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 26, 2006
TriCo Bancshares
(Exact name of registrant as specified in its charter)
California 0-10661 94-2792841
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(State or other (Commission File No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or organization)
63 Constitution Drive, Chico, California 95973
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(Address of principal executive offices) (Zip Code)
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))
Item 2.02: Results of Operations and Financial Condition
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On July 26, 2006 TriCo Bancshares announced its quarterly earnings for the
period ended June 30, 2006. A copy of the press release is attached as Exhibit
99.1 to this Form 8-K and is incorporated herein by reference.
Item 9.01: Exhibits
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(c) Exhibits
99.1 Press release dated July 26, 2006
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 26, 2006 By: /s/ Thomas J. Reddish
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Thomas J. Reddish, Executive Vice
President and Chief Financial Officer
(Principal Financial and Accounting
Officer)
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press release dated July 26, 2006
PRESS RELEASE Contact: Thomas J. Reddish
For Immediate Release EVP & CFO (530)898-0300
TRICO BANCSHARES QUARTERLY EARNINGS
CHICO, Calif. - (July 26, 2006) - TriCo
Bancshares (NASDAQ: TCBK), parent company of Tri Counties Bank, today announced
quarterly earnings of $6,557,000 for the quarter ended June 30, 2006. This
represents a 14.3% increase when compared with earnings of $5,737,000 for the
quarter ended June 30, 2005. Diluted earnings per share for the quarter ended
June 30, 2006 increased 14.3% to $0.40 from $0.35 for the quarter ended June 30,
2005. Total assets of the Company increased $150,513,000 (8.8%) to
$1,871,156,000 at June 30, 2006 from $1,720,643,000 at June 30, 2005. Total
loans of the Company increased $205,956,000 (16.5%) to $1,456,008,000 at June
30, 2006 from $1,250,052,000 at June 30, 2005. Total deposits of the Company
increased $114,263,000 (8.2%) to $1,514,440,000 at June 30, 2005 from
$1,400,177,000 at June 30, 2005. Diluted earnings per share for the six months
ended June 30, 2006 and 2005 were $0.80 and $0.67, respectively, on earnings of
$13,092,000 and $10,976,000, respectively.
The improvement in results from the year-ago quarter was due to a $1,997,000
(10.3%) increase in fully tax-equivalent net interest income to $21,358,000, and
a $221,000 (3.5%) increase in noninterest income to $6,531,000. These
contributing factors were partially offset by a $759,000 (4.9%) increase in
noninterest expense to $16,276,000 for the quarter ended June 30, 2006.
The increase in net interest income (FTE) was due to a $165,037,000 (10.9%)
increase in average balances of interest-earning assets to $1,676,705,000 that
was minimally offset by a 0.02% decrease in net interest margin (FTE) to 5.10%.
The decrease in net interest margin was mainly due to an 0.18% increase in the
impact of net noninterest-bearing funds to 0.53% from 0.35% in the year-ago
quarter that was offset by a 0.20% decrease in net interest spread as the
average yield on interest-earning assets increased 0.68% while the average rate
paid on interest-bearing liabilities increased 0.88% from the year-ago three
month period.
The Company provided $554,000 for loan losses in the second quarter of 2006
versus $561,000 in the second quarter of 2005. During the second quarter of
2006, the Company recorded $305,000 of net loan charge offs versus $232,000 of
net loan charge-offs in the year earlier quarter. The $305,000 of net loan
charge-offs during the second quarter of 2006 represented 0.085% of average loan
balances on an annualized basis. At June 30, 2006, the Company's combined
allowance for loan losses ($16,893,000) and reserve for unfunded commitments
($1,849,000) represented 479% of non-performing loans net of government agency
guarantees ($3,913,000).
The increase in noninterest income from the year-ago quarter was mainly due to a
$364,000 (10.9%) increase in service charges on deposit accounts to $3,706,000
and a $115,000 (14.7%) increase in ATM fees and interchange to $896,000 that
were partially offset by a $136,000 (20.6%) decrease in commissions on sale of
nondeposit investment products to $524,000, and a $116,000 (27.0%) decrease in
gain on sale of loans to $313,000. The increase in service charges on deposit
accounts was primarily due to the introduction of a business overdraft privilege
product in March 2005 and 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 decrease in gain on sale of loans is due to a
slowdown in residential mortgage refinance activity.
