TriCo Bancshares Announces Quarterly Results

  TriCo Bancshares Announces Quarterly Results

Business Wire

CHICO, Calif. -- July 27, 2012

TriCo Bancshares (NASDAQ: TCBK) (the "Company"), parent company of Tri
Counties Bank (the “Bank”), today announced a $2,550,000 (92.0%) increase in
earnings to $5,321,000 for the three months ended June 30, 2012 from
$2,771,000 for the three months ended June 30, 2011. Diluted earnings per
share for the three months ended June 30, 2012 were $0.33 compared to diluted
earnings per share of $0.17 for the three months ended June 30, 2011. Diluted
earnings per share for the six months ended June 30, 2012 and 2011 were $0.58
and $0.35, respectively, on earnings of $9,252,000 and $5,571,000,
respectively.

Total assets of the Company increased $349,434,000 (16.1%) to $2,525,618,000
at June 30, 2012 from $2,176,184,000 at June 30, 2011. Total loans of the
Company increased $156,420,000 (11.2%) to $1,552,482,000 at June 30, 2012 from
$1,396,062,000 at June 30, 2011. The increase in loans from the year-ago
balance is primarily due to $167,484,000 of loans acquired in the acquisition
of the banking operations of Citizens Bank of Northern California (“Citizens”)
on September 23, 2011 that was partially offset by charge offs and net loan
payoffs. Loans increased $41,397,000 (2.7%) during the three months ended June
30, 2012 primarily due to seasonal draws on lines of credit and demand for new
loans.

Total deposits of the Company increased $329,046,000 (17.9%) to $2,165,777,000
at June 30, 2012 from $1,836,731,000 at June 30, 2011. The increase in
deposits is mainly due to $239,899,000 of deposits acquired in the Citizens
acquisition.

The following is a summary of the components of the Company’s consolidated net
income for the periods indicated:

                          Three months ended                    
                           June 30,
(dollars in thousands)     2012         2011          $ Change   % Change
Net Interest Income        $ 25,934      $ 21,753      $ 4,181      19.2   %
Provision for loan           (3,371  )     (5,561  )     2,190      (39.4  %)
losses
Noninterest income           10,577        8,251         2,326      28.2   %
Noninterest expense          (24,367 )     (20,095 )     (4,272 )   21.3   %
Provision for income        (3,452  )    (1,577  )    (1,875 )   118.9  %
taxes
Net income                 $ 5,321      $ 2,771      $ 2,550     92.0   %
                                                                           

Included in the Company’s results for the three month period ended June 30,
2012 is the acquisition by Tri Counties Bank of the banking operations of
Citizens Bank of Northern California, Nevada City, California from the FDIC
under a whole bank purchase and assumption agreement without loss sharing on
September 23, 2011. The assets acquired and liabilities assumed in the
Citizens acquisition have been accounted for under the acquisition method of
accounting (formerly the purchase method). Loans acquired through the Citizens
acquisition are classified as Purchased Not Credit Impaired (PNCI), Purchased
Credit Impaired – cash basis (PCI – cash basis), or Purchased Credit Impaired
– other (PCI – other). Loans not acquired in an acquisition or otherwise
“purchased” are classified as “originated”. Further details regarding interest
income from loans, including fair value discount accretion, may be found under
the heading “Supplemental Loan Interest Income Data” in the Consolidated
Financial Data table at the end of this announcement.

The following table shows the components of net interest income and net
interest margin on a fully tax-equivalent (FTE) basis for the periods
indicated:

ANALYSIS OF CHANGE IN NET INTEREST MARGIN ON EARNING ASSETS
(unaudited, dollars in thousands)
                     Three Months Ended
                      June 30, 2012                      June 30, 2011
                      Average      Income/     Yield/   Average      Income/     Yield/
                      Balance       Expense      Rate     Balance       Expense      Rate
Assets
Earning assets
Loans                 $ 1,534,006   $ 25,792     6.73 %   $ 1,393,989   $ 21,735     6.24 %
Investments -           208,417       1,615      3.10 %     271,089       2,354      3.47 %
taxable
Investments -           9,561         171        7.15 %     11,839        216        7.31 %
nontaxable
Federal funds sold     579,164     430       0.30 %    351,512     242       0.28 %
Total earning           2,331,148    28,008    4.81 %     2,028,429    24,547    4.84 %
assets
Other assets, net      177,951                            164,222
Total assets          $ 2,509,099                         $ 2,192,651
Liabilities and
shareholders'
equity
Interest-bearing
Demand deposits       $ 473,124       197        0.17 %   $ 408,109       358        0.35 %
Savings deposits        731,988       296        0.16 %     613,924       372        0.24 %
Time deposits           380,943       584        0.61 %     406,436       1,072      1.06 %
Other borrowings        62,300        601        3.86 %     59,139        600        4.06 %
Trust preferred        41,238      332       3.22 %    41,238      312       3.03 %
securities
Total
interest-bearing        1,689,593    2,010     0.48 %     1,528,846    2,714     0.71 %
liabilities
Noninterest-bearing     562,909                             424,331
deposits
Other liabilities       33,569                              33,711
Shareholders'          223,028                            205,763
equity

