TCBK TriCo Bancshares

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):

July 24, 2008

TriCo Bancshares
(Exact name of registrant as specified in its charter)

 California 0-10661 94-2792841
------------------------ --------------- --------------------
 (State or other (Commission File No.) (I.R.S. Employer
 jurisdiction of Identification No.)

incorporation or organization)

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))

On July 24, 2008 TriCo Bancshares announced its quarterly earnings for the period ended June 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.

(c) Exhibits

99.1 Press release dated July 24, 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: July 24, 2008 By: /s/ Richard P. Smith
 --------------------------------
 Richard P. Smith, President and
 Chief Executive Officer

INDEX TO EXHIBITS

Exhibit No. Description
----------- -------------------------------------

 99.1 Press release dated July 24, 2008

PRESS RELEASE Contact: Richard P. Smith For Immediate Release President & CEO (530) 898-0300

TRICO BANCSHARES ANNOUNCES QUARTERLY EARNINGS

CHICO, Calif. - (July 24, 2008) - TriCo Bancshares (NASDAQ: TCBK), parent company of Tri Counties Bank, today announced quarterly earnings of $2,274,000 for the quarter ended June 30, 2008. This represents a 66.3% decrease when compared with earnings of $6,755,000 for the quarter ended June 30, 2007. Diluted earnings per share for the quarter ended June 30, 2008 decreased 65.8% to $0.14 from $0.41 for the quarter ended June 30, 2007. The decrease in earnings from the prior year quarter was primarily due to the Company's decision to increase by $8,300,000 the provision for loan losses to $8,800,000 and a $476,000 increase in the provision for credit losses on unfunded commitments to $550,000 for the quarter ended June 30, 2008.

Total assets of the Company increased $93,463,000 (5.0%) to $1,980,490,000 at June 30, 2008 from $1,887,027,000 at June 30, 2007. Total loans of the Company increased $35,696,000 (2.4%) to $1,543,324,000 at June 30, 2008 from $1,507,628,000 at June 30, 2007. Total deposits of the Company increased $174,000 (0.01%) to $1,511,053,000 at June 30, 2008 from $1,510,879,000 at June 30, 2007. Diluted earnings per share for the six months ended June 30, 2008 and 2007 were $0.39 and $0.80, respectively, on earnings of $6,322,000 and $13,199,000, respectively.

Net interest income (FTE) during the second quarter of 2008 increased $721,000 (3.2%) from the same period in 2007 to $23,029,000. The increase in net interest income (FTE) was due to a $120,602,000 (7.1%) increase in average balances of interest-earning assets to $1,819,222,000 that was partially offset by a 0.19% decrease in net interest margin (FTE) to 5.06% from the second quarter of 2007.

The Company provided $8,800,000 for loan losses in the second quarter of 2008 versus $500,000 in the second quarter of 2007. In the second quarter of 2008, the Company recorded $3,902,000 of net loan charge-offs versus $396,000 of net loan charge-offs in the second quarter of 2007. During the second quarter of 2008, the Company re-appraised all of its larger residential development projects. As a result of this effort, the Company charged-off $1,007,000 on a twenty-eight unit residential condominium project and $640,000 on a twenty-seven lot residential construction project. In addition, net charge-offs of $950,000 on home equity lines and loans and $554,000 on auto indirect loans were taken during the second quarter of 2008. During the second quarter of 2008, the Company also increased its allowance for loan losses by $4,898,000 from the first quarter of 2008 with such additional reserves allocated primarily to consumer loans, residential real estate and construction lending.

At June 30, 2008, the sum of the Company's allowance for loan losses of $24,281,000 and the reserve for unfunded commitments of $3,465,000 represented 187% 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 June 30, 2008 increased $4,958,000 (50.3%) to $14,808,000 from $9,850,000 at March 31, 2008.

Noninterest income for the second quarter of 2008 increased $251,000 (3.6%) from the second quarter of 2007, mainly due to a $241,000 increase in value of mortgage servicing rights to a positive $168,000 from a negative $73,000 for the second quarter of 2007. Also contributing to this increase in noninterest income was a $105,000 (2.7%) increase in service charges on deposit accounts to $3,963,000 and a $122,000 (11.7%) increase in ATM fees and interchange to $1,168,000. The increases in service charges on deposit accounts and ATM fees and interchange revenue were primarily due to increased number of customers. The improvement in change in value of mortgage servicing rights was 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. The following table summarizes the components of noninterest income for the quarters ended June 30, 2008 and 2007 (dollars in thousands).

