TriCo Bancshares (NASDAQ: TCBK) (the "Company"), parent company
of Tri Counties Bank (the “Bank”), today announced a quarterly
earnings of $3,126,000 for the quarter ended December 31, 2010.
This compares with earnings of $2,313,000 the Company reported for
the quarter ended December 31, 2009. Diluted earnings per share for
the quarter ended December 31, 2010 was $0.20 compared to diluted
earnings per share of $0.14 for the quarter ended December 31,
2009. Diluted earnings per share for the year ended December 31,
2010 and 2009 were $0.37 and $0.62, respectively, on earnings of
$6,005,000 and $9,962,000, respectively.
Included in the Company’s results for the three and twelve month
periods ended December 31, 2010 is the acquisition of the banking
operations of Granite Community Bank (“Granite”), Granite Bay,
California from the FDIC under a whole bank purchase and assumption
agreement with loss sharing on May 28, 2010 by Tri Counties Bank.
The assets acquired and liabilities assumed in the Granite
acquisition have been accounted for under the acquisition method of
accounting (formerly the purchase method). The acquired loan
portfolio and foreclosed assets are referred to as “covered loans”
and “covered foreclosed assets”, respectively. Collectively these
balances are referred to as “covered assets”.
Total assets of the Company increased $19,269,000 (0.9%) to
$2,189,789,000 at December 31, 2010 from $2,170,520,000 at December
31, 2009. Total loans of the Company decreased $80,640,000 (5.4%)
to $1,419,571,000 at December 31, 2010 from $1,500,211,000 at
December 31, 2009. The decrease in loans is net of $64,802,000 of
loans acquired in the Granite acquisition. Total deposits of the
Company increased $23,661,000 (1.3%) to $1,852,173,000 at December
31, 2010 from $1,828,512,000 at December 31, 2009. The increase in
deposits is net of $95,001,000 of deposits acquired in the Granite
acquisition on May 28, 2010, and a $70,000,000 decrease in
certificates of deposit issued to the State of California during
the fourth quarter of 2010.
The following is a summary of the components of net income for
the periods indicated (dollars in thousands):
Three months ended
December 31,
2010
2009 Net Interest Income $
22,591 $ 22,469 Provision for loan losses (8,144 )
(7,800 ) Noninterest income 9,881 7,925 Noninterest expense (19,470
) (19,528 ) Benefit (provision) for income taxes (1,732 )
(753 ) Net income $ 3,126
$ 2,313
Net interest income for the three months ended December 31, 2010
was $22,591,000, an increase of $122,000 or 0.5% compared to the
same period in 2009. The increase in net interest income was
attributable to a $119,488,000 or 6.0% increase in the average
balance of total interest-earning assets that was partially offset
by a decrease in fully tax-equivalent (FTE) net interest margin to
4.30% during the three months ended December 31, 2010 from 4.55%
during the year-ago quarter. The decrease FTE net interest margin
was mainly due to a change in the mix of interest-earning assets,
with average loan balances decreasing and other categories of lower
yielding assets increasing.
The following table details the components of the net interest
income and net interest margin on a fully tax-equivalent (FTE)
basis for the three months ended December 31, 2010 and 2009:
Quarter ended
December 31, 2010 Quarter ended
December 31, 2009 Average Yield/
Average Yield/ (Dollars in thousands)
Balance Income Rate
Balance Income
Rate Assets: Loans $ 1,443,603 $ 23,070 6.39 % $ 1,508,472 $ 24,356
6.46 % Securities 297,971 2,391 3.21 % 232,881 2,745 4.71 % Cash at
Fed and other banks $ 365,925 252 0.28 % $ 246,658
154 0.25 % Total earning assets $ 2,107,499
25,713 4.88 % 1,988,011 27,255 5.48 %
Other assets 127,972 147,611 Total assets
2,235,471 2,135,622 Liabilities and shareholders' equity:
Interest-bearing demand deposits $ 393,356 $ 459 0.47 % $ 339,924 $
709 0.83 % Savings deposits 580,451 449 0.31 % 484,638 762 0.63 %
Time deposits 515,809 1,200 0.93 % 597,091 2,254 1.51 % Junior sub
debt 41,238 320 3.10 % 41,238 319 3.09 % Other borrowings
63,040 608 3.86 % 69,593 617
3.55 % Total interest-bearing liabilities $ 1,593,894 3,036
0.76 % 1,532,484 4,661 1.22 %
Noninterest-bearing deposits 405,390 362,618 Other liabilities
32,475 35,264 Shareholders' equity 203,712 205,256 Total
liabilities and shareholders' equity $ 2,235,471 $
2,135,622 Net interest rate spread 4.12 % 4.27 % Net interest
income/net interest margin (FTE) $ 22,677 4.30 % $ 22,594
4.55 %
FTE adjustment (86 ) (125 ) Net interest income
before FTE adjustment $ 22,591 $ 22,469
The provision for loan losses was $8,144,000 for the three
months ended December 31, 2010, compared to $7,800,000 for the
three months ended December 31, 2009. The increases in the
provision for loan losses for the three months ended December 31,
2010 as compared to the same period in 2009 was primarily the
result of changes in the make-up of the loan portfolio and the
Bank’s loss factors in reaction to increased losses in the
construction, commercial real estate, commercial & industrial
(C&I), home equity and auto indirect loan portfolios.