Total liabilities
and shareholders'     $ 2,509,099                         $ 2,192,651
equity
Net interest rate                                4.33 %                              4.13 %
spread
Net interest
income/net interest                  25,998    4.46 %                  21,833    4.31 %
margin (FTE)
FTE adjustment                       (64    )                           (80    )
Net interest income                 $ 25,934                           $ 21,753 
(not FTE)
                                                                                     

Net interest income (FTE) during the three months ended June 30, 2012
increased $4,165,000 (19.1%) from the same period in 2011 to $25,998,000. The
increase in net interest income (FTE) was due to a $140,017,000 (10.4%)
increase in average balance of loans and a 49 basis point increase in average
yield on loans to 6.73%, both of which are primarily due to the Citizens
acquisition in September 2011. The operations of Citizens from April 1, 2012
to June 30, 2012 added approximately $5,032,000 and $5,000 to interest income
and interest expense, respectively. Included in the $5,032,000 of Citizens
related interest income recorded during the three months ended June 30, 2012,
is $2,278,000 of interest income from fair value discount accretion. Also
contributing to the increase in net interest income during the three months
ended June 30, 2012 was a 19 basis point decrease in the cost of deposits from
0.39% during the three months ended June 30, 2011 to 0.20% during the three
months ended June 30, 2012.

The Company provided $3,371,000 for loan losses in the second quarter of 2012
versus $3,996,000 in the first quarter of 2012 and $5,561,000 in the second
quarter of 2011. Included in the provision for loan losses during the quarter
ended June 30, 2012, was $281,000 related to Citizens loans. The allowance for
loan losses increased $397,000 from $45,452,000 at March 31, 2012 to
$45,849,000 at June 30, 2012.  The decrease in provision for loan losses
during the second quarter of 2012 compared to the first quarter of 2012 was
primarily the result of a decrease in nonperforming Originated loans and a
decrease in net loan charge offs.

The following table presents the key components of noninterest income for the
periods indicated:

                             Three months ended                 
                              June 30,
(dollars in thousands)        2012        2011        $ Change   % Change
Service charges on deposit    $ 3,644      $ 3,700        ($56  )   (1.5   %)
accounts
ATM fees and interchange        2,026        1,776        250       14.1   %
Other service fees              570          437          133       30.4   %
Mortgage banking service        379          370          9         2.4    %
fees
Change in value of mortgage    (464   )    (162  )     (302  )   186.4  %
servicing rights
Total service charges and      6,155      6,121      34       0.6    %
fees
                                                                    
Gain on sale of loans           1,237        495          742       149.9  %
Commission on NDIP              842          648          194       29.9   %
Increase in cash value of       450          450          -         0.0    %
life insurance
Change in indemnification       662          144          518       359.7  %
asset
Gain on sale of foreclosed      304          185          119       64.3   %
assets
Life insurance death            600          -            600
benefit
Other noninterest income       327        208        119      57.2   %
Total other noninterest        4,422      2,130      2,292    107.6  %
income
Total noninterest income      $ 10,577    $ 8,251    $  2,326    28.2   %
                                                                           

Noninterest income increased $2,326,000 (28.2%) to $10,577,000 in the three
months ended June 30, 2012 when compared to the three months ended June 30,
2011. The increase in noninterest income was primarily due to a $742,000
increase in gain on sale of loans, a $600,000 gain on life insurance benefit,
a $518,000 increase in change in indemnification asset, a $250,000 increase in
ATM fees and interchange, and a $194,000 increase in commissions on sale of
nondeposit investment products (NDIP), that were partially offset by a
$302,000 decrease in change in value of mortgage servicing rights to a
negative $464,000. The increase in gain on sale of loans is due to increased
residential real estate loan refinance activity and our focus to service that
activity. The increase in change in indemnification asset is due to increased
actual and estimated future losses in our covered loan and foreclosed assets
portfolios. The increase in commissions on sale of NDIP is due to our
application of additional resources in that area. The operations of Citizens
from April 1, 2012 to June 30, 2012 accounted for $643,000 of the $10,577,000
of noninterest income during the three months ended June 30, 2012.

