Exempt from federal taxes 363 307 56 18.2%
Federal funds sold 97 138 (41) -29.7%
---------- ---------- ---------- ----------
Total interest income 11,297 8,506 2,791 32.8%
INTEREST EXPENSE:
Deposits 1,274 1,247 27 2.2%
Subordinated debentures 413 353 60 17.0%
Other borrowings 279 82 197 240.2%
---------- ---------- ---------- ----------
Total interest expense 1,966 1,682 284 16.9%
Net Interest Income 9,331 6,824 2,507 36.7%
Provision for loan and lease losses 55 -- 55 0.0%
Net interest income after provision for loan
and lease losses 9,276 6,824 2,452 35.9%
NONINTEREST INCOME:
Service charges on deposit accounts 1,250 1,193 57 4.8%
Other fees and charges 584 493 91 18.5%
Earnings on cash surrender value of life
insurance policies 271 332 (61) -18.4%
Gain on sale of loans 11 475 (464) -97.7%
Gains on sales or calls of securities -- 12 (12) -100.0%
Other 230 219 11 5.0%
---------- ---------- ---------- ----------
Total noninterest income 2,346 2,724 (378) -13.9%
NONINTEREST EXPENSES:
Salaries and employee benefits 4,237 3,382 855 25.3%
Occupancy expense 601 417 184 44.1%
Furniture and equipment expense 598 660 (62) -9.4%
Other 2,968 2,259 709 31.4%
---------- ---------- ---------- ----------
Total noninterest expenses 8,404 6,718 1,686 25.1%
Income before Provision for Income Taxes 3,218 2,830 388 13.7%
Provision for Income Taxes 963 909 54 5.9%
Net Income $ 2,255 $ 1,921 $ 334 17.4%
Earnings per Share:
Basic $ 0.31 $ 0.29 $ 0.02 6.9%
Diluted $ 0.29 $ 0.28 $ 0.01 3.6%
North Valley Bancorp and subsidiaries
(dollars in thousands except per share data)
(unaudited)
31-Dec-04 31-Dec-03 $ Change % Change
----------- ----------- ----------- -----------
ASSETS
Cash and cash equivalents:
Cash and due from banks $ 23,575 $ 28,013 $ (4,438) -15.8%
Federal funds sold 640 31,510 (30,870) -98.0%
----------- ----------- ----------- -----------
Total cash and cash equivalents 24,215 59,523 (35,308) -59.3%
Interest-bearing cash in other financial institutions 500 123 377 306.5%
Investment securities:
Available for sale, at fair value 218,961 191,045 27,916 14.6%
Held to maturity, at amortized cost 133 1,455 (1,322) -90.9%
Loans and leases, net of allowance for loan and lease losses of
7,217 and $6,493 at December 31, 2004 and December 31, 2003 546,128 372,660 173,468 46.5%
Premises and equipment, net 13,927 12,699 1,228 9.7%
FHLB & FRB Stock 4,531 2,991 1,540 51.5%
Other real estate owned -- -- -- 0.0%
Goodwill and core deposit intangibles, net 18,799 2,272 16,527 727.4%
Accrued interest receivable 4,351 2,696 1,655 61.4%
Other assets 34,686 32,229 2,457 7.6%
----------- ----------- ----------- -----------
TOTAL ASSETS $ 866,231 $ 677,693 $ 188,538 27.8%
=========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand deposits $ 165,595 $ 118,678 $ 46,917 39.5%
Interest-bearing
Demand deposits 187,738 159,123 28,615 18.0%
Savings 200,628 157,106 43,522 27.7%
Time Certificates 157,693 163,407 (5,714) -3.5%
----------- ----------- ----------- -----------
Total deposits 711,654 598,314 113,340 18.9%
Other borrowed funds 57,594 9,459 48,135 508.9%
Accrued interest payable and other liabilities 9,884 7,371 2,513 34.1%
Subordinated debentures 21,651 16,496 5,155 31.3%
----------- ----------- ----------- -----------
Total liabilities 800,783 631,640 169,143 26.8%
----------- ----------- ----------- -----------
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 7,311,726 and 6,488,073 at December 31, 2004 and
December 31, 2003 37,917 23,406 14,511 62.0%
Retained Earnings 28,403 22,795 5,608 24.6%
Accumulated other comprehensive loss, net of tax (872) (148) (724) 489.2%
----------- ----------- ----------- -----------
Total stockholders' equity 65,448 46,053 19,395 42.1%
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 866,231 $ 677,693 $ 188,538 27.8%
=========== =========== =========== ===========
North Valley Bancorp and subsidiaries
(dollars in thousands except per share data)
(unaudited)
Financial Ratios
For the year ended December 31,
----------------------------
2004 2003
------------ ------------
Return on average assets 1.08% 1.19%
Return on average equity 16.54% 16.66%
Noninterest Income to average assets 1.22% 1.68%
Noninterest Expense to average assets 3.69% 4.06%
Net interest margin (taxable-equivalent) 4.67% 4.74%
Average equity to average assets 6.51% 7.12%
Allowance for Loan and Lease Losses
Balance beginning of year $ 6,493 $ 6,723
Provision for loan losses 271 --
Adjustments (YCB) 1,019
Net charge offs (recoveries) 566 230
Balance end of period $ 7,217 $ 6,493
For the year ended December 31,
----------------------------
2004 2003
------------ ------------
Return on average assets 1.02% 1.11%
Return on average equity 14.07% 16.86%
Noninterest Income to Average Assets 1.06% 1.57%
Noninterest Expense to Average Assets 3.82% 3.90%
Net interest margin (Taxable-equivalent) 4.90% 4.55%
Non-Performing Assets December 31, December 31,
2004 2003
------------ ------------
Total nonaccrual loans $ 1,155 $ 1,615
Loans 90 days past due and still accruing 1,015 1,395
Total nonperforming loans $ 2,170 $ 3,010
Other real estate owned -- --
Total nonperforming assets $ 2,170 $ 3,010
Nonaccrual loans to total gross loans 0.15% 0.43%
Nonperforming loans to total gross loans 0.39% 0.79%
Total nonperforming assets to total assets 0.21% 0.44%
Allowance for loan losses to nonperforming loans 332.58% 215.71%
Allowance for loan losses to total gross loans 1.30% 1.71%
Allowance for loan losses to nonperforming assets 332.58% 215.71%
Total Gross Loans 553,345 379,153
Total Assets 866,231 677,693
Average Loans Outstanding (ytd) 438,044 399,217
Average Assets (ytd) 777,604 671,356
Average Equity (ytd) 50,655 47,831