<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1996 Commission file number 0-10661
-------------- -------
TRICO BANCSHARES
----------------
(Exact name of registrant as specified in its charter)
California 94-2792841
---------- ----------
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
15 Independence Circle, Chico, California 95926
-----------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 916/898-0300
------------
-------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Title of Class: Common stock, no par value
Outstanding shares as of May 6, 1996: 4,460,543
<PAGE>
TRICO BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
--------- ------------
1996 1995
---- ----
<S> <C> <C>
Assets:
Cash and due from banks $ 28,761 $ 39,673
Federal funds sold 8,200 25,600
Securities held-to-maturity
(approximate fair value $109,722 and
$116,576) 112,874 116,865
Securities available-for-sale, net of
unrealized gain(loss) of $(742) and $(236) 72,198 76,246
Loans, net of allowance for loan losses of
$(5,706) and $(5,580) 323,869 313,186
Premises and equipment, net 13,785 13,189
Investment in real estate properties 1,173 1,173
Other real estate owned 646 631
Accrued interest receivable 4,023 4,609
Other assets 13,077 12,382
---------- ----------
Total assets $ 578,606 $ 603,554
========== ==========
Liabilities:
Deposits
Noninterest-bearing demand $ 76,226 $ 90,308
Interest-bearing demand 83,446 84,314
Savings 166,490 161,479
Time certificates 164,846 180,092
---------- ----------
Total deposits 491,008 516,193
Accrued interest payable and other
liabilities 9,066 7,856
Long term borrowings 24,289 26,292
---------- ----------
Total liabilities 524,363 550,341
Shareholders' equity:
Common stock 44,408 44,315
Retained earnings 10,697 9,548
Unrealized loss on securities available-
for-sale (862) (650)
---------- ----------
Total shareholders' equity 54,243 53,213
---------- ----------
Total liabilities and shareholders'
equity $ 578,606 $ 603,554
========== ==========
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands except earnings per common share)
For the three months
--------------------
ended March 31,
---------------
1996 1995
---- ----
<S> <C> <C>
Interest income:
Interest and fees on loans $ 8,563 $ 8,037
Interest on investment
securities-taxable 2,698 3,130
Interest on investment -
securities-tax exempt 33 44
Interest on federal funds sold 311 90
--------- ---------
Total interest income 11,605 11,301
--------- ---------
Interest expense:
Interest on deposits 4,153 3,750
Interest on federal funds purchased - 10
Interest on other borrowings 382 613
--------- ---------
Total interest expense 4,535 4,373
--------- ---------
Net interest income 7,070 6,928
Provision for loan losses 40 40
--------- ---------
Net interest income after
provision for loan losses 7,030 6,888
Noninterest income:
Service charges and fees 1,119 1,021
Other income 347 442
Securities gains (losses), net - (31)
--------- ---------
Total noninterest income 1,466 1,432
--------- ---------
Noninterest expenses:
Salaries and related expenses 2,959 2,810
Other, net 2,546 2,746
--------- ---------
Total noninterest expenses 5,505 5,556
--------- ---------
Net income before income taxes 2,991 2,764
Income taxes 1,247 1,134
--------- ---------
Net income 1,744 1,630
Preferred stock dividends - 105
--------- ---------
Net income available to
common shareholders 1,744 1,525
Primary earnings per common share $ 0.38 $ 0.33
========= =========
Fully diluted earnings per common share $ 0.37 $ 0.33
========= =========
</TABLE>
3
<PAGE>
TRICO BANCSHARES
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
(in thousands, except number of shares)
<TABLE>
<CAPTION>
Common stock
------------------------
Unrealized
Number Retained loss on
of shares Amount earnings securities Total
--------- -------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Balance,
December 31, 1995 4,464,828 $ 44,315 $ 9,548 $ (650) $ 53,213
Exercise common stock
options 4,000 41 $ 41
Common stock cash
dividends (595) $ (595)
Change in unrealized loss
on securities (212) $ (212)
Stock option amortization 52 $ 52
Net income, March 31, 1996 1,744 $ 1,744
--------- --------- --------- --------- ---------
Balance,
March 31, 1996 4,468,828 $ 44,408 $ 10,697 $ (862) $ 54,243
========= ========= ========= ========= =========
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(in thousands)
