UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 24, 2007
TriCo Bancshares
(Exact name of registrant as specified in its charter)
California 0-10661 94-2792841
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(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or organization)
63 Constitution Drive, Chico, California 95973
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(530) 898-0300
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02: Results of Operations and Financial Condition
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On October 24, 2007 TriCo Bancshares announced its quarterly earnings for the
period ended September 30, 2007. A copy of the press release is attached as
Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 9.01: Exhibits
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(c) Exhibits
99.1 Press release dated October 24, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TRICO BANCSHARES
Date: October 24, 2007 By: /s/ Thomas J. Reddish
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Thomas J. Reddish, Executive Vice
President and Chief Financial Officer
(Principal Financial and Accounting
Officer)
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press release dated October 24, 2007
[GRAPHIC OMITTED]
PRESS RELEASE Contact: Thomas J. Reddish
For Immediate Release EVP & CFO (530) 898-0300
TRICO BANCSHARES ANNOUNCES QUARTERLY EARNINGS
CHICO, Calif. - (October 24, 2007) - TriCo Bancshares (NASDAQ: TCBK), parent
company of Tri Counties Bank, today announced quarterly earnings of $6,793,000
for the quarter ended September 30, 2007. This represents a decrease of $27,000
(0.4%) when compared with earnings of $6,820,000 for the quarter ended September
30, 2006. Diluted earnings per share for the quarter ended September 30, 2007
were $0.42 compared to $0.42 for the quarter ended September 30, 2006. Total
assets of the Company increased $49,519,000 (2.6%) to $1,953,523,000 at
September 30, 2007 from $1,904,004,000 at September 30, 2006. Total loans of the
Company increased $27,917,000 (1.9%) to $1,535,076,000 at September 30, 2007
from $1,507,159,000 at September 30, 2006. Total deposits of the Company
increased $6,968,000 (0.5%) to $1,532,142,000 at September 30, 2007 from
$1,525,174,000 at September 30, 2006. Diluted earnings per share for the nine
months ended September 30, 2007 and 2006 were $1.22 and $1.22, respectively, on
earnings of $19,992,000 and $19,912,000, respectively.
The decrease in earnings from the quarter ended September 30, 2006 was due to a
$5,000 (0.02%) decrease in fully tax-equivalent (FTE) net interest income to
$21,840,000, and a $465,000 (198%) increase in the provision for loan losses to
$700,000 that were substantially offset by a $198,000 (3.0%) increase in
noninterest income to $6,847,000 and a $274,000 (1.6%) decrease in noninterest
expense to $16,752,000 for the quarter ended September 30, 2007.
The $5,000 (0.02%) decrease in net interest income (FTE) was due to a 0.07%
decrease in net interest margin (FTE) to 5.12% that was substantially offset by
a $20,381,000 (1.2%) increase in average balances of interest-earning assets to
$1,721,547,000. This decrease in net interest margin was mainly due to a 0.18%
decrease in net interest spread as the average yield on interest-earning assets
increased 0.14% while the average rate paid on interest-bearing liabilities
increased 0.32% from the quarter ended September 30, 2006. The effect of the
0.18% decrease in net interest spread was partially offset by a 0.11% increase
in the impact of net noninterest-bearing funds from the quarter ended September
30, 2006.
The Company provided $700,000 for loan losses in the third quarter of 2007
versus $235,000 in the third quarter of 2006. During the third quarter of 2007,
the Company recorded $560,000 of net loan charge-offs versus $135,000 of net
loan charge-offs in the year earlier quarter. The $560,000 of net loan
charge-offs during the third quarter of 2007 represented 0.15% of average loan
balances on an annualized basis. At September 30, 2007, the combination of the
Company's allowance for loan losses ($17,139,000) and reserve for unfunded
commitments ($2,040,000) represented 255% of non-performing loans net of
government agency guarantees ($7,507,000).
The increase in noninterest income from the quarter ended September 30, 2006 was
mainly due to a $136,000 (30.4%) increase in commissions on sale of nondeposit
investment products to $583,000, a $116,000 (3.1%) increase in service charges
on deposit accounts to $3,819,000, and an $89,000 (9.6%) increase in ATM fees
and interchange to $1,016,000, that were partially offset by a $53,000 (20.1%)
decrease in gain on sale of loans to $211,000. The increase in commissions on
sale of nondeposit investment products was primarily due to improved market
conditions and increased resources focused in this area. The increase in service
charges on deposit accounts was primarily due to growth in customer count. The
increase in ATM fees and interchange was due to growth in customer count and
expansion of ATM network as part of new branch openings. The decrease in gain on
sale of loans was due to a slowdown in residential mortgage refinance activity.
