<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 September 30, 1998 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.)
63 Constitution Drive, Chico, California 95973
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 530/898-0300
- --------------------------------------------------------------------------------
(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 November 10, 1998: 7,040,490
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
September 30, December 31,
1998 1997
-------------------- ------------------
Assets:
<S> <C> <C>
Cash and due from banks $ 35,828 $ 48,476
Federal funds sold - 15,000
-------------------- ------------------
Cash and cash equivalents 35,828 63,476
Securities held-to-maturity
(approximate fair value $79,438 and $88,950) 78,901 90,764
Securities available-for-sale, net of
unrealized gain of $2,135 and $471 206,290 175,753
Loans, net of allowance for loan losses of $(7,861) and $(6,459) 511,034 442,508
Premises and equipment, net 16,387 18,901
Investment in real estate properties 274 856
Other real estate owned 1,218 2,230
Accrued interest receivable 5,677 5,701
Other assets 25,899 25,976
-------------------- ------------------
Total assets $ 881,508 $ 826,165
==================== ==================
Liabilities:
Deposits
Noninterest-bearing demand $ 121,312 $ 122,069
Interest-bearing demand 134,278 130,958
Savings 208,455 216,402
Time certificates 260,947 254,665
-------------------- ------------------
Total deposits 724,992 724,094
Fed funds purchased 38,800 15,300
Accrued interest payable and other liabilities 10,598 10,207
Long term borrowings 36,428 11,440
-------------------- ------------------
Total liabilities 810,818 761,041
Shareholders' equity:
Common stock 48,517 48,161
Retained earnings 21,018 16,956
Unrealized gain on securities available for sale, net 1,155 7
-------------------- ------------------
Total shareholders' equity 70,690 65,124
-------------------- ------------------
Total liabilities and shareholders' equity $ 881,508 $ 826,165
==================== ==================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands except earnings per common share)
For the three months For the nine months
ended September 30, ended September 30,
---------------------------------- ----------------------------------
1998 1997 1998 1997
Interest income:
<S> <C> <C> <C> <C>
Interest and fees on loans $ 12,666 $ 11,767 $ 35,909 $ 33,338
Interest on investment
securities-taxable 3,696 3,519 11,186 10,165
Interest on investment
securities-tax exempt 545 189 1,230 440
Interest on federal funds sold 5 24 133 292
---------------- --------------- ---------------- --------------
Total interest income 16,912 15,499 48,458 44,235
---------------- --------------- ---------------- --------------
Interest expense:
Interest on deposits 5,874 5,885 17,453 16,775
Interest on federal funds purchased 199 29 267 160
Interest on repurchase agreements 153 - 365 -
Interest on other borrowings 516 213 1,095 899
---------------- --------------- ---------------- --------------
Total interest expense 6,742 6,127 19,180 17,834
---------------- --------------- ---------------- --------------
Net interest income 10,170 9,372 29,278 26,401
Provision for loan losses 920 1,000 2,980 2,200
---------------- --------------- ---------------- --------------
Net interest income after
provision for loan losses 9,250 8,372 26,298 24,201
Noninterest income:
Service charges and fees 1,798 1,748 5,555 4,923
Other income 964 729 4,168 2,059
---------------- --------------- ---------------- --------------
Total noninterest income 2,762 2,477 9,723 6,982
---------------- --------------- ---------------- --------------
Noninterest expenses:
Salaries and related expenses 4,177 3,997 12,592 11,604
Other, net 4,282 4,203 13,362 12,708
---------------- --------------- ---------------- --------------
Total noninterest expenses 8,459 8,200 25,954 24,312
---------------- --------------- ---------------- --------------
Net income before income taxes 3,553 2,649 10,067 6,871
Income taxes 1,269 1,035 3,712 2,614
---------------- --------------- ---------------- --------------
Net income 2,284 1,614 6,355 4,257
Basic earnings per common share* $ 0.33 $ 0.23 $ 0.91 $ 0.61
================ =============== ================ ==============
Diluted earnings per common share* $ 0.31 $ 0.22 $ 0.87 $ 0.59
================ =============== ================ ==============
* Calculated and restated to reflect the Company's 3-for-2 common stock split
effected October 30, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
(in thousands, except number of shares)
Common stock Unrealized
------------------------------ Gain on
Number Retained Securities,
of shares Amount earnings net Total
-------------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 4,662,649 $ 48,161 $ 16,956 $ 7 $ 65,124
Exercise of common stock
options 33,081 253 $ 253
3-for-2 Common Stock split* 2,346,815 $ -
Repurchase of common stock (2,055) (21) (38) $ (59)
Common stock cash
dividends (2,255) $ (2,255)
Change in unrealized
gain on securities 1,148 $ 1,148
Stock option amortization 124 $ 124
Net income 6,355 $ 6,355
-------------- ------------- ------------- -------------- -------------
Balance, September 30, 1998 7,040,490 $ 48,517 $ 21,018 $ 1,155 $ 70,690
============== ============= ============= ============== =============
* Represents the effect of the Company's 3-for-2 common stock split effected
October 30, 1998.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the nine months
ended September 30,
1998 1997
----------------- ----------------
Operating activities:
<S> <C> <C>
Net income $ 6,355 $ 4,257
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 2,980 2,200
Provision for losses on other real estate owned 586 169
Depreciation and amortization 1,942 1,759
Amortization of intangible assets 1,004 957
Accretion of investment security discounts (77) (62)
Deferred income taxes (715) (97)
Investment security (gains) losses (net) (250) (18)