For the three months
ended March 31,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Operating activities:
Net income $ 1,744 $ 1,630
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 40 40
Depreciation and amortization 415 386
Amortization of investment security discounts 38 39
Deferred income taxes (250) 279
Investment security (gains) losses, net - 31
(Gain) loss on sale of OREO, net 8 (99)
(Gain) loss on sale of loans, net (2) (12)
Origination of loans held for sale (7,645) (2,512)
Proceeds from loan sales 1,220 2,155
Amortization of stock options 52 52
(Increase) decrease in interest receivable 586 599
Increase (decrease) in interest payable 679 1,000
(Increase) decrease in other assets and liabilities 189 212
----------- -----------
Net cash provided by operating activities (2,926) 3,800
Investing activities:
Proceeds from maturities of securities held-to-maturity 6,626 2,096
Purchases of securities held-to-maturity (2,520) -
Proceeds from maturities of securities available-for-sale 5,555 4,181
Proceeds from sales of securities available-for-sale - 1,972
Purchases of securities available-for-sale (2,035) (3,042)
Net (increase) decrease in loans (4,417) 10,651
Purchases of premises and equipment (941) (423)
Proceeds from the sale of OREO 98 522
----------- -----------
Net cash used by investing activities 2,366 15,957
Financing activities:
Net increase (decrease) in deposits (25,185) (1,468)
Repayment of repurchase agreements - (30,457)
Payments of principal on long-term debt agreements (2,003) (2,011)
Cash dividends - Preferred - (105)
Cash dividends - Common (595) (352)
Sale of Common Stock 31 52
----------- -----------
Net cash provided by financing activities (27,752) (34,341)
----------- -----------
Increase (decrease) in cash and cash equivalents (28,312) (14,584)
Cash and cash equivalents at beginning of year 65,273 39,709
----------- -----------
Cash and cash equivalents at end of period $ 36,961 $ 25,125
=========== ===========
Supplemental information:
Cash paid for taxes $ 362 $ 315
Cash paid for interest expense $ 3,856 $ 3,373
</TABLE>
5
<PAGE>
Item 1. NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC) and in Management's opinion, include all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of results for
such interim periods. Certain information and note disclosures normally
included in annual financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to SEC rules or
regulations; however, the Company believes that the disclosures made are
adequate to make the information presented not misleading.
The interim results for the three months ended March 31, 1996 and 1995 are not
necessarily indicative of results for the full year. It is suggested that these
financial statements be read in conjunction with the financial statements and
the notes included in the Company's Annual Report for the year ended December
31, 1995.
NOTE B - MORTGAGE SERVICING
As of January 1, 1996, the Company adopted FASB Statement of Financial
Accounting Standards No 122, ACCOUNTING FOR MORTGAGE SERVICING RIGHTS, (SFAS
122). SFAS 122 requires a mortgage banking enterprise to recognize the rights to
service mortgage loans for others as a separate asset. SFAS 122 also requires
that a mortgage banking enterprise assess its capitalized mortgage servicing
rights for impairment based on the fair value of those rights and recognize
impairment through a valuation allowance.
The adoption of SFAS 122 did not have a material impact on the Company's
financial position or results of operations for the three months ended March 31,
1996.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
As TriCo Bancshares (the "Company") has not commenced any business operations
independent of Tri Counties Bank (the "Bank"), the following discussion pertains
primarily to the Bank. Average balances, including such balances used in
calculating certain financial ratios, are generally comprised of average daily
balances for the Company. Unless otherwise stated, interest income and net
interest income are presented on a tax equivalent basis.
OVERVIEW
The Company earned $1,744,000 for the first quarter ended March 31, 1996 versus
$1,630,000 in the first quarter of 1995. Fully diluted earnings per share were
$0.37 versus $0.33. The earnings per share results have been adjusted for a
five for four (5/4) stock split effected as a stock dividend in September 1995.
