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):
October 24, 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 October 24, 2006 TriCo Bancshares announced its quarterly earnings for the
period ended September 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 October 24, 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: October 24, 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 October 24, 2006
Exhibit No. 99.1
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PRESS RELEASE Contact: Thomas J. Reddish
For Immediate Release EVP & CFO (530) 898-0300
TRICO BANCSHARES ANNOUNCES RECORD QUARTERLY EARNINGS CHICO, Calif. - (October
24, 2006) - TriCo Bancshares (NASDAQ: TCBK), parent company of Tri Counties
Bank, today announced record quarterly earnings of $6,820,000 for the quarter
ended September 30, 2006. This represents a 14.4% increase when compared with
earnings of $5,961,000 for the quarter ended September 30, 2005. Diluted
earnings per share for the quarter ended September 30, 2006 increased 13.5% to
$0.42 from $0.37 for the quarter ended September 30, 2005. Total assets of the
Company increased $117,148,000 (6.6%) to $1,904,004,000 at September 30, 2006
from $1,786,856,000 at September 30, 2005. Total loans of the Company increased
$179,069,000 (13.5%) to $1,507,159,000 at September 30, 2006 from $1,328,090,000
at September 30, 2005. Total deposits of the Company increased $86,875,000
(6.0%) to $1,525,174,000 at September 30, 2006 from $1,438,299,000 at September
30, 2005. Diluted earnings per share for the nine months ended September 30,
2006 and 2005 were $1.22 and $1.04, respectively, on earnings of $19,912,000 and
$16,937,000, respectively.
The improvement in results from the year-ago quarter was due to a $1,991,000
(9.9%) increase in fully tax-equivalent (FTE) net interest income to
$22,077,000, and a $712,000 (75.2%) decrease in provision for loan losses. These
contributing factors were partially offset by a $1,346,000 (8.6%) increase in
noninterest expense to $17,026,000 for the quarter ended September 30, 2006.
The increase in net interest income (FTE) was due to a $126,774,000 (8.1%)
increase in average balances of interest-earning assets to $1,701,166,000 and a
0.09% increase in net interest margin (FTE) to 5.19%. The increase in net
interest margin was mainly due to an 0.23% increase in the impact of net
noninterest-bearing funds to 0.61% from 0.38% in the quarter ended September 30,
2005 that was partially offset by a 0.14% decrease in net interest spread as the
average yield on interest-earning assets increased 0.93% while the average rate
paid on interest-bearing liabilities increased 1.07% from the quarter ended
September 30, 2005.
The Company provided $235,000 for loan losses in the third quarter of 2006
versus $947,000 in the third quarter of 2005. During the third quarter of 2006,
the Company recorded $135,000 of net loan charge offs versus $43,000 of net loan
charge-offs in the third quarter of 2005. The net loan charge-offs of $135,000
during the third quarter of 2006 represented 0.04% of average loan balances on
an annualized basis. At September 30, 2006, the Company's combined allowance for
loan losses ($16,993,000) and reserve for unfunded commitments ($1,849,000)
represented 417% of non-performing loans net of government agency guarantees
($4,523,000).
Noninterest income for the third quarter of 2006 increased $17,000 (0.3%) from
the third quarter of 2005, mainly due to a $50,000 (1.4%) increase in service
charges on deposit accounts to $3,703,000, a $105,000 (12.8%) increase in ATM
fees and interchange to $927,000, and a $66,000 (35.9%) decrease in amortization
(or change in value) of mortgage servicing rights, that were partially offset by
a $88,000 (16.4%) decrease in commissions on sale of nondeposit investment
products to $447,000, and a $210,000 (44.3%) decrease in gain on sale of loans
to $264,000. The increase in service charges on deposit accounts was primarily
due to growth in the number of customers. The increase in ATM fees and
interchange was due to growth in the number of customers and expansion of ATM
network as part of new branch openings. The decrease in amortization (or change
in value) of mortgage servicing rights was due primarily to a slowdown in
residential mortgage refinance activity which generally increases the value of
mortgage servicing rights. The shift from amortization of mortgage servicing
rights to change in value of mortgage servicing rights was due to the adoption
of market value accounting for mortgage servicing rights effective January 1,
2006 and the related change in market value from July 1, 2006 to September 30,
2006. The decrease in gain on sale of loans was due to a slowdown in residential
mortgage refinance activity.
Noninterest expense for the third quarter of 2006 increased $1,346,000 (8.6%)
compared to the third quarter of 2005. Salaries and benefits expense increased
$692,000 (8.1%) to $9,276,000. 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 Roseville-Pleasant Grove (November 2005), Yuba
City-Marketplace (January 2006), Folsom-Empire Ranch (March 2006), Natomas-Arena
Blvd (April 2006), Antelope (May 2006), Anderson (June 2006), and Elk Grove
(August 2006). 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 $76,000 (13.1%) to
$655,000. Professional fees increased $88,000 (30.7%) to $375,000 due to
increased audit fees.
As of September 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 are
encouraged by the record results our team members were able to generate for our
Company during this most recent quarter even as we opened our sixth branch in
2006 to bring our total number of branches to fifty-four. We achieved another
quarter of strong loan growth, continued excellent credit quality of our loan
portfolio and a steady increase in service charge and fee revenue. We believe
these results reflect our ability to deliver, and our market's acceptance of,
our values of service and convenience. 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."
