-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ATipaKBlxZi/1auiwvq9z7WGD+4Y1m8QmnO/v+JUQeFZ+LLYPakr7spPQ/Ze69Fd gnGZnfm0Nx2LZg4iB+uTIg== 0000356171-99-000002.txt : 19990422 0000356171-99-000002.hdr.sgml : 19990422 ACCESSION NUMBER: 0000356171-99-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRICO BANCSHARES / CENTRAL INDEX KEY: 0000356171 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 942792841 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-10661 FILM NUMBER: 99598039 BUSINESS ADDRESS: STREET 1: TRI COUNTIES BANK ADMINISTRATION STREET 2: 40 PHILADELPHIA DRIVE CITY: CHICO STATE: CA ZIP: 95973 BUSINESS PHONE: 9168980300 MAIL ADDRESS: STREET 1: TRI COUNTIES BANK ADMINISTRATION STREET 2: 40 PHILADELPHIA DRIVE CITY: CHICO STATE: CA ZIP: 95973 10-Q 1 10-Q 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, 1999 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 April 20, 1999: 7,122,747
TRICO BANCSHARES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands) March 31, December 31, 1999 1998 ------------------- ------------------ Assets: Cash and due from banks $ 35,235 $ 50,483 Securities available-for-sale 262,224 279,676 Loans, net of allowance for loan losses of $8,986 and $8,206, respectively 539,565 524,227 Premises and equipment, net 16,133 16,088 Other real estate owned 1,016 1,412 Accrued interest receivable 5,340 5,821 Other assets 25,459 26,892 ------------------- ------------------ Total assets $ 884,972 $ 904,599 =================== ================== Liabilities: Deposits: Noninterest-bearing demand $ 136,900 $ 148,840 Interest-bearing demand 148,802 149,698 Savings 226,315 220,810 Time certificates 242,279 249,825 ------------------- ------------------ Total deposits 754,296 769,173 Federal funds purchased 14,000 9,400 Accrued interest payable and other liabilities 12,652 11,473 Long term borrowings 35,520 37,924 ------------------- ------------------ Total liabilities 811,868 832,570 Shareholders' equity: Common stock 49,222 48,838 Retained earnings 23,725 22,257 Accumulated other comprehensive income 157 934 ------------------- ------------------ Total shareholders' equity 73,104 72,029 ------------------- ------------------ Total liabilities and shareholders' equity $ 884,972 $ 904,599 =================== ==================
TRICO BANCSHARES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands except earnings per common share) For the three months ended March 31, 1999 1998 Interest income: Interest and fees on loans $ 12,384 $ 11,321 Interest on investment securities-taxable 3,405 3,630 Interest on investment securities-tax exempt 548 248 Interest on federal funds sold 8 66 ------------- ------------- Total interest income 16,345 15,265 ------------- ------------- Interest expense: Interest on deposits 5,109 5,712 Interest on federal funds purchased 201 4 Interest on repurchase agreements 7 53 Interest on other borrowings 521 169 ------------- ------------- Total interest expense 5,838 5,938 ------------- ------------- Net interest income 10,507 9,327 Provision for loan losses 840 825 ------------- ------------- Net interest income after provision for loan losses 9,667 8,502 Noninterest income: Service charges and fees 1,707 1,882 Other income 1,255 1,124 ------------- ------------- Total noninterest income 2,962 3,006 ------------- ------------- Noninterest expenses: Salaries and related expenses 4,433 4,187 Other, net 4,053 4,200 ------------- ------------- Total noninterest expenses 8,486 8,387 ------------- ------------- Net income before income taxes 4,143 3,121 Income taxes 1,509 1,191 ------------- ------------- Net income $ 2,634 $ 1,930 ============= ============= Basic earnings per common share $ 0.37 $ 0.28 ============= ============= Diluted earnings per common share $ 0.36 $ 0.27 ============= =============
TRICO BANCSHARES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) (in thousands, except number of shares) Common stock Accumulated -------------------------- Other Number Retained Comprehensive Comprehensive of shares Amount earnings Income Total Income -------------------------------------------------------------------------------------- Balance, December 31, 1998 7,050,990 $48,838 $22,257 $934 $72,029 Exercise of Common Stock options 72,550 365 $365 Repurchase of Common Stock (3,093) (22) (27) ($49) Common stock cash dividends (1,139) ($1,139) Stock option amortization 41 $41 Comprehensive income: Net income 2,634 $2,634 $2,634 Other comprehensive income: Change in unrealized gain on securities, net of tax and reclassification adjustment (777) ($777) ($777) ----------------- Comprehensive income $1,857 -------------------------------------------------------------------------------------- Balance, March 31, 1999 7,120,447 $49,222 $23,725 $157 $73,104 ---------------------------------------------------------------------