First quarter pretax earnings grew 8.2% or $227,000 over the same period in
1995. The improved operating results reflected increases in net interest income
and noninterest income coupled with a decrease in noninterest expenses. Over
half of the increase was provided by a $142,000 increase in net interest income
(not adjusted for tax equivalent basis). An interest income increase of
$304,000 was mostly attributable to changes in the mix of average earning assets
as the total of these assets in the first quarter of 1996 was relatively
unchanged from the first quarter of 1995. On a period over period basis, loans
which yield the highest rates increased $19.1 million or 6.4% and Federal funds
sold increased $17.2 million or 264%. These assets absorbed the $36.1 million
or 15.7% decrease in the outstanding balance of the securities portfolio.
Additionally, rate increases received on earning assets accounted for $51,000 of
the $304,000 total interest income increase. Interest expense was also up
$162,000. The combination of a $29,600,000 (20.2%) increase in time deposit
average balances and a 42 basis point increase in the average rate paid resulted
in an increase of $558,000 in interest expense. This increase for time deposits
was offset in part by lower balances in savings accounts and bank borrowings.
The net interest margin was 5.29% for the first quarter of 1996 versus 5.19% in
the prior year.
Noninterest income is comprised of "service charges and fees" and "other
income". Service charge and fee income increased 9.6% to $1,119,000 in the
first quarter of 1996 versus first quarter of 1995 results. The increase is due
mainly to an increase in account volumes as basic fee rates have generally not
changed. Other income decreased from $442,000 in 1995 to $347,000 in 1996. In
the first quarter of 1995, income of $116,000 was derived from the operations
and sale of OREO properties. In 1996 OREO properties had a $7,000 loss.
Overall, noninterest income increased $34,000 for the quarter.
7
<PAGE>
Noninterest expenses decreased $51,000 to $5,505,000 in the first quarter 1996
versus first quarter 1995. Due to the temporary elimination of FDIC insurance
premiums for the year 1996, this expense decreased $287,000 from the 1995 level
in the first quarter. This cost savings was offset in part by a $149,000 or
5.3% increase in salary and benefit expenses, which reflects increased costs for
additional employees at two new in-store branches, two loan production offices
and normal salary adjustments. The balance of the cost savings from the
elimination of FDIC insurance premiums was offset by increases in various other
expenses.
Assets of the Company totaled $578,606,000 at March 31, 1996 which was a
decrease of $24,948,000 from 1995 ending balances. Changes in assets from year
end balances included: an increase in loans of $10,809,000 to $329,575,000; a
decrease in securities of $8,039,000 to $185,072,000; and a decrease in cash and
near cash items of $28,312,000 to $36,961,000. Deposit balances at March 31,
1996 were down $25,285,000 (4.9%) from 1995 year end balances. Approximately
$14,000,000 of the change was related to noninterest-bearing demand deposits
which had increased substantially at year end due to seasonality of agricultural
payments and merchant trade. Time certificates of deposit balances were down
$15,246,000 (8.5%) as the Bank lowered rates paid on these instruments and the
Bank opted not to renew a State of California certificate for $9,000,000.
For the first quarter of 1996, the Company had an annualized return on assets of
1.18% and a return on equity of 12.9% versus 1.12% and 13.2% in 1995. TriCo
Bancshares ended the quarter with a leverage ratio of 9.5% (based on ending
assets), a Tier 1 capital ratio of 13.9% and a total risk-based capital ratio of
15.2%.
The following table provides a summary of the major elements of income and
expense for the first quarter of 1996 compared with the first quarter of 1995.
8
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
CONDENSED COMPARATIVE
INCOME STATEMENT
(in thousands, except earnings per common share)
Three months
ended March 31,
1996 1995 Percentage
---- ---- Change
(in thousands, except increase)
earnings per share) (decrease)
<S> <C> <C> <C>
Interest income $ 11,629 $ 11,333 2.6%
Interest expense 4,535 4,373 3.7%
----------- -----------
Net interest income 7,094 6,960 1.9%
Provision for loan losses 40 40 0.0%
----------- -----------
Net interest income after 7,054 6,920 1.9%
provision for loan losses
Noninterest income 1,466 1,432 2.4%
Noninterest expenses 5,505 5,556 -0.9%
----------- -----------
Net income before income taxes 3,015 2,796 7.8%
Income taxes 1,247 1,134 10.0%
Tax equivalent adjustment(1) 24 32 -25.0%
----------- -----------
Net income 1,744 1,630 7.0%
=========== ===========
Preferred stock dividends 0 (105) -100.0%
Net income available to 1,744 1,525 14.4%
common shareholders'
Primary earnings per common share 0.38 0.33 14.9%
(1) Interest on tax-free securities is reported on a tax equivalent basis of 1.73
for March 31, 1996 and 1995.
