TCBK TriCo Bancshares

TriCo Bancshares (Nasdaq:TCBK), parent company of Tri Counties Bank, today announced quarterly earnings of $6,535,000 for the quarter ended March 31, 2006. This represents a 24.7% increase when compared with earnings of $5,239,000 for the quarter ended March 31, 2005. Diluted earnings per share for the quarter ended March 31, 2006 increased 25.0% to $0.40 from $0.32 for the quarter ended March 31, 2005. Total assets of the Company increased $173,914,000 (10.5%) to $1,829,526,000 at March 31, 2006 versus $1,655,612,000 at March 31, 2005. Total loans of the Company increased $217,675,000 (18.4%) to $1,400,108,000 at March 31, 2006 versus $1,182,433,000 at March 31, 2005. Total deposits of the Company increased $128,642,000 (9.2%) to $1,527,391,000 at March 31, 2006 versus $1,398,749,000 at March 31, 2005. Richard Smith, President and Chief Executive Officer, commented, "We are pleased with the performance of our company during the quarter ended March 31, 2006. Loan growth during this most recent quarter was good and consistent with the pattern we have seen during the first quarter of recent years. The credit quality of our loan portfolio remained excellent during this most recent quarter. Deposit growth of nine percent from the year-ago quarter end and another quarter of double-digit growth in earnings per share when compared to the year-ago quarter are evidence that our growth strategy has been effective. We will continue to execute our growth strategy throughout the Central Valley of California as evidenced by the January 2006 opening of our full service branch in the Wal-Mart supercenter at 1150 Harter Road in Yuba City, California, the March 2006 opening of our full service branch in the Raley's supermarket at 25025 Blue Ravine Road in Folsom, California, and the April 2006 opening of our full service branch in the Bel Air supermarket at 3250 Arena Boulevard in North Natomas, California. The Folsom and North Natomas branches represent our ninth and tenth branches in the Sacramento metropolitan area, and our fiftieth and fifty-first branches overall." The improvement in results from the year-ago quarter was due to a $2,712,000 (14.5%) increase in fully tax-equivalent net interest income to $21,468,000, and a $1,121,000 (21.0%) increase in noninterest income. These contributing factors were partially offset by a $400,000 (400%) increase in provision for loan losses to $500,000 and a $1,309,000 (8.7%) increase in noninterest expense to $16,422,000 for the quarter ended March 31, 2006. The $2,712,000 increase in net interest income (FTE) was due to increased average balances of earning assets (up $182,749,000 or 12.5% to $1,646,777,000) and a 9 basis point increase in net interest margin (FTE) to 5.21% in the quarter ended March 31, 2006 compared to 5.12% in the year-ago quarter. The $400,000 increase in provision for loan losses was mainly due to loan growth as credit quality remained excellent. Net loan charge-offs during the quarter were $82,000. Nonperforming loans, net of government agency guarantees, were $4,048,000 at March 31, 2006 compared to $2,961,000 and $4,072,000 at December 31, 2005 and March 31, 2005, respectively. The Company's allowance for losses, which consists of the allowance for loan losses and the reserve for unfunded commitments, was $18,457,000 or 1.32% of total loans outstanding and 456% of nonperforming loans. The $1,121,000 (21.0%) increase in noninterest income from the year-ago quarter was mainly due to a $440,000 (14.5%) increase in service charges on deposit accounts to $3,474,000, a $180,000 (81.8%) gain in the increase in cash value of life insurance, and a $218,000 increase related to the change in value of mortgage servicing rights. The increase in service charges on deposit accounts was primarily due to the introduction of a business overdraft privilege product in March 2005 and growth in customer count. The gain in the increase in cash value of life insurance was due to higher earning rates on the related insurance policies. The increase related to the change in value of mortgage servicing rights is due to the adoption of market value accounting