-----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, GOjDfN09rhHP0Xt65i6VOUfMxcHW02v6Gu1OPxhtjR83JVPzmhFaBGl5UdE7z6Br iC4/iUfFC2JpywWYVEwozQ== 0000356171-05-000013.txt : 20051123 0000356171-05-000013.hdr.sgml : 20051123 20051123172828 ACCESSION NUMBER: 0000356171-05-000013 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051123 DATE AS OF CHANGE: 20051123 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-10661 FILM NUMBER: 051226009 BUSINESS ADDRESS: STREET 1: TRICO BANCSHARES STREET 2: 63 CONSTITUTION DRIVE CITY: CHICO STATE: CA ZIP: 95973 BUSINESS PHONE: 5308980300 MAIL ADDRESS: STREET 1: TRICO BANCSHARES STREET 2: 63 CONSTITUTION DRIVE CITY: CHICO STATE: CA ZIP: 95973 10-Q/A 1 tcb10qa_3q05.txt TCBK - FORM 10-Q/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q/A (Amendment No. 1) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended September 30, 2005 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) 530/898-0300 (Registrant's telephone number, including area code) - -------------------------------------------------------------------------------- (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 ----- ----- Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No ----- ----- Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X ----- ----- 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 October 25, 2005: 15,717,035 -1- EXPLANATORY NOTE This Amendment No. 1 on Form 10-Q/A is being filed to amend Part I, Item 1, and Part II, Item 6, of the Registrant's report on Form 10-Q for the quarter ended September 30, 2005, filed on November 3, 2005. This Amendment No. 1 does not otherwise alter the disclosures set forth in the original Form 10-Q. This Amendment No. 1 is effective for all purposes as of the date of the filing of the original Form 10-Q and except as noted above, we have not undertaken herein to amend, supplement or update any information contained in the original Form 10-Q to give effect to subsequent events. This Amendment No. 1 is being filed to correct two typographical errors in the Registrant's Consolidated Statements of Income and Comprehensive Income. In the original Form 10-Q the net interest income after provision for loan losses for the nine months ended September 30, 2005 and 2004 were reported as $5,843,000 and $9,812,000, respectively. The correct amounts as reported in this Amendment No. 1 are $55,843,000 and $49,812,000, respectively. This Amendment No. 1 has no effect on net income, total assets, total liabilities or total equity as previously reported. -2-
Part I, Item 1 of the original Form 10-Q is hereby amended and restated in its entirety as follows: PART I - FINANCIAL INFORMATION Item 1. Financial Statements TRICO BANCSHARES CONSOLIDATED BALANCE SHEETS (In thousands, except share data; unaudited) At September 30, At December 31, 2005 2004 2004 ------------------------------- ----------------- Assets: Cash and due from banks $85,413 $64,318 $70,037 Federal funds sold 218 - - ------------------------------- ----------------- Cash and cash equivalents 85,631 64,318 70,037 Securities available for sale 271,134 286,067 286,013 Federal Home Loan Bank stock, at cost 7,516 6,719 6,781 Loans, net of allowance for loan losses of $15,796, $15,167 and $14,525 1,312,294 1,111,256 1,158,442 Foreclosed assets, net of allowance for losses of $180, $180 and $180 - - - Premises and equipment, net 21,223 20,118 19,853 Cash value of life insurance 41,519 40,196 40,479 Accrued interest receivable 7,080 6,177 6,473 Goodwill 15,519 15,519 15,519 Other intangible assets 4,373 5,070 5,408 Other assets 20,567 19,106 18,501 ------------------------------- ----------------- Total Assets $1,786,856 $1,574,546 $1,627,506 =============================== ================= Liabilities and Shareholders' Equity: Liabilities: Deposits: Noninterest-bearing demand $346,456 $298,319 $311,275 Interest-bearing 1,091,843 993,822 1,037,558 ------------------------------- ----------------- Total deposits 1,438,299 1,292,141 1,348,833 Federal funds purchased 103,200 57,300 46,400 Accrued interest payable 3,960 2,706 3,281 Reserve for unfunded commitments 1,674 1,049 1,532 Other liabilities 20,452 17,265 19,938 Other borrowings 31,711 27,159 28,152 Junior subordinated debt 41,238 41,238 41,238 ------------------------------- ----------------- Total Liabilities 1,640,534 1,438,858 1,489,374 ------------------------------- ----------------- Commitments and contingencies Shareholders' Equity: Common stock, no par value: 50,000,000 shares authorized; issued and outstanding: 15,728,106 at September 30, 2005 71,412 15,697,817 at September 30, 2004 70,375 15,723,317 at December 31, 2004 70,699 Retained earnings 77,448 64,158 67,785 Accumulated other comprehensive (loss) income, net (2,538) 1,155 (352) ------------------------------- ----------------- Total Shareholders' Equity 146,322 135,688 138,132 ------------------------------- ----------------- Total Liabilities and Shareholders' Equity $1,786,856 $1,574,546 $1,627,506 =============================== =================
See accompanying notes to unaudited condensed consolidated financial statements. -3-
TRICO BANCSHARES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except per share data; unaudited) Three months ended September 30, Nine months ended September 30, 2005 2004 2005 2004 ---------------------------------------------------------------- Interest and dividend income: Loans, including fees $22,254 $18,867 $62,482 $53,157 Debt securities: Taxable 2,528 2,564 7,865 7,829 Tax exempt 468 432 1,297 1,312 Dividends 80 87 218 181 Federal funds sold 4 1 18 12 ---------------------------------------------------------------- Total interest income 25,334 21,951 71,880 62,491 ---------------------------------------------------------------- Interest expense: Deposits 3,824 2,497 10,526 7,333 Federal funds purchased 696 221 1,117 405 Other borrowings 351 327 1,007 967 Junior subordinated debt 648 449 1,779 890 ---------------------------------------------------------------- Total interest expense 5,519 3,494 14,429 9,595 ---------------------------------------------------------------- Net interest income 19,815 18,457 57,451 52,896 ---------------------------------------------------------------- Provision for loan losses 947 1,166 1,608 3,084 ---------------------------------------------------------------- Net interest income after provision for loan losses 18,868 17,291 55,843 49,812 ---------------------------------------------------------------- Noninterest income: Service charges and fees 4,795 4,436 13,362 13,427 Gain on sale of loans 474 258 1,195 1,316 Commissions on sale of non-deposit investment products 