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The Merger Agreement provides that each share of FNBB common stock issued and outstanding immediately prior to the effective time of the Merger will be canceled and converted into the right to receive 0.98 shares of TriCo common stock (the “Exchange Ratio”), with cash paid in lieu of fractional shares of TriCo common stock.

Based on the closing price of TriCo common stock of $41.64 on December 8, 2017, the consideration value was $40.81 per share of FNBB common stock or approximately $315.3 million in aggregate. The valueterms of the merger consideration will fluctuate until closingagreement dated as of July 27, 2021. The cash and stock transaction was valued at approximately $174.0 million in aggregate, based on TriCo's closing stock price of $42.48 on March 25, 2022. Under the value of TriCo’s stock and subject to a trading collar in certain circumstances. Upon consummationterms of the Merger,merger agreement, the shareholdersCompany issued approximately 4.1 million shares, in addition to approximately $431,000 in cash paid out for settlement of FNBB will own approximately 24% ofstock option awards at VRB. VRB was headquartered in Bakersfield, California, and had four branch locations in and around Bakersfield, and a loan production office in Fresno, California. The Bank's overlapping Bakersfield branch was consolidated into the combined company.

The consummation ofacquired VRB branch during the Merger is subject to a number of conditions, which include: (i) the approval of the Merger Agreement by FNBB’s shareholdersquarter ended June 30, 2022, and the approval of the Merger Agreement and the issuance of shares of TriCo common stock by TriCo’s shareholders; (ii) as of the closing of the Merger, FNBB shall have tangible common equity of not less than $119.0 million, subject to credit for certain merger-related expenses and certain assumptions and adjustments that are set forthVRB loan production office in the Merger Agreement; (iii) the receipt of all necessary regulatory approvals for the Proposed Transaction, without the imposition of conditions or requirements that the TriCo Board of Directors reasonably determines in good faith would, individually or in the aggregate, materially reduce the economic benefits of the Proposed Transaction; (iv) the absence of any regulation, judgment, decree, injunction or other order of a governmental authority which prohibits the consummation of the Proposed Transaction or which prohibits or makes illegal the consummation of the Proposed Transaction; (v) the effective registration of the shares of TriCo Common Stock to be issued to FNBB’s shareholdersFresno was consolidated with the Securities and Exchange Commission (the “SEC”) andnearby legacy TCBK loan production office during the approvalfourth quarter of such shares for listing on the Nasdaq Global Select Market; (vi) all representations and warranties made by 2022. All remaining branches now operate as Tri Counties Bank.

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The

services.

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The BHC Act,

See the Risk Factors section for a more extensive discussion of this topic.

Section 39 to the Federal Deposit Insurance Act requires thefederal bank regulatory agencies to establishhave established safety and soundness standards for insured financialdepository institutions covering:

Additionally, under FDICIA, a bank

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conservation buffer. See “Regulatory Capital Requirements.”

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also requires banks to implement a comprehensive information security program that includes administrative, technicalpurposes. Similar state laws may impose additional requirements on the Company and physical safeguards to ensure the security and confidentiality of customer records and information.

Bank.

The Company’s and

The Company and the Bank are also required to maintain a minimum leverage ratio of 4% of Tier 1 capital to total assets (the “leverage ratio”). The leverage ratio is determined by dividing an institution’s Tier 1 capital by its quarterly average total assets, less goodwill and certain other intangible assets. The minimum leverage ratio constitutes a minimum requirement for the mostwell-run banking organizations. See Note 29 in the financial statements at Item 8 of this report for a discussion about the Company’s risk-based capital and leverage ratios.