</TABLE>
9
<PAGE>
NET INTEREST INCOME / NET INTEREST MARGIN
Net interest income represents the excess of interest and fees earned on
interest-earning assets (loans, securities and Federal Funds sold) over the
interest paid on deposits and borrowed funds. Net interest margin is net
interest income expressed as a percentage of average earning assets. Net
interest income comprises the major portion of the Bank's income.
For the three months ended March 31, 1996, interest income increased slightly by
$296,000 or 2.6% over the same period in 1995. The average balances of total
earning assets was essentially the same during the two periods. However,
average loans outstanding increased $19,140,000 to $319,601,000 and Federal
funds sold increased $17,164,000 to $23,648,000. These two volume increases
accounted for additional interest income of $512,000 and $238,000 respectively.
These increases were offset in part by a period over period decrease in average
balances of securities of $36,146,000 or 15.8% which resulted in a reduction in
interest income on securities of $505,000. (See additional discussion in
Securities heading). These changes in the mix of earning assets accounted for
the preponderance of the change in interest income as rate changes resulted in
additional income of $51,000 or 17.2% of the increase in interest income.
For the first quarter of 1996, interest expense increased by $162,000 or 3.7%
over the year earlier period. Average balances of interest bearing liabilities
decreased $1,512,000 or just 0.3% from the previous year, but the mix within the
interest bearing liabilities changed. The change in the mix coupled with higher
rates on certificates of deposit and long term debt resulted in a fifteen basis
point increase in overall rates paid on interest bearing liabilities.
The combined effect of the increase in both interest income and interest expense
for the first quarter of 1996 versus 1995 resulted in a small increase of
$134,000 or 1.9% in net interest income. Net interest margin was up 10 basis
points from 5.19% to 5.29%. However, net interest margin was down from 5.37% in
the fourth quarter of 1995. Since loan balances increased toward the end of the
quarter, if interest rates remain stable, Management would expect some
improvement in the net interest rate margin in the next quarter.
The following two tables provide summaries of the components of the interest
income, interest expense and net interest margins on earning assets for the
quarter ended March 31, 1996 versus the same period in 1995.
10
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
ANALYSIS OF CHANGE IN NET INTEREST
MARGIN ON EARNING ASSETS
(in thousands)
Three Months Ended
------------------
March 31, 1996 March 31, 1995
-------------- --------------
Average Income/ Yield/ Average Income/ Yield/
Balance(1) Expense Rate Balance(1) Expense Rate
<S> <C> <C> <C> <C> <C>
Assets
Earning assets
Loan (2)(3) $ 319,601 $ 8,563 10.72% $ 300,461 $ 8,037 10.70%
Securities 193,194 2,755 5.70% 229,340 3,206 5.59%
Federal funds sold 23,648 311 5.26% 6,484 90 5.55%
--------- --------- --------- ---------
Total earning assets 536,443 11,629 8.67% 536,285 11,333 8.45%
--------- ---------
Cash and due from bank 29,661 30,939
Premises and equipment 13,337 13,255
Other assets,net 17,768 9,143
Less: allowance
for loan losses (5,593) (5,649)
--------- ---------
Total $ 591,616 $ 583,973
========= =========
Liabilities
and shareholders' equity
Interest-bearing
Demand deposits $ 84,662 476 2.25% $ 81,466 494 2.43%
Savings deposits 166,043 1,266 3.05% 183,652 1,403 3.06%
Time deposits 175,474 2,411 5.50% 145,912 1,853 5.08%
Federal funds purchased - - 642 10 6.23%
Short-term debt - - 23,815 362 6.08%
Long-term debt 26,054 382 5.86% 18,258 251 5.50%
--------- --------- --------- ---------
Total interest-bearing
liabilities 452,233 4,535 4.01% 453,745 4,373 3.86%
--------- ---------
Noninterest-bearing deposits 76,775 73,892
Other liabilities 8,598 6,847
Shareholders' equity 54,010 49,489
--------- ---------
Total liabilities
and shareholders' equity $ 591,616 $ 583,973
========= =========
Net interest rate spread(5) 4.66% 4.60%
=========
Net interest income/net $ 7,094 $ 6,960
========= =========
interest margin(6) 5.29% 5.19%
========= =========
(1)Average balances are computed principally on the basis of daily balances.