(Gain) loss on sale of OREO (23) 33
(Gain) loss on sale of loans (351) (139)
(Gain) loss on sale of fixed assets 79 (14)
Amortization of stock options 124 146
(Increase) decrease in interest receivable 24 (504)
Increase (decrease) in interest payable 203 771
(Increase) decrease in other assets and liabilities (898) (10,771)
----------------- ----------------
Net cash provided (used) by operating activities 10,983 (1,313)
Investing activities:
Proceeds from maturities of securities held-to-maturity 12,022 8,595
Proceeds from maturities of securities available-for-sale 67,019 18,815
Proceeds from sale of securities available-for-sale 77,121 29,033
Purchases of securities available-for-sale (172,682) (131,695)
Net (increase) decrease in loans (69,805) (31,930)
Proceeds from sales of fixed assets 183 -
Purchases of premises and equipment (1,232) (3,940)
Purchases and additions to real estate properties (21) -
Proceeds from the sale of OREO 1,439 470
----------------- ----------------
Net cash provided (used) by investing activities (85,956) (110,652)
Financing activities:
Net increase (decrease) in deposits 898 113,332
Net increase (decrease) in Fed funds purchased 23,500 (4,900)
Net increase (decrease) in repurchase agreements - 4,700
Borrowings under long-term debt agreements 30,000 -
Payments of principal on long-term debt agreements (5,012) (12,838)
Cash dividends - Common (2,255) (2,226)
Repurchase of common stock (59) (30)
Exercise of common stock options 253 143
----------------- ----------------
Net cash provided (used) by financing activities 47,325 98,181
----------------- ----------------
Increase (decrease) in cash and cash equivalents (27,648) (13,784)
Cash and cash equivalents at beginning of year 63,476 52,231
----------------- ----------------
Cash and cash equivalents at end of period $ 35,828 $ 38,447
================= ================
Supplemental information:
Cash paid for taxes $ 5,035 $ 2,924
Cash paid for interest expense $ 18,977 $ 18,187
</TABLE>
<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 nine months ended September 30, 1998 and 1997, 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, 1997.
Note B - Comprehensive Income
As of January 1, 1998, the Company adopted FASB Statement of Financial
Accounting Standards No. 130, Reporting Comprehensive Income, (SFAS 130). This
Statement established standards for the reporting and display of comprehensive
income and its components in the financial statements. For the Company,
comprehensive income includes net income reported on the statement of income and
changes in the fair value of its available-for-sale investments reported as a
component of shareholders' equity. The following table presents net income
adjusted by the change in unrealized gains or losses on the available-for-sale
investments as a component of comprehensive income (in thousands).
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
------------------ ----------------
<S> <C> <C> <C> <C>
Net income $ 2,284 $ 1,614 $ 6,355 $ 4,257
Net change in unrealized gains (losses)
on available-for-sale investments 996 499 1,148 764
-------- -------- -------- -------
Comprehensive income $ 3,280 $ 2,113 $ 7,503 $ 5,021
======= ======= ======== =======
</TABLE>
<PAGE>
Note C - Earnings per Share
On October 30, 1998, the Company effected a 3-for-2 stock split for shareholders
of record on October 9, 1998. Basic and diluted earnings per share retroactively
restated to reflect this stock split are as follows (in thousands except per
share data):
<TABLE>
<CAPTION>
Three Months Ended September 30, 1998
Weighted
Average Per-Share
Income Shares Amount
Basic Earnings per Share
<S> <C> <C> <C>
Net income available to common shareholders $ 2,284 7,025,057 $ 0.33
Common stock options outstanding -- 240,061
Diluted Earnings per Share
Net income available to common shareholders $ 2,284 7,265,118 $ 0.31
======= =========
Three Months Ended September 30, 1997
Weighted
Average Per-Share
Income Shares Amount
Basic Earnings per Share
Net income available to common shareholders $ 1,614 6,986,579 $ 0.23
Common stock options outstanding -- 262,585
Diluted Earnings per Share
Net income available to common shareholders $ 1,614 7,249,164 $ 0.22
======= =========
Nine Months Ended September 30, 1998
Weighted
Average Per-Share
Income Shares Amount
Basic Earnings per Share
Net income available to common shareholders $ 6,355 7,016,220 $ 0.91
Common stock options outstanding -- 260,516
Diluted Earnings per Share
Net income available to common shareholders $ 6,355 7,276,736 $ 0.87
======= =========
Nine Months Ended September 30, 1997
Weighted
Average Per-Share
Income Shares Amount
Basic Earnings per Share
Net income available to common shareholders $ 4,257 6,974,565 $ 0.61
Common stock options outstanding -- 266,129
Diluted Earnings per Share
Net income available to common shareholders $ 4,257 7,240,694 $ 0.59
======= =========
</TABLE>
<PAGE>
Note D - Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special accounting
for qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate, and assess the effectiveness of transactions
that receive hedge accounting.
Statement 133 is effective for fiscal years beginning after June 15, 1999 and
the Company plans to adopt its provisions effective January 1, 2000. While the
Company does not currently utilize any traditional derivative instruments
(options, swaps, forwards, etc.) in its business, certain of its investments and
long-term borrowings may have embedded options due to call or put features that
may be required to be accounted for differently under this Statement as compared
to current accounting principles. The Company has not yet quantified the impacts
of adopting Statement 133 on its consolidated financial statements, however, the
Statement could increase the volatility of future earnings and other
comprehensive income.
<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. Except within the "overview" section, interest income
and net interest income are presented on a tax equivalent basis.
