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):
February 2, 2009
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 February 2, 2009 TriCo Bancshares announced its quarterly earnings for the
period ended December 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 February 2, 2009
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: February 3, 2009 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 February 2, 2009
PRESS RELEASE Contact: Richard P. Smith
For Immediate Release President & CEO (530) 898-0300
TRICO BANCSHARES ANNOUNCES ANNUAL AND QUARTERLY EARNINGS FOR THE PERIODS ENDED
DECEMBER 31, 2008
CHICO, Calif. - (February 2, 2009) - TriCo Bancshares (NASDAQ: TCBK), parent
company of Tri Counties Bank, today announced annual earnings of $16,798,000 for
the year ended December 31, 2008. This represents a 34.6% decrease when compared
with earnings of $25,693,000 for the year ended December 31, 2007. Diluted
earnings per share for the year ended December 31, 2008 decreased 33.1% to $1.05
from $1.57 for the year ended December 31, 2007. Total assets of the Company
increased $63 million (3.2%) to $2.043 billion at December 31, 2008 versus
$1.980 billion at December 31, 2007. Total loans of the Company increased $39
million (2.5%) to $1.591 billion at December 31, 2008 versus $1.552 billion at
December 31, 2007. Total deposits of the Company increased $124 million (8.0%)
to $1.669 billion at December 31, 2008 versus $1.545 billion at December 31,
2007.
Net income for the quarter ended December 31, 2008 decreased $1,460,000 (25.6%)
to $4,241,000 from $5,701,000 in the quarter ended December 31, 2007. Diluted
earnings per share decreased 25.7% to $0.26 in the quarter ended December 31,
2008 from $0.35 in the quarter ended December 31, 2007.
The $1,460,000 decrease in earnings for the quarter ended December 31, 2008 over
the year-ago quarter was due to a $4,100,000 (304%) increase in provision for
loan losses and a decrease of $949,000 (13.3%) in noninterest income, that were
partially offset by an increase of $1,305,000 (6.1%) in net interest income and
a decrease of $1,019,000 (5.7%) in noninterest expense.
The $1,305,000 increase in net interest income to $22,615,000 was due to a $64
million (3.6%) increase in average balance of interest-earning assets and a 10
basis point increase in fully tax-equivalent net interest margin to 4.95% during
the quarter ended December 31, 2008 versus 4.85% during the quarter ended
December 31, 2007.
The provision for loan loss was $5,450,000 and $1,350,000 during the quarters
ended December 31, 2008 and December 31, 2007, respectively. Net loan
charge-offs were $2,448,000 during the quarter ended December 31, 2008 compared
to $1,158,000 during the quarter ended December 31, 2007. The $2,448,000 of net
loan charge-offs during the quarter ended December 31, 2008 were comprised of
$1,140,000 of home equity lines of credit and loans, $378,000 of indirect auto
loans, $330,0000 of residential mortgages, $189,000 of residential construction,
$175,000 of small business loans, and $236,000 of other loans. The $1,158,000 of
net loan charge-offs during the quarter ended December 31, 2007 were comprised
of $436,000 of home equity lines of credit and loans, $556,000 of indirect auto
loans, $84,000 of small business loans, and $82,000 of other loans.
Nonperforming loans, net of government agency guarantees, were $27,525,000 at
December 31, 2008 compared to $17,041,000 and $7,511,000 at September 30, 2008
and December 31, 2007, respectively. The increase in nonperforming loans during
the quarter ended December 31, 2008 was mainly due to a single $5,683,000 real
estate construction loan that was previously classified and substantially
reserved that was deemed nonperforming during the most recent quarter due to
continued downward pressure on residential real estate values and the unlikely
near-term development of this single family residential development. In
addition, approximately $1.6 million of agriculture loans, $1.1 million of Home
equity lines of credit and $900,000 and residential 1st mortgages became
nonperforming in the most recent quarter. The $1.6 million increase in
agriculture nonperforming loans was due to a single loan that is well secured.
At December 31, 2008, the Company's allowance for losses, which consists of the
allowance for loan losses ($27,590,000) and the reserve for unfunded commitments
($2,565,000), was $30,155,000 or 1.90% of total loans outstanding and 110% of
nonperforming loans at December 31, 2008 compared to $19,421,000 or 1.25% of
total loans outstanding and 259% of nonperforming loans at December 31, 2007.
The $949,000 decrease in noninterest income was primarily due to an $853,000
decrease in change in value of mortgage servicing rights and a $351,000 decrease
in service charges on deposit accounts that were partially offset by a $524,000
increase in increase in cash value of life insurance. The decrease in change in
value of mortgage servicing rights is mainly due to recent decreases in mortgage
rates, which in turn leads to higher anticipated mortgage refinances, which in
turn lead to estimated shorter average lives of servicing assets and thus lower
values for mortgage servicing rights. The decrease in service charges on deposit
products is mainly due to lower returned item fees which appear to be due to
general economic conditions and the effects of such on our customers' behavior.