Management re-evaluates its loss ratios and assumptions quarterly
and makes changes as appropriate based upon, among other things,
changes in loss rates experienced, collateral support for
underlying loans, changes and trends in the economy, and changes in
the loan mix. Included in the provision for loan losses for the
three months ended December 31, 2010 is $1,394,000 related to loans
covered under FDIC loss sharing agreements that was substantially
offset by a $1,294,000 increase in the FDIC loss-share
indemnification asset recorded in noninterest income.
Noninterest income for the three months ended December 31, 2010
was $9,881,000, an increase of $1,956,000, or 24.7%, as compared to
the same period in 2009. The following table presents the key
components of noninterest income for the three months ended
December 31, 2010 and 2009:
Three months ended December 31,
Change
Change (dollars in thousands) 2010
2009 Amount
Percent Service charges on deposit accounts $ 3,510 $ 4,153
($643 ) (15.5 %) ATM fees and interchange revenue 1,601 1,317 284
21.6 % Other service fees 378 402 (24 ) (6.0 %) Mortgage
servicing fees 358 306 52 17.0 % Change in value of mortgage
servicing rights 198 (235 ) 433 Gain on sale of loans 1,394 673 721
107.1 % Commissions on sale of nondeposit investment
products 342 271 71 (26.2 %) Increase in cash value of life
insurance 569 1,059 (490 ) (46.3 %) Gain (loss) on disposition of
foreclosed assets 156 - 156 Change in FDIC loss-share
indemnification asset 1,294 - 1,294 Other noninterest income
81 (21 )
102 Total noninterest income $
9,881 $ 7,925 $
1,956 24.7 %
The decrease in service charges in the three months ended
December 31, 2010 over the same period in 2009 is mainly due to new
overdraft regulations that became effective on July 1, 2010 and
caused a decrease in non-sufficient funds fees. ATM fees and
interchange revenue increased due to increased customer
point-of-sale transactions that are the result of incentives for
such usage. Other service fees increase mainly due to increased
loan servicing fees from higher balances of loans being serviced.
Change in value of mortgage servicing rights increased primarily
due to increased residential mortgage rates at the end of the
quarter that are expected to decrease the pace of future mortgage
refinancing that in turn increase the value of mortgage servicing
rights. Gain on sale of loans increased due to increased mortgage
refinancing activity when compared to prior year similar periods.
The reduction in increase in cash value of life insurance is
primarily due to unusually high earnings rates from such insurance
policies during the fourth quarter of 2009. The large contribution
from change in FDIC loss-share is due to increased actual and
estimated losses related to loans covered under FDIC loss sharing
agreements that occurred during the fourth quarter of 2010.