In addition to the historical information contained herein, this Quarterly
Report contains certain forward-looking statements. The reader of this Quarterly
Report 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 Quarterly Report 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.
Overview
The Company had record quarterly earnings of $2,284,000 for the third quarter
ended September 30, 1998. The quarterly earnings represented a 41.5% increase
over the $1,614,000 reported for the same period of 1997. Diluted earnings per
share for the third quarter 1998 were $0.31 versus $0.22 in the year earlier
period. Earnings for the nine months ended September 30, 1998 were $6,355,000
versus year ago results of $4,257,000. The diluted earnings per share were $0.87
and $0.59 for the respective nine-month periods.
Pretax earnings for the third quarter of 1998 were $3,553,000 versus $2,649,000
for the same period in 1997. Net interest income reflected growth of 8.5% to
$10,170,000. The interest income component was up $1,413,000 (9.1%) due to
higher quarter over quarter volume of earning assets ($792,701,000 versus
$721,002,000) and a 2 basis point increase in yield on average earning assets.
Interest expense increased $615,000 (10.0%) which was due predominately to a
$54,317,000 (8.8%) increase in interest-bearing liabilities. Average rates paid
for interest-bearing liabilities increased 4 basis points over the third quarter
of 1997. Net interest margin was 5.27% for the third quarter of 1998 versus
5.25% in the prior year. This higher net interest margin reflects the effects of
the higher growth rate in earning assets versus interest-bearing liabilities.
The provision for loan losses of $920,000 for the third quarter of 1998 was
$80,000 lower than in the same quarter of 1997.
Noninterest income increased $285,000 (11.5%) for the third quarter of 1998 over
the prior year third quarter. The service charge and fee income portion
increased 2.9% to $1,798,000. Other income increased $235,000 (32.2%) in the
third quarter of 1998 versus the same quarter in 1997. The increase in other
income includes gains on the sale of investments of $114,000 versus none in the
third quarter of 1997 and an additional gain of $58,000 realized from the sale
of the credit card portfolio which took place in May 1998. Noninterest expense
increased $259,000 (3.2%) in the third quarter 1998 versus 1997. Salary and
benefit expense increased $180,000 (4.5%) mostly due to higher commission
payments to sales personnel and accruals for incentive programs. Other expenses
increased $79,000 (1.9%). On a quarter over quarter basis, marketing and
advertising expenses were up by $114,000 and all other expenses were favorable
by a total of $35,000.
Assets of the Company totaled $881,508,000 at September 30, 1998, which was an
increase of $55,343,000 (6.7%) and $83,367,000 (10.5%) from the December 31,
1997 and September 30, 1997 ending balances, respectively. Changes in earning
asset balances from September 30, 1997 included an increase in loans of
$50,834,000 to $518,895,000 and an increase in securities of $38,523,000 to
$285,191,000. From year end 1997 balances, nonperforming assets have decreased
$1,672,000 and total $5,807,000 at September 30, 1998. Nonperforming assets were
0.66% of total assets at quarter end.
Year to date 1998, on an annualized basis, the Company has realized a return on
assets of 1.01% and a return on equity of 12.55% versus 0.73% and 9.12% in the
first nine months of 1997. TriCo Bancshares ended the quarter with a Tier 1
capital ratio of 10.5% and a total risk-based capital ratio of 11.8%.
The following tables provide a summary of the major elements of income and
expense for the third quarter of 1998 compared with the third quarter of 1997
and for the first nine months of 1998 compared with the first nine months of
1997.
<PAGE>
TRICO BANCSHARES
CONDENSED COMPARATIVE
INCOME STATEMENT
(in thousands, except earnings per common share)
Three months
ended September 30, Percentage
1998 1997 Change
(in thousands, except increase
earnings per share) (decrease)
Interest income $ 17,190 $ 15,597 10.2%
Interest expense 6,742 6,127 10.0%
------------ ------------
Net interest income 10,448 9,470 10.3%
Provision for loan losses 920 1,000 (8.0%)
------------ ------------
Net interest income after 9,528 8,470 12.5%
provision for loan losses
Noninterest income 2,762 2,477 11.5%
Noninterest expenses 8,459 8,200 3.2%
------------ ------------
Net income before income taxes 3,831 2,747 39.5%
Income taxes 1,269 1,035 22.6%
Tax equivalent adjustment1 278 98 183.2%
------------ ------------
Net income 2,284 1,614 41.5%
============ ============
Diluted earnings per common share2 $ 0.31 $ 0.22 40.9%
1 Interest on tax-free securities is reported on a tax equivalent basis of 1.51
and 1.52 for September 30, 1998 and 1997.
2 Calculated and restated to reflect the Company's 3-for-2 common stock split
effected October 30, 1998.
<PAGE>
TRICO BANCSHARES
CONDENSED COMPARATIVE
INCOME STATEMENT
(in thousands, except earnings per common share)
Nine months
ended September 30, Percentage
1998 1997 Change
(in thousands, except increase
earnings per share) (decrease)
Interest income $ 49,085 $ 44,464 10.4%
Interest expense 19,180 17,834 7.5%
------------ ------------
Net interest income 29,905 26,630 12.3%
Provision for loan losses 2,980 2,200 35.5%
------------ ------------
Net interest income after 26,925 24,430 10.2%
provision for loan losses
Noninterest income 9,723 6,982 39.3%
Noninterest expenses 25,954 24,312 6.8%
------------ ------------
Net income before income taxes 10,694 7,100 50.6%
Income taxes 3,712 2,614 42.0%
Tax equivalent adjustment1 627 229 174.2%
------------ ------------
Net income 6,355 4,257 49.3%
============ ============
Diluted earnings per common share2 $ 0.87 $ 0.59 47.5%
1 Interest on tax-free securities is reported on a tax equivalent basis of 1.51
and 1.52 for September 30, 1998 and 1997.
