TCBK TriCo Bancshares

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, � 2008 � � 2007 � 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 Total noninterest income $ 6,792 � $ 6,847 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, � 2008 2007 Base salaries, net of deferred loan origination costs $ 6,331 $ 6,143 Incentive compensation 675 451 Benefits and other compensation costs � 2,425 � � 2,381 � Total salaries and benefits expense � 9,431 � � 8,975 � 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 � Total other noninterest expense � 7,158 � � 7,777 � Total noninterest expense $ 16,589 � $ 16,752 � 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 September 30, � June 30, � March 31, � December 31, � September 30, 2008 � � 2008 � � 2008 � � 2007 � � 2007 � 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) � � Three months ended September 30, � June 30, � March 31, � December 31, � September 30, 2008 � � 2008 � � 2008 � � 2007 � � 2007 � 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