North Valley Bancorp - Current report filing (8-K)
September 17 2008 - 5:01AM
Edgar (US Regulatory)
United States
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)
September 16, 2008
NORTH VALLEY BANCORP
(Exact name of
registrant as specified in its charter)
California
(State or other
jurisdiction of incorporation)
0-10652
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94-2751350
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(Commission
File Number)
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(IRS Employer Identification No.)
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300 Park Marina
Circle, Redding, CA 96001
(Address of
principal executive offices) (Zip Code)
Registrants
telephone number, including area code:
(530) 226-2900
Check the appropriate box below if
the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13c-4(c))
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Item 8.01. Other Events
On
September 7, 2008, the United States Treasury and the Federal Housing Finance Agency
(FHFA) announced that FHFA was placing Fannie Mae (the Federal National Mortgage
Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation) under
conservatorship. The management of North Valley Bancorp (the Company), the
bank holding company for North Valley Bank (the Bank), believes that these
actions will adversely impact the value of the Companys holdings of preferred stock
issued by Fannie Mae.
At
September 16, 2008, the Company holds in its available-for-sale portfolio preferred
securities issued by Fannie Mae with a cost basis of $3.284 million. These securities have
a par value of $50 per share but currently trade at five to ten percent of par value. The
Company does not hold any common stock or other equity securities issued by Fannie Mae or
Freddie Mac. In light of the severe decline in the market value of these securities after
the takeover of Fannie Mae and Freddie Mac, the Company is actively working to determine
the extent of the losses that may be incurred on these securities. As it is unclear at
this time if the value of the securities will improve, the Company expects to record a
non-cash other-than-temporary impairment write-down of the securities for the
current quarter, ending September 30, 2008 based on fair value at that time. Under
applicable accounting guidelines, the write-down is expected to be substantial, and could
be as much as 100 percent of the value.
Even
if the Company determines that the full value of the Fannie Mae securities must be written
down, the Company and the Bank expect to remain well-capitalized under
regulatory standards as of September 30, 2008.
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.
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NORTH
VALLEY BANCORP
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Dated: September 16, 2008
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By:
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/s/ Kevin R. Watson
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Kevin R. Watson
Executive Vice President
Chief Financial Officer
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2
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