2 Calculated and restated to reflect the Company's 3-for-2 common stock split
effected October 30, 1998.
<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 quarter ended September 30, 1998, interest income increased $1,593,000
(10.2%) over the same period in 1997. The average balance of total earning
assets was higher by $71,699,000 (9.9%). The average balances of loans
outstanding and securities increased $40,629,000 and $32,362,000, respectively.
These two volume increases accounted for additional interest income of
$1,029,000 and $484,000, respectively. The average rate received on loans in the
third quarter of 1998 was 10.02% which was a decrease of 11 basis points from
the third quarter last year. The lower rate resulted in a decrease in interest
income of $130,000. The average rate received on securities rose 32 basis points
to 6.30% which accounted for a $229,000 increase in interest income. The overall
yield on average earning assets rose 2 basis points to 8.67%.
For the third quarter of 1998, interest expense increased by $615,000 (10.0%)
over the year earlier period. Average balances of interest-bearing liabilities
were up $54,317,000 (8.8%) which resulted in a $665,000 increase in interest
expense. Average balances of long-term debt and overnight borrowings increased
$24,987,000 (218%) and $16,778,000 (228%) respectively and accounted for
$584,000 of the change in interest expense. Rate variances on a
quarter-over-quarter basis resulted in a decrease of $50,000 in interest expense
for the third quarter of 1998. The overall rate on average earning liabilities
rose 4 basis points to 4.03%
The combined effect of the increases in interest income and interest expense for
the third quarter of 1998 versus the same period in 1997 resulted in an increase
of $978,000 (10.3%) in net interest income. Net interest margin for the
comparative quarters increased from 5.25% to 5.27%. The increase in net interest
margin was mainly due to average earning assets outgrowing average earning
liabilities by $17,382,000 for the comparative quarters. A $14,460,000 increase
in the average balance of noninterest bearing deposits accounted for most of the
difference in growth between earning assets and interest-bearing liabilities.
Net interest income and net interest margin comparisons between the first nine
months of 1998 and 1997 are influenced by the inclusion of nine months of
operations in 1998 of the nine branches purchased from Wells Fargo Bank on
February 21, 1997, compared to the inclusion of just over seven months of such
operations in 1997. As a result of the acquisition the Company gained
approximately $150,000,000 in deposits which where used to purchase securities.
In addition, during the second quarter of 1998, the Company borrowed $30,000,000
from the Federal Home Loan Bank and negotiated for $20,000,000 in certificates
of deposits with the State of California. These funds were invested in
securities at an average spread of 149 basis points. The ongoing effect of these
transactions will be to increase net interest income and slightly depress net
interest margin. To the extent the Company is successful in replacing some of
the investment portfolio with higher yielding loans, net interest margin will
tend to move higher. From March 31, 1997 to September 30, 1998, the Company's
loans balance has grown $89,280,000 (20.8%).
The nine-month period ending September 30, 1998 reflects an interest income
increase of $4,621,000 (10.4%) over the same period in 1997. Most of the
increase resulted from higher average balances on loans and investment
securities. Interest income from the volume increase for these two items totaled
$4,220,000. The balance of the increase came from higher yields on earning
assets. The average rate received on all earning assets for the nine month
period ended September 30, 1998 was 8.58% or 4 basis points higher than the
8.54% for the same period in 1997.
Interest expense for the nine-month period increased $1,346,000 (7.5%) from that
for the same period in 1997. Volume increases in deposits and borrowings added
$1,490,000 of interest expense. This was offset in part by slightly lower rates
on time deposits and long-term debt outstanding. Overall average rates paid on
interest-bearing liabilities in the first nine months of 1998 decreased 1 basis
point to 3.96% from the same period in 1997.
The combined effect of the increase in both interest income and interest expense
for the first nine months of 1998 versus 1997 resulted in an increase of
$3,275,000 (12.3%) in net interest income.
Net interest margin rose 11 basis points to 5.23% from 5.12%.
The following four tables provide summaries of the components of the interest
income, interest expense and net interest margins on earning assets for the
quarter and nine month periods ended September 30, 1998 versus the same periods
in 1997.
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
ANALYSIS OF CHANGE IN NET INTEREST
MARGIN ON EARNING ASSETS
(in thousands)
Three Months Ended
30-Sep-98 30-Sep-97
Average Income/ Yield/ Average Income/ Yield/
Balance1 Expense Rate Balance1 Expense Rate
Assets
Earning assets
<S> <C> <C> <C> <C> <C> <C>
Loans 2,3 $ 505,377 $ 12,666 10.02% $ 464,748 $ 11,767 10.13%
Securities4 286,879 4,519 6.30% 254,517 3,806 5.98%
Federal funds sold 445 5 4.49% 1,737 24 5.53%
------------- ----------- ------------ -----------
Total earning assets 792,701 17,190 8.67% 721,002 15,597 8.65%
----------- -----------
Cash and due from bank 35,150 31,777
Premises and equipment 16,665 16,936
Other assets, net 32,091 30,389
Less: allowance
for loan losses (7,424) (6,208)