for mortgage servicing rights effective January 1, 2006 and the related change in market value from January 1, 2006 to March 31, 2006. Noninterest expense for the first quarter of 2006 increased $1,309,000 (8.7%) to $16,422,000 compared to the first quarter of 2005. Salaries and benefits expense increased $787,000 (9.4%) to $9,156,000. The increase in salaries and benefits expense was mainly due to annual salary increases, and new employees at the Company's recently opened branches in Lincoln (February 2005), Folsom-East Bidwell (March 2005), Roseville-Pleasant Grove (November 2005), Yuba City-Marketplace (January 2006), and Folsom-Empire Ranch/Blue Ravine (March 2006). Other categories of noninterest expense such as equipment, occupancy, ATM network charges, and other also increased, in part, due to these newly opened branches. Advertising and marketing expense increased $98,000 (28.7%) to $440,000. Also, on January 1, 2006 the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS 123R), using the modified-prospective transition method, and began expensing the grant-date fair value of all unvested stock options outstanding as of December 31, 2005 over their remaining vesting periods. As such, the Company included $139,000 of expense related to vesting of stock options in noninterest expense during the first quarter of 2006 compared to no such expense during the first quarter of 2005. The after-tax effect of adopting SFAS 123R was a reduction of net income of $100,000 and $0, and a reduction in diluted earnings per share of $0.006 and $0, for the first quarters of 2006 and 2005, respectively. As of March 31, 2006, the Company had repurchased 374,371 shares of its common stock under its stock repurchase plan announced on July 31, 2003 and amended on April 9, 2004, which left 125,629 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 31-year history in the banking industry. Tri Counties Bank operates 32 traditional branch locations and 19 in-store branch locations in 22 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 58 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. -0- *T TRICO BANCSHARES -- CONSOLIDATED FINANCIAL DATA (Unaudited. Dollars in thousands, except per share data) Three months ended ----------------------------------------- March 31, December 31, September 30, 2006 2005 2005 ----------------------------------------- Statement of Income Data Interest income $27,978 $26,876 $25,334 Interest expense 6,773 6,100 5,519 Net interest income 21,205 20,776 19,815 Provision for loan losses 500 561 947 Noninterest income: Service charges and fees 4,857 4,790 4,795 Other income 1,591 1,832 1,837 Total noninterest income 6,448 6,622 6,632 Noninterest expense: Salaries and benefits 9,156 8,565 8,584 Intangible amortization 346 346 346 Provision for losses -- unfunded commitments - 139 3 Other expense 6,920 6,750 6,747 Total noninterest expense 16,422 15,800 15,680 Income before taxes 10,731 11,037 9,820 Net income $6,535 $6,734 $5,961 Share Data Basic earnings per share $0.42 $0.43 $0.38 Diluted earnings per share 0.40 0.41 0.37 Book value per common share 9.68 9.52 9.30 Tangible book value per common share $8.44 $8.25 $8.04 Shares outstanding 15,778,090 15,707,835 15,728,106 Weighted average shares 15,736,544 15,711,257 15,687,547 Weighted average diluted shares 16,379,595 16,336,888 16,330,035 Credit Quality Non-performing loans, net of government agency guarantees $4,048 $2,961 $3,048 Other real estate owned - - - Loans charged-off 357 392 479 Loans recovered $275 $261 $436 Allowance for losses to total loans(1) 1.32% 1.30% 1.32% Allowance for losses to NPLs(1) 456% 609% 573% Allowance for losses to NPAs(1) 456% 609% 573% Selected Financial Ratios Return on average total assets 1.43% 1.51% 1.37% Return on average equity 16.93% 18.00% 16.26% Average yield on loans 7.24% 7.11% 6.93% Average yield on interest- earning assets 6.86% 6.72% 6.51% Average rate on interest- bearing liabilities 2.11% 1.94% 1.79% Net interest margin (fully tax-equivalent) 5.21% 5.21% 5.10% Total risk based capital ratio 11.1% 10.8% 11.2% Tier 1 Capital ratio 10.0% 9.8% 10.1% Three months ended --------------------------- June 