535 578 1,727 1,707 Increase in cash value of life insurance 420 352 1,040 1,216 Other 408 737 945 1,392 ---------------------------------------------------------------- Total noninterest income 6,632 6,361 18,269 19,058 ---------------------------------------------------------------- Noninterest expense: Salaries and related benefits 8,584 8,319 25,361 24,926 Other 7,096 6,904 20,949 20,087 Total noninterest expense 15,680 15,223 46,310 45,013 Income before income taxes 9,820 8,429 27,802 23,857 Provision for income taxes 3,859 3,226 10,865 9,030 ---------------------------------------------------------------- Net income 5,961 5,203 16,937 14,827 ---------------------------------------------------------------- Other comprehensive (loss) income: Change in unrealized (loss) gain on securities available for sale, net (1,070) 3,139 (2,186) (659) ---------------------------------------------------------------- Comprehensive income $4,891 $8,342 $14,751 $14,168 ================================================================ Average shares outstanding 15,687,547 15,672,300 15,706,380 15,642,799 Diluted average shares outstanding 16,330,035 16,254,005 16,328,489 16,227,259 Per share data: Basic earnings $0.38 $0.33 $1.08 $0.95 Diluted earnings $0.37 $0.32 $1.04 $0.91 Dividends paid $0.11 $0.11 $0.33 $0.32
See accompanying notes to unaudited condensed consolidated financial statements. -4-
TRICO BANCSHARES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (In thousands, except per share data; unaudited) Accumulated Shares of Other Common Common Retained Comprehensive Stock Stock Earnings (Loss) Income Total ------------------------------------------------------------- Balance at December 31, 2003 15,668,248 $69,767 $56,379 $1,814 $127,960 Comprehensive income: ---------- Net income 14,827 14,827 Change in net unrealized gain on Securities available for sale, net (659) (659) ---------- Total comprehensive income 14,168 Stock options exercised 197,169 1,133 1,133 Tax benefit of stock options exercised 221 221 Repurchase of common stock (167,600) (746) (2,047) (2,793) Dividends paid ($0.32 per share) (5,001) (5,001) ------------------------------------------------------------- Balance at September 30, 2004 15,697,817 $70,375 $64,158 $1,155 $135,688 ============================================================= Balance at December 31, 2004 15,723,317 $70,699 $67,785 ($352) $138,132 Comprehensive income: ---------- Net income 16,937 16,937 Change in net unrealized gain on Securities available for sale, net (2,186) (2,186) ---------- Total comprehensive income 14,751 Stock options exercised 133,289 949 949 Tax benefit of stock options exercised 342 342 Repurchase of common stock (128,500) (578) (2,085) (2,663) Dividends paid ($0.33 per share) (5,189) (5,189) ------------------------------------------------------------- Balance at September 30, 2005 15,728,106 $71,412 $77,448 ($2,538) $146,322 =============================================================
See accompanying notes to unaudited condensed consolidated financial statements. -5-
TRICO BANCSHARES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands; unaudited) For the nine months ended September 30, 2005 2004 --------------------------------------- Operating activities: Net income $16,937 $14,827 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property and equipment, and amortization 2,818 2,431 Amortization of intangible assets 1,035 1,016 Provision for loan losses 1,608 3,084 Amortization of investment securities premium, net 973 1,448 Originations of loans for resale (59,861) (70,670) Proceeds from sale of loans originated for resale 60,396 71,352 Gain on sale of loans (1,195) (1,316) Amortization of mortgage servicing rights 490 562 Recovery of mortgage servicing rights valuation allowance - (600) Gain on sale of other real estate owned - (566) Loss (gain) on sale of fixed assets 95 (20) Increase in cash value of life insurance (1,040) (1,216) Change in: Interest receivable (607) (150) Interest payable 679 68 Other assets and liabilities, net 234 (2,002) --------------------------------------- Net cash provided by operating activities 22,562 18,248 --------------------------------------- Investing activities: Proceeds from maturities of securities available-for-sale 45,147 62,476 Purchases of securities available-for-sale (35,013) (39,580) Purchases of Federal Home Loan Bank stock (735) (1,935) Loan originations and principal collections, net (155,460) (145,989) Proceeds from sale of premises and equipment 24 541 Purchases of premises and equipment (3,853) (3,210) Proceeds from sale of other real estate owned - 1,490 --------------------------------------- Net cash used by investing activities (149,890) (126,207) --------------------------------------- Financing activities: Net increase in deposits 89,466 55,318 Net increase in Federal funds purchased 56,800 17,800 Issuance of junior subordinated debt - 20,619 Payments of principal on long-term other borrowings (38) (32) Net change in short-term other borrowings 3,597 4,304 Repurchase of common stock (2,663) (2,793) Dividends paid (5,189) (5,001) Exercise of stock options 949 1,133 --------------------------------------- Net cash provided by financing activities 142,922 91,348 --------------------------------------- Net change in cash and cash equivalents 15,594 (16,611) --------------------------------------- Cash and cash equivalents and beginning of period 70,037 80,929 --------------------------------------- Cash and cash equivalents at end of period $85,631 $64,318 ======================================= Supplemental disclosure of noncash activities: Unrealized loss on securities available for sale ($3,772) ($1,061) Income tax benefit from stock option exercises $342 $221 Supplemental disclosure of cash flow activity: Cash paid for interest expense $13,750 $9,527 Cash paid for income taxes $11,030 $11,030
