North Valley to pay deferred interest on trust preferreds, fully redeem Capital Trust I note

By Marisa Wong

Madison, Wis., June 7 - North Valley Bancorp said it received approval from the Federal Reserve Bank of San Francisco and the California Department of Financial Institutions to pay all deferred interest on the junior subordinated notes underlying its trust preferred securities and to redeem in full its $10.3 million 10.25% North Valley Capital Trust I subordinated note.

The deferred interest on the junior subordinated notes amounts to $5.7 million.

The North Valley Capital Trust I note will be redeemed July 25. Following the redemption, the trust preferred securities will no longer qualify as tier 1 capital for the company.

The redemption "will significantly reduce the company's interest expense," Michael J. Cushman, president and chief executive officer, said in a news release.

"This approval by the bank's regulators follows the termination of the formal agreement with the Federal Reserve Bank of San Francisco on April 16, 2012. The Federal Reserve Bank's approval of this redemption is a further indication of the progress the company is making in strengthening its financial performance."

Based in Redding, Calif., North Valley Bancorp is the holding company of North Valley Bank.

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