Noninterest expense for the second quarter of 2006 increased $759,000 (4.9%)
compared to the second quarter of 2005. Salaries and benefits expense increased
$210,000 (2.5%) to $8,618,000. The increase in salaries and benefits expense was
mainly due to annual salary increases, and new employees at the Company's
recently opened branches in Lincoln Roseville-Pleasant Grove (November 2005),
Yuba City-Marketplace (January 2006), Folsom-Empire Ranch (March 2006),
Natomas-Arena Blvd (April 2006), Antelope (May 2006), and Anderson (June 2006)
that were partially offset by reduced performance incentive expenses. Other
categories of noninterest expense including occupancy and ATM network charges
also increased, in part, due to these newly opened branches. Advertising and
marketing expense increased $198,000 (59.1%) to $533,000. Professional fees
increase $236,000 (86.1%) to $510,000 due to increased audit fees and increased
legal fees related to loan collection efforts.
As of June 30, 2006, the Company had repurchased 374,371 shares of its common
stock under its stock repurchase plan announced on July 31, 2003 and amended on
April 9, 2004, which left 125,629 shares available for repurchase under the
plan.
Richard Smith, President and Chief Executive Officer commented, "We continue to
execute our growth strategy within the Central Valley of California as evidenced
by the opening of five branches during the first six months of 2006. These
openings represent a 10% increase in our branch locations and a significant
increase in our Sacramento-area market presence. We believe this strategy will
allow us to continue to grow our Company in a profitable manner despite the
current environment of a flat yield curve, increased competition for deposits
and a slowdown in mortgage refinance activity. We are encouraged by the strong
loan growth, the continued excellent credit quality of our loan portfolio and
the steady increase in service charge and fee revenue we achieved during the
most recent quarter."
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 30-year history in the banking industry. Tri Counties
Bank operates 32 traditional branch locations and 21 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 60 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 per share data)
Three months ended
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June 30, March 31, December 31, September 30, June 30,
2006 2006 2005 2005 2005
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Statement of Income Data
Interest income $29,379 $27,978 $26,876 $25,334 $23,910
Interest expense 8,275 6,773 6,100 5,519 4,789
Net interest income 21,104 21,205 20,776 19,815 19,121
Provision for loan losses 554 500 561 947 561
Noninterest income:
Service charges and fees 4,956 4,857 4,790 4,795 4,505
Other income 1,575 1,591 1,832 1,837 1,805
Total noninterest income 6,531 6,448 6,622 6,632 6,310
Noninterest expense:
Salaries and benefits 8,618 9,156 8,565 8,584 8,408
Intangible amortization 350 346 346 346 346
Provision for losses -
unfunded commitments 36 - 139 3 39
Other expense 7,272 6,920 6,750 6,747 6,724
Total noninterest expense 16,276 16,422 15,800 15,680 15,517
Income before taxes 10,805 10,731 11,037 9,820 9,353
Net income $6,557 $6,535 $6,734 $5,961 $5,737
Share Data
Basic earnings per share $0.42 $0.42 $0.43 $0.38 $0.37
Diluted earnings per share 0.40 0.40 0.41 0.37 0.35
Book value per common share 9.96 9.68 9.52 9.30 9.10
Tangible book value per common share $8.75 $8.44 $8.25 $8.04 $7.81
Shares outstanding 15,855,107 15,778,090 15,707,835 15,728,106 15,684,092
Weighted average shares 15,798,565 15,736,544 15,711,257 15,687,547 15,701,867
Weighted average diluted shares 16,388,855 16,379,595 16,336,888 16,330,035 16,288,728
Credit Quality
Non-performing loans, net of
government agency guarantees $3,913 $4,048 $2,961 $3,048 $2,922
Other real estate owned - - - - -
Loans charged-off 564 357 392 479 513
Loans recovered $259 $275 $261 $436 $281
Allowance for losses to total loans(1) 1.29% 1.32% 1.30% 1.32% 1.32%
Allowance for losses to NPLs(1) 479% 456% 609% 573% 567%
Allowance for losses to NPAs(1) 479% 456% 609% 573% 567%
Selected Financial Ratios
Return on average total assets 1.42% 1.43% 1.51% 1.37% 1.37%
Return on average equity 16.68% 16.93% 18.00% 16.26% 16.03%
Average yield on loans 7.44% 7.24% 7.11% 6.93% 6.85%
Average yield on interest-earning assets 7.07% 6.86% 6.72% 6.51% 6.39%
Average rate on interest-bearing liabilities 2.50% 2.11% 1.94% 1.79% 1.62%
Net interest margin (fully tax-equivalent) 5.10% 5.21% 5.21% 5.10% 5.12%
Total risk based capital ratio 11.1% 11.1% 10.8% 11.2% 11.5%
Tier 1 Capital ratio 10.1% 10.0% 9.8% 10.1% 10.5%
(1) Allowance for losses includes allowance for loan losses and reserve for unfunded commitments.