See accompanying notes to unaudited condensed consolidated financial statements -6- NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1: General Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. The results of operations reflect interim adjustments, all of which are of a normal recurring nature and which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. The interim results for the three and nine month periods ended September 30, 2005 and 2004 are not necessarily indicative of the results expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes as well as other information included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004. Principles of Consolidation The consolidated financial statements include the accounts of the Company, and its wholly-owned subsidiary, Tri Counties Bank (the "Bank"). All significant intercompany accounts and transactions have been eliminated in consolidation. Nature of Operations The Company operates 32 branch offices and 15 in-store branch offices in the California counties of Butte, Contra Costa, Del Norte, Fresno, Glenn, Kern, Lake, Lassen, Madera, Mendocino, Merced, Nevada, Placer, Sacramento, Shasta, Siskiyou, Stanislaus, Sutter, Tehama, Tulare, Yolo and Yuba. The Company's operating policy since its inception has emphasized retail banking. Most of the Company's customers are retail customers and small to medium sized businesses. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, the Company evaluates its estimates, including those related to the adequacy of the allowance for loan losses, investments, intangible assets, income taxes and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The allowance for loan losses, goodwill and other intangible assets, income taxes, and the valuation of mortgage servicing rights, are the only accounting estimates that materially affect the Company's consolidated financial statements. Significant Group Concentration of Credit Risk The Company grants agribusiness, commercial, consumer, and residential loans to customers located throughout the northern San Joaquin Valley, the Sacramento Valley and northern mountain regions of California. The Company has a diversified loan portfolio within the business segments located in this geographical area. Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks and federal funds sold. Investment Securities The Company classifies its debt and marketable equity securities into one of three categories: trading, available-for-sale or held-to-maturity. Trading securities are bought and held principally for the purpose of selling in the near term. Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. All other securities not included in trading or held-to-maturity are classified as available-for-sale. During the nine months ended September 30, 2005, and throughout 2004, the Company did not have any securities classified as either held-to-maturity or trading. -7- Available-for-sale securities are recorded at fair value. Unrealized gains and losses, net of the related tax effect, on available-for-sale securities are reported as a separate component of accumulated other comprehensive income (loss) in shareholders' equity until realized. Premiums and discounts are amortized or accreted over the life of the related investment security as an adjustment to yield using the effective interest method. Dividend and interest income are recognized when earned. Realized gains and losses for securities are included in earnings and are derived using the specific identification method for determining the cost of securities sold. Unrealized losses due to fluctuations in fair value of securities held to maturity or available for sale are recognized through earnings when it is determined that an other than temporary decline in value has occurred. Loans Held for Sale Loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by aggregate outstanding commitments from investors of current investor yield requirements. Net unrealized losses are recognized through a valuation allowance by charges to income. At September 30, 2005 and 2004, and December 31, 2004, the Company had no loans held for sale. Mortgage loans held for sale are generally sold with the mortgage servicing rights retained by the Company. The carrying value of mortgage loans sold is reduced by the cost allocated to the associated mortgage servicing rights. Gains or losses on sales of mortgage loans are recognized based on the difference between the selling price and the carrying value of the related mortgage loans sold. Loans Loans are reported at the principal amount outstanding, net of unearned income and the allowance for loan losses. Loan origination and commitment fees and certain direct loan origination costs are deferred, and the net amount is amortized as an adjustment of the related loan's yield over the estimated life of the loan. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Accrual of interest on loans is generally discontinued either when reasonable doubt exists as to the full, timely collection of interest or principal or when a loan becomes contractually past due by 90 days or more with respect to interest or principal. When loans are 90 days past due, but in Management's judgment are well secured and in the process of collection, they may be classified as accrual. When a loan is placed on nonaccrual status, all interest previously accrued but not collected is reversed. Income on such loans is then recognized only to the extent that cash is received and where the future collection of principal is probable. Interest accruals are resumed on such loans only when they are brought fully current with respect to interest and principal and when, in the judgment of Management, the loans are estimated to be fully collectible as to both principal and interest. All impaired loans are classified as nonaccrual loans. Reserve for Unfunded Commitments The reserve for unfunded commitments is established through a provision for losses - unfunded commitments charged to noninterest expense. The reserve for unfunded commitments is an amount that Management believes will be adequate to absorb probable losses inherent in existing commitments, including unused portions of revolving lines of credits and other loans, standby letters of credits, and unused deposit account overdraft privilege. The reserve for unfunded commitments is based on evaluations of the collectibility, and prior loss experience of unfunded commitments. The evaluations take into consideration such factors as changes in the nature and size of the loan portfolio, overall loan portfolio quality, loan concentrations, specific problem loans and related unfunded commitments, and current economic conditions that may affect the borrower's or depositor's ability to pay. Allowance for Loan Losses The allowance for loan losses is established through a provision for loan losses charged to expense. Loans and deposit related overdrafts are charged against the allowance for loan losses when Management believes that the collectibility of the principal is unlikely or, with respect to consumer installment loans, according to an established delinquency schedule. The allowance is an amount that Management believes will be adequate to absorb probable losses inherent in existing loans and leases, based on evaluations of the collectibility, impairment and prior loss experience of loans and leases. The evaluations take into