The increase in cash value of life insurance is based on returns on such life
insurance polices as reported by the life insurance companies. The following
table summarizes the components of noninterest income for the quarters ended
December 31, 2008 and 2007 (dollars in thousands).
Three months ended
December 31,
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2008 2007
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Service charges on deposit accounts $3,862 $4,213
ATM fees and interchange revenue 1,104 1,057
Other service fees 528 540
Change in value of mortgage servicing rights (1,117) (264)
Gain on sale of loans 212 238
Commissions on sale of
nondeposit investment products 530 698
Increase in cash value of life insurance 754 230
Other noninterest income 292 402
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Total noninterest income $6,165 $7,114
=======================
The $1,019,000 decrease in noninterest expense during the quarter ended December
31, 2008 compared to the year-ago quarter was mainly due to an $850,000 decrease
in change in reserve for unfunded commitments and a $315,000 decrease in the
"other" category of other noninterest expense. The decrease in change in reserve
for unfunded commitments is based on the Company's projection of reduced future
usage of unfunded commitments and the associated reduced future losses. The
decrease in the "other" category of other noninterest income is due to reduced
business activity in many areas including home equity lending, travel and meals.
The following table summarizes the components of noninterest expense for the
quarters ended December 31, 2008 and 2007 (dollars in thousands).
Three months ended
December 31,
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2008 2007
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Base salaries, net of
deferred loan origination costs $6,394 $6,504
Incentive compensation 794 873
Benefits and other compensation costs 2,368 2,353
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Total salaries and benefits expense $9,556 $9,730
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Equipment and data processing $1,597 $1,597
Occupancy 1,224 1,260
ATM network charges 552 468
Professional fees 552 299
Advertising and marketing 547 562
Operational losses 291 141
Assessments 287 83
Telecommunications 285 467
Courier service 273 356
Postage 248 314
Intangible amortization 135 122
Change in reserve for unfunded commitments (800) 50
Other 1,985 2,302
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Total other noninterest expense $7,176 $8,021
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Total noninterest expense $16,732 $17,751
=========================
Average full time equivalent staff 630 645
Noninterest expense to revenue (FTE) 57.8% 62.6%
As of December 31, 2008, the Company has repurchased 166,600 shares of its
common stock under its stock repurchase plan adopted on August 21, 2007, which
left 333,400 shares available for repurchase under the plan.
Richard Smith, President and Chief Executive Officer commented, "Earnings for
the fourth quarter of 2008 are reflective of the challenging economic conditions
facing our bank and nation. We continue to remain focused upon the key
measurements of banking success that we define as maintaining a strong capital
position, building reserves for loans losses, maintaining ample liquidity,
controlling our non-interest expenses and focusing on the needs of our
customers. While our annual earnings per share this year are lower than in 2007,
bank revenues were higher in 2008 than 2007. This strong revenue stream
continues to provide the bank with the necessary earnings to successfully
execute our banking strategies during these deep recessionary periods." Smith
added, "At year end our bank achieved new milestones by exceeding $2 billion in
total assets for the first time in our history. We also achieved record ending
balances in total loans and deposits. Our strong, loyal and growing customer
base continues to provide the impetus for future growth and expansion."