(2)Nonaccrual loans are included.
(3)Interest income on loans includes fees on loans of $407,000 in 1996 and
$382,000 in 1995.
(4)Interest income is stated on a tax equivalent basis of 1.73 at March 31, 1996
and 1995.
(5)Net interest rate spread represents the average yield earned on interest-
earning assets less the average rate paid on interest-bearing liabilities.
(6)Net interest margin is computed by dividing net interest income by total
average earning assets.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
ANALYSIS OF VOLUME AND RATE CHANGES
ON NET INTEREST INCOME AND EXPENSE
(in thousand)
For the three months ended March 31,
------------------------------------
1996 over 1995
--------------
Yield/
Volume Rate(4) Total
--------- --------- ---------
<S> <C> <C> <C>
Increase (decrease) in
interest income:
Loans (1)(2) $ 512 $ 14 $ 526
Investment securities(3) (505) 54 (451)
Federal funds sold 238 (17) 221
--------- --------- ---------
Total 245 51 296
--------- --------- ---------
Increase (decrease) in
interest expense:
Demand deposits
(interest-bearing) 19 (37) (18)
Savings deposits (135) (2) (137)
Time deposits 375 183 558
Federal funds purchased (10) 0 (10)
Short-term debt (362) 0 (362)
Long-term debt 107 24 131
--------- --------- ---------
Total (6) 168 162
--------- --------- ---------
Increase (decrease) in
net interest income $ 251 $ (117) $ 134
========= ========= =========
(1)Nonaccrual loans are included.
(2)Interest income on loans includes fee income on loans of $407,000 in 1996 and
$382,000 in 1995.
(3)Interest income is stated on a tax equivalent basis of 1.73 for March 31,
1996 and 1995.
(4)The rate/volume variance has been included in the rate variance.
</TABLE>
12
<PAGE>
PROVISION FOR LOAN LOSSES
In the first quarters of 1996 and 1995, the Bank made provisions for loan losses
of $40,000. In 1996 the first quarter loan recoveries exceeded the loans
charged off by $86,000. Thus, the allowance for loan losses increased $126,000.
Since the loan balances were also up during the quarter, the allowance for loan
losses as a percentage of total loans decreased slightly from 1.75% at year end
to 1.73%.
NONINTEREST INCOME
Total noninterest income for the first quarter of 1996 increased $34,000 or 2.4%
from the same period in 1995. Service charges and fees on deposit accounts
increased 9.6% to $1,119,000 in the first quarter versus year ago results. This
change is due mainly to an increase in account volumes as basic fee rates have
generally not changed. Other income was down from $442,000 in 1995 to $347,000
in 1996. In the first quarter of 1995 income of $116,000 was derived from the
operations and sale of OREO properties. In 1996 OREO properties had a $7,000
operating loss.
NONINTEREST EXPENSE
Noninterest expense is comprise of operating expenses of the Company and the
Bank, plus the total noninterest (income) expenses of the Bank's real estate
development subsidiary. These expenses decreased $51,000 or 0.9% in the first
quarter of 1996 versus the same period last year.
Salaries and benefits expense were up $149,000 or 5.3%. Most of the salary
increase was due to normal salary progressions, new staffing at two supermarket
branches and two new loan production offices. Other expenses were down $200,000
or 7.3%. Due to the temporary elimination of FDIC insurance premiums for the
year 1996, the Bank realized a savings of $287,000 over the first quarter 1995
level. Various other expense items accounted for a net increase of $87,000 in
1996.