consideration such factors as changes in the nature and size of the portfolio, overall portfolio quality, loan concentrations, specific problem loans, and current economic conditions that may affect the borrower's ability to pay. The Company defines a loan as impaired when it is probable the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan's original effective interest rate. As a practical expedient, impairment may be measured based on the loan's observable market price or the fair value of the collateral if the loan is collateral dependent. When the measure of the impaired loan is less than the recorded investment in the loan, the impairment is recorded through a valuation allowance. -8- Credit risk is inherent in the business of lending. As a result, the Company maintains an allowance for loan losses to absorb losses inherent in the Company's loan portfolio. This is maintained through periodic charges to earnings. These charges are shown in the Consolidated Income Statements as provision for loan losses. All specifically identifiable and quantifiable losses are immediately charged off against the allowance. However, for a variety of reasons, not all losses are immediately known to the Company and, of those that are known, the full extent of the loss may not be quantifiable at that point in time. The balance of the Company's allowance for loan losses is meant to be an estimate of these unknown but probable losses inherent in the portfolio. For purposes of this discussion, "loans" shall include all loans and lease contracts that are part of the Company's portfolio. The Company formally assesses the adequacy of the allowance on a quarterly basis. Determination of the adequacy is based on ongoing assessments of the probable risk in the outstanding loan portfolio, and to a lesser extent the Company's loan commitments. These assessments include the periodic re-grading of credits based on changes in their individual credit characteristics including delinquency, seasoning, recent financial performance of the borrower, economic factors, changes in the interest rate environment, growth of the portfolio as a whole or by segment, and other factors as warranted. Loans are initially graded when originated. They are re-graded as they are renewed, when there is a new loan to the same borrower, when identified facts demonstrate heightened risk of nonpayment, or if they become delinquent. Re-grading of larger problem loans occur at least quarterly. Confirmation of the quality of the grading process is obtained by independent credit reviews conducted by consultants specifically hired for this purpose and by various bank regulatory agencies. The Company's method for assessing the appropriateness of the allowance for loan losses and the reserve for unfunded commitments includes specific allowances for identified problem loans and leases as determined by SFAS 114, formula allowance factors for pools of credits, and allowances for changing environmental factors (e.g., interest rates, growth, economic conditions, etc.). Allowance factors for loan pools are based on the previous 5 years historical loss experience by product type. Allowances for specific loans are based on SFAS 114 analysis of individual credits. Allowances for changing environmental factors are Management's best estimate of the probable impact these changes have had on the loan portfolio as a whole. This process is explained in detail in the notes to the Company's Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2004. Based on the current conditions of the loan portfolio, Management believes that the allowance for loan losses and the reserve for unfunded commitments, which collectively stand at $17,470,000 at September 30, 2005, are adequate to absorb probable losses inherent in the Company's loan portfolio. No assurance can be given, however, that adverse economic conditions or other circumstances will not result in increased losses in the portfolio. -9- The following tables summarize the activity in the allowance for loan losses, reserve for unfunded commitments, and allowance for losses (which is comprised of the allowance for loan losses and the reserve for unfunded commitments) for the periods indicated (dollars in thousands):
Three months ended Nine months ended September 30, September 30, ---------------------------------------------------- 2005 2004 2005 2004 ---------------------------------------------------- Allowance for loan losses: Balance at beginning of period $14,892 $14,613 $14,525 $12,890 Provision for loan losses 947 1,166 1,608 3,084 Loans charged off (479) (687) (1,287) (1,053) Recoveries of previously charged-off loans 436 75 950 246 ---------------------------------------------------- Net charge-offs (43) (612) (337) (807) ---------------------------------------------------- Balance at end of period $15,796 $15,167 $15,796 $15,167 ==================================================== Reserve for unfunded commitments: Balance at beginning of period $1,671 $916 $1,532 $883 Provision for losses - Unfunded commitments 3 133 142 166 ---------------------------------------------------- Balance at end of period $1,674 $1,049 $1,674 $1,049 ==================================================== Balance at end of period: Allowance for loan losses $15,796 $15,167 Reserve for unfunded commitments 1,674 1,049 ------------------------ Allowance for losses $17,470 $16,216 ======================== As a percentage of total loans: Allowance for loan losses 1.19% 1.35% Reserve for unfunded commitments 0.13% 0.09% ------------------------ Allowance for losses 1.32% 1.44% ========================
Servicing Servicing assets are recognized as separate assets when rights are acquired through purchase or through sale of financial assets. Generally, purchased servicing rights are capitalized at the cost to acquire the rights. For sales of mortgage loans, a portion of the cost of originating the loan is allocated to the servicing right based on relative fair value. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, the custodial earnings rate, an inflation rate, ancillary income, prepayment speeds and default rates and losses. Capitalized servicing rights are reported in other assets and are amortized into non-interest income in proportion to, and over the period of, the estimated future servicing income of the underlying financial assets. Servicing assets are evaluated for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights into tranches based on predominant risk characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranche. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income. Servicing fee income is recorded for fees earned for servicing loans. The fees are based on a contractual percentage of the outstanding principal; or a fixed amount per loan and are recorded as income when earned. The amortization of mortgage servicing rights is netted against loan servicing fee income. -10- The following table summarizes the Company's mortgage servicing rights recorded in other assets as of September 30, 2005 and December 31, 2004. December 31, September 30, (Dollars in thousands) 2004 Additions Reductions 2005 ----------------------------------------------- Mortgage Servicing Rights $3,476 $659 ($490) $3,645 Valuation allowance - - - - ----------------------------------------------- Mortgage servicing rights, net of valuation allowance $3,476 $659 ($490) $3,645 =============================================== At September 30, 2005 and December 31, 2004, the Company serviced real estate mortgage loans for others of $369 million and $368 million, respectively. At September 30, 2005 and December 31, 2004, the fair value of the Company's mortgage servicing rights assets was $3,812,000 and $3,568,000, respectively. Off-Balance Sheet Credit Related Financial Instruments In the ordinary course of business, the Company has entered into commitments to extend credit, including commitments under credit card arrangements, commercial letters of credit, standby letters of credit, and deposit account overdraft privilege. Such financial instruments are recorded when they are funded. Premises and Equipment Land is carried at cost. Buildings and equipment, including those acquired under capital lease, are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expenses are computed using the straight-line method over the estimated useful lives of the related assets or lease terms. Asset lives range from 3-10 years for furniture and equipment and 15-40 years for land improvements and buildings. Foreclosed Assets Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. Subsequent to foreclosure, management periodically performs valuations and the assets are carried at the lower of carrying amount or fair value less cost to sell. Revenue and expenses from operations and changes in the valuation allowance are included in other noninterest expense. Goodwill and Other Intangible Assets Goodwill represents the excess of costs over fair value of assets of businesses acquired. The Company adopted the provisions of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standard No. 142, Goodwill and Other Intangible Assets (SFAS 142), as of January 1, 2002. Pursuant to SFAS 142, goodwill and other intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142. SFAS 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with FASB Statement of Financial Accounting Standard No. 144, Accounting for Impairment or Disposal of Long-Lived Assets (SFAS 144). As of the date of adoption, the Company had identifiable intangible assets consisting of core deposit premiums and minimum pension liability. Core deposit premiums are amortized using an accelerated method over a period of ten years. Intangible assets related to minimum pension liability are adjusted annually based upon actuarial estimates. The following table summarizes the Company's core deposit intangibles as of September 30, 2005 and December 31, 2004. December 31, September 30, (Dollar in Thousands) 2004 Additions Reductions 2005 ----------------------------------------------- Core deposit intangibles $13,643 - - $13,643 Accumulated amortization (9,201) - ($1,035) (10,236) ----------------------------------------------- Core deposit intangibles, net $4,442 - ($1,035) $3,407 =============================================== Core deposit intangibles are amortized over their expected useful lives. Such lives are periodically reassessed to determine if any amortization period adjustments are indicated. -11- The following table summarizes the Company's estimated core deposit intangible amortization for each of the five succeeding years from December 31, 2004: Estimated Core Deposit Intangible Amortization Years Ended (Dollar in thousands) ----------- ----------------------- 2005 $1,381 2006 1,395 2007 490 2008 523 2009 328 Thereafter 325 ------ $4,442 ====== The following table summarizes the Company's minimum pension liability intangible as of September 30, 2005 and December 31, 2004. December 31, September 30, (Dollar in Thousands) 2004 Additions Reductions 2005 ---------------------------------------------- Minimum pension liability intangible $966 - - $966 ============================================== Intangible assets related to minimum pension liability are adjusted annually based upon actuarial estimates. The following table summarizes the Company's goodwill intangible as of September 30, 2005 and December 31, 2004. December 31, September 30, (Dollar in Thousands) 2004 Additions Reductions 2005 ---------------------------------------------- Goodwill 15,519 - - 15,519 ============================================== Impairment of Long-Lived Assets and Goodwill Long-lived assets, such as property, plant, and equipment, and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities of a disposed group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet. On December 31 of each year, goodwill is tested for impairment, and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount exceeds the asset's fair value. This determination is made at the reporting unit level and consists of two steps. First, the Company determines the fair value of a reporting unit and compares it to its carrying amount. Second, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the reporting unit's goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. Income Taxes The Company's accounting for income taxes is based on an asset and liability approach. The Company recognizes the amount of taxes payable or refundable for the current year, and deferred tax assets and liabilities for the future tax consequences that have been recognized in its financial statements or tax returns. The measurement of tax assets and liabilities is based on the provisions of enacted tax laws. -12- Stock-Based Compensation The Company uses the intrinsic value method to account for its stock option plans (in accordance with the provisions of Accounting Principles Board Opinion No. 25). Under this method, compensation expense is recognized for awards of options to purchase shares of common stock to employees under compensatory plans only if the fair market value of the stock at the option grant date (or other measurement date, if later) is greater than the amount the employee must pay to acquire the stock. Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123) permits companies to continue using the intrinsic value method or to adopt a fair value based method to account for stock option plans. The fair value based method results in recognizing as expense over the vesting period the fair value of all stock-based awards on the date of grant. The Company has elected to continue to use the intrinsic value method (see Recent Accounting Pronouncements). Had compensation cost for the Company's option plans been determined in accordance with SFAS 123, the Company's net income and earnings per share would have been reduced to the pro forma amounts indicated below:
Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share amounts) 2005 2004 2005 2004 ---- ---- ---- ---- Net income As reported $5,961 $5,203 $16,937 $14,827 Pro forma $5,865 $5,101 $16,642 $14,458 Basic earnings per share As reported $0.38 $0.33 $1.08 $0.95 Pro forma $0.37 $0.33 $1.06 $0.92 Diluted earnings per share As reported $0.37 $0.32 $1.04 $0.91 Pro forma $0.36 $0.31 $1.02 $0.89 Stock-based employee compensation cost, net of related tax effects, included in net income As reported $0 $0 $0 $0 Pro forma $96 $102 $295 $369
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing. Earnings Per Share Basic earnings per share represents income available to common shareholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustments to income that would result from assumed issuance. Potential common shares that may be issued by the Company relate solely from outstanding stock options, and are determined using the treasury stock method. Earnings per share have been computed based on the following:
Three Months Nine Months Ended September 30, Ended September 30, (in thousands) 2005 2004 2005 2004 ------------------- ------------------- Net income $5,961 $5,203 $16,937 $14,827 Average number of common shares outstanding 15,688 15,672 15,706 15,643 Effect of dilutive stock options 642 582 622 584 ------------------- ------------------- Average number of common shares outstanding used to calculate diluted earnings per share 16,330 16,254 16,328 16,227 =================== ===================
-13- Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. The components of other comprehensive income (loss) and related tax effects are as follows:
Three months ended September 30, Nine Months Ended September 30, -------------------------------- ------------------------------- 2005 2004 2005 2004 -------------------------------- ------------------------------- (in thousands) Unrealized holding gains (losses) on available-for-sale securities ($1,846) $5,416 ($3,772) ($1,061) Tax effect 776 (2,277) 1,586 402 -------------------------------- ------------------------------- Unrealized holding gains (losses) on available-for-sale securities, net of tax ($1,070) 3,139 ($2,186) ($659) ================================ ===============================
The components of accumulated other comprehensive loss, included in shareholders' equity, are as follows: September 30, December 31, 2005 2004 ----------------------------- (in thousands) Net unrealized (losses) gains on available-for-sale securities ($2,765) $1,007 Tax effect 1,162 (424) ----------------------------- Unrealized holding (losses) gains on available-for-sale securities, net of tax (1,603) 583 ----------------------------- Minimum pension liability (1,559) (1,559) Tax effect 624 624 ----------------------------- Minimum pension liability, net of tax (935) (935) ----------------------------- Accumulated other comprehensive loss ($2,538) ($352) ============================= Retirement Plans The Company has supplemental retirement plans covering directors and key executives. These plans are non-qualified defined benefit plans and are unsecured and unfunded. The Company has purchased insurance on the lives of the participants and intends to use the cash values of these policies to pay the retirement obligations. The following table sets forth the net periodic benefit cost recognized for the plans:
Three Months Nine Months Ended September 30, Ended September 30, (in thousands) 2005 2004 2005 2004 ---- ---- ---- ---- Net pension cost included the following components: Service cost-benefits earned during the period $104 $76 $313 $227 Interest cost on projected benefit obligation 134 123 402 371 Amortization of net obligation at transition 56 3 168 8 Amortization of prior service cost 24 27 72 81 Recognized net actuarial loss 0 27 2 82 ---------------------------------------- Net periodic pension cost $318 $256 $957 $769 ========================================
During the nine months ended September 30, 2005 and 2004, the Company contributed and paid out as benefits $393,000 and $378,000, respectively, to participants under the plans. For the year ending December 31, 2005, the Company expects to contribute and pay out as benefits $517,000 to participants under the plans. -14- Recent Accounting Pronouncements In December 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement of Financial Accounting Standard No. 123 (revised 2004), Share-Based Payment (SFAS 123R), which replaces SFAS No. 123, Accounting for Stock-Based Compensation, (SFAS 123) and supercedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values beginning with the first interim reporting period of the Company's fiscal year beginning after June 15, 2005, with early adoption encouraged. The pro forma disclosures previously permitted under SFAS 123 no longer will be an alternative to financial statement recognition. The Company is required to adopt SFAS 123R on January 1, 2006. Under SFAS 123R, the Company must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at date of adoption. The transition methods include prospective and retroactive adoption options. Under the retroactive option, prior periods may be restated either as of the beginning of the year of adoption or for all periods presented. The prospective method requires that compensation expense be recorded for all unvested stock options at the beginning of the first quarter of adoption of SFAS 123R, while the retroactive methods would record compensation expense for all unvested stock options and restricted stock beginning with the first period restated. The Company is evaluating the requirements of SFAS 123R and expects that the adoption of SFAS 123R will not have a material impact on the Company's consolidated results of operations and earnings per share. The Company has not yet determined the method of adoption or the effect of adopting SFAS 123R, and it has not determined whether the adoption will result in amounts that are similar to the current pro forma disclosures under SFAS 123. In May 