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):
April 28, 2008
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 April 28, 2008 TriCo Bancshares announced its quarterly earnings for the
period ended March 31, 2008. 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 April 28, 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: April 29, 2008 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 April 28, 2008
PRESS RELEASE Contact: Thomas J. Reddish
For Immediate Release EVP & CFO (530) 898-0300
TRICO BANCSHARES ANNOUNCES QUARTERLY EARNINGS
CHICO, Calif. - (April 28, 2008) - TriCo Bancshares (NASDAQ: TCBK) (the
"Company"), parent company of Tri Counties Bank, today announced quarterly
earnings of $4,048,000 for the quarter ended March 31, 2008. This represents a
decrease of $2,396,000 (37.2%) when compared with earnings of $6,444,000 for the
quarter ended March 31, 2007. Diluted earnings per share for the quarter ended
March 31, 2008 decreased 35.9% to $0.25 compared to $0.39 for the quarter ended
March 31, 2007. Total assets of the Company increased $133,029,000 (7.1%) to
$1,999,350,000 at March 31, 2008 from $1,866,321,000 at March 31, 2007. Total
loans of the Company increased $52,330,000 (3.5%) to $1,547,944,000 at March 31,
2008 from $1,495,614,000 at March 31, 2007. Total deposits of the Company
decreased $8,374,000 (0.5%) to $1,528,475,000 at March 31, 2008 from
$1,536,849,000 at March 31, 2007.
The decrease in earnings from the prior year quarter was primarily due to the
Federal Reserve's decrease in interest rates during the quarter along with the
Company's decision to increase by $3,618,000 (751%) the provision for loan
losses to $4,100,000 from $482,000, and to increase by $708,000 (605%) the
provision for credit losses on unfunded commitments from $117,000 to $825,000
for the quarter ended March 31, 2008. The increase in the provision for loan
losses was primarily due to higher net loan charge-offs, increased
non-performing loans and downgrades in loan classifications during the first
quarter of 2008 compared to the first quarter of 2007. During the first quarter
of 2008, the Company recorded $2,048,000 of net loan charge-offs versus $501,000
of net loan charge-offs in the first quarter of 2007. The $1,547,000 (309%)
increase in net loan charge-offs was principally related to non-performing
residential construction loans for which appraised values indicated declines in
the value of the underlying collateral. Non-performing loans, defined as
non-accruing loans and accruing loans delinquent 90 days or more, net of
government guarantees amounted to $9,850,000 at March 31, 2008 compared to
$5,991,000 at March 31, 2007. The increase in the provision for credit losses on
unfunded commitments was primarily due to estimated losses related to home
equity lines of credit and construction loans.
Net interest income on fully tax equivalent (FTE) basis during the first quarter
of 2008 decreased $120,000 (0.6%) to $21,546,000 from the same period in 2007.
The decrease in net interest income (FTE) was due to a 0.38% decrease in net
interest margin (FTE) to 4.74% that was partially offset by a $124,638,000
(7.4%) increase in average balances of interest-earning assets to
$1,817,212,000. The decrease in margin was mainly due to an increase in
nondeposit interest-bearing liabilities, or wholesale funding, as a percentage
of total funding sources, and a lag in reductions of interest rates on
interest-bearing liabilities compared to interest rates on interest-earning
assets. In addition, the average balance of interest-earning assets increased
$124,638,000, comprised of a $45,302,000 increase in the average balance of
loans and a $79,336,000 increase in the average balance of interest-earnings
assets resulting from increased investment balances.
Noninterest income for the first quarter of 2008 increased $250,000 (3.8%) from
the first quarter of 2007 due primarily to a $396,000 gain from the Company's
interest in VISA, Inc. and VISA's initial public offering in March 2008, a
$279,000 (7.8%) increase in service charges on deposit accounts to $3,838,000
and a $130,000 (13.7%) increase in ATM fees and interchange revenue to
$1,079,000. The increases in service charges on deposit accounts and ATM fees
and interchange revenue are mainly due to growth in number of customers. These
positive factors were partially offset by an increased negative change in the
value of mortgage servicing rights of $328,000 and an $80,000 (16.0%) decrease
in commission on sale of nondeposit investment products.
