California's North Valley Bancorp announced a deal this week to buy Six Rivers National Bank in Eureka for about $25 million of stock, edging out an in-town bank that had courted Six Rivers for two years.
The deal, announced Monday and slated to close in the first quarter, would let Redding-based North Valley grow to 20 branches spread over five northern California counties. North Valley currently has $300 million of assets and operates 12 branches in two counties.
Six Rivers, with $200 million of assets, has been trying to recover since losing $1.13 million in 1998. In September of that year, founder and chief executive officer John F. Burger resigned after a $2.9 million loan to a hardwood mill defaulted.
Since early 1997, Six Rivers has rejected four offers from Humboldt Bancorp, a $330 million-asset company in Eureka. Its most recent bid, which was turned aside in August, reportedly was for $26.5 million. At the time, Six Rivers officials insisted they could get more once asset quality was restored. Now they just say that they found a better partner in North Valley.
"Our board has considered a number of strategic alternatives in the past year and found a merger with North Valley to hold the greatest opportunity for our shareholders," said William Kay, Six Rivers' chairman. "There is no question in our minds that North Valley and Six Rivers will provide an excellent match for all parties involved."
Theodore S. Mason, Humboldt's chief executive, said his company may make a counteroffer.
"We are disappointed," he said. "We thought we had a better deal on the table with them, and they weren't interested."