In July, 2013, the federal banking agencies approved new capital rules implementing the “Basel III” regulatory capital reforms and other changes required by the Dodd-Frank Act. “Basel III” refers to capital guidelines adopted by the Basel Committee on Banking Supervision, which is a committee of central banks and bank supervisors/regulators from the major industrialized countries. The new capital rules include new risk-based capital and leverage ratios, which are being phased in from 2015 to 2019, and which refine the definition of what constitutes “capital” for purposes of calculating those ratios. The new minimum capital level requirements applicable to the Company and the Bank as of January 1, 2015 under the new capital rules included: (i) a newratios: (1) common equity Tier 1 capital ratioor “CET1” to risk‑weighted assets of 4.5%; (ii) a(2) Tier 1 capital ratio(that is, CET1 plus Additional Tier 1 capital) to risk‑weighted assets of 6% (increased from 4%)6.0%; (iii) a total(3) Total capital ratio(that is, Tier 1 capital plus Tier 2 capital) to risk‑weighted assets of 8% (unchanged from previous rules); and (iv)(4) a Tier 1 leverage ratio (Tier 1 capital to average consolidated assets as reported on regulatory financial statements) of 4% for all institutions.4.0%. The newBasel III capital rules also establishframework includes a “capital conservation buffer” above the new regulatory minimum capital requirements, which must consistof 2.5%, composed entirely of common equity Tier 1 capital. TheCET1, on top of the minimum risk‑weighted asset ratios. Banking institutions that fail to maintain a full capital conservation buffer face constraints on dividends, equity repurchases and discretionary executive compensation based on the amount of the shortfall and the institution’s “eligible retained income” (that is, to bephased-in over four years beginning on January 1, 2016, as follows:quarter trailing net income, net of distributions and tax effects not reflected in net income). The 2.5% capital conservation buffer will be 0.625% of risk-weighted assets for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter. This will resulteffectively results in the following minimum ratios beginning in 2019 (inclusive of the buffer): (i) a common equity Tier 1 capital ratioCET1 to risk‑weighted assets of 7.0%at least 7%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. Under the new capital rules, institutions are subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its common equity capital level falls below the buffer amount. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions.

The new capital rules provide regulators discretion to impose an additional capital buffer, the “countercyclical buffer,” of up to 2.5% of common equity Tier 1 capital to take into account the macro-financial environmentrisk‑weighted assets of at least 8.5%, and periods(iii) total capital to risk‑weighted assets of excessive credit growth. However, the countercyclical buffer only applies to larger banks with $250 billion or more in total assets or $10 billion or more in total foreign exposures and is not expected to have an impact on the Company or the Bank.

The new capital rules also implement revisions and clarifications consistent with Basel III regarding the various components of Tier 1 capital, including common equity, unrealized gains and losses, as well as certain instruments including trust preferred securities that will no longer qualify as Tier 1 capital, some of which will be phased out over time. However, the new capital rules provide that depository institution holding companies with less than $15 billion in total assets as of December 31, 2009, such as the Company, will be able to continue to includenon-qualifying instruments that were issued and included in Tier 1 capital prior to May 19, 2010, such as the Company’s Trust Preferred Securities, as Tier 1. This treatment is grandfathered and will apply even if the Company exceeds $15 billion assets due to organic growth. However, if the Company exceeds $15 billion in assets as the result of a merger or acquisition, then the Tier 1 treatment of its outstanding trust preferred securities will be phased out but may still be treated as Tier 2 capital.

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The new capital rules also include changes for the calculation of risk-weighted assets, which are being phased in beginning January 1, 2015. The new capital rules utilizes an increased number of credit risk exposure categories and risk weights, and also addresses: (i) an alternative standard of creditworthiness consistent with Section 939A of the Dodd-Frank Act; (ii) revisions to recognition of credit risk mitigation; (iii) rules for risk weighting of equity exposures and past due loans; (iv) revised capital treatment for derivatives and repo-style transactions; and (v) disclosure requirements fortop-tier banking organizations with $50 billion or more in total assets that are not subject to the “advance approach rules” that apply to banks with greater than $250 billion in consolidated assets.

at least 10.5%.

2022. For a discussion of the regulatory capital requirements, see “Note 26 – Regulatory Matters” to the consolidated financial statements at Part II, Item 8 of this report.