Noninterest expense for the first quarter of 2008 increased $613,000 (3.6%)
compared to the first quarter of 2007. Salaries and benefits expense decreased
$262,000 (2.7%) to $9,480,000. The decrease in salaries and benefits expense was
mainly due to decreased incentive compensation and the effect of a reduction in
the number of full-time equivalent employees that were partially offset by
annual salary increases. Other noninterest expense increased $168,000 (2.4%) to
$7,146,000 as data processing and software, telecommunications, and ATM network
charges increased due to additional products and services obtained from third
party providers, which were partially offset by reductions in equipment and
courier service expense. Professional fees were also higher due to increased
consulting and legal fees.
Richard Smith, President and Chief Executive Officer commented, "Our results in
the first quarter of 2008 reflect the continued deterioration of the economy in
the markets we serve. Consumers are showing greater strains related to lowering
home values and rapidly increasing costs for fuel and food. Gas and food prices
are big negatives for average consumers as wages are not increasing to offset
the rapid increases, and lower home values reduce options for consumer
financing. As a result of our ongoing and detailed review of our loan portfolio
we are increasing our provision for loan losses in the areas of unsecured
consumer and business loans, auto loans, high loan to value equity loans and
lines of credit and residential construction loans. We believe the allowance was
adequate for losses inherent in the loan portfolio as of March 31, 2008. Margin
pressures continued during the first quarter of 2008 as a result of significant
Federal Reserve rate cuts during the quarter. Our net interest margin declined
eleven basis points during the quarter as a result of slower repricing of
deposits compared to more immediate repricing of loans. The good news for the
market we serve is that the primary industry of agriculture is experiencing
strong demand and higher prices for its products. We expect this trend to
continue throughout 2008. Our home equity portfolio of under 80% loan-to-value
has continued to perform very well. Lower interest rates for home equity lines
of credit provides consumers with lower monthly payments which helps to offset
some higher consumer product costs. We stopped originating auto-dealer loans at
the end of November 2007, and loans outstanding are paying down at approximately
$5 million per month. Our total risk-based capital ratio increased to 12.1%
during the quarter."
The Company adopted a stock repurchase plan on August 21, 2007, for the
repurchase of up to 500,000 shares of the Company's common stock from time to
time as market conditions allow. The 500,000 shares authorized for repurchase
under this plan represented approximately 3.2% of the Company's approximately
15,815,000 common shares outstanding as of August 21, 2007. This plan has no
stated expiration date for the repurchases. As of March 31, 2008, the Company
had repurchased 166,600 shares under this plan, which left 333,400 shares
available for repurchase under the plan.
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
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March 31, December 31, September 30, June 30, March 31,
2008 2007 2007 2007 2007
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Statement of Income Data
Interest income $31,130 $32,179 $32,442 $31,986 $30,661
Interest expense 9,765 10,869 10,602 9,895 9,216
Net interest income 21,365 21,310 21,840 22,091 21,445
Provision for loan losses 4,100 1,350 700 500 482
Noninterest income:
Service charges and fees 5,128 5,546 5,218 5,375 5,061
Other income 1,722 1,568 1,629 1,654 1,539
Total noninterest income 6,850 7,114 6,847 7,029 6,600
Noninterest expense:
Base salaries net of deferred
loan origination costs 6,333 6,504 6,142 5,940 5,995
Incentive compensation expense 560 873 452 1,281 1,203
Employee benefits and other
compensation expense 2,587 2,353 2,381 2,398 2,544
Total salaries and benefits expense 9,480 9,730 8,975 9,619 9,742