Salary and benefit expenses increased $1,775,000 (16.6%) to $12,490,000 during
the three months ended June 30, 2012 compared to the three months ended June
30, 2011. Base salaries increased $1,075,000 (14.9%) to $8,273,000 during the
three months ended June 30, 2012. The increase in base salaries was mainly due
to a 10.3% increase in average full time equivalent staff to 741 and annual
merit increases when compared to the three months ended June 30, 2011. The
increase in full time equivalent staff is mainly due to the Citizens
acquisition on September 23, 2011. Incentive and commission related salary
expenses increased $564,000 (72.0%) to $1,347,000 during three months ended
June 30, 2012 due primarily to increases in production related incentives and
incentives tied to net income. Benefits expense, including retirement, medical
and workers’ compensation insurance, and taxes, increased $136,000 (5.0%) to
$2,870,000 during the three months ended June 30, 2012 primarily due to the
increase in average full time equivalent staff noted above. The operations of
Citizens from April 1, 2012 to June 30, 2012 added $894,000 to salaries and
benefits expense.

Other noninterest expenses increased $2,497,000 (26.6%) to $11,877,000 during
the three months ended June 30, 2012 when compared to the three months ended
June 30, 2011. Changes in the various categories of other noninterest expense
are reflected in the table below. The changes are indicative of the Citizens
acquisition, and the economic environment which has led to increases, or
fluctuations, in professional loan collection expenses, provision for
foreclosed asset losses, and foreclosed asset expenses. The operations of
Citizens from April 1, 2012 to June 30, 2012 added $1,257,000 to other
noninterest expense including $419,000 of loan and OREO expenses.

The following table presents the key components of the Company’s noninterest
expense for the periods indicated:

                              Three months ended                
                               June 30,
(dollars in thousands)         2012      2011         $ Change   % Change
Salaries                       $ 8,273    $ 7,198      $  1,075     14.9   %
Commissions and incentives       1,347      783           564       72.0   %
Employee benefits               2,870     2,734       136      5.0    %
Total salaries and benefits     12,490    10,715      1,775    16.6   %
expense
                                                                    
Occupancy                        1,857      1,402         455       32.5   %
Equipment                        1,126      880           246       28.0   %
Change in reserve for            40         (50    )      90
unfunded commitments
Data processing and software     1,143      956           187       19.6   %
Telecommunications               567        520           47        9.0    %
ATM network charges              532        507           25        4.9    %
Professional fees                691        573           118       20.6   %
Advertising and marketing        863        739           124       16.8   %
Postage                          218        219           (1    )   (0.5   %)
Courier service                  256        221           35        15.8   %
Intangible amortization          52         20            32        160.0  %
Operational losses               143        118           25        21.2   %
Provision for foreclosed         1,004      638           366       57.4   %
asset losses
Foreclosed asset expense         267        115           152       132.2  %
Assessments                      590        518           72        13.9   %
Other                           2,528     2,004       524      26.1   %
Total other noninterest         11,877    9,380       2,497    26.6   %
expense
Total noninterest expense      $ 24,367   $ 20,095    $  4,272    21.3   %
                                                                           

In addition to the historical information contained herein, this press release
may contain certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The reader of this press
release should understand that all such forward-looking statements are subject
to various uncertainties and risks that could affect their outcome. The
Company’s actual results could differ materially from those suggested by such
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, variances in the actual versus
projected growth in assets, return on assets, interest rate fluctuations,
economic conditions in the Company's primary market area, demand for loans,
regulatory and accounting changes, loan losses, expenses, rates charged on
loans and earned on securities investments, rates paid on deposits,
competition effects, fee and other noninterest income earned as well as other
factors detailed in the Company's reports filed with the Securities and
Exchange Commission which are incorporated herein by reference, including the
Form 10-K for the year ended December 31, 2011. These reports and this entire
press release should be read to put such forward-looking statements in context
and to gain a more complete understanding of the uncertainties and risks
involved in the Company's business. Any forward-looking statement may turn out
to be wrong and cannot be guaranteed. The Company does not intend to update
any of the forward-looking statements after the date of this release.