Designated Reserve Ratio for the DIF at 2%.

Interstate Branching

The Dodd-FrankDPFI.

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well as enhanced due diligence and “know your customer” standards in their dealings with high risk customers, foreigncooperation between financial institutions and law enforcement authorities.

affiliates (except those located in China, Russia, or certain other jurisdictions) for the purpose of combating illicit finance risks; and (5) expanded duties and powers of FinCEN. Many of the amendments require the Department of Treasury and FinCEN to promulgate rules. On September 29, 2022, FinCEN issued final regulations implementing the amendments with respect to beneficial ownership.

our operations.

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adequate to cover currentestimated future losses, we cannot assure you that we will not increase the allowance for loancredit losses further or that the allowance will be adequate to absorb loancredit losses we actually incur. EitherCredit losses in excess of these occurrences could have a material adverse effect on our business, financial conditionallowance or addition provisions to our allowance would reduce our net income and resultscapital, potentially materially.

We depend on key personnel and the loss of one or more of those key personnel may materially and adversely affect our prospects.

Competition for qualified employees and personnel in the banking industry is intense and there are a limited number of qualified persons with knowledge of, and experience in, the California community banking industry. The process of recruiting personnel with the combination of skills and attributes required to carry out our strategies is often lengthy. Our success depends to a significant degree upon our ability to attract and retain qualified management, loan origination, finance, administrative, marketing and technical personnel and upon the continued contributions of our management and personnel. In particular, our success has been and continues to be highly dependent upon the abilities of our senior management team of Messrs. Smith, Bailey, Carney, Fleshood, O’Sullivan and Reddish, who have expertise in banking and collective experience in the California markets we serve and have targeted for future expansion. We also depend upon a number of other key executives who are California natives or are long-time residents and who are integral to implementing our business plan. The loss of the services of any one of our senior executive management team or other key executives could have a material adverse effect on our business, financial condition, results of operations and cash flows.

operations.

Strong

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customers with commercial banks, savings and loan associations, credit unions, finance companies, mutual funds, insurance companies, brokerage firms and Internet-based marketplace lending platforms. In particular, ourOur competitors include major financial companies whose greater resources may afford them a marketplace advantage by enabling them to maintain numerous locations and mount extensive promotional and advertising campaigns. Additionally, banks and other financial institutions with larger capitalization and financial intermediaries that are not subject to bank regulatory restrictions may have larger lending limits which would allow them to serve the credit needs of larger customers. Areas of competition include interest rates for loans and deposits, efforts to obtain loan and deposit customers and a range in quality of products and services provided, including new technology-driven products and services. Technological innovation continues to contribute to greater competition in domestic and international financial

Our previous results may not be indicative of our future results.

We may not be able to sustain our historical rate of growth and level of profitability or may not even be able to grow our business or continue to be profitable at all. Various factors, such as economic conditions, regulatory and legislative considerations and competition, may also impede or prohibit our ability to expand our market presence and financial performance. If we experience a significant decrease in our historical rate of growth, our results of operations and financial condition may be adversely affected due to a high percentage of our operating costs being fixed expenses.

Severe weather, natural disasters

Our operations

The impacts of recent tax reform are not yet fully known, and theseemployees to conduct banking and other tax regulations could be subjectfinancial transactions. Disruptions to potential legislative, administrative or judicial changes or interpretations.