The $274,000 decrease in noninterest expense for the third quarter of 2007
compared to the third quarter of 2006 was mainly due to a $301,000 (3.2%)
decrease in salaries and benefits expense to $8,975,000. The decrease in
salaries and benefits expense was mainly due to reduced commission and incentive
expense that was partially offset by annual salary increases, and new employees
at the Company's recently opened branches. The reduced commission and incentive
expense was due to the Company's employees not earning certain bonus and
incentive compensation which is tied to the Company satisfying internal targeted
performance goals. The Company did not meet such goals for the third quarter of
2007 and thus did not incur the related compensation expense.
Richard Smith, President and Chief Executive Officer commented, "We are pleased
with our results for the quarter ended September 30, 2007, given the difficult
market conditions in residential real estate and continued margin pressures that
we have faced throughout 2007. During the third quarter, the nation's liquidity
crisis and rate reductions by the Federal Reserve added to operating challenges.
Despite this, TriCo's performance held up remarkably well. Most importantly,
credit quality remains good and demonstrates our ability to manage through the
residential real estate downturn. We have been minimally affected by the
pronounced slowdown in the California residential real estate market. While we
did achieve modest loan growth in the most recent quarter, we find ourselves
having to fund this growth with higher paying deposits or other borrowings."
On August 21, 2007, the Company announced the completion of its stock repurchase
plan originally adopted on July 31, 2003 and amended on April 9, 2004. Under
this plan, the Company repurchased a total of 500,000 shares of its common stock
with the final 105,629 shares being repurchased during August 2007 at an average
price of $20.97 per share. Also on August 21, 2007, the Board of Directors
adopted a new plan to repurchase, as conditions warrant, up to 500,000 shares of
the Company's common stock on the open market. As of September 30, 2007, the
Company had not repurchased any shares of its common stock under its stock
repurchase plan announced on August 21, 2007, which left 500,000 shares
available for repurchase under the plan.
In addition to the historical information contained herein, this press release
contains certain forward-looking statements. 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, 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. 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.
TriCo Bancshares and Tri Counties Bank are headquartered in Chico, California.
Tri Counties Bank has a 32-year history in the banking industry. Tri Counties
Bank operates 32 traditional branch locations and 25 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 64 ATMs and a 24-hour, seven days a week
telephone customer service center. Brokerage services are provided at the Bank's
offices by the Bank's association with Raymond James Financial, 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 end
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September 30, June 30, March 31, December 31, September 30,
2007 2007 2007 2006 2006
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Statement of Income Data
Interest income $32,442 $31,986 $30,661 $31,545 $31,421
Interest expense 10,602 9,895 9,216 9,821 9,576
Net interest income 21,840 22,091 21,445 21,724 21,845
Provision for loan losses 700 500 482 - 235
Noninterest income:
Service charges and fees 5,218 5,375 5,061 4,940 5,056
Other income 1,629 1,654 1,539 1,687 1,593
Total noninterest income 6,847 7,029 6,600 6,627 6,649
Noninterest expense:
Salaries and benefits 8,975 9,619 9,742 9,405 9,276
Intangible amortization 122 122 123 350 350
Provision for losses -
unfunded commitments - 74 117 - -
Other expense 7,655 7,628 6,978 7,247 7,400
Total noninterest expense 16,752 17,443 16,960 17,002 17,026