TRICO BANCSHARES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the three months ended March 31, 1999 1998 ---------------- -------------- Operating activities: Net income $2,634 $1,930 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 840 825 Provision for losses on other real estate owned - 38 Depreciation and amortization 647 628 Amortization of intangible assets 284 335 Accretion and amortization of investment securities discounts and premiums, net 181 (162) Deferred income taxes (80) (36) Investment security gains, net (9) (80) Gain on sale of OREO (14) (25) Gain on sale of loans (358) (215) (Gain) loss on sale of fixed assets (7) 38 Amortization of stock options 41 41 Decrease in interest receivable 481 205 Increase (decrease) in interest payable (67) 54 Decrease in other assets and liabilities 3,025 2,274 ---------------- -------------- Net cash provided by operating activities 7,598 5,850 ---------------- -------------- Investing activities: Proceeds from maturities of securities held-to-maturity - 4,191 Proceeds from maturities of securities available-for-sale 34,883 53,091 Proceeds from sales of securities available-for-sale 9,187 15,079 Purchases of securities available-for-sale (28,018) (80,298) Proceeds from sale of fixed asset 27 173 Net increase in loans (16,000) (18,049) Purchases of premises and equipment (406) (982) Proceeds from sale of OREO 185 882 Purchases and additions to real estate properties - (21) ---------------- -------------- Net cash used by investing activities (142) (25,934) ---------------- -------------- Financing activities: Net increase (decrease) in deposits (14,877) 4,911 Net increase (decrease) in Fed funds purchased (4,600) (15,300) Net increase (decrease) in repurchase agreements - 3,300 Borrowings under long-term debt agreements 1,000 - Payments of principal on long-term debt agreements (3,404) (4) Repurchase of common stock (49) - Cash dividends (1,139) (746) Exercise of common stock options 365 19 ---------------- -------------- Net cash used by financing activities (22,704) (7,820) ---------------- -------------- Increase (decrease) in cash and cash equivalents (15,248) (27,904) Cash and cash equivalents at beginning of period 50,483 63,476 ---------------- -------------- Cash and cash equivalents at end of period $35,235 $35,572 ---------------- -------------- Supplemental information Cash paid for taxes $50 $280 Cash paid for interest expense $5,905 $5,884
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, 1999 and 1998 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, 1998. Note B - 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): Three Months Ended March 31, 1999 Weighted Average Per-Share Income Shares Amount Basic Earnings per Share Net income available to common shareholders $ 2,634 7,105,437 $ 0.37 Common stock options outstanding -- 191,889 Diluted Earnings per Share Net income available to common shareholders $ 2,634 7,297,326 $ 0.36 ======= ========= Three Months Ended March 31, 1998 Weighted Average Per-Share Income Shares Amount Basic Earnings per Share Net income available to common shareholders $ 1,930 6,988,544 $ 0.28 Common stock options outstanding -- 288,943 Diluted Earnings per Share Net income available to common shareholders $ 1,930 7,277,487 $ 0.27 ======= ========= 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 $2,634,000 for the three months ended March 31, 1999. The quarterly earnings represented a 36.5% increase over the $1,930,000 reported for the three months ended March 31, 1998. Diluted earnings per share were $0.36 versus $0.27. First quarter 1999 pretax earnings increased $1,022,000 to $4,143,000. Net interest income reflected growth of 12.7% to $10,507,000. The interest income component was up $1,080,000 (7.1%) due to higher quarter over quarter volume of both loans and securities. The average balance of loans was up $80,629,000 (17.8%) to $534,161,000 while the average balance of securities was up $6,449,000 (2.4%) to $273,628,000 in 1999. The average yield on loans was down 71 basis points to 9.27% while the average yield on securities was up 20 basis points to 6.20% in 1999. The average balance of interest earning assets increased $83,355,000 (11.5%) to $808,523,000 while the average yield on interest earning assets decreased to 8.23% in the first quarter of 1999 versus 8.49% in the first quarter of 1998. Interest expense decreased $100,000 (1.7%) which was due to a 35 basis point decrease in the average rate paid on interest bearing liabilities to 3.49% offset by an 8.3% increase in the volume of interest bearing liabilities to $669,109,000 in 1999. Net interest margin was 5.34% for the first quarter of 1999 versus 5.22% in the prior year. Provision for loan losses for the first quarter of 1999 was $840,000 versus $825,000 in the same quarter in 1998. Net loan charge offs in the first quarter of 1999 were $60,000 compared to $500,000 in the same period of 1998. Noninterest income in the first quarter of 1999 was $2,962,000 versus $3,006,000 in the same period of 1998. The 1998 results included $129,000 of fee income related to the Bank's credit card portfolio, which was sold in May 1998. Commission income from the sale of investment products was $520,000 in the first quarter of 1999 versus $458,000 