The tax reform bill enacted on December 22, 2017 has had, and is expected to continue to have,far-reaching and significant effects on us, our customers andcaused by the U.S. economy. The tax reform bill lowered the corporate federal statutory tax rate and eliminated or limited certain federal corporate deductions. It is too early to evaluate all of the potential consequences of the tax reform bill, but such consequencesCOVID-19 pandemic could include lower commercial customer borrowings, either due to the increase in cash flows as a result of the reduction in the corporate statutory tax rate or the utilization by businesses in certain sectors of alternativenon-debt financing and/or early retirement of existing debt. Further, there can be no assurance that any benefits realized by us as a result of the reduction in the corporate federal statutory tax rate will ultimately result in increased netrisk of delinquencies, defaults, foreclosures and losses on our loans, as well as reductions in loan demand, the liquidity of loan guarantors, loan collateral values (particularly in real estate), loan originations, interest and noninterest income whether dueand deposit availability. Furthermore, the pandemic could cause us to decreased loan yields as a resultrecognize impairment of competition or to other factors. Uncertaintyour goodwill and our financial assets.

Federal income tax treatmentremote banking activities may also increase the risk of corporations may be further clarified and modified by other legislative, administrative or judicial changes or interpretations at any time. Any such changes could adversely affect us.

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Market andfraud in certain instances.

Market interest

In addition, the Federal Reserve raised benchmark interest rates throughout 2022 and may continue to raise interest rates in response to economic conditions, particularly inflationary pressures. We cannot predict the nature or timing of future changes in monetary, tax and other policies or the effects that they may have on our activities and financial results.

LIBOR to the LIBOR administrator after 2021. The Dodd-Frank Act, which was enacted in 2010, significantly changedannouncement indicates that the continuation of LIBOR on the current bank regulatory structurebasis cannot and affectswill not be guaranteed after 2021. In November 2020, the lending, deposit, investment, trading and operating activitiesLIBOR administrator published a consultation regarding its intention to delay the date on which it will cease publication of financial institutions and their holding companies. Among other things,U.S. dollar LIBOR from December 31, 2021 to June 30, 2023 for the Dodd-Frank Act created a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws. The CFPB has broad rule-making authority for a wide rangemost common tenors of consumer protection laws that apply to all banks and savings institutions,U.S. dollar LIBOR, including the authority to prohibit “unfair, deceptivethree-month LIBOR, but indicated no new contracts using U.S. dollar LIBOR should be entered into after December 31, 2021. Notwithstanding the publication of this consultation, there is no assurance of how long LIBOR of any currency or abusive” acts and practices. The CFPB has examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets. Banks with $10 billion or less in assets, such as the Bank, are subject to the CFPB’s rules buttenor will continue to be examined for compliance with the consumer laws by their primary bank regulators. In addition, the Dodd-Frank Act required the FDIC and FRB to adopt new, more stringent capital rules that apply to us. The Dodd-Frank Act also weakens the federal preemption rules that have been applicable for national banks and federal savings associations, and gives state attorneys general the ability to enforce federal consumer protection laws.

published. It is difficultimpossible to predict whether and to what extent banks will continue to provide LIBOR submissions to the continuing impact thatadministrator of LIBOR, whether LIBOR rates will cease to be published before June 30, 2023, or whether any additional reforms to LIBOR may be enacted in the Dodd-Frank ActUnited Kingdom or elsewhere. Although the Alternative Reference Rates Committee has announced Secured Overnight Financing Rate (“SOFR”) as its recommended alternative to LIBOR, SOFR may not gain market acceptance or be widely used as a benchmark. Uncertainty as to the nature of such potential changes, alternative reference rates, the elimination or replacement of LIBOR, or other reforms may adversely affect the value of, and the yetreturn on our financial instruments.

Existing and potential acquisitions may disrupt our business and dilute stockholder value.

On December 11, 2017, we entered into the Merger Agreement providing for our acquisition of FNBB and its wholly-owned subsidiary, First National Bank of Northern California. The Merger is expected to close in the second quarter of 2018, subject to the satisfaction of customary closing conditions, including the receipt of regulatory and shareholder approvals.

The success of the merger will depend on, among other things, our ability to realize the anticipated revenue enhancements and efficiencies and to combine the businesses of the Company and FNBB in a manner that does not materially disrupt the existing customer relationships of FNBB or result in decreased revenues resulting from any loss of customers and that permits growth opportunities to occur. If we are not able to successfully achieve these objectives, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected.

