Northern California National Bank, Chico, CA (NCNB)

A Case of a Skillfully Cultivated One Branch Bank


"A society grows great when old men plant trees whose shade they know they shall never sit in." 
- Greek Proverb

"Someone's sitting in the shade today, because someone planted a tree a long time ago." 
- Warren Buffet

Disclosure: As of this posting, I own shares of NCNB and may subsequently either dispose of them or purchase more.

Prospective Buyers
SKBHC Holdings, Seattle, WA (private)
TriCo Bancshares, Chico, CA (TCBK)
Umpqua Holdings, Portland, OR (UMPQ)
Financial Snapshot
(as of 09/30/2013)

Total assets:
$137M
Tangible book value per share:
$10.88
NPAs to assets:
0.4%
Price to book:
81.8%
Market cap:
$12.1M
Dividend yield:
0%
Trailing 12-month return on assets:
0.61%
Trailing 12-month return on equity:
5.3%
Luminaries
John Lucchesi, Chairman, President, and CEO
Todd Lewis, Executive VP and CFO
Gold Stars
Once upon a time, there was a unique sort of arborist, named John Lucchesi, who cultivated community bank branches with great care in the land of Chico, California.
    Lucchesi is the man who picked up two little sappling branches once known as North State Bank, and spent 11 years nurturing them until they grew strong and proud. In 2003, Lucchesi helped to graft each of his branches onto the great big TriCo tree. Over ten years later, one of those branches is the 3rd strongest of the 65 on that tree.
      On any given day today, you can still find Lucchesi, carefully cultivating an even sturdier branch at the corner of 7th and Mangrove in Chico, which he named Northern California National Bank when he founded it in March of 2006. This one-branch bank of Lucchesi's has sprouted 50% more deposits than the two neighboring branches of the giant Umpqua tree combined, and more deposits than all but one of the seven TriCo tree branches in the area.  
        Thanks to Lucchesi's artful care, NCNB has never been plagued by the diseases that have struck so many of our nation's bank branches. NPAs there never even reached 1%, and the bank had no need for injections of TARP that others needed just to stay alive.
            By my calculations, Lucchesi's branch today is worth even more than the 190% of book value that TriCo recently paid for North Valley Bank (NOVB). I hope it gives Lucchesi satisfaction to know that when he chooses to step aside from his art, the one-branch NCNB will have its choices of trees to join.
              Sources
              • Confidential interviews with shareholders

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