30, March 31, 2005 2005 --------------------------- Statement of Income Data Interest income $23,910 $22,636 Interest expense 4,789 4,121 Net interest income 19,121 18,515 Provision for loan losses 561 100 Noninterest income: Service charges and fees 4,505 4,062 Other income 1,805 1,265 Total noninterest income 6,310 5,327 Noninterest expense: Salaries and benefits 8,408 8,369 Intangible amortization 346 343 Provision for losses -- unfunded commitments 39 100 Other expense 6,724 6,301 Total noninterest expense 15,517 15,113 Income before taxes 9,353 8,629 Net income $5,737 $5,239 Share Data Basic earnings per share $0.37 $0.33 Diluted earnings per share 0.35 0.32 Book value per common share 9.10 8.87 Tangible book value per common share $7.81 $7.57 Shares outstanding 15,684,092 15,733,517 Weighted average shares 15,701,867 15,729,725 Weighted average diluted shares 16,288,728 16,366,705 Credit Quality Non-performing loans, net of government agency guarantees $2,922 $4,072 Other real estate owned - - Loans charged-off 513 295 Loans recovered $281 $233 Allowance for losses to total loans(1) 1.32% 1.37% Allowance for losses to NPLs(1) 567% 398% Allowance for losses to NPAs(1) 567% 398% Selected Financial Ratios Return on average total assets 1.37% 1.29% Return on average equity 16.03% 14.83% Average yield on loans 6.85% 6.69% Average yield on interest- earning assets 6.39% 6.25% Average rate on interest- bearing liabilities 1.62% 1.43% Net interest margin (fully tax-equivalent) 5.12% 5.12% Total risk based capital ratio 11.5% 11.9% Tier 1 Capital ratio 10.5% 10.8% (1) Allowance for losses includes allowance for loan losses and reserve for unfunded commitments. TRICO BANCSHARES -- CONSOLIDATED FINANCIAL DATA (Unaudited. Dollars in thousands, except per share data) Three months ended ------------------------------------------------------ March December September June March 31, 2006 31, 2005 30, 2005 30, 2005 31, 2005 ------------------------------------------------------ Balance Sheet Data Cash and due from banks $78,742 $90,562 $85,413 $79,287 $77,365 Federal funds sold - 2,377 218 235 181 Securities, available-for- sale 244,441 260,278 271,134 288,902 293,730 Federal Home Loan Bank Stock 7,691 7,602 7,516 7,440 6,781 Loans Commercial loans 134,049 143,175 141,057 137,620 125,354 Consumer loans 510,809 508,233 494,277 456,247 425,437 Real estate mortgage loans 630,821 623,511 600,875 573,836 556,059 Real estate construction loans 124,429 110,116 91,881 82,349 75,583 Total loans, gross 1,400,108 1,385,035 1,328,090 1,250,052 1,182,433 Allowance for loan losses (16,644) (16,226) (15,796) (14,892) (14,563) Premises and equipment 21,068 21,291 21,223 21,182 20,599 Cash value of life insurance 42,168 41,768 41,519 41,099 40,699 Goodwill 15,519 15,519 15,519 15,519 15,519 Intangible assets 4,061 4,407 4,373 4,719 5,065 Other assets 32,372 28,662 27,647 27,100 27,803 Total assets 1,829,526 1,841,275 1,786,856 1,720,643 1,655,612 Deposits Noninterest- bearing demand deposits 354,514 368,412 346,456 332,887 312,738 Interest- bearing demand deposits 249,064 244,193 243,926 236,134 238,787 Savings deposits 432,087 438,177 449,893 466,062 484,660 Time certificates 491,726 446,015 398,024 365,094 362,564 Total deposits 1,527,391 1,496,797 1,438,299 1,400,177 1,398,749 Federal funds purchased 45,800 96,800 103,200 83,000 20,700 Reserve for unfunded commitments 1,813 1,813 1,674 1,671 1,632 Other liabilities 29,046 23,744 24,412 24,161 25,483 Other borrowings 31,441 31,390 31,711 27,628 28,176 Junior subordinated debt 41,238 41,238 41,238 41,238 41,238 Total liabilities 1,676,729 1,691,782 1,640,534 1,577,875 1,515,978 Total shareholders' equity 152,797 149,493 146,322 142,768 139,634 Accumulated other comprehensive loss (5,330) (3,825) (2,538) (1,468) (2,242) Average loans 1,384,541 1,344,654 1,284,977 1,209,061 1,167,039 Average interest- earning assets 1,646,777 1,615,901 1,574,392 1,511,668 1,464,028 Average total assets 1,822,441 1,784,018 1,744,015 1,679,653 1,628,827 Average deposits 1,498,825 1,473,625 1,421,055 1,407,586 1,363,064 Average total equity $154,410 $149,619 $146,660 $143,196 $141,264 *T