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 December 31, � September 30, � June 30,
� March 31, � December 31, 2007 � 2007 � 2007 � 2007 � 2006
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) � � Three months ended
December 31, � September 30, � June 30, � March 31, � December 31,
2007 � 2007 � 2007 � 2007 � 2006 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
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