The Bank is investing more than $1.8 million in 1996 to upgrade and enhance
its computer and systems technology in 1996. This is an ongoing process to
increase efficiency and deliver products which can compete effectively with the
major California banks in the Bank's market area. These costs will be
capitalized and depreciated over the useful lives of the systems. The impact in
the first quarter of 1996 was not material.
PROVISION FOR INCOME TAXES
The effective tax rate for the three months ended March 31, 1996 is 41.7%. This
rate equals the combined California and Federal statutory rates. The actual
rate
13
<PAGE>
equals the statutory rate as the Bank does not have significant holdings of tax-
exempt securities. The Bank does not anticipate increasing its tax-free
securities holdings in the near term.
LOANS
In the first quarter of 1996, loan balances increased $10,809,000 or 3.4% from
the year end balances. Average loan balances for the quarter were $319,601,000
versus $300,461,000 in the same period last year. The loan growth in the first
quarter is positive as the first quarter is normally a slower period due to the
seasonality of agriculture loans and winter weather conditions. During the
first quarter commercial loans increased $4.3 million; construction loans
decreased $2.0 million; real estate loans increased $6.9 million and consumer
loans were up $1.6 million. Competition for loans remains strong in the market
place. The Bank opened a new lending office in Sacramento during the first
quarter. Management believes that with the consolidations taking place in the
California banking environment good opportunities will arise to increase market
share.
SECURITIES
At March 31, 1996, securities held-to-maturity had a cost basis of $112,874,000
and an approximate fair value of $109,722,000. This portfolio contained
mortgage-backed securities totaling $88,784,000 of which $37,047,000 were CMO's.
The securities available-for-sale portfolio had a fair value of $72,198,000 and
an amortized cost of $72,941,000. This portfolio contained mortgage-backed
securities with an amortized cost of $30,773,000 of which $23,093,000 were
CMO's. At December 31, 1995, the fair value of the two portfolios was $525,000
less than the amortized cost. As long term interest rates moved up in the first
quarter of 1996, at March 31, 1996 the total unrealized loss had increased to
$3,895,000.
Management has generally continued its policy of allowing the securities
portfolio to decrease as paydowns and maturities occur. Approximately $12.1
million of securities matured in the first quarter of 1996 and only $4.5 million
of purchases were made as replacements
14
<PAGE>
NONPERFORMING LOANS
As shown in the following table, total nonperforming assets have increased about
10.4% to $3,383,000 in the first three months of 1996. Non performing assets
represent only .58% of total assets. Nonaccrual loans increased while OREO
decreased during this period. All nonaccrual loans are considered to be
impaired when determining the valuation allowance under SFAS 114. The
collections department personnel continue to make a concerted effort to work
problem and potential problem loans to reduce risk of loss.
<TABLE>
<CAPTION>
March 31, December 31,
--------- ------------
1996 1995
---- ----
<S> <C> <C>
Nonaccrual loans $ 2,717 $ 2,213
Accruing loans past due 90 days or more 20 220
Restructured loans (in compliance with
modified terms) 0 0
----------- -----------
Total nonperforming loans 2,737 2,433
Other real estate owned 646 631
----------- -----------
Total nonperforming assets $ 3,383 $ 3,064
=========== ===========
Nonincome producing investments in real
estate held by Bank's real estate
development subsidiary $ 1,173 $ 1,173
=========== ===========
Nonperforming loans to total loans 0.83% 0.76%
Allowance for loan losses to
nonperforming loans 208% 229%
Nonperforming assets to total assets 0.58% 0.51%
Allowance for loan losses to
nonperforming assets 169% 182%
</TABLE>
15
<PAGE>
ALLOWANCE FOR LOAN LOSS
The Bank maintains its allowance for loan losses at a level Management believes
will be adequate to absorb probable losses inherent in existing loans, leases
and commitments to extend credit, based on evaluations of the collectibility,
impairment and prior loss experience of loans, leases and commitments to extend
credit.
The following table presents information concerning the allowance and provision
for loan losses.