 Three months ended
 June 30,
 ----------------------
 2008 2007
 ----------------------

Service charges on deposit accounts $3,963 $3,858
ATM fees and interchange revenue 1,168 1,046
Other service fees 527 544
Change in value of mortgage servicing rights 168 (73)
Gain on sale of loans 316 279
Commissions on sale of
 nondeposit investment products 525 550
Increase in cash value of life insurance 360 405
Other noninterest income 253 420
 -----------------------
Total noninterest income $7,280 $7,029
 =======================

Noninterest expense for the second quarter of 2008 increased $401,000 (2.3%) compared to the second quarter of 2007. Salaries and benefits expense increased $26,000 (0.3%) in the second quarter of 2008 compared to $9,645,000 in the second quarter of 2007, mainly due to annual salary increases and increased benefit costs that were substantially offset by reduced incentive compensation. Other noninterest expense increased $375,000 (4.8%) in the second quarter of 2008 primarily due to a $476,000 increase in provision for credit losses on unfunded commitments. The following table summarizes the components of noninterest expense for the quarters ended June 30, 2008 and 2007 (dollars in thousands).

 Three months ended
 June 30,
 ---------------------
 2008 2007
Base salaries, net of
 deferred loan origination costs $6,316 $5,940
Incentive compensation 830 1,281
Benefits and other compensation costs 2,499 2,398
 ---------------------
 Total salaries and benefits expense 9,645 9,619
 =====================
Occupancy 1,228 1,178
Equipment 998 1,072
Telecommunications 630 419
Data processing and software 596 499
Provisions for losses - unfunded commitments 550 74
ATM network charges 529 498
Professional fees 509 462
Advertising and marketing 434 600
Courier service 275 284
Postage 216 203
Intangible amortization 133 122
Operational losses 92 125
Assessments 83 84
Other 1,926 2,204
 ----------------------
Total other noninterest expense 8,199 7,824
 ----------------------
Total noninterest expense $17,844 $17,443
 ======================
Average full time equivalent staff 626 630
Noninterest expense to revenue (FTE) 58.87% 59.46%

As of June 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, "Due to the continued economic uncertainty in California, during the second quarter of 2008 we remained focused upon building our loan loss reserves to position ourselves in managing through this difficult economic cycle. Since the beginning of the year our allowance for losses to total loans has increased from 1.25% to 1.80% at June 30, 2008. Although this has lowered our earnings per share, we believe that operating with higher loan loss reserves combined with our strong capital position best serves the interest of our shareholders and customers in the long term. Our net interest income and noninterest income have remained strong during the second quarter of 2008 and exceeded the levels during the second quarter of 2007. We continue to add new bank customers as we execute our core business strategies."