------------- ------------
Total $ 869,183 $ 793,896
============= ============
Liabilities
and shareholders' equity
Interest-bearing
Demand deposits $ 136,991 788 2.30% $ 126,420 720 2.28%
Savings deposits 209,166 1,623 3.10% 208,147 1,613 3.10%
Time deposits 262,592 3,463 5.28% 261,630 3,552 5.43%
Federal funds purchased 13,552 199 5.87% 1,989 29 5.83%
Short-term debt 10,583 153 5.78% 5,368 42 3.13%
Long-term debt 36,431 516 5.67% 11,444 171 5.98%
------------- ----------- ------------ -----------
Total interest-bearing
liabilities 669,315 6,742 4.03% 614,998 6,127 3.99%
----------- -----------
Noninterest-bearing deposits 119,724 105,264
Other liabilities 11,164 10,299
Shareholders' equity 68,980 63,335
------------- ------------
Total liabilities
and shareholders' equity $ 869,183 $ 793,896
============= ============
Net interest rate spread5 4.64% 4.66%
Net interest income/net $ 10,448 $ 9,470
=========== ===========
interest margin6 5.27% 5.25%
=========== ===========
1 Average balances are computed principally on the basis of daily balances.
Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $744,000 in 1998 and $496,000 in 1997.
4 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 at September 30, 1998 and
1997.
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>
<PAGE>
<TABLE>
<CAPTION>
TRICO BANCSHARES
ANALYSIS OF CHANGE IN NET INTEREST
MARGIN ON EARNING ASSETS
(in thousands)
Nine Months Ended
30-Sep-98 30-Sep-97
Average Income/ Yield/ Average Income/ Yield/
Balance1 Expense Rate Balance1 Expense Rate
Assets
Earning assets
<S> <C> <C> <C> <C> <C> <C>
Loans 2,3 $ 477,493 $ 35,909 10.03% $ 445,908 $ 33,338 9.97%
Securities4 282,063 13,043 6.17% 240,781 10,834 6.00%
Federal funds sold 3,083 133 5.75% 7,224 292 5.39%
------------- ------------ ------------ -------------
Total earning assets 762,639 49,085 8.58% 693,913 44,464 8.54%
------------ -------------
Cash and due from bank 32,939 37,107
Premises and equipment 17,836 16,301
Other assets, net 33,330 31,551
Less: allowance
for loan losses (7,025) (6,086)
------------- ------------
Total $ 839,719 $ 772,786
============= ============
Liabilities
and shareholders' equity
Interest-bearing
Demand deposits $ 134,599 2,291 2.27% $ 118,924 2,019 2.26%
Savings deposits 211,141 4,860 3.07% 206,087 4,736 3.06%
Time deposits 260,365 10,302 5.28% 250,038 10,020 5.34%
Federal funds purchased 6,151 267 5.79% 3,807 160 5.60%
Short-term debt 8,521 365 5.71% 8,325 354 5.67%
Long-term debt 25,610 1,095 5.70% 12,316 545 5.90%
------------- ------------ ------------ -------------
Total interest-bearing
liabilities 646,387 19,180 3.96% 599,497 17,834 3.97%
------------ -------------
Noninterest-bearing deposits 114,503 100,955
Other liabilities 11,297 10,081
Shareholders' equity 67,532 62,253
------------- ------------
Total liabilities
and shareholders' equity $ 839,719 $ 772,786
============= ============
Net interest rate spread5 4.62% 4.57%
Net interest income/net $ 29,905 $ 26,630
============ =============
interest margin6 5.23% 5.12%
============ =============
1 Average balances are computed principally on the basis of daily balances.
Average balance of securities is based on amortized cost.
2 Nonaccrual loans are included.
3 Interest income on loans includes fees on loans of $2,173,000 in 1998 and $1,520,000 in 1997.
4 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 at September 30, 1998 and
1997.
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>
<PAGE>
TRICO BANCSHARES
ANALYSIS OF VOLUME AND RATE CHANGES
ON NET INTEREST INCOME AND EXPENSE
(in thousands)
For the three months ended September 30,
1998 over 1997
Yield/
Volume Rate4 Total
------------- ---------- ----------
Increase (decrease) in interest income:
Loans 1,2 $ 1,029 $ (130) $ 899
Investment securities3 484 229 713
Federal funds sold (18) (1) (19)
------------- ---------- ----------
Total 1,495 98 1,593
------------- ---------- ----------
Increase (decrease) in interest expense:
Demand deposits
(interest-bearing)
60 8 68
Savings deposits
8 2 10
Time deposits
13 (102) (89)
Federal funds purchased
169 1 170
Short-term debt
41 70 111
Long-term debt
374 (29) 345
------------- ---------- ----------
Total 665 (50) 615
------------- ---------- ----------
Increase (decrease) in
net interest income $ 830 $ 148 $ 978
============= ========== ==========
1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $744,000 in 1998 and
$496,000 in 1997.
3 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 for
September 30, 1998 and 1997.
4 The rate/volume variance has been included in the rate variance.
<PAGE>
TRICO BANCSHARES
ANALYSIS OF VOLUME AND RATE CHANGES
ON NET INTEREST INCOME AND EXPENSE
(in thousands)
For the nine months ended September 30,
1998 over 1997
Yield/
Volume Rate4 Total
---------- ---------- ----------
Increase (decrease) in interest income:
Loans 1,2 $ 2,362 $ 209 $ 2,571
Investment securities3 1,858 351 2,209
Federal funds sold (167) 8 (159)
---------- ---------- ----------
Total 4,053 568 4,621
---------- ---------- ----------
Increase (decrease) in interest expense:
Demand deposits
(interest-bearing) 266 6 272
Savings deposits 116 8 124
Time deposits 414 (132) 282
Federal funds purchased 98 9 107
Short-term debt 8 3 11
Long-term debt 588 (38) 550
---------- ---------- ----------
Total 1,490 (144) 1,346
---------- ---------- ----------
Increase (decrease) in
net interest income $ 2,563 $ 712 $ 3,275
========== ========== ==========
1 Nonaccrual loans are included.
2 Interest income on loans includes fee income on loans of $2,173,000 in 1998
and $1,520,000 in 1997.
