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):
January 30, 2008
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 January 30, 2008 TriCo Bancshares announced its quarterly earnings for the
period ended December 31, 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 January 30, 2008
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: January 30, 2008 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 January 30, 2008
PRESS RELEASE Contact: Thomas J. Reddish
For Immediate Release Executive Vice President & CFO
(530) 898-0300
TRICO BANCSHARES ANNOUNCES ANNUAL AND QUARTERLY EARNINGS FOR THE PERIODS ENDED
DECEMBER 31, 2007
CHICO, Calif. - (January 30, 2008) - TriCo Bancshares (NASDAQ: TCBK), parent
company of Tri Counties Bank, today announced annual earnings of $25,693,000 for
the year ended December 31, 2007. This represents a 4.2% decrease when compared
with earnings of $26,830,000 for the year ended December 31, 2006. Diluted
earnings per share for the year ended December 31, 2007 decreased 4.3% to $1.57
from $1.64 for the year ended December 31, 2006. Total assets of the Company
increased $61 million (3.2%) to $1.981 billion at December 31, 2007 versus
$1.920 billion at December 31, 2006. Total loans of the Company increased $42
million (2.8%) to $1.552 billion at December 31, 2007 versus $1.510 billion at
December 31, 2006. Total deposits of the Company decreased $54 million (3.4%) to
$1.545 billion at December 31, 2007 versus $1.599 billion at December 31, 2006.
Net income for the quarter ended December 31, 2007 decreased 17.6% to $5,701,000
from $6,918,000 in the quarter ended December 31, 2006. Diluted earnings per
share decreased 16.7% to $0.35 in the quarter ended December 31, 2007 from $0.42
in the quarter ended December 31, 2006.
The decrease in earnings for the quarter ended December 31, 2007 over the
year-ago quarter was due to a $414,000 (1.9%) decrease in net interest income to
$21,310,000, a $1,350,000 increase in provision for loan losses from $0 in the
year-ago quarter, and a $749,000 (4.4%) increase in noninterest expense to
$17,751,000, which were partially offset by a $487,000 (7.3%) increase in
noninterest income to $7,114,000 from the year-ago quarter.
The $414,000 decrease in net interest income was due to a 28 basis point
decrease in fully tax-equivalent net interest margin to 4.85% during the quarter
ended December 31, 2007 versus 5.13% during the quarter ended December 31, 2006,
which was partially offset by a $65 million (3.8%) increase in average balance
of interest-earning assets when compared to the year-ago quarter. The fully
tax-equivalent net interest margin was 5.12% during the quarter ended September
30, 2007. The decrease in fully tax-equivalent net interest margin to 4.85%
during the quarter ended December 31, 2007 was due to many factors including a
100 basis point decrease in the prime lending rate between August 31, 2007 and
December 31, 2007 which directly impacted the interest earned on the Company's
variable rate loans tied to the prime lending rate, a lag in the downward
repricing of interest-bearing liabilities compared to interest-earning assets, a
change in the mix of interest-bearing liabilities towards a higher percentage of
certificates of deposit and other borrowings, and credit and liquidity troubles
at some of our competitors which caused them to offer exceptionally high deposit
rates which in turn kept deposit rates for the entire industry elevated more
than they possibly otherwise would be.
The provision for loan loss was $1,350,000 and $0 during the quarters ended
December 31, 2007 and December 31, 2006, respectively. Net loan charge-offs were
$1,158,000 during the quarter ended December 31, 2007 compared to $79,000 during
the quarter ended December 31, 2006. The $1,158,000 of net loan charge-offs
during the quarter ended December 31, 2007 were comprised of $556,000 of
indirect auto loans, $436,000 of home equity lines of credit and loans, $84,000
of small business loans, and $82,000 of other loans. Nonperforming loans, net of
government agency guarantees, were $7,511,000 at December 31, 2007 compared to
$4,512,000 at December 31, 2006. The Company's allowance for losses, which
consists of the allowance for loan losses and the reserve for unfunded
commitments, was $19,421,000 or 1.25% of total loans outstanding and 259% of
nonperforming loans at December 31, 2007 compared to $18,763,000 or 1.24% of
total loans outstanding and 416% of nonperforming loans at December 31, 2006.