Income before taxes 11,235 11,177 10,603 11,349 11,233
Net income $6,793 $6,755 $6,444 $6,918 $6,820
Share Data
Basic earnings per share $0.43 $0.42 $0.41 $0.44 $0.43
Diluted earnings per share 0.42 0.41 0.39 0.42 0.42
Book value per common share 11.50 11.22 10.96 10.69 10.41
Tangible book value per common share $10.44 $10.16 $9.89 $9.60 $9.22
Shares outstanding 15,891,300 15,917,291 15,910,291 15,857,207 15,857,107
Weighted average shares 15,889,061 15,916,313 15,878,929 15,857,166 15,855,933
Weighted average diluted shares 16,310,631 16,463,389 16,415,845 16,396,320 16,365,858
Credit Quality
Non-performing loans, net of
government agency guarantees $7,507 $13,360 $5,991 $4,512 $4,523
Other real estate owned 187 187 187 - -
Loans charged-off 843 751 739 498 368
Loans recovered $283 $355 $238 $419 $233
Allowance for losses to total loans(1) 1.25% 1.26% 1.26% 1.24% 1.25%
Allowance for losses to NPLs(1) 255% 143% 315% 416% 417%
Allowance for losses to NPAs(1) 249% 141% 305% 416% 417%
Selected Financial Ratios
Return on average total assets 1.44% 1.44% 1.38% 1.46% 1.45%
Return on average equity 14.92% 15.11% 14.79% 16.23% 16.64%
Average yield on loans 7.93% 7.93% 7.63% 7.81% 7.82%
Average yield on interest-earning assets 7.58% 7.58% 7.30% 7.43% 7.44%
Average rate on interest-bearing liabilities 3.18% 3.02% 2.85% 2.97% 2.86%
Net interest margin (fully tax-equivalent) 5.12% 5.25% 5.12% 5.13% 5.19%
Total risk based capital ratio 11.7% 11.8% 11.8% 11.3% 11.1%
Tier 1 Capital ratio 10.7% 10.8% 10.8% 10.3% 10.1%
(1) Allowance for losses includes allowance for loan losses and reserve for unfunded commitments.
TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands)
Three months ended
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September 30, June 30, March 31, December 31, September 30,
2007 2007 2007 2006 2006
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Balance Sheet Data
Cash and due from banks $70,791 $93,636 $75,263 $102,220 $78,281
Federal funds sold 488 1,715 - 794 1,387
Securities, available-for-sale 239,242 175,891 188,478 198,361 209,886
Federal Home Loan Bank Stock 8,652 8,543 8,442 8,320 8,206
Loans
Commercial loans 165,559 159,822 142,083 153,105 153,705
Consumer loans 542,875 526,575 516,550 525,513 527,185
Real estate mortgage loans 697,670 687,744 687,088 679,661 661,962
Real estate construction loans 128,972 133,487 149,893 151,600 164,307
Total loans, gross 1,535,076 1,507,628 1,495,614 1,509,879 1,507,159
Allowance for loan losses (17,139) (16,999) (16,895) (16,914) (16,993)
Premises and equipment 20,804 20,891 20,924 21,830 21,556
Cash value of life insurance 44,751 44,346 43,941 43,536 42,991
Goodwill 15,519 15,519 15,519 15,519 15,519
Intangible assets 1,298 1,421 1,543 1,666 3,361
Other assets 34,041 34,436 33,492 34,755 32,651
Total assets 1,953,523 1,887,027 1,866,321 1,919,966 1,904,004
Deposits
Noninterest-bearing demand deposits 345,467 366,321 364,401 420,025 357,754
Interest-bearing demand deposits 214,726 226,591 235,497 230,671 229,143
Savings deposits 386,866 387,422 381,069 374,605 369,933
Time certificates 585,083 530,545 555,882 573,848 568,344
Total deposits 1,532,142 1,510,879 1,536,849 1,599,149 1,525,174
Federal funds purchased 66,000 80,500 38,000 38,000 106,500
Reserve for unfunded commitments 2,040 2,040 1,966 1,849 1,849
Other liabilities 29,382 28,878 32,524 30,383 28,254
Other borrowings 99,996 44,892 41,347 39,911 35,848
Junior subordinated debt 41,238 41,238 41,238 41,238 41,238
Total liabilities 1,770,798 1,708,427 1,691,924 1,750,530 1,738,863
Total shareholders' equity 182,725 178,600 174,397 169,436 165,141
Accumulated other
comprehensive loss (3,628) (4,779) (3,988) (4,521) (3,607)
Average loans 1,517,419 1,506,913 1,490,055 1,498,040 1,477,551
Average interest-earning assets 1,721,547 1,698,620 1,692,574 1,711,743 1,701,166
Average total assets 1,891,992 1,871,260 1,865,448 1,890,765 1,880,029
Average deposits 1,499,793 1,500,733 1,534,473 1,550,979 1,501,630
Average total equity $182,080 $178,836 $174,262 $170,518 $163,919