in 1998. For the three months ended March 31, 1999, gain on sale of loans and investments were $358,000 and $9,000, respectively, compared to $215,000 and $80,000, respectively, in 1998. Excluding credit card fee income, investment commission income, and gain on sale of loans and investments, noninterest income decreased $49,000 to $2,075,000 in the first quarter of 1999. Most of this decrease was due to the elimination of certain deposit products, which also resulted in offsetting reductions in related noninterest expenses. Noninterest expense increased $99,000 (1.2%) to $8,486,000 in the first quarter 1999 versus 1998. Salary and benefit expense increased $246,000 (5.9%) on a quarter over quarter basis to $4,433,000. The salary expense was higher due to increased commissions paid on loan and investment sales and normal salary progression. Other noninterest expenses decreased $147,000 (3.5%) to $4,053,000 in the first quarter of 1999. A recovery of $8,000 of expenses related to loan collections and other real estate owned in the first quarter of 1999 compared to expenses of $130,000 in the same period of 1998 accounted for $138,000 of the decrease in other noninterest expenses. Assets of the Company totaled $884,972,000 at March 31, 1999 which was a decrease of $19,627,000 from December 31, 1998 balances and a $62,550,000 increase from March 31, 1998 ending balances. For the first quarter of 1999 the Company had an annualized return on assets of 1.19% and a return on equity of 14.37% versus 0.96% and 11.66% in 1998. TriCo Bancshares ended the quarter with a Tier 1 capital ratio of 10.7% and a total risk-based capital ratio of 12.0%. The following table provides a summary of the major elements of income and expense for the first quarter of 1999 compared with the first quarter of 1998. TRICO BANCSHARES CONDENSED COMPARATIVE INCOME STATEMENT (in thousands, except earnings per common share) Three months ended March 31, Percentage 1999 1998 Change (in thousands, except increase earnings per share) (decrease) Interest income $ 16,630 $ 15,394 8.0% Interest expense 5,838 5,938 -1.7% -------------- -------------- Net interest income 10,792 9,456 14.1% Provision for loan losses 840 825 1.8% -------------- -------------- Net interest income after provision for loan losses 9,952 8,631 15.3% Noninterest income 2,962 3,006 -1.5% Noninterest expenses 8,486 8,387 1.2% -------------- -------------- Net income before income taxes 4,428 3,250 36.2% Income taxes 1,509 1,191 26.7% Tax equivalent adjustment1 285 129 121.0% -------------- -------------- Net income $ 2,634 $ 1,930 36.5% ============== ============== Diluted earnings per common share2 $0.36 $0.27 33.3% 1 Interest on tax-free securities is reported on a tax equivalent basis of 1.52 for March 31, 1999 and 1998. 2 Calculated and restated to reflect the Company's 3-for-2 common stock split effected October 30, 1998. 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, 1999, interest income increased $1,236,000 or 8.0% over the same period in 1998. The average balance of total earning assets was higher by $83,355,000 (11.5%). The average balance of loans and securities outstanding increased $80,629,000 (17.8%) and $6,449,000 (2.4%), respectively, while Federal Funds sold decreased $3,723,000 (83.5%). The loan and securities volume increases accounted for additional interest income of $2,013,000 and $97,000, respectively. The decrease in the average balance of Federal Funds sold resulted in a reduction in interest income of $55,000. The average yields on loans and Federal Funds sold were lower by 71 and 156 basis points, respectively, and reduced interest income for the quarter by $953,000. The average yield on securities was higher by 20 basis points increasing interest income for the quarter by $134,000. The overall yield on earning assets fell 26 basis points to 8.23%. For the first quarter of 1999, interest expense decreased by $100,000 or 1.7% over the year earlier period. Average balances of demand deposits, savings deposits, and borrowings increased $11,697,000 (8.8%), $7,317,000 (3.4%), and $39,201,00 (254.6%) respectively. The average balance of time deposits was $7,098,000 (2.8%) lower during the first quarter of 1999 versus the year earlier period. For the first quarter of 1999, the average balance of total interest bearing liabilities increased $51,117,000 (8.3%) over the year earlier period increasing interest expense by $645,000. The overall average rate on earning liabilities fell 35 basis points to 3.49%, and reduced interest expense by $745,000. The combined effect of the increase in interest income and the decrease in interest expense for the first quarter of 1999 versus 1998 resulted in an increase of $1,336,000 or 14.1% in net interest income. Net interest margin was up 12 basis points from 5.22% to 5.34%. The average balance of noninterest bearing deposits was $22,777,000 (20.8%) higher in the first quarter of 1999 versus the first quarter of 1998. 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, 1999 versus the same period in 1998.
