UPDATE: Northern California National Bank, Chico, CA (NCNB)


In the two and a half years since I first reviewed Northern California National Bank in the Timyan Bank Alert™, assets are up 45%, book value has grown by 21%, loans have grown by 33%, deposits by 40%, a dividend has been instituted, NPAs have remained negligible and the value of the franchise has grown by $10 per share in my estimation.

And since the stock is only up 20% since then, NCNB is an even better bargain for bank investors today. It's conceivable that an acquirer could and would pay $28 per share to own this beautiful one-branch bank.


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

Prospective Buyers
Banner Corp, Walla Walla, WA (BANR)*
TriCo Bancshares, Chico, CA (TCBK)
Umpqua Holdings, Portland, OR (UMPQ)

* I had listed SKBHC here in my original post, but Banner Corp has since acquired it. Banner's lone Chico branch has a paltry $9M in deposits, so I'd say BANR should either buy NCNB or leave Chico to bankers that care more about it.
Financial Snapshot
(as of 06/30/2016)

Total assets:
$198M
Tangible book value per share:
$13.19
NPAs to assets:
0.09%
Price to book:
83.4%
Market cap:
$15M
Dividend yield:
1.4%
Trailing 12-month return on assets:
0.55%
Trailing 12-month return on equity:
6.22%
Luminaries
John Lucchesi, former Chairman, President, and CEO (deceased)
Stephen Gonsalves, Chairman
Todd Lewis, President, CEO, and CFO
Gold Stars
I am sad to report that since I first reviewed Northern California National Bank in the Timyan Bank Alert™, its Founder has died. I had hoped to trek out West to meet him and to acknowledge him personally. Banking needs more folks like John Lucchesi! And life really is short.

John Lucchesi is one of my favorite bankers of all time. He grew up in Chico, went to Chico State University and returned to his hometown after a 25-year career with Bank of America that took him to Asia. Back in Chico, Lucchesi ran North State National Bank until he sold it to Tri Counties Bank in 2002. 

Apparently, Lucchesi was one of those ambitious guys who just couldn't retire, so in 2006, at the young age of 67, he started Northern California National. When other banks were reeling from bad loans in the Great Recession, Northern California National was growing without loan problems due to Lucchesi's careful stewardship. 

Lucchesi's Northern California National is a case study in how to build a great community bank from the ground up. Today, months after he left us, it may be the sturdiest bank in Chico and a highly coveted franchise.

I know this updated blog post is a small tribute, unworthy of the man and his end-of-life's work.  I had hoped to at least be able to shake his hand...

    Sources
    • Confidential interviews with shareholders

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