Noninterest expense for the three months ended December 31, 2010
was $19,470,000, a decrease of $58,000, or 0.3%, as compared to the
same period in 2009. The following table presents the key
components of noninterest expense for the three months ended
December 31, 2010 and 2009:
Three months ended December 31, Change Change (dollars in
thousands) 2010 2009 Amount Percent Salaries
and benefits expense: Base salaries net of deferred origination
costs $ 7,160 $ 7,031 $ 129 1.8 % Incentive compensation expense
478 308 170 55.2 % Benefits and other compensation costs
2,434 2,350 84 3.6 % Total salaries and benefits
expense 10,072 9,689 383 4.0 % Other
noninterest expense: Equipment and data processing 1,613 1,804 (191
) (10.6 %) Occupancy 1,457 1,276 181 14.2 % Advertising 702 706 (4
) (0.6 %) ATM network charges 475 687 (212 ) (30.9 %)
Telecommunications 456 496 (40 ) (8.1 %) Professional fees 396 571
(175 ) (30.6 %) Courier service 222 221 1 0.5 % Postage 217 226 (9
) (4.0 %) Intangible amortization 85 65 20 30.8 % Operational
losses 103 90 13 14.4 % Assessments 833 1,465 (632 ) (43.1 %)
Change in reserve for unfunded commitments (200 ) - (200 )
Provision for foreclosed asset losses 336 33 303 918.2 % Foreclosed
assets expense 601 100 501 501.0 % Other 2,102
2,099 3 0.1 % Total other noninterest expense $ 9,398
9,839 (441 ) (4.5 %) Total noninterest expense $ 19,470 $
19,528 ($58 ) (0.3 %) Average full time equivalent employees
677 658 19 2.9 %
Salaries and related benefits increased $383,000, or 4.0% in the
three months ending December 31, 2010, as compared to the same
period in the prior year. The increase was due to very low
incentive compensation in all product lines during the fourth
quarter of 2009, and a 2.9% percent increase in average full time
equivalent staff, primarily in new branches and loan collection
functions. Equipment expense decreased due to reduced equipment
purchases and some equipment reaching full depreciation. Occupancy
expense increased for the three months ended December 31, 2010, as
compared to the same period in the prior year, primarily due to
four new branch openings, one each in the third and fourth quarters
of 2009 and one each in the first and second quarters of 2010, and
three branches and one admin facility acquired in the Granite
acquisition on May 28, 2010. The increases in provision for
foreclosed asset losses and foreclosed assets expense is due to
additional value deterioration of such foreclosed assets and
associated operating and maintenance expenses.
For the three months ended December 31, 2010, the Company
recorded an income tax expense of $1,732,000. This tax expense
represents 35.7% of the $4,858,000 net income before tax recorded
for the three months ended December 31, 2010. The effective tax
rate for the three month period ended December 31, 2009 was 24.6%.
The provision or benefit for income taxes for all periods presented
is primarily attributable to the respective level of earnings and
the incidence of allowable deductions, particularly from increase
in cash value of life insurance, tax-exempt loans and state and
municipal securities.
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, 2009. 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 35-year history in the
banking industry. It operates 34 traditional branch locations and
27 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 69 ATMs and a 24-hour, seven
days-a-week telephone customer service center. Brokerage services
are provided by the Bank’s investment services affiliate, Raymond
James Financial Services, 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, 2010 2010 2010
2010 2009
Statement of Income
Data Interest income $25,627 $27,233 $25,776 $25,936 $27,130
Interest expense 3,036 3,497 3,642 3,958 4,661 Net interest income
$22,591 23,736 22,134 21,978 22,469 Provision for loan losses 8,144
10,814 10,000 8,500 7,800 Noninterest income: Service charges and
fees 6,045 5,237 6,082 5,735 5,943 Other income 3,836 1,926 2,022
1,812 1,982 Total noninterest income 9,881 7,163 8,104 7,547 7,925
Noninterest expense: Base salaries net of deferred loan origination
costs $7,160 7,131 6,990 6,974 7,031 Incentive compensation expense
478 294 526 546 308 Employee benefits and other compensation
expense 2,434 2,473 2,469 2,630 2,350 Total salaries and benefits
expense 10,072 9,898 9,985 10,150 9,689 Other noninterest expense
9,398 10,626 8,423 8,653 9,839 Total noninterest expense 19,470
20,524 18,408 18,803 19,528 Income (loss) before taxes $4,858 (439)
1,830 2,222 3,066
Net income $3,126 $1 $1,320 $1,558 $2,313
Share Data Basic earnings per share $0.20 $0.00 $0.08 $0.10
$0.15 Diluted earnings per share $0.20 $0.00 $0.08 $0.10 $0.14 Book
value per common share $12.64 $12.66 $12.76 $12.63 $12.71 Tangible
book value per common share $11.62 $11.64 $11.74 $11.63 $11.71
Shares outstanding 15,860,138 15,860,138 15,860,138 15,860,138
15,787,753 Weighted average shares 15,860,138 15,860,138 15,860,138
15,822,789 15,787,753 Weighted average diluted shares 16,009,538
15,972,826 16,107,909 16,073,875 16,012,078
Credit Quality
Nonperforming loans $75,987 $84,983 $72,708 $70,284 $49,871
Guaranteed portion of nonperforming loans(2) 3,937 4,131 4,674
4,853 4,975 Foreclosed assets, net of allowance 9,913 11,172 9,945
5,579 3,726 Loans charged-off 6,040 11,163 8,424 8,101 7,258 Loans
recovered 1,698 689 513 468 380 Allowance for losses to total
loans(1) 3.18% 2.86% 2.75% 2.75% 2.62% Allowance for losses to
NPLs(1) 59% 49% 57% 57% 78% Allowance for losses to NPAs(1) 53% 43%
50% 53% 73%
Selected Financial Ratios Return on average
total assets 0.56% 0.00% 0.24% 0.29% 0.43% Return on average equity
6.14% 0.00% 2.61% 3.05% 4.51% Average yield on loans 6.39% 6.61%
6.20% 6.21% 6.46% Average yield on interest-earning assets 4.88%
5.31% 5.13% 5.19% 5.48% Average rate on interest-bearing
liabilities 0.76% 0.87% 0.92% 1.02% 1.22% Net interest margin
(fully tax-equivalent) 4.30% 4.63% 4.41% 4.40% 4.55% (1)
Allowance for losses includes allowance for loan losses and reserve
for unfunded commitments. (2) Portion of nonperforming loans
guaranteed by the U.S. Government, including its agencies and its
government-sponsored agencies.