TriCo Bancshares and Tri Counties Bank are headquartered in Chico, California.
Tri Counties Bank has a 37-year history in the banking industry. It operates
41 traditional branch locations and 27 in-store branch locations in 23
California counties. Tri Counties Bank offers financial services and provides
a diversified line of products and services to consumers and businesses, which
include demand, savings and time deposits, consumer finance, online banking,
mortgage lending, and commercial banking throughout its market area. It
operates a network of 73 ATMs and a 24-hour, seven days-a-week telephone
customer service center. Brokerage services are provided by the Bank’s
investment services affiliate, Raymond James Financial Services, Inc. For
further information please visit the Tri Counties Bank web site at
http://www.tricountiesbank.com.


TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands, except share data)
                  Three months ended
                   June 30,        March 31,       December 31,    September 30,   June 30,
                   2012            2012            2011            2011            2011
Statement of
Income Data
Interest income    $ 27,944         $ 27,164         $ 29,609         $ 24,472         $ 24,467
Interest expense     2,010            2,128            2,329            2,465            2,714
Net interest         25,934           25,036           27,280           22,007           21,753
income
Provision for        3,371            3,996            5,429            5,069            5,561
loan losses
Noninterest
income:
Service charges      6,155            5,952            6,457            5,584            6,121
and fees
Other income         4,422            2,313            4,032            9,139            2,130
Total
noninterest          10,577           8,265            10,489           14,723           8,251
income
Noninterest
expense:
Base salaries
net of deferred      8,273            8,159            8,071            7,478            7,198
loan origination
costs
Incentive
compensation         1,347            1,375            188              1,850            783
expense
Employee
benefits and
other                2,870            3,228            2,506            2,602            2,734
compensation
expense
Total salaries
and benefits         12,490           12,762           10,765           11,930           10,715
expense
Other
noninterest          11,877           10,153           11,311           8,943            9,380
expense
Total
noninterest          24,367           22,915           22,076           20,873           20,095
expense
Income before        8,773            6,390            10,264           10,788           4,348
taxes
Net income         $ 5,321          $ 3,931          $ 6,549          $ 6,470          $ 2,771
Share Data
Basic earnings     $ 0.33           $ 0.25           $ 0.41           $ 0.40           $ 0.17
per share
Diluted earnings   $ 0.33           $ 0.25           $ 0.41           $ 0.40           $ 0.17
per share
Book value per     $ 13.96          $ 13.71          $ 13.55          $ 13.19          $ 12.82
common share
Tangible book
value per common   $ 12.91          $ 12.66          $ 12.49          $ 12.14          $ 11.82
share
Shares               15,992,893       15,978,958       15,978,958       15,978,958       15,978,958
outstanding
Weighted average     15,985,922       15,978,958       15,978,958       15,978,958       15,922,228
shares
Weighted average     16,047,344       16,042,765       16,015,312       16,006,358       15,953,572
diluted shares
Credit Quality
Nonperforming      $ 69,749         $ 70,764         $ 75,775         $ 74,324         $ 73,720
originated loans
Total
nonperforming        82,877           82,575           85,731           85,067           73,720
loans
Guaranteed
portion of           218              218              3,061            3,287            3,496
nonperforming
loans
Foreclosed
assets, net of       12,743           14,789           16,332           17,870           9,337
allowance
Loans                4,188            4,922            5,340            4,428            5,230
charged-off
Loans recovered      1,214            464              525              697              407
Selected
Financial Ratios
Return on
average total        0.85       %     0.63       %     1.04       %     1.17       %     0.51       %
assets
Return on            9.54       %     7.14       %     12.19      %     12.41      %     5.39       %
average equity
Average yield on     6.73       %     6.53       %     6.94       %     6.24       %     6.24       %
loans
Average yield on
interest-earning     4.81       %     4.66       %     5.12       %     4.82       %     4.84       %
assets
Average rate on
interest-bearing     0.48       %     0.49       %     0.53       %     0.64       %     0.71       %
liabilities
Net interest
margin (fully        4.46       %     4.30       %     4.71       %     4.34       %     4.31       %
tax-equivalent)
Supplemental
Loan Interest
Income Data:
Discount
accretion PCI -      108              18               418              28               -
cash basis loans
Discount
accretion PCI -      886              776              949              223              185
other loans
Discount
accretion PNCI       1,391            1,286            1,738            -                -
loans
Regular interest     3,439            3,420            3,651            978              872
Purchased loans
All other loan       19,968           19,429           20,491           20,758           20,678
interest income
Total loan           25,792           24,929           27,247           21,987           21,735
interest income
                                                                                                    

TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands)
                     Three months ended
                      June 30,       March 31,      December 31,   September 30,  June 30,
Balance Sheet Data    2012           2012           2011           2011           2011
Cash and due from     $ 644,102       $ 681,760       $ 637,275       $ 522,636       $ 391,054
banks
Securities,             202,849         212,157         229,223         257,300         264,992
available-for-sale
Federal Home Loan       9,990           10,508          10,610          11,124          9,199
Bank Stock
Loans held for sale     5,321           5,869           10,219          10,872          4,379
Loans:
Commercial loans        139,733         129,906         139,131         154,257         140,531
Consumer loans          393,248         419,539         406,330         400,627         382,864
Real estate             984,147         924,336         965,922         978,492         828,757
mortgage loans
Real estate             35,354          37,304          39,649          42,251          43,910
construction loans
Total loans, gross      1,552,482       1,511,085       1,551,032       1,575,627       1,396,062
Allowance for loan      (45,849   )     (45,452   )     (45,914   )     (45,300   )     (43,962   )
losses
Foreclosed assets       12,743          14,789          16,332          17,870          9,337
Premises and            22,595          19,814          19,893          19,717          20,142
equipment
Cash value of life      50,292          50,853          50,403          51,891          51,441
insurance
Goodwill                15,519          15,519          15,519          15,519          15,519
Intangible assets       1,196           1,248           1,301           1,353           475
Mortgage servicing      4,757           4,784           4,603           4,238           4,818
rights
FDIC
indemnification         4,046           3,405           4,405           4,473           4,545
asset
Accrued interest        7,545           7,095           7,312           7,397           6,549
receivable
Other assets            38,030          39,474          43,384          33,750          41,634
Total assets            2,525,618       2,532,908       2,555,597       2,488,467       2,176,184
Deposits:
Noninterest-bearing     578,010         564,143         541,276         469,630         419,391
demand deposits
Interest-bearing        480,337         488,573         431,565         425,281         401,040
demand deposits
Savings deposits        737,433         724,449         797,182         788,276         618,413
Time certificates       369,997         392,581         420,513         437,036         397,887
Total deposits          2,165,777       2,169,746       2,190,536       2,120,223       1,836,731
Accrued interest        1,415           1,587           1,674           1,815           1,865
payable
Reserve for
unfunded                2,590           2,550           2,740           2,640           2,640
commitments
Other liabilities       30,538          29,675          30,427          28,808          29,561
Other borrowings        60,831          69,074          72,541          82,919          59,234
Junior subordinated     41,238          41,238          41,238          41,238          41,238
debt
Total liabilities       2,302,389       2,313,870       2,339,156       2,277,643       1,971,269
Total shareholders'     223,229         219,038         216,441         210,824         204,915
equity
Accumulated other       3,537           3,658           3,811           3,468           2,644
comprehensive gain
Average loans           1,534,006       1,527,536       1,570,648       1,410,151       1,393,989
Average
interest-earning        2,331,148       2,334,842       2,320,205       2,037,348       2,028,429
assets
Average total           2,509,099       2,514,541       2,513,634       2,207,800       2,192,651
assets
Average deposits        2,148,964       2,149,212       2,149,422       1,865,399       1,852,800
Average total         $ 223,028       $ 220,366       $ 214,979       $ 208,560       $ 205,763
equity
Total risk based        14.3      %     14.3      %     13.9      %     13.5      %     14.6      %
capital ratio
Tier 1 capital          13.0      %     13.0      %     12.7      %     12.2      %     13.3      %
ratio
Tier 1 leverage         9.7       %     9.5       %     9.5       %     10.5      %     10.4      %
ratio
Tangible capital        8.2       %     8.0       %     7.9       %     7.8       %     8.7       %
ratio

Contact:

TriCo Bancshares
Richard P. Smith, 530-898-0300
President & CEO
 
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