3 Interest income is stated on a tax equivalent basis of 1.51 and 1.52 for
September 30, 1998 and 1997.
4 The rate/volume variance has been included in the rate variance.
<PAGE>
Provision for Loan Losses
The Bank provided $920,000 for loan losses in the third quarter of 1998 versus
$1,000,000 in 1997. Net charge-offs for all loans in the third quarter of 1998
totaled $197,000 versus $869,000 in the year earlier period. Additional
provisions required to cover the effects of changes in the overall economic
environment on the loan portfolio amounted to $723,000 in the third quarter of
1998. As reported in the Form 10-Q for the first quarter of 1998, the Bank sold
its credit card portfolio effective May 1, 1998, and is no longer liable for
charge-offs in that portfolio. For all of 1997, net credit card charge-offs
totaled $958,000 representing 36.3% of the total net charge-offs for the year.
For the nine months ended September 30, 1998, net credit card charge-offs
totaled $316,000 (through the sale date of May 1, 1998) representing 20.0% of
total net charge-offs of $1,578,000.
Noninterest Income
Noninterest income for the third quarter of 1998, increased $285,000 (11.5%)
from the same period in 1997. Income from service charges and fees increased
2.9% to $1,798,000. Other income increased $235,000 (32.2%) in the third quarter
of 1998 versus the same quarter in 1997. The increase in other income includes
gains on the sale of investments of $114,000 versus none in the third quarter of
1997 and an additional gain of $58,000 realized from the sale of the credit card
portfolio which took place in May 1998.
The Bank sold its credit card portfolio of $14,365,000 for a gain of $793,000 in
the second quarter of 1998. For the nine months ended September 30, 1998,
excluding the gain on the sale of the credit card portfolio, noninterest income
was up $1,890,000 (27.1%) over the same period for 1997. Part of the increase is
attributable to full first quarter 1998 operations of the nine branches
purchased from Wells Fargo Bank versus only five weeks of operations for those
branches in the first quarter of 1997. Service charges and fee income was up
$632,000 (12.8%) as a result of increased volume of accounts and fees on
non-Bank customer ATM transactions implemented in the fourth quarter of 1997.
Other income, exclusive of the credit card gain, increased $1,258,000 (61.1%).
Significant increases in the following items contributed to the overall
increase: vendor rebates $324,000, gain on sale of investments $232,000, loan
recoveries in excess of amounts previously charged-off $228,000, gain on sale of
mortgage loans $212,000.
Noninterest Expense
Noninterest expense is comprised of operating expenses of the Company and the
Bank, plus the total noninterest (income) expenses of the Bank's real estate
development subsidiary. Noninterest expense increased $259,000 (3.2%) in the
third quarter 1998 versus 1997. Salary and benefit expense increased $180,000
(4.5%) mostly due to higher commission payments to sales personnel and accruals
for various incentive programs. Other expenses increased $79,000 (1.9%). On a
quarter-over-quarter basis, the provision for OREO property valuations was
reduced by $49,000 and all other expenses were reduced by a total of $30,000.
For the nine-month period noninterest expenses increased $1,642,000 (6.8%) in
1998 over 1997. Part of the increase is attributable to full first quarter 1998
operations of the nine branches purchased from Wells Fargo Bank versus only five
weeks of operations for those branches in the first quarter of 1997. One time
direct costs related to the conversion of the nine Wells branches totaled
$358,000 in the first nine months of 1997. Salary and benefit expense increased
$988,000 (8.5%) on a year-over-year basis. The salary expense was higher due to
first quarter effect of increased staff from the 1997 Wells branch acquisition,
higher benefit costs, commissions paid to sales staff, various incentive
programs, and normal salary progression. Other noninterest expenses increased
$654,000 (5.2%) in 1998 over 1997. Occupancy costs increased $165,000 mostly due
to higher depreciation relating to equipment for the acquired branches, leases
for five of the acquired branches and upgraded technology. Other expenses such
as computer communications, telephone, ATM charges, courier service and postage
were higher as a result of the branch acquisition. Amortization of intangible
assets related to the acquired branches added $47,000 of expense in the first
nine months of 1998. Provisions for OREO property valuations increased $417,000
to $586,000 for the nine months.
Provision for Income Taxes
The effective tax rate for the nine months ended September 30, 1998 is 36.9% and
reflects a decrease from 38.0% in the year earlier period. The tax rate is lower
than the statutory rate of 40.4% due to nontaxable earnings from municipal
bonds. The Bank has been increasing its holdings of tax-exempt municipal bonds
so the tax rate should continue to be lower than the statutory rate.
Securities
At September 30, 1998, securities held-to-maturity had a cost basis of
$78,901,000 and an approximate fair value of $79,438,000. This portfolio
contained mortgage-backed securities totaling $56,683,000 of which $21,946,000
were collateralized mortgage obligations (CMOs). The securities
available-for-sale portfolio had a fair value of $206,290,000 and an amortized
cost of $204,155,000. This portfolio contained mortgage-backed securities with
an amortized cost of $99,545,000 of which $14,831,000 were CMOs.