The Company and FNBB have operated and, until the completion of the Merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the Merger. Integration efforts between the two companies could also divert management attention and resources.

These integration matters could have an adverse effect on each of the Company and FNBB the transition period and on the combined company following completion of the Merger.

We intend to continue to explore expanding our branch system through opening new bank branches andin-store branches in existing or new markets in northern and central California. In the ordinary course of business, we evaluate potential branch locations that would bolster our ability to cater to the small business, individual and residential lending markets in California. Any given new branch, if and when opened, will have expenses in excess of revenues for varying periods after opening that may adversely affect our results of operations or overall financial condition. As a result, merger or acquisition discussions and, in some cases, negotiations may take place and future mergers or acquisitions involving cash, debt or equity

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securities may occur at any time. Acquisitions typically involve the payment of a premium over book and market values, and, therefore, some dilution of our stock’s tangible book value and net income per common share may occur in connection with any future transaction. Furthermore, failure to realize the expected revenue increases, cost savings, increases in geographic or product presence, and/or other projected benefits from recent or future acquisitions could have a material adverse effect on our financial condition and results of operations.

We cannot say with any certainty that we will be able to consummate, or if consummated, successfully integrate future acquisitions or that we will not incur disruptions or unexpected expenses in integrating such acquisitions. In attempting to make such future acquisitions, we anticipate competing with other financial institutions, many of which have greater financial and operational resources. Acquiring other banks, businesses, or branches involves various risks commonly associated with acquisitions, including, among other things:

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As of December 31, 2017, directors and executive officers beneficially owned approximately 8.9% ofpayments on the junior subordinated debentures before we can pay any dividends on our common stock and, in the event of our Employee Stock Ownership Plan (“ESOP”) owned approximately 5.1%. Agreements withbankruptcy, dissolution or liquidation, the holders of the junior subordinated debentures must be satisfied before any distributions can be made on our senior management also provide for significant payments under certain circumstances following a change in control. These compensation arrangements, together with the common stock beneficially owned by our board of directors, management, and the ESOP could make it difficult or expensive to obtain majority support for shareholder proposals or potential acquisition proposals of us that our directors and officers oppose.

stock.

Holders of our junior subordinated debentures have rights that are senior to those

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of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected in a timely basis. A significant deficiency is a deficiency or combination of deficiencies, in internal control over financial reporting that is less severe than material weakness, yet important enough to merit attention by those responsible for the oversight of the Company’s financial reporting.

We rely on communications, information, operating and financial control systems technology and we may suffer an interruption in

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the extent of remediation and other additional costs that may be incurred by us. To date, we do not believe such consequences are material, however the network security incident is still recent and the investigation is ongoing. Although we maintain insurance coverage, including cybersecurity insurance, the amount of coverage available may not cover all losses. We rely on certain third-party vendors.

We are reliant upon certain third-party vendorsanticipate that we will incur additional expenses in future periods. Network breaches at other financial institutions have, in some instances, resulted in litigation, government investigations and other regulatory enforcement inquiries. Given the uncertainties about the impact of the incident and the inherent uncertainties involved in litigation, government investigations and regulatory

perceived security vulnerabilities and any resulting damage to our reputation or loss of confidence in the security of our systems could adversely affect our business. As cyber threats continue to evolve, we have been and will likely continue to be required to expend significant resources to continuously enhance our protective measures and may be required to expend significant resources to investigate and remediate any information security vulnerabilities or incidents.

In addition, advances in technology such as digital, mobile, telephone, text, and online banking; e-commerce; and self-service automatic teller machines and other equipment, as well as changing customer preferences to access our products and services through digital channels, could decrease the value of our branch network and other assets. We may close or sell certain branches and restructure or reduce our remaining branches and work force. These actions could lead to losses on assets, expense to reconfigure branches and loss of customers in certain markets. As a result, our business, financial condition or results of operations may be adversely affected.