TRICO BANCSHARES - CONSOLIDATED FINANCIAL DATA
(Unaudited. Dollars in thousands, except per share data)
Three months ended
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June 30, March 31, December 31, September 30, June 30,
2006 2006 2005 2005 2005
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Cash and due from banks $84,663 $78,742 $90,562 $85,413 $79,287
Federal funds sold 526 - 2,377 218 235
Securities, available-for-sale 221,828 244,441 260,278 271,134 288,902
Federal Home Loan Bank Stock 8,103 7,691 7,602 7,516 7,440
Loans
Commercial loans 146,952 134,049 143,175 141,057 137,620
Consumer loans 517,588 510,809 508,233 494,277 456,247
Real estate mortgage loans 642,422 630,821 623,511 600,875 573,836
Real estate construction loans 149,046 124,429 110,116 91,881 82,349
Total loans, gross 1,456,008 1,400,108 1,385,035 1,328,090 1,250,052
Allowance for loan losses (16,893) (16,644) (16,226) (15,796) (14,892)
Premises and equipment 21,597 21,068 21,291 21,223 21,182
Cash value of life insurance 42,571 42,168 41,768 41,519 41,099
Goodwill 15,519 15,519 15,519 15,519 15,519
Intangible assets 3,711 4,061 4,407 4,373 4,719
Other assets 33,523 32,372 28,662 27,647 27,100
Total assets 1,871,156 1,829,526 1,841,275 1,786,856 1,720,643
Deposits
Noninterest-bearing demand deposits 354,576 354,514 368,412 346,456 332,887
Interest-bearing demand deposits 235,100 249,064 244,193 243,926 236,134
Savings deposits 388,847 432,087 438,177 449,893 466,062
Time certificates 535,917 491,726 446,015 398,024 365,094
Total deposits 1,514,440 1,527,391 1,496,797 1,438,299 1,400,177
Federal funds purchased 96,700 45,800 96,800 103,200 83,000
Reserve for unfunded commitments 1,849 1,813 1,813 1,674 1,671
Other liabilities 24,964 29,046 23,744 24,412 24,161
Other borrowings 33,971 31,441 31,390 31,711 27,628
Junior subordinated debt 41,238 41,238 41,238 41,238 41,238
Total liabilities 1,713,162 1,676,729 1,691,782 1,640,534 1,577,875
Total shareholders' equity 157,994 152,797 149,493 146,322 142,768
Accumulated other
comprehensive loss (5,629) (5,330) (3,825) (2,538) (1,468)
Average loans 1,427,735 1,384,541 1,344,654 1,284,977 1,209,061
Average interest-earning assets 1,676,705 1,646,777 1,615,901 1,574,392 1,511,668
Average total assets 1,850,487 1,822,441 1,784,018 1,744,015 1,679,653
Average deposits 1,497,571 1,498,825 1,473,625 1,421,055 1,407,586
Average total equity $157,232 $154,410 $149,619 $146,660 $143,196