North Valley Bancorp Announces a $40 Million Capital Raise Through a Private Placement
April 20 2010 - 5:30PM
Marketwired
North Valley Bancorp (NASDAQ: NOVB), the parent company of North
Valley Bank, today reported a $40 million capital raise through a
private placement of Series A Mandatorily Convertible Cumulative
Perpetual Preferred Stock ("Series A Preferred Stock"). The Company
has entered into securities purchase agreements with selected
institutional investors, directors, executive officers and certain
other accredited investors. The proceeds will be used for general
corporate purposes, including increasing the capital of the Bank.
"We are very pleased with this capital raise, which confirms
investor confidence in our franchise, employees and business plan,"
commented Michael J. Cushman, President and CEO. "This is an
important step in positioning our Company as we work through the
challenges of the current economic environment and prepare for
future opportunities. Our team's primary goal is to maintain a
strong financial position to support our clients and communities
while being poised for opportunities that reward shareholders."
The Company will issue 40,000 shares of Series A Preferred Stock
to the investors at a price of $1,000 per share. The conversion
ratio for each share of Series A Preferred Stock will be equal to
the quotient obtained by dividing the Series A Share Price by the
conversion price. Each share of Series A Preferred Stock will
initially be convertible into 666.67 shares of common stock, based
on the initial conversion price of $1.50 per share. The conversion
price is subject to possible adjustments in the future under
certain circumstances. The Series A Preferred Stock will
automatically convert into shares of the Company's common stock
once the Company has received shareholder approval for the
transaction (under applicable NASDAQ listing rules) plus
shareholder approval for an increase in the number of authorized
shares of common stock available for issuance sufficient to
accommodate conversion. The Company plans to hold a meeting of
shareholders for this purpose on or before July 30, 2010. No
purchasers of the Series A Preferred Stock will own more than 9.9%
of the Company's voting securities (or securities that convert into
voting securities in the hands of such investor), as calculated
under the applicable regulations of the Board of Governors of the
Federal Reserve System. There are no contemplated changes to the
board or management team considered as part of this capital
raise.
Additional details on the terms of the private placement will be
described further in a forthcoming filing on Form 8-K with the
Securities and Exchange Commission, which may be accessed through
www.sec.gov.
Sandler O'Neill & Partners, L.P. and FIG Partners are
serving as placement agents on the private placement.
North Valley Bancorp is a bank holding company headquartered in
Redding, California. Its subsidiary, North Valley Bank ("NVB"),
operates twenty-five 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.
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, except as required by
law.
For further information contact: Michael J. Cushman 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
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