TRICO BANCSHARES ANALYSIS OF CHANGE IN NET INTEREST MARGIN ON EARNING ASSETS (in thousands) Three Months Ended March 31, 1999 March 31, 1998 -------------- -------------- Average Income/ Yield/ Average Income/ Yield/ Balance1 Expense Rate Balance1 Expense Rate Assets Earning assets Loan 2,3 $ 534,161 $ 12,384 9.27% $ 453,532 $ 11,321 9.98% Securities 273,628 4,238 6.20% 267,179 4,007 6.00% Federal funds sold 734 8 4.36% 4,457 66 5.92% ------------- ------------- ----------- ------------- ------------ ----------- Total earning assets 808,523 16,630 8.23% 725,168 15,394 8.49% ------------- ------------ Cash and due from bank 35,592 32,670 Premises and equipment 16,107 18,985 Other assets,net 35,301 34,419 Less: allowance for loan losses (8,471) (6,621) ------------- ------------- Total $ 887,052 $ 804,621 ============= ============= Liabilities and shareholders' equity Interest-bearing Demand deposits $ 145,307 564 1.55% $ 133,610 748 2.24% Savings deposits 224,501 1,679 2.99% 217,184 1,648 3.04% Time deposits 244,705 2,866 4.68% 251,803 3,316 5.27% Fed funds purchased 16,280 201 4.94% 235 4 6.81% Repurchase agreements 555 7 5.05% 3,722 53 5.70% Long-term debt 37,761 521 5.52% 11,438 169 5.91% ------------- ------------- ----------- ------------- ------------ ----------- Total interest-bearing liabilities 669,109 5,838 3.49% 617,992 5,938 3.84% ------------- ------------ Noninterest-bearing deposits 132,358 109,581 Other liabilities 12,242 10,845 Shareholders' equity 73,343 66,203 ------------- ------------- Total liabilities and shareholders' equity $ 887,052 $ 804,621 ============= ============= Net interest rate spread5 4.74% 4.65% Net interest income/net $ 10,792 $ 9,456 ============= ============ interest margin6 5.34% 5.22% ============= ============ 1Average balances are computed principally on the basis of daily balances. 2Nonaccrual loans are included. 3Interest income on loans includes fees on loans of $737,000 in 1999 and $627,000 in 1998. 4Interest income is stated on a tax equivalent basis of 1.52 at March 31, 1999 and 1998. 5Net interest rate spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. 6Net interest margin is computed by dividing net interest income by total average earning assets.
TRICO BANCSHARES ANALYSIS OF VOLUME AND RATE CHANGES ON NET INTEREST INCOME AND EXPENSE (in thousand) For the three months ended March 31, 1999 over 1998 Yield/ Volume Rate4 Total -------- ------- -------- Increase (decrease) in interest income: Loans 1,2 $2,013 $(950) $1,063 Investment securities3 97 134 231 Federal funds sold (55) (3) (58) -------- ------- -------- Total 2,054 (819) 1,236 -------- ------- -------- Increase (decrease) in interest expense: Demand deposits (interest-bearing) 65 (249) (184) Savings deposits 56 (25) 31 Time deposits (93) (357) (450) Federal funds purchased 273 (76) 197 Repurchase agreements (45) (1) (46) Long-term debt 389 (37) 352 -------- ------- -------- Total 645 (745) (100) -------- ------- -------- Increase (decrease) in net interest income $1,409 $ (74) $1,336 ======== ======= ======== 1Nonaccrual loans are included. 2Interest income on loans includes fee income on loans of $737,000 in 1999 and $627,000 in 1998. 3Interest income is stated on a tax equivalent basis of 1.52 for March 31, 1999 and 1998. 4The rate/volume variance has been included in the rate variance. Provision for Loan Losses The Bank provided $840,000 for loan losses in the first quarter of 1999 versus $825,000 in 1998. Net charge-offs for all loans in the first quarter of 1999 totaled $60,000 versus $500,000 in the year earlier period. Noninterest Income Noninterest income in the first quarter of 1999 was $2,962,000 versus $3,006,000 in the same period of 1998. The 1998 results included $129,000 of fee income related to the Bank's credit card portfolio, which was sold in May 1998. Commission income from the sale of investment products was $520,000 in the first quarter of 1999 versus $458,000 in 1998. For the three months ended March 31, 1999, gain on sale of loans and investments were $358,000 and $9,000, respectively, compared to $215,000 and $80,000, respectively, in 1998. Excluding credit card fee income, investment commission income, and gain on sale of loans and investments, noninterest income decreased $49,000 to $2,075,000 in the first quarter of 1999. Most of this decrease was