TRICO BANCSHARES -
CONSOLIDATED FINANCIAL DATA (Unaudited. Dollars in thousands)
Three months ended December 31,
September 30, June 30, March 31,
December 31,
Balance Sheet Data 2010
2010 2010
2010 2009
Cash and due from banks $ 371,066 $ 398,191 $ 322,644 $ 308,664 $
346,589 Securities, available-for-sale 277,271 250,012 275,783
292,065 211,622 Federal Home Loan Bank Stock 9,133 9,157 9,523
9,274 9,274 Loans held for sale 4,988 9,455 4,153 3,384 4,641
Loans: Commercial loans 141,902 149,743 162,898 147,988 163,181
Consumer loans 423,238 436,597 434,943 444,831 458,083 Real estate
mortgage loans 807,482 821,562 860,615 810,386 815,375 Real estate
construction loans 46,949 44,890 42,484 48,600 58,931 Total loans,
gross 1,419,571 1,452,792 1,500,940 1,451,805 1,495,570 Allowance
for loan losses (42,571 ) (38,770 ) (38,430 ) (36,340 ) (35,473 )
Foreclosed assets 9,913 11,172 9,945 5,579 3,726 Premises and
equipment 19,120 18,947 19,001 19,178 18,742 Cash value of life
insurance 50,541 49,972 49,546 49,120 48,694 Goodwill 15,519 15,519
15,519 15,519 15,519 Intangible assets 580 665 750 260 325 Mortgage
servicing rights 4,605 3,905 4,033 4,310 4,089 FDIC indemnification
asset 5,640 5,098 7,515 - - Accrued interest receivable 7,131 7,318
7,472 7,715 7,763 Other assets 37,282 36,185 36,251 39,054 39,439
Total assets 2,189,789 2,229,618 2,224,645 2,169,587 2,170,520
Deposits: Noninterest-bearing demand deposits 424,070 389,315
386,617 378,695 377,334 Interest-bearing demand deposits 395,413
383,859 383,578 375,313 359,179 Savings deposits 585,845 577,603
552,616 533,115 511,671 Time certificates 446,845 537,764 567,138
546,174 580,328 Total deposits 1,852,173 1,888,541 1,889,949
1,833,297 1,828,512 Accrued interest payable 2,151 2,368 2,487
3,064 3,614 Reserve for unfunded commitments 2,640 2,840 2,840
3,640 3,640 Other liabilities 29,170 26,721 25,257 27,112 26,114
Other borrowings 62,020 67,182 60,452 60,952 66,753 Junior
subordinated debt 41,238 41,238 41,238 41,238 41,238 Total
liabilities 1,989,392 2,028,890 2,022,223 1,969,303 1,969,871 Total
shareholders' equity 200,397 200,728 202,422 200,284 200,649
Accumulated other comprehensive gain (loss) 1,310 3,606 4,132 2,053
2,278 Average loans 1,443,603 1,481,497 1,463,473 1,469,685
1,508,472 Average interest-earning assets 2,107,499 2,060,108
2,019,684 2,008,896 1,988,011 Average total assets 2,235,471
2,237,670 2,191,660 2,169,138 2,135,622 Average deposits 1,895,006
1,893,677 1,849,118 1,825,190 1,784,271 Average total equity $
203,712 $ 205,324 $ 203,528 $ 204,200 $ 205,256 Total risk based
capital ratio 14.2 % 13.8 % 13.6 % 13.5 % 13.4 % Tier 1 capital
ratio 12.9 % 12.6 % 12.3 % 12.3 % 12.1 % Tier 1 leverage ratio 10.0
% 9.9 % 10.2 % 10.3 % 10.5 % Tangible capital ratio 8.5 % 8.3 % 8.4
% 8.6 % 8.6 %
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