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 29, 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 October 29, 2008, TriCo Bancshares announced its quarterly earnings for the
period ended September 30, 2008. 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 29, 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: October 29, 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 October 29, 2008
PRESS RELEASE Contact: Richard P. Smith
For Immediate Release President & CEO (530) 898-0300
TRICO BANCSHARES ANNOUNCES QUARTERLY EARNINGS
CHICO, Calif. - (October 29, 2008) - TriCo Bancshares (NASDAQ: TCBK), parent
company of Tri Counties Bank, today announced quarterly earnings of $6,235,000
for the quarter ended September 30, 2008. This represents an 8.2% decrease when
compared with earnings of $6,793,000 for the quarter ended September 30, 2007.
Diluted earnings per share for the quarter ended September 30, 2008 decreased
7.1% to $0.39 from $0.42 for the quarter ended September 30, 2007. The decrease
in earnings from the prior year quarter was primarily due to the Company's
decision to increase by $1,900,000 the provision for loan losses to $2,600,000
that was partially offset by an $879,000 increase in net interest income to
$22,719,000 for the quarter ended September 30, 2008.
Total assets of the Company increased $22,944,000 (1.2%) to $1,976,467,000 at
September 30, 2008 from $1,953,523,000 at September 30, 2007. Total loans of the
Company increased $28,160,000 (1.8%) to $1,563,236,000 at September 30, 2008
from $1,535,076,000 at September 30, 2007. Total deposits of the Company
increased $31,699,000 (2.1%) to $1,563,841,000 at September 30, 2008 from
$1,532,142,000 at September 30, 2007. Diluted earnings per share for the nine
months ended September 30, 2008 and 2007 were $0.78 and $1.22, respectively, on
earnings of $12,557,000 and $19,992,000, respectively.
Net interest income on a fully tax-equivalent (FTE) basis during the third
quarter of 2008 increased $858,000 (3.9 %) from the same period in 2007 to
$22,899,000. The increase in net interest income (FTE) was due to a $84,463,000
(4.9%) increase in average balances of interest-earning assets to $1,806,010,000
that was substantially offset by a 0.05% decrease in net interest margin (FTE)
to 5.07%.
The Company provided $2,600,000 for loan losses in the third quarter of 2008
versus $700,000 in the third quarter of 2007. In the third quarter of 2008, the
Company recorded $2,293,000 of net loan charge-offs versus $560,000 of net loan
charge-offs in the third quarter of 2007. Included in the $2,293,000 of net loan
charge-offs during the third quarter of 2008 were $1,000,000 on home equity
lines and loans and $910,000 on auto indirect loans.
At September 30, 2008, the sum of the Company's allowance for loan losses of
$24,588,000 and the reserve for unfunded commitments of $3,365,000 represented
164% of non-performing loans net of government agency guarantees. Non-performing
loans, defined as non-accruing loans and accruing loans delinquent 90 days or
more, net of government guarantees at September 30, 2008 increased $2,233,000
(15.1%) to $17,041,000 from $14,808,000 at June 30, 2008.
Noninterest income for the third quarter of 2008 decreased $55,000 (0.8%) from
the third quarter of 2007, mainly due to a $430,000 decrease in the value of
mortgage servicing rights to a negative $571,000 from a negative $141,000 in the
third quarter of 2007. The negative impact of the decrease in the value of
mortgage servicing rights was partially offset by a $261,000 (6.8%) increase in
service charges on deposit accounts to $4,080,000, and a $148,000 (14.6%)
increase in ATM fees and interchange to $1,164,000. The increases in service
charges on deposit accounts and ATM fees and interchange revenue were primarily
due to increased numbers of customers. The following table summarizes the
components of noninterest income for the quarters ended September 30, 2008 and
2007 (dollars in thousands).