<TABLE>
<CAPTION>
March 31, March 31,
--------- ---------
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Balance, beginning of period $ 5,580 $ 5,608
Provision charged to operations 40 40
Loans charged off (123) (119)
Recoveries of loans previously
charged off 209 67
----------- -----------
Balance, end of period $ 5,706 $ 5,596
=========== ===========
Ending loan portfolio $ 329,575 $ 296,711
=========== ===========
Allowance to loans as a
percentage of ending loan portfolio 1.73% 1.89%
----------- -----------
</TABLE>
16
<PAGE>
EQUITY
The following table indicates the amounts of regulatory capital of the Company.
<TABLE>
<CAPTION>
Tier I Total Risk- Leverage
Based
------------------------------------------
(dollars in thousands)
<S> <C> <C> <C>
March 31,1996
Company's % 13.9% 15.2% 9.5%
Regulatory minimum % 4.0% 8.0% 4.0%
Company's capital $ $ 55,105 $ 60,060 $ 55,105
Regulatory minimum $ 15,858 31,611 23,144
------------ ------------ ------------
Computed excess $ 39,247 $ 28,449 $ 31,961
============ ============ ============
</TABLE>
17
<PAGE>
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 May 6, 1996 /s/Robert H. Steveson
---------------------------- ---------------------------------
Robert H. Steveson
President and
Chief Executive Officer
Date May 6, 1996 /s/Robert M. Stanberry
---------------------------- ---------------------------------
Robert M. Stanberry
Vice President and
Chief Financial Officer
18
<PAGE>
PART II
OTHER INFORMATION
Item 6. EXHIBITS INDEX PAGE
a. EXHIBITS
Computations of Earnings Per Share 20
b. REPORTS ON FORM 8-K:
None
19
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
COMPUTATIONS OF EARNINGS PER SHARE
(in thousands
except earnings per share)
(unaudited)
For the three months
ended March 31,
1996 1995
---- ----
<S> <C> <C>
Shares used in the computation
of earnings per share(1):
Weighted daily average
of shares outstanding 4,465,927 4,393,750
Shares used in the computation of
primary earnings per shares 4,646,490 4,598,305
========== ==========
Shares used in the computation of
fully diluted earnings per share 4,668,500 4,611,876
========== ==========
Net income used in the computation
of earnings per common share:
Net income, as reported $ 1,744 $ 1,626
Adjustment for preferred
stock dividend - (105)
---------- ----------
Net income, as adjusted $ 1,744 $ 1,521
========== ==========
Primary earnings per common share $ 0.38 $ 0.33
========== ==========
Fully diluted earnings per common share $ 0.37 $ 0.33
========== ==========
(1)Retroactively adjusted for stock dividends and splits.
</TABLE>
20
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<CIK> 0000356171
<NAME> TRICO BANCSHARES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 28,761
<INT-BEARING-DEPOSITS> 414,782
<FED-FUNDS-SOLD> 8,200
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 72,198
<INVESTMENTS-CARRYING> 112,874
<INVESTMENTS-MARKET> 109,722
<LOANS> 329,575
<ALLOWANCE> 5,706
<TOTAL-ASSETS> 578,606
<DEPOSITS> 491,008
<SHORT-TERM> 0
<LIABILITIES-OTHER> 9,066
<LONG-TERM> 24,289
0
0
<COMMON> 44,408
<OTHER-SE> 9,835
<TOTAL-LIABILITIES-AND-EQUITY> 578,606
<INTEREST-LOAN> 8,563
<INTEREST-INVEST> 2,731
<INTEREST-OTHER> 311
<INTEREST-TOTAL> 11,605
<INTEREST-DEPOSIT> 4,153
<INTEREST-EXPENSE> 4,535
<INTEREST-INCOME-NET> 7,070
<LOAN-LOSSES> 40
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,505
<INCOME-PRETAX> 2,991
<INCOME-PRE-EXTRAORDINARY> 1,744
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,744
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0.38
<YIELD-ACTUAL> 8.67
<LOANS-NON> 2,717
<LOANS-PAST> 20
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,580
<CHARGE-OFFS> 123
<RECOVERIES> 209
<ALLOWANCE-CLOSE> 40
<ALLOWANCE-DOMESTIC> 5,706
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