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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December 31, September 30, June 30, March 31, December 31,
2008 2008 2008 2008 2007
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Statement of Income Data
Interest income $29,679 $29,971 $30,332 $31,130 $32,179
Interest expense $7,064 7,252 7,471 9,765 10,869
Net interest income $22,615 22,719 22,861 21,365 21,310
Provision for loan losses $5,450 2,600 8,800 4,100 1,350
Noninterest income:
Service charges and fees $4,377 5,224 5,826 5,128 5,546
Other income $1,788 1,568 1,454 1,722 1,568
Total noninterest income $6,165 6,792 7,280 6,850 7,114
Noninterest expense:
Base salaries net of deferred
loan origination costs $6,394 6,331 6,316 6,333 6,504
Incentive compensation expense $794 675 830 560 873
Employee benefits and other
compensation expense $2,368 2,425 2,499 2,587 2,353
Total salaries and benefits expense $9,556 9,431 9,645 9,480 9,730
Intangible amortization $135 133 133 122 122
Provision for losses -
unfunded commitments ($800) (100) 550 825 50
Other expense $7,841 7,125 7,516 7,146 7,849
Total noninterest expense $16,732 16,589 17,844 17,573 17,751
Income before taxes $6,598 10,322 3,497 6,542 9,323
Net income $4,241 $6,235 $2,274 $4,048 $5,701
Share Data
Basic earnings per share $0.27 $0.40 $0.14 $0.26 $0.36
Diluted earnings per share 0.26 0.39 0.14 0.25 0.35
Book value per common share 12.56 12.14 11.86 12.02 11.87
Tangible book value per common share $11.54 $11.10 $10.81 $10.97 $10.82
Shares outstanding 15,756,101 15,744,881 15,744,881 15,744,950 15,911,550
Weighted average shares 15,750,857 15,744,881 15,744,881 15,842,085 15,908,151
Weighted average diluted shares 16,068,456 15,951,668 15,953,288 16,081,722 16,265,571
Credit Quality
Non-performing loans, net of
government agency guarantees $27,525 $17,041 $14,808 $9,850 $7,511
Other real estate owned 1,185 1,178 1,178 836 187
Loans charged-off 2,780 2,578 4,176 2,385 1,425
Loans recovered $332 $285 $274 $337 $267
Allowance for losses to total loans(1) 1.90% 1.79% 1.80% 1.44% 1.25%
Allowance for losses to NPLs(1) 110% 164% 187% 226% 259%
Allowance for losses to NPAs(1) 105% 153% 174% 209% 252%
Selected Financial Ratios
Return on average total assets 0.85% 1.26% 0.46% 0.81% 1.17%
Return on average equity 8.66% 13.04% 4.74% 8.37% 12.08%
Average yield on loans 6.73% 6.92% 6.99% 7.22% 7.64%
Average yield on interest-earning assets 6.48% 6.68% 6.71% 6.80% 7.29%
Average rate on interest-bearing liabilities 2.07% 2.06% 2.11% 2.78% 3.16%
Net interest margin (fully tax-equivalent) 4.95% 5.07% 5.06% 4.74% 4.85%
Total risk based capital ratio 12.4% 12.4% 12.3% 12.1% 11.9%
Tier 1 Capital ratio 11.2% 11.1% 11.0% 10.9% 10.9%
(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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December 31, September 30, June 30, March 31, December 31,
2008 2008 2008 2008 2007
====================================================================================
Balance Sheet Data
Cash and due from banks $86,355 $67,300 $76,658 $74,713 $88,798
Federal funds sold - - - - -
Securities, available-for-sale 266,561 241,900 253,129 272,276 232,427
Federal Home Loan Bank Stock 9,235 9,147 9,010 8,885 8,766
Loans
Commercial loans 189,645 189,837 178,104 157,832 164,815
Consumer loans 514,448 513,132 518,200 525,065 535,819
Real estate mortgage loans 802,527 770,553 751,651 729,704 716,013
Real estate construction loans 84,229 89,714 95,369 135,343 135,319
Total loans, gross 1,590,849 1,563,236 1,543,324 1,547,944 1,551,966
Allowance for loan losses (27,590) (24,588) (24,281) (19,383) (17,331)
Premises and equipment 18,841 19,094 19,580 20,069 20,492
Cash value of life insurance 46,815 46,061 45,701 45,341 44,981
Goodwill 15,519 15,519 15,519 15,519 15,519
Intangible assets 653 786 920 1,053 1,176
Other assets 35,952 38,012 40,930 32,933 33,827
Total assets 2,043,190 1,976,467 1,980,490 1,999,350 1,980,621
Deposits
Noninterest-bearing demand deposits 401,247 334,015 347,336 358,684 378,680
Interest-bearing demand deposits 241,560 228,441 215,530 216,478 216,952
Savings deposits 380,799 374,640 382,918 398,763 383,226
Time certificates 645,664 626,745 565,269 554,550 566,365
Total deposits 1,669,270 1,563,841 1,511,053 1,528,475 1,545,223
Federal funds purchased - 67,000 123,750 102,300 56,000
Reserve for unfunded commitments 2,565 3,365 3,465 2,915 2,090
Other liabilities 30,180 30,048 29,250 31,355 31,066
Other borrowings 102,005 79,873 85,048 103,767 116,126
Junior subordinated debt 41,238 41,238 41,238 41,238 41,238
Total liabilities 1,845,258 1,785,365 1,793,804 1,810,050 1,791,743
Total shareholders' equity 197,932 191,102 186,686 189,300 188,878
Accumulated other
comprehensive gain (loss) 2,056 (2,455) (2,980) 25 (1,552)
Average loans 1,565,343 1,549,009 1,546,257 1,535,357 1,530,729
Average interest-earning assets 1,840,915 1,806,010 1,819,222 1,817,212 1,776,770
Average total assets 1,995,239 1,974,392 1,986,674 1,988,666 1,949,096
Average deposits 1,625,574 1,545,435 1,507,252 1,511,604 1,545,369
Average total equity $195,828 $191,211 $192,005 $193,449 $188,753