due to the elimination of certain deposit products, which also resulted in offsetting reductions in related noninterest expenses. Noninterest Expense Noninterest expense increased $99,000 (1.2%) to $8,486,000 in the first quarter 1999 versus 1998. Salary and benefit expense increased $246,000 (5.9%) on a quarter over quarter basis to $4,433,000. The salary expense was higher due to increased commissions paid on loan and investment sales and normal salary progression. Other noninterest expenses decreased $147,000 (3.5%) to $4,053,000 in the first quarter of 1999. A recovery of $8,000 of expenses related to loan collections and other real estate owned in the first quarter of 1999 compared to expenses of $130,000 in the same period of 1998 accounted for $138,000 of the decrease in other noninterest expenses. Provision for Income Taxes The effective tax rate for the three months ended March 31, 1999 was 36.4% and reflects a decrease from 38.2% in the year earlier period. The decrease in tax rate is mainly the result of higher nontaxable earnings from municipal bonds. Loans In the first quarter of 1999, loan balances increased $16,118,000 or 3.0% from the year end balances. Both commercial and real estate loans increased while there was a slight decrease in consumer loans. At March 31, 1999 loans totaled $548,551,000 which was a $80,396,000 (17.2%) increase from the year earlier totals. Securities At March 31, 1999, securities available-for-sale had a fair value of $262,224,000 and an amortized cost of $261,976,000. This portfolio contained mortgage-backed securities with an amortized cost of $166,281,000 of which $29,959,000 were CMO's. At March 31, 1999, the Bank had no securities classified as held-to-maturity. Nonperforming Loans As shown in the following table, total nonperforming assets have decreased 13.7% to $2,656,000 in the first three months of 1999. Non performing assets represent only 0.30% 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 continues to make a concerted effort to work problem and potential problem loans to reduce risk of loss. March 31, December 31, 1999 1998 Nonaccrual loans $ 989 $ 1,045 Accruing loans past due 90 days or more 651 620 Restructured loans (in compliance with modified terms) 0 0 ----------- ----------- Total nonperforming loans 1,640 1,665 Other real estate owned 1,016 1,412 ----------- ----------- Total nonperforming assets $ 2,656 $ 3,077 =========== =========== Nonperforming loans to total loans 0.30% 0.31% Allowance for loan losses to nonperforming loans 548% 493% Nonperforming assets to total assets 0.30% 0.34% Allowance for loan losses to nonperforming assets 338% 267% 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. March 31, March 31, 1999 1998 (in thousands) Balance, beginning of period $ 8,206 $ 6,459 Provision charged to operations 840 825 Loans charged off (100) (556) Recoveries of loans previously charged off 40 56 ============ ============ Balance, end of period $ 8,986 $ 6,784 ============ ============ Ending loan portfolio $ 548,551 $ 468,155 ============ ============ Allowance to loans as a percentage of ending loan portfolio 1.64% 1.45% ============ ============
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 March 31, 1999: Total Capital to Risk Weighted Assets $73,332 11.96% =>$49,054 =>8.0% =>$61,317 =>10.0% Tier I Capital to Risk Weighted Assets $65,667 10.71% =>$24,527 =>4.0% =>$36,791 => 6.0%
Item 3. MARKET RISK MANAGEMENT There have not been any significant changes in the risk management profile of the Bank since December 31, 1998. 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 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TRICO BANCSHARES Date April 20, 1999 /s/ Robert H. Steveson ------------------ ------------------------------------- Robert H. Steveson President and Chief Executive Officer Date April 20, 1999 /s/ Thomas J. Reddish ------------------ ------------------------------------- Thomas J. Reddish Vice President and Controller EX-27 2 EX-27
9 0000356171 TRICO BANCSHARES 1,000 3-MOS DEC-31-1999 MAR-31-1999 35,235 0 0 0 0 262,224 262,472 548,551 8,986 884,972 754,296 9,400 12,652 35,520 0 0 49,222 23,882 884,972 12,384 3,953 8 16,345 5,109 5,838 10,507 840 9 8,486 4,143 4,143 0 0 2,634 0.37 0.36 8.23 989 651 0 0 8,206 100 40 8,986 8,986 0 0
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