Three months ended
September 30,
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2008 2007
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Service charges on deposit accounts $4,080 $3,819
ATM fees and interchange revenue 1,164 1,016
Other service fees 551 523
Change in value of mortgage servicing rights (571) (141)
Gain on sale of loans 341 211
Commissions on sale of
nondeposit investment products 594 583
Increase in cash value of life insurance 360 405
Other noninterest income 273 431
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Total noninterest income $6,792 $6,847
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Noninterest expense for the third quarter of 2008 decreased $163,000 (1.0%)
compared to the third quarter of 2007. Salaries and benefits expense increased
$456,000 (5.1%) to $9,431,000 due to increases in all areas including salaries,
commissions and incentives, and benefits. Other noninterest expense decreased
$619,000 (8.0%) due to decreases over a broad range of other expense categories.
The following table summarizes the components of noninterest expense for the
quarters ended September 30, 2008 and 2007 (dollars in thousands).
Three months ended
September 30,
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2008 2007
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Base salaries, net of
deferred loan origination costs $6,331 $6,143
Incentive compensation 675 451
Benefits and other compensation costs 2,425 2,38
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Total salaries and benefits expense 9,431 8,975
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Occupancy 1,289 1,178
Equipment 1,017 1,052
Data processing and software 600 564
ATM network charges 506 463
Advertising and marketing 451 620
Telecommunications 402 412
Professional fees 300 408
Courier service 258 285
Postage 185 178
Intangible amortization 133 122
Assessments 118 82
Operational losses 81 128
Provisions for losses - unfunded commitments (100) 0
Other 1,918 2,285
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Total other noninterest expense 7,158 7,777
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Total noninterest expense $16,589 $16,752
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Average full time equivalent staff 668 646
Noninterest expense to revenue (FTE) 55.89% 58.01%
As of September 30, 2008, the Company had repurchased 166,600 shares of its
common stock under its stock repurchase plan announced on August 21, 2007, which
left 333,400 shares available for repurchase under the plan.
Richard Smith, President and Chief Executive Officer commented, "We are pleased
with our performance during the 3rd quarter of 2008, as we continue to grow
earnings per share, increase our capital levels, maintain strong credit quality
and carefully manage our resources to maintain a safe and sound banking
institution during these challenging economic times. We are benefiting and
taking advantage of market disruptions and recent consolidations within the
financial industry and as a result we continue to grow and expand our customer
base throughout our branch network. During the quarter, we increased loan
balances by $19.9 million and our deposits increased by $52.8 million."
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, 2007. 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 33-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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September 30, June 30, March 31 December 31 September 30,
2008 2008 2008 2007 2007
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Statement of Income Data
Interest income $29,971 $30,332 $31,130 $32,179 $32,442
Interest expense 7,252 7,471 9,765 10,869 10,602
Net interest income 22,719 22,861 21,365 21,310 21,840
Provision for loan losses 2,600 8,800 4,100 1,350 700
Noninterest income:
Service charges and fees 5,224 5,826 5,128 5,546 5,218
Other income 1,568 1,454 1,722 1,568 1,629
Total noninterest income 6,792 7,280 6,850 7,114 6,847
Noninterest expense:
Base salaries net of deferred
loan origination costs 6,331 6,316 6,333 6,504 6,143
Incentive compensation expense 675 830 560 873 451
Employee benefits and other
compensation expense 2,425 2,499 2,587 2,353 2,381