2005, the FASB issued FASB Statement of Financial Accounting Standard No. 154, Accounting Changes and Error Corrections, (SFAS 154) a Replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS 154 establishes, unless impracticable, retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements specific to a newly adopted accounting principle. Previously, most changes in accounting principle were recognized by including the cumulative effect of changing to the new accounting principle in net income of the period of the change. Under SFAS 154, retrospective application requires (i) the cumulative effect of the change to the new accounting principle on periods prior to those presented to be reflected in the carrying amounts of assets and liabilities as of the beginning of the first period presented, (ii) an offsetting adjustment, if any, to be made to the opening balance of retained earnings (or other appropriate components of equity) for that period, and (iii) financial statements for each individual prior period presented to be adjusted to reflect the direct period-specific effects of applying the new accounting principle. Special retroactive application rules apply in situations where it is impracticable to determine either the period-specific effects or the cumulative effect of the change. Indirect effects of a change in accounting principle are required to be reported in the period in which the accounting change is made. SFAS 154 carries forward the guidance in APB Opinion 20 "Accounting Changes," requiring justification of a change in accounting principle on the basis of preferability. SFAS 154 also carries forward without change the guidance contained in APB Opinion 20, for reporting the correction of an error in previously issued financial statements and for a change in accounting estimate. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect SFAS 154 will significantly impact its financial statements upon its adoption on January 1, 2006. Reclassifications Certain amounts previously reported in the 2004 financial statements have been reclassified to conform to the 2005 presentation. Additionally, in the first quarter of 2005, the Company reclassified the reserve for unfunded commitments from the allowance for loan losses to other liabilities, and reclassified the provision for unfunded commitments from the provision for loan losses to other noninterest expense. These reclassifications did not affect previously reported net income or total shareholders' equity. -15- TRICO BANCSHARES Financial Summary (dollars in thousands, except per share amounts; unaudited)
Three months ended Nine months ended September 30, September 30, ------------------------------------------------------------ 2005 2004 2005 2004 ------------------------------------------------------------ Net Interest Income (FTE) $20,086 $18,712 $58,203 $53,670 Provision for loan losses 947 1,166 1,608 3,084 Noninterest income 6,632 6,361 18,269 19,058 Noninterest expense 15,680 15,223 46,310 45,013 Provision for income taxes (FTE) 4,130 3,481 11,617 9,804 ------------------------------------------------------------ Net income $5,961 $5,203 $16,937 $14,827 ============================================================ Earnings per share: Basic $0.38 $0.33 $1.08 $0.95 Diluted $0.37 $0.32 $1.04 $0.91 Per share: Dividends paid $0.11 $0.11 $0.33 $0.32 Book value at period end $9.30 $8.64 Tangible book value at period end $8.04 $7.33 Average common shares outstanding 15,688 15,672 15,706 15,643 Average diluted shares outstanding 16,330 16,254 16,328 16,227 Shares outstanding at period end 15,728 15,698 At period end: Loans, net $1,312,294 $1,111,256 Total assets 1,786,856 1,574,546 Total deposits 1,438,299 1,292,141 Other borrowings 31,711 27,159 Junior subordinated debt 41,238 41,238 Shareholders' equity $146,322 $135,688 Financial Ratios: During the period (annualized): Return on assets 1.37% 1.34% 1.34% 1.32% Return on equity 16.26% 15.57% 15.71% 15.12% Net interest margin1 5.10% 5.35% 5.12% 5.32% Net loan charge-offs to average loans 0.01% 0.22% 0.04% 0.10% Efficiency ratio1 58.69% 60.71% 60.56% 61.89% At Period End: Equity to assets 8.19% 8.62% Total capital to risk assets 11.19% 12.36% Allowance for losses to loans2 1.32% 1.44%
1 Fully taxable equivalent (FTE) 2 Allowance for losses includes allowance for loan losses and reserve for unfunded commitments. -16- PART II - OTHER INFORMATION Item 6 - Exhibits 3.1* Restated Articles of Incorporation dated May 9, 2003, filed as Exhibit 3.1 to TriCo's Quarterly Report on Form 10-Q for the quarter ended March 31, 2003. 3.2* Bylaws of TriCo Bancshares, as amended, filed as Exhibit 3.2 to TriCo's Form S-4 Registration Statement dated January 16, 2003 (No. 333-102546). 4 Certificate of Determination of Preferences of Series AA Junior Participating Preferred Stock filed as Exhibit 3.3 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001. 10.1* Rights Agreement dated June 25, 2001, between TriCo and Mellon Investor Services LLC filed as Exhibit 1 to TriCo's Form 8-A dated July 25, 2001. 10.2* Form of Change of Control Agreement dated as of August 23, 2005, between TriCo, Tri Counties Bank and each of Bruce Belton, Craig Carney, Gary Coelho, W.R. Hagstrom, Andrew Mastorakis, Rick Miller, Richard O'Sullivan, Thomas Reddish, and Ray Rios filed as Exhibit 10.2 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. 10.4* TriCo's Non-Qualified Stock Option Plan filed as Exhibit 4.2 to TriCo's Form S-8 Registration Statement dated January 18, 1995 (No. 33-88704). 10.5* TriCo's Incentive Stock Option Plan filed as Exhibit 4.3 to TriCo's Form S-8 Registration Statement dated January 18, 1995 (No. 33-88704). 10.6* TriCo's 1995 Incentive Stock Option Plan filed as Exhibit 4.1 to TriCo's Form S-8 Registration Statement dated August 23, 1995 (No. 33-62063). 10.7* TriCo's 2001 Stock Option Plan, as amended filed as Exhibit 10.7 to TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2005. 10.8* Amended Employment Agreement between TriCo and Richard Smith dated as of August 23, 2005 filed as Exhibit 10.8 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. 10.9* Tri Counties Bank Executive Deferred Compensation Plan restated April 1, 1992, and January 1, 2005 filed as Exhibit 10.9 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. 10.10* Tri Counties Bank Deferred Compensation Plan for Directors effective January 1, 2005 filed as Exhibit 10.10 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. 10.11* 2005 Tri Counties Bank Deferred Compensation Plan for Executives and Directors effective January 1, 2005 filed as Exhibit 10.11 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. 