TCBK TriCo Bancshares

TriCo Bancshares (NASDAQ:TCBK), parent company of Tri Counties Bank, today announced quarterly earnings of $6,755,000 for the quarter ended June 30, 2007. This represents a 3.0% increase when compared with earnings of $6,557,000 for the quarter ended June 30, 2006. Diluted earnings per share for the quarter ended June 30, 2007 increased 2.5% to $0.41 from $0.40 for the quarter ended June 30, 2006. Total assets of the Company increased $15,871,000 (0.9%) to $1,887,027,000 at June 30, 2007 from $1,871,156,000 at June 30, 2006. Total loans of the Company increased $51,620,000 (3.6%) to $1,507,628,000 at June 30, 2007 from $1,456,008,000 at June 30, 2006. Total deposits of the Company decreased $3,561,000 (0.2%) to $1,510,879,000 at June 30, 2007 from $1,514,440,000 at June 30, 2006. Diluted earnings per share for the six months ended June 30, 2007 and 2006 were $0.80 and $0.80, respectively, on earnings of $13,199,000 and $13,092,000, respectively. The improvement in results from the year-ago quarter was due to a $950,000 (4.4%) increase in fully tax-equivalent (FTE) net interest income to $22,308,000, a $54,000 (9.7%) decrease in the provision for loan losses to $500,000, and a $498,000 (7.6%) increase in noninterest income to $7,029,000. These contributing factors were partially offset by a $1,167,000 (7.2%) increase in noninterest expense to $17,443,000 for the quarter ended June 30, 2007. The increase in net interest income (FTE) was due to a $21,915,000 (1.3%) increase in average balances of interest-earning assets to $1,698,620,000 and a 0.15% increase in net interest margin (FTE) to 5.25%. This increase in net interest margin was mainly due to an 0.16% increase in the impact of net noninterest-bearing funds from the year-ago three month period that was partially offset by a 0.01% decrease in net interest spread as the average yield on interest-earning assets increased 0.51% while the average rate paid on interest-bearing liabilities increased 0.52% from the year-ago three month period. The Company provided $500,000 for loan losses in the second quarter of 2007 versus $554,000 in the second quarter of 2006. During the second quarter of 2007, the Company recorded $396,000 of net loan charge offs versus $305,000 of net loan charge-offs in the year earlier quarter. The $396,000 of net loan charge-offs during the second quarter of 2007 represented 0.11% of average loan balances on an annualized basis. At June 30, 2007, the combination of the Company�s allowance for loan losses ($16,999,000) and reserve for unfunded commitments ($2,040,000) represented 143% of non-performing loans net of government agency guarantees ($13,360,000). The $13,360,000 of non-performing loans net of government guarantees at June 30, 2007 represents an increase of $7,369,000 from the $5,991,000 balance of such loans at March 31, 2007. $7,175,000 of the $7,369,000 increase was related to two residential real estate construction loans to a single borrower that matured, were well secured and in the process of refinance at June 30, 2007 with an entity other than the Company. The loans were paid off in-full on July 26, 2007. The increase in noninterest income from the year-ago quarter was mainly due to a $152,000 (4.1%) increase in service charges on deposit accounts to $3,858,000, a $150,000 (16.7%) increase in ATM fees and interchange to $1,046,000, and a $115,000 improvement in change in value of mortgage servicing rights to $73,000. 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 improvement in change in value of mortgage servicing rights is primarily due to a slowdown in refinance activity which extends the estimated life of existing mortgages and enhances the value of the related mortgage servicing rights. Noninterest expense for the second quarter of 2007 increased $1,167,000 (7.2%) compared to the second quarter of 2006. Salaries and benefits expense increased $1,001,000 (11.6%) to $9,619,000, mainly due to annual salary increases, and a 1.5% increase in average full time equivalent staff made up primarily of new employees at the Company�s recently opened branches. Other categories of noninterest expense such as equipment, occupancy and ATM network charges also increased, in part, due to these newly opened branches. Intangible amortization decreased $228,000 (65%) to $122,000 during the second quarter of 2007 as the core deposit intangible related to the purchase of several branches in 1997 became fully amortized in the fourth quarter of 2006. As of June 30, 2007, the Company had repurchased 394,371 shares of its common stock under its stock repurchase plan announced on July 31, 2003 and amended on April 9, 2004, which left 105,629 shares available for repurchase under the plan. Richard Smith, President and Chief Executive Officer commented, �We are pleased with our results for the second quarter of 2007 as TriCo realized a small improvement over the second quarter of 2006 results and a nicer improvement over the first quarter of 2007 results. We continue to believe that the slowdown in real estate value appreciation and real estate activity in general is affecting both wholesale and retail banking growth rates. However, we are optimistic about the prospects of our Company as we continue to add customers and expand our franchise in a profitable manner despite the challenging interest rate environment and competitive pressures.