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 22 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 share data)
Three months ended
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September 30, June 30, March 31, December 31, September 30,
2006 2006 2006 2005 2005
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Statement of Income Data
Interest income $31,421 $29,379 $27,978 $26,876 $25,334
Interest expense 9,576 8,275 6,773 6,100 5,519
Net interest income 21,845 21,104 21,205 20,776 19,815
Provision for loan losses 235 554 500 561 947
Noninterest income:
Service charges and fees 5,056 4,956 4,857 4,790 4,795
Other income 1,593 1,575 1,591 1,832 1,837
Total noninterest income 6,649 6,531 6,448 6,622 6,632
Noninterest expense:
Salaries and benefits 9,276 8,618 9,156 8,565 8,584
Intangible amortization 350 350 346 346 346
Provision for losses -
unfunded commitments - 36 - 139 3
Other expense 7,400 7,272 6,920 6,750 6,747
Total noninterest expense 17,026 16,276 16,422 15,800 15,680
Income before taxes 11,233 10,805 10,731 11,037 9,820
Net income $6,820 $6,557 $6,535 $6,734 $5,961
Share Data
Basic earnings per share $0.43 $0.42 $0.42 $0.43 $0.38
Diluted earnings per share 0.42 0.40 0.40 0.41 0.37
Book value per common share 10.41 9.96 9.68 9.52 9.30
Tangible book value per common share $9.22 $8.75 $8.44 $8.25 $8.04
Shares outstanding 15,857,107 15,855,107 15,778,090 15,707,835 15,728,106
Weighted average shares 15,855,933 15,798,565 15,736,544 15,711,257 15,687,547
Weighted average diluted shares 16,365,858 16,388,855 16,379,595 16,336,888 16,330,035
Credit Quality
Non-performing loans, net of
government agency guarantees $4,523 $3,913 $4,048 $2,961 $3,048
Other real estate owned - - - - -
Loans charged-off 368 564 357 392 479
Loans recovered $233 $259 $275 $261 $436
Allowance for losses to total loans(1) 1.25% 1.29% 1.32% 1.30% 1.32%
Allowance for losses to NPLs(1) 417% 479% 456% 609% 573%
Allowance for losses to NPAs(1) 417% 479% 456% 609% 573%
Selected Financial Ratios
Return on average total assets 1.45% 1.42% 1.43% 1.51% 1.37%
Return on average equity 16.64% 16.68% 16.93% 18.00% 16.26%
Average yield on loans 7.82% 7.44% 7.24% 7.11% 6.93%
Average yield on interest-earning assets 7.44% 7.07% 6.86% 6.72% 6.51%
Average rate on interest-bearing liabilities 2.86% 2.50% 2.11% 1.94% 1.79%
Net interest margin (fully tax-equivalent) 5.19% 5.10% 5.21% 5.21% 5.10%
Total risk based capital ratio 11.1% 11.1% 11.1% 10.8% 11.2%
Tier 1 Capital ratio 10.1% 10.1% 10.0% 9.8% 10.1%
(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
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September 30, June 30, March 31, December 31, September 30,
2006 2006 2006 2005 2005
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Balance Sheet Data
Cash and due from banks $78,281 $84,663 $78,742 $90,562 $85,413
Federal funds sold 1,387 526 - 2,377 218
Securities, available-for-sale 209,886 221,828 244,441 260,278 271,134
Federal Home Loan Bank Stock 8,206 8,103 7,691 7,602 7,516
Loans
Commercial loans 153,705 146,952 134,049 143,175 141,057
Consumer loans 527,185 517,588 510,809 508,233 494,277
Real estate mortgage loans 661,962 642,422 630,821 623,511 600,875
Real estate construction loans 164,307 149,046 124,429 110,116 91,881
Total loans, gross 1,507,159 1,456,008 1,400,108 1,385,035 1,328,090
Allowance for loan losses (16,993) (16,893) (16,644) (16,226) (15,796)
Premises and equipment 21,556 21,597 21,068 21,291 21,223
Cash value of life insurance 42,991 42,571 42,168 41,768 41,519
Goodwill 15,519 15,519 15,519 15,519 15,519
Intangible assets 3,361 3,711 4,061 4,407 4,373
Other assets 32,651 33,523 32,372 28,662 27,647
Total assets 1,904,004 1,871,156 1,829,526 1,841,275 1,786,856
Deposits
Noninterest-bearing demand deposits 357,754 354,576 354,514 368,412 346,456
Interest-bearing demand deposits 229,143 235,100 249,064 244,193 243,926
Savings deposits 369,933 388,847 432,087 438,177 449,893
Time certificates 568,344 535,917 491,726 446,015 398,024
Total deposits 1,525,174 1,514,440 1,527,391 1,496,797 1,438,299
Federal funds purchased 106,500 96,700 45,800 96,800 103,200
Reserve for unfunded commitments 1,849 1,849 1,813 1,813 1,674
Other liabilities 28,254 24,964 29,046 23,744 24,412
Other borrowings 35,848 33,971 31,441 31,390 31,711
Junior subordinated debt 41,238 41,238 41,238 41,238 41,238
Total liabilities 1,738,863 1,713,162 1,676,729 1,691,782 1,640,534
Total shareholders' equity 165,141 157,994 152,797 149,493 146,322
Accumulated other
comprehensive loss (3,607) (5,629) (5,330) (3,825) (2,538)
Average loans 1,477,551 1,427,735 1,384,541 1,344,654 1,284,977
Average interest-earning assets 1,701,166 1,676,705 1,646,777 1,615,901 1,574,392
Average total assets 1,880,029 1,850,487 1,822,441 1,784,018 1,744,015
Average deposits 1,501,630 1,497,571 1,498,825 1,473,625 1,421,055
Average total equity $163,919 $157,232 $154,410 $149,619 $146,660