10.13* Tri Counties Bank Supplemental Retirement Plan for Directors dated September 1, 1987, as restated January 1, 2001, and amended and restated January 1, 2004 filed as Exhibit 10.12 to TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. -17- 10.14* 2004 TriCo Bancshares Supplemental Retirement Plan for Directors effective January 1, 2004 filed as Exhibit 10.13 to TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. 10.15* Tri Counties Bank Supplemental Executive Retirement Plan effective September 1, 1987, as amended and restated January 1, 2004 filed as Exhibit 10.14 to TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. 10.16* 2004 TriCo Bancshares Supplemental Executive Retirement Plan effective January 1, 2004 filed as Exhibit 10.15 to TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. 10.17* Form of Joint Beneficiary Agreement effective March 31, 2003 between Tri Counties Bank and each of George Barstow, Dan Bay, Ron Bee, Craig Carney, Robert Elmore, Greg Gill, Richard Miller, Andrew Mastorakis, Richard O'Sullivan, Thomas Reddish, Jerald Sax, and Richard Smith, filed as Exhibit 10.14 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003. 10.18* Form of Joint Beneficiary Agreement effective March 31, 2003 between Tri Counties Bank and each of Don Amaral, William Casey, Craig Compton, John Hasbrook, Michael Koehnen, Wendell Lundberg, Donald Murphy, Carroll Taresh, and Alex Vereshagin, filed as Exhibit 10.15 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003. 10.19* Form of Tri-Counties Bank Executive Long Term Care Agreement effective June 10, 2003 between Tri Counties Bank and each of Craig Carney, Andrew Mastorakis, Richard Miller, Richard O'Sullivan, and Thomas Reddish, filed as Exhibit 10.16 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003. 10.20* Form of Tri-Counties Bank Director Long Term Care Agreement effective June 10, 2003 between Tri Counties Bank and each of Don Amaral, William Casey, Craig Compton, John Hasbrook, Michael Koehnen, Donald Murphy, Carroll Taresh, and Alex Verischagin, filed as Exhibit 10.17 to TriCo's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003. 10.21* Form of Indemnification Agreement between TriCo Bancshares/Tri Counties Bank and each of the directors of TriCo Bancshares/Tri Counties Bank effective on the date that each director is first elected, filed as Exhibit 10.18 to TriCo'S Annual Report on Form 10-K for the year ended December 31, 2003. 10.22* Form of Indemnification Agreement between TriCo Bancshares/Tri Counties Bank and each of Craig Carney, W.R. Hagstrom, Andrew Mastorakis, Rick Miller, Richard O'Sullivan, Thomas Reddish, Ray Rios, and Richard Smith filed as Exhibit 10.21 to TriCo's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004. 31.1 Rule 13a-14(a)/15d-14(a) Certification of CEO 31.2 Rule 13a-14(a)/15d-14(a) Certification of CFO 32.1 Section 1350 Certification of CEO 32.2 Section 1350 Certification of CFO * Previously filed and incorporated by reference. -18- 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 hereunto duly authorized. TRICO BANCSHARES (Registrant) Date: November 23, 2005 /s/ Thomas J. Reddish ----------------------------------- Thomas J. Reddish Executive Vice President and Chief Financial Officer -19- Exhibit 31.1 Rule 13a-14/15d-14 Certification of CEO I, Richard P. Smith, certify that; 1. I have reviewed this amendment no. 1 to the quarterly report on Form 10-Q/A of TriCo Bancshares; 2. Based on my knowledge, this amended quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this amended quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this amended quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this amended quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13-d-15(f) and 15d-15(f)) for the registrant and we have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this amended quarterly report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this amended quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this amended quarterly report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors; a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 23, 2005 /s/ Richard P. Smith ---------------------------------------- Richard P. Smith President and Chief Executive Officer Exhibit 31.2 Rule 13a-14/15d-14 Certification of CFO I, Thomas J. Reddish, certify that; 1. I have reviewed this amendment no. 1 to the quarterly report on Form 10-Q/A of TriCo Bancshares; 2. Based on my knowledge, this amended quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this amended quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this amended quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this amended quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) and internal control over financial reporting (as defined in Exchange Act Rules 13-d-15(f) and 15d-15(f)) for the registrant and we have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this amended quarterly report is being prepared; b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this amended quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this amended quarterly report based on such evaluation; and d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors; a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 23, 2005 /s/ Thomas J. Reddish ---------------------------------------- Thomas J. Reddish Executive Vice President and Chief Financial Officer Exhibit 32.1 Section 1350 Certification of CEO In connection with the Amendment No. 1 to the Quarterly Report of TriCo Bancshares (the "Company") on Form 10-Q/A for the period ended September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard P. Smith, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Richard P. Smith ------------------------------------- Richard P. Smith President and Chief Executive Officer A signed original of this written statement required by Section 906 has been provided to TriCo Bancshares and will be retained by TriCo Bancshares and furnished to the Securities and Exchange Commission or its staff upon request. Exhibit 32.2 Section 1350 Certification of CFO In connection with the Amendment No. 1 to the Quarterly Report of TriCo Bancshares (the "Company") on Form 10-Q/A for the period ended September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas J. Reddish, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Thomas J. Reddish ------------------------------------- Thomas J. Reddish Executive Vice President and Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to TriCo Bancshares and will be retained by TriCo Bancshares and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----