� 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 23 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 62 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 June 30, 2007 � March 31, 2007 � December 31, 2006 � September 30, 2006 � June 30, 2006 Statement of Income Data Interest income $31,986 $30,661 $31,545 $31,421 $29,379 Interest expense 9,895 9,216 9,821 9,576 8,275 Net interest income 22,091 21,445 21,724 21,845 21,104 Provision for loan losses 500 482 - 235 554 Noninterest income: Service charges and fees 5,375 5,061 4,940 5,056 4,956 Other income 1,654 1,539 1,687 1,593 1,575 Total noninterest income 7,029 6,600 6,627 6,649 6,531 Noninterest expense: Salaries and benefits 9,619 9,742 9,405 9,276 8,618 Intangible amortization 122 123 350 350 350 Provision for losses - unfunded commitments 74 117 - - 36 Other expense 7,628 6,978 7,247 7,400 7,272 Total noninterest expense 17,443 16,960 17,002 17,026 16,276 Income before taxes 11,177 10,603 11,349 11,233 10,805 Net income $6,755 $6,444 $6,918 $6,820 $6,557 Share Data Basic earnings per share $0.42 $0.41 $0.44 $0.43 $0.42 Diluted earnings per share 0.41 0.39 0.42 0.42 0.40 Book value per common share 11.22 10.96 10.69 10.41 9.96 Tangible book value per common share $10.16 $9.89 $9.60 $9.22 $8.75 Shares outstanding 15,917,291 15,910,291 15,857,207 15,857,107 15,855,107 Weighted average shares 15,916,313 15,878,929 15,857,166 15,855,933 15,798,565 Weighted average diluted shares 16,463,389 16,415,845 16,396,320 16,365,858 16,388,855 Credit Quality Non-performing loans, net of government agency guarantees $13,360 $5,991 $4,512 $4,523 $3,913 Other real estate owned 187 187 - - - Loans charged-off 751 739 498 368 564 Loans recovered $355 $238 $419 $233 $259 Allowance for losses to total loans(1) 1.26% 1.26% 1.24% 1.25% 1.29% Allowance for losses to NPLs(1) 143% 315% 416% 417% 479% Allowance for losses to NPAs(1) 141% 305% 416% 417% 479% Selected Financial Ratios Return on average total assets 1.44% 1.38% 1.46% 1.45% 1.42% Return on average equity 15.11% 14.79% 16.23% 16.64% 16.68% Average yield on loans 7.93% 7.63% 7.81% 7.82% 7.44% Average yield on interest-earning assets 7.58% 7.30% 7.43% 7.44% 7.07% Average rate on interest-bearing liabilities 3.02% 2.85% 2.97% 2.86% 2.50% Net interest margin (fully tax-equivalent) 5.25% 5.12% 5.13% 5.19% 5.10% Total risk based capital ratio 11.8% 11.8% 11.3% 11.1% 11.1% Tier 1 Capital ratio 10.8% 10.8% 10.3% 10.1% 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 June 30, 2007 � March 31, 2007 � December 31, 2006 � September 30, 2006 � June 30, 2006 Balance Sheet Data Cash and due from banks $93,636 $75,263 $102,220 $78,281 $84,663 Federal funds sold 1,715 - 794 1,387 526 Securities, available-for-sale 175,891 188,478 198,361 209,886 221,828 Federal Home Loan Bank Stock 8,543 8,442 8,320 8,206 8,103 Loans Commercial loans 159,822 142,083 153,105 153,705 146,952 Consumer loans 526,575 516,550 525,513 527,185 517,588 Real estate mortgage loans 687,744 687,088 679,661 661,962 642,422 Real estate construction loans 133,487 149,893 151,600 164,307 149,046 Total loans, gross 1,507,628 1,495,614 1,509,879 1,507,159 1,456,008 Allowance for loan losses (16,999) (16,895) (16,914) (16,993) (16,893) Premises and equipment 20,891 20,924 21,830 21,556 21,597 Cash value of life insurance 44,346 43,941 43,536 42,991 42,571 Goodwill 15,519 15,519 15,519 15,519 15,519 Intangible assets 1,421 1,543 1,666 3,361 3,711 Other assets 34,436 33,492 34,755 32,651 33,523 Total assets 1,887,027 1,866,321 1,919,966 1,904,004 1,871,156 Deposits Noninterest-bearing demand deposits 366,321 364,401 420,025 357,754 354,576 Interest-bearing demand deposits 226,591 235,497 230,671 229,143 235,100 Savings deposits 387,422 381,069 374,605 369,933 388,847 Time certificates 530,545 555,882 573,848 568,344 535,917 Total deposits 1,510,879 1,536,849 1,599,149 1,525,174 1,514,440 Federal funds purchased 80,500 38,000 38,000 106,500 96,700 Reserve for unfunded commitments 2,040 1,966 1,849 1,849 1,849 Other liabilities 28,878 32,524 30,383 28,254 24,964 Other borrowings 44,892 41,347 39,911 35,848 33,971 Junior subordinated debt 41,238 41,238 41,238 41,238 41,238 Total liabilities 1,708,427 1,691,924 1,750,530 1,738,863 1,713,162 Total shareholders' equity 178,600 174,397 169,436 165,141 157,994 Accumulated other comprehensive loss (4,779) (3,988) (4,521) (3,607) (5,629) Average loans 1,506,913 1,490,055 1,498,040 1,477,551 1,427,735 Average interest-earning assets 1,698,620 1,692,574 1,711,743 1,701,166 1,676,705 Average total assets 1,871,260 1,865,448 1,890,765 1,880,029 1,850,487 Average deposits 1,500,733 1,534,473 1,550,979 1,501,630 1,497,571 Average total equity $178,836 $174,262 $170,518 $163,919 $157,232