The $749,000 (4.4%) increase in noninterest expense during the quarter ended
December 31, 2007 compared to the year-ago quarter was due to a $325,000 (3.5%)
increase in salaries and benefits expense to $9,730,000 and a $602,000 (8.3%)
increase in other noninterest expenses to $7,849,000. The increase in salaries
and benefits expense was due to increases in base salaries and benefits expenses
that were partially offset by a decrease in incentive compensation expense. The
increase in other noninterest expense was primarily due to increased occupancy,
equipment, and marketing expense that were partially offset by reduced
intangible amortization.
The $487,000 (7.3%) increase in noninterest income was primarily due to a
$606,000 (12.3%) increase in service charges and fees to $5,546,000 during the
quarter ended December 31, 2007 from the quarter ended December 31, 2006. Other
noninterest income decreased $119,000 (7.1%) to $1,568,000 due mainly to a
$314,000 (58%) decrease in income from cash value of life insurance to $230,000,
and a $111,000 (31.8%) decrease in gain on sale of loans to $238,000, that were
partially offset by a $281,000 (67.4%) increase in commission on sale of
nondeposit investment products to $698,000.
As of December 31, 2007, the Company had not repurchased any shares of its
common stock under its stock repurchase plan adopted on August 21, 2007, which
left 500,000 shares available for repurchase under the plan.
Richard Smith, President and Chief Executive Officer commented, "Earnings for
the fourth quarter of 2007 proved to be very challenging for the banking
industry as well as our bank. The difference is that our lower earnings in the
fourth quarter are based more upon lower asset yields as a result of a lower
prime rate and liabilities that could not re-price quickly due to industry
liquidity challenges. Our earnings results were only minimally affected by loan
losses as our loan portfolio has held up well during this slowing economic
cycle."
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 ended
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December 31, September 30, June 30, March 31, December 31,
2007 2007 2007 2007 2005
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Statement of Income Data
Interest income $32,179 $32,442 $31,986 $30,661 $31,545
Interest expense 10,869 10,602 9,895 9,216 9,821
Net interest income 21,310 21,840 22,091 21,445 21,724
Provision for loan losses 1,350 700 500 482 -
Noninterest income:
Service charges and fees 5,546 5,218 5,375 5,061 4,940
Other income 1,568 1,629 1,654 1,539 1,687
Total noninterest income 7,114 6,847 7,029 6,600 6,627
Noninterest expense:
Base salaries net of deferred
loan origination costs 6,504 6,142 5,940 5,995 5,885
Incentive compensation expense 873 452 1,281 1,203 1,408
Employee benefits and other
compensation expense 2,353 2,381 2,398 2,544 2,112
Total salaries and benefits expense 9,730 8,975 9,619 9,742 9,405
Intangible amortization 122 122 122 123 350
Provision for losses -
unfunded commitments 50 - 74 117 -
Other expense 7,849 7,655 7,628 6,978 7,247
Total noninterest expense 17,751 16,752 17,443 16,960 17,002
Income before taxes 9,323 11,235 11,177 10,603 11,349
Net income $5,701 $6,793 $6,755 $6,444 $6,918
Share Data
Basic earnings per share $0.36 $0.43 $0.42 $0.41 $0.44
Diluted earnings per share 0.35 0.42 0.41 0.39 0.42
Book value per common share 11.87 11.50 11.22 10.96 10.69
Tangible book value per common share $10.82 $10.44 $10.16 $9.89 $9.60
Shares outstanding 15,911,550 15,891,300 15,917,291 15,910,291 15,857,207
Weighted average shares 15,908,151 15,889,061 15,916,313 15,878,929 15,857,166
Weighted average diluted shares 16,265,571 16,310,631 16,463,389 16,415,845 16,396,320
Credit Quality
Non-performing loans, net of
government agency guarantees $7,511 $7,507 $13,360 $5,991 $4,512
Other real estate owned 187 187 187 187 -
Loans charged-off 1,425 843 751 739 498
Loans recovered $267 $283 $355 $238 $419
Allowance for losses to total loans(1) 1.25% 1.25% 1.26% 1.26% 1.24%
Allowance for losses to NPLs(1) 259% 255% 143% 315% 416%
Allowance for losses to NPAs(1) 252% 249% 141% 305% 416%
Selected Financial Ratios
Return on average total assets 1.17% 1.44% 1.44% 1.38% 1.46%
Return on average equity 12.08% 14.92% 15.11% 14.79% 16.23%
Average yield on loans 7.64% 7.93% 7.93% 7.63% 7.81%
Average yield on interest-earning assets 7.29% 7.58% 7.58% 7.30% 7.43%
Average rate on interest-bearing liabilities 3.16% 3.18% 3.02% 2.85% 2.97%
Net interest margin (fully tax-equivalent) 4.85% 5.12% 5.25% 5.12% 5.13%
Total risk based capital ratio 11.9% 11.7% 11.8% 11.8% 11.4%
Tier 1 Capital ratio 10.9% 10.7% 10.8% 10.8% 10.4%
(1) Allowance for losses includes allowance for loan losses and reserve for unfunded commitments.
TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands, except share data)
Three months ended
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December 31, September 30, June 30, March 31, December 31,
2007 2007 2007 2007 2006
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Balance Sheet Data
Cash and due from banks $88,798 $70,791 $93,636 $75,263 $102,220
Federal funds sold - 488 1,715 - 794
Securities, available-for-sale 232,427 239,242 175,891 188,478 198,361
Federal Home Loan Bank Stock 8,766 8,652 8,543 8,442 8,320
Loans
Commercial loans 164,815 165,559 159,822 142,083 153,105
Consumer loans 535,819 542,875 526,575 516,550 525,513
Real estate mortgage loans 716,013 697,670 687,744 687,088 679,661
Real estate construction loans 135,319 128,972 133,487 149,893 151,600
Total loans, gross 1,551,966 1,535,076 1,507,628 1,495,614 1,509,879
Allowance for loan losses (17,331) (17,139) (16,999) (16,895) (16,914)
Premises and equipment 20,492 20,804 20,891 20,924 21,830
Cash value of life insurance 44,981 44,751 44,346 43,941 43,536
Goodwill 15,519 15,519 15,519 15,519 15,519
Intangible assets 1,176 1,298 1,421 1,543 1,666
Other assets 33,827 34,041 34,436 33,492 34,755
Total assets 1,980,621 1,953,523 1,887,027 1,866,321 1,919,966
Deposits
Noninterest-bearing demand deposits 378,680 345,467 366,321 364,401 420,025
Interest-bearing demand deposits 216,952 214,726 226,591 235,497 230,671
Savings deposits 383,226 386,866 387,422 381,069 374,605
Time certificates 566,365 585,083 530,545 555,882 573,848
Total deposits 1,545,223 1,532,142 1,510,879 1,536,849 1,599,149
Federal funds purchased 56,000 66,000 80,500 38,000 38,000
Reserve for unfunded commitments 2,090 2,040 2,040 1,966 1,849
Other liabilities 31,066 29,382 28,878 32,524 30,383
Other borrowings 116,126 99,996 44,892 41,347 39,911
Junior subordinated debt 41,238 41,238 41,238 41,238 41,238
Total liabilities 1,791,743 1,770,798 1,708,427 1,691,924 1,750,530
Total shareholders' equity 188,878 182,725 178,600 174,397 169,436
Accumulated other
comprehensive loss (1,552) (3,628) (4,779) (3,988) (4,521)
Average loans 1,530,729 1,517,419 1,506,913 1,490,055 1,498,040
Average interest-earning assets 1,776,770 1,721,547 1,698,620 1,692,574 1,711,743
Average total assets 1,949,096 1,891,992 1,871,260 1,865,448 1,890,765
Average deposits 1,545,369 1,499,793 1,500,733 1,534,473 1,550,979
Average total equity $188,753 $182,080 $178,836 $174,262 $170,518