Total salaries and benefits expense 9,431 9,645 9,480 9,730 8,975
Intangible amortization 133 133 122 122 122
Provision for losses -
unfunded commitments (100) 550 825 50 -
Other expense 7,125 7,516 7,146 7,849 7,655
Total noninterest expense 16,589 17,844 17,573 17,751 16,752
Income before taxes 10,322 3,497 6,542 9,323 11,235
Net income $6,235 $2,274 $4,048 $5,701 $6,793
Share Data
Basic earnings per share $0.40 $0.14 $0.26 $0.36 $0.43
Diluted earnings per share 0.39 0.14 0.25 0.35 0.42
Book value per common share 12.14 11.86 12.02 11.87 11.50
Tangible book value per common share $11.10 $10.81 $10.97 $10.82 $10.44
Shares outstanding 15,744,881 15,744,881 15,744,950 15,911,550 15,891,300
Weighted average shares 15,744,881 15,744,881 15,842,085 15,908,151 15,889,061
Weighted average diluted shares 15,951,668 15,953,288 16,081,722 16,265,571 16,310,631
Credit Quality
Non-performing loans, net of
government agency guarantees $17,041 $14,808 $9,850 $7,511 $7,507
Other real estate owned 1,178 1,178 836 187 187
Loans charged-off 2,578 4,176 2,385 1,425 843
Loans recovered $285 $274 $337 $267 $283
Allowance for losses to total loans(1) 1.79% 1.80% 1.44% 1.25% 1.25%
Allowance for losses to NPLs(1) 164% 187% 226% 259% 255%
Allowance for losses to NPAs(1) 153% 174% 209% 252% 249%
Selected Financial Ratios
Return on average total assets 1.26% 0.46% 0.81% 1.17% 1.44%
Return on average equity 13.04% 4.74% 8.37% 12.08% 14.92%
Average yield on loans 6.92% 6.99% 7.22% 7.64% 7.93%
Average yield on interest-earning assets 6.68% 6.71% 6.80% 7.29% 7.58%
Average rate on interest-bearing liabilities 2.06% 2.11% 2.78% 3.16% 3.18%
Net interest margin (fully tax-equivalent) 5.07% 5.06% 4.74% 4.85% 5.12%
Total risk based capital ratio 12.4% 12.3% 12.1% 11.9% 11.7%
Tier 1 Capital ratio 11.1% 11.0% 10.9% 10.9% 10.7%
(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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September 30, June 30, March 31, December 31, September 30,
2008 2008 2008 2007 2007
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Balance Sheet Data
Cash and due from banks $67,300 $76,658 $74,713 $88,798 $70,791
Federal funds sold - - - - 488
Securities, available-for-sale 241,900 253,129 272,276 232,427 239,242
Federal Home Loan Bank Stock 9,147 9,010 8,885 8,766 8,652
Loans
Commercial loans 189,837 178,104 157,832 164,815 165,559
Consumer loans 513,132 518,200 525,065 535,819 542,875
Real estate mortgage loans 770,553 751,651 729,704 716,013 697,670
Real estate construction loans 89,714 95,369 135,343 135,319 128,972
Total loans, gross 1,563,236 1,543,324 1,547,944 1,551,966 1,535,076
Allowance for loan losses (24,588) (24,281) (19,383) (17,331) (17,139)
Premises and equipment 19,094 19,580 20,069 20,492 20,804
Cash value of life insurance 46,061 45,701 45,341 44,981 44,751
Goodwill 15,519 15,519 15,519 15,519 15,519
Intangible assets 786 920 1,053 1,176 1,298
Other assets 38,012 40,930 32,933 33,827 34,041
Total assets 1,976,467 1,980,490 1,999,350 1,980,621 1,953,523
Deposits
Noninterest-bearing demand deposits 334,015 347,336 358,684 378,680 345,467
Interest-bearing demand deposits 228,441 215,530 216,478 216,952 214,726
Savings deposits 374,640 382,918 398,763 383,226 386,866
Time certificates 626,745 565,269 554,550 566,365 585,083
Total deposits 1,563,841 1,511,053 1,528,475 1,545,223 1,532,142
Federal funds purchased 67,000 123,750 102,300 56,000 66,000
Reserve for unfunded commitments 3,365 3,465 2,915 2,090 2,040
Other liabilities 30,048 29,250 31,355 31,066 29,382
Other borrowings 79,873 85,048 103,767 116,126 99,996
Junior subordinated debt 41,238 41,238 41,238 41,238 41,238
Total liabilities 1,785,365 1,793,804 1,810,050 1,791,743 1,770,798
Total shareholders' equity 191,102 186,686 189,300 188,878 182,725
Accumulated other
comprehensive gain (loss) (2,455) (2,980) 25 (1,552) (3,628)
Average loans 1,549,009 1,546,257 1,535,357 1,530,729 1,517,419
Average interest-earning assets 1,806,010 1,819,222 1,817,212 1,776,770 1,721,547
Average total assets 1,974,392 1,986,674 1,988,666 1,949,096 1,891,992
Average deposits 1,545,435 1,507,252 1,511,604 1,545,369 1,499,793
Average total equity $191,211 $192,005 $193,449 $188,753 $182,080