Intangible amortization 122 122 122 122 123
Provision for losses -
unfunded commitments 825 50 - 74 117
Other expense 7,146 7,849 7,655 7,628 6,978
Total noninterest expense 17,573 17,751 16,752 17,443 16,960
Income before taxes 6,542 9,323 11,235 11,177 10,603
Net income $4,048 $5,701 $6,793 $6,755 $6,444
Share Data
Basic earnings per share $0.26 $0.36 $0.43 $0.42 $0.41
Diluted earnings per share 0.25 0.35 0.42 0.41 0.39
Book value per common share 12.02 11.87 11.50 11.22 10.96
Tangible book value per common share $10.97 $10.82 $10.44 $10.16 $9.89
Shares outstanding 15,744,950 15,911,550 15,891,300 15,917,291 15,910,291
Weighted average shares 15,842,085 15,908,151 15,889,061 15,916,313 15,878,929
Weighted average diluted shares 16,081,722 16,265,571 16,310,631 16,463,389 16,415,845
Credit Quality
Non-performing loans, net of
government agency guarantees $9,850 $7,511 $7,507 $13,360 $5,991
Other real estate owned 836 187 187 187 187
Loans charged-off 2,385 1,425 843 751 739
Loans recovered $337 $267 $283 $355 $238
Allowance for losses to total loans(1) 1.44% 1.25% 1.25% 1.26% 1.26%
Allowance for losses to NPLs(1) 226% 259% 255% 143% 315%
Allowance for losses to NPAs(1) 209% 252% 249% 141% 305%
Selected Financial Ratios
Return on average total assets 0.81% 1.17% 1.44% 1.44% 1.38%
Return on average equity 8.37% 12.08% 14.92% 15.11% 14.79%
Average yield on loans 7.22% 7.64% 7.93% 7.93% 7.63%
Average yield on interest-earning assets 6.80% 7.29% 7.58% 7.58% 7.30%
Average rate on interest-bearing liabilities 2.78% 3.16% 3.18% 3.02% 2.85%
Net interest margin (fully tax-equivalent) 4.74% 4.85% 5.12% 5.25% 5.12%
Total risk based capital ratio 12.1% 11.9% 11.7% 11.8% 11.8%
Tier 1 Capital ratio 10.9% 10.9% 10.7% 10.8% 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, except share data)
Three months ended
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March 31, December 31, September 30 June 30, March 31,
2008 2007 2007 2007 2007
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Balance Sheet Data
Cash and due from banks $74,713 $88,798 $70,791 $93,636 $75,263
Federal funds sold - - 488 1,715 -
Securities, available-for-sale 272,276 232,427 239,242 175,891 188,478
Federal Home Loan Bank Stock 8,885 8,766 8,652 8,543 8,442
Loans
Commercial loans 157,832 164,815 165,559 159,822 142,083
Consumer loans 525,065 535,819 542,875 526,575 516,550
Real estate mortgage loans 729,704 716,013 697,670 687,744 687,088
Real estate construction loans 135,343 135,319 128,972 133,487 149,893
Total loans, gross 1,547,944 1,551,966 1,535,076 1,507,628 1,495,614
Allowance for loan losses (19,383) (17,331) (17,139) (16,999) (16,895)
Premises and equipment 20,069 20,492 20,804 20,891 20,924
Cash value of life insurance 45,341 44,981 44,751 44,346 43,941
Goodwill 15,519 15,519 15,519 15,519 15,519
Intangible assets 1,053 1,176 1,298 1,421 1,543
Other assets 32,933 33,827 34,041 34,436 33,492
Total assets 1,999,350 1,980,621 1,953,523 1,887,027 1,866,321
Deposits
Noninterest-bearing demand deposits 358,684 378,680 345,467 366,321 364,401
Interest-bearing demand deposits 216,478 216,952 214,726 226,591 235,497
Savings deposits 398,763 383,226 386,866 387,422 381,069
Time certificates 554,550 566,365 585,083 530,545 555,882
Total deposits 1,528,475 1,545,223 1,532,142 1,510,879 1,536,849
Federal funds purchased 102,300 56,000 66,000 80,500 38,000
Reserve for unfunded commitments 2,915 2,090 2,040 2,040 1,966
Other liabilities 31,355 31,066 29,382 28,878 32,524
Other borrowings 103,767 116,126 99,996 44,892 41,347
Junior subordinated debt 41,238 41,238 41,238 41,238 41,238
Total liabilities 1,810,050 1,791,743 1,770,798 1,708,427 1,691,924
Total shareholders' equity 189,300 188,878 182,725 178,600 174,397
Accumulated other
comprehensive gain (loss) 25 (1,552) (3,628) (4,779) (3,988)
Average loans 1,535,357 1,530,729 1,517,419 1,506,913 1,490,055
Average interest-earning assets 1,817,212 1,776,770 1,721,547 1,698,620 1,692,574
Average total assets 1,988,666 1,949,096 1,891,992 1,871,260 1,865,448
Average deposits 1,511,604 1,545,369 1,499,793 1,500,733 1,534,473
Average total equity $193,449 $188,753 $182,080 $178,836 $174,262