At December 31, 1997, securities held-to-maturity had a cost basis of
$90,764,000 and an approximate fair value of $88,950,000. This portfolio
contained mortgage-backed securities totaling $68,429,000 of which $27,821,000
were CMOs. The securities available-for-sale portfolio had a fair value of
$175,753,000 and an amortized cost of $175,282,000. This portfolio contained
mortgage-backed securities with an amortized cost of $36,556,000 of which
$19,677,000 were CMOs.
Loans
At September 30, 1998, loan balances were $50,834,000 (10.9%) higher than the
ending balances at September 30, 1997 and $69,928,000 (15.6%) higher than the
ending balances at December 31, 1997. The Bank sold its credit card portfolio
totaling $14,365,000 in the second quarter of 1998. Had these loans been
included at quarter end, loan growth on a year over year basis would have been
13.9%. On a year over year basis at September 30, commercial and real estate
loan balances were higher while there was a decrease in consumer loans due to
the sale of the credit cards. Real estate construction loans were relatively
flat.
Nonperforming Loans
As shown in the following table, total nonperforming assets have decreased 22.4%
to $5,807,000 in the first nine months of 1998. Nonperforming assets represent
only 0.66% of total assets. Both nonaccrual loans and OREO decreased during this
period. All nonaccrual loans are considered to be impaired when determining the
valuation allowance under SFAS 114. The Bank's Collections Department personnel
continue to make a concerted effort to work problem and potential problem loans
to reduce risk of loss.
September 30, December 31,
1998 1997
Nonaccrual loans $ 4,356 $ 4,721
Accruing loans past due 90 days or more 233 528
Restructured loans (in compliance with
modified terms) - -
------------ ------------
Total nonperforming loans 4,589 5,249
Other real estate owned 1,218 2,230
------------ ------------
Total nonperforming assets $ 5,807 7,479
============ ============
Nonincome producing investments in real
estate held by Bank's real estate
development subsidiary $ 274 $ 856
============ ============
Nonperforming loans to total loans 0.88% 1.17%
Allowance for loan losses to
nonperforming loans 171% 123%
Nonperforming assets to total assets 0.66% 0.91%
Allowance for loan losses to
nonperforming assets 135% 86%
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.
For the nine months ended September 30
1998 1997
(in thousands)
Balance, Beginning of period $ 6,459 $ 6,097
Provision charged to operations 2,980 2,200
Loans charged off (1,831) (2,105)
Recoveries of loans previously
charged off 253 172
Balance, end of period $ 7,861 $ 6,364
================ ================
Ending loan portfolio $ 518,895 $ 468,061
================ ================
Allowance as a percentage
of ending loan portfolio 1.51% 1.36%
================ ================
<TABLE>
<CAPTION>
Equity
The following table indicates the amounts of regulatory capital of the Company.
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
Amount Ratio Amount Ratio Amount Ratio
As of September 30, 1998:
Total Capital
<S> <C> <C> <C> <C> <C> <C>
to Risk Weighted Assets $68,968 $11.76% =>$46,918 =>8.0% =>$58,647 =>10.0%
Tier I Capital
to Risk Weighted Assets $61,636 $10.51% =>$23,459 =>4.0% =>$35,189 => 6.0%
Tier I Capital
to Average Assets $61,636 $7.16% =>$23,459 =>4.0% =>$29,323 => 5.0%
</TABLE>
<PAGE>
Matters Related to the Year 2000
The Company utilizes software and related information technologies that will be
affected by the date change in the year 2000. Additionally, the Company relies
on certain noninformation technology systems such as communications and building
operations systems that could also be affected by the date change. The failure
of these noninformation technology systems could interrupt or shutdown business
operations for some period of time. Based on ongoing assessments and testing,
the Company has determined that it will be required to modify or replace
portions of its software so that its computer systems will properly utilize
dates beyond December 31, 1999. The Company presently believes that with
modifications to existing software and conversions to new software, the adverse
effects of the year 2000 issue can be mitigated. However, if such modifications
and conversions are not made, or are not completed in a timely manner, the year
2000 issue could have a material impact on the operations and financial
condition of the Company and could lead to enforcement actions by regulatory
agencies.
The Company is committed to attaining Year 2000 compliance, ensuring that its
information systems accurately process dates and times, including calculating,
comparing and sequencing data from, into and between the 20th and 21st
centuries. Non-information technology systems that may use embedded technologies
are included in the process.
The Year 2000 Project Plan underway at the Company covers five phases; awareness
and planning, assessment, renovation, validation/testing and implementation.
Within this project, the Company has focused on the identification and
priortization of in-house systems, reliance on vendor supplied systems and
software, the exchange/transmission of data with external parties, corporate
borrower compliance efforts and ongoing customer awareness/communication. In
addition, the Company is addressing contingency planning at the system,
department and bank levels, with focus on mission critical systems and Company
functions. The assessment phase is complete and the Company is completing tasks
concurrently within the renovation, validation/testing and implementation
phases. The majority of mission critical systems testing is targeted for
completion by December 31, 1998. The target date to complete all testing and
implementations is June 30, 1999.
For all phases, the Company budgeted an incremental $175,000 for programming
changes and testing of internally developed systems and software licensed from
third parties. Most of the $175,000 budgeted will be incurred and expensed in
1999. The estimated costs of and time frames related to these projects are based
on estimates of the Company's management and there can be no assurance that
actual costs will not differ materially from the current expectations or that
the proposed time frames can be maintained. Specific factors that might cause
such material differences include, but are not limited to, the availability and
cost of personnel trained in this area, the ability to locate and correct all
relevant computer code, the ability to formulate and implement contingency
plans, if required, and similar uncertainties. The Company relies on various
third party systems or services to conduct its business, including regional and
national telecommunications and data processing services providers. The failure
of any of these entities to satisfactorily address the year 2000 issue could
have a material adverse affect on the Company's operations and financial
condition. The Company is presently monitoring the progress of these and other
entities' year 2000 compliance.