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
 -----------------------------------------------------------------------------
 June 30, March 31, December 31, September 30, June 30,
 2008 2008 2007 2007 2007
 -----------------------------------------------------------------------------
Statemet of Income Data
Interest income $30,332 $31,130 $32,179 $32,442 $31,986
Interest expense 7,471 9,765 10,869 10,602 9,895
Net interest income 22,861 21,365 21,310 21,840 22,091
Provision for loan losses 8,800 4,100 1,350 700 500
Noninterest income:
 Service charges and fees 5,826 5,128 5,546 5,218 5,375
 Other income 1,454 1,722 1,568 1,629 1,654
Total noninterest income 7,280 6,850 7,114 6,847 7,029
Noninterest expense:
 Base salaries net of deferred
 loan origination costs 6,316 6,333 6,504 6,142 5,940
 Incentive compensation expense 830 560 873 452 1,281
 Employee benefits and other
 compensation expense 2,499 2,587 2,353 2,381 2,398
 Total salaries and benefits expense 9,645 9,480 9,730 8,975 9,619
 Intangible amortization 133 122 122 122 122
 Provision for losses -
 unfunded commitments 550 825 50 - 74
 Other expense 7,516 7,146 7,849 7,655 7,628
Total noninterest expense 17,844 17,573 17,751 16,752 17,443
Income before taxes 3,497 6,542 9,323 11,235 11,177
Net income $2,274 $4,048 $5,701 $6,793 $6,755
Share Data
Basic earnings per share $0.14 $0.26 $0.36 $0.43 $0.42
Diluted earnings per share 0.14 0.25 0.35 0.42 0.41
Book value per common share 11.86 12.02 11.87 11.50 11.22
Tangible book value per common share $10.81 $10.97 $10.82 $10.44 $10.16
Shares outstanding 15,744,881 15,744,950 15,911,550 15,891,300 15,917,291
Weighted average shares 15,744,881 15,842,085 15,908,151 15,889,061 15,916,313
Weighted average diluted shares 15,953,288 16,081,722 16,265,571 16,310,631 16,463,389
Credit Quality
Non-performing loans, net of
 government agency guarantees $14,808 $9,850 $7,511 $7,507 $13,360
Other real estate owned 1,178 836 187 187 187
Loans charged-off 4,176 2,385 1,425 843 751
Loans recovered $274 $337 $267 $283 $355
Allowance for losses to total loans(1) 1.80% 1.44% 1.25% 1.25% 1.26%
Allowance for losses to NPLs(1) 187% 226% 259% 255% 143%
Allowance for losses to NPAs(1) 174% 209% 252% 249% 141%
Selected Financial Ratios
Return on average total assets 0.46% 0.81% 1.17% 1.44% 1.44%
Return on average equity 4.74% 8.37% 12.08% 14.92% 15.11%
Average yield on loans 6.99% 7.22% 7.64% 7.93% 7.93%
Average yield on interest-earning assets 6.71% 6.80% 7.29% 7.58% 7.58%
Average rate on interest-bearing liabilities 2.11% 2.78% 3.16% 3.18% 3.02%
Net interest margin (fully tax-equivalent) 5.06% 4.74% 4.85% 5.12% 5.25%
Total risk based capital ratio 12.3% 12.1% 11.9% 11.7% 11.8%
Tier 1 Capital ratio 11.0% 10.9% 10.9% 10.7% 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)
 Three months ended
 --------------------------------------------------------------------------------
 June 30, March 31, December 31, September 30, June 30,
 2008 2008 2007 2007 2007
 --------------------------------------------------------------------------------
Balance Sheet Data
Cash and due from banks $76,658 $74,713 $88,798 $70,791 $93,636
Federal funds sold - - - 488 1,715
Securities, available-for-sale 253,129 272,276 232,427 239,242 175,891
Federal Home Loan Bank Stock 9,010 8,885 8,766 8,652 8,543
Loans
 Commercial loans 178,104 157,832 164,815 165,559 159,822
 Consumer loans 518,200 525,065 535,819 542,875 526,575
 Real estate mortgage loans 751,651 729,704 716,013 697,670 687,744
 Real estate construction loans 95,369 135,343 135,319 128,972 133,487
Total loans, gross 1,543,324 1,547,944 1,551,966 1,535,076 1,507,628
Allowance for loan losses (24,281) (19,383) (17,331) (17,139) (16,999)
Premises and equipment 19,580 20,069 20,492 20,804 20,891
Cash value of life insurance 45,701 45,341 44,981 44,751 44,346
Goodwill 15,519 15,519 15,519 15,519 15,519
Intangible assets 920 1,053 1,176 1,298 1,421
Other assets 40,930 32,933 33,827 34,041 34,436
Total assets 1,980,490 1,999,350 1,980,621 1,953,523 1,887,027
Deposits
 Noninterest-bearing demand deposits 347,336 358,684 378,680 345,467 366,321
 Interest-bearing demand deposits 215,530 216,478 216,952 214,726 226,591
 Savings deposits 382,918 398,763 383,226 386,866 387,422
 Time certificates 565,269 554,550 566,365 585,083 530,545
Total deposits 1,511,053 1,528,475 1,545,223 1,532,142 1,510,879
Federal funds purchased 123,750 102,300 56,000 66,000 80,500
Reserve for unfunded commitments 3,465 2,915 2,090 2,040 2,040
Other liabilities 29,250 31,355 31,066 29,382 28,878
Other borrowings 85,048 103,767 116,126 99,996 44,892
Junior subordinated debt 41,238 41,238 41,238 41,238 41,238
Total liabilities 1,793,804 1,810,050 1,791,743 1,770,798 1,708,427
Total shareholders' equity 186,686 189,300 188,878 182,725 178,600
Accumulated other
 comprehensive gain (loss) (2,980) 25 (1,552) (3,628) (4,779)
Average loans 1,546,257 1,535,357 1,530,729 1,517,419 1,506,913
Average interest-earning assets 1,819,222 1,817,212 1,776,770 1,721,547 1,698,620
Average total assets 1,986,674 1,988,666 1,949,096 1,891,992 1,871,260
Average deposits 1,507,252 1,511,604 1,545,369 1,499,793 1,500,733
Average total equity $192,005 $193,449 $188,753 $182,080 $178,836

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