Item 3. MARKET RISK MANAGEMENT
There have not been any significant changes in the market risk profile of the
Bank since December 31, 1997.
PART II
Other Information
(a) Item 6. Exhibits Filed Herewith
Exhibit No. Exhibits
3.1 Articles of Incorporation, as amended to date, filed as
Exhibit 3.1 to Registrant's Report on Form 10-K, filed for
the year ended December 31, 1989, are incorporated herein
by reference.
3.2 Bylaws, as amended to 1992, filed as Exhibit 3.2 to
Registrant's Report on Form 10-K, filed for the year ended
December 31, 1992, are incorporated herein by reference.
4.2 Certificate of Determination of Preferences of Series B
Preferred Stock, filed as Appendix A to Registrant's
Registration Statement on Form S-1 (No. 33-22738), is
incorporated herein by reference.
10.1 Lease for Park Plaza Branch premises entered into as of
September 29, 1978, by and between Park Plaza Limited
Partnership as lessor and Tri Counties Bank as lessee,
filed as Exhibit 10.9 to the TriCo Bancshares Registration
Statement on Form S-14 (Registration No. 2-74796) is
incorporated herein by reference.
10.2 Lease for Administration Headquarters premises entered into
as of April 25, 1986, by and between Fortress-Independence
Partnership (A California Limited Partnership) as lessor
and Tri Counties Bank as lessee, filed as Exhibit 10.6 to
Registrant's Report on Form 10-K filed for the year ended
December 31, 1986, is incorporated herein by reference.
10.3 Lease for Data Processing premises entered into as of April
25, 1986, by and between Fortress-Independence Partnership
(A California Limited Partnership) as lessor and Tri
Counties Bank as lessee, filed as Exhibit 10.7 to
Registrant's Report on Form 10-K filed for the year ended
December 31, 1986, is incorporated
herein by reference.
10.4 Lease for Chico Mall premises entered into as of March 11,
1988, by and between Chico Mall Associates as lessor and
Tri Counties Bank as lessee, filed as Exhibit 10.4 to
Registrant's Report on Form 10-K filed for the year ended
December 31, 1988, is incorporated by reference.
10.5 First amendment to lease entered into as of May 31, 1988 by
and between Chico Mall Associates and Tri Counties Bank,
filed as Exhibit 10.5 to Registrant's Report on Form 10-K
filed for the year ended December 31, 1988, is incorporated
by reference.
10.9 Employment Agreement of Robert H. Steveson, dated December
12, 1989 between Tri Counties Bank and Robert H. Steveson,
filed as Exhibit 10.9 to Registrant's Report on Form 10-K
filed for the year ended December 31, 1989, is incorporated
by reference.
10.11 Lease for Purchasing and Printing Department premises
entered into as of February 1, 1990, by and between Dennis
M. Casagrande as lessor and Tri Counties Bank as lessee,
filed as Exhibit 10.11 to Registrant's Report on Form 10-K
filed for the year ended December 31, 1991, is incorporated
herein by reference.
10.12 Addendum to Employment Agreement of Robert H. Steveson,
dated April 9, 1991, filed as Exhibit 10.12 to Registrant's
Report on Form 10-K filed for the year ended December 31,
1991, is incorporated herein by reference.
22.1 Tri Counties Bank, a California banking corporation, is the
only subsidiary of Registrant.
(b) Reports on Form 8-K:
None
<PAGE>
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 November 10, 1998 /s/ Robert H. Steveson
--------------------- ------------------------
Robert H. Steveson
President and
Chief Executive Officer
Date November 10, 1998 /s/ Robert M. Stanberry
--------------------- ------------------------
Robert M. Stanberry
Vice President and
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000356171
<NAME> TRICO BANCSHARES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 35,828
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 206,290
<INVESTMENTS-CARRYING> 78,901
<INVESTMENTS-MARKET> 79,438
<LOANS> 518,895
<ALLOWANCE> 7,861
<TOTAL-ASSETS> 881,508
<DEPOSITS> 724,992
<SHORT-TERM> 38,800
<LIABILITIES-OTHER> 10,598
<LONG-TERM> 36,428
0
0
<COMMON> 48,517
<OTHER-SE> 22,173
<TOTAL-LIABILITIES-AND-EQUITY> 881,508
<INTEREST-LOAN> 35,909
<INTEREST-INVEST> 12,416
<INTEREST-OTHER> 133
<INTEREST-TOTAL> 48,458
<INTEREST-DEPOSIT> 17,453
<INTEREST-EXPENSE> 19,180
<INTEREST-INCOME-NET> 29,278
<LOAN-LOSSES> 2,980
<SECURITIES-GAINS> 316
<EXPENSE-OTHER> 25,954
<INCOME-PRETAX> 10,067
<INCOME-PRE-EXTRAORDINARY> 10,067
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,355
<EPS-PRIMARY> 0.91
<EPS-DILUTED> 0.87
<YIELD-ACTUAL> 5.23
<LOANS-NON> 4,356
<LOANS-PAST> 233
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 6,459
<CHARGE-OFFS> 1,831
<RECOVERIES> 253
<ALLOWANCE-CLOSE> 7,861
<ALLOWANCE-DOMESTIC> 7,861
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
